Exhibit 4.10
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DRAFT: 25/02/03
THIS AMENDED AND RESTATED SERVICING AGREEMENT is made as a deed on [6th March],
2003
BETWEEN:
(1) HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales whose registered
office is at Trinity Road, Halifax, West Yorkshire HX1 2RG in its
capacity as the Servicer of the Loans and the Related Security;
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel
Islands whose registered office is at 47 Esplanade, St. Helier, Jersey
JE1 0BD, Channel Islands, in its capacity as the Mortgages Trustee;
(3) HALIFAX PLC (registered number 02367076), a public limited company
incorporated under the laws of England and Wales whose registered
office is at Trinity Road, Halifax, West Yorkshire HX1 2RG in its
capacity as the Seller and as one of the Beneficiaries;
(4) PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a
private limited company incorporated under the laws of England and
Wales whose registered office is at Blackwell House, Guildhall Yard,
London EC2V 5AE in its capacity as Funding 1 and one of the
Beneficiaries;
(5) STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company
organised under the laws of the Commonwealth of Massachusetts, United
States of America with its branch office at 1 Canada Square, Canary
Wharf, London E14 5AF acting as a co-trustee in its capacity as
Security Trustee; and
(6) U.S. BANK NATIONAL ASSOCIATION, a national banking association formed
under the laws of the United States of America, acting through its
office at 1 Federal Street, 3rd Floor, Boston, Massachusetts 02110,
acting as a co-trustee in its capacity as Security Trustee.
WHEREAS:
(A) The Servicer carries on the business of, inter alia, administering
mortgage loans secured on residential properties within the United
Kingdom.
(B) By the Mortgage Sale Agreement, the Seller agreed to assign the Loans
and Related Security comprised in the Initial Portfolio to the
Mortgages Trustee. The Mortgages Trustee holds the Initial Portfolio
together with any New Portfolio on trust for Funding 1 and the Seller
pursuant to the terms of the Mortgages Trust Deed.
(C) The Servicer has agreed to provide administration and management
services to the Mortgages Trustee, the Seller and Funding 1 on the
terms and subject to the conditions contained in the Servicing
Agreement dated 14th June, 2002, (as amended and restated on the Second
Issuer Closing Date and as further amended and/or restated from time to
time, the "SERVICING AGREEMENT") in relation to, inter alia, the Loans
and Related Security assigned to the Mortgages Trustee by the Seller.
(D) The parties to the Servicing Agreement have agreed to amend and restate
the terms of that Agreement as set out herein.
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IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 The Amended and Restated Master Definitions and Construction Schedule
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood on [5th March], 2003 (as the same may be amended,
varied or supplemented from time to time with the consent of the
parties hereto) is expressly and specifically incorporated into this
Agreement and, accordingly, the expressions defined in the Amended and
Restated Master Definitions and Construction Schedule (as so amended,
varied or supplemented) shall, except where the context otherwise
requires and save where otherwise defined herein, have the same
meanings in this Agreement, including the Recitals hereto and this
Agreement shall be construed in accordance with the interpretation
provisions set out in CLAUSE 2 of that Amended and Restated Master
Definitions and Construction Schedule.
1.2 Any reference in this Agreement to any discretion, power or right on
the part of the Mortgages Trustee shall be as exercised by the
Mortgages Trustee only as directed by the Beneficiaries but subject in
each case to the provisions of CLAUSE 16.2 of the Mortgages Trust Deed.
1.3 Save as expressly provided herein, any warranties or undertakings
provided under this Agreement are made to each other party of this
Agreement.
1.4 This Agreement amends and restates the Servicing Agreement made on 14th
June, 2002 between the parties hereto (the "PRINCIPAL AGREEMENT"). As
of the date of this Agreement, any future rights or obligations
(including such obligations accrued to the date of this Agreement) of a
party under the Principal Agreement shall be extinguished and shall
instead be governed by this Agreement. The parties agree that the
amended and restated Agreement shall have effect and be operational as
from 14th June, 2002.
2. APPOINTMENT OF SERVICER
2.1 Subject to CLAUSES 2.3 and 4.3(D), and until termination pursuant to
CLAUSE 21, the Mortgages Trustee, the Seller and Funding 1 (according
to their respective estates and interests) each hereby appoints the
Servicer as its lawful agent on their respective behalves to administer
the Loans, to provide certain other administration and management
services and to exercise their respective rights, powers and
discretions, and to perform their respective duties, under and in
relation to the Loans and their Related Security. The Servicer in each
case hereby accepts such appointment on the terms and subject to the
conditions of this Agreement. The Security Trustee consents to the
appointment of the Servicer on the terms of and subject to the
conditions of this Agreement.
2.2 For the avoidance of doubt and in connection with the rights, powers
and discretions conferred under CLAUSE 2.1, during the continuance of
its appointment hereunder, the Servicer shall, subject to the terms and
conditions of this Agreement, the Mortgage Conditions, the Mortgage
Sale Agreement and the Mortgages Trust Deed, have the full power,
authority and right to do or cause to be done any and all things which
it reasonably considers necessary, convenient or incidental to the
administration of the Loans and their Related Security or the exercise
of such rights, powers and discretions, provided however that neither
the Mortgages Trustee nor Funding 1 nor their respective directors
shall be required or obliged at any time to enter into any transaction
or to comply with any directions which the Servicer may give with
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respect to the operating and financial policies of the Mortgages
Trustee or Funding 1 and the Servicer hereby acknowledges that all
powers to determine such policies (including the determination of
whether or not any particular policy is for the benefit of the
Mortgages Trustee or Funding 1) are, and shall at all times remain,
vested, as the case may be, in the Mortgages Trustee and/or Funding 1
(and their respective directors) and none of the provisions of this
Agreement shall be construed in a manner inconsistent with this
proviso.
2.3 The appointment pursuant to CLAUSE 2.1 is conditional upon the issue of
the First Issuer Notes having taken place and shall take effect upon
and from the Initial Closing Date automatically without any further
action on the part of any person PROVIDED THAT if the issue of the
First Issuer Notes has not occurred by the 14th June, 2002, or such
later date as the First Issuer and the Joint Lead Managers may agree,
this Agreement shall cease to be of further effect.
3. THE ADMINISTRATION SERVICES
3.1 GENERAL
(A) The duty of the Servicer shall be to provide the services set out in
this Agreement including Schedule 1 hereto (the "SERVICES").
(B) If and when the Servicer is requested to confirm or state the capacity
in which it is administering and servicing the Loans, their Related
Security and related matters pursuant to this Agreement by any Borrower
or any third party not being a party to this Agreement and to whom the
Servicer is obliged by law to disclose such information, the Servicer
shall confirm or state that it is acting in its capacity as servicer of
the Loans, their Related Security and related matters as agent for and
on behalf of the Mortgages Trustee and the Beneficiaries and not on its
own behalf.
3.2 SUB-CONTRACTS
(A) The Servicer may sub-contract or delegate the performance of all or any
of its powers and obligations under this Agreement, provided that (but
subject to CLAUSE 3.2(B)):
(i) the prior written consent of Funding 1 and the Security
Trustee to the proposed arrangement (including, if Funding 1
and the Security Trustee consider it necessary, approving any
contract which sets out the terms on which such arrangements
are to be made) has been obtained and written notification has
been given to each of the Rating Agencies;
(ii) where the arrangements involve the custody or control of any
Customer Files and/or Title Deeds relating to the Portfolio
for the purpose of performing any delegated Services the
sub-contractor or delegate has executed an acknowledgement in
form and substance acceptable to Funding 1 and the Security
Trustee to the effect that any such Customer Files and/or
Title Deeds are and will be held to the order of the Mortgages
Trustee (as trustee for the Beneficiaries);
(iii) where the arrangements involve or may involve the receipt by
the sub-contractor or delegate of monies belonging to the
Beneficiaries which, in accordance with this Agreement, are to
be paid into the Mortgages Trustee GIC Account and/or the
Funding 1 GIC Account, the sub-contractor or delegate has
executed a declaration in form and substance acceptable to the
Beneficiaries that any such monies held by it or to its order
are held on trust for the Beneficiaries and will be paid
forthwith into, as
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applicable, the Mortgages Trustee GIC Account and/or the
Funding 1 GIC Account in accordance with the terms of the
Mortgages Trust Deed;
(iv) any such sub-contractor or delegate has executed a written
waiver of any Security Interest arising in connection with
such delegated Services (to the extent that such Security
Interest relates to the Portfolio or any amount referred to in
(iii) above); and
(v) neither the Security Trustee, the Mortgages Trustee nor
Funding 1 shall have any liability for any costs, charges or
expenses payable to or incurred by such sub-contractor or
delegate or arising from the entering into, the continuance or
the termination of any such arrangement.
(B) The provisos to CLAUSE 3.2(A)(i), (ii) and (iii) shall not apply:
(i) to the engagement by the Servicer of:
(a) any receiver, solicitor, insurance broker, valuer,
surveyor, accountant, estate agent, insolvency
practitioner, auctioneer, bailiff, debt counsellor,
tracing agent, property management agent, licensed
conveyancer or other professional adviser acting as
such; or
(b) any locksmith, builder or other contractor acting as
such in relation to a Property,
in any such case being a person or persons whom the Servicer
would be willing to appoint in respect of its own mortgages in
connection with the performance by the Servicer of any of its
obligations or functions or in connection with the exercise of
its powers under this Agreement; or
(ii) to any delegation to any wholly-owned subsidiary of the Seller
or HBOS plc from time to time. (C) The Mortgages Trustee
and/or Funding 1 and the Security Trustee may by notice in
writing require the Servicer to assign to the Mortgages
Trustee any rights which the Servicer may have against any
sub-contractor or delegate arising from the performance of
services by such person relating to any matter contemplated by
this Agreement and the Servicer acknowledges that such rights
assigned to the Mortgages Trustee will be exercised by the
Mortgages Trustee as trustee for the Beneficiaries subject to
the terms of the Mortgages Trust Deed.
