EXHIBIT 4.3
DRAFT (2): 31ST MAY, 2005 ALLEN & OVERY
ALLEN & OVERY LLP
AMENDED AND RESTATED
MORTGAGE SALE AGREEMENT
HALIFAX PLC
as Seller and one of the Beneficiaries
and
PERMANENT FUNDING (NO. 1) LIMITED
as Funding 1 and one of the Beneficiaries
and
PERMANENT MORTGAGES TRUSTEE LIMITED
as Mortgages Trustee
and
THE BANK OF NEW YORK
as Security Trustee
[22nd] June, 2005
CONTENTS
CLAUSE PAGE
1. Definitions and Construction...........................................2
2. Sale and Purchase of Initial Portfolio.................................3
3. Initial Closing Date...................................................3
4. Sale and Purchase of New Portfolios....................................5
5. Trust of Monies.......................................................10
6. Completion of the Transfer of Loans...................................11
7. Undertakings..........................................................12
8. Warranties and Repurchase by the Seller...............................15
9. Other Warranties......................................................18
10. Further Assurance.....................................................19
11. Consequences of Breach................................................19
12. Subordination.........................................................19
13. Non-Merger............................................................19
14. No Agency or Partnership..............................................20
15. Payments..............................................................20
16. Waiver and Variation..................................................20
17. Notices...............................................................20
18. Assignment............................................................21
19. Change of Security Trustee............................................21
20. Not Used..............................................................21
21. Third Party Rights....................................................21
22. Governing Law.........................................................22
SCHEDULE
1. Representations and Warranties........................................23
2. Registered Transfer...................................................31
3. Unregistered Transfer.................................................32
4. Lending Criteria......................................................35
5. Power of Attorney in favour of Funding 1, the
Mortgages Trustee and the Security Trustee............................39
6. Loan Repurchase Notice................................................42
7. Assignment of Third Party Rights......................................44
8. Assignment of Halifax Mortgage Re Limited MIG Policies................47
9. Halifax Mortgage Re Limited MIG Policies Assignment notice............51
10. Insurance Endorsement.................................................52
11. Insurance Acknowledgements............................................54
12. New Portfolio Notice..................................................58
13. Forms of Scottish Transfer............................................60
14. Forms of Scottish Transfer............................................63
15. Form of Scottish Declaration of Trust.................................66
16. Form of Memorandum of Release.........................................73
17. Re-Assignment of MIG Policies.........................................74
18. Halifax Mortgage Re Limited MIG Policies Re-Assignment Notice.........78
APPENDIX
Part 1 Initial Portfolio..........................................83
Part 2 Standard Documentation.....................................84
THIS AMENDED AND RESTATED MORTGAGE SALE AGREEMENT is made on [22nd] June, 2005
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 (acting in its
capacities as the SELLER and one of the BENEFICIARIES);
(2) 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 35 Great St. Helen's, London EC3A 6AP (acting in
its capacities as FUNDING 1 and one of the BENEFICIARIES);
(3) 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 (acting in its capacity as the MORTGAGES TRUSTEE); and
(4) THE BANK OF NEW YORK, a New York banking corporation, acting through its
offices at 48th Floor, One Canada Square, London E14 5AL (acting in its
capacity as SECURITY TRUSTEE, which expression shall include such company
and all other persons or companies for the time being acting as security
trustee (or co-trustee) pursuant to the terms of the Funding 1 Deed of
Charge).
WHEREAS:
(A) The Seller carries on the business of, inter alia, originating mortgage
loans to individual borrowers secured on residential properties in
England, Wales or Scotland.
(B) The Seller has sold to the Mortgages Trustee certain of the above
mentioned mortgage loans together with the benefit of their related
security on the terms and subject to the conditions set out in the
Mortgage Sale Agreement (as amended and/or restated by this Agreement and
from time to time, the MORTGAGE SALE AGREEMENT).
(C) The Mortgages Trustee holds all of the above mentioned mortgage loans as
bare trustee for the Beneficiaries upon, with and subject to the trusts,
powers and provisions of the Mortgages Trust Deed (as amended and/or
restated from time to time, the MORTGAGES TRUST DEED).
(D) On 12th March, 2004 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an Amended
and Restated Mortgage Sale Agreement of the same date and the Seller sold
a new portfolio of mortgage loans to the Mortgages Trustee on 12th March,
2004 on such amended terms.
(E) On 22nd July, 2004 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an Amended
and Restated Mortgage Sale Agreement of the same date and the Seller sold
a new portfolio of mortgage loans to the Mortgages Trustee on 22nd July,
2004 on such amended terms.
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(F) On 18th November, 2004 the parties to the Mortgage Sale Agreement agreed
to amend the terms of the Mortgage Sale Agreement as set out in an Amended
and Restated Mortgage Sale Agreement of the same date and the Seller sold
a new portfolio of mortgage loans to the Mortgages Trustee on 18th
November, 2004 on such amended terms.
(G) On 23rd March, 2005 the parties to the Mortgage Sale Agreement agreed to
amend the terms of the Mortgage Sale Agreement as set out in an Amended
and Restated Mortgage Sale Agreement of the same date and the Seller sold
a new portfolio of mortgage loans to the Mortgages Trustee on 23rd March,
2005 on such amended terms.
(H) The parties to the Mortgage Sale Agreement have agreed to amend and
restate the terms of the Mortgage Sale Agreement as set out herein and the
Seller may sell new portfolios of mortgage loans and their related
security to the Mortgages Trustee on such amended terms.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Deed and dated [22nd]
June, 2005 (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Agreement) (the
MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
specifically incorporated into this Agreement and, accordingly, the
expressions defined in the Master Definitions and Construction Schedule
(as so amended, varied or supplemented from time to time) 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 the Master Definitions
and Construction Schedule.
1.2 Any reference in this Agreement to any discretion, power, right, duty
or obligation on the part of the Mortgages Trustee shall be as
exercised by the Mortgages Trustee subject in each case to the
provisions of CLAUSE 16.2 of the Mortgages Trust Deed.
1.3 For the purposes of Section 2 of the Law of Property (Miscellaneous
Provisions) Act 1989, the terms of the Transaction Documents are, so
far as applicable, incorporated herein.
1.4 The Initial Portfolio contained as Part 1 of the Exhibit to this Agreement
and any schedule of New Loans attached to any New Portfolio Notice may be
provided in a document stored upon electronic media (including, but not
limited to, a CD-ROM) in a form acceptable to the Mortgages Trustee, the
Security Trustee and Funding 1 (each acting reasonably).
1.5 This Agreement amends and restates the Mortgage Sale Agreement made
on the 14th June, 2002 as amended and restated on the 6th March,
2003, 25th November, 2003, 12th March, 2004, 22nd July, 2004, 18th
November, 2004 and 23rd March, 2005 (the PRINCIPAL AGREEMENT). As of the
date of this Agreement, any future rights or obligations (excluding 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.
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2. SALE AND PURCHASE OF INITIAL PORTFOLIO
2.1 Subject to CLAUSE 2.2, in consideration of the Purchase Price (which shall
be paid in accordance with CLAUSE 3.3) and the covenant of the
Mortgages Trustee to hold the Trust Property upon trust, with and subject
to all the trusts, powers and provisions of the Mortgages Trust Deed, the
Seller hereby agrees to sell to the Mortgages Trustee with full title
guarantee, the Initial Portfolio on the Initial Closing Date.
2.2 The obligation of the Seller under CLAUSE 2.1 shall be subject to
and conditional upon:
(a) the issue by the First Issuer of the Issuer Notes on the Initial
Closing Date and the borrowing by Funding 1 of the Term Advances
under the First Issuer Intercompany Loan Agreement;
(b) the constitution of the Mortgages Trust on or prior to the Initial
Closing Date; and
(c) the Transaction Documents in existence on the Initial Closing Date
having been executed and delivered by the parties thereto on or
before the Initial Closing Date.
2.3 The sale of the Portfolio shall not include any obligation to pay
any Delayed Cashbacks, Home Cash Reserve Drawings or Flexible Loan
Drawings (if any), which obligation shall at all times, and
notwithstanding the sale of the Portfolio, remain an obligation of the
Seller.
3. INITIAL CLOSING DATE
3.1 (a) A meeting shall take place at 11 a.m. on the Initial Closing
Date at the offices of Allen & Overy LLP, One New Change, London
EC4M 9QQ or such other time or offices as the parties may agree
at which the Seller shall deliver to the Security Trustee or its
representative the following documents:
(i) two originals of the power of attorney dated as at the
Initial Closing Date and substantially in the form set
out in SCHEDULE 5 hereto, duly executed by the Seller;
(ii) a certified copy of each of the duly executed Insurance
Acknowledgements;
(iii) a certified copy of each of the duly executed Insurance
Endorsements;
(iv) a duly executed assignment of the Halifax Mortgage Re
Limited MIG Policies to the extent that they relate to
the Mortgages comprised in the Initial Portfolio from
the Seller to the Mortgages Trustee and a certified copy
of a notice (the original of which shall be served by
the Seller by courier or by special delivery) of such
assignment from the Seller to HBOS Insurance (PCC)
Guernsey Limited dated as at the Initial Closing Date
and in the form (mutatis mutandis) set out in SCHEDULE 8
and hereto respectively and a certified copy of
consent to assignment of the Halifax Mortgage Re Limited
MIG Policies (or acknowledgement that the Mortgages
Trustee will be an insured in respect of the Initial
Portfolio under the Halifax Mortgage Re Limited MIG
Policies following such assignment) from HBOS Insurance
(PCC) Guernsey Limited in such form as HBOS Insurance
(PCC) Guernsey Limited reasonably requires;
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(v) a certificate of a duly authorised officer of the Seller
dated as at the Initial Closing Date attaching a copy of
the board minute of the Seller authorising its duly
appointed representatives to agree the sale of the
Portfolio and authorising execution and performance of
this Agreement, the Servicing Agreement, the other
Transaction Documents to which the Seller is a party
(in any capacity) and all of the documentation to be
entered into pursuant to this Agreement and confirming
that the resolutions referred to therein are in full
force and effect and have not been amended or rescinded
as at the date of the certificate;
(vi) a duly executed assignment of rights against third
parties comprised in the Initial Portfolio dated as at
the Initial Closing Date and in the form of the
Assignment of Third Party Rights; and
(vii) a solvency certificate from an authorised signatory
of the Seller dated the Initial Closing Date in a form
acceptable to the Mortgages Trustee, Funding 1 and the
Security Trustee (each acting reasonably).
(b) The parties hereto acknowledge that completion on the Initial
Closing Date of the sale to the Mortgages Trustee of all of the
Seller's right, title, interest and benefit in and to the
Initial Portfolio subject to the terms and provisions of the
Mortgages Trust Deed shall occur as indicated in this CLAUSE 3,
provided that the matters described in CLAUSES 6.2, 6.3, 6.4 and
6.5 shall not occur until the relevant time indicated in CLAUSE
6 or, as applicable, CLAUSE 7.4.
3.2 The Seller undertakes that from the Initial Closing Date until the
perfection of the assignment or assignation (as appropriate) in
accordance with CLAUSES 6.2, 6.3, 6.4 and 6.5, the Seller shall hold
the Title Deeds and Customer Files relating to the Portfolio that are
in its possession or under its control or held to its order to the
order of the Mortgages Trustee or as the Mortgages Trustee shall
otherwise direct.
3.3 Subject to fulfilment of the conditions referred to in CLAUSES 2.2
and 3, the Seller shall be paid the Purchase Price by telegraphic
transfer by Funding 1 on the Initial Closing Date.
3.4 The Seller shall provide all reasonable co-operation to the
Mortgages Trustee, Funding 1 and the Security Trustee to enable them
to carry out their respective duties and enforce their rights under
the Transaction Documents. Without prejudice to the generality of
the foregoing, the Seller shall:
(a) upon reasonable prior notice and during normal office hours,
permit the Mortgages Trustee, Funding 1, the Security Trustee
and their authorised employees and agents and other persons
nominated by the Security Trustee and approved by the Seller
(such approval not to be unreasonably withheld or delayed), to
review the Customer Files and the Title Deeds in relation to the
Portfolio (subject to such person(s) agreeing to keep the same
confidential but provided that disclosure shall be permitted to
the professional advisors and auditors of the party to whom such
disclosure is made and/or to the extent that such disclosure is
required by law or for the purpose of any judicial or other
proceedings); and/or
(b) give promptly all such information and explanations relating
to the Loans and their Related Security as the Mortgages
Trustee,Funding 1 or the Security Trustee may reasonably request
(including a list of the Loans and their Related Security in the
Portfolio along with details of the location of the Title Deeds
relating thereto),
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provided that prior to completion in accordance with CLAUSE 6, the Seller
shall be under no obligation to provide any information or documentation
to any person other than the Mortgages Trustee and/or the Security Trustee
or their respective employees and/or professional advisors or allow such
person access to the Customer Files or Title Deeds if to do so would
result in a breach of the applicable Mortgage Terms or the Data Protection
Act 1998.
4. SALE AND PURCHASE OF NEW PORTFOLIOS
4.1 Subject to fulfilment of the conditions set out in CLAUSES 2.2, 3.1,
4.2 (or as applicable, 4.3) and 4.4 and the restriction set out in
CLAUSE 2.3, if the Seller shall, at any time and from time to time
serve a properly completed New Portfolio Notice on the Mortgages
Trustee and Funding 1 with a copy to the Security Trustee (such
service to be in the Seller's sole discretion), the Seller agrees
that on the date for completion of the sale specified in such New
Portfolio Notice the Seller shall sell with full title guarantee (or
in relation to rights and assets situated in or governed by the law
of Scotland with absolute warrandice) to the Mortgages Trustee the
relevant New Portfolio.
4.2 The conditions to be met as at each Sale Date are:
(a) no event of default under the Transaction Documents shall have
occurred which is continuing as at the relevant Sale Date;
(b) the Principal Deficiency Ledger shall not have a debit balance
as at the most recent Funding 1 Interest Payment Date after
applying all Funding 1 Available Revenue Receipts on that
Funding 1 Interest Payment Date;
(c) the Mortgages Trustee is not aware that the purchase of the
New Portfolio on the relevant Sale Date would adversely affect
the then current rating by the Rating Agencies of the Notes (or
any of them);
(d) as at the relevant Sale Date, the Seller has not received any
notice that the short term, unsecured, unguaranteed and
unsubordinated debt obligations of the Seller are not rated at
least P-1 by Moody's, A-1 by S&P and F1 by Fitch at the time of,
and immediately following, the sale of the New Loans to the
Mortgages Trustee;
(e) as at the relevant Sale Date, the aggregate Outstanding
Principal Balance of the Loans in the Mortgages Trust, in
respect of which the aggregate amount in arrears is more than
three times the Monthly Payment then due, is less than 5 per cent.
of the aggregate Outstanding Principal Balance of the Loans in
the Mortgages Trust;
(f) except where Funding 1 pays amounts to the Seller in
consideration of New Loans to be sold to the Mortgages Trustee,
the aggregate Outstanding Principal Balance (excluding Arrears
of Interest) of New Loans transferred in any one Interest Period
must not exceed 15 per cent. of the aggregate Outstanding
Principal Balance of Loans (excluding Arrears of Interest) in
the Mortgages Trust as at the beginning of that Interest Period;
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(g) the sale of the New Portfolio on the relevant Sale Date does not
result in the product of WAFF and WALS for the Portfolio after
such purchase calculated on the relevant Sale Date (in the same
way as for the Initial Portfolio (or as agreed by the Servicer
and the Rating Agencies from time to time)) exceeding the
product of WAFF and WALS for the Portfolio calculated on the
most recent Closing Date plus 0.25 per cent.;
(h) the yield (as calculated below) of the Loans in the Mortgages
Trust together with the yield of the New Loans to be sold to the
Mortgages Trustee on the relevant Sale Date (together for the
purposes of this paragraph, the RELEVANT LOANS) is at least 0.50
per cent. greater than Sterling-LIBOR for three-month sterling
deposits as at the previous Interest Payment Date, after taking
into account the average yield on the Loans which are Variable
Rate Loans, Tracker Rate Loans and Fixed Rate Loans and the
margins on the Funding 1 Swap(s), in each case as at the
relevant Sale Date. The yield of the Relevant Loans is to be
calculated as follows:
(A x B) + (C x (D - E + F)) + (G x (H + I))
-------------------------------------------
J
where,
(A) = the Outstanding Principal Balance, on the
relevant Sale Date, of the Relevant Loans which are
Fixed Rate Loans;
(B) = the interest rate receivable by Funding 1
under the Funding 1 Fixed Floating Rate Swap as at the
relevant Sale Date;
(C) = the Outstanding Principal Balance, on the relevant
Sale Date, of the Relevant Loans which are Variable
Rate Loans;
(D) = the weighted average Variable Base Rate of the
Relevant Loans which are Variable Rate Loans on the
relevant Sale Date;
(E) = the Variable Rate Swap SVR for the Relevant Loans
which are Variable Rate Loans on the relevant Sale
Date;
(F) = the interest rate receivable by Funding 1 under the
Funding 1 Variable Rate Swap as at the relevant Sale
Date;
(G) = the Outstanding Principal Balance, on the relevant
Sale Date, of the Relevant Loans which are Tracker
Rate Loans;
(H) = the interest rate receivable by Funding 1 under the
Tracker Rate Swap as at the relevant Sale Date;
(I) = the weighted average margin of the Relevant Loans
which are Tracker Rate Loans over or under the Bank of
England Repo Rate on the relevant Sale Date;
(J) = the Outstanding Principal Balance of the Relevant
Loans on the relevant Sale Date;
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(i) the sale of the New Loans on the relevant Sale Date does not
result in the loan-to-value ratio of the Loans and the New Loans
after application of the LTV Test on the relevant Sale Date
exceeding the loan-to-value ratio (based on the LTV Test) of
Loans in the Portfolio on the most recent Closing Date plus 0.25
per cent.;
(j) the sale of the New Loans on the relevant Sale Date does not
result in Loans (other than Fixed Rate Loans) which after taking
into account the Funding 1 Swap will yield less than Sterling-
LIBOR plus 0.50 per cent. as at the relevant Sale Date and that
have more than 2 years remaining on their incentive period
accounting for more than 15 per cent. of the aggregate
Outstanding Principal Balance of all Loans comprising the Trust
Property;
(k) the sale of the New Loans on the relevant Sale Date does not
result in the Fixed Rate Loans which have more than 1 year
remaining on their incentive period accounting for more than 50
per cent. of the aggregate Outstanding Principal Balance of
Loans comprised in the Trust Property;
(l) no sale of the New Loans may occur, if, as at the relevant
Sale Date, the Step-up Date in respect of any Note issued after
1st January, 2003 and still outstanding has been reached and
such Note has not been redeemed in full. For the avoidance of
doubt, this prohibition on the sale of New Loans to the Mortgages
Trustee shall remain in effect only for so long as any such Note
remains outstanding and, upon its redemption, the sale of New
Loans to the Mortgages Trustee may be resumed in accordance with
the terms of this Agreement;
(m) as at the Sale Date, the adjusted General Reserve Fund is equal
to or greater than the General Reserve Fund Threshold;
(n) if the sale of New Loans includes the sale of New Loan Types
to the Mortgages Trustee, the Security Trustee has received
written confirmation from each of the Rating Agencies that such
New Loan Types may be sold and assigned to the Mortgages Trustee
and that such sale of New Loan Types would not have an adverse
effect on the then current ratings of the Notes;
(o) the Funding 1 Swap Agreement has been modified as required (or,
if appropriate, Funding 1 has entered into a new swap agreement)
to hedge against the interest rates payable in respect of such
New Loans and the floating rate of interest payable on the
Issuer Intercompany Loan; and
(p) no Trigger Event has occurred on or before the relevant Sale
Date.
