Exhibit 4.3
Dated 22 September 2004
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NORTHERN ROCK PLC
as Seller
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
- and -
THE BANK OF NEW YORK
as Security Trustee
------------------------------------
MORTGAGE SALE AGREEMENT
NINTH DEED OF AMENDMENT
------------------------------------
SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
WOOLGATE EXCHANGE
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
THIS DEED is made on 22 September 2004
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales, whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Seller and in its capacity as a Beneficiary;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, whose registered
office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel
Islands in its capacity as Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out of
its branch office established in England (registered overseas company
number FC022999 and branch number BR005916) at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ in its capacity as a Beneficiary; and
(4) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its
capacity as Security Trustee.
WHEREAS:
(A) The Seller carries on the business (inter alia) of originating mortgage
loans secured on residential properties in England, Wales and Scotland.
(B) The Seller has sold and assigned to the Mortgages Trustee certain
mortgage loans, together with the benefit of the related security for
the same, on the terms and subject to the conditions set out in the
Mortgage Sale Agreement dated 26 March 2001 among the parties hereto (as
amended, varied, novated or supplemented from time to time, the
"Mortgage Sale Agreement").
(C) The parties have agreed to amend and restate the Mortgage Sale Agreement
(the "First Amended and Restated Mortgage Sale Agreement") pursuant to
the provisions set out in a deed of amendment and restatement dated 23
July 2001 (the "First Deed of Amendment and Restatement").
(D) The parties have agreed to amend and restate the First Amended and
Restated Mortgage Sale Agreement (the "Second Amended and Restated
Mortgage Sale Agreement") pursuant to the provisions set out in a deed
of amendment and restatement dated 28 September 2001 (the "Second Deed
of Amendment and Restatement").
(E) The parties have agreed to amend and restate the Second Amended and
Restated Mortgage Sale Agreement (the "Third Amended and Restated
Mortgage Sale Agreement") pursuant to the provisions set out in a deed
of amendment and restatement dated 20 March 2002 (the "Third Deed of
Amendment and Restatement").
(F) The parties have agreed to amend and restate the Third Amended and
Restated Mortgage Sale Agreement (the "Fourth Amended and Restated
Mortgage Sale Agreement") pursuant to the
provisions set out in a deed of amendment and restatement dated 27
January 2003 (the "Fourth Deed of Amendment and Restatement").
(G) The parties have agreed to amend and restate the Fourth Amended and
Restated Mortgage Sale Agreement (the "Fifth Amended and Restated
Mortgage Sale Agreement") pursuant to the provisions set out in a deed
of amendment and restatement dated 14 April 2003 (the "Fifth Deed of
Amendment and Restatement").
(H) The parties have agreed to amend and restate the Fifth Amended and
Restated Mortgage Sale Agreement (the "Sixth Amended and Restated
Mortgage Sale Agreement") pursuant to the provisions set out in a deed
of amendment and restatement dated 21 May 2003 (the "Sixth Deed of
Amendment and Restatement").
(I) The parties have agreed to amend and restate the Sixth Amended and
Restated Mortgage Sale Agreement (the "Seventh Amended and Restated
Mortgage Sale Agreement") pursuant to the provisions set out in a deed
of amendment and restatement dated 26 January 2004 (the "Seventh Deed of
Amendment and Restatement").
(J) The parties have agreed to amend and restate the Seventh Amended and
Restated Mortgage Sale Agreement (the "Eighth Amended and Restated
Mortgage Sale Agreement") pursuant to the provisions set out in a deed
of amendment and restatement dated 28 January 2004 (the "Eighth Deed of
Amendment and Restatement").
(K) The parties now wish to amend and restate the Eighth Amended and
Restated Mortgage Sale Agreement.
(L) With effect from the date hereof, the provisions of the Mortgage Sale
Agreement, the First Amended and Restated Mortgage Sale Agreement, the
Second Amended and Restated Mortgage Sale Agreement, the Third Amended
and Restated Mortgage Sale Agreement, the Fourth Amended and Restated
Mortgage Sale Agreement, the Fifth Amended and Restated Mortgage Sale
Agreement, the Sixth Amended and Restated Mortgage Sale Agreement, the
Seventh Amended and Restated Mortgage Sale Agreement, the Eighth Amended
and Restated Mortgage Sale Agreement and this Deed shall be read and
construed as one document.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Ninth Amendment and Restatement Deed made on 22 September 2004
between, among others, the parties hereto (as the same have been and may
be amended, varied or supplemented from time to time with the consent of
the parties hereto) are expressly and specifically incorporated into and
shall apply to this Deed.
1.2 The Mortgage Sale Agreement as amended and restated pursuant to the
First Deed of Amendment and Restatement, the Second Deed of Amendment
and Restatement, the Third Deed of Amendment and Restatement, the Fourth
Deed of Amendment and Restatement, the Fifth Deed of
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Amendment and Restatement, the Sixth Deed of Amendment and Restatement,
the Seventh Deed of Amendment and Restatement, the Eighth Deed of
Amendment and Restatement and pursuant hereto shall be referred to
herein as the "Amended and Restated Mortgage Sale Agreement".
1.3 As used in the Amended and Restated Mortgage Sale Agreement the terms
"Mortgage Sale Agreement", "this Mortgage Sale Agreement", "herein",
"hereinafter", "hereof", "hereto" and other words of similar import
shall mean or refer to the Amended and Restated Mortgage Sale Agreement,
unless the context otherwise specifically requires.
2. AMENDMENTS TO THE EIGHTH AMENDED AND RESTATED MORTGAGE SALE AGREEMENT
Upon execution of this Deed by the parties hereto, the Eighth Amended
and Restated Mortgage Sale Agreement shall be and hereby is amended and
restated in the form of Appendix I hereto.
3. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any provision of this Deed or
any provision of the Amended and Restated Mortgage Sale Agreement under
the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ but this shall not
affect any right or remedy of a third party which exists or is available
apart from that Act.
4. COUNTERPARTS
This Deed may be executed in any number of counterparts, and has the
same effect as if the signatures and/or seals on the counterparts were
on a single copy of this Deed.
5. GOVERNING LAW
5.1 This Deed is governed by, and shall be construed in accordance with,
English law.
5.2 Each of the parties hereto irrevocably agrees that the courts of England
shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in
connection with this Deed and, for such purposes, irrevocably submits to
the jurisdiction of such courts.
IN WITNESS WHEREOF this Deed has been executed as a deed and delivered by the
parties hereto on the day and year first above written.
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Executed by
NORTHERN ROCK PLC
as its deed as follows: By
Signed for and on its behalf by one of its -------------------------------------
duly authorised attorneys/signatories Duly Authorised Attorney/Signatory
Name
-------------------------------------
Signature
--------------------------------
Witness
Full name
--------------------------------
Occupation
--------------------------------
Address Woolgate Exchange
--------------------------------
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
London
--------------------------------
▇▇▇▇ ▇▇▇
--------------------------------
Executed by
GRANITE FINANCE FUNDING LIMITED
as its deed as follows: By
Signed for and on its behalf by one of its
directors and by another of its -------------------------------------
directors/its secretary secretary Director
Name
-------------------------------------
By
-------------------------------------
Director/Secretary
Name
-------------------------------------
Executed by By
GRANITE FINANCE TRUSTEES LIMITED -------------------------------------
as its deed as follows: Director
Signed for and on its behalf by one of its
directors and by another of its directors/its
secretary
Name
-------------------------------------
By
-------------------------------------
Director/Secretary
Name
-------------------------------------
4
Executed by
THE BANK OF NEW YORK
as its deed as follows: By
-------------------------------------
Signed for and on its behalf by one of its Duly Authorised Attorney/Signatory
duly authorised attorneys/signatories
Name
-------------------------------------
5
Appendix 1
Amended and Restated Mortgage Sale Agreement
6
Dated 22 September 2004
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NORTHERN ROCK PLC
as Seller
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
- and -
THE BANK OF NEW YORK
as Security Trustee
------------------------------------------
NINTH AMENDED
MORTGAGE SALE AGREEMENT
------------------------------------------
SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
WOOLGATE EXCHANGE
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
CONTENTS
Clause Page No.
1. Definitions and Construction.........................................4
2. Sale and Purchase of Initial Mortgage Portfolio......................5
3. Initial Closing Date.................................................5
4. Sale and Purchase of New Mortgage Portfolios.........................7
5. Trust of Monies.....................................................14
6. Perfection of the Assignment........................................15
7. Undertakings........................................................17
8. Warranties and Repurchase by the Seller.............................21
9. Further Assurance...................................................27
10. Consequences of Breach..............................................27
11. Subordination.......................................................27
12. Non-Merger..........................................................27
13. No Agency or Partnership............................................27
14. Payments............................................................28
15. Assignment..........................................................28
16. Security Trustee....................................................28
17. New Intercompany Loans..............................................29
18. Non Petition Covenant; Limited Recourse.............................29
19. Amendments and Waiver...............................................30
20. Notices.............................................................31
21. Third Party Rights..................................................31
22. Execution in Counterparts; Severability.............................31
23. Governing Law and Submission to Jurisdiction........................32
24. Process Agent.......................................................32
25. Appropriate Forum...................................................32
26. Transaction Documents...............................................33
2
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES.................................35
SCHEDULE 2 FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND AND
SCOTTISH TRANSFERS..................................................44
Part 1 FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)............45
Part 2 FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)..........46
Part 3 FORM OF TRANSFER (LAND REGISTER - SCOTLAND).......................48
Part 4 FORM OF TRANSFER (SASINE REGISTER - SCOTLAND).....................50
SCHEDULE 3 ASSIGNMENT OF INSURANCE CONTRACTS..............................52
SCHEDULE 4 INSURANCE CONTRACTS............................................54
SCHEDULE 5 Part 1 ASSIGNMENT OF GUARANTEES................................55
Part 2 ASSIGNATION OF GUARANTEES.........................................57
SCHEDULE 6 NEW MORTGAGE PORTFOLIO NOTICE..................................60
SCHEDULE 7 LOAN REPURCHASE NOTICE.........................................63
SCHEDULE 8 FORM OF NOTIFICATION TO BORROWERS..............................65
SCHEDULE 9 OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE
LOANS)..............................................................66
SCHEDULE 10 POWER OF ATTORNEY IN FAVOUR OF THE MORTGAGES TRUSTEE,
FUNDING AND THE SECURITY TRUSTEE....................................67
SCHEDULE 11 FORM OF SCOTTISH TRUST DEED..................................70
SCHEDULE 12 LENDING CRITERIA.............................................77
SCHEDULE 13 STANDARD DOCUMENTATION.......................................80
APPENDIX A THE INITIAL MORTGAGE LOAN PORTFOLIO............................81
3
THIS NINTH AMENDED MORTGAGE SALE AGREEMENT DATED 22 SEPTEMBER 2004 FURTHER
AMENDS AND RESTATES THE MORTGAGE SALE AGREEMENT DATED 26 MARCH 2001
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales, whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Seller and in its capacity as a Beneficiary;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, whose registered
office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel
Islands in its capacity as the Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, but acting out of
its branch office established in England (registered overseas company
number FC022999 and branch number BR005916) at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ in its capacity as a Beneficiary; and
(4) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its
capacity as Security Trustee.
WHEREAS:
(A) The Seller carries on the business (inter alia) of originating mortgage
loans secured on residential properties in England, Wales and Scotland.
(B) The Seller has agreed to sell and assign to the Mortgages Trustee
certain mortgage loans, together with the benefit of the related
security for the same, on the terms and subject to, the conditions set
out in this Mortgage Sale Agreement (the "Agreement").
(C) The Mortgages Trustee has agreed to hold certain of the above mentioned
mortgage loans as bare trustee for the Beneficiaries upon, with and
subject to the trusts, powers and provisions of the Mortgages Trust
Deed.
IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions and Construction
1.1. The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Ninth Amendment and Restatement Deed made on 22 September 2004
between, among others, the Seller, Funding and the Mortgages Trustee (as
the same have been and may be amended, varied or supplemented from time
to time with the consent of the parties hereto) are expressly and
specifically incorporated into and shall apply to this Agreement.
4
2. Sale and Purchase of Initial Mortgage Portfolio
2.1 Agreement to Assign: Subject to Clause 2.2 (Conditions), in
consideration of the Purchase Price for the Initial Mortgage Portfolio
(which shall be paid in accordance with Clause 3.3 (Effect of Payment of
Initial Purchase Price)) and the covenant of the Mortgages Trustee to
hold the Trust Property upon trust for the Seller and Funding as
beneficiaries of the Mortgages Trust upon, with and subject to all the
trusts, powers and provisions of the Mortgages Trust Deed and the
Mortgages Trustee's agreement in Clause 3.5 (Early Repayment Charges) to
pay to the Seller any and all Early Repayment Charge Receipts, the
Seller hereby agrees to sell and assign the Initial Mortgage Portfolio
to the Mortgages Trustee on the Initial Closing Date with full title
guarantee.
2.2 Conditions: The obligation of the Seller under Clause 2.1 (Agreement to
Assign) shall be subject to and conditional upon:
(a) the issue by the First Issuer of the Notes on the Initial Closing
Date and the borrowing by Funding of the amount provided for under
the First Issuer Intercompany Loan Agreement;
(b) the constitution of the Mortgages Trust on or prior to the Initial
Closing Date;
(c) the Transaction Documents having been executed and delivered by
the parties thereto on or before the Initial Closing Date or, in
the case of any Transaction Documents which are to be executed
immediately after the Initial Closing Date, the same having been
executed and being available for delivery and none of the parties
knowing of any reason why the same should not be delivered
immediately thereafter;
(d) the payment of the Initial Contribution by Funding to the
Mortgages Trustee in accordance with the terms of the Mortgages
Trust Deed; and
2.3 the payment of the Initial Purchase Price by the Mortgages Trustee to
the Seller in accordance with paragraph (a) of Clause 3.2 (Purchase
Price).
3. Initial Closing Date
3.1 Initial Closing and Conditions Precedent: A meeting shall take place on
the Initial Closing Date at the offices of ▇▇▇▇▇ & ▇▇▇▇, ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, or such offices as the parties may agree, at
which the Seller shall deliver to the Security Trustee (upon request),
Funding and the Mortgages Trustee or the representative of such party
(or procure such delivery to such party of) the following documents:
(a) an original power of attorney in the form set out in Schedule 10
(Power of Attorney in favour of the Mortgages Trustee, Funding and
the Security Trustee) duly executed by the Seller;
(b) a certificate of solvency in relation to the Seller dated as at
the Initial Closing Date (in the form of the agreed draft) duly
executed by the Seller;
5
(c) a list of the Mortgage Loans in the Initial Mortgage Portfolio;
(d) an assignment of the Insurance Contracts to the extent that such
Insurance Contracts relate to the Initial Mortgage Portfolio in
the form set out in Schedule 3 (Assignment of Insurance Contracts)
duly executed by the Seller; and
(e) a certified copy of the board minutes of the securitisation
sub-committee of the Seller authorising its duly appointed
representatives to agree the sale and assignment of the Initial
Mortgage Portfolio and authorising the execution and performance
of this Agreement, the Mortgages Trust Deed, the Administration
Agreement, the other Transaction Documents and all of the
documentation to be entered into pursuant to the Transaction
Documents.
3.2 Purchase Price: Subject to fulfilment of the conditions referred to in
paragraphs (a) to (and including) (d) of Clause 2.2 (Conditions) and
Clause 3.1 (Initial Closing and Conditions Precedent), the Mortgages
Trustee shall pay the Purchase Price for the Initial Mortgage Portfolio
to the Seller, in the manner that the Seller directs, for value, as
follows:
(a) the Initial Purchase Price for the Initial Mortgage Portfolio
shall be paid by the Mortgages Trustee to the Seller on the
Initial Closing Date (which Initial Purchase Price shall be paid
by the Mortgages Trustee from funds received by the Mortgages
Trustee from Funding on such date in respect of Funding's Initial
Contribution for the Funding Share of the Closing Trust Property
pursuant to the Mortgages Trust Deed);
(b) subject to and in accordance with the Mortgages Trustee Revenue
Priority of Payments, an amount of Deferred Purchase Price in
respect of the Mortgage Portfolio shall be paid by the Mortgages
Trustee to the Seller on each Distribution Date but only from and
to the extent (if any) of any Relevant Distribution (as defined
under paragraph (b) of Clause 4.2 (Consideration provided by
Funding) of the Mortgages Trust Deed) available for payment on
such date and in an amount equal to the Deferred Contribution for
the Funding Share of the Trust Property paid by Funding to the
Mortgages Trustee on such date or in respect of which the payment
of such Deferred Contribution is otherwise satisfied on such date
in accordance with the Mortgages Trust Deed; and
(c) a final amount of Deferred Purchase Price in respect of the
Mortgage Portfolio shall be paid by the Mortgages Trustee to the
Seller following the receipt by the Mortgages Trustee from Funding
of any Final Deferred Contribution, which payment shall be in an
amount equal to such Final Deferred Contribution for the Funding
Share of the Trust Property paid by Funding to the Mortgages
Trustee or in respect of which the payment of such Final Deferred
Contribution is otherwise satisfied in accordance with the
Mortgages Trust Deed.
3.3 Effect of Payment of Initial Purchase Price: The parties hereto
acknowledge that the effect of the payment to the Seller by the
Mortgages Trustee of the Initial Purchase Price on the Initial Closing
Date will be the assignment to the Mortgages Trustee of the beneficial
ownership of, and all of the Seller's beneficial right, title, interest
and benefit in and to, the
6
Initial Mortgage Portfolio subject to the terms and provisions of the
Mortgages Trust Deed, which assignment will be perfected upon the
occurrence of any of the events set forth in Clause 6 (Perfection of the
Assignment) and the transfer to the Mortgages Trustee of legal title to
the Initial Mortgage Portfolio in accordance with Clause 6 (Perfection
of the Assignment).
3.4 Documents: The Seller undertakes that from the Initial Closing Date
until the perfection of the assignment in accordance with Clause 6.1
(Perfection Events) and delivery of the Title Deeds in accordance with
Clause 6.2 (Perfection), the Seller shall hold the deeds and documents
constituting the Title Deeds and Mortgage Loan Files and all other
certificates, notices, policies, endorsements and other matters
necessary to establish title thereto relating to the Mortgage Portfolio
that are in its possession or under its control or held to its order to
the order of the Mortgages Trustee or the Security Trustee or as the
Mortgages Trustee or the Security Trustee shall direct.