(D) Notwithstanding any sub-contracting or delegation of the performance of
its obligations under this Agreement, the Servicer shall not thereby be
released or discharged from any liability hereunder and shall remain
responsible for the performance of all of the obligations of the
Servicer under this Agreement, and the performance or non-performance
or the manner of performance of any sub-contractor or delegate of any
of the Services shall not affect the Servicer's obligations under this
Agreement and any breach in the performance of the Services by such
sub-contractor or delegate shall, subject to the Servicer being
entitled for a period of twenty London Business Days from receipt of
any notice of the breach to remedy such breach by any sub-contractor or
delegate, be treated as a breach of this Agreement by the Servicer.
3.3 NOTICES ETC.
(A) Within 20 London Business Days of the Initial Closing Date, the
Servicer will give notice (or procure that notice is given) by courier
or by special delivery to HBOS Insurance (PCC)
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Guernsey Limited of the assignment to the Mortgages Trustee by the
Seller of its interests in the Halifax Mortgage Re Limited MIG Policies
pursuant to the Assignment of Halifax Mortgage Re Limited MIG Policies,
which shall be held by the Mortgages Trustee absolutely as bare trustee
for the Beneficiaries pursuant to the Mortgages Trust Deed, and the
Servicer shall take all reasonable steps to ensure the return by the
relevant recipient of the duplicate notices of assignment by way of
acknowledgement thereof.
(B) Promptly upon request by Funding 1 and the Security Trustee, the
Servicer shall procure that any notices permitted to be given by the
Mortgages Trustee under Clause 6.4 of the Mortgage Sale Agreement are
so given by the Servicer on the Mortgages Trustee's behalf.
3.4 LIABILITY OF SERVICER
(A) The Servicer shall indemnify each of the Mortgages Trustee and the
Beneficiaries on demand on an after-tax basis for any loss, liability,
claim, expense or damage suffered or incurred by any of them in respect
of the negligence or wilful default of the Servicer in carrying out its
functions as Servicer under this Agreement or the other Transaction
Documents or as a result of a breach by the Servicer of the terms and
provisions of this Agreement or the other Transaction Documents in
relation to such functions.
(B) For the avoidance of doubt, the Servicer shall not be liable in respect
of any loss, liability, claim, expense or damage suffered or incurred
by the Mortgages Trustee and/or the Beneficiaries and/or any other
person as a result of the proper performance of the Services by the
Servicer save where such loss, liability, claim, expense or damage is
suffered or incurred as a result of any negligence or wilful default of
the Servicer or as a result of a breach by the Servicer of the terms
and provisions of this Agreement or the other Transaction Documents in
relation to such functions.
(C) Any indemnification under this CLAUSE 3.4 in respect of loss suffered
by the Beneficiaries shall be paid for by reducing the Seller Share of
the Trust Property by an amount equal to the relevant loss incurred by
the Beneficiaries in accordance with CLAUSE 8.4 of the Mortgages Trust
Deed and SCHEDULE 2 to the Cash Management Agreement.
4. MORTGAGES TRUSTEE VARIABLE BASE RATE/MORTGAGES TRUSTEE TRACKER RATE
4.1 The Mortgages Trustee and each of the Beneficiaries each hereby grants
the Servicer full right, liberty and authority from time to time, in
accordance with the relevant Mortgage Terms, to determine and set the
Mortgages Trustee Variable Base Rate and any variable margin
incorporated within the Mortgages Trustee Tracker Rate above the Bank
of England repo rate applicable in relation to Tracker Rate Loans
chargeable to Borrowers from time to time. In exercising such right,
liberty and authority the Servicer undertakes to each of the other
parties to this Agreement that it shall not at any time set or maintain
the Mortgages Trustee Variable Base Rate at a rate which is higher than
the then prevailing Seller's Variable Base Rate, nor will it set or
maintain a margin incorporated within the Mortgages Trustee Tracker
Rate above the Bank of England repo rate in respect of any Tracker Rate
Loan, which is higher than the margin above the Bank of England repo
rate then applying to those Tracker Rate Loans owned by the Seller
outside the Portfolio except in the limited circumstances described in
this paragraph when the Mortgages Trustee will be entitled to do so.
The Servicer will not at any time, without the prior consent of the
Mortgages Trustee and Funding 1, set or maintain:
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(i) the Mortgages Trustee Variable Base Rate at a rate which is
higher than (although it may be lower than or equal to) the
then prevailing Seller's Variable Base Rate which applies to
loans beneficially owned by the Seller outside the Portfolio;
(ii) the margin incorporated within the Mortgages Trustee Tracker
Rate in respect of any Tracker Rate Loan in the Portfolio
which, where the offer conditions for that Tracker Rate Loan
provide that the margin above the Bank of England repo rate
shall be the same as the margin above the Bank of England repo
rate applicable to all other loans having the same offer
conditions in relation to interest rate setting as that
Tracker Rate Loan, is higher or lower than the margin above
the Bank of England repo rate then applying to those Tracker
Rate Loans beneficially owned by the Seller outside the
Portfolio; and
(iii) the margin incorporated within the Mortgages Trustee Tracker
Rate above the Bank of England repo rate in respect of any
other Tracker Rate Loan which is higher than the margin above
the Bank of England repo rate which would then be set in
accordance with the Seller's Policy from time to time in
relation to that Tracker Rate Loan,
unless the Servicer is required to do so pursuant to CLAUSE 4.3, and,
subject to that requirement, that it shall not change the Mortgages
Trustee Variable Base Rate nor the Mortgages Trustee Tracker Rate save
for the same reasons as the Seller was entitled, under the Mortgage
Conditions, to change the Seller's Variable Base Rate and the Seller's
Tracker Rate prior to the assignment to the Mortgages Trustee of the
Loans comprised in the Portfolio and their Related Security. Each of
the Mortgages Trustee and the Beneficiaries shall be bound by the
Mortgages Trustee Variable Base Rate and the Mortgages Trustee Tracker
Rate set in accordance with this Agreement.
4.2 The Servicer shall take the steps rendered necessary by the relevant
Mortgage Terms and applicable law (including, without limitation, the
Guidance Note on Interest Variation Terms issued by the Office of Fair
Trading in February 2000 and any successor guideline or applicable
additional guidelines) to bring each change in such rate or rates of
interest to the attention of the relevant Borrowers, whether due to a
change in the Mortgages Trustee Variable Base Rate or the Mortgages
Trustee Tracker Rate or as a consequence of any provisions of the
Mortgage Terms. Any change in the Mortgages Trustee Variable Base Rate
or the Mortgages Trustee Tracker Rate shall be notified in writing to
each of the Mortgages Trustee, the Security Trustee and the
Beneficiaries as soon as reasonably practicable and shall, upon receipt
of a request from any of such parties, notify such requesting party of
any changes in the Monthly Payments in relation to the Loans. All costs
arising in relation to such a notification of a change in such rate or
rates of interest shall be borne by the Servicer.
4.3 (A) On each Funding 1 Interest Payment Date the Servicer shall
determine, having regard to the aggregate of:
(i) the revenue which Funding 1 would expect to receive
during the next succeeding Interest Period; and
(ii) the other resources available to Funding 1 including
the Funding 1 Swap Agreement, the Funding 1 Liquidity
Facility and the Reserve Fund,
whether Funding 1 would receive an amount of revenue during
that Loan Interest Period which when aggregated with the funds
otherwise available to it is less than the amount which is the
aggregate of (1) the amount of interest which will be payable
in respect of the Term AAA Advances on the Funding 1 Interest
Payment Date falling at
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the end of such Loan Interest Period and (2) the other senior
expenses of Funding 1 which rank in priority thereto (the
amount (if any) by which it is less being the "INTEREST RATE
SHORTFALL").
(B) If the Servicer determines that there will be an Interest Rate
Shortfall, it will within one London Business Day of such
determination give written notice thereof to the Mortgages
Trustee, Funding 1 and the Security Trustee of such Interest
Rate Shortfall and of the Mortgages Trustee Variable Base Rate
and/or the Mortgages Trustee Tracker Rate which would (taking
into account the applicable Mortgage Conditions), in the
Servicer's reasonable opinion, need to be set in order for no
Interest Rate Shortfall to arise, having regard to the date(s)
(which shall be specified in the notice) on which such change
to the Mortgages Trustee Variable Base Rate and the Mortgages
Trustee Tracker Rate would take effect and at all times acting
in accordance with the standards of a Reasonable, Prudent
Mortgage Lender as regards the competing interests of
Borrowers with Mortgage Trustee Variable Base Rate Loans and
Borrowers with Mortgages Trustee Tracker Rate Loans.
(C) If the Mortgages Trustee, Funding 1 and the Security Trustee
notify the Servicer that, having regard to the obligations of
Funding 1, the Mortgages Trustee Variable Base Rate and/or the
Mortgages Trustee Tracker Rate should be increased, the
Servicer, as agent for and on behalf of, inter alia, the
Mortgages Trustee and the Beneficiaries, shall take all steps
which are necessary, including publishing any notice which is
required in accordance with the Mortgage Terms, to effect such
change in the Mortgages Trustee Variable Base Rate and/or the
Mortgages Trustee Tracker Rate on the date(s) specified in the
notice referred to in CLAUSE 4.3(B).
(D) The Mortgages Trustee and/or Funding 1 and the Security
Trustee may terminate the authority of the Servicer under
CLAUSE 4.1 and CLAUSE 4.3 to determine the Mortgages Trustee
Variable Base Rate and the Mortgages Trustee Tracker Rate on
or after the occurrence of a Servicer Termination Event, in
which case the Mortgages Trustee shall set the Mortgages
Trustee Variable Base Rate and the Mortgages Trustee Tracker
Rate in accordance with this CLAUSE 4.
