AMENDED AND RESTATED CASH MANAGEMENT EXHIBIT 4.8
AGREEMENT
21 NOVEMBER 2007
BANK OF SCOTLAND PLC
(AS CASH MANAGER AND SELLER)
AND
PERMANENT MORTGAGES TRUSTEE LIMITED
(AS MORTGAGES TRUSTEE)
AND
PERMANENT FUNDING (NO. 1) LIMITED
(AS FUNDING 1)
AND
PERMANENT FUNDING (NO. 2) LIMITED
(AS FUNDING 2)
AND
THE BANK OF NEW YORK
(AS FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE)
CONTENTS
CLAUSE PAGE
1. Definitions and Interpretation.......................................2
2. Appointment of Cash Manager..........................................2
3. The Services.........................................................3
4. Payments, Accounts, Ledgers..........................................4
5. Early Repayment Fees.................................................9
6. Swaps................................................................9
7. No Liability........................................................10
8. Costs and Expenses..................................................10
9. Information.........................................................11
10. Remuneration........................................................13
11. Covenants of Cash Manager...........................................14
12. Services Non-Exclusive..............................................14
13. Termination.........................................................15
14. Further Assurance...................................................17
15. Miscellaneous.......................................................18
16. Confidentiality.....................................................19
17. Notices.............................................................20
18. No Partnership......................................................21
19. Assignment..........................................................21
20. Amendments and Consents.............................................21
21. Exclusion of Third Party Rights.....................................21
22. Counterparts........................................................22
23. Severability........................................................22
24. Governing Law and Submission to Jurisdiction........................22
SCHEDULE
1. The Cash Management Services........................................23
2. Cash Management and Maintenance of Ledgers..........................25
3. Form of Funding 1 Quarterly Report..................................36
4. Form of Funding 2 Quarterly Report..................................38
Signatories..................................................................40
THIS AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT (this AGREEMENT) is made as
a deed on 21 November 2007
BETWEEN:
(1) BANK OF SCOTLAND PLC, (registered number SC327000) (formerly The
Governor and Company of the Bank of Scotland), a public limited
company incorporated under the laws of Scotland whose registered
office is at Xxx Xxxxx, Xxxxxxxxx, XX0 0XX (acting in its capacities
as the CASH MANAGER, the SELLER and a BENEFICIARY);
(2) PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
private company incorporated under the laws of Jersey, Channel Islands
whose registered office is at 00 Xxxxxxxxx, Xx. Xxxxxx, Xxxxxx, XX0
0XX, Channel Islands (acting in its capacity as the MORTGAGES
TRUSTEE);
(3) 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 00 Xxxxx Xx. Xxxxx'x Xxxxxx XX0X
0XX (acting in its capacities as FUNDING 1 and a BENEFICIARY);
(4) PERMANENT FUNDING (NO. 2) LIMITED (registered number 4441772), a
private limited company incorporated under the laws of England and
Wales whose registered office is at 00 Xxxxx Xx. Xxxxx'x Xxxxxx XX0X
0XX (acting in its capacities as FUNDING 2 and a BENEFICIARY);
(5) THE BANK OF NEW YORK, a New York banking corporation acting through
its offices at One Canada Square, London E14 5AL(acting in its
capacities as the FUNDING 1 SECURITY TRUSTEE, which expression shall
include such company and all other persons or companies for the time
being acting as Funding 1 Security Trustee (or co-trustee) pursuant to
the terms of the Funding 1 Deed of Charge and the FUNDING 2 SECURITY
TRUSTEE, which expression shall include such company and all other
persons or companies for the time being acting as Funding 2 Security
Trustee (or co-trustee) pursuant to the terms of the Funding 2 Deed of
Charge).
WHEREAS:
(A) On the Initial Closing Date and on several subsequent dates, Halifax
(then in its capacity as the Seller) agreed to sell and assign certain
mortgage loans (together with their related security) it had
originated to the Mortgages Trustee. The Mortgage Trustee has held the
assigned mortgage loans as bare trustee for Funding 1 and the Seller
and, as of the Programme Date, Funding 2 pursuant to the terms of the
Mortgages Trust Deed.
(B) On the Initial Closing Date and several subsequent Closing Dates,
Funding 1 has used the proceeds of Funding 1 Intercompany Loans
granted to it by Funding 1 Issuers to pay Halifax (then in its
capacity as the Seller) for an increased share in the Mortgages Trust.