3.5 Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
the Seller as part of the Deferred Purchase Price any and all Early
Repayment Charge Receipts received by the Mortgages Trustee in respect
of the Mortgage Loans included in the Initial Mortgage Portfolio
PROVIDED THAT, if any Mortgage Loans in respect of which Early Repayment
Charges are payable are the subject of a trust pursuant to Clause 5.1
(Trust in favour of Mortgages Trustee), the Seller, the Mortgages
Trustee, Funding and the Security Trustee agree that the benefit of any
Early Repayment Charges payable under such Mortgage Loan shall, on the
date of payment to the Seller of the related Early Repayment Charge
Receipts, be released from such trust.
3.6 Insurance: The Seller shall as soon as reasonably practical after the
sale and assignment of the Initial Mortgage Portfolio on the Initial
Closing Date procure that the respective interests of the Mortgages
Trustee, Funding and the Security Trustee are noted by the relevant
insurers in relation to each Insurance Contract.
4. Sale and Purchase of New Mortgage Portfolios
4.1 Agreement to Assign: Subject to fulfilment of the conditions set out in
Clauses 2.2 (Conditions), 3.1 (Initial Closing and Conditions
Precedent), 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans) and 4.3 (No Further Assignment), in consideration of either:
(a) the Purchase Price, if any is payable (which if it is payable
shall be paid in accordance with Clause 4.5 (Purchase Price)), for
the New Mortgage Portfolio and the covenant by the Mortgages
Trustee to hold the Trust Property upon trust for the Seller and
Funding as beneficiaries of the Mortgages Trust, upon, and with
and subject to the trusts, powers and provisions of the Mortgages
Trust Deed; or
(b) the covenant by the Mortgages Trustee to hold the Trust Property
upon trust for the Seller and Funding as beneficiaries of the
Mortgages Trust upon, and with and subject to the trusts, powers
and provisions of the Mortgages Trust Deed,
7
and (in either case) the Mortgages Trustee's agreement in Clause 4.8
(Early Repayment Charges) to pay to the Seller any and all Early
Repayment Charge Receipts, if the Seller shall at any time and from time
to time serve a properly completed New Mortgage Portfolio Notice as set
out in Schedule 6 (New Mortgage Portfolio Notice) on the Mortgages
Trustee and Funding with a copy (upon request) to the Security Trustee
(such service to be in the Seller's sole discretion), then on the
Assignment Date specified in the New Mortgage Portfolio Notice the
Seller agrees that it shall sell and assign to the Mortgages Trustee the
relevant New Mortgage Portfolio with full title guarantee (or, in
relation to assets and rights situated in or governed by the law of
Scotland, with absolute warrandice), PROVIDED THAT (a) the Seller hereby
covenants and undertakes that it will not sell and assign New Mortgage
Loans to the Mortgages Trustee during any Trust Calculation Period prior
to the Distribution Date in such Trust Calculation Period, and (b) the
Seller hereby agrees that it is only permitted to make one sale and
assignment of New Mortgage Loans to the Mortgages Trustee during any
Trust Calculation Period.
4.2 Conditions to Effecting an Assignment of New Mortgage Loans: The
conditions to be met as at each Assignment Date in order to effect a
sale and assignment of New Mortgage Loans are:
(a) the aggregate Arrears of Interest in respect of all of the
Mortgage Loans in the Mortgages Trust, as a percentage of the
aggregate gross interest due during the previous 12 months on all
Mortgage Loans outstanding during all or part of such period, does
not exceed 2 per cent., or such other percentage as agreed to by
the Rating Agencies on such Assignment Date. "Arrears of Interest"
for this purpose in respect of a Mortgage Loan on any date means
the aggregate amount overdue on the Mortgage Loan on that date,
but only where such aggregate amount overdue equals or exceeds an
amount equal to the Monthly Payment then due on the Mortgage Loan
and such amount has been overdue for an entire calendar month;
(b) the long term, unsecured, unguaranteed and unsubordinated debt
obligations of the Seller are rated no lower than A3 by ▇▇▇▇▇'▇
and A- by Fitch at the time of, and immediately following, the
assignment of the New Mortgage Loans to the Mortgages Trustee;
(c) on the relevant Assignment Date, the aggregate Current Balance of
the Mortgage Loans in the Mortgages Trust, in respect of which the
aggregate amount is then in arrears for at least 3 months, is less
than 4 per cent. of the aggregate Current Balance of all Mortgage
Loans in the Mortgages Trust on such Assignment Date, unless the
Rating Agencies have confirmed that the then current ratings of
the Notes will not be adversely affected;
(d) the Lending Criteria applicable at the time of origination of each
relevant New Mortgage Loan have been applied to the New Mortgage
Loan and to the circumstances of the Borrower at the time the New
Mortgage Loan was made, provided that material variations from
such Lending Criteria may occur so long as the Rating Agencies
have been notified of any such material variations;
8
(e) no New Mortgage Loan has on the relevant Assignment Date an
aggregate amount in arrears which is greater than the amount of
the Monthly Payment then due;
(f) the Rating Agencies have not provided written confirmation to the
Mortgages Trustee, the Security Trustee and the Issuer that the
assignment to the Mortgages Trustee of the New Mortgage Loans on
the Assignment Date will adversely affect the then current ratings
of the existing Notes of any Issuer (provided that, in respect of
the assignment by the Seller to the Mortgages Trustee of a New
Mortgage Portfolio in connection with the issuance by a New Issuer
of New Notes and the drawing by Funding of a New Intercompany
Loan, the condition to be met at the relevant Assignment Date of
such New Mortgage Portfolio will be that the Rating Agencies have
confirmed in writing to the Mortgages Trustee, the Security
Trustee and the Issuer that the assignment to the Mortgages
Trustee of the New Mortgage Portfolio on such Assignment Date will
not adversely affect the then current ratings of the existing
Notes of any Issuer);
(g) the aggregate Current Balance of New Mortgage Loans transferred in
any one Interest Period does not exceed 10 per cent. of the
aggregate Current Balance of Mortgage Loans in the Mortgages Trust
as at the beginning of that Interest Period;
(h) each Issuer Reserve Fund is fully funded on the relevant
Assignment Date up to the relevant required amount or, if any
Issuer Reserve Fund is not so fully funded, no payments have been
made from such Issuer Reserve Fund;
(i) no Intercompany Loan Enforcement Notice has been served in respect
of any Intercompany Loan;
(j) the assignment of the New Mortgage Portfolio on the relevant
Assignment Date does not result in the product of WAFF and WALS
for the Mortgage Portfolio after such purchase, calculated on the
relevant Assignment Date in the same way as for the Initial
Mortgage Portfolio (or as agreed by the Administrator and the
Rating Agencies from time to time), exceeding the product of WAFF
and WALS for the Mortgage Portfolio calculated on the most recent
preceding Closing Date plus 0.35 per cent.;
(k) to the extent necessary, each Issuer has entered into appropriate
hedging arrangements in respect of such New Mortgage Loans before
such Mortgage Loans are assigned to the Mortgage Trust;
(l) no event of default under the Transaction Documents has occurred
which is continuing as at the relevant Assignment Date;
(m) the weighted average yield on the Mortgage Portfolio together with
the New Mortgage Portfolio to be assigned to the Mortgages Trustee
on the relevant Assignment Date is not less than LIBOR for
three-month sterling deposits plus [0.50] per cent., taking into
account the weighted average yield on the Mortgage Loans and the
margins on any Basis Rate Swaps as at the relevant Assignment
Date;
9
(n) the assignment of the New Mortgage Portfolio on the relevant
Assignment Date does not result in the weighted average loan to
value ratio of Mortgage Loans in the Mortgage Portfolio on the
relevant Assignment Date (after the purchase of the New Mortgage
Portfolio) after application of the LTV Test on the relevant
Assignment Date exceeding the loan to value ratio (based on the
LTV Test) of Mortgage Loans in the Mortgage Portfolio on the most
recent preceding Closing Date plus 0.25 per cent.;
(o) no New Mortgage Loan has a maturity date on or after January 2039;
(p) the related Borrower under each New Mortgage Loan has made at
least one Monthly Payment;
(q) for so long as any Notes issued by any Issuer that have a Final
Repayment Date earlier than January 2041 are outstanding, the
assignment of New Mortgage Loans to the Mortgages Trustee may only
occur if, following such assignment, the aggregate number of
Repayment Mortgage Loans in the Mortgage Portfolio is greater than
or equal to 25 per cent. of the aggregate number of Mortgage Loans
in the Mortgage Portfolio;
(r) the Rating Agencies have provided written confirmation that the
then current ratings on the Notes would not be adversely affected
by the assignment to the Mortgages Trustee of a New Mortgage Loan
in respect of a mortgage loan product having characteristics
and/or features that differ materially from the characteristics
and/or features of the Mortgage Loans in the Initial Mortgage
Portfolio;
(s) the Seller shall as at the relevant Assignment Date make the
Representations and Warranties (which shall apply to Personal
Secured Loans except where specifically excluded) to the Mortgages
Trustee, Funding and the Security Trustee in relation to each New
Mortgage Loan in the New Mortgage Portfolio being sold on the
relevant Assignment Date in accordance with Clause 8 (Warranties
and Repurchase by the Seller) and such Representations and
Warranties must be true in relation to each New Mortgage Loan (but
if such Representation and Warranties are only discovered to be
untrue after the relevant Assignment Date, the Mortgages Trustee's
only remedy shall be under Clause 7 (Undertakings); and
(t) following the purchase by the Mortgages Trust of any New Mortgage
Portfolio, the aggregate Current Balance of Mortgage Loans in the
Mortgages Trust that are subject to a maximum rate of interest and
which charge interest at the lesser of the Seller's Standard
Variable Rate and the maximum rate of interest (as specified in
the relevant Mortgage Conditions) (the "Capped Rate Mortgage
Loans") will not exceed 3 per. cent of the aggregate Current
Balance of all Mortgage Loans in the Mortgages Trust (including
such Capped Rate Mortgage Loans) as of such Assignment Date,
unless ▇▇▇▇▇'▇ has confirmed in writing that the then current
ratings of the Notes will not be adversely affected,
PROVIDED THAT, if an Initial Purchase Price is payable to the Seller by
the Mortgages Trustee on the relevant Assignment Date, only the
conditions set out in paragraphs (e), (f), (i),
10
(k), (l), (m), (o), (p), (q), (r) and (s) are required to be satisfied
to effect an assignment of the New Mortgage Loans.
Notwithstanding the foregoing, the Mortgages Trustee may waive or vary
any of the conditions set forth in Clause 4.2 provided that each of the
Rating Agencies has confirmed in writing (whether or not such
confirmation is addressed to the Mortgages Trustee) that the relevant
waiver or variation will not adversely affect the then current ratings
of the existing Notes of any Issuer or that it approves the relevant
waiver or variation.
4.3 No Further Assignment: The Seller and the Mortgages Trustee agree that
the Seller may not sell and assign any New Mortgage Portfolio after the
Step-up Date in respect of the Notes of any Issuer if the option to
redeem any such Notes on the related Step-up Date pursuant to Condition
5(D) of those Notes is not exercised.
4.4 Closing and Conditions Precedent: A meeting shall take place on the date
of the sale and assignment of the relevant New Mortgage Portfolio at the
offices of the Seller or at such other office as may be agreed by the
parties at which the Seller shall deliver to the Security Trustee or its
representative the following documents:
(a) a certificate of solvency in relation to the Seller dated the
relevant Assignment Date (in the form of the agreed draft) duly
executed by the Seller;
(b) an assignment of the Insurance Contracts to the extent that such
Insurance Contracts relate to the New Mortgage Portfolio in the
form set out in Schedule 3 (Assignment of Insurance Contracts)
duly executed by the Seller;
(c) a certificate of a duly authorised officer of the Seller attaching
a copy of the board minutes referred to in paragraph (e) of Clause
3.1 (Initial Closing and Conditions Precedent) and confirming that
the resolutions referred to therein are in full force and effect
and have not been amended or rescinded as at the date of the
certificate; and
(d) a Scottish Trust Deed in respect of the Scottish Mortgage Loans in
the New Mortgage Portfolio (if any) and their Related Security, in
the form set out in Schedule 11 and with the annexure thereto duly
completed, duly executed by the Seller.
4.5 Purchase Price: Subject to fulfilment of the conditions referred to in
Clauses 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans), 4.3 (No Further Assignment) and 4.4 (Closing and Conditions
Precedent), the Mortgages Trustee shall, if and to the extent that the
same is payable, pay the Purchase Price for the New Mortgage Portfolio
to the Seller, in the manner that the Seller directs, for value, as
follows:
(a) (if any Initial Purchase Price is payable in respect of the New
Mortgage Portfolio which shall only be the case if an Initial
Contribution is paid by Funding to the Mortgages Trustee on such
date pursuant to the terms of the Mortgages Trust Deed) the
Initial Purchase Price for the New Mortgage Portfolio shall be
paid by the Mortgages Trustee to the Seller on the relevant
Assignment Date (which Initial Purchase Price shall be paid by the
Mortgages Trustee from funds received by the Mortgages Trustee
from Funding on such date in respect of Funding's Initial
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Contribution for the Funding Share of the New Trust Property
pursuant to the Mortgages Trust Deed), PROVIDED THAT if on any
date the Seller is obliged to repurchase any Mortgage Loan or
Mortgage Loans pursuant to Clause 8.4 (Repurchase), 8.5 (Purchase
of Product Switches, Further Advances and purchases relating to
Personal Secured Loans) or 8.6 (Repurchase of Fixed Rate Mortgage
Loans), and on such date the Seller sells and assigns New Mortgage
Loans and their Related Security to the Mortgages Trustee, the
Seller is entitled to set-off against the repurchase price payable
by it on such repurchase as set forth under Clause 8.7 (Completion
of Repurchase) the amount of any Initial Purchase Price payable
for any such New Mortgage Loans and shall instead pay (or be paid)
such net amount; and
(b) subject to and in accordance with the Mortgages Trustee Revenue
Priority of Payments, an amount of Deferred Purchase Price in
respect of the Mortgage Portfolio shall be paid by the Mortgages
Trustee to the Seller on each Distribution Date but only from and
to the extent (if any) of any Relevant Distribution (as defined
under paragraph (b) of Clause 4.2 (Consideration provided by
Funding) of the Mortgages Trust Deed) available for payment on
such date and in an amount equal to the Deferred Contribution for
the Funding Share of the Trust Property paid by Funding to the
Mortgages Trustee on such date or in respect of which the payment
of such Deferred Contribution is otherwise satisfied on such date
in accordance with the Mortgages Trust Deed.
4.6 Effect of Payment of Initial Purchase Price or Fulfilment of Conditions:
The parties hereto acknowledge that the effect of either the payment to
the Seller by the Mortgages Trustee of the Initial Purchase Price on the
relevant Assignment Date or, if no Initial Purchase Price is payable on
such date, the confirmation from the Seller of the fulfilment of the
conditions referred to in Clauses 4.2 (Conditions to Effecting an
Assignment of New Mortgage Loans) and the delivery to the Security
Trustee of the documents referred to in Clause 4.4 (Closing and
Conditions Precedent) on such date, will be the assignment and transfer
to the Mortgages Trustee of the beneficial ownership of, and all of the
Seller's beneficial right, title, interest and benefit in and to, the
New Mortgage Portfolio subject to the terms and provisions of the
Mortgages Trust Deed. Upon payment to the Seller by the Mortgages
Trustee of the Initial Purchase Price on the relevant Assignment Date
or, if no Initial Purchase Price is payable on such date, upon receipt
of confirmation from the Seller of the fulfilment of the conditions
referred to in Clauses 4.2 (Conditions to Effecting an Assignment of New
Mortgage Loans), the fact that any of the conditions referred to in
Clause 4.2 may not have been satisfied or waived, or any of the
conditions precedent set out in Clause 4.4 (Closing and Conditions
Precedent) have not been delivered or waived, shall not prevent the sale
and assignment of the New Mortgage Portfolio to the Mortgages Trustee on
the relevant Assignment Date (or prevent any Scottish Trust Deed from
taking effect) and any unsatisfied conditions precedent shall deemed to
have been waived. The foregoing is without prejudice to all of the
rights and remedies of the Mortgages Trustee against the Seller,
including without limitation, all claims for breach of Representation
and Warranty. Each such assignment and transfer will be perfected upon
the occurrence of any of the events set forth in Clause 6 (Perfection of
the Assignment) and the transfer and assignation to the Mortgages
Trustee of legal title to such New Mortgage Portfolio in accordance with
Clause 6 (Perfection of the Assignment).
12
4.7 Documents: The Seller undertakes that from the relevant Assignment Date
until the perfection of the assignment in accordance with Clause 6.1
(Perfection Events) and the delivery of the Title Deeds in accordance
with Clause 6.2 (Perfection), the Seller shall hold the deeds and
documents constituting the Title Deeds and Mortgage Loan Files and all
other certificates, notices, policies, endorsements and other matters
necessary to establish title thereto relating to the Mortgage Portfolio
that are in its possession or under its control or held to its order to
the order of the Mortgages Trustee or as the Mortgages Trustee shall
direct.
4.8 Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
the Seller as part of the Deferred Purchase Price any and all Early
Repayment Charge Receipts received by the Mortgages Trustee in respect
of the Mortgage Loans included in the New Mortgage Portfolio PROVIDED
THAT, if any Mortgage Loans in respect of which Early Repayment Charges
are payable are the subject of a trust pursuant to Clause 5.1 (Trust in
favour of Mortgages Trustee), the Seller, the Mortgages Trustee, Funding
and the Security Trustee agree that the benefit of any Early Repayment
Charges payable under such Mortgage Loan shall, on the date of payment
to the Seller of the related Early Repayment Charge Receipts, be
released from such trust.
4.9 Insurance: The Seller shall as soon as reasonably practical after
completion of the sale and assignment of each New Mortgage Portfolio
procure that the respective interests of the Mortgages Trustee, Funding
and the Security Trustee are noted by the relevant insurers in relation
to each Insurance Contract.