5. ADMINISTRATION OF MORTGAGES
5.1 DIRECT DEBITING SCHEME
(A) For the purposes of collecting amounts due from Borrowers under the
Loans and the Related Security comprised in the Portfolio in accordance
with this Agreement the Servicer will unless otherwise agreed in
writing with the Beneficiaries:
(i) act, or procure that another person approved in writing by the
Beneficiaries (such approval not to be unreasonably withheld)
(the "THIRD PARTY COLLECTION AGENT") acts, as collection agent
for the Mortgages Trustee and the Beneficiaries under the
Direct Debiting Scheme and remains a member of the Direct
Debiting Scheme or any scheme which replaces the Direct
Debiting Scheme;
(ii) subject to CLAUSES 5.1(B) and 5.1(C), deliver to the Bankers
Automated Clearing System ("BACS") or to the Account Bank such
instructions as may be necessary from time to time for the
debit of the account of each Borrower in respect of which
there is a direct debit mandate (the date of such delivery
being the "D.D. DATE") with the Monthly Payment due from such
Borrower, and for the amount of such Monthly Payment to be
credited to the Mortgages Trustee GIC Account on the day after
the
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D.D. Date or, if such is not a London Business Day, the
following London Business Day unless the short-term ratings of
the Account Bank fall below A-1 by S&P, P-1 by Moody's or F-1
by Fitch, in which case all further instructions by the
Servicer to debit the accounts of Borrowers that are subject
to direct debit bank mandates shall be made to another bank
which has a rating of at least A-1 by S&P, P-1 by Moody's or
F-1 by Fitch, or directly to the Mortgages Trustee GIC
Account;
(iii) subject to CLAUSES 5.1(B) and 5.1(C), deliver to each Account
Bank or BACS (as appropriate) instructions for the debit of
the account of each Borrower in respect of which there is a
direct debit mandate and the Monthly Payment due and owing
from such Borrower on the D.D. Date immediately preceding the
next succeeding Monthly Payment Date remains outstanding to
the extent that, on the date of presentation of such
instructions, such Monthly Payment has not been received in
full by the Servicer on behalf of the Mortgages Trustee and
where the instructions for the debit of the account of the
relevant Borrower for the Monthly Payment due and owing from
such Borrower was returned to the Administrator marked
"insufficient funds" within ten London Business Days of
receipt by the Administrator of any such returned
instructions;
(iv) subject to CLAUSES 5.1(B) and 5.1(C), deliver to each Account
Bank or BACS (as appropriate) such other instructions for the
debit of the account of each Borrower in respect of which
there is a direct debit mandate in accordance with the Direct
Debiting Scheme as may be appropriate for the recovery of sums
due by such Borrower;
(v) comply in all material respects with the requirements from
time to time of the Direct Debiting Scheme including "The
Originator's Guide and Rules to the Direct Debiting Scheme" as
amended from time to time; and
take all such other steps as are reasonably appropriate, including in
particular the preparation and administration of appropriate computer
tapes in connection with BACS, to ensure that all monies received from
Borrowers during banking hours on any particular day are credited on
the next day to the Mortgages Trustee GIC Account.
(B) The Servicer may agree with a Borrower that the Direct Debiting Scheme
shall not apply to Monthly Payments to be made by such Borrower,
provided, subject to CLAUSE 5.1(D), that (i) alternative payment
arrangements are made which are intended to ensure timely payment of
Monthly Payments due from the Borrower to the Mortgages Trustee on
behalf of the Beneficiaries, and (ii) the change in arrangements was
made at the instigation of the Borrower or by the Servicer in
accordance with the procedures which would be adopted by a Reasonable,
Prudent Mortgage Lender.
(C) The Servicer may, notwithstanding the proviso to CLAUSE 5.1(B), agree
such procedures for the payment by a Borrower of (i) overdue amounts
and (ii) amounts payable on redemption of a Mortgage in whole or in
part other than through the Direct Debiting Scheme as would be agreed
by a Reasonable, Prudent Mortgage Lender.
(D) The Servicer shall, notwithstanding the proviso to CLAUSE 5.1(B), use
its reasonable endeavours to credit Monthly Payments made by a Borrower
under a payment arrangement other than the Direct Debiting Scheme to
the Mortgages Trustee GIC Account as follows:
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(i) where the Borrower pays by standing order, by close of
business on the second London Business Day following the day
on which such amount is received or credited by the Servicer;
(ii) where the Borrower pays by payment of cash, by transfer
payment from another account of the Seller or by cheque where
reference to the relevant Borrower is provided or payments are
made by way of paying-in book, by close of business on the
London Business Day which immediately follows the day on which
such amount is received or credited by the Servicer; and
(iii) where the Borrower pays by cheque where a reference to the
relevant Borrower is not provided, by close of business on the
next London Business Day after notification from the banks
operating the Seller Bank Accounts of the identity of the
Borrower.
(E) Where a Borrower permits a direct debit to be made to his bank account,
the Servicer will endeavour to procure that such Borrower maintains a
valid and effective mandate relating to such direct debit in relation
to each Monthly Payment due from that Borrower, provided that in any
case where a Borrower will not permit a direct debit to be made to his
bank account the Servicer will endeavour to make alternative
arrangements acceptable to a Reasonable, Prudent Mortgage Lender so
that such Borrower nevertheless pays each Monthly Payment within the
month in which it falls due.
(F) In the event that the BACS system ceases to operate for any reason the
Servicer will use reasonable endeavours to make alternative
arrangements for the use of the back up systems available to each
Account Bank.
(G) If at any time the Servicer shall receive notice whether under the
Direct Debiting Scheme or otherwise that any amount (or part thereof),
which was paid in or credited pursuant to CLAUSE 5.1 and which has been
transferred to the Mortgages Trustee GIC Account has not been received
as cleared funds or has otherwise been recalled, the Servicer shall
notify the Cash Manager and instruct the Cash Manager forthwith to
debit the Mortgages Trustee GIC Account and credit the relevant
collection account for the whole or any part of such amount (such
amount hereinafter referred to as the "shortfall") and, an amount equal
to any costs which are irrecoverable by the Servicer from the relevant
Borrower incurred by the Servicer as a result of such shortfall;
PROVIDED THAT no debit from the Mortgages Trustee GIC Account for the
credit of the collection accounts in respect of any shortfall may be
made on or after a Calculation Date in respect of the relevant period
between that Calculation Date and the next Distribution Date unless
sufficient funds are available after providing or making provision for
all payments to be made on the next succeeding Distribution Date. After
that following Distribution Date the Mortgages Trustee shall transfer,
or procure on its behalf the transfer, from the Mortgages Trustee GIC
Account to the relevant collection account of an amount equal to such
shortfall subject to it having sufficient funds available to it or the
Servicer shall deduct an amount equal to such shortfall from payments
otherwise due on a daily basis from the Seller to the Mortgages Trustee
in respect of Principal Receipts and Interest Receipts received under
the Loans.
5.2 ADMINISTRATION AND ENFORCEMENT OF MORTGAGES
(A) The Mortgages Trustee and the Beneficiaries hereby direct the Servicer
to administer the Loans comprised in the Portfolio and carry out its
specific obligations under this Agreement in accordance with the
Seller's Policy.
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(B) The Servicer will, in relation to any default by a Borrower under or in
connection with a Loan or a Mortgage comprised in the Portfolio, comply
with the Enforcement Procedures or, to the extent that the Enforcement
Procedures are not applicable having regard to the nature of the
default in question, take such action as is not materially prejudicial
to the interests of the Mortgages Trustee (as trustee for the
Beneficiaries) and the Beneficiaries under the relevant MIG Policy,
provided that:
(i) the Servicer shall only become obliged to comply with the
Enforcement Procedures (to the extent applicable) or to take
action as aforesaid after it has become aware of the default;
(ii) it is acknowledged by the Beneficiaries that mortgage lenders
generally exercise discretion in pursuing their respective
enforcement procedures and that the Servicer may exercise such
discretion as would a Reasonable, Prudent Mortgage Lender in
applying the Enforcement Procedures to any particular
defaulting Borrower or taking action as aforesaid, provided
that in exercising such discretion the interest of Funding 1
in the Portfolio is not materially prejudiced; and
(iii) in any case where any of the Insurance Policies requires exact
compliance with certain enforcement procedures the Servicer
shall procure the prior written consent of the relevant
insurance company for any deviation by it from such
enforcement procedures.
5.3 RECORDS
The Servicer shall keep and maintain records in relation to the
Portfolio, on a Loan by Loan basis, for the purposes of identifying
amounts paid by each Borrower, any amount due from a Borrower and the
principal balance (and, if different, the total balance) from time to
time outstanding on a Borrower's account and such other records as
would be kept by a Reasonable, Prudent Mortgage Lender. The Servicer
will provide such information to the Mortgages Trustee and/or Funding 1
and/or the Security Trustee or to their order at any time upon
reasonable notice subject to the Servicer being reasonably capable of
providing such information without significant additional cost and
subject to the provisions of the Data Protection Act 1998 and other
applicable legislation from time to time and provided that no duty of
confidence and no industry code of practice will or may be breached
thereby.
5.4 TRUST
(A) If the Servicer in carrying out its functions as Servicer under this
Agreement receives (including in its capacity as agent for the
Mortgages Trustee and the Beneficiaries) any money whatsoever arising
from the Loans and their Related Security, which money belongs to the
Mortgages Trustee (as trustee for the Beneficiaries) and is to be paid
to the Mortgages Trustee GIC Account pursuant to this Agreement or any
of the other Transaction Documents or otherwise, it will hold such
monies on trust for the Mortgages Trustee and shall keep such money
separate from all other monies held by the Servicer and shall, as soon
as reasonably practicable and in any event within the time limits
referred to in CLAUSE 5.1, pay the monies into the Mortgages Trustee
GIC Account.
(B) All other sums received by the Servicer in respect of the Loans and
their Related Security shall be held by the Servicer for itself.
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6. NO LIABILITY
6.1 The Servicer shall have no liability for any obligation of a Borrower
under any Loan comprised in the Portfolio or any Related Security and
nothing herein shall constitute a guarantee, or similar obligation, by
the Servicer of any Loan, Mortgage or any Borrower.
6.2 Save as otherwise provided in this Agreement, the Servicer shall have
no liability for the obligations of the Mortgages Trustee or the
Beneficiaries under any of the Transaction Documents or otherwise and
nothing herein shall constitute a guarantee, or similar obligation, by
the Servicer of the Mortgages Trustee or the Beneficiaries in respect
of any of them.