In this CLAUSE 4.2 references to any Monthly Payment due at any date
means the Monthly Payment payable in respect of the month in which
that date falls.
4.3 The obligations of the Seller under CLAUSE 4.1 shall be subject to and
conditional upon no Insolvency Event having occurred which is continuing
as at the relevant Sale Date.
4.4 Subject to fulfilment of the conditions referred to in CLAUSES 4.2, 4.3,
4.4, 4.5 and 4.6, the consideration to be provided to the Seller for the
sale and assignment of the New Portfolio to the Mortgages Trustee on a
Sale Date shall be the aggregate of:
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(a) the payment by Funding 1 to the Seller by telegraphic transfer
on the relevant Sale Date of the proceeds of any New Intercompany
Loan advanced to Funding 1 by a New Issuer; and/or
(b) the covenant of the Mortgages Trustee to hold the Trust
Property on trust for the Seller (as to the Seller Share) and
Funding 1 (as to the Funding 1 Share) pursuant to the terms of
the Mortgages Trust Deed.
4.5 (a) On the date of the sale of the relevant New Portfolio the
Seller shall deliver to the Security Trustee or its
representative the following documents:
(i) on the date of the first sale of a relevant New Portfolio
including Scottish Loans:
(A) two originals of the power of attorney dated as at
the Sale Date and substantially in the form set out in
SCHEDULE 5 hereof duly executed by the Seller;
(B) a certified copy of each of the duly executed
Insurance Acknowledgements; and
(C) a certified copy of each of the duly executed
Insurance Endorsements;
(ii) a duly executed assignment of the Halifax Mortgage Re
Limited MIG Policies to the extent that they relate to the
Mortgages comprised in the relevant New Portfolio from the
Seller to the Mortgages Trustee and a certified copy of a
notice (the original of which shall be served by the
Seller by courier or by special delivery) of such
assignment from the Seller to HBOS Insurance (PCC)
Guernsey Limited dated as of the relevant Assignment Date
and in the form (mutatis mutandis) set out in SCHDULE 8
and hereof respectively and a certified copy of consent
to assignment of the Halifax Mortgage Re Limited MIG
policies (or acknowledgement that the Mortgages Trustee
will be an insured under the Halifax Mortgage Re Limited
MIG Policies following the assignment) from HBOS Insurance
(PCC) Guernsey Limited in such form as HBOS Insurance
(PCC) Guernsey Limited reasonably requires;
(iii) a duly executed assignment of rights against third
parties comprised in the relevant New Portfolio dated as
at the relevant Sale Date and in the form of the
Assignment of Third Party Rights;
(iv) a certified copy of each of the duly executed Insurance
Acknowledgements;
(v) on any Sale Date that Funding 1 provides consideration
for New Loans to be sold to the Mortgages Trustee pursuant
to CLAUSE 4.4(A) above only, a certificate of a duly
authorised officer of the Seller dated as at the relevant
Sale Date attaching either (i) a copy of the board minute
referred to in CLAUSE 3.1(A)(V) or (ii) any board minutes
or considerations, notes and resolutions of the Seller or
its duly authorised delegate (as applicable) authorising
its duly appointed representatives to agree the sale of a
New Portfolio, and authorising the execution and
performance of the Transaction Documents to which the
Seller is party, in each case confirming that the
resolutions referred to herein are in full force and
effect and have not been amended or rescinded as at the
date of the certificate;
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(vi) on any Sale Date that Funding 1 provides consideration
for New Loans to be sold to the Mortgages Trustee pursuant
to CLAUSE 4.4(A) above only, a solvency certificate from
an authorised signatory of the Seller dated as at the
relevant Sale Date; and
(vii) a Scottish Declaration of Trust in respect of any
Scottish Loans and their Related Security comprised in the
relevant New Portfolio, in the form (mutatis mutandis) set
out in SCHEDULE 15 and with the annexure thereto duly
completed, duly executed by the Seller, the Mortgages
Trustee and Funding 1.
(b) The parties hereto acknowledge that completion on each relevant Sale
Date of the sale to the Mortgages Trustee of all of the Seller's
right, title, interest and benefit in and to the relevant New
Portfolio subject to the terms and provisions of the Mortgages Trust
Deed shall occur as indicated in this CLAUSE 4 PROVIDED THAT the
matters described in CLAUSES 6.6 and 6.5 shall not occur until the
relevant time indicated in CLAUSE 6 or, as applicable, CLAUSE 7.5.
4.6 (a) The Seller undertakes that from the relevant Sale Date until the
perfection of the assignment or assignation (as appropriate) in
accordance with CLAUSES 6.2 and 6.5, the Seller shall hold the
Title Deeds and Customer Files relating to the New Portfolio
that are in its possession or under its control or held to its
order to the order of the Mortgages Trustee or as the Mortgages
Trustee shall direct.
(b) The Seller undertakes that within three (3) London Business Days
of the Sale Date to provide the Mortgages Trustee and the
Security Trustee with an updated, complete and accurate list of
the Loans and their Related Security which comprise the New
Portfolio which may be provided in a document stored upon
electronic media (including, but not limited to a CD-Rom) in a
form acceptable to the Mortgages Trustee and the Security
Trustee (each acting reasonably).
4.7 Prior to the earlier to occur of:
(a) a Trigger Event; and
(b) (i) if Funding 1 does not enter into a New Intercompany Loan
Agreement, the Interest Payment Date in [December 2011]; or
(ii) if Funding 1 does enter into New Intercompany Loan
Agreements, the latest Interest Payment Date specified by
Funding 1 by notice in writing to the Seller and the
Mortgages Trustee as applying in relation to this
covenant,
the Seller undertakes to use all reasonable endeavours to offer to
sell, in accordance with the provisions of this CLAUSE 4, to the
Mortgages Trustee and the Mortgages Trustee undertakes to use all
reasonable endeavours to acquire from the Seller and to hold pursuant
to the terms of the Mortgages Trust Deed until the earlier of the
Interest Payment Date falling in [December 2011] (or such later date
as may be notified by Funding 1 to the Seller) and the occurrence of
a Trigger Event, sufficient New Loans and their Related Security so
that the aggregate Outstanding Principal Balance of Loans in the
Portfolio during the period from and including the Eighth Issuer
Closing Date to but excluding the Funding 1 Interest Payment Date in
September 2009 is not less than [pound]31,000,000,000 (or such other
amount or amounts specified by Funding 1 in the notice referred to in
CLAUSE 4.7(B)(II) above) provided that the Seller shall not be
obliged to sell to the Mortgages Trustee, and the Mortgages Trustee
shall not be obliged to acquire, New Loans and their Related Security
if in the reasonable opinion of the Seller the sale to the Mortgages
Trustee of New Loans and their Related Security would adversely
affect the business of the Seller.
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4.8 On each Sale Date that Funding 1 provides consideration for New
Loans to be sold to the Mortgages Trustee pursuant to CLAUSE 4.4(A)
above, the Beneficiaries shall appoint a firm of independent auditors
to undertake a due diligence exercise on a sample of the Customer
Files relating to the New Loans to be sold to the Mortgages Trustee
on the relevant Sale Date. The costs of such independent auditors
shall be borne by the relevant New Issuer (which shall be procured by
Funding 1).
5. TRUST OF MONIES
5.1 Notwithstanding the sales effected by this Agreement, if at, or at
any other time after, the Closing Date (but prior to any repurchase
in accordance with CLAUSE 8.5) the Seller holds, or there is held to
its order, or it receives, or there is received to its order any
property, interests, rights or benefits and/or the proceeds thereof
hereby agreed to be sold, the Seller undertakes to each of the
Mortgages Trustee, Funding 1 and the Security Trustee that, subject
to CLAUSE 6, it will promptly remit, assign and/or transfer the same
to the Mortgages Trustee or, if appropriate, the Security Trustee and
until it does so or to the extent that the Seller is unable to effect
such remittance, assignment, assignation or transfer, it will hold
such property, interests, rights or benefits and/or the proceeds
thereof upon trust for the Mortgages Trustee subject at all times to
the Mortgages Trust.
5.2 If at, or any time after, the Initial Closing Date the Mortgages
Trustee holds, or there is held to its order, or it receives, or
there is received to its order, any property, interests, rights or
benefits relating to:
(a) any Loan or Loans under a Mortgage Account and its Related
Security repurchased by the Seller pursuant to CLAUSE 8.5; or
(b) (without prejudice to CLAUSE 11) amounts owed by a Borrower to
the Seller which the Seller has not agreed to sell under
CLAUSE 2.1,
and/or the proceeds thereof, the Mortgages Trustee undertakes to the
Seller that it will remit, assign, re-assign, retrocess or transfer
the same to the Seller, as the case may require, and until it does
so or to the extent that the Mortgages Trustee is unable to effect
such remittance, assignation, assignment, reassignment, retrocession
or transfer, the Mortgages Trustee undertakes to hold such property,
interests, rights or benefits and/or the proceeds thereof upon trust
for the Seller as the beneficial owner thereof or as the Seller may
direct provided that the Mortgages Trustee shall not be in breach of
its obligations under this CLAUSE 5 if, having received any such
monies and paid them to third parties in error, it pays an amount
equal to the monies so paid in error to the Seller in accordance with
the Servicing Agreement.
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6. COMPLETION OF THE TRANSFER OF LOANS
6.1 The assignments or assignations (as appropriate) contemplated by this
Agreement shall be perfected on the twentieth London Business Day
after the earliest to occur of:
(a) the service of an Intercompany Loan Acceleration Notice or a
Note Acceleration Notice in relation to any Intercompany Loan or
any Notes, respectively, of any Issuer; or
(b) the Seller being required to perfect the Mortgages Trustee's
legal title to the Mortgages, or procure any or all of the acts
referred to in this CLAUSE 6 by an order of a court of competent
jurisdiction or by any regulatory authority of which the Seller
is a member or any organisation whose members comprise (but are
not necessarily limited to) mortgage lenders and with whose
instructions it is customary for the Seller to comply; or
(c) it becoming necessary by law to do any or all of the acts
referred to in this CLAUSE 6; or
(d) the Security Trustee certifying that, in its reasonable
opinion, the property, assets and rights of Funding 1 comprised
in the security constituted by the Funding 1 Deed of Charge or
any material part thereof is/are in jeopardy and that the doing
of any or all of the acts referred to in CLAUSES 6.2 to 6.6
inclusive is necessary in order materially to reduce such
jeopardy; or
(e) unless otherwise agreed in writing by the Rating Agencies and
the Security Trustee, the termination of the Seller's role as
Servicer under the Servicing Agreement; or
(f) the Seller calling for perfection by serving notice in writing
to that effect on the Mortgages Trustee, Funding 1 and the
Security Trustee; or
(g) the date on which the Seller ceases to be assigned a long term
unsecured, unsubordinated debt obligation rating from S&P of at
least BBB- or from Moody's of at least Baa3 or from Fitch of at
least BBB-; or
(h) the occurrence of an Insolvency Event in relation to the
Seller; or
(i) the latest of the last repayment dates of the Intercompany
Loans where any Intercompany Loan has not been discharged in
full.
6.2 Completion of the transfer of the English Mortgages in the
Portfolio shall be effected by:
(a) a Registered Transfer, in the case of English Mortgages over
Registered Land (in the form set out in SCHEDULE 2); and
(b) an Unregistered Transfer, in the case of English Mortgages
over Unregistered Land (in the form set out in SCHEDULE 3).
6.3 Completion of the transfer of the Scottish Mortgages in the
Portfolio shall be effected by:
11
(a) the completion and registration in the Land Register of
Scotland of an SLR Transfer (in the form set out in
SCHEDULE 13), in the case of Scottish Mortgages over Properties
title to which is registered in the Land Register of Scotland;
and
(b) the completion and recording in the General Register of Sasines
of a Sasine Transfer (in the form set out in SCHEDULE 14), in
the case of Scottish Mortgages over Properties title to which is
recorded in the General Register of Sasines.
6.4 Completion of the transfer of any other matter comprised in the
Portfolio shall be effected by a transfer, conveyance or assignation
in such form as the Mortgages Trustee may reasonably require.
6.5 Subject to CLAUSE 7.5, prior to perfection pursuant to CLAUSE 6.1,
neither the Mortgages Trustee nor Funding 1 nor the Security Trustee
will:
(a) submit or require the submission of any notice, form, request
or application to or pay any fee for the registration of, or the
noting of any interest at the Land Charges Department of the
Land Registry or at the Land Registry or Registers of Scotland
in relation to, the Mortgages Trustee's and/or Funding 1's
interests in the Portfolio;
(b) give or require the giving of any notice to any Borrower of
the assignment or assignation of that Borrower's Loan and its
Related Security to the Mortgages Trustee or the charge by
Funding 1 of Funding 1's interest in that Borrower's Loan and
its Related Security to the Security Trustee pursuant to the
Funding 1 Deed of Charge; or
(c) send or require to be sent to any solicitor who has acted on
behalf of the Seller in respect of any Mortgage with respect to
which the Seller has not received a complete set of the Title
Deeds a letter or other communication requiring such solicitor
to hold such documents to the order of the Mortgages Trustee or
the Security Trustee (as the case may be).
6.6 Within 25 London Business Days following perfection pursuant to
CLAUSE 6.1, the Seller will do such of the acts or things referred to
in CLAUSES 6.2 to 6.5 as the Security Trustee or the Mortgages
Trustee requires the Seller to do.
6.7 The Seller shall indemnify each of the Mortgages Trustee, Funding 1
and the Security Trustee from and against any and all costs, fees and
expenses (including, without limitation, legal fees and expenses and
any applicable Value Added Tax thereon) which may be incurred by the
Mortgages Trustee and/or Funding 1 and/or the Security Trustee by
reason of the doing of any act, matter or thing referred to in this
CLAUSE 6 and CLAUSE 7.5.
7. UNDERTAKINGS
7.1 The Mortgages Trustee and Funding 1 undertake to the Seller that they
will at all times (or will direct the Servicer at all times to) use
reasonable endeavours to administer and enforce (and exercise their
powers and rights and perform their obligations under) the Loans
comprised in the Portfolio and their Related Security in accordance
with the Seller's Policy (for so long as it exists and thereafter in
accordance with such policies as would be applied by a Reasonable,
Prudent Mortgage Lender in the conduct of its business), provided
that if the Seller fails to comply with its obligations to repurchase
any Loan and its Related Security pursuant to CLAUSE 8.5 the
Mortgages Trustee shall be entitled to waive any Early Repayment Fee
in respect of such Loan and its Related Security if, in the Mortgages
Trustee's reasonable opinion, such waiver is reasonably necessary in
order to effect an interest rate change.
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7.2 The Seller hereby undertakes to the Mortgages Trustee and Funding 1
that, in the event that any Borrower establishes that it has at any
time prior to the Initial Closing Date or, as the case may be, the
relevant Sale Date, paid to the Seller any amounts in excess of sums
due to the Seller as at the date of payment under the Mortgage
Conditions applicable to that Loan, the Seller will reimburse the
Borrower for such overpayment together with any interest, cost or
other expense associated therewith. The Seller further agrees to
hold the Mortgages Trustee and Funding 1 harmless against any such
claims and to indemnify the Mortgages Trustee and Funding 1 on an
after Tax basis in relation to any costs, expense, loss or other
claim which may arise in connection therewith. Any payment made by
the Seller to the Mortgages Trustee and Funding 1 in discharge of the
foregoing indemnity shall be regarded as a rebate of part of the
Purchase Price of the relevant Loan.