As of the Programme Date, Funding 1 may continue to use the proceeds
of Funding 1 Intercompany Loans and Funding 2 may use the proceeds of
Loan Tranches advanced under the Master Intercompany Loan Agreement to
pay the Mortgages Trustee for an increased share in the Mortgages
Trust.
(C) Halifax (then in its capacity as the Cash Manager) agreed to provide
Cash Management Services to the Mortgages Trustee, Funding 1 and the
Funding 1 Security Trustee and, as of the Programme Date, to Funding 2
and the Funding 2 Security Trustee in relation to, inter alia, the
Trust Property on the terms and subject to the conditions contained in
the Cash Management Agreement.
(D) On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
Xxx 0000, The Governor and Company of the Bank of Scotland was
registered as a public company under the Companies Act
1
1985 and changed its name to Bank of Scotland plc and the business and
all property and liabilities of Halifax (including its cash management
business and its rights and obligations under the Cash Management
Agreement) were transferred to Bank of Scotland.
(E) The parties to the Cash Management Agreement have agreed to further
amend and restate the terms of the Cash Management Agreement on the
date hereof as set out herein.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 The amended and restated master definitions and construction schedule
signed by, amongst others, the parties to this Agreement and dated 21
November 2007 (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 3 of
the Master Definitions and Construction Schedule.
1.2 This Agreement amends and restates the Cash Management Agreement made
on 14 June 2002 as amended and restated on 22 March 2006 and 17
October 2006 (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.
1.3 Any reference in this Agreement to any discretion, power or right on
the part of the Mortgages Trustee shall be exercised by the Mortgages
Trustee only as directed by the Beneficiaries but subject in each case
to the provisions of Clause 16 of the Mortgages Trust Deed.
2. APPOINTMENT OF CASH MANAGER
2.1 APPOINTMENT
Until termination pursuant to Clause 13, the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee (according to their respective estates and interests)
each hereby appoints the Cash Manager as its lawful agent to provide
the Cash Management Services set out in this Agreement, including in
relation to:
(a) the Mortgages Trust;
(b) Funding 1; and
(c) Funding 2,
and the Cash Manager in each case hereby accepts such appointment on
the terms and subject to the conditions of this Agreement.
2.2 DUTIES PRESCRIBED BY TRANSACTION DOCUMENTS
For the avoidance of doubt and in connection with the powers conferred
under Clause 2.1, save as expressly provided elsewhere in this
Agreement, nothing herein shall be construed so as to give the
2
Cash Manager any powers, rights, authorities, directions or
obligations other than as specified in this Agreement or any of the
other Transaction Documents.
2.3 APPOINTMENT CONDITIONAL UPON ISSUANCE OF FIRST ISSUER NOTES
The appointment pursuant to Clause 2.1 is conditional upon the issue
of the First Issuer Notes and the making of the First Issuer Term
Advances under the First Issuer Intercompany Loan Agreement and shall
take effect upon and from the Initial Closing Date automatically
without any further action on the part of any person PROVIDED THAT if
the issue of the First Issuer Notes by the First Issuer has not
occurred by 14 June 2002, or such later date as the First Issuer and
the Lead Manager may agree this Agreement shall cease to be of further
effect.
2.4 APPOINTMENT CONDITIONAL UPON ACQUISITION OF A BENEFICIAL INTEREST
The appointment pursuant to Clause 2.1 is conditional upon the
acquisition by Funding 2 from the Seller of a portion of the Seller's
beneficial interest in the Mortgages Trust pursuant to the Seller
Trust Property Assignment Agreement and shall take effect upon and as
of the Programme Date automatically without any further action on the
part of any person PROVIDED THAT if Funding 2 has not acquired from
the Seller a portion of the Seller's beneficial interest in the
Mortgages Trust by 17 October 2006, or such later date as Funding 2
and the Seller may agree, the appointment of the Cash Manager as agent
of Funding 2 under Clause 2.1 shall not take effect.
3. THE SERVICES
3.1 GENERAL
The Cash Manager shall provide the services set out in this Agreement
(including, without limitation, the Schedules to this Agreement) (the
CASH MANAGEMENT SERVICES).