7. NEW LOANS
7.1 The Portfolio may be augmented from time to time by the assignment to
the Mortgages Trustee on any Distribution Date of a New Portfolio by
the Seller.
7.2 The assignment of each New Portfolio to the Mortgages Trustee will in
all cases be subject to the terms set out in the Mortgage Sale
Agreement including, without limitation, the conditions set out in
CLAUSES 4 of the Mortgage Sale Agreement and the representations and
warranties set out in CLAUSE 8 of the Mortgage Sale Agreement.
8. PRODUCT SWITCHING AND FURTHER ADVANCES
8.1 (a) The Servicer shall not accept an application for a Further
Advance without first having received confirmation in writing
from the Seller that the Seller would, if so offered by the
Mortgages Trustee, purchase the relevant Loan and its Related
Security from the Mortgages Trustee.
(b) The Servicer shall not accept an application for a Product
Switch without first having received confirmation in writing
from the Seller save where the Seller and the Servicer are
both Halifax plc that the Seller would, if so offered by the
Mortgages Trustee, purchase the relevant Loan and its Related
Security from the Mortgages Trustee if on the immediately
preceding Distribution Date, the Seller is in breach of the
conditions referred to in CLAUSES 4.2(a) to (o) inclusive of
the Mortgage Sale Agreement as if references therein to "New
Loans" and "New Portfolio" were references to the Loan which
would result from the implementation of such Product Switch
and as if references to "Assignment Date" were references to
the date when the Seller and relevant Borrower complete such
Product Switch.
8.2 Subject to complying with the terms of CLAUSE 8.1, where the Servicer
accepts a Product Switch or a Further Advance, the Servicer shall then
notify the Seller and the Mortgages Trustee in writing.
8.3 Notwithstanding CLAUSE 8.2, subject to complying with the terms of
Clause 8.1, the Servicer may accept requests from Borrowers for Product
Switches and Further Advances provided that the Servicer acts in
accordance with its then procedure which would be acceptable to a
Reasonable, Prudent Mortgage Lender.
9. REDEMPTION OF MORTGAGES
9.1 Upon repayment in full of all sums secured by a Mortgage and/or other
Related Security comprised in the Portfolio, the Servicer shall, and is
hereby authorised by the Mortgages Trustee and the Beneficiaries to
execute a receipt or discharge or relevant HM Land Registry
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Form DS1 of the Mortgage and any such other or further instrument or
deed of satisfaction regarding such Mortgage and/or the Related
Security as it considers to be necessary or advisable, to implement an
Electronic Notification of Discharge to HM Land Registry and to release
the relevant Title Deeds to the person or persons entitled thereto.
9.2 The Servicer undertakes that prior to any actual release by it of the
relevant Title Deeds it will take reasonable and appropriate steps to
satisfy itself that the relevant Title Deeds are being released to the
person or persons entitled thereto.
9.3 The Servicer shall procure that if, upon completion of the Enforcement
Procedures, an amount in excess of all sums due by the relevant
Borrower is recovered or received, the balance, after discharge of all
sums due by the Borrower, is paid to the person or persons next
entitled thereto.
10. POWERS OF ATTORNEY
10.1 For good and valuable consideration and as security for the interests
of the Mortgages Trustee and the Beneficiaries hereunder, each of the
Mortgages Trustee and the Beneficiaries hereby appoints the Servicer as
its attorney on its behalf, and in its own or the attorney's name, for
the following purposes:
(A) executing all documents necessary for the purpose of
discharging a Mortgage comprised in the Portfolio which has
been repaid in full and any Related Security or for the sale
of a Property as Mortgagee;
(B) executing all documents and implementing all Electronic
Notifications of Discharge to HM Land Registry necessary for
the purpose of releasing a Borrower in accordance with CLAUSE
9;
(C) executing all documents and doing all such acts and things
which in the reasonable opinion of the Servicer are necessary
or desirable for the efficient provision of the Services
hereunder; and
(D) exercising its rights, powers and discretion under the
Mortgages including the right to fix the Mortgages Trustee
Variable Base Rate and the Mortgages Trustee Tracker Rate or
any related rights,
provided that, for the avoidance of doubt, these Powers of Attorney
shall not authorise the Servicer to sell any of the Loans and/or their
Related Security comprised in the Portfolio except as specifically
authorised in the Transaction Documents. For the avoidance of doubt,
neither the Mortgages Trustee nor Funding 1 shall be liable or
responsible for the acts of the Servicer or any failure by the Servicer
to act under or in respect of these Powers of Attorney.
10.2 The appointments contained in CLAUSE 10.1 shall be irrevocable unless
and until following a Termination Event the Mortgages Trustee and/or
Funding 1 and the Security Trustee serves notice pursuant to CLAUSE 21
to terminate the Servicer's appointment under this Agreement upon which
the appointments contained in CLAUSE 10.1 shall be automatically
revoked.
11. COSTS AND EXPENSES
11.1 The Mortgages Trustee (on behalf of the Beneficiaries) will on each
Distribution Date reimburse, in accordance with CLAUSE 10.2 of the
Mortgages Trust Deed, the Servicer for all out-of-pocket costs,
expenses and charges (together with any amounts in respect of
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Irrecoverable Value Added Tax due thereon) properly incurred by the
Servicer in the performance of the Services including any such costs,
expenses or charges not reimbursed to the Servicer on any previous
Distribution Date and the Servicer shall supply the Mortgages Trustee
with a copy of an appropriate VAT invoice issued by the person making
the supply.
11.2 The Servicer will use reasonable endeavours to recover from the
relevant Borrowers all costs and expenses incurred by the Servicer
which are properly recoverable from those Borrowers under the relevant
Mortgage Conditions.
12. INFORMATION
12.1 MAINTENANCE OF RECORDS
(A) Subject to CLAUSE 18, the Servicer shall keep the Customer Files
relating to the Portfolio in safe custody and shall take appropriate
technical and organisational measures against the unauthorised or
unlawful processing of personal data and against accidental loss or
destruction of, or damage to, personal data. The Servicer shall
maintain in an adequate form such records as are necessary to enforce
each Mortgage comprised in the Portfolio and, where relevant, any other
Related Security.
(B) A duplicate of any computer records held by the Servicer which contains
information relating to the Loans and the Related Security shall be
lodged by the Servicer on a daily basis at the offices of the Seller at
the Pudsey Data Centre or at such other locations selected by the
Servicer, so long as such location is a location separate from that in
which the original computer records are stored and in an environment
conducive to the safe storage of electronic media, such records to be
held to the order of the Mortgages Trustee and to be replaced by a
revised duplicate as and when the original records are revised. The
Servicer shall keep the Mortgages Trustee informed of the location of
the Customer Files and duplicate computer records.
12.2 USE OF I.T. SYSTEMS
(A) The Servicer represents and warrants that at the date hereof in respect
of the software which is used by the Servicer in providing the
Services, it shall for the duration of this Agreement:
(i) ensure that it has in place all necessary licences and/or
consents from the respective licensor or licensors (if any) of
such software; and
(ii) except in so far as it would breach any other of its legal
obligations, grant to any person to whom it may sub-contract
or delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as the
Mortgages Trustee and the Beneficiaries elect as a substitute
servicer in accordance with the terms of this Agreement a
licence to use any proprietary software together with any
updates which may be made thereto from time to time.
(B) The Servicer shall use reasonable endeavours to maintain in working
order the information technology systems used by the Servicer in
providing the Services.
(C) The Servicer shall pass to any person to whom it may sub-contract or
delegate the performance of all or any of its powers and obligations
under this Agreement and/or to such person as the Mortgages Trustee and
the Beneficiaries elect as a substitute servicer in accordance with the
terms of this Agreement the benefit of any warranties in relation to
the software insofar as the same are capable of assignment.
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12.3 ACCESS TO BOOKS AND RECORDS
Subject to all applicable laws, the Servicer shall permit the Mortgages
Trustee and Funding 1 (and their auditors) and the Security Trustee and
any other person nominated by the Beneficiaries (to whom the Servicer
has no reasonable objection) upon reasonable notice during normal
office hours to have access, or procure that such person or persons are
granted access, to all books of record and account (including, for the
avoidance of doubt, the Title Deeds and Customer Files) relating to the
administration of the Loans and the Related Security comprised in the
Portfolio and related matters in accordance with this Agreement.
12.4 INFORMATION COVENANTS
(A) The Servicer shall provide the Mortgages Trustee, the Beneficiaries,
the Joint Lead Managers and the Rating Agencies quarterly with a report
in, or substantially in, the form set out in SCHEDULE 2 and shall
assist the Cash Manager in the production of quarterly reports
substantially in the forms set out in Schedule 3 of the Cash Management
Agreement.
(B) The Servicer shall notify the Rating Agencies in writing of the details
of (i) any material amendment to the Transaction Documents, (ii) any
proposed material change in the valuation procedures or policies
applied or to be applied in relation to Properties by it in connection
with its mortgage business (details of which change may be included in
a report provided under paragraph (A)) and (iii) any other information
relating to its mortgage business and financial condition as the Rating
Agencies may reasonably request in connection with the ratings of the
First Issuer Notes and any New Notes and other matters contemplated by
the Transaction, provided that such request does not adversely
interfere with the Servicer's day to day provision of the Services
under the other terms of this Agreement.
(C) The Servicer shall, at the request of Funding 1 and the Security
Trustee (where the Servicer is the Seller) and at the request of the
Beneficiaries (where the Servicer is no longer the Seller), furnish
Funding 1, the Security Trustee and/or the Beneficiaries (as
appropriate) and the Rating Agencies with such other information
relating to its business and financial condition as it may be
reasonable for Funding 1, the Security Trustee and/or the Beneficiaries
(as appropriate) to request in connection with the ratings of the First
Issuer Notes and any New Notes and other matters contemplated by the
Transaction, provided that Funding 1, the Security Trustee or the
Beneficiaries (as appropriate) shall not make such a request more than
once every three months unless, in the belief of Funding 1, the
Security Trustee or the Beneficiaries (as appropriate), an Intercompany
Loan Event of Default or a Termination Event shall have occurred and is
continuing or may reasonably be expected to occur.