7.3 Each of the Seller and the Mortgages Trustee and Funding 1 undertakes
to each other and to the Security Trustee that if and to the extent
that any determination shall be made by any court or other competent
authority or any ombudsman in respect of any Loan and its Related
Security that:
(a) any term which relates to the recovery of interest under the
Standard Documentation applicable to that Loan and its Related
Security is unfair; or
(b) the interest payable under any Loan is to be set by reference to
HVR 1 or HVR 2 (as applicable) (and not a rate set by the
Seller's successors or assigns or those deriving title from
them); or
(c) the variable margin above the Bank of England repo rate under
any Tracker Rate Loan must be set by the Seller (rather than by
its successors or assigns or those deriving title from them); or
(d) the interest payable under any Loan is to be set by reference to
an interest rate other than that set or purported to be set by
either the Servicer or the Mortgages Trustee as a result of the
Seller having more than one variable mortgage rate,
then, at Funding 1's direction (subject to the prior written consent
of the Security Trustee), the Mortgages Trustee will serve upon the
Seller a notice in the form of the Loan Repurchase Notice requiring
the Seller to repurchase the relevant Loan and all other Loans under
the relevant Mortgage Account and its Related Security in accordance
with CLAUSE 8.5 (but in the case of a determination in respect of (b)
above, only if at any time on or after such determination, HVR 1 or
HVR 2 (as applicable) shall be below or shall fall below the standard
variable rate of interest set by such successors or assigns or those
deriving title from them).
7.4 The Seller hereby undertakes to the Mortgages Trustee, Funding 1 and
the Security Trustee that:
(a) if the long term unsecured, unsubordinated and unguaranteed debt
obligations of the Seller cease to be assigned a rating of Baa2 or
higher from Moody's and BBB or higher from S&P and BBB or higher
from Fitch, the Seller shall deliver to the Mortgages Trustee,
Funding 1, the Security Trustee and the Rating Agencies a draft
letter of notice to each of the Borrowers of the sale and purchase
effected by this Agreement; and
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(b) if the long term unsecured, unsubordinated and unguaranteed debt
obligations of the Seller cease to be assigned a rating of Baa3 or
higher from Moody's and BBB- or higher from S&P and BBB- or higher
from Fitch, then the Seller shall, within 20 London Business Days
of it becoming aware of such a rating being assigned, give notice
of the sale and purchase effected by this Agreement to each Borrower.
7.5 The Seller undertakes to the Mortgages Trustee, Funding 1 and the
Security Trustee that, pending perfection under CLAUSE 6, the Seller:
(a) shall not do or omit to do any act or thing which might, in the
reasonable opinion of the Security Trustee, prejudice the
interests of the Mortgages Trustee, Funding 1 and/or the Security
Trustee in the Portfolio;
(b) shall promptly notify the Mortgages Trustee, Funding 1 and the
Security Trustee in writing if it receives written notice of any
litigation or claim calling into question in any material way the
Seller's or the Mortgages Trustee's title to any Loan comprised in
the Portfolio or its Related Security or if it becomes aware of any
material breach of any of the Representations and Warranties or
other obligations under this Agreement;
(c) shall, if reasonably required so to do by the Mortgages Trustee or
the Security Trustee, participate or join in any legal proceedings
to the extent necessary to protect preserve and enforce the
Seller's or the Mortgages Trustee's or Funding 1's or the Security
Trustee's title to or interest in any Loan or its Related Security;
(d) shall use all reasonable endeavours to obtain as soon as reasonably
possible:
(i) the title number to each Property in respect of which a
Mortgage is registered at the Land Registry to the extent
that such title number does not appear in the Exhibit to
this Agreement (or, as the case may be, the relevant New
Portfolio Notice); and
(ii) the title number to each Property in respect of which a
Mortgage is registered in the Land Register of Scotland to
the extent that such title number does not appear in the
Exhibit to this Agreement (or, as the case may be, the
relevant New Portfolio Notice); and
(e) shall make and enforce claims under the Buildings Policies and the
Halifax Insurance Policies and hold the proceeds of such claims on
trust for the Mortgages Trustee or as the Mortgages Trustee may
direct.
7.6 The Seller hereby further undertakes to the Mortgages Trustee and Funding 1
that it is and at all times shall remain solely responsible for funding any
Delayed Cashbacks and any Home Cash Reserve Drawings and Flexible Loan
Drawings (if any) made by a Borrower and for funding any request for any
Further Advance made by a Borrower and, for the avoidance of doubt, neither
the Mortgages Trustee nor Funding 1 will be required to advance moneys to
the Seller or to a Borrower in order to fund such a Delayed Cashback, Home
Cash Reserve
14
Drawing, Flexible Loan Drawing (if any), or Further Advance in any
circumstances whatsoever.
7.7 The Seller shall grant security powers of attorney to the Mortgages
Trustee, Funding 1 and the Security Trustee in the form set out in
SCHEDULE 5 allowing any of the Mortgages Trustee, Funding 1 and the
Security Trustee and their delegates from time to time (inter alia) to set
the Seller's Variable Base Rate in the circumstances referred to in
CLAUSE 4 of the Servicing Agreement and/or following perfection pursuant
to CLAUSE 6.1 PROVIDED THAT nothing in this CLAUSE 7.7 shall prevent the
Seller (or any of its attorneys from time to time) from setting a higher
Seller's Variable Base Rate than those set or to be set or required or to
be required by the Mortgages Trustee, Funding 1 or the Security Trustee.
8. WARRANTIES AND REPURCHASE BY THE SELLER
8.1 (a) The Seller hereby makes the Representations and Warranties:
(i) in respect of each Loan and its Related Security in the Initial
Portfolio as at the date hereof and on the Initial Closing Date;
and
(ii) in relation to each New Loan and its Related Security in a New
Portfolio, on the date of the service of the relevant New
Portfolio Notice and on the relevant Sale date.
(b) Each statement comprised in the Representations and Warranties shall
be construed as a separate statement and (save as expressly provided
to the contrary) shall not be limited or restricted by reference to
or inference from the terms of any other such statement.
(c) The Seller acknowledges:
(i) that the Representations and Warranties are made with a view
to inducing the Mortgages Trustee, Funding 1 and the Security
Trustee (as the case may be) either to enter into this
Agreement and the other Transaction Documents to which is a
party or to agree to purchase the New Loans and their Related
Security comprised in each New Portfolio, and
(ii) that each of the Mortgages Trustee, Funding 1 and the Security
Trustee has entered into this Agreement and the other
Transaction Documents to which it is a party in reliance upon
the Representations and Warranties notwithstanding any
information in fact possessed or discoverable by the Mortgages
Trustee, Funding 1 and/or the Security Trustee or otherwise
disclosed to any of them, and
(iii) that prior to entering into this Agreement and the other
Transaction Documents to which each is a party neither the
Mortgages Trustee nor Funding 1 nor the Security Trustee has
made any enquiries of any matter.
8.2 The Mortgages Trustee's, Funding 1's and the Security Trustee's sole remedy
in respect of a breach of any of the Representations and Warranties shall
be to take action under this CLAUSE 8 or under CLAUSE 6 of the Mortgages
Trust Deed.
15
8.3 In the event of a material breach of any of the Representations or
Warranties in respect of any Loan and/or its Related Security made under
CLAUSE 8.1 or if any of those Representations or Warranties proves to be
materially untrue as at the Initial Closing Date or, as the case may be,
the relevant Sale Date, and provided that:
(a) the Mortgages Trustee has given the Seller not less than 20 London
Business Days' notice in writing (or such shorter period of notice
as may be agreed between the Mortgages Trustee and the Seller);
(b) the Mortgages Trustee has obtained the prior written consent of the
Security Trustee; and
(c) such breach or untruth, where capable of remedy, is not remedied to
the reasonable satisfaction of Funding 1 and the Security Trustee
within the 20 London Business Days period referred to in (a) (or such
longer period as Funding 1 and the Security Trustee may direct the
Mortgages Trustee in writing),
then at Funding 1's direction (subject to the prior written consent of the
Security Trustee) the Mortgages Trustee shall serve upon the Seller a
notice in the form of the Loan Repurchase Notice requiring the Seller to
repurchase the relevant Loan and its Related Security (and any other Loan
secured or intended to be secured by that Related Security or any part of
it) in accordance with CLAUSE 8.5.
8.4 (a) If the Seller accepts an application from, or makes an offer (which
is accepted) to, a Borrower for a Further Advance or a
Home Cash Reserve Advance then (save in the case of any Loan which
is then in arrears), at Funding 1's direction (subject to the prior
written consent of the Security Trustee), the Mortgages Trustee will
serve upon the Seller a notice in the form of the Loan Repurchase
Notice requiring the Seller to repurchase the relevant Loan and its
Related Security (and any other Loan secured or intended to be
secured by that Related Security or any part of it) in accordance
with CLAUSE 8.5.
(b) If the Seller accepts an application from, or makes an offer (which
is accepted) to, a Borrower for a Product Switch and (except as
provided in paragraph (c) below) on the immediately preceding
Distribution Date, the Seller is in breach of the conditions referred
to in CLAUSES 4.2(A) to (P) inclusive 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
SALE DATE were references to the date when the Seller and relevant
Borrower complete such Product Switch then (save in the case of any
Loan which is then in arrears) from and including the relevant
Distribution Date to but excluding the date when such conditions have
been satisfied, at Funding 1's direction (subject to the prior written
consent of the Security Trustee), the Mortgages Trustee will serve
upon the Seller a notice in the form of the Loan Repurchase Notice
requiring the Seller to repurchase the relevant Loan and its Related
Security (and any other Loan secured or intended to be secured by that
Related Security or any part of it) in accordance with CLAUSE 8.5.
(c) If the Seller accepts an application from, or makes an offer (which
is accepted) to, a Borrower for a Product Switch, the effect of which
is to extend the final maturity date of the relevant Loan beyond June
2040 then, at Funding 1's direction (subject to the prior written
consent of the Security Trustee), the Mortgages Trustee will serve
upon the Seller a notice in the form of the Loan Repurchase Notice
requiring the Seller to repurchase the relevant Loan and its Related
Security in accordance with CLAUSE 8.5 notwithstanding that the
conditions referred to in CLAUSES 4.2(A) TO 4.2(P) have been
satisfied.
16
(d) For the avoidance of doubt, the Seller shall not accept an
application from nor make an offer (which is accepted) to a Borrower
for a Further Advance, a Home Cash Reserve Advance or a Product Switch
if the relevant Loan to which such Further Advance, Home Cash Reserve
Advance or Product Switch relates is then in arrears subject only to
such exceptions as made on a case by case basis as would be acceptable
to a Reasonable, Prudent Mortgage Lender.
8.5 Upon receipt of a Loan Repurchase Notice duly signed on behalf of the
Mortgages Trustee, the Seller shall sign and return a duplicate copy and
shall repurchase from the Mortgages Trustee, and the Mortgages Trustee
shall re-assign or re-transfer to the Seller free from the Security
Interests created by the Funding 1 Deed of Charge and the Second
Supplemental Funding 1 Deed of Charge, the relevant Loan (and any other
Loan secured or intended to be secured by that Related Security or any
part of it) and their Related Security. Completion of such repurchase
shall take place on the Distribution Date after receipt by the Seller of
such Loan Repurchase Notice or such other date as the Mortgages Trustee
may direct in the Loan Repurchase Notice (provided that the date so
specified by the Mortgages Trustee shall not be later than 90 days after
receipt by the Seller of such notice) when the Seller shall pay to the
Mortgages Trustee GIC Account (or as the Mortgages Trustee shall direct)
an amount equal to the aggregate Outstanding Principal Balance of such Loan
or Loans and any Related Security and all Arrears of Interest and Accrued
Interest relating thereto (save for the repurchase of any Loan and its
Related Security which is subject to a Further Advance, a Home Cash
Reserve Advance or a Product Switch pursuant to CLAUSE 8.4 in which case
the Seller shall pay to the Mortgages Trustee GIC Account (or as the
Mortgages Trustee shall direct) an amount equal to the
aggregate Outstanding Principal Balance of such Loan and its Related
Security and Accrued Interest relating thereto only) as at the date of
such repurchase and the provisions of CLAUSE 8.6 shall apply.
8.6 On the date of completion of any repurchase of a Loan and its Related
Security in accordance with CLAUSE 8.5 above, the Security Trustee, the
Mortgages Trustee and Funding 1 shall at the cost of the Seller execute
and deliver, or cause their respective duly authorised attorneys to
execute and deliver, to the Seller:
(a) a memorandum of release of such Loan and its Related Security from
the security constituted by the Funding 1 Deed of Charge and the
Second Supplemental Funding 1 Deed of Charge substantially in the form
set out in SCHEDULE 16;
(b) in relation to the English Mortgages, if perfection of the assignment
to the Mortgages Trustee has occurred in accordance with CLAUSE 6:
(i) if the relevant English Mortgage is over Registered Land, a
transfer of such Mortgage to the Seller in the form of the
Registered Transfer; or
(ii) if the relevant English Mortgage is over Unregistered Land, a
transfer of such English Mortgage to the Seller in the form of
the Unregistered Transfer;
17
(c) in relation to the Scottish Mortgages, if perfection of the
assignation to the Mortgages Trustee has occurred in accordance
with CLAUSE 6:
(i) if the relevant Scottish Mortgage is over a Property title to
which is registered in the Land Register of Scotland, a
transfer by the Mortgages Trustee in favour of the Seller in a
form substantially similar to an SLR Transfer; and
(ii) if the relevant Scottish Mortgage is over a Property title to
which is recorded in the General Register of Sasines, a
transfer by the Mortgages Trustee in favour of the Seller in a
form substantially similar to a Sasine Transfer;
(d) a re-assignment or retrocession (as appropriate) of the rights
of the Mortgages Trustee in respect of the relevant Related
Security and a notice of such re-assignment or retrocession (as
(appropriate) each in a form reasonably acceptable to the Seller
which shall, in the case of the re-assignment of the MIG Policies
and notice of such re-assignment, be substantially in the form
set out in SCHEDULE 17 and SCHEDULE 18 hereto respectively and in
the case the re-assignment of rights against third parties, be
substantially in the form set out in SCHEDULE 19); and
(e) a notification to the Servicer that all further sums due in respect
of such repurchased Loan are for the Seller's account.
Upon such completion the Seller shall cease to be under any further
obligation to hold any Title Deeds or other documents relating to such
Loan or Loans and its/their Related Security to the order of the Mortgages
Trustee and if the Mortgages Trustee holds the Title Deeds it will return
them to the Seller. Any repurchase by the Seller of or in respect of a
Loan or Loans and its or their Related Security shall constitute a
discharge and release of the Seller from any claims which the Mortgages
Trustee and/or Funding 1 or the Security Trustee may have against the
Seller arising from the relevant Representation or Warranty in relation to
that Loan or Loans and its or their Related Security only but shall not
affect any rights arising from a breach of any other express provision of
this Agreement or any Representation or Warranty in relation to any other
Loan and other Related Security.
8.7 After the Seller becomes aware of any event and/or fact which may
reasonably give rise to an obligation under any clause of this Agreement
to repurchase any Loan it shall notify the Mortgages Trustee, Funding 1
and the Security Trustee in writing thereof as soon as
reasonably practicable.
8.8 The terms of this Clause 8 shall not prejudice the rights of the
Mortgages Trustee or the Beneficiaries under the Mortgages Trust Deed.
8.9 The parties to this Agreement may, with the prior written consent of the
Security Trustee, waive or amend the Representations and Warranties.
In determining whether to give its consent to the proposed waiver or
amendments to the Representations and Warranties, the Security Trustee
shall exercise its discretion in accordance with the terms of CLAUSE 25.8
of the Funding 1 Deed of Charge.
9. OTHER WARRANTIES
On the date of this Agreement, the Closing Date, and each Sale Date, the
Seller represents and warrants to each of the Mortgages Trustee, Funding 1
and the Security Trustee that:
18
(a) the Seller has not acquired or owned or possessed any rights in any
Issuer, the Mortgages Trustee or Funding 1 such that it would CONTROL
such Issuer within the meaning of Section 416 ICTA 1988; and
(b) there is not any CONNECTION (within the meaning of Section 87 Finance
Act 1996) between any Issuer and any Borrower.
10. FURTHER ASSURANCE
The parties hereto agree that they will co-operate fully to do all such
further acts and things and execute any further documents that may be
necessary or desirable to give full effect to the transactions contemplated
by this Agreement (but subject always to CLAUSE 6).
5. CONSEQUENCES OF BREACH
Without prejudice to CLAUSES 7 and 8, Funding 1, the Mortgages Trustee and
the Security Trustee severally acknowledge to and agree with the Seller,
and the Security Trustee acknowledges to and agrees with Funding 1 and the
Mortgages Trustee, that the Seller shall have no liability or
responsibility (whether, in either case, contractual, tortious or
delictual express or implied) for any loss or damage for or in respect of
any breach of, or any act or omission in respect of, any of its
obligations hereunder other than loss or damage directly (and not
indirectly or consequentially) suffered by the Mortgages Trustee and/or
Funding 1 or the assets comprised in the Funding 1 Security constituted by
the Funding 1 Deed of Charge by reason of such breach, act or omission.