3.2 APPROVALS AND AUTHORISATIONS
The Cash Manager shall maintain, or procure the maintenance of, the
approvals, authorisations, consents and licences required in
connection with the respective businesses of the Mortgages Trustee,
Funding 1 and Funding 2 and shall prepare and submit, or procure the
preparation and submission of, on behalf of the Mortgages Trustee,
Funding 1 and Funding 2, all necessary applications and requests for
any further approvals, authorisations, consents or licences which may
be required in connection with the respective businesses of the
Mortgages Trustee, Funding 1 and Funding 2 and shall, so far as it is
reasonably able to do so, perform the Cash Management Services in such
a way as not to prejudice the continuation of any such approvals,
authorisations, consents or licences.
3.3 COMPLIANCE WITH TRANSACTION DOCUMENTS, ETC.
The Cash Management Services shall include procuring (so far as the
Cash Manager, using its reasonable endeavours, is able so to do)
compliance by the Mortgages Trustee, Funding 1 and Funding 2 with all
applicable legal requirements and with the terms of the Transaction
Documents to which each of the Mortgages Trustee and/or Funding 1
and/or Funding 2 is a party, PROVIDED ALWAYS THAT the Cash Manager
shall not lend or provide any sum to the Mortgages Trustee, Funding 1
or Funding 2 (other than as expressly contemplated by the Transaction
Documents) and the Cash Manager shall have no liability whatsoever to
the Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee, the Funding 2 Security Trustee or any other person for any
failure by the Mortgages Trustee, Funding 1 or Funding 2 to make any
payment due under any of the Transaction Documents (other than to the
extent arising from (a) the Cash Manager failing to make a payment in
its capacity as Servicer, Funding 1 Swap Provider, Funding 2 Swap
Provider or
3
in any other capacity under the Transaction Documents, or (b) the Cash
Manager failing to perform any of its obligations under any of the
Transaction Documents).
3.4 LIABILITY OF CASH MANAGER
(a) The Cash Manager shall indemnify each of the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee on demand on an after Tax basis for any loss,
liability, claim, expense or damage suffered or incurred by any of
them in respect of the negligence, bad faith or wilful default of the
Cash Manager in carrying out its functions as Cash Manager under this
Agreement or under the other Transaction Documents or as a result of a
breach by the Cash Manager of the terms and provisions of this
Agreement or such other Transaction Documents to which the Cash
Manager is a party (in its capacity as Cash Manager) in relation to
such functions.
(b) For the avoidance of doubt, the Cash Manager shall not be liable in
respect of any loss, liability, claim, expense or damage suffered or
incurred by the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee, the Funding 2 Security Trustee and/or any other
person as a result of the proper performance of the Cash Management
Services by the Cash Manager save to the extent that such loss,
liability, claim, expense or damage is suffered or incurred as a
result of any negligence, bad faith or wilful default of the Cash
Manager or as a result of a breach by the Cash Manager of the terms
and provisions of this Agreement or any of the other Transaction
Documents to which the Cash Manager is a party (in its capacity as
Cash Manager) in relation to such functions.
4. PAYMENTS, ACCOUNTS, LEDGERS
4.1 BANK ACCOUNTS
(a) The Cash Manager hereby confirms that the Mortgages Trustee GIC
Account has been established on or before the date hereof pursuant to
the Bank Account Agreement and the Mortgages Trustee Guaranteed
Investment Contract and that the Mortgages Trustee GIC Account Mandate
in the agreed form will apply thereto at the Initial Closing Date. The
Cash Manager undertakes (to the extent to which the same is within its
control) that at the Initial Closing Date the Mortgages Trustee GIC
Account will be operative and that the Cash Manager will not create or
permit to subsist any Security Interest in relation to the Mortgages
Trustee GIC Account (but without prejudice to the Mortgages Trust).
(b) The Cash Manager hereby confirms that the Funding 1 GIC Account has
been established on or before the date hereof pursuant to the Bank
Account Agreement and the Funding 1 Guaranteed Investment Contract and
that the Funding 1 GIC Account Mandate in the agreed form will apply
thereto at the Initial Closing Date. The Cash Manager undertakes (to
the extent to which the same is within its control) that at the
Initial Closing Date the Funding 1 GIC Account will be operative and
that the Cash Manager will not knowingly create or permit to subsist
any Security Interest in relation to the Funding 1 GIC Account other
than as created under or permitted pursuant to the Funding 1 Deed of
Charge.