(D) The Servicer shall make available to beneficial owners of the Issuer
Notes, who have provided beneficial ownership certification as
described herein, on a monthly basis a report containing information
about the loans in Mortgages Trust.
13. REMUNERATION
The Mortgages Trustee (on behalf of the Beneficiaries) shall pay to the
Servicer for its Services hereunder an administration fee (the
"ADMINISTRATION FEE") (inclusive of Value Added Tax) which:
(A) shall be calculated in relation to each Distribution Period on
the basis of the number of days elapsed and a 365 day year at
the rate of 0.05 per cent. per annum, inclusive of Value Added
Tax, on the aggregate amount of the Trust Property as at close
of
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business on the preceding Funding 1 Interest Payment Date (or,
as applicable, the Initial Closing Date); and
(B) shall be paid to the Servicer in arrear on each Distribution
Date in the manner contemplated by and in accordance with the
provisions of CLAUSE 10.2 of the Mortgages Trust Deed.
14. INSURANCES
14.1 The Servicer will administer the arrangements for insurance to which
the Mortgages Trustee is a party or in which either the Seller or the
Mortgages Trustee (on behalf of the Beneficiaries) has an interest and
which relate to the Loans and the Mortgages comprised in the Portfolio
or the business of the Mortgages Trustee. In particular, but without
limitation, the Servicer shall promptly notify the Mortgages Trustee
and the Beneficiaries and the Trustee of the existence of any insurance
policies to which the Seller is a party or in which it has an interest
in addition to those specifically referred to in the definition of
"Halifax Insurance Policies" in the Master Definitions and Construction
Schedule.
14.2 The Servicer shall use its reasonable endeavours to credit to the
Mortgages Trustee GIC Account all proceeds received from any claim made
under any Insurance Policy in relation to any Loan or its Related
Security by close of business on the London Business Day which
immediately follows the day on which such amounts are received or
credited by the Servicer and which is to be applied either in whole or
in part in repayment of a Loan.
15. HALIFAX INSURANCE POLICIES
15.1 The Servicer shall not knowingly take or omit to take any action which
would:
(A) result in the avoidance or termination of any of the Halifax
Insurance Policies in relation to any Loans and Mortgages to
which any Halifax Insurance Policy applies; or
(B) reduce the amount payable on any claim made on behalf of the
Mortgages Trustee (as trustee for the Beneficiaries) under any
Halifax Insurance Policy; or
(C) invalidate any Halifax Insurance Policy.
15.2 The Servicer shall prepare and submit any claim under the Halifax
Insurance Policies in accordance with the requirements of the relevant
Halifax Insurance Policy and otherwise with the usual procedures
undertaken by a Reasonable, Prudent Mortgage Lender on behalf of the
Mortgages Trustee and the Beneficiaries and shall comply with the other
requirements of the insurer under the relevant Halifax Insurance
Policy.
15.3 If the Seller's Policy requires the Servicer to make a claim under the
relevant MIG Policy and the Servicer has failed to make such a claim,
then the Beneficiaries may direct the Mortgages Trustee on their behalf
to direct the Servicer to make a claim or, in default thereof by the
Servicer, the Beneficiaries may direct the Mortgages Trustee to itself
make a claim under such policy and the Servicer shall, within ten
London Business Days of receiving a written request from the Mortgages
Trustee (as trustee for the Beneficiaries), provide the Mortgages
Trustee with such information as the Mortgages Trustee may require to
enable it to make a claim under the relevant MIG Policy.
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16. BUILDINGS POLICIES
16.1 The Servicer shall not knowingly take any action or omit to take any
action which would result in the avoidance or termination of any
applicable Buildings Policy or would reduce the amount payable on any
claim thereunder.
16.2 Upon receipt of notice that any Borrower whose Loan is secured by a
mortgage of a leasehold Property has failed to make a payment when due
of any sums due under the relevant lease in respect of the insurance of
the property the Servicer may debit that Borrower's account with the
relevant amount which shall then be paid to the landlord.
16.3 If the Servicer becomes aware that a Borrower has failed to pay
premiums due under any Buildings Policy, the Servicer shall take such
action as would a Reasonable, Prudent Mortgage Lender with a view to
ensuring that the relevant Property continues to be insured in
accordance with the applicable Mortgage Terms or the Alternative
Insurance Recommendations.
17. TITLE DEEDS
17.1 The Servicer shall keep the Title Deeds relating to the Portfolio in
safe custody and shall not without the prior written consent of the
Mortgages Trustee and the Beneficiaries part with possession, custody
or control of them otherwise than to a sub-contractor or delegate
appointed pursuant to CLAUSE 3.2 or to a solicitor, licensed
conveyancer or authorised practitioner, subject to the usual
undertaking to hold them to the order of the Seller (who in turn will
hold them to the order of the Mortgages Trustee (as trustee for the
Beneficiaries)) or to H.M. Land Registry or, upon redemption of the
relevant Loan, to the order of the Borrower.
17.2 The Title Deeds relating to the Portfolio shall be kept in such manner
so that a computer record is maintained of their location and they are
identifiable and retrievable by reference to an account number and pool
identifier and identifiable and distinguishable from the title deeds
relating to other properties and mortgages in respect of which the
Servicer is mortgagee or servicer. In the event of receipt by the
Servicer of notice that the short-term, unsecured, unsubordinated and
unguaranteed debt of the Servicer is rated less than A-1 by S&P and P-1
by Moody's and F1 by Fitch, the Servicer shall use reasonable
endeavours to ensure that the Title Deeds are identified as distinct
from the title deeds of other properties and mortgages which do not
form part of the Portfolio.
17.3 The Servicer shall provide access or procure that access is provided to
the Title Deeds and other records relating to the administration of the
Loans and Mortgages in the Portfolio to the Mortgages Trustee, the
Beneficiaries, the Security Trustee and their respective agents at all
reasonable times and upon reasonable notice. The Servicer acknowledges
that the Title Deeds and Customer Files relating to the Portfolio in
its possession, custody or control will be held to the order of the
Mortgages Trustee (as trustee for the Beneficiaries) and that it has,
in its capacity as Servicer, no beneficial interest therein and the
Servicer (in its capacity as such but not in its capacity as a
Beneficiary) irrevocably waives any rights or any Security Interest
which it might have therein or to which it might at any time be
entitled.
17.4 The Servicer shall, forthwith on the termination of the appointment of
the Servicer pursuant to CLAUSE 21, deliver the Title Deeds and
Customer Files to or to the order of the Mortgages Trustee or to such
person as the Mortgages Trustee elects as a substitute servicer in
accordance with the terms of this Agreement upon written request by the
Mortgages Trustee made at any time on or after notice of, or on or
after, termination of the appointment of the Servicer pursuant to
CLAUSE 21.
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17.5 The Servicer undertakes that it will use all reasonable efforts to
obtain, as soon as practicable and, in any event, in the case of the
Mortgages in the Initial Portfolio, on or prior to the Distribution
Date falling in June, 2003, and in the case of Mortgages which relate
to New Loans, on or prior to the first Distribution Date falling after
the first anniversary of the date on which the New Loans are purchased
from the Seller, details of the title numbers applicable to Properties
comprising registered land or land which is the subject of an
application for first registration. The Servicer shall include in the
quarterly report to be delivered in accordance with CLAUSE 12.4 of this
Agreement details of such title numbers relating to the Initial
Portfolio as are then known to the Servicer at the time of such report
together with such other information relating thereto as the Mortgages
Trustee may reasonably request.
18. DATA PROTECTION
The Servicer represents that as at the date hereof the Servicer has and
hereafter it will maintain on behalf of itself and on behalf of the
Mortgages Trustee (as trustee for the Beneficiaries) all appropriate
registrations, licences and authorities (if any) required under the
Data Protection Act 1998 to enable each of them to perform their
respective obligations under this Agreement. In addition to the
foregoing and notwithstanding any of the other provisions of this
Agreement, each of the Servicer and the Mortgages Trustee hereby agree
and covenant as follows:
(A) that only data that is not "PERSONAL DATA" (as described in
the Data Protection Act 1998) may be transferred by the
Servicer to the Mortgages Trustee or any other entity located
in Jersey (unless Jersey is declared an "approved state" by
the European Commission, in which case the Servicer may
transfer such personal data to the Mortgages Trustee in
Jersey);
(B) that, to the extent that circumstances enable the Mortgages
Trustee to exercise its right to demand that the Servicer
transfer inter alia personal data to the Mortgages Trustee,
the Servicer shall only transfer such personal data to an
agent of the Mortgages Trustee that is located in the United
Kingdom and maintains all appropriate registrations, licences
and authorities (if any) required under the Data Protection
Act 1998 (the "Agent"), and that the Mortgages Trustee will
ensure that the Agent (i) does not transfer such personal data
out of the United Kingdom; and (ii) will comply with the
provisions of the Data Protection Act 1998;
(C) that if, at the date at which circumstances enable the
Mortgages Trustee to exercise its right to demand that the
Servicer transfer inter alia personal data to the Mortgages
Trustee, Jersey has been declared an "approved state" by the
European Commission then the Servicer shall transfer the
relevant personal data to the Mortgages Trustee;
(D) that, to the extent that circumstances enable the Mortgages
Trustee to exercise its right to demand that the Servicer
transfer inter alia personal data to the Mortgages Trustee,
the Servicer notify each Borrower that the Mortgages Trustee
is a "DATA CONTROLLER" (as defined in the Data Protection Act
1998) and provide each such Borrower with the address of the
Mortgages Trustee;
(E) that the Servicer and the Mortgages Trustee will only use any
data in relation to the Loans and the related Borrowers for
the purposes of administering and/or managing the Portfolio,
and will not sell such data to any third party or allow any
third party to use such data other than in compliance with the
conditions stated in this Clause 18 and for the sole purpose
of administering and/or managing the Portfolio;
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(F) that the Mortgages Trustee will comply with the provisions of
the Data Protection (Jersey) Law 1987 (as amended) and (so
long as the provisions of the Data Protection Act 1998 do not
conflict with the provisions of the Data Protection (Jersey)
Law 1987) with the provisions of the Data Protection Act 1998
(as amended);
(G) that, upon the request of a Borrower, the Servicer will inform
such Borrower that both the Servicer and the Mortgages Trustee
are "data controllers" as described in the Data Protection Act
1998; and
(H) that both the Servicer and the Mortgages Trustee shall
maintain a written record of their reasons for applying the
Data Protection Order 2000 (as set forth under the Conditions
under paragraph 3 of Part II of Schedule I of such Order).