For this purpose (and without limiting the scope of the above exclusion in
respect of indirect or consequential loss or damage) any loss or damage
suffered by the Mortgages Trustee and/or Funding 1 or such assets as a
result of the breach, act or omission in question also having been or given
rise to an Event of Default or enforcement of the Funding 1 Security
contributed by the Funding 1 Deed of Charge shall be treated as indirect or
consequential loss or damage PROVIDED THAT this sentence shall not apply to
any direct or non-consequential loss or damage arising from any such
breach, act or omission.
12. SUBORDINATION
The Seller agrees with Funding 1, the Mortgages Trustee and the Security
Trustee that on the enforcement of any Mortgage any sums owed to the Seller
by a Borrower and which are secured under such Mortgage and the rights and
remedies of the Seller in respect of the sums owed to the Seller shall at
all times be subject and subordinated to any sums owed to the Mortgages
Trustee by the Borrower and which are secured under such Mortgage and to
the rights and remedies of the Mortgages Trustee in respect of such sums
owed to the Mortgages Trustee by the Borrower.
13. NON-MERGER
Any term of this Agreement to which effect is not given on the Initial
Closing Date or on any Sale Date (including in particular, but without
limitation, the liability of the Seller under the Representations and
Warranties and the indemnity in CLAUSE 6.7 and the provisions of CLAUSE 4)
shall not merge and shall remain in full force and effect notwithstanding
the sale and purchases contemplated by this Agreement.
19
14. NO AGENCY OR PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any relationship of agency,
save as expressly provided herein, or partnership between the parties and
that in fulfilling its obligations hereunder, each party shall be acting
entirely for its own account.
15. PAYMENTS
Except as otherwise specifically provided, all payments to be made pursuant
to this Agreement shall be made in sterling in immediately available funds
without exercising or seeking to exercise any right of set-off as may
otherwise exist and shall be deemed to be made when they are received by
the payee and shall be accounted for accordingly unless failure to receive
any payment is due to an error by the payee's bank.
16. WAIVER AND VARIATION
16.1 Exercise or failure to exercise any right under this Agreement
shall not, unless otherwise herein provided, constitute a waiver of
that or any other right.
16.2 Subject to CLAUSE 25 of the Funding 1 Deed of Change any mendments to
this Agreement will be made only with the prior written consent of each
party to this Agreement.
17. NOTICES
Any notices to be given pursuant to this Agreement to any of the parties
hereto shall be in writing and shall be sufficiently served if sent by
prepaid first class post, by hand or by facsimile transmission and shall be
deemed to be given (in the case of facsimile transmission) when despatched
or (in the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
(a) in the case of the Seller: to Halifax plc, Trinity Road, Halifax,
West Yorkshire HX1 2RG (LP/3/3/SEC) (facsimile number +44 (0) 113 235
7511) for the attention of the Head of Mortgage Securitisation with a
copy to HBOS Treasury Services PLC, 33 Old Broad Street, London EC2N
1HZ (facsimile number +44 (0)20 7574 8303) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(b) in the case of Funding 1: to Permanent Funding (No. 1) Limited,
35 Great St. Helens, London EC3A 6AP (facsimile number +44 (0)
20 7398 6325) for the attention of the Secretary with a copy to
HBOS Treasury Services PLC, 33 Old Broad Street, London EC2N 1HZ
(facsimile number +44 (0)20 7574 8303) for the attention of Head
of Mortgage Securitisation and Covered Bonds;
(c) 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 (0)20 7574 8303) for the attention of Head of
Mortgage Securitisation and Covered Bonds; and
20
(d) in the case of the Security Trustee: to The Bank of New York, One
Canada Square, London E14 5AL (facsimile number + 44 (0)20 7964
6061/6399) for the attention of Global Structural Finance -
Corporate Trust,
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 17.
18. ASSIGNMENT
18.1 Subject always to the provisions of CLAUSE 19, no party hereto shall be
entitled to assign all or any part of its rights or obligations hereunder
to any other party without the prior written consent of each of the other
parties hereto (which shall not, if requested, be unreasonably withheld)
save that Funding 1 shall be entitled to assign whether by way of security
or otherwise all or any of its rights under this Agreement without such
consent to the Security Trustee pursuant to the Funding 1 Deed of Charge
and the Security Trustee may at its sole discretion assign all or any of
its rights under or in respect of this Agreement without such consent to
any successor Security Trustee in exercise of its rights under the Funding
1 Deed of Charge.
18.2 The Seller acknowledges that on the assignment pursuant to the Funding 1
Deed of Charge by Funding 1 to the Security Trustee of Funding 1's rights
under this Agreement the Security Trustee may enforce such rights in the
Security Trustee's own name without joining Funding 1 in any such action
(which right the Seller hereby waives) and the Seller hereby waives as
against the Security Trustee any rights or equities in its favour arising
from any course of dealing between the Seller and Funding 1.
19. CHANGE OF SECURITY TRUSTEE
19.1 If there is any change in the identity of the Security Trustee in
accordance with the Funding 1 Deed of Charge, the Seller, the Mortgages
Trustee and Funding 1 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
hereunder and releasing the outgoing Security Trustee from its future
obligations under this Agreement and the Seller shall give notice thereof
to the Rating Agencies.
19.2 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 Seller or Funding 1 or the Mortgages
Trustee hereunder.
20. NOT USED
21. THIRD PARTY RIGHTS
A person who is not a party to this agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) Act 1999.
21
22. GOVERNING LAW
22.1 This Agreement shall be governed by the laws of England (provided that any
terms of this Agreement which are particular to Scots law shall be
construed in accordance with the laws of Scotland).
22.2 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. The Mortgages
Trustee irrevocably appoints Structured Finance Management Limited of 35
Great St. Helen's London EC3A 6AP as its agent for service of process.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first before written.
SIGNED by )
as attorney for )
HALIFAX PLC in the presence of ) ----------------------------
Witness's Signature: -------------
Name: -------------------
Address: -------------------
SIGNED by )
for and on behalf of )
PERMANENT FUNDING (NO. 1) LIMITED ) ----------------------------
SIGNED by )
for and on behalf of )
PERMANENT MORTGAGES )
TRUSTEE LIMITED ) ----------------------------
SIGNED by )
for and on behalf of )
THE BANK OF NEW YORK ) ----------------------------
22
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
1. LOANS
1.1 The particulars of the Loans set out in the Exhibit (or, as the case may
be, the relevant New Portfolio Notice and in each Scottish Declaration of
Trust) are true, complete and accurate in all material respects.
1.2 Each Loan was originated by the Seller and was originated and is
denominated in pounds sterling (or was originated and is denominated in
euro if the euro has been adopted as the lawful currency for the time
being of the United Kingdom).
1.3 Each Loan in the Portfolio as at the Eighth Issuer Closing Date was made
not earlier than 1st February, 1996 and not later than 28th February, 2005.
1.4 Each Loan matures for repayment not later than June 2040.
1.5 No Loan has an Outstanding Principal Balance of more than (pound)500,000.
1.6 The Lending Criteria are the lending criteria applicable to the Loans and
their Related Security.
1.7 Prior to the making of each Initial Advance and Further Advance:
(a) the Lending Criteria and all preconditions to the making of any Loan
were satisfied in all material respects subject only to such
exceptions as made on a case by case basis as would be acceptable to
a Reasonable, Prudent Mortgage Lender; and
(b) the requirements of the relevant MIG Policy were met, so far as
applicable to that Loan.
1.8 (a) Each Loan was made and its Related Security taken or received
substantially on the terms of the Standard Documentation without any
material variation thereto and nothing has been done subsequently to
add to, lessen, modify or otherwise vary the express provisions of
any of the same in any material respect.
(b) The brochures, application forms, offers, offer conditions and
marketing material distributed by the Seller to the Borrower when
offering a Loan to a Borrower:
(i) do not conflict in any material respect with the terms
applicable to the relevant Loan and its Related Security at the
time that the Loan was entered into;
(ii) do not conflict with and would not prohibit or otherwise limit
the terms of, the Transaction Documents or the matters
contemplated thereby, including for the avoidance of doubt and
without limitation:
23
(A) the assignment or assignation (as appropriate) of the Loans
and their Related Security to the Mortgages Trustee or the
placing of the Loans and their Related Security into trust;
(B) the administration of the Loans and their Related Security
by the Servicer or a delegate or sub-contractor of the
Servicer or (for as long as the Seller and the Servicer are
the same legal entity) the appointment of a new Servicer
following the occurrence of an Insolvency Event in relation
to the Seller; and
(C) so far as the Seller is aware to the best of its knowledge,
information and belief, the ability of the Mortgages Trustee
or the Security Trustee to set the variable rate payable
under any Variable Rate Loan independently of (and without
regard to the level of) the Seller's standard variable rate
of interest or if the Seller has more than one standard
variable rate of interest, the relevant Seller's standard
variable rate of interest, subject to any applicable cap on
that variable rate which is not itself linked to any rate
set by the Seller and to set the variable margin above the
Bank of England repo rate under any Tracker Rate Loan
independently of (and without regard to the level of) any
differential set by the Seller, subject to any applicable
cap on that variable margin above the Bank of England repo
rate which is not itself linked to any margin set by the
Seller.
(c) There is no restriction on the Seller's successors and assigns and
assignees to the legal title of the Loans (including, without
limitation, the Mortgages Trustee if and when legal title to the Loans
is transferred to it) right:
(i) to set the variable rate payable under any Variable Rate Loan
independently of (and without regard to the level of) the
Seller's standard variable rate of interest or if the Seller has
more than one standard variable rate of interest, the relevant
Seller's standard variable rate of interest, subject to any
applicable cap on that variable rate which is not itself linked
to any rate set by the Seller (subject to complying with the
obligations under the Standard Documents as to changes in
interest rates generally and so that in particular the successors
will not be able to change the interest rate following a transfer
of legal title unless the reasons for changing the interest rate
set out in the Standard Documents apply) and provided that in
relation to Loans which are subject to HVR 2, the differential
between that rate and the Loans which are subject to HVR 1 is
maintained; and
(ii) to set the variable margin above the Bank of England repo rate
under any Tracker Rate Loan independently of (and without regard
to the level of) any differential set by the Seller, subject to
any applicable cap on that variable margin above the Bank of
England repo rate which is not itself linked to any margin set
by the Seller (subject to complying with the obligations under
the Standard Documents as to changes in margins generally and so
that in particular the successors will not be able to change the
margin following a transfer of legal title unless the reasons for
changing the margin set out in the Standard Documents apply).
24
1.9 The Seller is under no obligation to make Further Advances (other than
Flexible Loan Drawings (if any), Delayed Cashbacks and Home Cash Reserve
Drawings) or to release retentions or to pay fees or other sums relating to
any Loan or its Related Security to any Borrower.
1.10 Each Borrower has made at least two Monthly Payments in respect of each
Loan.
1.11 Other than with respect to monthly interest payments or as provided in
paragraph 1.12 below, no Borrower is or has, since the date of the relevant
Mortgage, been in material breach of any obligation owed in respect of the
relevant Loan or under the Related Security and accordingly no steps have
been taken by the Seller to enforce any Related Security.
1.12 The total amount of arrears of interest or principal, together with any
fees, commissions and premiums payable at the same time as such interest
payment or principal repayment, on any Loan is not on the Initial Closing
Date or the relevant Sale Date (as applicable), nor has been during the 12
months immediately preceding the Initial Closing Date or the relevant Sale
Date (as applicable) more than the amount of the Monthly Payment then due.
1.13 No Loan is guaranteed by a third party save where the guarantee constitutes
legal, valid and binding obligations of the guarantor enforceable in
accordance with their terms.
1.14 Each Flexible Loan was originated not earlier than 1st November, 2004 and
was made under the 2004 Mortgage Conditions (2nd Edition).
1.15 Interest on each Loan is charged in accordance with the Standard
Documentation.
1.16 Interest on each Loan is payable monthly in arrear.
1.17 Each Loan and its Related Security is valid, binding and enforceable in
accordance with its terms and is non-cancellable:
(i) save in relation to any term in any Loan or in its Related Security,
in each case which is not binding by virtue of the Unfair Terms in
Consumer Contracts Regulations 1994 or (as the case may be) the Unfair
Terms in Consumer Contracts Regulations 1999; and
(ii) save in relation to any amount advanced under a Flexible Loan, any
Delayed Cashback, any Home Cash Reserve Drawing and any other
Further Advance, in each case which is not enforceable by virtue of
the Consumer Credit Act 1974.
To the best of the Seller's knowledge, none of the terms in any Loan or in
its Related Security is not binding by virtue of its either (i) being
unfair within the meaning of the Unfair Terms in Consumer Contracts
Regulations 1994 or (as the case may be) the Unfair Terms in Consumer
Contracts Regulations 1999 or (ii) not being compliant with the terms of
the Consumer Credit Act 1974. In this Warranty 1.17, reference to any
legislation shall be construed as a reference to that legislation as
amended, extended or re-enacted from time to time.
1.18 All of the Borrowers are individuals and were aged 18 years or older at the
date he or she executed the relevant Mortgage.
1.19 Not used.
25
1.20 Each loan in the relevant Portfolio is either:
(a) a Variable Rate Loan, Tracker Rate Loan or Fixed Rate Loan; or
(b) a New Loan Type which each of the Rating Agencies has confirmed in
writing may be included in the relevant New Portfolio.
2. MORTGAGES
2.1 The whole of the Outstanding Principal Balance on each Loan and any
Arrears of Interest and all Accrued Interest is secured by a Mortgage.
2.2 Each Mortgage is in the form of the pro forma contained in the Standard
Documentation which was applicable at the time the Mortgage was executed.
2.3 Each Mortgage constitutes a valid and subsisting first charge by way of
legal mortgage or (in the case of Scottish Mortgages) first ranking
standard security over the relevant Property subject only in certain
appropriate cases to applications for registration or recording at the Land
Registry or Registers of Scotland which where requisite have been made and
are pending and in relation to such cases the Seller is not aware of any
caution, notice, inhibition or any other matter that would prevent such
registration or recording.
2.4 Each Mortgage has first priority for the whole of the Outstanding Principal
Balance on the Loan and all Arrears of Interest and Accrued Interest
thereon and all future interest, fees, costs and expenses payable under or
in respect of such Mortgage.
2.5 The Seller has and will maintain, all consents, authorisations, approvals,
licences and orders, including without limitation all authorisations under
the FSMA requirements to originate, advise upon and administer the Loans
and Mortgages.
2.6 The Seller has complied and will comply, in all material respects, with all
applicable laws and regulations, including without limitation the FSA's
rules in MCOB, in respect of its advisory activities relating to, and the
origination and administration of the Loans and Mortgages.
2.7 Each Mortgage in respect of a RTB Loan was made to a Borrower for the
purposes of exercising the right-to-buy or for another approved purpose
(save where a Deed of Postponement has been granted by the local
authority) and has (or the Seller has the evidence necessary to ensure
that the Mortgages will have) priority over any statutory charge save in
cases where the mortgage is originated at a time where there is no more
than one year remaining of the RTB Disposal Period or where adequate
insurance is in place.
3. THE PROPERTIES
3.1 All of the Properties are in England, Wales or Scotland.
3.2 Each Property constitutes a separate dwelling unit (subject to limited case
by case exceptions) and is either freehold, leasehold or (in Scotland)
heritable or held under a long lease.
3.3 Save for children of Borrowers and children of someone living with the
Borrower, every person who, at the date upon which any English Mortgage was
granted, had attained the age of eighteen and was in or about to be in
actual occupation of the relevant Property, is either named as a Borrower
or has signed a Deed of Consent in the form of the pro forma contained in
the Standard Documentation which was applicable at the time the Mortgage
was executed.
26
3.4 At the date upon which any Scottish Mortgage was granted all necessary
MHA Documentation had been obtained so as to ensure that neither that
Scottish Mortgage nor the related Property is subject to or affected by
any statutory right of occupancy under the Matrimonial Homes (Family
Protection) (Scotland) Act 1981.
3.5 No Property has been let otherwise than by way of:
(a) an assured shorthold tenancy which meets the requirements of
Section 19A or Section 20 of the Housing Act 1988; or
(b) a short assured tenancy which meets the requirements of section
32 of the Housing (Scotland) Act 1988; or
(c) an assured tenancy;
in each case which meets the Seller's Policy in connection with lettings
to non-owners.
3.6 No Property is the subject of a shared ownership lease arrangement or
staircase purchasing arrangement.
4. VALUERS' AND SOLICITORS' REPORTS
4.1 Not more than twelve months (or a longer period (including in the case
of an inter-group remortgage) as may be acceptable to a Reasonable,
Prudent Mortgage Lender) prior to the grant of each Mortgage (or such
longer period (including in the case of an inter-group remortgage) as
may be acceptable to a Reasonable, Prudent Mortgage Lender) the Seller
received a Valuation Report from a Valuer on the relevant Property (or
such other form of report concerning the valuation of the relevant
Property as would be acceptable to a Reasonable, Prudent Mortgage
Lender), the contents of which were such as would be acceptable to a
Reasonable, Prudent Mortgage Lender.
4.2 The principal amount of the Initial Advance (including any retention(s)
subsequently advanced to the Borrower but disregarding Capitalised
Expenses) is either:
(a) not more than 75 per cent. of the lower of the purchase price
and the appraised value of the Property as stated in the
Valuation Report referred to above in paragraph 4.1 (the
APPRAISED VALUE) (or, in case of a remortgage, of the appraised
value) of the Property; or
(b) greater than 75 per cent. (but not more than 97 per cent.) of
the lower of the purchase price and the appraised value (or, in
the case of a remortgage, of the appraised value), in which
case for those Loans originated prior to 1st January, 2001 only
that part of the Initial Advance which exceeds 75 per cent. of
the lower of the purchase price and the appraised value (or, in
the case of a remortgage, of the appraised value) is covered
under the terms of a MIG Policy.