4.10 Mortgage Portfolio: Prior to the earlier to occur of:
(a) a Trigger Event; and
(i) if Funding does not enter into a New Intercompany Loan
Agreement, the Payment Date in January 2008; or
(ii) if Funding does enter into New Intercompany Loan Agreements,
the latest Payment Date specified by Funding by notice in
writing to the Seller and the Mortgages Trustee as applying
in relation to this covenant,
the Seller undertakes to use all reasonable efforts to offer to sell and
assign, in accordance with the provisions of this Clause 4 (Sale and
Purchase of New Mortgage Portfolios), to the Mortgages Trustee and the
Mortgages Trustee undertakes to use all reasonable endeavours to acquire
from the Seller and to hold pursuant to the terms of the Mortgages Trust
Deed, sufficient New Mortgage Loans and their Related Security so that
the Overcollateralisation Test is not breached on three consecutive
Distribution Dates PROVIDED THAT the Seller shall not be obliged to sell
and assign to the Mortgages Trustee, and the Mortgages Trustee shall not
be obliged to acquire, New Mortgage Loans and their Related Security if
in the opinion of the Seller the sale and assignment to the Mortgages
Trustee of New Mortgage Loans and their Related Security would adversely
affect the business of the Seller.
For the purposes of this Clause 4.10, the "Overcollateralisation Test"
shall be calculated on each Distribution Date and shall be breached on
any Distribution Date where the aggregate
13
Current Balance of Mortgage Loans in the Mortgage Portfolio on such
Distribution Date is less than an amount equal to the product of 1.05
and the Principal Amount Outstanding of all Notes of all Issuers at such
Distribution Date, and for this purpose, where such Notes outstanding
are Controlled Amortisation Notes, the Principal Amount Outstanding of
such Notes will be calculated on a straight-line basis by applying the
appropriate CPR to such Notes on a monthly, rather than a quarterly
basis.
5. Trust of Monies
5.1 Trust in favour of Mortgages Trustee: Notwithstanding the assignment and
transfer effected by this Agreement (or by any Scottish Trust Deed made
pursuant hereto) if at, or at any other time after, the Initial Closing
Date or, as the case may be in respect of any New Mortgage Portfolio,
the relevant Assignment Date (but prior to any repurchase in accordance
with Clause 8.5 (Purchase of Product Switches, Further Advances and
purchases relating to Personal Secured Loans)) the Seller holds, or
there is held to its order, or it receives, or there is received to its
order any property, interest, right or benefit and/or the proceeds
thereof hereby agreed to be sold to the Mortgages Trustee, the Seller
undertakes with the Mortgages Trustee, Funding and the Security Trustee
that it will hold such property, interest, right or benefit and/or the
proceeds thereof upon trust for the Mortgages Trustee (pursuant, in the
case of any property, interest, right or benefit and/or the proceeds
thereof relating to a Scottish Mortgage Loan or its Related Security, to
the relevant Scottish Trust Deed) subject at all times to the Mortgages
Trust. In addition, if for any reason the assignment and transfer of the
Initial Mortgage Portfolio, or any New Mortgage Portfolio (or any part
thereof), or any property, interest, right or benefit therein or any of
the proceeds thereof (each a "relevant asset"), is held to be
ineffective or unenforceable against any Borrower, the Seller undertakes
with the Mortgages Trustee, Funding and the Security Trustee and hereby
declares that it will hold such relevant asset upon trust for the
Mortgages Trustee. The Mortgages Trustee agrees that it will hold its
beneficial interest in such relevant asset subject at all times to the
Mortgages Trust.
5.2 Trust in favour of Seller: If at, or any time after, the Initial Closing
Date or, as the case may be in respect of any New Mortgage Portfolio,
the relevant Assignment Date, the Mortgages Trustee holds, or there is
held to its order, or it receives, or there is received to its order,
any property, interest, right or benefit relating to:
(a) any Mortgage Loan or Mortgage Loans under a Mortgage Account and
its Related Security repurchased by the Seller pursuant to Clause
8 (Warranties and Repurchase by the Seller); or
(b) (without prejudice to Clause 10 (Consequences of Breach)) any
Early Repayment Charges payable by a Borrower in respect of any
Mortgage Loan in the Mortgages Trust;
and/or the proceeds thereof, the Mortgages Trustee undertakes with the
Seller that it will remit, assign or transfer the same to the Seller, as
the case may require, and until it does so or to the extent that the
Mortgages Trustee is unable to effect such remittance, assignment or
transfer, the Mortgages Trustee undertakes to hold such property,
interest, right or benefit
14
and/or the proceeds thereof upon trust for the Seller as the sole
beneficial owner thereof or as the Seller may direct provided that the
Mortgages Trustee shall not be in breach of its obligations under this
Clause 5 if, having received any such moneys and paid them to third
parties in error, it pays (at the direction of the Beneficiaries) to the
Seller an amount equal to the moneys so paid in error in accordance with
the Administration Agreement. In addition, if the Seller is required or
elects to repurchase any Mortgage Loan and its Related Security pursuant
to Clauses 8.4 (Repurchase), 8.5 (Purchase of Product Switches, Further
Advances and purchases relating to Personal Secured Loans) or 8.6
(Repurchase of Fixed Rate Mortgage Loans) and such Mortgage Loan or its
Related Security, or any part thereof, or any property, interest, right
or benefit therein or any of the proceeds thereof (each, a "relevant
asset"), is held by the Seller subject to a trust pursuant to Clause 5.1
(Trust in favour of Mortgages Trustee), then the Seller, the Mortgages
Trustee, Funding and the Security Trustee agree that such relevant asset
shall be released from the trust constituted pursuant to Clause 5.1
(Trust in favour of Mortgages Trustee) on the date that such relevant
asset would otherwise have been repurchased or re-transferred pursuant
to Clause 8.7 (Completion of Repurchase).
6. Perfection of the Assignment
6.1 Perfection Events: The execution of transfers and assignations of the
Mortgages to the Mortgages Trustee and the notifications to Borrowers
notifying such Borrowers of the assignment or assignation of their
Mortgage Loans and Related Security to the Mortgages Trustee shall be
completed within 20 business days of receipt of a written request in
accordance with Clause 6.2 (Perfection) upon the occurrence of any of
the following events:
(a) the valid service of an Intercompany Loan Enforcement Notice or a
Note Enforcement Notice, provided that the perfection of an
assignment of the Mortgage Portfolio shall not be required if the
sole reason for the service of any Note Enforcement Notice is a
default by a Currency Swap Provider or Interest Rate Swap Provider
of any Issuer; or
(b) unless otherwise agreed by the Rating Agencies, the termination of
the Seller's role as Administrator under the Administration
Agreement and failure of any substitute administrator to assume
the duties of the Administrator; or
(c) the Seller being required by an order of a court of competent
jurisdiction, or by a change in law occurring after the Initial
Closing Date, or by a regulatory authority of which the Seller is
a member or with whose instructions it is customary that the
Seller comply, to perfect the transfer of legal title to the
Mortgage Loans and the Related Security in favour of the Mortgages
Trustee; or
(d) the security under the Funding Deed of Charge or any material part
of such security being in jeopardy and it being necessary to
perfect the transfer of legal title to the Mortgage Loans and
their Related Security in favour of the Mortgages Trustee in order
to reduce such jeopardy materially; or
(e) the occurrence of an Insolvency Event in relation to the Seller;
or
15
(f) notice in writing from the Seller to the Mortgages Trustee and
Funding (with a copy to the Security Trustee) requesting such
transfer.
6.2 Perfection: If an event set forth in any of paragraphs (a) to (f) of
Clause 6.1 (Perfection Events) occurs and either the Mortgages Trustee
or Funding (with the consent of the Security Trustee) or the Security
Trustee so requests in writing, the Seller shall perfect the assignments
as contemplated by and in accordance with this Clause 6 (Perfection of
the Assignment) in relation to all Mortgage Loans then in the Mortgage
Portfolio and shall:
(a) deliver to the Mortgages Trustee all Title Deeds and (subject to
receipt of up to date schedules) the transfers and assignations
referred to in Clause 6.3 (Transfer Documents) duly executed by
the Seller; and
(b) give formal notice of the transfers and assignations to the
relevant Borrowers, insurers and other persons (all such notices
being in such form or forms as may be required by the Mortgages
Trustee or Funding (with the written consent of the Security
Trustee) or the Security Trustee).
6.3 Transfer Documents: If an event set forth in any of paragraphs (a) to
(f) of Clause 6.1 (Perfection Events) occurs, the transfers that the
Seller is required to deliver are:
(a) transfers in the form set out in Part 1 of Schedule 2 (Form of
Transfer (Registered Land - England and Wales)) of all the English
Mortgages then in the Mortgage Portfolio secured (or intended to
be secured) over English Properties which comprise registered land
(including any English Property which is the subject of an
application for first registration at the Land Registry);
(b) transfers in the form set out in Part 2 of Schedule 2 (Form of
Transfer (Unregistered Land - England and Wales)) of all the
English Mortgages then in the Mortgage Portfolio secured (or
intended to be secured) over English Properties which comprise
unregistered land (excluding any which is the subject of an
application for first registration);
(c) assignations in the form set out in Part 3 of Schedule 2 (Form of
Transfer (Land Register - Scotland)) of all the Scottish Mortgages
then in the Mortgage Portfolio secured (or intended to be secured
over Scottish Properties title to which is registered (or in the
course of being registered) in the Land Register of Scotland;
(d) assignations in the form set out in Part 4 of Schedule 2 (Form of
Transfer (Sasine Register - Scotland)) of all the Scottish
Mortgages then in the Mortgage Portfolio secured (or intended to
be secured) over Scottish Properties title to which is recorded
(or in the course of being recorded) in the General Register of
Sasines;
(e) transfers and assignations of the benefit of the Guarantees
relating to any relevant Mortgage Loan in the form of the
Assignment of Guarantees set out in Part 1 of Schedule 5
(Assignment of Guarantees) in relation to Guarantees governed by
English law and in the form of the Assignation of Guarantees set
out in Part 2 of
16
Schedule 5 (Assignation of Guarantees) in relation to Guarantees
governed by Scots law; and
(f) transfers and assignations of the Related Security or any other
property or security sold to the Mortgages Trustee under this
Agreement in such form as the Mortgages Trustee or the Security
Trustee may reasonably require.
The Mortgages Trustee or Funding (with the consent of the Security
Trustee) or the Security Trustee may require that the form of any
transfer or assignation referred to in this Clause 6.3 be changed at any
time to reflect changes in law or relevant registry practice or
requirements.
6.4 Prior to Perfection: Prior to perfection pursuant to Clause 6.1
(Perfection Events) and subject to Clause 7.3 (Seller Ratings) and
Clauses 3.6 (Insurance) and 4.9 (Insurance) neither the Mortgages
Trustee nor Funding nor the Security Trustee will:
(a) register or record itself at, or submit or require the submission
of any notice, form, request or application to, or pay any fee for
the registration or recording of, or the noting of any interest
at, the Land Charges Department of H.M. Land Registry or in the
Registers of Scotland or at H.M. Land Registry in relation to the
Mortgages Trustee's and/or Funding's interests in the Mortgage
Portfolio;
(b) give or require the giving of any notice to any Borrower, insurer
or any other person of the assignment or assignation of that
Borrower's Mortgage Loan and its Related Security or such other
property as may be included in the Mortgage Portfolio to the
Mortgages Trustee or the charge by Funding of Funding's beneficial
interest in that Borrower's Mortgage Loan and its Related Security
or such property to the Security Trustee pursuant to the Funding
Deed of Charge; or
(c) send or require to be sent to any solicitor who has acted on
behalf of the Seller in respect of any Mortgage with respect to
which the Seller has not received a complete set of the Title
Deeds a letter or other communication requiring such solicitor to
hold such documents to the order of the Mortgages Trustee or the
Security Trustee (as the case may be).
6.5 Further Assurance: The Seller shall, subject to the other provisions of
this Clause 6 (Perfection of the Assignment), upon request do all such
other deeds, assurances, agreements, instruments, acts and things as the
Mortgages Trustee, Funding or the Security Trustee may require in order
to give effect to the terms of this Agreement and the assignments and
assignations contemplated herein.
7. Undertakings
7.1 Administration: The Mortgages Trustee and Funding undertake that they
will at all times (or will direct the Administrator at all times to)
administer and enforce (and exercise their powers and rights and perform
their obligations under) the Mortgage Loans comprised in the Mortgage
Portfolio and their Related Security in accordance with the
Administration Procedures (for so long as these exist and thereafter in
accordance with such policies as would be applied by a reasonable,
prudent mortgage lender in the conduct of its business).
17
7.2 Reimbursement of Borrower: The Seller hereby undertakes with the
Mortgages Trustee and Funding that, in the event that any Borrower
establishes that it has at any time prior to the Initial Closing Date
or, as the case may be, the relevant Assignment Date, paid to the Seller
any amounts in excess of sums due to the Seller as at the date of
payment under the Mortgage Conditions applicable to that Mortgage Loan
(other than any Overpayment made by a Borrower under Flexible Mortgage
Loan) the Seller will reimburse the Borrower for such overpayment
together with any interest, cost or other expense associated therewith.
The Seller further agrees to hold the Mortgages Trustee and Funding
harmless against any such claims and to indemnify the Mortgages Trustee
and Funding on an after Tax basis in relation to any costs, expense,
loss or other claim which may arise in connection therewith. Any payment
made by the Seller to the Mortgages Trustee and Funding in discharge of
the foregoing indemnity shall be regarded as a rebate of part of the
Purchase Price of the relevant Mortgage Loan.
7.3 Seller Ratings: The Seller hereby undertakes with the Mortgages Trustee,
Funding and the Security Trustee that if the long term unsecured,
unsubordinated and unguaranteed debt obligations of the Seller cease to
be assigned a long term credit rating:
(a) from ▇▇▇▇▇'▇ of no lower than Baal or from Fitch of no lower than
BBB+, the Seller (unless ▇▇▇▇▇'▇ or Fitch, as applicable, confirms
that the then current ratings of the Notes will not be adversely
affected) will deliver to the Mortgages Trustee, Funding, the
Security Trustee (upon request) and the Rating Agencies details of
the names and addresses of the Borrowers with Mortgage Loans then
in the Mortgage Portfolio on computer diskette and a draft letter
of notice to such Borrowers of the sale and assignment of those
Mortgage Loans and the Related Security to the Mortgages Trustee
in the form set out in Schedule 8 (Form of Notification to
Borrowers); and
(b) from S&P of no lower than BBB-, from ▇▇▇▇▇'▇ of no lower than Baa3
or from Fitch of no lower than BBB-, the Seller (unless S&P,
▇▇▇▇▇'▇ and Fitch, as applicable, confirms that the then-current
ratings of the Notes will not be adversely affected) shall within
10 Business Days of such cessation give notice of the sale and
assignment effected by this Agreement (and, in the case of any
Scottish Mortgage Loan, the making of the relevant Scottish Trust
Deed) to each Borrower with a Mortgage Loan then in the Mortgage
Portfolio in the form set out in Schedule 8 (Form of Notification
to Borrowers) (and if the Seller fails to give such notice, then
the Mortgages Trustee shall give such notice as the Seller's
attorney under the power of attorney set out in Schedule 10 (Power
of Attorney in favour of the Mortgages Trustee, Funding and the
Security Trustee)),
(c) provided that, in respect of Clause 7.3(a), should the Seller be
required as described in such Clause to provide the details of the
names and addresses of Borrowers to the Mortgages Trustee and
Funding, each of the Mortgages Trustee and Funding (to the extent,
in respect of Funding, that such information is to be delivered to
Funding other than at its United Kingdom branch office) hereby
agrees to appoint an agent that is located in the United Kingdom
and which maintains all appropriate registrations, notifications,
licences and authorities (if any) required under the Data
18
Protection Act 1998 to receive and maintain such information on
its behalf, and under no circumstances shall either the Mortgages
Trustee or Funding accept such information at its Jersey
registered office or otherwise in Jersey (unless Jersey is
declared an "approved state" by the European Commission, in which
case such data may be delivered to the Mortgages Trustee and/or
Funding at their respective Jersey offices).
7.4 Pending Perfection: The Seller undertakes to the Mortgages Trustee,
Funding and the Security Trustee that, pending perfection under Clause 6
(Perfection of the Assignment), the Seller:
(a) shall promptly notify the Mortgages Trustee, Funding and (upon
request) the Security Trustee if it receives written notice of any
litigation or claim calling into question in any material way the
Seller's or the Mortgages Trustee's title to any Mortgage Loan
comprised in the Mortgage Portfolio or its Related Security or if
it becomes aware of any material breach of any of the
Representations and Warranties or other obligations under this
Agreement; and
(b) shall, if reasonably required so to do by the Mortgages Trustee,
participate or join in and lend its name to and take such other
steps as may reasonably be required by the Mortgages Trustee in
relation to, any legal proceedings in respect of the Mortgage
Loans and the Related Security to the extent necessary to protect,
preserve and enforce the Seller's or the Mortgages Trustee's or
Funding's or the Security Trustee's title to or interest in any
Mortgage Loan or its Related Security provided that the Seller is
reimbursed, subject to and in accordance with the relevant
priority of payments under and in accordance with the Transaction
Documents, by the Mortgages Trustee or Funding for the reasonable
legal expenses and costs of such proceedings.
7.5 Responsibility of Seller: The Seller hereby further undertakes with the
Mortgages Trustee and Funding that it is and at all times shall remain
solely responsible for any Product Switches (other than a Re-Fixed
Mortgage Loan), for funding any Cash Re-Draws made by a Borrower under a
Flexible Mortgage Loan, for funding any request for any Further Advance
made by a Borrower, for funding any request for any Further Draw under a
Personal Secured Loan and for paying to the Mortgages Trustee from time
to time an amount equal to the Unpaid Interest associated with any
Non-Cash Re-Draw made by a Borrower under a Flexible Mortgage Loan. For
the avoidance of doubt, neither the Mortgages Trustee nor Funding will
be required to advance moneys to the Seller or to a Borrower in order to
fund such a Re-Draw or Further Advance or Further Draw in any
circumstances whatsoever.