(c) The Cash Manager hereby confirms that the Funding 1 Transaction
Account has been established on or before the date hereof and that the
Funding 1 Transaction Account Mandate in the agreed form will apply
thereto at the Initial Closing Date. The Cash Manager undertakes (to
the extent to which the same is within its control) that at the
Initial Closing Date the Funding 1 Transaction Account will be
operative and that the Cash Manager will not knowingly create or
permit to subsist any Security Interest in relation to the Funding 1
Transaction Account other than as created under or permitted pursuant
to the Funding 1 Deed of Charge.
4
(d) The Cash Manager hereby confirms that the Funding 2 GIC Account has
been established on or before the Programme Date pursuant to the Bank
Account Agreement and the Funding 2 Guaranteed Investment Contract and
that the Funding 2 GIC Account Mandate in the agreed form will apply
thereto at the Programme Date. The Cash Manager undertakes (to the
extent to which the same is within its control) that at the Programme
Date the Funding 2 GIC Account will be operative and that the Cash
Manager will not knowingly create or permit to subsist any Security
Interest in relation to the Funding 2 GIC Account other than as
created under or permitted pursuant to the Funding 2 Deed of Charge.
(e) The Cash Manager hereby confirms that the Funding 2 Transaction
Account has been established on or before the Programme Date and that
the Funding 2 Transaction Account Mandate in the agreed form will
apply thereto at the Programme Date. The Cash Manager undertakes (to
the extent to which the same is within its control) that at the
Programme Date the Funding 2 Transaction Account will be operative and
that the Cash Manager will not knowingly create or permit to subsist
any Security Interest in relation to the Funding 2 Transaction Account
other than as created under or permitted pursuant to the Funding 2
Deed of Charge.
4.2 MORTGAGES TRUSTEE LEDGERS
(a) The Cash Manager shall open and maintain in the books of the Mortgages
Trustee certain ledgers to be known as the Revenue Ledger and the
Principal Ledger which shall together reflect the aggregate of all
amounts of cash standing to the credit of the Mortgages Trustee GIC
Account from time to time.
(b) The Cash Manager shall also open and maintain in the books of the
Mortgages Trustee certain ledgers to be known as the Losses Ledger and
the Funding 1 Share/Funding 2 Share/Seller Share Ledger.
(c) The Cash Manager shall make credits and debits to the Mortgages
Trustee Ledgers in the manner described in Schedule 2.
4.3 FUNDING 1 LEDGERS
(a) The Cash Manager shall open and maintain in the books of Funding 1
certain ledgers to be known as the Funding 1 Revenue Ledger, the
Funding 1 Principal Ledger, the Funding 1 General Reserve Ledger, the
Funding 1 Cash Accumulation Ledger and, if the Funding 1 Liquidity
Reserve Fund is established, the Funding 1 Liquidity Reserve Ledger
which shall together reflect the aggregate of all amounts of cash
standing to the credit of the Funding 1 GIC Account and the Funding 1
Transaction Account and all amounts invested in Authorised Investments
purchased from amounts standing to the credit of the Funding 1 GIC
Account and the Funding 1 Transaction Account from time to time.
(b) The Cash Manager shall also open and maintain in the books of Funding
1 certain ledgers to be known as (i) the Funding 1 Principal
Deficiency Ledger, which comprised, on the Initial Closing Date, three
sub-ledgers known as the AAA Principal Deficiency Sub Ledger, the AA
Principal Deficiency Sub Ledger and the BBB Principal Deficiency Sub
Ledger, and shall comprise on the Fourth Issuer Closing Date, four
sub-ledgers known as the AAA Principal Deficiency Sub Ledger, the AA
Principal Deficiency Sub Ledger, the A Principal Deficiency Sub
Ledger, and the BBB Principal Deficiency Sub Ledger (ii) the Funding 1
Intercompany Loan Ledger and (iii) the Funding 1 Liquidity Facility
Ledger. If Funding 1 enters into New Intercompany Loan Agreements and
the New Term Advances advanced thereunder have different Term Advance
Ratings to the Term Advance Ratings assigned to the existing Term
Advances (including the Fourth Issuer Term Advances), then the Cash
Manager shall establish new sub-ledgers in respect of the Funding 1
Principal Deficiency Ledger, which shall correspond to the Term
Advance Ratings assigned to each such New Term Advance.
5
(c) The Cash Manager shall make credits and debits to the Funding 1
Ledgers in accordance with the provisions of Schedule 2.