4.3 Prior to the taking of each Mortgage (other than a remortgage), the
Seller:
27
(a) instructed the Seller's solicitor, licensed conveyancer or (in
Scotland) qualified conveyancer to carry out an investigation of
title to the relevant Property and to undertake such other searches,
investigation, enquiries and other actions on behalf of the Seller
as are set out in the instructions which the Seller issued to the
relevant solicitor as are set out in:
(i) the CML's Lenders' Handbook for England and Wales in relation
to English Mortgages;
(ii) the Seller's Mortgage Practice Notes in relation to Scottish
Mortgages taken before the CML's Lenders' Handbook for
Scotland was adopted in 2000; or
(iii) the CML's Lenders' Handbook for Scotland in relation to
Scottish Mortgages taken after the CML's Lenders' Handbook for
Scotland was adopted in 2000,
(or such comparable, predecessor or successor instructions and/or
guidelines as may for the time being be in place), subject only to
such variations made on a case by case basis as would have been
acceptable to a Reasonable, Prudent Mortgage Lender at the relevant
time; or
(b) received a Certificate of Title from the solicitor or licensed
conveyancer or (in Scotland) qualified conveyancer referred to in
paragraph (a) relating to such Property the contents of which were
such as would have been acceptable to a Reasonable, Prudent Mortgage
Lender at that time.
4.4 The benefit of all Valuation Reports, any other valuation report referred
to in paragraph 4.1 and Certificates of Title which were provided to the
Seller not more than two years prior to the date of this Agreement can be
validly assigned to the Mortgages Trustee without obtaining the consent of
the relevant Valuer, solicitor or licensed conveyancer or (in Scotland)
qualified conveyancer.
5. BUILDINGS INSURANCE
5.1 Each Property is insured under:
(a) a buildings insurance policy arranged by the Borrower in accordance
with the relevant Mortgage Conditions or in accordance with the
Alternative Insurance Recommendations; or
(b) the Halifax Policies; or
(c) a Seller-introduced building insurance policy; or
(d) a buildings insurance policy arranged by the relevant landlord; or
(e) the Properties in Possession Cover.
5.2 No act, event or circumstance has occurred which would adversely affect the
Properties in Possession Cover or entitle the insurers to refuse to make
payment thereunder or to reduce the amount payable in respect of any claim
thereunder.
28
5.3 All claims under the Properties in Possession Cover have been paid in full
within a reasonable time of the date of submission of the claim and, save
in respect of minor claims, there are no claims outstanding.
5.4 The Seller has maintained and will maintain all consents, authorisations,
approvals, licences and orders, including without limitation all
authorisations under the FSMA, to carry on any insurance related
activities in respect of the Properties.
6. MIG POLICIES
6.1 Where applicable, the MIG Policies are in full force and effect in
relation to the Initial Portfolio or, as the case may be, each New
Portfolio and all premiums thereon have been paid.
6.2 The benefit of the Halifax Mortgage Re Limited MIG Policies can be and will
have been, with effect from the Initial Closing Date or the relevant Sale
Date, as applicable, validly assigned to the Mortgages Trustee and charged
to the Security Trustee, insofar as they relate to the Initial Portfolio
or, as the case may be, each New Portfolio in each case in the manner and
to the extent contemplated by the Transaction Documents.
6.3 To the best of the knowledge of the Seller no act, event or circumstance
has occurred which would adversely affect the MIG Policies or entitle the
insurers to refuse to make payment thereunder or to reduce the amount
payable in respect of any claim thereunder insofar as they relate to the
Initial Portfolio or, as the case may be, each New Portfolio.
6.4 All valid claims under the MIG Policies have been paid in full within a
reasonable time of the date of submission of the claim.
7. THE SELLER'S TITLE
7.1 The Seller has good title to, and is the absolute unencumbered legal and
beneficial owner of, all property, interests, rights and benefits agreed
to be sold and/or assigned by the Seller to the Mortgages Trustee pursuant
to this Agreement free and clear of all mortgages, charges, liens,
Encumbrances, claims and equities (including, without limitation, rights
of set-off or counterclaim and unregistered or overriding interests which
fall within any of the paragraphs of schedules 1 or 3 to the Land
Registration Act 2002 (as such schedules have effect in accordance with
section 90(5) and Schedule 12 of the Land Registration Act 2002) or Section
28(1) of the Land Registration (Scotland) Act 1979 and the Seller is not in
breach of any covenant implied by reason of its selling the Portfolio with
full title guarantee or absolute warrandice (or which would be implied if
the Registered Transfers, Unregistered Transfers or Scottish Transfers, as
applicable, were completed).
7.2 All steps necessary to perfect the Seller's title to the Loans and the
Related Security were duly taken at the appropriate time or are in the
process of being taken, in each case (where relevant) within any applicable
priority periods or time limits for registration with all due diligence and
without undue delay.
7.3 Save for Title Deeds held at the Land Registry or Registers of Scotland,
the Title Deeds and the Customer Files relating to each of the Loans and
their Related Security are held by, or are under the control of:
(a) the Seller; or
29
(b) the Seller's solicitors or licensed conveyancers or (in Scotland)
qualified conveyancers to the order of the Seller,
and the Title Deeds held at the Land Registry have been sent to it with a
request that any such Title Deeds will be returned to the Seller or its
solicitors on its behalf.
7.4 Neither the entry by the Seller into this Agreement nor any transfer,
assignment, assignation or creation of trust contemplated by this Agreement
affects or will adversely affect any of the Loans and their Related
Security (including, without limitation, the Insurance Policies) and the
Seller may freely assign and create a trust or trusts in respect of all
its rights, title, interests and benefits therein as contemplated in this
Agreement without breaching any term or condition applying to any of them.
7.5 The Seller has not knowingly waived or acquiesced in any breach of any of
its rights in respect of a Loan or its Related Security, other than waivers
and acquiescence such as a Reasonable, Prudent Mortgage Lender might make
on a case by case basis.
8. GENERAL
8.1 The Seller has, since the making of each Loan, kept or procured the
keeping of full and proper accounts, books and records showing clearly
all transactions, payments, receipts, proceedings and notices relating
to such Loan.
8.2 Neither the Seller nor as far as the Seller is aware any of its agents
has received written notice of any litigation, claim, dispute or complaint
(in each case, subsisting, threatened or pending) in respect of any
Borrower, Property, Loan, Related Security, Halifax Policy, MIG Policy or
Properties in Possession Cover which (if adversely determined) might have a
material adverse effect on the Trust Property or any part of it.
8.3 The Seller has received from each Borrower a variable direct debit
instruction in favour of the Seller signed by the relevant Borrower and
addressed to its bank, variable as to the amount payable by such Borrower
by unilateral notice given from time to time by the Seller to such
Borrower's bank without further instruction or consent from such Borrower
or such other method of payment as may be acceptable to a Reasonable,
Prudent Mortgage Lender.
8.4 There are no authorisations, approvals, licences, orders, notifications
or consents required as appropriate for the Seller to enter into or to
perform the obligations under this Agreement or to render this Agreement
legal, valid, binding, enforceable and admissible in evidence.
8.5 The Insurance Acknowledgements are valid, binding and enforceable against
the relevant insurer by the Mortgages Trustee and the Security Trustee.
30
SCHEDULE 2
REGISTERED TRANSFER
IN THE FORM OF THE LAND REGISTRY FORM TR4 AS SHOWN OVERLEAF WITH SUCH
AMENDMENTS AS THE MORTGAGES TRUSTEE MAY REASONABLY REQUIRE TO GIVE EFFECT TO
THIS AGREEMENT OR IN SUCH OTHER FORM AS THE MORTGAGES TRUSTEE MAY REASONABLY
REQUIRE TO TAKE ACCOUNT OF CHANGES IN LAW OR PRACTICE.
31
SCHEDULE 3
UNREGISTERED TRANSFER
THIS DEED OF TRANSFER OF MORTGAGES is made the day of
BY:
(1) HALIFAX PLC whose registered office is at Trinity Road, Halifax, West
Yorkshire HX1 2RG (hereinafter called the TRANSFEROR) of the one part; and
IN FAVOUR OF:
(2) PERMANENT MORTGAGES TRUSTEE LIMITED whose registered office is 47
Esplanade, St Helier, Jersey JE1 0BD (hereinafter called the TRANSFEREE)
of the other part.
WHEREAS:
(A) By the charges by way of legal mortgage (the MORTGAGES) brief particulars
of which are set out in the Annexure hereto the properties brief
particulars of which are similarly set out became security for the
repayment of the monies therein mentioned.
(B) By a mortgage sale agreement (as amended and/or restated from time to
time) made between, inter alia, the Transferor and the Transferee on 14th
June, 2002 (as the same may be or have been amended, varied or supplemented
from time to time with the consent of the parties hereto, the MORTGAGE SALE
AGREEMENT), the Transferor agreed to sell and the Transferee agreed to buy
all right, title, interest, benefit and obligation (both present and
future) of the Transferor in and under those Mortgages and all other
mortgages in favour of the Transferor over such properties which do not
relate to registered land for the consideration mentioned in the said
Mortgage Sale Agreement.
NOW THIS DEED WITNESSETH as follows:
1. In consideration for the sums payable and other consideration indicated
under the Mortgage Sale Agreement (receipt of which is hereby acknowledged),
the Transferor hereby transfers unto the Transferee with full title
guarantee all rights, title, interests, benefits and obligations (both
present and future) of the mortgagee in and under the Mortgages including
for the avoidance of doubt:
(a) the right to demand, sue for, recover, receive and give receipts for
all principal moneys payable or to become payable under the relevant
Mortgages or the unpaid part thereof and the interest due or to become
due thereon;
(b) the benefit of all securities for such principal moneys and interest,
the benefit of all consents to mortgage signed by occupiers of the
mortgaged properties and the benefit of and the right to sue on all
covenants with, or vested in, the mortgagee in relation to each
Mortgage and the rights to exercise all powers of the mortgagee in
relation to each Mortgage;
32
(c) all the estate and interest in the relevant mortgaged properties
vested in the mortgagee subject to redemption or cesser; and
(d) all causes of action of the mortgagee against any person in
connection with any report, valuation, opinion, certificate, consent
to mortgage or other statement of fact or opinion given in connection
with any Mortgage or affecting the decision to make the relevant
advance.
2. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
HALIFAX PLC )
acting by its attorney in )
the presence of: ) _________________________
Witness's Signature: _________________________
Name: _________________________
Address: _________________________
33
ANNEX 1
Account No. Property address Date of Mortgage Borrower
34
SCHEDULE 4
LENDING CRITERIA
LENDING CRITERIA
The Loans in the Initial Portfolio or, as the case may be, the relevant New
Portfolio were originated according to the Seller's lending policy at the
applicable time the Loan was offered. At the Eighth Issuer Closing Date the
Seller's lending policy included the criteria set out below. However, the
Seller retains the right to revise its lending policy from time to time, and so
the criteria applicable to New Loans may not be the same as those set out below.
1. Types of Property
Properties may be either freehold, leasehold or (in Scotland) heritable or
held under a long lease. In the case of leasehold properties, the
unexpired portion of the lease must in most cases not expire earlier than
30 years after the term of the Loan. The property must be used solely for
residential purposes (with extremely limited case by case exceptions) and
must be in sound structural condition and repair or be capable of being put
into such state. House boats, mobile homes and any property on which
buildings insurance cannot be arranged are not acceptable. All persons who
are to be legal owners of the Property on completion of the relevant
Mortgage must be Borrowers.
Mortgage applications may be accepted by the Seller on properties in:
(a) England (including the Isle of Wight and Scilly Isles);
(b) Wales (including Anglesey);
(c) Northern Ireland; and
(d) Scotland.
All properties have been valued by a valuer approved by the Seller or,
where appropriate, according to a methodology which would meet the
standards of a Reasonable, Prudent Mortgage Lender and which has been
approved by the Seller.
2. Term of Loan
There is no minimum term on home purchase Loans and the maximum term is 40
years for all loans. A repayment period for a new Further Advance that
would extend beyond the term of the original advance may also be accepted
at the Seller's discretion, subject to the following:
(a) the consent of any subsequent lender or guarantor to the
Further Advance;
(b) the Seller may in its discretion extend the period of the original
advance, provided that, in all leasehold cases, not less than 30 years
of the lease must be left unexpired at the end of the term of the
Mortgage; and
35
(c) the approval of the valuer where the valuer has previously
recommended a term which is shorter than the maximum Loan terms
referred to above.
If a Borrower requests to increase the term of the existing Loan, the
maximum term for a repayment Loan is 25 years from the date from which the
extended term is granted. However, the total term from the start date of
the account must not exceed 40 years.
If a Borrower or guarantor is already retired or a mortgage term is
requested that will take the Borrower/guarantor's term beyond the
anticipated retirement age, specific procedures must be followed by the
Seller.
3. Age of Applicant
All Borrowers must be aged 18 or over. There is no maximum age limit.
However, if the term of the Mortgage extends into retirement, the Seller
will attempt to ascertain the Borrower's anticipated income in retirement.
If the Seller determines the Borrower will not be able to afford the
Mortgage into retirement, the application will be declined. If the
Borrower is already retired, the Seller will consider the Borrower's
ability to support the Loan.
4. Loan to Value (or LTV) Ratio
The maximum original LTV ratio of Loans in the Initial Portfolio is 97 per
cent. At the date of this Agreement, for Properties of [pound] 150,000 or
less, the Seller may lend up to 97 per cent. of the improved valuation of
the Property (the original valuation plus the increase in value deriving
from any improvements). For Properties in excess of [pound] 150,000, the
permissible LTV ratio decreases as the Loan amount increases. The Seller
will not provide Loans in excess of 100 per cent. of the sum of the
purchase price and the increase in value deriving from any improvements.
In the case of a Property that is being purchased, value is determined by
the lower of the valuation and the purchase price. In the case of a
remortgage or Further Advance, value is determined on the basis of a
valuation only.
5. Mortgage Indemnity Guarantee Policies/High LTV Fees
Borrowers are currently required to pay high LTV fees to the Seller for
each Mortgage account where the aggregate of the outstanding principal
balance of the relevant Loan(s) at origination (excluding any capitalised
high LTV fees and/or booking fees and/or valuation fees) exceeds certain
specified percentages.
If the LTV ratio exceeds 90 per cent., the Borrower pays high LTV fees
based on the difference between the actual LTV ratio and a 75 per cent. LTV
ratio.
Prior to 1st January, 2001, the Seller required cover under mortgage
indemnity guarantee, or MIG, policies for Mortgages where the LTV ratio
exceeded 75 per cent., though during 1999 and 2000 the Seller paid the
premium for the MIG cover if the LTV ratio was between 75 per cent. and 90
per cent. Since 1st January, 2001, the Seller has not required cover under
MIG policies for any Loans.
36
6. Status of Applicant(s)
The maximum amount of the aggregate Loan(s) under a mortgage account is
determined by the application of an affordability model. This model
delivers an individualised result that reflects the applicant's net income,
existing credit commitments and burden of family expenditure. The model
also calculates the full debt servicing cost at a stressed rate of interest
before comparing this cost to the net disposable income that the applicant
has available. The credit score also influences the decision of how much
to lend using the principle that high credit scores infer a proven ability
to manage financial affairs. The Seller maintains rules on the amount of
variable income (overtime, bonus, commission) that it will allow into the
model and as a general rule will allow no more than 60% of these items.
Benefit payments are allowed (including tax credits) as these quite often
compensate for the taxation and National Insurance deductions that would
normally cause lower levels of income to fall below the minimum wage
levels. This model returns "answers" of zero up to amounts that would
equate to over five times income. Regardless, the Seller maintains a
policy rule that it will not lend more than an amount equal to five times
income.
In cases where a single Borrower is attempting to have the Seller take a
secondary income into account, the Seller will consider the sustainability
of the Borrower's work hours, the similarity of the jobs and/or skills, the
commuting time and distance between the jobs, the length of employment at
both positions and whether the salary is consistent with the type of
employment. The Seller will determine, after assessing the above factors,
if it is appropriate to use both incomes. If so, both incomes will be used
as part of the normal income calculation.
When there are two applicants, the Seller adds joint incomes together for
the purpose of deciding which income band to use. The Seller may, at its
discretion, consider the income of additional applicants as well but only a
maximum rate of one times that income.
Positive proof of the borrower's identity and address must be established.
In exceptional circumstances this requirement can be waived (provided money
laundering regulations are complied with), but the reasons for doing so
must be fully documented.
The Seller may exercise discretion within its lending criteria in applying
those factors which are used to determine the maximum amount of the
Loan(s). Accordingly, these parameters may vary for some Loans. The Seller
may take the following into account when exercising discretion: credit
score result, existing customer relationship, percentage of LTV, stability
of employment and career progression, availability of living allowances
and/or mortgage subsidy from the employer, employer's standing, regularity
of overtime, bonus or commission (up to a maximum of 60 per cent. of the
income), credit commitments, quality of security (such as type of property,
repairs, location or saleability), and the increase in income needed to
support the Loan.
The Seller may not exercise discretion where it is lending over 95 per
cent. of value or the Borrower's credit score fails. There is an exception
from this policy for existing Borrowers who are moving home and the
Seller's overall position is improved.
37
7. Credit History
(a) Credit Search
With the exception, in some circumstances, of Further Advances to existing
Borrowers, a credit search is carried out in respect of all applicants.