19. COVENANTS OF SERVICER
19.1 The Servicer hereby covenants with and undertakes to each of the
Mortgages Trustee, the Beneficiaries and the Security Trustee that
without prejudice to any of its specific obligations hereunder it will:
(A) administer the Loans and their Related Security as if the same
had not been assigned to the Mortgages Trustee but had
remained on the books of the Seller;
(B) provide the Services in such manner and with the same level of
skill, care and diligence as would a Reasonable, Prudent
Mortgage Lender;
(C) comply with any proper directions, orders and instructions
which the Mortgages Trustee or the Beneficiaries may from time
to time give to it in accordance with the provisions of this
Agreement and, in the event of any conflict, those of the
Mortgages Trustee shall prevail;
(D) keep in force all licences, approvals, authorisations and
consents which may be necessary in connection with the
performance of the Services and prepare and submit on a timely
basis all necessary applications and requests for any further
approval, authorisation, consent or licence required in
connection with the performance of the Services and in
particular any necessary registrations under the Data
Protection Act 1998;
(E) save as otherwise agreed with the Mortgages Trustee and each
of the Beneficiaries, provide free of charge to the Mortgages
Trustee and the Beneficiaries, office space, facilities,
equipment and staff sufficient to fulfil the obligations of
the Mortgages Trustee and the Beneficiaries under this
Agreement;
(F) not knowingly fail to comply with any legal requirements in
the performance of the Services;
(G) make all payments required to be made by it pursuant to this
Agreement on the due date for payment thereof in sterling (or
as otherwise required under the Transaction Documents) in
immediately available funds for value on such day without
set-off (including, without limitation, in respect of any fees
owed to it) or counterclaim;
(H) not without the prior written consent of the Security Trustee
amend or terminate any of the Transaction Documents save in
accordance with their terms; and
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(I) forthwith upon becoming aware of any event which may
reasonably give rise to an obligation of the Seller to
repurchase any Loan pursuant to the Mortgage Sale Agreement,
notify the Mortgages Trustee and the Beneficiaries in writing
of such event.
19.2 The covenants of the Servicer in CLAUSE 19.1 shall remain in force
until this Agreement is terminated but without prejudice to any right
or remedy of the Mortgages Trustee and/or the Seller and/or Funding 1
arising from breach of any such covenant prior to the date of
termination of this Agreement.
20. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Servicer from rendering or
performing services similar to those provided for in this Agreement to
or for itself or other persons, firms or companies or from carrying on
business similar to or in competition with the business of the
Mortgages Trustee and the Beneficiaries.
21. TERMINATION
21.1 If any of the following events ("SERVICER TERMINATION EVENTS") shall
occur:
(A) default is made by the Servicer in the payment on the due date
of any payment due and payable by it under this Agreement and
such default continues unremedied for a period of three London
Business Days after the earlier of the Servicer becoming aware
of such default and receipt by the Servicer of written notice
from Funding 1, the Security Trustee and the Mortgages Trustee
requiring the same to be remedied;
(B) default is made by the Servicer in the performance or
observance of any of its other covenants and obligations under
this Agreement, which in the reasonable opinion of the
Security Trustee is materially prejudicial to the interests of
Funding 1 and/or the Issuers under the Intercompany Loans
and/or the interests of the holders of the First Issuer Notes
and any New Notes from time to time and such default continues
unremedied for a period of twenty London Business Days after
the earlier of the Servicer becoming aware of such default and
receipt by the Servicer of written notice from Funding 1 and
the Security Trustee requiring the same to be remedied,
provided however that where the relevant default occurs as a
result of a default by any person to whom the Servicer has
sub-contracted or delegated part of its obligations hereunder,
such default shall not constitute a Termination Event if,
within such period of ten London Business Days of receipt of
such notice from Funding 1 and the Security Trustee, the
Servicer terminates the relevant sub-contracting or delegation
arrangements and takes such steps as Funding 1 and the
Security Trustee may in their absolute discretion specify to
remedy such default or to indemnify the Mortgages Trustee and
the Beneficiaries against the consequences of such default;
(C) an order is made or an effective resolution passed for winding
up the Servicer;
(D) the Servicer ceases or threatens to cease to carry on its
business or a substantial part of its business or stops
payment or threatens to stop payment of its debts or the
Servicer is deemed unable to pay its debts within the meaning
of Sections 123(1)(a), (b), (c) or (d) of the Insolvency Act
1986 (as that section may be amended) or becomes unable to pay
its debts as they fall due or the value of its assets falls to
less than the amount of its liabilities (taking into account
for both these purposes its contingent and prospective
liabilities) or otherwise becomes insolvent; or
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(E) proceedings are initiated against the Servicer under any
applicable liquidation, administration, insolvency,
composition, reorganisation (other than a reorganisation where
the Servicer is solvent) or other similar laws, save where
such proceedings are being contested in good faith by the
Servicer, or an administrative or other receiver,
administrator or other similar official is appointed in
relation to the Servicer or in relation to the whole or any
substantial part of the undertaking or assets of the Servicer
or an encumbrancer takes possession of the whole or any
substantial part of the undertaking or assets of the Servicer,
or a distress, execution or diligence or other process is
levied or enforced upon or sued out against the whole or any
substantial part of the undertaking or assets of the Servicer
and in any of the foregoing cases it is not discharged within
thirty London Business Days; or if the Servicer initiates or
consents to judicial proceedings relating to itself under any
applicable liquidation, administration, insolvency,
composition, reorganisation or other similar laws or makes a
conveyance or assignment for the benefit of its creditors
generally, or
(F) the Board of Funding 1 resolves, after due consideration and
acting reasonably, that the appointment of the servicer should
be terminated,
then the Mortgages Trustee and/or Funding 1 and the Security Trustee
may at once or at any time thereafter while such default continues by
notice in writing to the Servicer terminate its appointment as Servicer
under this Agreement with effect from a date (not earlier than the date
of the notice) specified in the notice. Upon termination of the
Servicer as servicer under this Agreement, the Security Trustee shall
use its reasonable endeavours to appoint a substitute servicer that
satisfies the conditions set forth in CLAUSES 21.2(C), (D) and (E).
21.2 The appointment of the Servicer under this Agreement may be terminated
upon the expiry of not less than 12 months' notice of termination given
by the Servicer to the Mortgages Trustee and the Beneficiaries provided
that:
(A) the Mortgages Trustee and the Beneficiaries consent in writing
to such termination;
(B) a substitute servicer shall be appointed, such appointment to
be effective not later than the date of such termination and
the Servicer shall notify the Rating Agencies in writing of
the identity of such substitute servicer;
(C) such substitute servicer has experience of administering
mortgages of residential property in the United Kingdom and is
approved by the Mortgages Trustee and the Beneficiaries;
(D) such substitute servicer enters into an agreement
substantially on the same terms as the relevant provisions of
this Agreement and the Servicer shall not be released from its
obligations under the relevant provisions of this Agreement
until such substitute servicer has entered into such new
agreement; and
(E) the then current ratings (if any) of the First Issuer Notes or
any New Notes are not adversely affected as a result thereof,
unless otherwise agreed by an Extraordinary Resolution (as
defined in the Note Trust Deed) of the holders of the relevant
class of Notes.
21.3 On and after termination of the appointment of the Servicer under this
Agreement pursuant to this CLAUSE 21, all authority and power of the
Servicer under this Agreement shall be terminated and be of no further
effect and the Servicer shall not thereafter hold itself out in
21
any way as the agent of the Mortgages Trustee and/or the Beneficiaries
pursuant to this Agreement.
21.4 Upon termination of the appointment of the Servicer under this
Agreement pursuant to this CLAUSE 21, the Servicer shall:
(A) forthwith deliver (and in the meantime hold on trust for, and
to the order of, the Mortgages Trustee) to the Mortgages
Trustee or as it shall direct the Customer Files, the Title
Deeds, all books of account, papers, records, registers,
correspondence and documents in its possession or under its
control relating to the affairs of or belonging to the
Mortgages Trustee (as trustee for the Beneficiaries) and the
Mortgages in the Portfolio and any other Related Security, (if
practicable, on the date of receipt) any monies then held by
the Servicer on behalf of the Mortgages Trustee and any other
assets of the Mortgages Trustee and the Beneficiaries;
(B) take such further action as the Mortgages Trustee, Funding 1
and the Security Trustee may reasonably direct at the expense
of the Beneficiaries (including in relation to the appointment
of a substitute servicer) provided that the Mortgages Trustee
shall not be required to take or direct to be taken such
further action unless it has been indemnified to its
satisfaction;
(C) provide all relevant information contained on computer records
in the form of magnetic tape, together with details of the
layout of the files encoded on such magnetic tapes;
(D) co-operate and consult with and assist the Mortgages Trustee,
Funding 1, the Security Trustee and their nominees (which
shall, for the avoidance of doubt, include any new servicer
appointed by any of them) for the purposes of explaining the
file layouts and the format of the magnetic tapes generally
containing such computer records on the computer system of the
Mortgages Trustee or such nominee; and
(E) permit the Mortgages Trustee, Funding 1 and the Security
Trustee to have access at reasonable times to the Halifax
Insurance Policies.