4.4 FUNDING 2 LEDGERS
(a) The Cash Manager shall open and maintain in the books of Funding 2
certain ledgers to be known as the Funding 2 Revenue Ledger, the
Funding 2 Principal Ledger, the Funding 2 General Reserve Ledger, the
Funding 2 Cash Accumulation Ledger, the Start-Up Loan Revenue
Contribution Ledger and, if the Funding 2 Liquidity Reserve Fund is
established, the Funding 2 Liquidity Reserve Ledger which shall
together reflect the aggregate of all amounts of cash standing to the
credit of the Funding 2 GIC Account and the Funding 2 Transaction
Account and all amounts invested in Authorised Investments purchased
from amounts standing to the credit of the Funding 2 GIC Account and
the Funding 2 Transaction Account from time to time.
(b) The Cash Manager shall also open and maintain in the books of Funding
2 certain ledgers to be known as (i) the Funding 2 Principal
Deficiency Ledger, which comprises six sub-ledgers known as the AAA
Principal Deficiency Sub Ledger, the AA Principal Deficiency Sub
Ledger, the A Principal Deficiency Sub Ledger, the BBB Principal
Deficiency Sub Ledger, the BB Principal Deficiency Sub Ledger and the
Funding 2 Subordinated Loan Tranche Principal Deficiency Sub Ledger
and (ii) the Master Intercompany Loan Ledger, to be divided into
sub-ledgers each of which shall record payments made under each Loan
Tranche.
(c) The Cash Manager shall make credits and debits to the Funding 2
Ledgers in accordance with the provisions of Schedule 2.
4.5 BANK ACCOUNTS
(a) The Cash Manager shall procure that so far as it may be able in
relation to all Loans comprised in the Portfolio, the following
amounts are paid into the Mortgages Trustee GIC Account:
(i) all Monthly Payments, other interest received under and in
respect of the Loans and any costs or other amounts received
under the Loans (including in any such case amounts recovered
on enforcement of rights against any Borrower or guarantor of
the Borrower, any Property or any of the Borrower's or
guarantor's other property or assets);
(ii) all final releases and all repayments or prepayments of
principal under the Loans;
(iii) any amount received by or on behalf of the Mortgages Trustee
pursuant to any Halifax Insurance Policy or the Buildings
Policies; and
(iv) any other amounts whatsoever received by or on behalf of the
Mortgages Trustee after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on the
Mortgages Trustee GIC Account is credited to such account.
(b) The Cash Manager shall procure that the following amounts are paid
into the Funding 1 GIC Account:
(i) all Funding 1 Revenue Receipts;
(ii) all Funding 1 Principal Receipts;
(iii) all amounts received by Funding 1 pursuant to the Funding 1
Swap Agreement; and
6
(iv) any other amounts whatsoever received by or on behalf of
Funding 1 after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on the
Funding 1 Bank Accounts and all investment proceeds from Authorised
Investments purchased from amounts standing to the credit of the
Funding 1 GIC Account are credited to such account.
(c) The Cash Manager shall procure that all Liquidity Drawings under the
Funding 1 Liquidity Facility are paid into the Funding 1 Transaction
Account.
(d) The Cash Manager shall procure that all transfers and withdrawals of
amounts standing to the credit of the Funding 1 Transaction Account
and the Funding 1 GIC Account shall be made in accordance with the
provisions of the Funding 1 Deed of Charge.
(e) The Cash Manager shall procure that the following amounts are paid
into the Funding 2 GIC Account:
(i) all Funding 2 Revenue Receipts;
(ii) all Funding 2 Principal Receipts;
(iii) all amounts received by Funding 2 pursuant to the Funding 2
Swap Agreement; and
(iv) any other amounts whatsoever received by or on behalf of
Funding 2 after the Programme Date,
and the Cash Manager shall procure that all interest earned on the
Funding 2 Bank Accounts and all investment proceeds from Authorised
Investments purchased from amounts standing to the credit of the
Funding 2 GIC Account are credited to such account.
(f) The Cash Manager shall procure that all transfers and withdrawals of
amounts standing to the credit of the Funding 2 Transaction Account
and the Funding 2 GIC Account shall be made in accordance with the
provisions of the Funding 2 Deed of Charge.
(g) Each of the payments into the Mortgages Trustee GIC Account, the
Funding 1 GIC Account, the Funding 1 Transaction Account, the Funding
2 GIC Account and the Funding 2 Transaction Account referred to in
Clauses 4.5(a), (b), (c), (d), (e) and (f) shall be made forthwith
upon receipt by the Mortgages Trustee, Funding 1, Funding 2 or the
Cash Manager, as the case may be, of the amount in question.