Applications may be declined where an adverse credit history (for example,
county court judgement (or the Scottish equivalent), default, or bankruptcy
notice) is revealed.
(b) Existing Lender's Reference
In some cases, the Seller may also seek a reference from any existing
and/or previous lender. Any reference must satisfy the Seller that the
account has been properly conducted and that no history of material arrears
exists.
(c) First Time Buyers/Applicants in rented accommodation
Where applicants currently reside in rented accommodation, the Seller may
seek a landlord's reference. In addition, if considered appropriate, a
further reference may be taken in connection with any other property rented
by the applicant(s) within the preceding 18 months.
Tenancy statements may only be accepted from local authorities, housing
associations or reputable landlords known to the relevant branch/business
centre.
(d) Bank Reference
A bank reference may be sought or the applicants may be required to provide
bank statements in support of his or her application.
8. Scorecard
The Seller uses some of the above criteria and various other criteria to
provide an overall score for the application that reflects a statistical
analysis of the risk of advancing the Loan. The lending policies and
processes are determined centrally to ensure consistency in the management
and monitoring of credit risk exposure. Full use is made of software
technology in credit scoring new applications. Credit scoring applies
statistical analysis to publicly available data and customer-provided data
to assess the likelihood of an account going into arrears. Mortgage
collection is conducted through a number of payment collection departments.
The Seller reserves the right to decline an application that has received
a passing score. The Seller does have an appeals process if an applicant
believes his or her application to be unfairly denied. It is the Seller's
policy to allow only authorised individuals to exercise discretion in
granting variances from the scorecard.
38
SCHEDULE 5
POWER OF ATTORNEY IN FAVOUR OF FUNDING 1, THE MORTGAGES TRUSTEEAND THE
SECURITY TRUSTEE
THIS DEED OF POWER OF ATTORNEY is made on the , 2005 by:
(1) HALIFAX PLC whose registered office is at Trinity Road, Halifax, West
Yorkshire HX1 2RG (registered number 02367076) (the SELLER);
IN FAVOUR OF each of:
(2) PERMANENT FUNDING (NO. 1) LIMITED whose registered office is at 35 Great
St. Helen's, London EC3A 6AP (registered number 4267660) (FUNDING 1);
(3) PERMANENT MORTGAGES TRUSTEE LIMITED whose registered office is at 47
Esplanade, St Helier, Jersey JE1 0BD (registered number 83116) (the
MORTGAGES TRUSTEE);
(4) THE BANK OF NEW YORK, a New York banking corporation, acting through its
offices at 48th Floor, One Canada Square, London E14 5AL in its capacity
as security trustee (the SECURITY TRUSTEE, which expression shall include
such company and all other persons or companies for the time being acting
as the security trustee or security trustees under the Funding 1 Deed of
Charge).
WHEREAS:
(A) By virtue of a mortgage sale agreement (the MORTGAGE SALE AGREEMENT) dated
14th June, 2002 and as subsequently amended and restated on 6th March,
2003, 25th November, 2003, 12th March, 2004, 22nd July, 2004, 18th
November, 2004, 23rd March, 2005 and on [22nd] June, 2005 and made between
the Seller (1) Funding 1 (2) the Mortgages Trustee (3) and the Security
Trustee provision was made for the execution by the Seller of this Power
of Attorney.
(B) Words and phrases in this Power of Attorney shall (save where expressed to
the contrary) have the same meanings respectively as the words and phrases
in the Master Definitions and Construction Schedule dated [22nd] June,
2005 as amended, varied or supplemented from time to time and signed by
amongst others, the parties to the Power of Attorney.
NOW THIS DEED WITNESSETH as follows:
1. The Seller irrevocably and by way of security for the performance of the
covenants, conditions and undertakings on the part of the Seller contained
in the Mortgage Sale Agreement and the Servicing Agreement HEREBY APPOINTS
each of Funding 1, the Mortgages Trustee and the Security Trustee and any
receiver and/or administrator appointed from time to time in respect of
Funding 1 and/or the Mortgages Trustee or their assets (each an ATTORNEY)
severally to be its true and lawful attorney for the Seller and in the
Seller's name or otherwise to do any act matter or thing which any Attorney
considers necessary or desirable for the protection, preservation or
enjoyment of that Attorney's interest in the Loans and their Related
Security and/or which ought to be done under the covenants, undertakings
and provisions contained in the Mortgage Sale Agreement including (without
limitation) any or all of the following:
39
(a) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) any conveyance, assignation or transfer
(including, for the avoidance of doubt each Scottish Declaration of
Trust) of the Loans or any of them to the Mortgages Trustee and its
successors in title or to any other person or persons entitled to the
benefit thereof;
(b) to execute, sign, seal and deliver (using the company seal of the
Seller where appropriate) any conveyance, assignment, assignation
or transfer (including for the avoidance of doubt, each Scottish
Declaration of Trust) of the Related Security or any item comprised
therein (to the extent only that such item or items relate to the
Loans) to the Mortgages Trustee and its successors in title or to any
other person or persons entitled to the benefit thereof or entitled
to be registered at the Land Registry as proprietor thereof or to be
registered in the Land Register of Scotland or recorded in the
General Register of Sasines as heritable creditor thereof (as the
case may be);
(c) to do every other act or thing which the Seller is obliged to do
under the Mortgage Sale Agreement or which that Attorney may
otherwise consider to be necessary proper or expedient for fully and
effectually vesting or transferring the interests sold thereunder in
the Loans and their Related Security or any or each of them and/or
the Seller's estate right and title therein or thereto in or to the
Mortgages Trustee and its successors in title or to any other person
or persons entitled to the benefit thereof (as the case may be) in
the same manner and as fully and effectually in all respects as the
Seller could have done including, without limitation, any of the
acts referred to in CLAUSE 6.5(A) to (C) of the Mortgage Sale
Agreement;
(d) to exercise its rights, powers and discretions under the Loans
including the right to fix the rate or rates of interest payable
under the Loans in accordance with the terms thereof including, for
the avoidance of doubt, whilst such Loans subsist and subject to the
consent of the Mortgages Trustee being given to the setting of such
rates, setting the Seller's Variable Base Rate in the circumstances
referred to in CLAUSE 4 of the Servicing Agreement and/or following
perfection pursuant to CLAUSE 6.1 of the Mortgages Sale Agreement
PROVIDED THAT nothing in the Clause shall prevent the Seller (or any
of its attorneys from time to time) from setting a higher rate than
those set or to be set or required or to be required by the Mortgages
Trustee or Funding 1 under this Power of Attorney;
(e) to discharge the Mortgages or any of them and to sign, seal, deliver
and execute such receipts, releases, surrenders, instruments,
discharges, retrocessions and deeds as may be requisite or advisable
in order to discharge the relevant Property or Properties from the
Mortgages or any of them; and
(f) to exercise all the powers of the Seller in relation to such Loans
and their Related Security.
2. Each Attorney shall have the power by writing under its hand by an officer
of the Attorney from time to time to appoint a substitute who shall have
power to act on behalf of the Seller as if that substitute shall have been
originally appointed Attorney by this Power of Attorney (including, without
limitation, the power of further substitution) and/or to revoke any such
appointment at any time without assigning any reason therefor.
40
3. The Seller hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorneys shall lawfully do or cause
to be done in and concerning the Loans or their Related Security by virtue
of this Power of Attorney.
4. The laws of England shall apply to this Power of Attorney and the
interpretation thereof.
IN WITNESS WHEREOF the Seller has executed and delivered this document as a deed
the day and year first before written.
THE COMMON SEAL of )
HALIFAX PLC )
was hereunto affixed in )
the presence of: )
______________________ Authorised Signatory
______________________ Authorised Signatory
41
SCHEDULE 6
LOAN REPURCHASE NOTICE
Dated [ ]
1. It is hereby agreed that for the purpose of this notice the PRINCIPAL
AGREEMENT shall mean the Mortgage Sale Agreement dated 14th June, 2002
as amended and restated on 6th March, 2003, 25th November, 2003, 12th
March, 2004, 22nd July, 2004, 18th November, 2004, 23rd March, 2005 and
as further amended and restated on [22nd] June, 2005 and from time to
time, made between (1) HALIFAX PLC (the SELLER) (2) PERMANENT FUNDING
(NO. 1) LIMITED (3) PERMANENT MORTGAGES TRUSTEE LIMITED (the MORTGAGES
TRUSTEE) and (4) THE BANK OF NEW YORK (as the same may be or have been
amended, varied or supplemented from time to time with the consent of
those parties).
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. In accordance with CLAUSE 8.5 of the Principal Agreement, upon receipt
of this Loan Repurchase Notice by the Seller there shall exist between
the Seller and the Mortgages Trustee an agreement (the AGREEMENT FOR
SALE) for the sale by the Mortgages Trustee to the Seller of the Loans
and their Related Security more particularly described in the Schedule
hereto. Completion of such sale shall take place on [ ].
4. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
provisions of the Principal Agreement.
- -----------------------------------
Signed for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED
[On duplicate
We hereby acknowledge receipt of and confirm the contents of the Loan Repurchase
Notice dated [ ].
- -----------------------------------
Signed for and on behalf of
HALIFAX PLC]
42
SCHEDULE
1 2 3 4 5
Title No. (if Borrower Account No. Property Date of
registered) Postcode Mortgage
43
SCHEDULE 7
ASSIGNMENT OF THIRD PARTY RIGHTS
THIS DEED OF ASSIGNMENT is made on [*]
BY:
(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 (the
TRANSFEROR);
IN FAVOUR OF:
(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
(the TRANSFEREE).
WHEREAS:
(A) By the charges by way of legal mortgage or standard security (the
MORTGAGES) brief particulars of which are set out in the Annexure hereto
the properties brief particulars of which are similarly set out became
security for the repayment of the moneys therein mentioned.
(B) By the Mortgage Sale Agreement, the Transferor agreed to sell and the
Transferee agreed to buy all right, title, interest and benefit (both
present and future) of the Transferor in and under those Mortgages and
all Related Security and all monies secured by those Mortgages and
Related Security.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals) shall,
except where the context otherwise requires and save where otherwise
defined in this Deed, have the meanings given to them in the master
definitions and construction schedule dated [22nd] June, 2005 as amended
and/or restated from time to time, signed by, amongst others, the parties
to this Deed (as the same may be amended, varied or supplemented from
time to time with the consent of the parties to this Deed) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) and this Deed shall be construed
in accordance with the interpretation provisions set out in CLAUSE 2
thereof.
2. The Transferor hereby assigns absolutely unto the Transferee with full
title guarantee or, in the case of any Related Security or causes of
action (as described in CLAUSE 2(B) below) governed by Scots law, with
absolute warrandice:
(a) the benefit of all Related Security relating to the Mortgages
(including without limitation all securities for the principal
moneys and interest secured by the Mortgages and the benefit of
all consents to mortgage signed by occupiers of the mortgaged
properties and MHA Documentation and the benefit of all
guarantees, indemnities and surety contracts relating to the
Mortgages) other than any such Related Security which has been
transferred to the Transferee by other means or which is not
otherwise capable of such transfer; and
44
(b) all causes and rights of action of the Transferor against any
person in connection with any report, valuation, opinion,
certificate, consent or other statement of fact or opinion given
in connection with any Related Security relating to the
Mortgages or affecting the decision to make any advance in
connection with such Mortgages.
3 The Transferor on behalf of the Transferee agrees to intimate the
assignation contained in CLAUSE 2 hereof to all relevant third parties
where required to do so pursuant to CLAUSE 6 of the Mortgage Sale
Agreement or as otherwise required by the Security Trustee.
4 This Deed shall be governed by and construed in accordance with English
law
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED AS A DEED by )
HALIFAX PLC )
acting by its attorney in )
the presence of: ) __________________________
Witness's Signature: ____________________
Name: ____________________
Address: ____________________
45
ANNEXURE REFERRED TO IN THE FOREGOING ASSIGNMENT
Account No Property address Borrower Date of Mortgage
46
SCHEDULE 8
ASSIGNMENT OF HALIFAX MORTGAGE RE LIMITED MIG POLICIES
THIS DEED is made on [*]
BY:
(1) HALIFAX PLC (registered number 02367076), a public limited company
incoporated under the laws of England and Wales, whose registered
office is at Trinity Road, Halifax, West Yorkshire HX1 2RG (the
SELLER);
IN FAVOUR OF:
(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 (the MORTGAGES TRUSTEE).
WHEREAS:
(A) By a Mortgage Sale Agreement dated 14th June, 2002, as amended and
restated on 6th March, 2003, 25th November, 2003, 12th March, 2004,
22nd July, 2004, 18th November, 2004, 23rd March, 2005 and as further
amended and restated on [22nd] June, 2005 and from time to time made
between, amongst others, the parties hereto, the Seller agreed to
transfer to the Mortgages Trustee certain charges by way of legal
mortgage or standard security secured on residential property in
England, Wales and Scotland together with the benefit of any monies
secured thereby from time to time.
(B) The Seller has the benefit of mortgage indemnity insurance policies
brief details of which are set out in the Schedule to this Deed (the
HMRL MIG POLICIES).
(C) The Seller has agreed with the Mortgages Trustee to assign to the
Mortgages Trustee the benefit of the HMRL MIG Policies to the extent
that they relate to the Loans in the Portfolio.
(D) The insurance businesses (including, for the avoidance of doubt, the
HMRL MIG Policies) of Halifax Mortgage Re Limited were acquired by HBOS
Insurance (PCC) Guernsey Limited on 21st December, 2001.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
master definitions and construction schedule dated [22nd] June, 2005 as
amended and/or restated from time to time, signed by amongst others,
the parties to this Deed, (as the same may be amended, varied or
supplemented from time to time with the consent of the parties to this
Deed) (the MASTER DEFINITIONS CONSTRUCTION SCHEDULE) and this Deed shall
be construed in accordance with the interpretation provisions set out
in CLAUSE 2 thereof.
47
2. The Seller with full title guarantee hereby conveys, transfers and
assigns to the Mortgages Trustee absolutely all its right, title,
interest and benefit in the HMRL MIG Policies to the extent that they
relate to the Mortgages which as at this date are comprised in the
Portfolio, and all moneys and proceeds to become payable under any of
the same and all covenants relating thereto and all powers and remedies
for enforcing the same.
3. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF which this document has been executed and delivered as a
deed the day and year first before written.
EXECUTED AS A DEED by )
HALIFAX PLC )
acting by its attorney in )
the presence of: ) ______________________
Witness's Signature: ____________________
Name: ____________________
Address: ____________________
48
SCHEDULE 1
MORTGAGE INDEMNITY GUARANTEE POLICIES NUMBERED [*] RESPECTIVELY ISSUED TO THE
SELLER BY HALIFAX MORTGAGE RE LIMITED.
49
SCHEDULE 2
1 2 3 4 5
Title No. (if Borrower Account No Property Date of Mortgage
registered) Postcode
50
SCHEDULE 9
HALIFAX MORTGAGE RE LIMITED MIG POLICIES ASSIGNMENT NOTICE
To: HBOS Insurance (PCC) Guernsey Ltd
c/o AON Insurance Managers (Guernsey) Limited
(as Managers of HBOS Insurance (PCC) Ltd)
PO Box 33
Maison Trinity
Trinity Square
St Peter Port
Guernsey GY1 4AT
[*]
Dear Sirs,
RE: ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED 227001,
227001(A), 227002, 227003 AND 227006 RESPECTIVELY (THE MIG POLICIES)
We hereby give you notice that, by an Assignment dated [*] and made between
ourselves and Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
(a copy of which is attached to this notice), we assigned all of our right,
title, benefit and interest in the MIG Policies to the Mortgages Trustee (to
the extent that they relate to the loans and the mortgages in a portfolio
referred to in [the Mortgage Sale Agreement dated [22nd] June, 2005 as amended
and/or restated from time to time between ourselves, Permanent Funding (No. 1)
Limited, the Mortgages Trustee and The Bank of New York/the New Portfolio
Notice dated [*] between ourselves, Permanent Funding (No.1) Limited and the
Mortgages Trustee)]1 .
Yours faithfully,
- -----------------------------------
For and on behalf of
HALIFAX PLC
Copy: Permanent Mortgages Trustee Limited
Permanent Funding (No. 1) Limited
The Bank of New York
- -----------------------------------
1 Delete as applicable.
51
SCHEDULE 10
INSURANCE ENDORSEMENT
ON THE HEADED NOTEPAPER OF [THE RELEVANT INSURER ]
ENDORSEMENT [X] attaching to, supplemental to and forming part of policy number
[policy number] (the POLICY) issued by [name of Insurer] (the INSURER).
Expressions defined in the Policy shall unless indicated otherwise, have the
same meanings in this endorsement.
It is hereby noted and agreed that with effect from the date of this
Endorsement:
1. The definition of INSURED shall be deleted in its entirety and replaced
with the following wording:
(a) "Halifax plc (HALIFAX) whose registered office is at Trinity
Road, Halifax, West Yorkshire, HX1 2RG;
(b) any assignee or person to whom Halifax has assigned (whether
legally or equitably and whether by way of security or
otherwise) or has declared a trust in respect of any loans and/
or mortgages and/or standard securities and related collateral
and/or assets to which this Policy relates (an ASSIGNEE)
(whether or not any such Assignee holds the same on trust for
another or others); and
(c) any person benefiting from security granted by Halifax or its
Assignee over any loans and/or mortgages and/or standard
securities and related collateral and/or assets to which this
Policy relates in connection with the financing or re-financing
of such loans and/or mortgages and/or standard securities and
related collateral and/or assets."