7.6 Product Switches and Further Advances:
(a) Neither the Mortgages Trustee nor Funding shall (and each shall
procure that its agents do not):
(i) issue to any Borrower any offer of a Further Advance; or
19
(ii) issue to any Borrower any offer of a Product Switch (other
than a Re-Fixed Mortgage Loan),
without first having given notice in writing to the Seller seeking
confirmation from the Seller that the Seller will repurchase the
Mortgage Loan to which such offer relates from the Mortgages
Trustee in accordance with the terms of this Agreement.
(b) If the Seller gives such confirmation to the Mortgages Trustee,
the Mortgages Trustee (or its agents, including the Administrator,
on its behalf) shall then issue to that Borrower the relevant
offer referred to in paragraph (a) above and shall (in the case of
any offer referred to in paragraph (a) above) then notify the
Seller in writing as soon as the Mortgages Trustee has accepted
the mortgage documentation completed by the Borrower in relation
to such offer.
(c) The Mortgages Trustee shall not itself make any Further Advance or
Product Switch (other than in relation to a Re-Fixed Mortgage
Loan).
7.7 Standard Variable Rate: Subject to the provisions of Clause 7.9, the
Seller covenants with and undertakes to the Mortgages Trustee, Funding
and the Security Trustee that, where the Administrator determines on any
date that there will be a Shortfall during the next succeeding Interest
Period and notifies the Seller to such effect, the Seller shall take all
steps which are necessary, including publishing any notice which is
required in accordance with the Mortgage Conditions, to set the Standard
Variable Rate and such other discretionary rates and margins applicable
to the Mortgage Loans at such levels as may be notified to the Seller by
the Mortgages Trustee, Funding or the Security Trustee (which rates
shall be the same rates as previously notified to the Mortgages Trustee,
Funding and the Security Trustee in accordance with Clause 4.3(b) of the
Administration Agreement) as being the rates required in order for no
Shortfall to arise.
7.8 Security Powers of Attorney: The Seller shall grant security powers of
attorney to the Mortgages Trustee, Funding and the Security Trustee in
the form set out in Schedule 10 (Power of Attorney in favour of the
Mortgages Trustee, Funding and the Security Trustee) allowing any of the
Mortgages Trustee, Funding and the Security Trustee and their delegates
from time to time (inter alia) to set the Standard Variable Rate, such
other discretionary rates and margins applicable to the Mortgage Loans
and (save for the Security Trustee) the rate of (and terms relating to)
the Existing Borrowers' Re-Fix Rate should the Seller fail to do so in
accordance with its obligations under this Agreement, but only to the
extent that such rates have been previously notified to the Mortgages
Trustee, Funding and the Security Trustee in accordance with Clause
4.3(b) of the Administration Agreement. Nothing in this Clause 7.8 shall
prevent the Seller (or any of its attorneys from time to time) from
setting a higher Northern Rock Standard Variable Rate or higher rates
for other discretionary rates and margins (or in the case of the
Existing Borrowers' Re-Fix Rate setting a higher rate and imposing terms
more advantageous to the Mortgages Trustee) than those to be set or
required by the Mortgages Trustee, Funding and (other than in respect to
an Existing Borrower's Re-Fix Rate) the Security Trustee.
7.9 Shortfall: Unless any of the Mortgages Trustee, Funding or the Security
Trustee needs to do
20
so to avoid a Shortfall, none of the Mortgages Trustee, Funding or the
Security Trustee shall set the Standard Variable Rate and other
discretionary rates and margins for Mortgage Loans which are in the
Mortgages Trust (disregarding any discounts or additions to it) at rates
higher than the then equivalent rates for mortgage loans which are not
in the Mortgages Trust.
7.10 Forwarding of Notice: The Security Trustee undertakes, upon receipt of
any notice as specified in Clause 8.5(c) of the Mortgages Trust Deed, to
forward such notice to the Mortgages Trustee, Funding, the Seller and
the Cash Manager in the manner set forth in Clause 20 within three (3)
London Business Days of receipt thereof. The Security Trustee shall have
no other obligation other than the foregoing following receipt of such
notice.
8. Warranties and Repurchase by the Seller
8.1 Representations and Warranties: The Seller makes the Representations and
Warranties set out in Schedule 1 (Representations and Warranties) to
each of the Mortgages Trustee, Funding and the Security Trustee:
(a) in respect of each Mortgage Loan and its Related Security in the
Initial Mortgage Portfolio as at the date hereof and on the
Initial Closing Date;
(b) in relation to each New Mortgage Loan (other than Personal Secured
Loans if specifically excluded from a Representation and Warranty)
and its Related Security in a New Mortgage Portfolio, on the date
of the service of the relevant New Mortgage Portfolio Notice and
on the relevant Assignment Date;
(c) in the form set out in Part 2 of Schedule 1 (Representations and
Warranties) in relation to the matters and at the dates set out
therein; and
(d) in the form set out in Part 3 of Schedule 1 (Representations and
Warranties) in relation to the matters and at the dates set out
therein.
8.2 Reliance: The Seller acknowledges that the Representations and
Warranties are made with a view to inducing the Mortgages Trustee,
Funding and the Security Trustee either to enter into this Agreement and
the other Transaction Documents to which each is a party or to agree to
purchase the New Mortgage Loans and their Related Security comprised in
each New Mortgage Portfolio, and that each of the Mortgages Trustee,
Funding and the Security Trustee has entered into this Agreement and the
other Transaction Documents to which it is a party in reliance upon the
Representations and Warranties notwithstanding any information possessed
or discoverable by the Mortgages Trustee, Funding and/or the Security
Trustee. The Mortgages Trustee, Funding and the Security Trustee
acknowledge that they have not entered into this Agreement in reliance
upon any representation, warranty or undertaking other than those set
out in this Agreement or upon any other enquiry, investigation or search
whatsoever.
8.3 Remedies: The Mortgages Trustee's, Funding's and the Security Trustee's
sole remedy in respect of a breach of any of the Representations and
Warranties shall be to take action under this Clause 8 (Warranties and
Repurchase by the Seller) or under Clause 8.4 (Adjustments to Trust
Property) of the Mortgages Trust Deed. Furthermore, in respect of any
actual or
21
alleged breach of Clause 8.1 (Representations and Warranties), the
Mortgages Trustee, Funding or the Security Trustee shall, as applicable:
(a) notify the Seller as soon as reasonably practicable following any
claim or intimation of claim by any person of or arising from such
actual or alleged breach and thereafter keep the Seller informed
in relation to such claim or intimation;
(b) not settle or compromise any such claim made or intimated or
otherwise do anything which may be prejudicial to the position of
the Seller in relation thereto having regard to this Agreement,
except pursuant to the written directions of the Seller or with
the Seller's prior written approval, such directions and approval
not to be unreasonably withheld; and
(c) comply with the Seller's reasonable directions as to answering,
disputing, defending, compromising, settling, or otherwise in
relation to the claim made or initiated (including without
limitation the instruction of particular legal advisers), and if
and to the extent required by the Seller, do such things as the
Seller may reasonably require to enable and authorise the Seller
or persons nominated by the Seller to answer, dispute, defend,
compromise, settle or otherwise deal with any such claim or
intimated claim, or mitigate loss or potential loss on behalf of
the Mortgages Trustee, subject in each case to the Seller
indemnifying the Mortgages Trustee, Funding and the Security
Trustee against the consequences of complying with the Seller's
directions and requirements.
8.4 Repurchase: Subject to Clause 8.14 (Repurchase Not Possible), in the
event of a material breach of any of the Representations or Warranties
in respect of any Mortgage Loan and/or its Related Security as at the
Initial Closing Date or, as the case may be, the relevant Assignment
Date, which could have a material adverse effect on the Mortgage Loan
and/or its Related Security (having regard to, among other things,
whether a loss is likely to be incurred in respect of the Mortgage Loan
to which the breach relates after taking account of the likelihood of
recoverability or otherwise of any sums under any applicable insurance
policies), and further provided that:
(a) the Mortgages Trustee, Funding or the Security Trustee has given
the Seller not less than 28 days' notice in writing;
(b) the Mortgages Trustee has obtained the consent of the Security
Trustee; and
(c) such breach, where capable of remedy, is not remedied to the
satisfaction of Funding and the Security Trustee within the 28 day
period referred to in (a) (or such longer period as Funding and
the Security Trustee may direct the Mortgages Trustee),
then at Funding's (with the consent of the Security Trustee) or the
Security Trustee's direction, the Mortgages Trustee may serve upon the
Seller a notice in the form of the Loan Repurchase Notice whereupon the
Seller will be required to repurchase (i) the relevant Mortgage Loan and
its Related Security, (ii) any other Mortgage Loan secured or intended
to be secured by that Related Security or any part of it and (iii) any
other Mortgage Loan secured on the same
22
Mortgaged Property as the relevant Mortgage Loan to which the breach
relates in accordance with Clause 8.7 (Completion of Repurchase),
provided, however, that the Security Trustee shall have no duty to
provide any such notice to the Seller or consider granting its consent
pursuant to this Clause 8.4 unless the Security Trustee has been
notified by a party to a Transaction Document of such material breach of
such Representation or Warranty which, in the opinion of such party (as
communicated to the Security Trustee), could have a material adverse
effect on the related Mortgage Loan and/or its Related Security, taking
into account the considerations provided in this Clause 8.4, and further
provided that prior to receipt of such notice the Security Trustee shall
be entitled to assume that no such material breach has occurred.
8.5 Purchase of Product Switches, Further Advances and purchases relating to
Personal Secured Loans: In the event of there being at any date in
respect of any Mortgage Loan assigned to the Mortgages Trustee hereunder
a PS/FA/PSL Event (other than a Mortgage Loan becoming a Re-Fixed
Mortgage Loan, such PS/FA/PSL Event being dealt with under Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans)), the Seller may at any time
serve notice in the form of the Loan Repurchase Notice on the Mortgages
Trustee whereupon the Mortgages Trustee will be required to sell and to
transfer to the Seller in accordance with Clause 8.7 (Completion of
Repurchase):
(a) any Mortgage Loan subject to a PS/FA/PSL Event, together with its
Related Security;
(b) any other Mortgage Loan secured or intended to be secured by the
Related Security referred to in (a) above or any part of it; and
(c) any other Mortgage Loan secured on the same Mortgaged Property
that secures the Mortgage Loan subject to a PS/FA/PSL Event,
together with its Related Security,
each such Mortgage Loan to be identified in the Loan Repurchase Notice
(any such Mortgage Loan or Mortgage Loans, a "PS/FA/PSL Mortgage Loan"),
free from the Mortgages Trust and any right or interest that the
Security Trustee may have in such PS/FA/PSL Mortgage Loan and its
Related Security under the Funding Deed of Charge. Any PS/FA/PSL
Mortgage Loan purchased by the Seller shall be released from the
Mortgages Trust and shall no longer constitute Trust Property and shall
be released from any right or interest that the Security Trustee may
have had in such Mortgage Loan and its Related Security under the
Funding Deed of Charge prior to such repurchase.
8.6 Repurchase of Fixed Rate Mortgage Loans
(a) Where a Mortgage Loan bears interest at a fixed rate for a certain
period (the "initial fixed rate period"), after the expiry of
which the Borrower is entitled to apply for a new fixed rate
(whether or not subject to certain conditions), the Mortgages
Trustee may by notice in writing to the Seller given at any time
not more than 60 days before the expiry of that initial fixed rate
period (which for the avoidance of doubt shall exclude any period
of extension to which the relevant Borrower is entitled), offer to
re-sell to the Seller that Mortgage Loan together with its Related
Security if that Mortgage Loan becomes a Re-Fixed Mortgage Loan
during the 3-month period immediately following the end of that
initial fixed rate period. The offer will be in
23
writing in the form set out in Schedule 9 (Offer under Clause 8.6
) and will be signed by or on behalf of the Mortgages Trustee.
(b) The Seller may accept the offer made in accordance with paragraph
(a) above on the date on which that Mortgage Loan becomes a
Re-Fixed Mortgage Loan during the 3-month period immediately
following the end of the initial fixed rate period relating to it,
only by payment to the Mortgages Trustee of the consideration
payable for the repurchase of the relevant Mortgage Loan and its
Related Security in accordance with Clause 8.7 (Completion of
Repurchase).
(c) The parties hereto acknowledge that the effect of the payment to
the Mortgages Trustee by the Seller of the consideration for the
repurchase of the relevant Mortgage Loan and its Related Security
in accordance with paragraph (b) above will be the assignment and
transfer to the Seller of the beneficial ownership of, and all of
the Mortgages Trustee's beneficial right, title, interest and
benefit in and to, that Mortgage Loan, and completion of the
repurchase shall be effected by the parties in accordance with
Clause 8.7 (Completion of Repurchase).
(d) The Seller hereby covenants and undertakes that if it does not
accept the offer made by the Mortgages Trustee in accordance with
paragraph (b) above, then whether or not the Mortgage Loan becomes
a Re-Fixed Mortgage Loan, it will set the Existing Borrowers'
Re-Fix Rate applicable for the 3-month period immediately after
expiry of the initial fixed rate period relating to that Mortgage
Loan at a rate not less than that (and on terms not less
advantageous to the Mortgages Trustee or Funding than those)
notified from time to time to the Seller by the Mortgages Trustee,
Funding or the Administrator as being required by the Mortgages
Trustee or Funding.
8.7 Completion of Repurchase: Completion of any repurchase or re-transfer or
purchase or transfer, as applicable, shall take place:
(a) in the case of any repurchase or re-transfer pursuant to Clause
8.4 (Repurchase) or any purchase or transfer pursuant to Clause
8.5 (Purchase of Product Switches, Further Advances and purchases
relating to Personal Secured Loans) on the first London Business
Day immediately following expiry of a period of 10 days following
the date of the service upon the Seller of the relevant Loan
Repurchase Notice or at the Seller's earlier election; or
(b) in the case of any repurchase or re-transfer pursuant to Clause
8.6 (Repurchase of Fixed Rate Mortgage Loans), immediately upon
the Mortgage Loan becoming a Re-Fixed Mortgage Loan,
whereupon, the Seller shall pay to the Mortgages Trustee an amount equal
to the Current Balance of such Mortgage Loan or Mortgage Loans and any
Related Security and all Arrears of Interest and Accrued Interest
relating thereto as at the date of completion of such repurchase. The
provisions of Clause 8.8 (Transfers), Clause 8.9 (Documentation) and
Clause 8.16 (Scottish Trust) shall apply to any such repurchase or
re-transfer.
24
8.8 Transfers: On the date of completion of any repurchase of a Mortgage
Loan and its Related Security in accordance with this Clause 8
(Warranties and Repurchase by the Seller), the Mortgages Trustee and
Funding shall at the cost of the Seller execute and deliver or cause
their respective duly authorised attorneys to execute and deliver to the
Seller:
(a) if perfection of the assignment and assignation to the Mortgages
Trustee has occurred in accordance with Clause 6 (Perfection of
the Assignment):
(i) if the relevant Mortgage is over Registered Land, a transfer
of such Mortgage to the Seller in the form of the Registered
Transfer; or
(ii) if the relevant Mortgage is over Unregistered Land, a
transfer to the Seller in the form of the Unregistered
Transfer; or
(iii) if the relevant Mortgage is a Scottish Mortgage, an
assignation to the Seller in the applicable form of Scottish
Transfer;
(b) a re-assignment or retrocession of the rights of the Mortgages
Trustee in respect of the relevant Related Security each in a form
reasonably acceptable to the Seller (which shall, in the case of
the re-assignment of the Insurance Contracts, be substantially in
the form of the Assignment of Insurance Contracts set out in
Schedule 3 (Assignment of Insurance Contracts); and
(c) a notification to the Administrator that all further sums due in
respect of such repurchased Mortgage Loan are for the Seller's
account.
8.9 Documentation: Upon any completion of the repurchase of any Mortgage
Loan and its Related Security in accordance with this Clause 8
(Warranties and Repurchase by the Seller) the Seller shall cease to be
under any further obligation to hold any Title Deeds or other documents
relating to such Mortgage Loan or Mortgage Loans and its Related
Security to the order of the Mortgages Trustee and the Security Trustee
and if the Mortgages Trustee or the Security Trustee then holds the
Title Deeds, the Mortgages Trustee or, as the case may be, the Security
Trustee shall forthwith return them to the Seller. Any such repurchase
by the Seller of a Mortgage Loan or Mortgage Loans and its or their
Related Security shall constitute a discharge and release of the Seller
from any claims which the Mortgages Trustee and/or Funding or the
Security Trustee may have against the Seller arising from the relevant
Representation or Warranty in relation to that Mortgage Loan or Mortgage
Loans and its or their Related Security only, but shall not affect any
rights arising from a breach of any other express provision of this
Agreement or any Representation or Warranty in relation to any other
Mortgage Loan and other Related Security.
8.10 Notification: Forthwith after the Seller becomes aware of any event
which may reasonably give rise to an obligation under Clause 8
(Warranties and Repurchase by the Seller) to repurchase any Mortgage
Loan it shall notify the Mortgages Trustee, Funding and the Security
Trustee in writing thereof as soon as reasonably practicable.
8.11 No Prejudice: The terms of this Clause 8 (Warranties and Repurchase
by the Seller) shall not prejudice the rights of the Mortgages
Trustee or the Beneficiaries under the Mortgages
25
Trust Deed.
8.12 Claims against Seller: If a breach of a Representation or Warranty
arises in respect of any Mortgage Loan and (in either case) no
repurchase requirement arises in respect of the Seller pursuant to this
Clause 8 (Warranties and Repurchase by the Seller), neither the
Mortgages Trustee, Funding nor the Security Trustee shall have any claim
against the Seller in respect of, or in relation to, such breach of
Representation or Warranty in relation to that Mortgage. For the
avoidance of doubt, save as provided for in this Clause 8 (Warranties
and Repurchase by the Seller), the Seller is not obliged to repurchase
any other Mortgage Loan or its Related Security.
8.13 Assignment: If the Seller makes any payment to the Mortgages Trustee GIC
Account (or as the Mortgages Trustee shall direct) in full satisfaction
of any claim made by the Mortgages Trustee, Funding or the Security
Trustee in relation to any Representation or Warranty set out in
Schedule 1 (Representations and Warranties), the Mortgages Trustee,
Funding or the Security Trustee, as the case may be, shall assign to the
Seller such rights as they have against any third party which relate to
such claim.