(h) For the avoidance of doubt, as soon as reasonably practicable after
becoming aware of the same, the Cash Manager may, and shall, withdraw
Cash from, as the case may be, the Mortgages Trustee GIC Account, the
Funding 1 Transaction Account, the Funding 1 GIC Account, the Funding
2 Transaction Account and/or the Funding 2 GIC Account if, and to the
extent that, such Cash was credited thereto in error and shall use its
reasonable endeavours to ensure that such Cash is applied correctly
thereafter.
(i) The Cash Manager shall promptly notify each of the Mortgages Trustee,
Funding 1 and/or the Funding 1 Security Trustee (in the case of
Funding 1 Bank Accounts), Funding 2 and/or the Funding 2 Security
Trustee (in the case of Funding 2 Bank Accounts) (as applicable) of
any additional account which supplements or replaces any account
specifically referred to in the definitions of the "Mortgages Trustee
GIC Account", the "Funding 1 Transaction Account", the "Funding 1 GIC
Account", the "Funding 2 Transaction Account" or the "Funding 2 GIC
Account", as the case may be, in the Master Definitions and
Construction Schedule.
7
(j) Each of the Cash Manager, the Mortgages Trustee, Funding 1 (in the
case of Funding 1 Bank Accounts) and Funding 2 (in the case of Funding
2 Bank Accounts) undertakes that, so far as it is able to procure the
same, the Mortgages Trustee GIC Account, the Funding 1 Transaction
Account, the Funding 1 GIC Account, the Funding 2 Transaction Account
and the Funding 2 GIC Account and all instructions and Mandates in
relation thereto will continue to be operative and will not, save as
provided in Clause 4.7 below or as permitted pursuant to the Bank
Account Agreement be changed without the prior written consent of the
Funding 1 Security Trustee and/or the Funding 2 Security Trustee (as
applicable) (such consent not to be unreasonably withheld or delayed).
For the avoidance of doubt, the Cash Manager may change the Authorised
Signatories in respect of any instructions or Mandates relating to
Funding 1, Funding 2 and/or the Mortgages Trustee, without the prior
written consent of the Funding 1 Security Trustee and/or the Funding 2
Security Trustee (as applicable), in accordance with Clause 4.2 of the
Bank Account Agreement.
(k) The Cash Manager and Funding 1 agree that the Cash Manager shall
procure that (i) the tranche of the Advance being made available to
Funding 1 pursuant to paragraph 2(a) of the First Start-Up Loan
Agreement for the purposes of funding the Funding 1 General Reserve
Fund and (ii) the tranche (if any) of any New Start-up Loan Agreement
for the purposes of funding further the Funding 1 General Reserve Fund
(or any other similar reserve fund) shall be credited to the Funding 1
GIC Account promptly upon receipt of such amounts by Funding 1, and
the Funding 1 General Reserve Ledger shall record such credit.
(l) The Cash Manager and Funding 2 agree that the Cash Manager shall
procure that (i) any Advance being made available to Funding 2
pursuant to the Funding 2 Start-Up Loan Agreement dated the Programme
Date for the purposes of funding the Funding 2 General Reserve Fund
(or any other similar reserve fund), (ii) any Advance (if any) of any
new Funding 2 Start-up Loan Agreement for the purposes of funding
further the Funding 2 General Reserve Fund (or any other similar
reserve fund) and (iii) any Start-Up Loan Tranche or part thereof made
available to Funding 2 pursuant to the Master Intercompany Loan
Agreement for the purposes of funding further the Funding 2 General
Reserve Fund (or any other similar reserve fund) shall be credited to
the Funding 2 GIC Account promptly upon receipt of such amounts by
Funding 2, and the Funding 2 General Reserve Ledger shall record the
amount to be credited for the purposes of funding the Funding 2
General Reserve Fund.
(m) The Cash Manager and Funding 2 agree that the Cash Manager shall
procure that any Start-Up Loan Tranche or part thereof made available
to Funding 2 pursuant to the Master Intercompany Loan Agreement for
the purposes of contributing towards Funding 2 Available Revenue
Receipts on the Funding 2 Interest Payment Date immediately following
the relevant Closing Date shall be credited to the Funding 2 GIC
Account promptly upon receipt of such amount by Funding 2 and the
Start-Up Loan Revenue Contribution Ledger shall record such credit
(and, for the avoidance of doubt, such amounts shall not be credited
to the Funding 2 General Reserve Ledger).