2. Each term of the Policy which is inconsistent with the intent and/or
effect of the amended definition of INSURED contemplated in paragraph 1
above (the NEW DEFINITION) shall be subject to the New Definition and
shall not apply to the extent that such term of the Policy is
inconsistent with the New Definition.
3. This endorsement does not have, nor is intended by the parties to have,
the effect of conferring on the Insurer any greater liabilities under
the Policy than those of the Insurer immediately prior to this
endorsement being entered into between parties to this endorsement.
4. The Insurer acknowledges and agrees that any Insured under the Policy
may from time to time appoint Halifax or any other person as agent of
that Insured to deal with the Insurer on its behalf in the
administration of and making and payment of claims under the Policy.
All other terms, clause and conditions of the Policy remain unchanged.
52
This Endorsement is signed for and on behalf of the Insurer by a duly
authorised signatory:
- -----------------------------------
[Name]
[Position]
[Insurer]
Dated ,2005
53
SCHEDULE 11
INSURANCE ACKNOWLEDGEMENTS
PART 1
ON THE HEADED NOTEPAPER OF GE MORTGAGE INSURANCE LIMITED
To: Halifax plc (the SELLER)
LP/3/3/SEC
Trinity Road
Halifax
West Yorkshire
HX1 2RG
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
47 Esplanade
St Helier
Jersey
JE1 08D
Channel Islands
Permanent Funding (No. 1) Limited (FUNDING 1)
35 Great St Helen's London EC3A 6AP
The Bank of New York (the SECURITY TRUSTEE)
One Canada Square
London
E14 5AL
[date]
Dear Sirs,
MORTGAGE INDEMNITY GUARANTY POLICIES NUMBERS 227001, 227001(A), 227002, 227003
AND 227006 (THE MIG POLICIES)
We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:
(a) the Seller may assign or agree to transfer or declare a trust in respect
of its interest in properties which are (or may from time to time be)
covered by the MIG Policies to the Mortgages Trustee;
(b) the Mortgages Trustee may declare a trust over its interest in such
properties in favour of Funding 1 and the Seller; and
(c) Funding 1 may charge its interest in such properties to the Security
Trustee.
54
In consideration of the payment of (pound)1 made by each of the Seller, the
Mortgages Trustee, Funding 1 and the Security Trustee (receipt whereof is
hereby acknowledged), we hereby confirm that the arrangements set out in
PARAGRAPHS (A) to (C) inclusive above will not cause the MIG Policies to lapse
or terminate and, notwithstanding any such arrangements, we will continue to
pay claims under the MIG Policies in the same way and in the same amount as we
would have paid them, had the said arrangements not been entered into.
Yours faithfully,
FOR AND ON BEHALF OF GE MORTGAGE INSURANCE LIMITED
55
PART 2
ON THE HEADED NOTEPAPER OF HBOS INSURANCE (PCC) GUERNSEY LTD
To: Halifax plc (the SELLER)
LPn/3/3/SEC
Trinity Road
Halifax
West Yorkshire
HX1 2RG
Permanent Mortgages Trustee Limited (the MORTGAGES TRUSTEE)
47 Esplanade
St Helier
Jersey
JE1 08D
Channel Islands
Permanent Funding (No. 1) Limited (FUNDING 1)
35 Great St. Helen's
London
EC3A 6AP
The Bank of New York (the SECURITY TRUSTEE)
48th Floor
One Canada Square
London
E14 5AL
[*], 2005
Dear Sirs,
MORTGAGE INDEMNITY GUARANTEE POLICY NUMBERS 227001, 227001(A), 227002, 227003
AND 227006 (THE "MIG POLICIES")
We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:
(a) all of the Seller's right, title, benefit and interest in the MIG
Policies (to the extent that the same relate to the mortgage loans and
their collateral security sold or to be sold by the Seller to the
Mortgages Trustee pursuant to a mortgage sale agreement to be entered
into between each of the parties to whom this letter is addressed) shall
be assigned by the Seller to the Mortgages Trustee;
(b) the Seller may sell and assign or agree to sell and assign or declare a
trust in respect of its interest in properties which are (or may from
time to time be) covered by the MIG Policies to or in favour of the
Mortgages Trustee;
56
(c) the Mortgages Trustee may declare a trust over its interest in such
properties in favour of Funding 1 and the Seller; and
(d) Funding 1 may charge its beneficial interest in such properties to the
Security Trustee.
In consideration of the payment of (pound)1 made by each of the Seller, the
Mortgages Trustee, Funding 1 and the Security Trustee (receipt whereof is
hereby acknowledged), we hereby confirm that the arrangements set out in
PARAGRAPHS (A) to (D) inclusive above will not cause the MIG Policies to lapse
or terminate and, notwithstanding any such arrangements, we will continue to
pay claims under the MIG Policies in the same way and in the same amount as we
would have paid them, had the said arrangements not been entered into.
Yours faithfully,
FOR AND ON BEHALF OF HBOS INSURANCE (PCC) GUERNSEY LIMITED
57
SCHEDULE 12
NEW PORTFOLIO NOTICE
Dated [ ]
1. It is hereby agreed for the purpose of this notice the PRINCIPAL
AGREEMENT shall mean the Mortgage Sale Agreement dated 14th June, 2002
as amended and restated on 6th March, 2003, 25th November, 2003, 12th
March, 2004, 22nd July, 2004, 18th November, 2004, 23rd March, 2005 and
as further amended and restated on [22nd] June, 2005 made between (1)
HALIFAX PLC (the SELLER) (2) PERMANENT FUNDING (NO. 1) LIMITED
(FUNDING 1) (3) PERMANENT MORTGAGES TRUSTEE LIMITED (the MORTGAGES
TRUSTEE) and (4) THE BANK OF NEW YORK (as the same may be or have been
amended, varied or supplemented from time to time with the consent of
those parties).
2. Save where the context otherwise requires, words and expressions in this
notice shall have the same meanings respectively as when used in the
Principal Agreement.
3. In accordance with and subject to CLAUSE 4.1 of the Principal Agreement,
upon receipt by the Seller of the duplicate of this notice signed by
Funding 1 and the Mortgages Trustee, there shall exist between the
Seller, Funding 1 and the Mortgages Trustee an agreement (the AGREEMENT
FOR SALE) for the sale by the Seller to the Mortgages Trustee of the New
Loans and their Related Security more particularly described in the
Schedule hereto (other than any New Loans and their Related Security
which have been redeemed in full prior to the next following Sale Date).
Completion of such sale shall take place on [ ].
4. The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
provisions of the Principal Agreement.
- ------------------------------------
Signed for and on behalf of
HALIFAX PLC
[On duplicate:
We hereby acknowledge receipt of the New Portfolio Notice dated [ ],
and confirm that we are prepared to purchase New Loans as set out in that
notice.
- ------------------------------------
Signed for and on behalf of
PERMANENT FUNDING (NO. 1) LIMITED
- ------------------------------------
Signed for and on behalf of
[PERMANENT MORTGAGES TRUSTEE LIMITED]
58
SCHEDULE
1. 2. 3. 4. 5.
Title No. (if Borrower Property Postcode Account No. Date of Mortgage
registered)
59
SCHEDULE 13
FORMS OF SCOTTISH TRANSFER
LAND REGISTER
We, HALIFAX PLC, incorporated under the Companies Acts (registered number
02367076) and having our Registered Office at Trinity Road, Halifax, West
Yorkshire HX1 2RG (the TRANSFEROR) CONSIDERING THAT in terms of a Mortgage Sale
Agreement among us the Transferor, PERMANENT MORTGAGES TRUSTEE LIMITED, a
private limited company incorporated under the laws of Jersey, Channel Islands
(registered number 83116) and having its registered office at 47 Esplanade,
St Helier, Jersey JE1 0BD (the TRANSFEREE) and others dated 14th June, 2002 as
amended and restated on 6th March, 2003, 25th November, 2003, 12th March, 2004,
22nd July, 2004, 18th November, 2004, 23rd March, 2005 and as further amended
and restated on [22nd] June, 2005 (the MORTGAGE SALE AGREEMENT) we have sold
our whole right, title and interest in and to the Standard Securities and
others hereinafter mentioned to the Transferee NOW THEREFORE we, the
Transferor, IN CONSIDERATION of the sums payable in terms of and in implement
of the Mortgage Sale Agreement HEREBY ASSIGN to the Transferee as trustee under
and in terms of the Mortgages Trust Deed among us, the Transferor, the
Transferee and others dated 13th June 2002 as amended and restated on 6th
March, 2003, 25th November, 2003, 12th March, 2004, 22nd July, 2004, 18th
November, 2004, 23rd March, 2005 and as further amended and restated on [22nd]
June, 2005 (the MORTGAGES TRUST DEED) and its successor or successors as
trustee or trustees under and in terms of the Mortgages Trust Deed:
(a) the Standard Securities granted by the respective parties whose names are
specified in Column 3 of the Schedule annexed and executed as relative
hereto in favour of us the Transferor for all sums due and to become due,
to the extent of the sums specified in the relative entry in Column 6 of
the said Schedule being the amounts now due under the said respective
Standard Securities, registered said Standard Securities in the Land
Register under the Title Number specified in the relative entry in Column
4 of the said Schedule on the date specified in the relative entry in
Column 5 of the said Schedule; and
(b) the whole rights, title and interest of us the Transferor in and under
all and any personal bonds, credit agreements or agreements for loan
(however constituted) secured by the said Standard Securities and granted
by or entered into with the said respective parties whose names are
specified in Column 3 of the said Schedule, the dates of the respective
personal bonds, credit agreements or agreements for loan being specified
in the relative entry in Column 7 of the said Schedule;
60
With interest from and also arrears and accumulations of interest due and
unpaid as at [ ]; And we grant warrandice:
IN WITNESS WHEREOF these presents typewritten on this [and the preceding] page
are together with the Schedule annexed hereto executed at [ ]
on the [ ] day of [ ] as follows:
SUBSCRIBED for and on behalf of HALIFAX PLC by
________________________ _______________________Authorised Signatory
(Print Full Name)
before this witness
_______________________Witness
_______________________
(Print Full Name)
_______________________
_______________________
(Address)
61
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY HALIFAX PLC IN
FAVOUR OF PERMANENT MORTGAGES TRUSTEE LIMITED
1 2 3 4 5 6 7
Account Address Borrowers Title Registration Sum Due Date of
No. Full Names Number Date Bond or
Loan Agreement
__________________________ Authorised Signatory
62
SCHEDULE 14
FORMS OF SCOTTISH TRANSFER
SASINE REGISTER
We, HALIFAX PLC, incorporated under the Companies Acts (registered number
02367076) and having our Registered Office at Trinity Road, Halifax, West
Yorkshire HX1 2RG (the TRANSFEROR) CONSIDERING THAT in terms of a Mortgage Sale
Agreement among us the Transferor, PERMANENT MORTGAGES TRUSTEE LIMITED, a
private limited company incorporated under the laws of Jersey, Channel Islands
(registered number 83116) and having its registered office at 47 Esplanade,
St Helier, Jersey JE1 0BD (the TRANSFEREE) and others dated 14th June, 2002 as
amended and restated on 6th March, 2003, 25th November, 2003, 12th March, 2004,
22nd July, 2004, 18th November, 2004, 23rd March, 2005 and as further amended
and restated on [22nd] June, 2005 (the MORTGAGE SALE AGREEMENT) we have sold
our whole right, title and interest in and to the Standard Securities and
others hereinafter mentioned to the Transferee NOW THEREFORE we the Transferor
IN CONSIDERATION of the sums payable in terms of and in implement of the
Mortgage Sale Agreement HEREBY ASSIGN to the Transferee as trustee under and in
terms of the Mortgages Trust Deed among us, the Transferor, the Transferee and
others dated 13th June, 2002 as amended and restated on 6th March, 2003, 25th
November 2003, 12th March, 2004, 22nd July, 2004, 18th November 2004, 23rd
March, 2005 and as further amended and restated on [22nd] June, 2005 (the
MORTGAGES TRUST DEED) and its successor or successors as trustee or trustees
under and in terms of the Mortgages Trust Deed:
(a) the Standard Securities granted by the respective parties whose names are
specified in Column 3 of the Schedule annexed and executed as relative
hereto in favour of us the Transferor for all sums due and to become due,
to the extent of the sums specified in the relative entry in Column 6 of
the said Schedule being the amounts now due under the said respective
Standard Securities, recorded said Standard Securities in the Register
for the County specified in the relative entry in Column 4 of the said
Schedule on the date specified in the relative entry in Column 5 of the
said Schedule; and
(b) the whole rights, title and interest of us the Transferor in and under
all and any personal bonds, credit agreements or agreements for loan
(however constituted) secured by the said Standard Securities and granted
by or entered into with the said respective parties whose names are
specified in Column 3 of the said Schedule, the dates of the respective
personal bonds, credit agreements or agreements for loan being specified
in the relative entry in Column 7 of the said Schedule;
63
With interest from and also arrears and accumulations of interest due and
unpaid as at [ ]; And we grant warrandice:
IN WITNESS WHEREOF these presents typewritten on this [and the preceding] page
are together with the Schedule annexed hereto executed at [ ] on
the [ ] day of [ ] as follows:
SUBSCRIBED for and on behalf of HALIFAX PLC by
________________________ ________________________Authorised Signatory
(Print Full Name)
before this witness
________________________Witness
________________________
(Print Full Name)
________________________
________________________
(Address)
64
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY HALIFAX PLC IN
FAVOUR OF PERMANENT MORTGAGES TRUSTEE LIMITED
1 2 3 4 5 6 7
Account Address Borrowers County Recording Sum Due Date of
No. Full Names Date Bond or Loan
Agreement
_______________________Authorised Signatory
65
SCHEDULE 15
FORM OF SCOTTISH DECLARATION OF TRUST
DECLARATION OF TRUST
among
HALIFAX PLC, incorporated under the Companies Acts (registered number 02367076)
and having its Registered Office at Trinity Road, Halifax, West Yorkshire HX1
2RG (the SELLER);
and
PERMANENT MORTGAGES TRUSTEE LIMITED, a private limited company incorporated
under the laws of Jersey, Channel Islands (registered number 83116), and having
its registered office at 47 Esplanade, St Helier, Jersey JE1 0BD, Channel
Islands as trustee under and in terms of the mortgages trust deed
aftermentioned (the MORTGAGES TRUSTEE);
and
PERMANENT FUNDING (NO. 1) LIMITED, incorporated under the Companies Acts
(registered number 4267660) and having its registered office at 35 Great
St. Helen's, London EC3A 6AP (FUNDING 1).
WHEREAS:
(A) Title to the Scottish Trust Property aftermentioned is held by and vested
in the Seller.
(B) In terms of a Mortgages Trust Deed entered into among the Seller, Funding
1 and the Mortgages Trustee dated 13th June 2002 as amended and restated
on 6th March 2003, 25th November 2003, 12th March, 2004, 22nd July, 2004,
18th November, 2004, 23rd March, 2005 and as further amended and restated
on [22nd] June, 2005 and the Mortgages Trust constituted in terms
thereof, the Mortgages Trustee holds the Trust Property on trust for the
Beneficiaries therein specified.
(C) In terms of a Mortgage Sale Agreement entered into among, inter alia, the
Seller, Funding 1 and the Mortgages Trustee dated 14th June 2002, as
amended on 6th March 2003, 25th November 2003, 12th March, 2004, 22nd
July, 2004, 18th November, 2004, 23rd March, 2005 and as amended and
restated on [22nd] June, 2005 (the MORTGAGE SALE AGREEMENT) the Seller
has agreed to sell inter alia the said Scottish Trust Property to the
Mortgages Trustee to be held thereafter by the Mortgages Trustee under
and in terms of the Mortgages Trust.
(D) In implement of CLAUSE 4.5(A)(VII) of the Mortgage Sale Agreement and
pending the taking of legal title to the said Scottish Trust Property by
the Mortgages Trustee, the Seller has undertaken to grant this deed.
66
NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:
1. INTERPRETATION
In this deed:
(a) the amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this deed and dated [22nd]
June, 2005 (as the same may be amended, varied or supplemented from time
to time with the consent of the parties to this deed) (the MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and specifically
incorporated into this deed and, accordingly, the expressions defined in
the Master Definitions and Construction Schedule (as so amended, varied
or supplemented from time to time) shall, except where the context
otherwise requires and save where otherwise defined herein, have the same
meanings in this deed, including the Recitals and this deed shall be
construed in accordance with the interpretation provisions set out in
CLAUSE 2 of the Master Definitions and Construction Schedule; and
(b) SCOTTISH TRUST PROPERTY shall mean the Scottish Loans and their Related
Security brief particulars of which are detailed in the schedule annexed
and executed as relative hereto (the SCHEDULE) and any Further Advances
and Home Cash Reserve Advances made in respect of such Scottish Loans,
and all right, title, interest and benefit of the Seller to:
(i) all payments of principal and interest (including, for the
avoidance of doubt, all Accrued Interest, Arrears of Interest,
Capitalised Expenses and Capitalised Arrears) and other sums due or
to become due in respect of such Scottish Loans and their Related
Security including, without limitation, the right to demand, sue
for, recover and give receipts for all principal monies, interest
and costs and the right to sue on all covenants and undertakings
made or expressed to be made in favour of the Seller under the
applicable Mortgage Terms;
(ii) subject where applicable to the subsisting rights of redemption of
Borrowers, all MHA Documentation, Deeds of Postponement, all third
party guarantees and any other collateral security for the
repayment of the relevant Scottish Loans;
(iii) the right to exercise all the powers of the Seller in relation
thereto;
(iv) all proceeds resulting from the enforcement of any of those
Scottish Loans and their Related Security;
(v) each Certificate of Title and Valuation Report relevant to those
Scottish Loans and any right of action of the Seller against any
solicitor, qualified conveyancer, valuer or other person in
connection with any report, valuation, opinion, certificate or
other statement of fact or opinion given in connection with any of
those Scottish Loans and their Related Security, or any part
thereof or affecting the decision of the Seller to make or offer to
make any of those Scottish Loans or part thereof;
(vi) the proceeds of all claims made by or on behalf of the Seller or to
which the Seller is entitled in relation to the Scottish Properties
secured by the Scottish Mortgages detailed in the Schedule under
the Buildings Policies and the Properties in Possession Cover; and
67
(vii) the MIG Policies, so far as they relate to the relevant Scottish
Loans and their Related Security, including the right to receive
the proceeds of any claims.