8.14 Repurchase Not Possible: If a Mortgage Loan has never existed, or has
ceased to exist, such that it is not outstanding on the date on which it
is due to be repurchased pursuant to this Clause 8 (Warranties and
Repurchase by the Seller), the Seller shall not be obliged to repurchase
the Mortgage Loan and the Related Security but shall instead indemnify
the Mortgages Trustee, Funding and the Security Trustee against any loss
suffered by reason of any Representation or Warranty relating to or
otherwise affecting that Mortgage Loan being untrue or incorrect by
reference to the facts subsisting at the date on which the relevant
Representation or Warranty was given, provided that the amount of such
indemnity shall not exceed the sum of (i) the Current Balance of the
Mortgage Loan that would have been payable by the Borrower in respect of
such Mortgage Loan on and after the relevant completion date for the
repurchase in relation to such Mortgage Loan had the Mortgage Loan
existed and complied with each of the Representations and Warranties set
out Schedule 1 (Representations and Warranties) as at such date in
relation to such Mortgage Loan and (ii) interest thereon from such
relevant completion date at the weighted average yield of the Mortgage
Loans.
8.15 Indemnity: The Seller shall indemnify the Mortgages Trustee against any
loss suffered as a result of any Borrower exercising a Right of Set Off
against the Mortgages Trustee provided that the amount of such indemnity
in relation to any Mortgage Loan shall not exceed the sum of the Current
Balance of that Mortgage Loan and interest payable by the Borrower under
that Mortgage Loan as at the date that the Borrower exercises the Right
of Set Off. In this clause "Right of Set Off" means any right of set off
arising from a deposit of money made by the Borrower with the Seller or
from any transaction between the Borrower and the Seller other than one
relating to the Mortgage Loan.
8.16 Scottish Trust: Upon any completion of the repurchase or purchase by the
Seller of any Scottish Mortgage Loan and its Related Security in
accordance with this Clause 8 (Warranties and Repurchase by the Seller)
such Scottish Mortgage Loan and its Related Security shall thereupon be
released from the Scottish Trust and shall cease to form part of the
Scottish
26
Trust Property.
9. Further Assurance
The parties hereto agree that they will co-operate fully to do all such
further acts and things and execute any further documents that may be
necessary or desirable to give full effect to the transactions
contemplated by this Agreement (but subject always to Clause 6
(Perfection of the Assignment)).
10. Consequences of Breach
Without prejudice to Clause 8 (Warranties and Repurchase by the Seller),
the Mortgages Trustee, Funding and the Security Trustee severally
acknowledge to and agree with the Seller, and the Security Trustee
acknowledges to and agrees with Funding and the Mortgages Trustee, that
the Seller shall have no liability or responsibility (whether, in either
case, contractual, tortious or delictual, express or implied) for any
loss or damage for or in respect of any breach of, or any act or
omission in respect of, any of its obligations hereunder other than loss
or damage directly (and not indirectly or consequentially) suffered by
the Mortgages Trustee and/or Funding or the assets comprised in the
Funding Security constituted by the Funding Deed of Charge by reason of
such breach, act or omission. For this purpose (and without limiting the
scope of the above exclusion in respect of indirect or consequential
loss or damage) any loss or damage suffered by the Mortgages Trustee
and/or Funding or such assets which would not have been suffered by it
or such assets had the breach, act or omission in question not also been
or given rise to an Event of Default or enforcement of the security
constituted by the Funding Deed of Charge shall be treated as indirect
or consequential loss or damage.
11. Subordination
The Seller agrees with the Mortgages Trustee, Funding and the Security
Trustee that on the enforcement of any Mortgage any sums owed to the
Seller by a Borrower secured under such Mortgage and the rights and
remedies of the Seller in respect of the sums owed to the Seller shall
at all times be subject and subordinated to any sums owed to the
Mortgages Trustee by the Borrower and to the rights and remedies of the
Mortgages Trustee in respect of such sums owed to the Mortgages Trustee
by the Borrower.
12. Non-Merger
Any term of this Agreement to which effect is not given on the Initial
Closing Date or on any Assignment Date (including in particular, but
without limitation, the liability of the Seller under the
Representations and Warranties and the provisions of Clause 4 (Sale and
Purchase of New Mortgage Portfolios)) shall not merge and shall remain
in full force and effect notwithstanding the sale and purchase
contemplated by this Agreement.
13. No Agency or Partnership
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any relationship of
agency, save as expressly provided herein, or
27
partnership between the parties and that in fulfilling its obligations
hereunder, each party shall be acting entirely for its own account.
14. Payments
All payments to be made pursuant to this Agreement shall be made in
sterling in immediately available funds without exercising or seeking to
exercise any right of set-off as may otherwise exist and shall be deemed
to be made when they are received by the payee and shall be accounted
for accordingly unless failure to receive any payment is due to an error
by the payee's bank.
15. Assignment
15.1 Assignment: Subject always to the provisions of Clause 16 (Security
Trustee), no party hereto shall be entitled to assign all or any part of
its rights or obligations hereunder to any other party without the prior
written consent of each of the other parties hereto (which shall not, if
requested, be unreasonably withheld) save that Funding shall be entitled
to assign by way of security all or any of its rights under this
Agreement without such consent to the Security Trustee pursuant to the
Funding Deed of Charge and the Security Trustee may at its sole
discretion assign all or any of its rights under or in respect of this
Agreement without such consent to any successor Security Trustee under
the Funding Deed of Charge and may assign all of any part of the Funding
Security upon an enforcement of the Funding Security in accordance with
the Funding Deed of Charge.
15.2 Acknowledgement of Security Assignment: The Seller acknowledges that on
the assignment pursuant to the Funding Deed of Charge by Funding to the
Security Trustee of Funding's rights under this Agreement the Security
Trustee may enforce such rights in the Security Trustee's own name
without joining Funding in any such action (which right the Seller
hereby waives) and the Seller hereby waives as against the Security
Trustee any rights or equities in its favour arising from any course of
dealing between the Seller and Funding.
16. Security Trustee
16.1 Vesting of Rights: If there is any change in the identity of the
security trustee in accordance with the Funding Deed of Charge, the
Seller, the Mortgages Trustee and Funding shall execute such documents
and take such action as the successor security trustee and the outgoing
security trustee may require for the purpose of vesting in the successor
security trustee the rights and obligations of the outgoing security
trustee hereunder and releasing the outgoing security trustee from its
future obligations under this Agreement and the Seller shall give notice
thereof to the Rating Agencies.
16.2 No Assumption: It is hereby acknowledged and agreed that by its
execution of this Agreement the Security Trustee shall not assume or
have any of the obligations or liabilities of the Seller or Funding or
the Mortgages Trustee hereunder. Furthermore, any liberty or power which
may be exercised or any determination which may be made hereunder by the
Security Trustee may be exercised or made in the Security Trustee's
absolute discretion without any obligation to give reasons therefor, but
in any event must be exercised or made in
28
accordance with the provisions of the Funding Deed of Charge. Without
prejudice to the generality of the foregoing, all references to the
Security Trustee taking action in connection with any duty of the Seller
shall also be read subject to Clause 25 and Schedule 4 of the
Administration Agreement.
17. New Intercompany Loans
If Funding enters into a New Intercompany Loan Agreement, then the
Seller, the Mortgages Trustee, Funding and the Security Trustee shall
execute such documents and take such action as may be required by the
Rating Agencies for the purpose of including the New Issuer in the
Transaction including, without limitation:
(a) effecting any necessary changes to Clause 4 (Sale and Purchase of
New Mortgage Portfolios);
(b) ensuring that any Transaction Document relevant to a New Issuer
has been executed and delivered prior to the relevant Closing
Date;
(c) executing and delivering all documents required by Clause 4.4
(Closing and Conditions Precedent) in relation to any New Mortgage
Portfolio.
18. Non Petition Covenant; Limited Recourse
18.1 Non Petition Covenant: Each of the parties hereto hereby agrees that it
shall not institute against either Funding or the Mortgages Trustee any
winding-up, administration, insolvency or similar proceedings so long as
any sum is outstanding under any Intercompany Loan Agreement of any
Issuer or for two years plus one day since the last day on which any
such sum was outstanding.
18.2 Limited Recourse: Each of the parties hereto agrees that:
(a) in relation to the Mortgages Trustee, any amount payable by the
Mortgages Trustee to any other party to this Agreement under this
Agreement not being an amount payable out of the Trust Property in
accordance with the terms of the Mortgages Trust Deed shall only
be payable to the extent that on that date the Mortgages Trustee
has sufficient funds to pay such amount out of fees paid to it
under the Mortgages Trust Deed; and
(b) in relation to Funding:
(i) only the Security Trustee may enforce the security created
in favour of the Security Trustee under the Funding Deed of
Charge in accordance with the provisions thereof;
(ii) notwithstanding any other provision of this Agreement or any
other Transaction Document, no sum due or owing to any party
to this Agreement from or by Funding under this Agreement
shall be payable by Funding except to the extent that
Funding has sufficient funds available or (following
29
enforcement of the Funding Security) the Security Trustee
has realised sufficient funds from the Funding Security to
pay such sum subject to and in accordance with the relevant
Funding Priority of Payments and provided that all
liabilities of Funding required to be paid in priority
thereto or pari passu therewith pursuant to such Funding
Priority of Payments have been paid, discharged and/or
otherwise provided for in full; and
(iii) it shall not take any steps for the purpose of recovering
any amount payable by Funding or enforcing any rights
arising out of this Agreement against Funding otherwise than
in accordance with the Funding Deed of Charge.
18.3 Corporate Obligations: To the extent permitted by law, no recourse under
any obligation, covenant, or agreement of any person contained in this
Agreement shall be had against any shareholder, officer or director of
such person as such, by the enforcement of any assessment or by any
legal proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that this Agreement is a corporate
obligation of each person expressed to be a party hereto and no personal
liability shall attach to or be incurred by the shareholders, officers,
agents or directors of such person as such, or any of them, under or by
reason of any of the obligations, covenants or agreements of such person
contained in this Agreement, or implied therefrom, and that any and all
personal liability for breaches by such person of any of such
obligations, covenants or agreements, either under any applicable law or
by statute or constitution, of every such shareholder, officer, agent or
director is hereby expressly waived by each person expressed to be a
party hereto as a condition of and consideration for the execution of
this Agreement.
19. Amendments and Waiver
19.1 Entire Agreement: This Agreement sets out the entire agreement and
understanding between the parties with respect to the subject matter of
this Agreement superseding all prior oral or written understandings
other than the other Transaction Documents.
19.2 Amendments and Waiver: No amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing and
signed by each of the parties hereto. In the case of a waiver or
consent, such waiver or consent shall be effective only in the specific
instance and as against the party or parties giving it for the specific
purpose for which it is given.
19.3 Rights cumulative: The respective rights of each of the parties to this
Agreement are cumulative and may be exercised as often as they consider
appropriate. No failure on the part of any party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any
other right. The remedies in this Agreement are cumulative and not
exclusive of any remedies provided by law.
30
20. Notices
Any notices or other communication or document to be given or delivered
pursuant to this Agreement to any of the parties hereto shall be
sufficiently served if sent by prepaid first class post, by hand or by
facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched or (where delivered by hand) on
the day of delivery if delivered before 17.00 hours on a London Business
Day or on the next London Business Day if delivered thereafter or (in
the case of first class post) when it would be received in the ordinary
course of the post and shall be sent:
(a) in the case of the Seller, to Northern Rock plc, ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number
0191 213 2203) for the attention of the Group Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance Trustees
Limited, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel
Islands, (facsimile number 01534-609-333) for the attention of the
Company Secretary;
(c) in the case of Funding, to Granite Finance Funding Limited, ▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, (facsimile number 020 8409 8911) for
the attention of the Company Secretary; and
(d) in the case of the Security Trustee, to The Bank of New York
(London Branch), at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(facsimile number 020-7964-6399) for the attention of Corporate
Trust (Global Structured Finance),
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by any
party to the others by fifteen days prior written notice in accordance
with the provisions of this Clause 20.
21. Third Party Rights
A person who is not a party to this Agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇, but this
shall not affect any right or remedy of a third party which exists or is
available apart from that Act.
22. Execution in Counterparts; Severability
22.1 Counterparts: This Agreement may be executed in any number of
counterparts (manually or by facsimile) and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute
one and the same instrument.
22.2 Severability: Where any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations under this Agreement, or of such provision or obligation in
any other jurisdiction, shall not be affected or impaired thereby.
31
23. Governing Law and Submission to Jurisdiction
23.1 Governing Law: This Agreement is governed by, and shall be construed in
accordance with, English law (PROVIDED THAT any terms of this Agreement
which are particular to the law of Scotland shall be construed in
accordance with Scots law).
23.2 Submission to Jurisdiction: Each of the parties hereto irrevocably
agrees that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Agreement and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
24. Process Agent
The Mortgages Trustee irrevocably and unconditionally appoints Mourant &
Co. Capital (SPV) Limited at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ or otherwise
at its registered office for the time being as its agent for service of
process in England in respect of any proceedings in respect of this
Agreement and undertakes that in the event of Mourant & Co. Capital
(SPV) Limited ceasing so to act it will appoint another person with a
registered office in London as its agent for service of process.
25. Appropriate Forum
Each of the parties hereto irrevocably waives any objection which it
might now or hereafter have to the courts of England being nominated as
the forum to hear and determine any Proceedings and to settle any
disputes, and agrees not to claim that any such court is not a
convenient or appropriate forum.
32
26. Transaction Documents
To the extent necessary to comply with the requirements of Section 2 Law
of Property (Miscellaneous Provisions) ▇▇▇ ▇▇▇▇, this Agreement
incorporates by reference to them the Transaction Documents.
AS WITNESS whereof the parties hereto have executed this Agreement for
delivery on the day and year first before written.
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
------------------------------
Authorised Signatory
Title: ___________________
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
------------------------------
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
------------------------------
Authorised Signatory
Name:
Title:
33
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
------------------------------
Authorised Signatory
Name:
Title:
34
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
Part 1
1. The particulars of each Mortgage Loan and its related Mortgage in the
Initial Mortgage Portfolio set out in Appendix A to this Agreement are
complete, true and accurate in all material respects.
2. Immediately prior to a Closing Date or an Assignment Date, as the case
may be, subject to completion of any registration or recording which may
be pending at H.M. Land Registry or the Registers of Scotland, the
Seller was the absolute beneficial and legal owner of the Mortgages, the
Related Security and the other property to be assigned and transferred
by the Seller to the Mortgages Trustee under this Agreement at such
Closing Date or such Assignment Date, as the case may be, and the Seller
has not assigned (whether by way of absolute assignment or by way of
security only), transferred, charged, disposed of or dealt with the
benefit of any of the Mortgage Loans or their related Mortgages, any of
the other rights relating thereto or any of the property, rights,
titles, interests or benefits to be sold or assigned pursuant to this
Agreement other than pursuant to this Agreement.
3. With the exception of Personal Secured Loans, each Mortgage Loan and its
related Mortgage and the Related Security constitutes a valid and
binding obligation of the Borrower enforceable in accordance with its
terms (save any terms which are not binding by virtue of the Unfair
Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in
Consumer Contracts Regulations 1999) and each such related Mortgage and
the Related Security secures the repayment of all advances, interest,
costs and expenses payable by the relevant Borrower to the Seller in
priority to any other charges registered against the relevant Mortgaged
Property.
4. At the time that it was made, each Mortgage Loan (other than Personal
Secured Loans) complied in all respects with applicable laws and
regulations including, without limitation, consumer protection, data
protection and contract law.
5. Subject to completion of any registration which may be pending at H.M.
Land Registry or the Registers of Scotland, each Mortgage (other than a
Mortgage in respect of a Personal Secured Loan) either constitutes, or
will constitute, following registration at H.M. Land Registry (in
England and Wales), a first ranking charge by way of legal mortgage or
following registration or recording at the Registers in Scotland, a
first ranking standard security over the relevant Mortgaged Property.
6. Each relevant Mortgaged Property is located in England, Wales or
Scotland.
7. All steps necessary to perfect the Seller's title to each Mortgage Loan
and its related Mortgage were duly taken at the appropriate time or are
in the process of being taken with all due diligence.
8. No lien or right of set-off or counterclaim (other than a Right of
Set-off referred to in Clause 8.15 (Indemnity)) has been created or
arisen between the Seller and any Borrower which
35
would entitle such Borrower to reduce the amount of any payment
otherwise due under the relevant Mortgage Loan save in relation to the
Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
in Consumer Contracts Regulations 1999 and save in relation to section
75 of the Consumer Credit ▇▇▇ ▇▇▇▇.
9. Prior to making a Mortgage Loan to a Borrower, the Seller instructed or
required to be instructed on its behalf solicitors to carry out in
relation to the relevant Mortgaged Property all investigations, searches
and other actions that would have been undertaken by the Seller acting
in accordance with standards consistent with those of a reasonable and
prudent mortgage lender, lending to Borrowers in England and Wales (in
respect of English Mortgage Loans) and Scotland (in respect of Scottish
Mortgage Loans), when advancing money in an amount equal to such advance
to an individual to be secured on a mortgaged property of the kind
permitted under the Lending Criteria and a report on title was received
by or on behalf of the Seller from such solicitors which, either
initially or after further investigation revealed no material matter
which would cause the Seller, acting reasonably, to decline the Mortgage
Loan having regard to the Lending Criteria.
10. In relation to each Mortgage the Borrower has a good and marketable
title to the relevant Mortgaged Property.
11. Prior to making a Mortgage Loan the relevant Mortgaged Property was
valued by an independent valuer from the panel of valuers from time to
time appointed by the Seller or by an employee valuer of the Seller, and
the results of such valuation would be acceptable to a reasonable and
prudent mortgage lender.
12. Prior to making a Mortgage Loan, the nature and amount of such Mortgage
Loan, the circumstances of the relevant Borrower and nature of the
relevant Mortgaged Property satisfied the Lending Criteria in force at
that time in all material respects.
13. The exercise of any discretion by the Seller in the making of any
Mortgage Loan has been consistent with the practice of a reasonable and
prudent mortgage lender.