21.5 The Servicer shall deliver to the Mortgages Trustee and the
Beneficiaries as soon as reasonably practicable but in any event within
five days of becoming aware thereof a notice of any Termination Event
or any event which with the giving of notice or lapse of time or
certification would constitute the same. Such notification shall
specify which event in CLAUSE 21 has occurred and was the cause of such
Termination Event (or any event which the giving of notice or lapse of
time or certification would constitute a Termination Event), a
description of the details of such Termination Event, and, if relevant,
a reference to the provision in this Agreement or the other Transaction
Documents which the Servicer has breached.
21.6 Termination of this Agreement or the appointment of the Servicer under
this Agreement shall be without prejudice to the liabilities of the
Mortgages Trustee and the Beneficiaries to the Servicer or vice versa
incurred before the date of such termination. The Servicer shall have
no right of set-off or any lien in respect of such amounts against
amounts held by it on behalf of the Mortgages Trustee.
21.7 This Agreement shall terminate at such time as Funding 1 has no further
interest in any of the Loans or the Mortgages which have been comprised
in the Portfolio.
22
21.8 On termination of the appointment of the Servicer under the provisions
of this Clause 21, the Servicer shall be entitled to receive all fees
and other monies accrued up to the date of termination but shall not be
entitled to any other or further compensation. Such monies so
receivable by the Servicer shall be paid by the Mortgages Trustee on
the dates on which they would otherwise have fallen due hereunder. For
the avoidance of doubt, such termination shall not affect the
Servicer's rights to receive payment of all amounts (if any) due to it
from the Mortgages Trustee other than under this Agreement.
21.9 Prior to termination of this Agreement, the Servicer, the Seller, the
Security Trustee, the Mortgages Trustee and Funding 1 shall co-operate
to obtain the agreement of the Borrowers to a new bank mandate
permitting the Mortgages Trustee to operate the Direct Debiting Scheme.
21.10 Any provision of this Agreement which is stated to continue after
termination of the Agreement shall remain in full force and effect
notwithstanding termination.
22. FURTHER ASSURANCE
22.1 The parties hereto agree that they will co-operate fully to do all such
further acts and things and execute any further documents as may be
necessary or desirable to give full effect to the arrangements
contemplated by this Agreement.
22.2 Without prejudice to the generality of CLAUSE 22.1, the Mortgages
Trustee and the Beneficiaries shall upon request by the Servicer
forthwith give to the Servicer such further powers of attorney or other
written authorisations, mandates or instruments as are necessary to
enable the Servicer to perform the Services.
22.3 In the event that there is any change in the identity of the Mortgages
Trustee or an additional Mortgages Trustee is appointed, the remaining
Mortgages Trustee and/or the retiring Mortgages Trustee, as the case
may be, shall execute such documents with any other parties to this
Agreement and take such actions as such new Mortgages Trustee may
reasonably require for the purposes of vesting in such new Mortgages
Trustee the rights of the Mortgages Trustee under this Agreement and
releasing the retiring Mortgages Trustee from further obligations
thereunder and while any Note remains outstanding shall give notice
thereof to the Rating Agencies.
22.4 Nothing herein contained shall impose any obligation or liability on
the Mortgages Trustee to assume or perform any of the obligations of
the Servicer hereunder or render it liable for any breach thereof.
23. MISCELLANEOUS
23.1 Subject to CLAUSE 23.2, in the event that the funds available to the
Mortgages Trustee on any Funding 1 Interest Payment Date are not
sufficient to satisfy in full the aggregate amount payable to the
Servicer by the Mortgages Trustee on such Funding 1 Interest Payment
Date then the amount payable to the Servicer on such Funding 1 Interest
Payment Date shall be reduced by the amount of the shortfall and such
shortfall shall (subject always to the provisions of this CLAUSE 23) be
payable on the immediately succeeding Funding 1 Interest Payment Date.
23.2 In the event that:
(A) after redemption in full of the Intercompany Loans; or
23
(B) after service of an Intercompany Loan Acceleration Notice and
payment of all other prior claims,
the remaining sums available to the Mortgages Trustee or remaining
proceeds of enforcement are insufficient to satisfy in full the
outstanding fees or other claims of the Servicer, such fees shall be
reduced by the amount of the deficiency.
23.3 Each of the Seller and the Servicer agrees that it will not:
(A) set off or purport to set off any amount which the Mortgages
Trustee, Funding 1 or each Issuer is or will become obliged to
pay to it under any of the Transaction Documents against any
amount from time to time standing to the credit of or to be
credited to the Mortgages Trustee GIC Account, the Funding 1
GIC Account, the Funding 1 Transaction Account or any Issuer
Transaction Account or in any other account prior to transfer
to the Mortgages Trustee GIC Account, the Funding 1 GIC
Account, the Funding 1 Transaction Account or any Issuer
Account, as appropriate; or
(B) make or exercise any claims or demands, any rights of
counterclaim or any other equities against or withhold payment
of any and all sums of money which may at any time and from
time to time be standing to the credit of the Mortgages
Trustee GIC Account, the Funding 1 GIC Account, the Funding 1
Transaction Account or the relevant Issuer Account.
23.4 The Servicer agrees that for so long as any First Issuer Notes and New
Notes are outstanding it will not petition nor commence proceedings for
the administration or winding up of the Mortgages Trustee or Funding 1
or any Issuer nor participate in any ex parte proceedings with regard
thereto.
23.5 In relation to all sums due and payable by the Mortgages Trustee to the
Servicer, the Servicer agrees that it shall have recourse only to sums
paid to or received by (or on behalf of) the Mortgages Trustee pursuant
to the provisions of the Mortgage Sale Agreement, the other Transaction
Documents and in relation to the Mortgages.
23.6 For the avoidance of doubt, neither Beneficiary shall be liable to pay
any amounts due under CLAUSES 11 and 13 without prejudice to the
obligations of the Mortgages Trustee in respect of such amounts.
23.7 Notwithstanding any other provisions of this Agreement, all obligations
to, and rights of, Funding 1 under or in connection with this Agreement
(other than its obligations under Clause 24) shall automatically
terminate upon the discharge in full of all amounts owing by it under
any Intercompany Loan Agreement, provided that this shall be without
prejudice to any claims in respect of such obligations and rights
arising on or prior to such date.
24. CONFIDENTIALITY
During the continuance of this Agreement or after its termination, each
of the Mortgages Trustee and the Beneficiaries shall use its best
endeavours not to disclose to any person, firm or company whatsoever
any information relating to the business, finances or other matters of
a confidential nature of any other party hereto of which it may
exclusively by virtue of being party to the Transaction Documents have
become possessed and shall use all reasonable endeavours to prevent any
such disclosure as aforesaid, provided however that the provisions of
this CLAUSE 24 shall not apply:
24
(A) to any information already known to the Mortgages Trustee or
the Beneficiaries otherwise than as a result of entering into
any of the Transaction Documents;
(B) to any information subsequently received by the Mortgages
Trustee or the Beneficiaries which it would otherwise be free
to disclose;
(C) to any information which is or becomes public knowledge
otherwise than as a result of the conduct of the Mortgages
Trustee or the Beneficiaries;
(D) to any extent that the Mortgages Trustee or the Beneficiaries
is required to disclose the same pursuant to any law or order
of any court or pursuant to any direction, request or
requirement (whether or not having the force of law) of any
central bank or any governmental or other authority
(including, without limitation, any official bank examiners or
regulators);
(E) to the extent that the Mortgages Trustee or the Beneficiaries
needs to disclose the same for determining the existence of,
or declaring, an Intercompany Loan Event of Default or a
Termination Event, the protection or enforcement of any of its
rights under any of the Transaction Documents or in connection
herewith or therewith or for the purpose of discharging, in
such manner as it thinks fit, its duties under or in
connection with such agreements in each case to such persons
as require to be informed of such information for such
purposes; or
(F) in relation to any information disclosed to the professional
advisers of the Mortgages Trustee or the Beneficiaries or (in
connection with the review of current ratings of the First
Issuer Notes or any New Notes or with a prospective rating of
any debt to be issued by an Issuer) to any credit rating
agency or any prospective new Servicer or Mortgages Trustee.
25. NOTICES
Any notices to be given pursuant to this Agreement to any of the
parties hereto shall be sufficiently served if sent by prepaid first
class post, by hand or facsimile transmission and shall be deemed to be
given (in the case of facsimile transmission) when despatched, (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 Servicer, to Halifax plc, Trinity Road,
Halifax, West Yorkshire HX1 2RG (facsimile number +44 (0) 1422
391777) for the attention of Mortgage Securitisation Manager
with a copy to HBOS Treasury Services plc, 33 Old Broad
Street, London EC2N 1HZ (facsimile number +44 (020) 7574 8784)
for the attention of Head of Capital Markets and
Securitisation;
(B) in the case of the Mortgages Trustee, to Permanent Mortgages
Trustee Limited, 47 Esplanade, St. Helier, Jersey JE1 0BD
(facsimile number +44 (0) 1534 726391) for the attention of
the Secretary with a copy to HBOS Treasury Services plc, 33
Old Broad Street, London EC2N 1HZ (facsimile number +44 (020)
7574 8784) for the attention of Head of Capital Markets and
Securitisation;
(C) in the case of the Seller, to Halifax plc, Trinity Road,
Halifax, West Yorkshire HX1 2RG (facsimile number +44 (0) 1422
391777) for the attention Mortgage Securitisation Manager with
a copy to HBOS Treasury Services PLC, 33 Old Broad
25
Street, London EC2N 1HZ (facsimile number +44 (020) 7574 8784)
for the attention of Head of Capital Markets and
Securitisation;
(D) in the case of Funding 1, to Permanent Funding (No. 1)
Limited, Blackwell House, Guildhall Yard, London EC2V 5AE
(facsimile number +44 (020) 7556 0975) for the attention of
the Secretary with a copy to HBOS Treasury Services plc, 33
Old Broad Street, London EC2N 1HZ (facsimile number+44 (020)
7574 8784) for the attention of Head of Capital Markets and
Securitisation;
(E) in the case of the Security Trustee:
(i) to State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, (facsimile
number + 1 (617) 662 2919) for the attention of Mark
Nelson; and
(ii) to U.S. National Bank Association, 1 Federal Street,
3rd Floor, Boston, Massachusetts 02110, (facsimile
number + 1 (617) 603 6638) for the attention of
Corporate Trust Services;
(F) 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 written notice
in accordance with the provisions of this CLAUSE 25. All
notices served under this Agreement shall be simultaneously
copied to the Security Trustee by the person serving the same.