2. DECLARATION OF TRUST
The Seller hereby DECLARES that from and after the date hereof the
Seller holds and, subject to CLAUSE 8 below, shall henceforth hold the
Scottish Trust Property and its whole right, title and interest, present
and future, therein and thereto in trust absolutely for the Mortgages
Trustee and its assignees (whether absolutely or in security) whomsoever.
3. INTIMATION
The Seller hereby intimates to the Mortgages Trustee the coming into
effect of the trust hereby declared and created and the Mortgages
Trustee by its execution of this deed immediately subsequent to the
execution hereof by the Seller acknowledges such intimation.
4. DEALINGS WITH SCOTTISH TRUST PROPERTY AND NEGATIVE PLEDGE
The Seller warrants and undertakes that:
(a) as at the date hereof it holds, subject to any pending
registration or recording in the Land Register of Scotland or
the General Register of Sasines, legal title to the Scottish
Trust Property unencumbered by any fixed or floating charge,
diligence or other Security Interest;
(b) it shall not create or agree to create any fixed or floating
charge or other Security Interest over or which may attach to or
affect the whole or any part of the Scottish Trust Property or
otherwise dispose of the same at any time when such Scottish
Trust Property or part thereof remains subject to the trust
hereby created; and
(c) it shall deal with the Scottish Trust Property (including without
prejudice to said generality the calculation and setting of any
interest rate applicable thereto) in accordance with the
provisions of the Transaction Documents and the specific written
instructions (if any) of the Mortgages Trustee or its foresaids
and shall take, subject to CLAUSE 8 below, any such action as
may be necessary (including for the avoidance of doubt the
raising or defending of any proceedings in any court of law
whether in Scotland or elsewhere) to secure or protect the title
to the Scottish Trust Property but only in accordance with the
specific written instructions (if any) of the Mortgages Trustee
or its foresaids.
5. TRANSFER OF TITLE
5.1 The Mortgages Trustee and its foresaids as beneficiary hereunder
shall have the right to call upon the Seller to execute and deliver to
the Mortgages Trustee, subject to the terms of CLAUSE 6 of the Mortgage
Sale Agreement, valid assignations of the Scottish Trust Property or any
part thereof, and that notwithstanding the winding up of the Seller, the
making of any administration order or the filing of documents with the
court for the appointment of an administrator or the service of a notice
of intention to appoint an administrator in respect of the Seller or the
appointment of a receiver to all or any part of the Scottish Trust
Property.
68
5.2 The Seller undertakes to the Mortgages Trustee and binds and obliges
itself that, upon the occurrence of any one of the events specified in
CLAUSE 6.1 of the Mortgage Sale Agreement, it will within five London
Business Days of such occurrence provide such information as is
necessary to enable the Mortgages Trustee to complete Scottish Transfers
(including all schedules and annexures thereto) in relation to the whole
of the Scottish Trust Property.
5.3 For further assuring the said rights and powers specified in this CLAUSE
5, the Seller has granted a power of attorney in favour of the Mortgages
Trustee, Funding 1 and the Security Trustee substantially in the form
set out in SCHEDULE 5 to the Mortgage Sale Agreement.
6. MORTGAGES TRUSTEE DECLARATION OF TRUST
The Mortgages Trustee by its said execution of this deed hereby DECLARES
that its whole right, title and beneficial interest in and to the
Scottish Trust Property in terms of this deed are and shall be held (to
the extent not already so held) by the Mortgages Trustee and its
foresaids under and in terms of the Mortgages Trust and all sums and
amounts received or held by the Mortgages Trustee relating thereto or
deriving therefrom have been and shall be added (to the extent
aforesaid) to the Trust Property and held by the Mortgages Trustee under
the Mortgages Trust Deed.
7. MORTGAGES TRUST INTIMATION
The Mortgages Trustee hereby intimates to Funding 1 and the Seller, as
Beneficiaries of the Mortgages Trust, the declaration of trust made in
terms of CLAUSE 6 above and Funding 1 and the Seller by executing this
deed acknowledge such intimation.
8. TERMINATION OF TRUST
If:
(a) legal title to any part or parts of the Scottish Trust Property
is taken by the Mortgages Trustee or its foresaids in accordance
with the provisions of CLAUSE 5 above (which in the case of any
Scottish Mortgage shall be constituted by the registration or
recording of the title thereto in the Land Register of Scotland
or the General Register of Sasines (as appropriate)); or
(b) any part or parts of the Scottish Trust Property forms the
subject of a repurchase in accordance with the terms of CLAUSE
8.5 of the Mortgage Sale Agreement,
the trust hereby declared and created pursuant to CLAUSES 2 and 3 above
shall (but only when any of the events or transactions before stated has
been completed irrevocably, validly and in full) ipso facto fall and
cease to be of effect in respect of such part or parts of the Scottish
Trust Property but shall continue in full force and effect in respect of
the whole remainder (if any) of the Scottish Trust Property.
9. CHANGE OF TRUSTEE
Except with the prior consent of the Mortgages Trustee and (for so long
as each retains any right or interest in the Scottish Trust Property)
Funding 1 and the Security Trustee, the Seller shall not be entitled to
resign office as a trustee or assume a new trustee or trustees under
this deed.
69
10. VARIATION
This deed and the trusts hereby declared and created pursuant to CLAUSES
2 and 3 and CLAUSES 6 and 7 above shall not be varied in any respect
without the consent in writing of the Mortgages Trustee and (for so long
as each retains any right or interest in the Scottish Trust Property)
Funding 1 and the Security Trustee.
11. GOVERNING LAW
This deed shall be governed by and construed in accordance with the law
of Scotland and each of the parties hereby prorogates the non-exclusive
jurisdiction of the Scottish courts so far as not already subject
thereto and waives any right or plea of forum non conveniens in respect
of such jurisdiction.
12. REGISTRATION
The parties hereto consent to the registration of these presents for
preservation:
IN WITNESS WHEREOF these presents typewritten on this and the preceding [ ]
pages together with the Schedule annexed hereto are executed for and on behalf
of the Seller, the Mortgages Trustee and Funding 1 at [ ] on
[ ] as follows:
SUBSCRIBED for and on behalf of
HALIFAX PLC by [ ], its
Attorney, at London on [ ] 2005 before this
witness:
..............................Witness ................. Attorney
(Signature) (Signature)
..............................
(Print Full Name)
..............................
..............................
(Address)
70
SUBSCRIBED for and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED by [ ],
one of its Directors, at London on [ ] 2005
before this witness:
................................. Witness ..................Director
(Signature) (Signature)
.................................
(Print Full Name)
.................................
.................................
(Address)
SUBSCRIBED for an on behalf of
PERMANENT FUNDING (NO. 1) LIMITED by [ ], one
of its Directors, at London on [ ] 2005 before
this witness:
................................. Witness .................Director
(Signature) (Signature)
.................................
(Print Full Name)
.................................
.................................
(Address)
71
THIS IS THE SCHEDULE REFERRED TO IN THE FOREGOING DECLARATION OF TRUST
AMONG HALIFAX PLC, PERMANENT MORTGAGES TRUSTEE LIMITED AND
PERMANENT FUNDING (NO. 1) LIMITED
DETAILS OF SCOTTISH LOANS AND RELATED SECURITY
1. 2. 3. 4. 5. 6. 7.
Account Address Borrowers' Title Registration/ Sum Due Date of Loan
No. full names Number/ Recording Agreement
County Date
....................................Attorney
Halifax plc
....................................Director
Permanent Mortgages Trustee Limited
....................................Director
Permanent Funding (No.1) Limited
72
SCHEDULE 16
FORM OF MEMORANDUM OF RELEASE
Permanent Mortgages Trustee Limited
47 Esplanade
St Helier
Jersey
JE1 0BD
Channel Islands
[*]
Halifax Plc
LP/3/3/SEC
Trinity Road
Halifax
West Yorkshire
HX1 2RG
Attn: Head of Mortgage Securitisation
Dear Sirs,
Pursuant to Clause 8.6 of the Mortgage Sale Agreement, we hereby acknowledge:
(a) that the loans detailed in the Annexure to the attached Assignment of
Third Party Rights are released from the security created by the
Funding 1 Deed of Charge and the Second Supplemental Funding 1 Deed of
Charge; and
(b) that all further monies due and received on the loans are now for the
account of Halifax.
Terms used (but not defined) herein shall have the meanings given to them in
the master definitions and construction schedule dated [22nd] June, 2005 signed
by, amongst others, the parties to this memorandum.
Yours faithfully
....................................
For and on behalf of
PERMANENT MORTGAGE TRUSTEES LIMITED
73
SCHEDULE 17
RE-ASSIGNMENT OF MIG POLICIES
THIS DEED is made on [*]
BY:
1. 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 (the MORTGAGES TRUSTEE);
IN FAVOUR OF:
2. 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 (the SELLER).
WHEREAS:
(A) By the Mortgage Sale Agreement dated 14th June, 2002, as amended and
re-stated on 6th March, 2003, 25th November, 2003, 12th March, 2004,
22nd July, 2004, 18th November, 2004, 23rd March, 2005 and, as further
amended and restated on [22nd] June, 2005 made between, amongst others,
the parties hereto, the Mortgages Trustee agreed to transfer to the
Seller certain charges by way of legal mortgage or standard security
secured on residential property in England, Wales and Scotland together
with the benefit of any monies secured thereby.
(B) By the Mortgage Sale Agreement, the Mortgages Trustee has agreed to
re-transfer to the Seller the Mortgages listed in Schedule 2 to this
Deed and to re-assign to the Seller the benefit of the mortgage
indemnity insurance policies brief details of which are set out in
Schedule 1 to this Deed (the HMRL MIG POLICIES) to the extent that they
relate to the Mortgages listed in Schedule 2 to this Deed.
(C) The insurance businesses (including, for the avoidance of doubt, the
HMRL MIG Policies) of Halifax Mortgage Re Limited were acquired by HBOS
Insurance (PCC) Guernsey Limited on 21st December, 2001.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
master definitions and construction schedule dated [22nd] June, 2005,
signed by amongst others, the parties to this Deed, (as the same may be
amended, varied or supplemented from time to time with the consent of
the parties to this Deed) (the Master Definitions Construction Schedule)
and this Deed shall be construed in accordance with the interpretation
provisions set out in Clause 2 thereof.
2. The Mortgages Trustee with full title guarantee hereby conveys,
transfers and assigns to the Seller absolutely all its right, title,
interest and benefit in the HMRL MIG Policies to the extent that they
relate to the Mortgages which are listed in Schedule 2 to this Deed, and
all moneys and proceeds to become payable under any of the same and all
covenants relating thereto and all powers and remedies for enforcing the
same.
74
3. This Deed shall be governed by and construed in accordance with English
law.
IN WITNESS WHEREOF which this document has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED acting by )
its attorney in the presence of: )
Witness:
Name:
Address:
75
SCHEDULE 1
Mortgage indemnity guarantee policies numbered [*] respectively issued to the
Seller by Halifax Mortgage Re Limited.
76
SCHEDULE 2
1. 2. 3. 4. 5.
Title No. (if Borrower Account No. Property Postcode Date of Mortgage
registered)
77
SCHEDULE 18
HALIFAX MORTGAGE RE LIMITED MIG POLICIES RE-ASSIGNMENT NOTICE
To: HBOS Insurance (PCC) Guernsey Ltd
c/o AON Insurance Managers (Guernsey) Limited
(as Managers of HBOS Insurance (PCC) Ltd)
PO Box 33
Maison Trinity
Trinity Square
St Peter Port
Guernsey GY1 4AT
[*]
Dear Sirs,
RE: ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED
227001, 227001 (A), 227002, 227003 AND 227006 RESPECTIVELY (THE
MIG POLICIES)
We hereby give you notice that, by an Assignment dated [*] and made between
ourselves and Halifax plc (the ASSIGNMENT), a copy of which is attached to this
notice, we assigned all of our right, title, benefit and interest in the MIG
Policies to Halifax plc (to the extent that they relate to the loans and the
mortgages listed in Schedule 2 to the Assignment).
Yours faithfully,
...............................
For and on behalf of
PERMANENT MORTGAGES TRUSTEE LIMITED
Copy: Halifax plc
Permanent Funding (No. 1) Limited
The Bank of New York
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SCHEDULE 19
RE-ASSIGNMENT OF THIRD PARTY RIGHTS
THIS DEED OF ASSIGNMENT is made on [*]
BY:
1. 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
(the TRANSFEROR);
IN FAVOUR OF:
2. 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
(the TRANSFEREE).
WHEREAS:
(A) By the charges by way of legal mortgage or standard security (the
MORTGAGES) brief particulars of which are set out in the Annexure hereto
the properties brief particulars of which are similarly set out
became security for the repayment of the moneys therein mentioned.
(B) By the Mortgage Sale Agreement, the Transferee sold and the Transferor
purchased all right, title, interest and benefit of the Transferee in
and under the Mortgages and all Related Security and all monies secured
by those Mortgages on or about [22nd] June, 2005.
(C) By Clause 8.5 of the Mortgage Sale Agreement, the Transferor has now
agreed to sell and the Transferee has agreed to repurchase all right,
title, interest and benefit (both present and future) of the Transferor
in and under those Mortgages and all Related Security and all monies
secured by those Mortgages and Related Security.
NOW THIS DEED WITNESSETH as follows:
1. Terms used (but not defined) in this Deed (including the recitals)
shall, except where the context otherwise requires and save where
otherwise defined in this Deed, have the meanings given to them in the
Master Definitions and Construction Schedule dated [22nd] June, 2005
signed by, amongst others, the parties to this Deed (as the same may be
amended, varied or supplemented from time to time with the consent of
the parties to this Deed) (the MASTER DEFINITIONS AND CONSTRUCTION
SCHEDULE) and this Deed shall be construed in accordance with the
interpretation provisions set out in CLAUSE 2 thereof.
2. The Transferor hereby assigns absolutely unto the Transferee with full
title guarantee or, in the case of any Related Security or causes of
action (as described in CLAUSE 2(B) below) governed by Scots Law, with
absolute warrandice:
(a) the benefit of all Related Security relating to the Mortgages
(including without limitation all securities for the principal
moneys and interest secured by the Mortgages and the benefit of
all consents to mortgage signed by occupiers of the mortgaged
properties and MHA Documentation and the benefit of all
guarantees, indemnities and surety contracts relating to the
Mortgages) other than any such Related Security which has been
transferred to the Transferee by other means or which is not
otherwise capable of such transfer; and
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(b) all causes of action of the Transferor against any person in
connection with any report, valuation, opinion, certificate,
consent or other statement of fact or opinion given in connection
with any Related Security relating to the Mortgages or affecting
the decision to make any advance in connection with such
Mortgages.
3. This Deed shall be governed by and construed in accordance with English
law (provided that any terms of the Deed which are particular to Scots
law shall be construed in accordance with those laws of Scotland).
IN WITNESS WHEREOF this document has been executed and delivered as a deed the
day and year first before written.
EXECUTED as a DEED by )
PERMANENT MORTGAGES )
TRUSTEE LIMITED )
acting by its attorney in )
the presence of: )
Witness's signature:
Name:
Address:
80
ANNEXURE REFERRED TO IN THE FOREGOING ASSIGNMENT
Account No. Property Address Borrower Date of Mortgage
81
APPENDIX 1
PART 1 INITIAL PORTFOLIO
PART 2 STANDARD DOCUMENTATION
82
APPENDIX 2
PART 1
INITIAL PORTFOLIO
This is Part 1 (on accompanying CD-ROM) of the Exhibit to a Mortgage Sale
Agreement dated 14th June, 2002 made between Halifax plc (1) Permanent Funding
(No. 1) Limited (2) Permanent Mortgages Trustee Limited (3) and State Street
Bank and Trust Company (4).
Ian G Stewart
HALIFAX PLC
David Balai
PERMANENT FUNDING (NO. 1) LIMITED
David Balai
PERMANENT MORTGAGES TRUSTEE LIMITED
David Duclos
STATE STREET BANK AND TRUST COMPANY
83
PART 2
STANDARD DOCUMENTATION
This is Part 2 of the Exhibit to a Mortgage Sale Agreement dated 14th June,
2002 made between Halifax plc (1) Permanent Funding (No. 1) Limited (2)
Permanent Mortgages Trustee Limited (3) and State Street Bank and Trust Company
(4).
Ian G Stewart
HALIFAX PLC
David Balai
PERMANENT FUNDING (NO. 1) LIMITED
David Balai
PERMANENT MORTGAGES TRUSTEE LIMITED
David Duclos
STATE STREET BANK AND TRUST COMPANY
84