14. Each Mortgage Loan and its related Mortgage has been made on the terms
of the Standard Mortgage Documentation (so far as applicable) which has
not been varied in any material respect, save for the making of the Base
Rate Pledge.
15. With the exception of agreements for Personal Secured Loans, no
agreement for any Mortgage Loan (other than to the extent it relates to
the funding of buildings insurance premiums) is or has ever been, wholly
or partly regulated by the Consumer Credit ▇▇▇ ▇▇▇▇ (other than by
Sections 137 to 140 of such Act) or constitutes an extortionate credit
bargain under Sections 137 to 140 of such Act or, to the extent it is so
regulated or partly regulated, all the requirements of the Consumer
Credit Act have been met in full. No Mortgage Loan is, or has ever been,
a linked transaction within Section 19 of the Consumer Credit Act.
16. Interest on each Mortgage Loan: (a) is charged on the capital balance of
each Mortgage Loan in accordance with the provisions of that Mortgage
Loan and its related Mortgage; (b) is not in any event adjusted by
reference to the principal amount due thereunder; (c) is payable
36
monthly in advance; and (d) is calculated by reference to the Standard
Variable Rate or the Bank of England Base Rate, subject to any
applicable caps, discounts and fixed rates and the Base Rate Pledge; and
(e) subject to (d) above, may be set by the Seller and its successors
and assigns to that Mortgage Loan.
17. No payment of interest (or in the case of Repayment Mortgage Loans,
principal and interest) equivalent to an amount in excess of one month's
instalment at the applicable rate in respect of a Mortgage Loan in the
Initial Mortgage Portfolio was at any time during the 12 months before
the relevant Closing Date or Assignment Date, as the case may be, in
arrears.
18. So far as the Seller is aware, no Borrower is in material breach of its
Mortgage.
19. So far as the Seller is aware, the underwriting, origination and
completion of each Mortgage Loan is not the subject of fraud by any
person (including, without limitation, the Borrower or any professional
or third party employed or engaged on behalf of the Seller).
20. As at the date of this Agreement, the first payment due has been paid by
the relevant Borrower in respect of each Mortgage Loan and each Mortgage
Loan was fully performing.
21. Where any Borrower is or was entitled to repayment of any early
repayment charge in respect of any mortgage previously held by the
Borrower with the Seller, that repayment has been or will be made by the
Seller.
22. Except where a Mortgaged Property was at completion of the relevant
Mortgage (or, where appropriate, in the case of self-build properties,
at the date of completion of the relevant mortgaged property) covered by
the Block Buildings Policy or a block buildings policy providing
equivalent cover, the Seller took all reasonable steps to ensure that at
the date of completion of the relevant Mortgage Loan each Mortgaged
Property was:
(a) insured under a buildings policy either (i) in the joint names of
the Borrower and the Seller or (ii) with the interest of the
Seller noted thereon;
(b) insured under a Block Buildings Policy; or
(c) with respect to leasehold properties, insured by the relevant
landlord with the Seller's approval,
and in all cases against risks usually covered by a comprehensive
buildings policy and to an amount not less than the full reinstatement
cost of such Mortgaged Property as determined by an independent valuer
or a valuer employed by the Seller.
23. The Block Buildings Policy referred to above covers such fire and other
commercial risks as would be required by the Seller acting in accordance
with its normal standard for an amount not less than the full
reinstatement value of the Properties covered by the Block Buildings
Policy.
24. The Insurance Contracts are in full force and effect and all premiums
thereon due on or before the date of this Agreement have been paid in
full and the Seller is not aware of any
37
circumstances giving the insurer under the Insurance Contracts the right
to avoid or terminate such policy in so far as it relates to the
Mortgaged Properties or the Mortgage Loans. Where the Lending Criteria
then in force required that a Mortgage Loan was covered by the Insurance
Contract referred to in paragraph 1 of Schedule 4 (Insurance Contracts),
that Mortgage Loan is covered by such Insurance Contract.
25. To the extent that a Guarantee was required under the Lending Criteria
in relation to a particular Mortgage Loan, that Guarantee constitutes
the valid, binding and enforceable obligations of the guarantor
thereunder (save to the extent that the Guarantee is not valid, binding
or enforceable by virtue of the Unfair Terms in Consumer Contracts
Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations
1999).
26. If a Mortgaged Property is leasehold or long leasehold, written notice
has been given to the landlord of the creation of the Mortgage.
27. In relation to each English Mortgage, any person who at the date when
the Mortgage Loan was made has been identified by the Borrower to the
Seller as residing or about to reside in the relevant Mortgaged Property
is either named as a joint Borrower or has signed a form of consent
declaring that he or she agrees that any present or future rights or
interests as he or she may have or acquire over or in respect of the
relevant Mortgaged Property shall be postponed and made subject to the
rights, interests and remedies of the Seller under the relevant Mortgage
and that he or she shall not claim any such rights or interests against
the Seller. In relation to each Scottish Mortgage, all necessary MHA
Documentation has been obtained to as to ensure that neither the
relevant Mortgage nor the relevant Mortgaged Property is subject to or
affected by any statutory right of occupancy.
28. No Borrower was under 18 years of age at the time of completion of the
relevant Mortgage Loan.
29. No Mortgage Loan has a final maturity beyond January 2039.
30. The Seller has procured that full and proper accounts, books and records
have been kept showing clearly all material transactions, payments,
receipts and proceedings relating to that Mortgage Loan and its Mortgage
and all such accounts, books and records are up to date and in the
possession of the Seller or held to its order (subject to the provisions
of the Mortgages Trust Deed).
31. The origination and collection practices employed by the Seller with
respect to the Mortgage Loans have been, in all respects, legal and
consistent with the practice of a reasonable and prudent mortgage
lender.
32. The Seller has not received written notice of any litigation or claim
calling into question in any material way its title to any Mortgage Loan
and its Mortgage or the value of any security. The Seller is not engaged
in any litigation, and no litigation is pending or threatened by the
Seller, against any person in connection with any report, valuation,
opinion, certificate, consent or other statement of fact or opinion
given in connection with any Mortgage Loan received by the Seller in
connection with the origination of any Mortgage Loan.
38
33. In respect of any Mortgaged Property which is subject to a second or
subsequent mortgage or standard security, the Seller has first priority
for the full amount of the Mortgage Loan (other than in respect of a
Personal Secured Loan) and all costs, fees and expenses relative
thereto.
34. Subject to completion of any registration or recording which may be
pending at the H.M. Land Registry or the Registers of Scotland, all
Property Deeds and Mortgage Loan Files are held by, or to the order of,
the Seller.
35. Each Borrower is a natural person, and no Borrower is at present an
employee or an officer of the Seller.
36. All Mortgage Loans were originated by or on behalf of the Seller in the
ordinary course of the Seller's residential secured lending activities.
No Mortgage Loan was acquired by the Seller subject to any discount and
no Mortgage Loan has been written down by the Seller in its accounts.
37. The Mortgage Loans and their related Mortgages contain no obligations on
the part of the Seller to make any further advances, and all costs, fees
and expenses incurred in making, closing or registering the Mortgage
Loans and the Related Security have been paid in full.
38. All formal approvals, consents and other steps necessary to permit a
legal or equitable or beneficial transfer or a transfer of servicing
away from the Seller of the Mortgage Loans and their related Mortgages
to be sold under this Agreement whenever required under the Transaction
Documents have been obtained or taken and there is no requirement in
order for the transfer to be effective to notify the Borrower before, on
or after any equitable or beneficial transfer or before any legal
transfer of the Mortgage Loans and their related Mortgages.
39. So far as the Seller is aware, none of the terms in any Mortgage Loan
and its related Mortgage are unfair terms within the meaning of the
Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
in Consumer Contracts Regulations 1999 in any material respect save
those which impose Early Repayment Charges.
40. The Seller has confirmed to all relevant Borrowers that where any
Mortgage Loan provides that where any Early Repayment Charge is payable
at any time when the interest rate payable under that Mortgage Loan is
equal to or set by reference to the Standard Variable Rate (including
without limitation where the Mortgage Loan provides for a capped or
discounted rate), the interest rate payable under that Mortgage Loan
will be no more than 1.99 per cent. above the Bank of England's base
rate.
41. In relation to a Right to Buy Mortgage Loan:
(a) in the case of each English Mortgage Loan the Seller was at the time of
origination of that Mortgage Loan an approved lending institution within
the meaning given to that expression in the Housing ▇▇▇ ▇▇▇▇;
(b) the original advance was made to the person exercising the right
to buy; and
39
(c) the original advance was made for the purposes of enabling the
recipient thereof to purchase the relevant Mortgaged Property.
For the purpose of this paragraph 41, "Right to Buy Mortgage Loan" means
(i) in relation to an English Mortgage Loan, a Mortgage Loan in respect
of which the "right to buy" provisions of the Housing ▇▇▇ ▇▇▇▇ apply
(other than any Mortgage Loan in respect of which the period during
which the statutory charge referred to in section 156 of that Act would
have existed, had the relevant circumstances applied, has expired) and
(ii) in relation to a Scottish Mortgage Loan, a Mortgage Loan in respect
of which the "right to buy" provisions of the Housing (Scotland) ▇▇▇
▇▇▇▇ apply (other than any Mortgage Loan in respect of which the period
during which the seller's standard security referred to in section 72 of
that Act remains in effect has expired).
42. The loyalty discount applicable to certain Mortgage Loans after seven
years will not apply to any such Mortgage Loans during any period when
the interest rate is fixed.
43. The Seller has paid to the relevant Borrower the full amount of the
cashback payment in relation to any Cashback Mortgage Loan, either upon
completion of the relevant Mortgage Loan or, if subsequent to
completion, prior to the assignment of such Mortgage Loan to the
Mortgages Trustee.
44. No Mortgage Loan has a Current Balance of more than (GBP)500,000.
45. Each English Mortgage Loan and its Related Security in the Mortgage
Portfolio was made not earlier than 1 July 1995 and each Scottish
Mortgage Loan and its Related Security in the Mortgage Portfolio was
made not earlier than 1 July 2001.
46. Each Mortgage Loan was originated by the Seller in pounds sterling and
is denominated in pounds sterling (or originated and denominated in euro
at any time when the euro has been adopted as the lawful currency of the
United Kingdom) and is currently repayable in pounds sterling.
47. The Seller's Lending Criteria are consistent with the criteria that
would be used by a reasonable and prudent mortgage lender.
48. The Seller is not aware of any material claim outstanding under any of
the Buildings Policies relating to a Mortgaged Property.
49. No Mortgage Loan has an LTV greater than 95 per cent. In relation to
Personal Secured Loans, the combined LTV of the maximum amount of credit
provided under a Personal Secured Loan and the other Mortgage Loans
secured on the same property is not greater than 95 per cent.
50. Each Mortgage Loan (other than a Personal Secured Loan) has been made
for one of the following purposes:
(a) the purchase of land; or
40
(b) the provisions of dwellings or business premises on any land; or
(c) the alteration, enlarging, repair or improvement of a dwelling or
business premises on any land provided that the creditor is the
creditor under (i) an agreement by which the debtor is provided
with credit for any of the purposes in (a) or (b) above or (ii) an
agreement refinancing an agreement under which the debtor is
provided with credit for any of the purposes in (a) or (b) above;
or
(d) to refinance any existing indebtedness of the debtor, whether to
the creditor or another person, under any agreement by which the
debtor was provided with credit for any of the purposes in (a),
(b) and (c) above.
41
Part 2
1. In respect of each of the Preliminary Prospectus as of its date (except
insofar as the information contained therein has been amended,
supplemented or deleted in the Prospectus) and the Prospectus as at the
date thereof:
(a) each of them contained all information with respect to the Seller,
the Initial Mortgage Portfolio and to the Notes which was material
in the context of the issue and offering of the Notes (including
all information required by English law);
(b) the statements contained in each of them relating to the Seller
and the Initial Mortgage Portfolio were in every material
particular true and accurate and not misleading;
(c) the opinions and intentions expressed in each of them with regard
to the Seller and the Initial Mortgage Portfolio were honestly
held, were reached after considering all relevant circumstances
and were based on reasonable assumptions;
(d) there were no other facts in relation to the Seller, the Initial
Mortgage Portfolio or the Notes the omission of which would, in
the context of the issue and offering of the Notes, make any
statement in either of them misleading; and
(e) all reasonable enquiries had been made by the Seller to ascertain
such facts and to verify the accuracy of all such information and
statements.
2. The Seller has not acquired or owned or possessed any rights in the
Mortgages Trustee or Funding such that it would "control" the Mortgages
Trustee or Funding within the meaning of section 416 ICTA 1988.
There is not any "connection" (within the meaning of section 87 Finance
Act 1996) between either the Mortgages Trustee or Funding, respectively,
and any Borrower.
42
Part 3
The Seller makes the following representations and warranties to each of the
Mortgages Trustee, Funding and the Security Trustee:
1. Status: It is a public limited company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which it
is incorporated, capable of being sued in its own right and not subject
to any immunity from any proceedings, and it has the power to own its
property and assets and to carry on its business as it is being
conducted.
2. Powers and authority: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of each of the
Transaction Documents to which it is or will be a party, and each such
Transaction Document has been duly executed and delivered by it.
3. Legal validity: Each Transaction Document to which it is or will be a
party constitutes or when executed in accordance with its terms will
constitute its legal, valid and binding obligation.
4. Non-conflict: The execution by it of each of the Transaction Documents
to which it is a party and the exercise by it of its rights and the
performance of its obligations under such Transaction Documents will
not:
(a) result in the existence or imposition of, nor oblige it to create,
any Security Interest in favour of any person over all or any of
its present or future revenues or assets save for any which are
created under or pursuant to the Funding Deed of Charge;
(b) conflict with any document which is binding upon it or any of its
assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial order of
any government, governmental body or court, domestic or foreign,
having jurisdiction over it.
5. No litigation: It is not a party to any material litigation, arbitration
or administrative proceedings and, to its knowledge, no material
litigation, arbitration or administrative proceedings are pending or
threatened against it.
6. Consents and Licences: All governmental consents, licences and other
approvals and authorisations required in connection with the entry into,
performance, validity and enforceability of, and the transactions
contemplated by, the Transaction Documents have been obtained or
effected (as appropriate) and are in full force and effect.
43
SCHEDULE 2
FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND
AND SCOTTISH TRANSFERS
44
Part 1
FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)
In the form of H.M. Land Registry Form TR4
45
Part 2
FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)
This Transfer of Mortgages is made on [************] between NORTHERN ROCK PLC
(registered number 3273685) whose registered office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter called the "Transferor") of
the one part and GRANITE FINANCE TRUSTEES LIMITED (registered number 79309)
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
Channel Islands (hereinafter called the "Transferee") of the other part.
WHEREAS:
(A) By the charges by way of legal mortgage ("Mortgages") brief particulars
of which are set out in the Annexure hereto the properties brief
particulars of which are similarly set out ("Properties") became
security for the repayment of the moneys therein mentioned.
(B) By a mortgage sale agreement dated 26 March 2001 made between inter
alios the Transferor and the Transferee (as amended, restated, varied,
supplemented or novated from time to time), the Transferor has agreed to
sell and the Transferee has agreed to buy all right, title, interest and
benefit (both present and future) in and under the Mortgages for the
consideration hereinafter mentioned.
NOW THIS DEED WITNESSETH as follows:
1. In consideration of the sums payable and the other consideration under
the Agreement by the Transferee (receipt of which is hereby
acknowledged) the Transferor with full title guarantee hereby transfers
unto the Transferee all right, title, interest and benefit (both present
and future) in and under the Mortgages including for the avoidance of
doubt:
(i) the right to demand, ▇▇▇ for, recover, receive and give receipts
for all principal moneys payable or to become payable under the
Mortgages or the unpaid part thereof and the interest due or to
become due thereon; and
(ii) the benefit of all securities for such principal moneys and
interest, the benefit of all consents to mortgage signed by
occupiers of the Properties, and the benefit of and the right to
▇▇▇ on all covenants with the Transferor in each Mortgage and the
right to exercise all powers of the Transferor in relation to each
Mortgage; and
(iii) all the estate and interest in the Properties vested in the
Transferor subject to redemption or cesser; and
(iv) all causes of action of the Transferor against any person in
connection with any report, valuation, opinion, certificate or
other statement of fact or opinion or consent to mortgage given in
connection with any Mortgage or affecting the Transferor's
decision to make the relevant advance.
46
IN WITNESS of which NORTHERN ROCK PLC has caused this Transfer to be executed
and delivered as a deed on the date which appears first above.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
------------------------------
Authorised Signatory
Name:
Title:
------------------------------
Authorised Signatory
Name:
Title:
[Alternative methods of executing as a deed will be acceptable if
effective]
47
Part 3
FORM OF TRANSFER (LAND REGISTER - SCOTLAND)
We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:
1 the Standard Securities granted by the respective parties whose names
are specified in Column 3 of the Schedule annexed and executed as
relative hereto in favour of us the Transferor for all sums due and to
become due, to the extent of all sums now due and which may at any time
or times hereafter become due under the said Standard Securities,
registered said Standard Securities in the Land Register under the Title
Number specified in the relative entry in Column 4 of the said Schedule
on the date specified in the relative entry in Column 5 of the said
Schedule; and
2 the whole rights and interest of us the Transferor in and under all and
any personal bonds, credit agreements or agreements for loan (however
constituted) secured by the said Standard Securities and granted by or
entered into with the said respective parties whose names are specified
in Column 3 of the said Schedule, together with all sums, present and
future, due thereunder and all other rights, interests and benefits
pertaining thereto:
With interest from and also arrears and accumulations of interest due and
unpaid as at [************]: And we grant warrandice: IN WITNESS WHEREOF these
presents typewritten on this [and the preceding] page are together with the
Schedule annexed hereto executed at [************] on the [************] day
of [************] as follows:
SUBSCRIBED for and on behalf of the said
NORTHERN ROCK PLC
by
............................. .................................
and
............................ .................................