26. VARIATION AND WAIVER
No variation or waiver of this Agreement shall be effective unless it
is in writing and signed by (or by some person duly authorised by) each
of the parties. No single or partial exercise of, or failure or delay
in exercising, any right under this Agreement shall constitute a waiver
or preclude any other or further exercise of that or any other right.
No variation or waiver of this Agreement shall be made if the same
would adversely affect the then current ratings of any of the Notes.
27. NO PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any partnership
between any of the parties.
28. ASSIGNMENT
28.1 The Mortgages Trustee may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
each of the Beneficiaries.
28.2 The Servicer may not assign or transfer any of its rights and
obligations under this Agreement without the prior written consent of
the Mortgages Trustee (as trustee for the Beneficiaries) and each of
the Beneficiaries.
28.3 The Servicer acknowledges that Funding 1 has assigned its rights under
this Agreement to the Security Trustee pursuant to the Funding 1 Deed
of Charge and acknowledges that pursuant to the terms of the Funding 1
Deed of Charge, Funding 1 has, inter alios, authorised the Security
Trustee, prior to the Funding 1 Security becoming enforceable, to
exercise, or refrain from exercising, all rights, powers, authorities,
discretions and remedies under or in respect of the
26
Transaction Documents, including this Agreement, in such manner as in
its absolute discretion it shall think fit.
29. CHANGE OF SECURITY TRUSTEE
29.1 If there is any change in the identity of the Security Trustee in
accordance with the Funding 1 Deed of Charge, the Servicer, the Seller,
Funding 1 and the Mortgages Trustee shall execute such documents and
take such action as the successor Security Trustee and the outgoing
Security Trustee may reasonably require for the purpose of vesting in
the successor Security Trustee the rights and obligations of the
outgoing Security Trustee under this Agreement and releasing the
outgoing Security Trustee from its future obligations under this
Agreement.
29.2 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 Servicer, the Seller, Funding 1 or
the Mortgages Trustee under this Agreement.
30. AMENDMENTS
Subject to CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental
Provisions Regarding the Security Trustee), any amendments to this
Agreement will be made only with the prior written consent of each
party to this Agreement.
31. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Agreement do not intend that any term of this
Agreement should be enforced, by virtue of the Contracts (Rights of
Third Parties) Act 1999, by any person who is not a party to this
Agreement.
32. COUNTERPARTS AND SEVERABILITY
32.1 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.
32.2 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.
33. GOVERNING LAW AND JURISDICTION
33.1 This Agreement is governed by, and shall be construed in accordance
with, the laws of England.
33.2 Each party to this Agreement hereby irrevocably submits to the
non-exclusive jurisdiction of the English courts in any action or
proceeding arising out of or relating to this Agreement, and hereby
irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined by such courts. Each party to
this Agreement hereby irrevocably waives, to the fullest extent it may
possibly do so, any defence or claim that the English courts are an
inconvenient forum for the maintenance or hearing of such action or
proceeding.
27
34. PROCESS AGENT
The Mortgages Trustee irrevocably and unconditionally appoints
Structured Finance Management Limited of Blackwell House, Guildhall
Yard, London EC2V 5AE 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 Structured Finance
Management Limited ceasing so to act it will appoint another person
with a registered office in London as its agent for service of process.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as a
deed the day and year first before written.
28
SCHEDULE 1
THE SERVICES
In addition to the Services set out in the body of the Servicing Agreement, the
Servicer shall:
(a) keep records and books of account for the Mortgages Trustee in relation
to the Loans and Related Security comprised in the Portfolio;
(b) keep records for all taxation purposes and Value Added Tax;
(c) notify relevant Borrowers of any change in their Monthly Payments;
(d) assist the auditors of the Mortgages Trustee and provide information to
them upon reasonable request;
(e) provide a redemption statement upon the request of a Borrower or the
Borrower's solicitor or licensed conveyancer;
(f) notify relevant Borrowers of any other matter or thing which the
applicable Mortgage Conditions or Offer Conditions require them to be
notified of in the manner and at the time required by the relevant
Mortgage Terms;
(g) subject to the provisions of this Agreement (including without
limitation Clause 5.2) take all reasonable steps to recover all sums
due to the Mortgages Trustee including without limitation by the
institution of proceedings and/or the enforcement of any Loan comprised
in the Portfolio or any Related Security;
(h) take all other action and do all other things which it would be
reasonable to expect a Reasonable, Prudent Mortgage Lender to do in
administering its loans and their related security; and
(i) act as collection agent for the Mortgages Trustee under the Direct
Debiting Scheme in accordance with the provisions of this Agreement.
29
SCHEDULE 2
FORM OF QUARTERLY POOL CUT
FIELD DESCRIPTION
- ----- -----------
Year/Month Processing year and month in YYYYMM format
Account Number Unique Mortgage Account Identifier
Original Advance
Current Loan balance Includes Capital, Interest, Arrears and Unpaid Charges
Latest Property Valuation Most recent valuation. It will be equal to original
valuation if no further valuation was done
Completion Date The date the advance was completed
Outstanding Monthly Periods The number of monthly periods remaining on the Loan
Method of Repayment Code to signify types of Loans: e.g. Endowment,
Interest Only, Repayment, Pension, Investment Linked
based on worst case reporting
First Income First applicant's primary income
Second Income Second applicant's primary income
Post Code Property postcode
MIG Cover Amount Amount of MIG Policy cover
Current Arrears Balance Includes unpaid interest, unpaid capital, unpaid
charges
Arrears Multiplier (Current) Arrears at previous month end divided by current month
payment due
Arrears Multiplier (1 to 2 months) Arrears at previous month end divided by current month
payment due
Arrears Multiplier (2 to 3 months) Arrears at previous month end divided by payment due
for that month
Arrears Multiplier (3 to 6 months) As above, but for 3 months prior to current month
Arrears Multiplier (6 to 12 months) As above, but for 6 months prior to current month
Arrears Multiplier (1 to 2 years) As above, but for 1 year prior to current month
Arrears Multiplier (2 years plus) As above, but for 2 years prior to current month
Property type Terraced, semi-detached, detached, other (flats,
maisonettes, etc.) or unknown
Loan Use House purchase or remortgage
Property Use Owner occupied, rental, etc
Product code(s) Code identifier for the product(s)
MAR Monthly payment amount
Arrangement term Where an arrangement exists for the primary account
the period of the arrangement from the start of the
arrangement
Arrangement amount Amount of the arrangement made
Arrangement type Code for the arrangement type
30
EXECUTION
SERVICER
EXECUTED as a DEED by )
HALIFAX PLC )
acting by its attorney )
in the presence of: )
Witness's signature:
Name:
Address:
MORTGAGES TRUSTEE
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED acting by two )
directors/a director and the secretary )
Director
Director/Secretary
SELLER
EXECUTED as a DEED by )
HALIFAX PLC )
acting by its attorney )
in the presence of )
Witness'd signature:
Name:
Address:
31
FUNDING 1
EXECUTED as a DEED by )
PERMANENT FUNDING (NO. 1) )
LIMITED acting by two directors/ )
a director and the secretary )
Director
Director/Secretary
SECURITY TRUSTEE
EXECUTED as a DEED by an authorised )
signatory for and on behalf of )
STATE STREET BANK AND )
TRUST COMPANY )
Authorised signatory
EXECUTED as a DEED by an authorised )
signatory for and on behalf of )
U.S. NATIONAL BANK )
ASSOCIATION )
)
Authorised signatory
DATED [6TH MARCH], 2003
HALIFAX PLC
as Servicer
and
PERMANENT MORTGAGES TRUSTEE LIMITED
as Mortgages Trustee
and
HALIFAX PLC
as Seller
and
PERMANENT FUNDING (NO. 1) LIMITED
as Funding 1
and
STATE STREET BANK AND TRUST COMPANY
and
U.S. NATIONAL BANK ASSOCIATION
as Security Trustee
--------------------------------
AMENDED AND RESTATED SERVICING AGREEMENT
--------------------------------
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation......................................................................2
2. Appointment of Servicer.............................................................................2
3. The Administration Services.........................................................................3
4. Mortgages Trustee Variable Base Rate/MortgageS Trustee Tracker Rate.................................5
5. Administration of Mortgages.........................................................................7
6. No Liability.......................................................................................11
7. New Loans..........................................................................................11
8. Product Switching and Further Advances.............................................................11
9. Redemption of Mortgages............................................................................11
10. Powers of Attorney.................................................................................12
11. Costs and Expenses.................................................................................12
12. Information........................................................................................13
13. Remuneration.......................................................................................14
14. Insurances.........................................................................................15
15. Halifax Insurance Policies.........................................................................15
16. Buildings Policies.................................................................................16
17. Title Deeds........................................................................................16
18. Data Protection....................................................................................17
19. Covenants of Servicer..............................................................................18
20. Services Non-exclusive.............................................................................19
21. Termination........................................................................................19
22. Further Assurance..................................................................................22
23. Miscellaneous......................................................................................22
24. Confidentiality....................................................................................23
25. Notices............................................................................................24
26. Variation and Waiver...............................................................................25
27. No Partnership.....................................................................................25
28. Assignment.........................................................................................25
29. Change of Security Trustee.........................................................................26
30. Amendments.........................................................................................26
31. Exclusion of Third Party Rights....................................................................26
32. Counterparts and Severability......................................................................26
33. Governing Law and Jurisdiction.....................................................................26
34. Process Agent......................................................................................27
SCHEDULE
1. The Services.............................................................................................28
2. Form of Quarterly Pool Cut...............................................................................29
EXECUTION...................................................................................................30