48
Schedule referred to in the foregoing Assignation by
Northern Rock plc
in favour of GRANITE FINANCE TRUSTEES LIMITED
1 2 3 4 5
Account No. Address Borrowers Full Names Title Number Registration Date
49
Part 4
FORM OF TRANSFER (SASINE REGISTER - SCOTLAND)
We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:
1 the Standard Securities granted by the respective parties whose names
are specified in Column 3 of the Schedule annexed and executed as
relative hereto in favour of us the Transferor for all sums due and to
become due, to the extent of all sums now due and which may at any time
or times hereafter become due under the said Standard Securities,
recorded said Standard Securities in the Register for the County
specified in the relative entry in Column 4 of the said Schedule on the
date specified in the relative entry in Column 5 of the said Schedule;
and
2 the whole rights and interest of us the Transferor in and under all and
any personal bonds, credit agreements or agreements for loan (however
constituted) secured by the said Standard Securities and granted by or
entered into with the said respective parties whose names are specified
in Column 3 of the said Schedule, together with all sums, present and
future, due thereunder and all other rights, interests and benefits
pertaining thereto:
With interest from and also arrears and accumulations of interest due and
unpaid as at [************]: And we grant warrandice: IN WITNESS WHEREOF these
presents typewritten on this [and the preceding] page are together with the
Schedule annexed hereto executed at [************] on the [************] day
of [************] as follows:
SUBSCRIBED for and on behalf of the said
NORTHERN ROCK PLC
by
............................. .................................
and
............................ .................................
REGISTER on behalf of the within named GRANITE FINANCE TRUSTEES LIMITED as
trustee within mentioned in the REGISTERS of the COUNTIES of [************]
50
Schedule referred to in the foregoing Assignation by Northern Rock PLC
in favour of Granite Finance Trustees Limited
1 2 3 4 5
Account No. Address Borrowers Full Names County Recording
51
SCHEDULE 3
ASSIGNMENT OF INSURANCE CONTRACTS
THIS ASSIGNMENT is made by way of deed on [************]
BETWEEN
NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ("Northern Rock");
and
GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands
(the "Mortgages Trustee")
WHEREAS
(A) By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time "Mortgage Sale Agreement") and
made between Northern Rock, as Seller, the Mortgages Trustee, Granite
Finance Funding Limited ("Funding") and The Bank of New York, as
security trustee (the "Security Trustee"), certain mortgages and
standard securities (the "Mortgages") and the loans secured thereby were
agreed to be transferred to the Mortgages Trustee.
(B) Northern Rock has the benefit of the Insurance Contracts, as defined in
the Master Definitions Schedule dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to the Mortgages
and the mortgaged properties upon which they are secured (the "Mortgaged
Properties") as well as to certain mortgages and properties in which the
Mortgages Trustee has no interest.
(C) This Assignment is supplemental to the Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee absolutely all the estate and interest in
the Insurance Contracts including the rights to receive the proceeds of any
claim to the extent only that such estate, interest, and rights relate to the
Mortgaged Properties and/or the Mortgages, to hold the same unto the Mortgages
Trustee absolutely.
52
IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a Deed or the date which first appears above.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
------------------------------
Authorised Signatory
Name:
Title:
------------------------------
Authorised Signatory
Name:
Title:
53
SCHEDULE 4
INSURANCE CONTRACTS
Policy number Insurer Policy name/type Date of Policy
1. NR 9501 Northern Rock Mortgage Mortgage Indemnity 18.07.1996
Indemnity Company Limited
2.(a)BL-HHS AXA General Insurance Supercover Buildings 01.01.1997
Limited and Contents
(b)DR-FHH AXA General Insurance Superchoice Buildings 01.01.1997
Limited and Contents
(c)DR-SGD AXA General Insurance Supercover Gold 01.11.1999
Limited Buildings and Contents
(d)AG112/Z1413248 AXA General Insurance Contingency Insurance 18.10.1999
Limited
(e)AG112/Z1413256 AXA General Insurance Properties in 18.10.1999
Limited Possession
(f)BL-BBR AXA General Insurance Cover Me Buildings 18.12.2000
Limited and Contents
54
SCHEDULE 5
Part 1
ASSIGNMENT OF GUARANTEES
THIS ASSIGNMENT is made by way of deed on [************]
BETWEEN:
NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ("Northern Rock");
and
GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands
(the "Mortgages Trustee")
WHEREAS:
(A) By a mortgage sale agreement dated 26 March 2001 ( as amended, varied,
supplemented or novated from time to time the "Mortgage Sale Agreement")
and made between Northern Rock, the Mortgages Trustee, Granite Finance
Funding Limited and The Bank of New York, certain mortgages (the
"Mortgages") were agreed to be transferred and assigned to the Mortgages
Trustee.
(B) Northern Rock has the benefit of the Guarantees as defined in the Master
Definitions Agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to certain of
the Mortgages.
(C) This Assignment is made pursuant to the Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee all its right, title, interest and benefit
(both present and future) in the Guarantees relating to the Mortgages the
subject of a Transfer of even date herewith including for the avoidance of
doubt:
(i) the benefit of and the right to ▇▇▇ on all covenants with and
undertakings to Northern Rock in each Guarantee and the right to
exercise all powers of Northern Rock in relation to each Guarantee; and
(ii) all the estate and interest in the Guarantees vested in Northern Rock;
to hold the same unto the Mortgages Trustee absolutely.
IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a deed on the date which first appears above.
55
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed by order of the Board of Directors )
in the presence of: )
------------------------------
Authorised Signatory
Name:
Title:
------------------------------
Authorised Signatory
Name:
Title:
[Alternative methods of executing as a deed will be acceptable if effective]
56
Part 2
ASSIGNATION OF GUARANTEES
ASSIGNATION
by
NORTHERN ROCK PLC, incorporated in England (Registered Number 3273685) whose
Registered Office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ (Northern Rock);
in favour of
GRANITE FINANCE TRUSTEES LIMITED, incorporated in Jersey (Registered Number
79309) whose Registered Office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, Channel Islands (the "Mortgages Trustee")
WHEREAS:
(A) By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time, the "Mortgage Sale
Agreement") and made between Northern Rock, the Mortgages Trustee,
Granite Finance Funding Limited and The Bank of New York, certain
mortgage loans and their related security (the "Mortgages") were agreed
to be transferred and assigned to the Mortgages Trustee;
(B) Northern Rock has the benefit of the Guarantees as defined in the Master
Definitions Agreement dated 26 March 2001 (as amended, varied,
supplemented or novated from time to time) which relate to certain of
the Mortgages;
(C) This Assignation is made pursuant to the Mortgage Sale Agreement;
NOW THEREFORE the parties hereby AGREE as follows:
1 Assignation
Northern Rock hereby assigns to the Mortgage Trustee with absolute
warrandice its whole right, title, benefit and interest, present and
future, in and to the Guarantees governed by Scots law and detailed in
the Schedule hereto (the "Scottish Guarantees") relating to the
Mortgages including for the avoidance of doubt the benefit of and the
right to ▇▇▇ on all obligations and undertakings to Northern Rock in
each Scottish Guarantee and the right to exercise all powers of Northern
Rock in relation to each Scottish Guarantee.
57
2 Intimation
Northern Rock hereby undertakes to the Mortgages Trustee that it will,
within fourteen days of the execution of this deed, serve a notice of
assignation by recorded delivery post in such form as the Mortgage
Trustee shall approve upon each of the Guarantors pursuant to each
Scottish Guarantee.
3 Governing Law
This deed shall be governed by Scots law and the parties hereto submit
to the non-exclusive jurisdiction of the Scottish courts.
IN WITNESS WHEREOF these presents consisting of this and the preceding page
together with the Schedule annexed hereto are executed as follows:
SUBSCRIBED for and on behalf of the said
NORTHERN ROCK PLC
at
............................. .................................
on
............................. .................................
by
.............................
and
............................
SUBSCRIBED for and on behalf of the said
GRANITE FINANCE TRUSTEES LIMITED
at
............................. .................................
on
............................. .................................
by
.............................
and
............................
58
Schedule referred to in the foregoing Assignation of Guarantees by
Northern Rock PLC in favour of Granite Finance Trustees Limited
[Details of Guarantees]
59
SCHEDULE 6
NEW MORTGAGE PORTFOLIO NOTICE
Dated [************]
1. It is hereby agreed for the purpose of this notice the "Principal
Agreement" shall mean the Mortgage Sale Agreement dated 26 March 2001
made between (1) NORTHERN ROCK PLC (the "Seller"), (2) GRANITE FINANCE
TRUSTEES LIMITED (the "Mortgages Trustee") (3) GRANITE FINANCE FUNDING
LIMITED ("Funding") and (4) THE BANK OF NEW YORK (the "Security
Trustee"), as the same may be amended, varied, supplemented or novated
from time to time.
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. In accordance with and subject to Clause 4.1 (Agreement to Assign) of
the Principal Agreement, upon receipt by the Seller of the duplicate of
this notice signed by the Mortgages Trustee, there shall exist between
the Seller and the Mortgages Trustee an agreement (the "Agreement for
Sale") for the sale and assignment by the Seller to the Mortgages
Trustee of the New Mortgage Loans and the Related Security more
particularly described in the Schedule hereto (other than any New
Mortgage Loans and their Related Security which have been redeemed in
full prior to the next following Assignment Date). Completion of such
sale shall take place, subject to the provisions of the Principal
Agreement, on [************] (the "Assignment Date").
4. The Seller hereby confirms that the conditions required to be fulfilled
pursuant to Clause 4.2 (Conditions to Effecting an Assignment of New
Mortgage Loans) of the Principal Agreement have been fulfilled [/save
for conditions ( ) ( ) and ( )]
5. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
provisions of the Principal Agreement.
Signed for and on behalf of )
NORTHERN ROCK PLC )
by: )
------------------------
[On duplicate
We hereby acknowledge receipt of the New Mortgage Portfolio Notice dated
[************], and confirm [that the conditions set out in paragraph ( ) ( )
and ( ) of Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans) have been waived and] the sale and assignment of the New Mortgage Loans
as set out in that notice.
60
Signed for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
]
-------------------------------
61
Schedule
1 2 3 4
Account No. Property Address Name(s) Date of
Mortgage
Completion
62
SCHEDULE 7
LOAN REPURCHASE NOTICE
Dated [************]
1. We refer to the Mortgage Sale Agreement dated 26 March 2001 (as amended,
varied, supplemented or novated from time to time the "Principal
Agreement") made between (1) NORTHERN ROCK PLC (the "Seller"), (2)
GRANITE FINANCE TRUSTEES LIMITED (the "Mortgages Trustee") (3) GRANITE
FINANCE FUNDING LIMITED ("Funding") and (4) THE BANK OF NEW YORK (the
"Security Trustee").
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. We hereby send this notice pursuant to and in accordance with Clause
[8.4 (Repurchase)/8.5 (Purchase of Product Switches, Further Advances
and purchases relating to Personal Secured Loans)]* of the Principal
Agreement, upon receipt of which you as [the Seller/the Mortgages
Trustee]* will be required to [repurchase from us/re-sell to us/purchase
from us/sell to us]* the Mortgage Loan(s) and Related Security set out
in the attached schedule in accordance with the terms of Clause 8
(Repurchase) of the Principal Agreement on [insert date].
Signed for and on behalf of )
[GRANITE FINANCE TRUSTEES )
LIMITED/NORTHERN ROCK PLC] )
by: )
------------------------------
* Delete as appropriate
63
Schedule
1 2 3 4
Account No. Property Address Name(s) Date of
Mortgage
Completion
64
SCHEDULE 8
FORM OF NOTIFICATION TO BORROWERS
[To: Borrower]
Dear Sirs,
Northern Rock
Account No.[************]
We hereby notify you that on [************] 2001, Northern Rock agreed to sell
your mortgage to Granite Finance Trustees Limited.
[Additional text will be allowed with Mortgages Trustee's and Security
Trustee's consent]
Yours faithfully,
Northern Rock plc
65
SCHEDULE 9
OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE LOANS)
To: Northern Rock plc
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
From: Granite Finance Trustees Limited
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Date: [************]
Pursuant to Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans) of the
mortgage sale agreement dated 26 March 2001 made between (1) Northern Rock
plc, (2) Granite Finance Funding Limited, (3) Granite Finance Trustees Limited
and (4) The Bank of New York (as amended, varied, supplemented or novated from
time to time the "Agreement") we hereby offer to re-sell to you the Mortgage
Loan(s) together with their Related Security, details of which are set out in
the attached print out, if such Mortgage Loan(s) become Re-Fixed Mortgage
Loans within 3 months of the expiry of the relevant initial fixed rate periods
applicable to that/those Mortgage Loans. If you wish to do so, please accept
this offer by payment to us of the consideration for the repurchase of the
relevant Mortgage Loan(s) and Related Security in accordance with Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans) of the Agreement if such Mortgage
Loan(s) become Re-Fixed Mortgage Loans within 3 months of the expiry of the
relevant initial fixed rate periods applicable to that/those Mortgage Loans.
Capitalised terms used in this notice and not defined herein have the meanings
given to them in the Agreement.
Signed by or on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
as Seller )
[acting as its attorney NORTHERN ROCK PLC:] )
------------------------------
66
SCHEDULE 10
POWER OF ATTORNEY IN FAVOUR OF
THE MORTGAGES TRUSTEE, FUNDING AND THE SECURITY TRUSTEE
THIS DEED OF POWER OF ATTORNEY is made on the [o] by:
(1) NORTHERN ROCK PLC whose registered office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (registered number 3273685) in its
capacity as Seller,
in favour of each of:
(2) GRANITE FINANCE TRUSTEES LIMITED whose registered office is at ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands
(registered number 79309) in its capacity as Mortgages Trustee;
(3) GRANITE FINANCE FUNDING LIMITED, acting out of its branch office
established in England (registered overseas company number FC022999 and
branch number BR005916) at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ and
(4) THE BANK OF NEW YORK a New York Banking Corporation whose London branch
address is at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its
capacity as Security Trustee.
WHEREAS:
(A) By virtue of a mortgage sale agreement (the "Mortgage Sale Agreement")
dated 26 March 2001 and as subsequently amended, and made between (1)
the Seller, (2) the Mortgages Trustee (3) Funding and (4) the Security
Trustee, provision was made for the execution by the Seller of this
Power of Attorney.
(B) The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule [ ] Amendment and Restatement Deed made on [ ] between,
among others, the Seller, Funding and the Mortgages Trustee (as the same
have been and may be amended, varied or supplemented from time to time
with the consent of the parties hereto) are expressly and specifically
incorporated into and shall apply to this Deed.
NOW THIS DEED WITNESSETH:
1. The Seller irrevocably and by way of security for the performance of the
covenants, conditions and undertakings on the part of the Seller
contained in the Mortgage Sale Agreement and the Administration
Agreement HEREBY APPOINTS each of Funding, the Mortgages Trustee and the
Security Trustee (each an "Attorney") and any receiver and/or
administrator appointed from time to time in respect of Funding and/or
the Mortgages Trustee or their assets severally to be its true and
lawful attorney for the Seller and in the Seller's name or otherwise to
do any act, matter or thing which any Attorney considers necessary for
67
the protection or preservation of that Attorney's interest in the
Mortgage Loans, the Mortgages, the Mortgage Deeds and their Related
Security or which ought to be done under the covenants, undertakings and
provisions contained in the Mortgage Sale Agreement including (without
limitation) any or all of the following that is to say:
(a) to exercise its rights, powers and discretions under the Mortgage
Loans, the Mortgages, the Mortgage Deeds and the Related Security
including the right to fix the rate or rates of interest payable
under the Mortgage Loans in accordance with the terms thereof
(including whilst such Mortgage Loans subsist and subject to the
consent of the Mortgages Trustee being given to the setting of
such rates), setting the Standard Variable Rate of the Seller,
such other discretionary rates and margins applicable to the
Mortgage Loans and (other than in respect of the Security Trustee)
the rate of (and terms relating to) the Existing Borrowers' Re-Fix
Rate in the circumstances referred to in Clause 4 (Interest Rates)
of the Administration Agreement provided that nothing in this
Clause shall prevent the Seller (or any of its attorneys from time
to time) from setting higher rates (and in the case of the
Existing Borrowers' Re-Fix Rate, imposing terms more advantageous
to the Mortgages Trustee) than those set or to be set or required
or to be required by the Mortgages Trustee or Funding under this
power of attorney;
(b) to exercise all the powers exercisable by the Seller by reason of
its remaining for the time being the registered owner at H.M. Land
Registry or registered or recorded heritable creditor in the
Registers of Scotland of any of the Mortgage Loans, the Mortgages,
the Mortgage Deeds and the Related Security and in particular, but
without prejudice to the generality of the foregoing, to make
Further Advances to Borrowers;
(c) to demand, ▇▇▇ for and receive all moneys due or payable under the
Mortgage Loans, the Mortgages, the Mortgage Deeds and the Related
Security or any such collateral security or related rights;
(d) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) a conveyance, assignation or transfer of
the Mortgage Loans, the Mortgages, the Mortgage Deeds and the
Related Security or any of them to the Mortgages Trustee and its
successors in title or other person or persons entitled to the
benefit thereof;
(e) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) a conveyance, assignment, assignation or
transfer of the Related Security or any item comprised therein (to
the extent only that such item or items relate to the Mortgage
Loans) to the Mortgages Trustee and its successors in title or
other person or persons entitled to the benefit thereof or
entitled to be registered or recorded at H.M. Land Registry or the
Registers of Scotland as proprietor or heritable creditor thereof
(as the case may be);
(f) to discharge the Mortgages or the Related Security or any of them
and to sign, seal, deliver and execute such receipts, releases,
surrenders, instruments and deeds as may
68
be required or advisable in order to discharge the relevant
Mortgaged Property or Properties from the Mortgages or any of
them; and
(g) to do every other act or thing which the Seller is obliged to do
under the Mortgage Sale Agreement or which that Attorney may
otherwise consider to be necessary proper or expedient for fully
and effectually vesting or transferring the interests sold
thereunder in the Mortgage Loans, the Mortgages, the Mortgage
Deeds and their Related Security or any or each of them and/or the
Seller's estate right and title therein or thereto in the
Mortgages Trustee and its successors in title or other person or
persons entitled to the benefit thereof (as the case may be) in
the same manner and as fully and effectually in all respects as
the Seller could have done.
2. Each Attorney shall have the power by writing under its hand by an
officer of the Attorney from time to time to appoint a substitute who
shall have power to act on behalf of the Seller as if that substitute
shall have been originally appointed Attorney by this deed (including,
without limitation, the power of further substitution) and/or to revoke
any such appointment at any time without assigning any reason therefor.
3. The laws of England shall apply to this deed and the interpretation
thereof and to all acts of the Attorney carried out or purported to be
carried out under the terms hereof.
4. The Seller hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorneys shall lawfully do or cause
to be done in and concerning the Mortgage Loans, the Mortgages or the
Mortgage Deeds or their Related Security by virtue of this deed.
IN WITNESS whereof the Seller has executed this document as a deed the day and
year first before written.
EXECUTED under THE COMMON SEAL of )
NORTHERN ROCK PLC )
affixed in the presence of: )
------------------------------
Authorised Signatory
Name:
Title:
------------------------------
Authorised Signatory
Name:
Title:
69
SCHEDULE 11
FORM OF SCOTTISH TRUST DEED
DECLARATION OF TRUST
among
NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(registered number 3273685), having its registered office at Northern ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (in its capacity as seller of the
Mortgage Loans, the "Seller" and, in its capacity as a beneficiary of the
Mortgages Trust, the "Seller Beneficiary");
GRANITE FINANCE TRUSTEES LIMITED, incorporated under the laws of Jersey
(registered number 79309), and having its registered office at ▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇, Channel Islands (the "Mortgages
Trustee"); and
GRANITE FINANCE FUNDING LIMITED, incorporated under the laws of Jersey
(registered number 79308), but acting out of its branch office established in
England (registered overseas company number FC022999 and branch number
BR005916) at ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ("Funding" and, in its capacity as
a beneficiary of the Mortgages Trust, the "Funding Beneficiary" and, together
with the Seller Beneficiary, the "Beneficiaries" and each a "Beneficiary").
WHEREAS:
(A) Title to the Scottish Trust Property referred to below is held by and
vested in the Seller;
(B) In terms of the Mortgages Trust Deed entered into among the Seller,
Funding and the Mortgages Trustee dated 26 March 2001 (as amended,
restated, varied, supplemented or novated from time to time, the
"Mortgages Trust Deed") and the Mortgages Trust constituted in terms
thereof the Mortgages Trustee holds the Trust Property on trust for the
Beneficiaries;
(C) In terms of the Mortgage Sale Agreement entered into among the Seller,
the Mortgages Trustee, Funding and the Security Trustee dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to
time, the "Mortgage Sale Agreement") the Seller has agreed to sell and
assign the Scottish Trust Property to the Mortgages Trustee to be held
thereafter by the Mortgages Trustee under and in terms of the Mortgages
Trust; and
(D) In implementation of Clause 4.4 of the Mortgage Sale Agreement and
pending the taking of legal title to the Scottish Trust Property by the
Mortgages Trustee, the Seller has undertaken to grant this deed;
NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:
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1 Interpretation
In this deed:-
1.1 Words and expressions defined in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master
Definitions [ ] Amendment and Restatement Deed made on [ ]
between, among others, the parties hereto (as the same have been and may
be further amended , restated, varied or supplemented from time to time
with the consent of the parties thereto) shall, except where the context
otherwise requires and save where otherwise defined herein, have the
same meanings in this deed, including the recitals hereto, and this deed
shall be construed in accordance with the interpretation provisions set
out in Clause 2 thereof; and
1.2 "Scottish Trust Property" shall mean the Scottish Mortgage Loans and the
Scottish Mortgages and other Related Security relative thereto brief
particulars of which are detailed in the schedule annexed and executed
as relative hereto, together with:
a) all principal sums (including all Further Advances, Further Draws
and Re-Draws), interest and expenses, present or future, comprised
therein and secured thereby and the right to demand, recover,
receive and give receipts for the same;
b) the Seller's whole right and interest in the Mortgaged Properties
secured by the said Scottish Mortgages;
c) all rights of action of the Seller against any person in
connection with any report, valuation, opinion, certificate,
consent or other statement of fact or opinion given in connection
with any of the said Scottish Mortgage Loans and their Related
Security;
d) all powers and remedies for enforcing the said Scottish Mortgage
Loans and their Related Security and all proceeds resulting
therefrom; and
e) all other monies, rights, interests, benefits and others
pertaining thereto or deriving therefrom, including the benefit
and proceeds of any insurance policy pertaining thereto.
2 Declaration of Trust
The Seller hereby DECLARES that from and after the date hereof it holds
and, subject to Clause 9 (Termination of Trust) hereof, shall henceforth
hold the Scottish Trust Property and its whole rights, title, benefit
and interest, present and future, therein and thereto in trust
absolutely for the Mortgages Trustee and its assignees (whether
absolutely or in security) whomsoever.
3 Intimation
The Seller hereby intimates to the Mortgages Trustee the coming into
effect of the trust hereby declared and created and the Mortgages
Trustee by its execution hereof immediately subsequent to the execution
of this Deed by the Seller acknowledges such intimation.
71
4 Dealings with Trust Property and Negative Pledge
The Seller warrants and undertakes to the Mortgages Trustee that:
4.1 as at the date hereof, it holds (subject to any pending
registration or recording in the Registers of Scotland) legal
title to the Scottish Trust Property unencumbered by any fixed or
floating charge or other Security Interest;
4.2 it shall not create or agree to create any fixed or floating
charge or other Security Interest over or which may attach to or
affect the whole or any part of the Scottish Trust Property or
otherwise dispose of the same at any time when such property or
part thereof remains subject to the trust hereby created; and
4.3 it shall deal with the Scottish Trust Property (including without
limitation the calculation and setting of any interest rate
applicable thereto) in accordance with the provisions of the
Transaction Documents and the specific written instructions (if
any) of the Mortgages Trustee or its foresaids and shall take,
subject to Clause 9 (Termination of Trust) hereof, any such action
as may be necessary (including without limitation the raising or
defending of any proceedings in any court of law whether in
Scotland or elsewhere) to secure or protect the title to the
Scottish Trust Property but only in accordance with the specific
written instructions (if any) of the Mortgages Trustee or its
foresaids.
5 Change of Trustee
Except with the prior written consent of the Mortgages Trustee or its
foresaids and (for so long as each retains any right or interest in the
Scottish Trust Property) Funding and the Security Trustee, the Seller
shall not be entitled to resign office as a trustee or assume a new
trustee or trustees under this Deed.
6 Power of Beneficiary
6.1 The Mortgages Trustee, as beneficiary hereunder, shall have the
right in the circumstances stated in Clause 6 (Perfection of the
Assignment) of the Mortgage Sale Agreement to complete its title
to the Scottish Trust Property or any part thereof or to call upon
the Seller to execute and deliver to the Mortgages Trustee or its
foresaids valid assignations and transfers (including where
applicable Scottish Transfers) of the Scottish Trust Property or
any part thereof, and that notwithstanding the winding-up of the
Seller or the administration of the Seller, or the appointment of
any receiver to all or any part of the Scottish Trust Property.
6.2 Without prejudice to the generality of Clause 6.1, the Seller
undertakes to the Mortgages Trustee and binds and obliges itself
that, upon the occurrence of any one of the events specified in
Clause 6.1(a) to (f) of the Mortgage Sale Agreement, it will
within five London Business Days of such occurrence provide such
information as is necessary to enable the Mortgages Trustee to
complete Scottish Transfers (including all schedules and annexures
thereto) in relation to the whole of the Scottish Mortgages
comprised within the Scottish Trust Property.
72
6.3 For further assuring the said rights and powers specified in this
Clause 6, the Seller has granted a power of attorney in favour of
the Mortgages Trustee, Funding and the Security Trustee
substantially in the form set out in Schedule 10 to the Mortgage
Sale Agreement.
7 Mortgages Trustee Declaration of Trust
7.1 The Mortgages Trustee by its said execution of this Deed hereby
DECLARES that its whole right, title and beneficial interest in
and to the Scottish Trust Property in terms of this Deed are and
shall be held (to the extent not already so held) by the Mortgages
Trustee under and in terms of the Mortgages Trust and all monies
received or held by the Mortgages Trustee relating thereto or
deriving therefrom have been and shall be comprised in the Trust
Property as defined in the Mortgages Trust Deed and shall be
subject to and administered by the whole terms and conditions of
the Mortgages Trust Deed and the Administration Agreement.
7.2 Each of the Seller, the Seller Beneficiary, Funding and the
Funding Beneficiary hereby acknowledge, accept and agree to the
declaration constituted by and the whole other terms and
conditions of the foregoing Clause 7.1.
8 Mortgages Trust Intimation
The Mortgages Trustee hereby intimates to the Beneficiaries of the
Mortgages Trust, the declaration of trust made in terms of Clause 7
hereof and the Beneficiaries of the Mortgages Trust by their respective
executions of this Deed acknowledge such intimation.
9 Termination of Trust
If at any time during the subsistence of the trust hereby declared and
created:
9.1 full legal title to any part or parts of the Scottish Trust
Property is taken by the Mortgages Trustee or its foresaids in
accordance with the provisions of Clause 6 (Perfection of the
Assignment) of the Mortgage Sale Agreement (which in the case of
any Scottish Mortgage shall be constituted by the registration or
recording of the title thereto in the Registers of Scotland); or
9.2 any Scottish Mortgage Loan and Related Security comprised within
the Scottish Trust Property has been repurchased by the Seller
pursuant to Clauses 8.4 to 8.6 (inclusive) of the Mortgage Sale
Agreement; or
9.3 any such Scottish Mortgage Loan and Related Security has been
redeemed in full and therefore no longer forms part of the
Mortgage Portfolio; then
the trust hereby declared and created shall (but only when the relevant
events or transaction have been completed irrevocably, validly and full)
ipso facto fall and cease to be of effect in respect of such part or
parts of the Scottish Trust Property but shall continue in full force
and effect in respect of the whole remainder (if any) of the Scottish
Trust Property.
73
10 Variation
This Deed and the trust hereby declared and created shall not be varied
in any respect without the consent in writing of the Mortgages Trustee
or its foresaids and (for so long as each retains any right or interest
in the Scottish Trust Property) Funding and the Security Trustee.
11 Governing Law
11.1 This Deed shall be governed by, and construed in accordance with, Scots
law, other than Clauses 7 and 8 hereof which shall be governed by, and
construed in accordance with, English law.
11.2 The parties hereto submit to the non-exclusive jurisdiction of the
Scottish courts so far as not already subject thereto and waive any
right or plea of forum non conveniens in respect of such jurisdiction.
12 Registration
The parties consent to the registration of this deed for preservation.
IN WITNESS WHEREOF these presents consisting of this and the preceding [four]
pages together with the Schedule hereto are subscribed by the Seller, the
Mortgages Trustee and Funding as follows:
As Seller and as Seller Beneficiary:
SUBSCRIBED by
NORTHERN ROCK PLC
acting by:
Director Director
.............................. ......................
(Print Full Name) (Signature)
Director/ Director/
.............................. ......................
(Print Full Name) Secretary (Signature) Secretary
all together at
on
74
As Mortgages Trustee:
SUBSCRIBED by
GRANITE FINANCE TRUSTEES LIMITED
acting by:
Director Director
.............................. ......................
(Print Full Name) (Signature)
Director/ Director/
.............................. ......................
(Print Full Name) Secretary (Signature) Secretary
all together at
on
As Funding and as Funding Beneficiary:
SUBSCRIBED by
GRANITE FINANCE FUNDING LIMITED
acting by:
Director Director
.............................. ......................
(Print Full Name) (Signature)
Director/ Director/
.............................. ......................
(Print Full Name) Secretary (Signature) Secretary
all together at
on
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This is the Schedule to the foregoing Scottish Trust Deed between Northern
Rock PLC, Granite Finance Trustees Limited and Granite Finance Funding
Limited
Scottish Mortgage Loans and Related Security
1 2 3 4
Account No. Property Address Borrower Name(s) Date of
Mortgage
Completion
76
SCHEDULE 12
LENDING CRITERIA/1/
General
To proceed with obtaining a Mortgage Loan, each prospective Borrower completes
an application form which includes information with respect to the applicant's
income from all sources, current employment details, bank account information
(where the Borrower has a bank account), current mortgage information (if
applicable) and certain other personal information. A credit reference agency
search is made against each Borrower at their current address and, if
necessary, former addresses, in all cases which will give details of any
public information which includes county court judgements and details of any
bankruptcy.
Employment details
The Seller operates the following policy in respect of the verification of
Borrower income details. Under this policy, Borrowers are categorised as
either "employed" or "self-employed" by the Seller.
Proof of income for employed prospective Borrowers may be established by:
(a) two current consecutive monthly payslips or, if paid weekly, the last
three consecutive payslips; or
(b) Form P60, or employer's reference, with evidence of continued
employment.
Proof of income for self-employed prospective Borrowers may be established by:
(a) a letter from the Borrower's accountant in acceptable form; or
(b) acceptable confirmation of self-employment which might include any of a
tax return, accountant's letter or a trade invoice, together with a
certificate from the Borrower as to income.
For certain Mortgage Loan products, particularly those that may involve larger
maximum loan amounts or higher loan to value ("LTV") ratios, the Seller
generally will require an acceptable accountant's letter or audited accounts.
Income Capacity
The following maximum income multiples are applied in determining the amount
of the Mortgage Loan:
(a) Single applicant- 3.50 times gross income for all Mortgage Loans (other
than Together Mortgage Loans); 3.80 times gross income for Together
Mortgage Loans.
---------
/1/ These Lending Criteria apply to Mortgage Loans other than Personal
Secured Loans.
77
(b) Joint applicants - a sum equal to: (1) the higher of 2.75 times the
joint gross income of the applicants (3.00 times joint gross income for
Together Mortgage Loans), or 3.50 times the highest earning applicant's
gross income (3.80 times the highest joint gross income for Together
Mortgage Loans) plus (2) the gross income of the other applicant.
Valuation
The Seller requires that a valuation of the Mortgaged Property be obtained
either from its in-house valuation department or from an independent firm of
professional valuers selected from a panel of approved valuers. Details of
professional indemnity insurance held by panel valuers are kept by the Seller.
All valuations of Properties are reviewed by the person underwriting the
Mortgage Loan and/or the valuation team.
Property Types
The Seller applies the criteria set out below in determining the eligibility
of Properties to serve as security for Mortgage Loans. Under these criteria,
eligible property types include freehold, heritable and leasehold houses,
leasehold and heritable flats and mixed commercial and residential use
properties where there is a separate entrance for the residential part of the
Mortgaged Property. In the case of a Mortgage Loan secured by a leasehold
property, the Seller requires that the unexpired term of the lease be at least
30 years from the end of the agreed mortgage term, with a minimum remaining
term of 50 years from the beginning of the mortgage term.
Certain property types falling outside the criteria may be considered on a
case by case basis. However, certain property types will not be considered for
the purposes of providing security for a Mortgage Loan. The types of property
falling within this category comprise freehold flats (in England and Wales),
shared ownership or shared equity schemes and properties of non-standard
construction of a type considered to be defective.
Loan Amount
Generally, the maximum loan amount is (GBP)500,000, but this varies according
to the application in question. In exceptional cases, this limit may be
exceeded.
Term
Each Mortgage Loan must have an initial term of between 7 and 30 years (in the
case of a Together Mortgage Loan, a Together Connections Mortgage Loan and a
Connections Mortgage Loan) or between 7 and 35 years in the case of all other
Mortgage Loans.
Age of applicant
All Borrowers in respect of non-Together Mortgage Loans must be aged 18 or
over. All Borrowers in respect of Together Mortgage Loans must be aged 21 or
over. There are no maximum age limits.
78
Discretion to lend outside Lending Criteria
On a case-by-case basis, and within approved limits as detailed in the
Seller's lending policy, the Seller may have determined that, based upon
compensating factors, a prospective Borrower who did not strictly qualify
under its lending criteria warranted an underwriting exception. Compensating
factors may include, but are not limited to, a low LTV ratio, stable
employment and time in residence at the applicant's current residence.
Maximum Loan To Value
For Mortgage Loans up to (GBP)250,000, the maximum LTV ratio permitted is 95
per cent. of the current market value of the Mortgaged Property determined by
the valuation. For Mortgage Loans up to (GBP)400,000 the maximum LTV ratio
permitted is 90 per cent. of the current market value of the Mortgaged
Property determined by relevant valuation. For Mortgage Loans of over
(GBP)400,000 the maximum LTV ratio permitted is 85 per cent. of the current
market value of the Mortgaged Property determined by valuation.
79
SCHEDULE 13
STANDARD DOCUMENTATION
Doc No. Document Period in Use
1. (a) NRBS Mortgage Offer - General Conditions 01/07/95 to 31/12/95
(b)NRBS Mortgage Offer - General Conditions 01/01/96 to 30/11/96
(c)NRBS Mortgage Offer - General Conditions 01/12/96 to 30/09/97
2. NRBS Mortgage Deed 01/07/95 to 30/09/97
3. NRBS Mortgage Conditions Booklet 1995 01/07/95 to 30/09/97
4. (a)NR plc Mortgage Offer - General Conditions 01/10/97 to 31/12/97
(b)NR plc Mortgage Offer - General Conditions 01/12/97 to 31/12/97
(c)NR plc Mortgage Offer - General Conditions 01/01/98 to 31/05/98
(d)NR plc Mortgage Offer - General Conditions 01/06/98 to 31/12/98
(e)NR plc Mortgage Offer - General Conditions 01/01/99 to present
5. NRBS/NR plc Transitional Mortgage Deed 01/07/97 to 01/10/97
6. NR plc Mortgage Deed 01/10/97 to present
7. NR plc Mortgage Conditions 1997 01/10/97 to present
8. NR plc "Together" Mortgage Deed 01/04/99 to present
9. Discounted Mortgage Brochures
10. Discounted Mortgage Special Conditions
11. Cashback Mortgage Brochures
12. Cashback Mortgage Special Conditions
13. Fixed Rate Mortgage Brochures
14. Fixed Rate Mortgage Special Conditions
15. Together Mortgage Brochures
16. Together Mortgage Special Conditions
80
APPENDIX A
THE INITIAL MORTGAGE LOAN PORTFOLIO
Account No Property Address Name of Date of Current
Borrower(s) Mortgage Balance
Completion
81