(n) The Cash Manager shall give all notices and make all determinations
and withdrawals under the Funding 1 Liquidity Facility Agreement on
behalf of Funding 1, as set out therein.
4.6 WITHDRAWALS
The Cash Manager may make withdrawals:
(a) on behalf of the Mortgages Trustee from the Mortgages Trustee
GIC Account; and
(b) on behalf of Funding 1 from the Funding 1 GIC Account and the
Funding 1 Transaction Account, but only until receipt of an
Intercompany Loan Acceleration Notice served by the Funding 1
Security Trustee on Funding 1 (with a copy to the Cash Manager
and the Mortgages Trustee); and
8
(c) on behalf of Funding 2 from the Funding 2 GIC Account and the
Funding 2 Transaction Account, but only until receipt of a
Master Intercompany Loan Acceleration Notice served by the
Funding 2 Security Trustee on Funding 2 (with a copy to the
Cash Manager and the Mortgages Trustee),
respectively as permitted by this Agreement, the Mortgages Trust Deed,
the Bank Account Agreement, the Mortgages Trustee Guaranteed
Investment Contract, the Funding 1 Guaranteed Investment Contract, the
Funding 2 Guaranteed Investment Contract, the Funding 1 Liquidity
Facility Agreement, the Funding 1 Deed of Charge and the Funding 2
Deed of Charge, but shall not in carrying out its functions as Cash
Manager under this Agreement otherwise make withdrawals from the
Mortgages Trustee GIC Account, the Funding 1 Bank Accounts or the
Funding 2 Bank Accounts.
4.7 CASH MANAGEMENT
In administering the Mortgages Trustee GIC Account, the Funding 1 Bank
Accounts and the Funding 2 Bank Accounts on behalf of the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee (as applicable), the Cash Manager shall
comply with the provisions of Schedule 2 prior to receipt by the Cash
Manager of a copy of (in respect of the Funding 1 Bank Accounts) any
Intercompany Loan Acceleration Notice served by the Funding 1 Security
Trustee on Funding 1 and (in respect of the Funding 2 Bank Accounts)
any Master Intercompany Loan Acceleration Notice served by the Funding
2 Security Trustee on Funding 2.
5. EARLY REPAYMENT FEES
The Cash Manager shall withdraw any Early Repayment Fees paid into the
Mortgages Trustee GIC Account and pay the same to the Seller, by
telegraphic transfer to such account as may be specified by the Seller
from time to time, promptly following a request for such withdrawal
being received from the Seller. For the avoidance of doubt, the Cash
Manager shall not record the receipt or withdrawal of Early Repayment
Fees in any of the ledgers maintained under this Agreement.
6. SWAPS
6.1 COMPUTATIONS UNDER FUNDING 1 SWAP
On each Calculation Date, the Cash Manager shall determine, in
accordance with the terms of the Funding 1 Swap, in respect of the
relevant Calculation Period:
(a) the Average Fixed Rate Loan Balance, the Average Variable Rate
Loan Balance and the Average Tracker Rate Loan Balance (each
as defined in the Funding 1 Swap Agreement);
(b) the weighted average of the fixed rates of interest charged to
borrowers of Fixed Rate Loans;
(c) the Tracker Swap Rate; and
(d) the Variable Rate Swap SVR,
and shall notify Funding 1 and the Funding 1 Security Trustee of such
amounts, balances and rates.
6.2 TERMINATION OF FUNDING 1 SWAP
If on or prior to the date of the earlier of either (a) the reduction
of the aggregate principal amount outstanding of all Intercompany
Loans to zero or (b) the service of an Intercompany Loan Acceleration
Notice, the Funding 1 Swap is terminated, then the Cash Manager (on
behalf of
9
Funding 1 and the Funding 1 Security Trustee) shall purchase a new
hedge against the possible variance between (i) the Mortgages Trustee
Variable Base Rate payable on the Variable Rate Loans, the fixed rates
of interest payable on the Fixed Rate Loans and the Tracker Swap Rate
and (ii) a LIBOR-based rate for three-month sterling deposits, on
terms acceptable to Funding 1 and the Rating Agencies with a new
Funding 1 swap provider whom the Rating Agencies have previously
confirmed in writing will not cause the then current rating of any
Notes of the Funding 1 Issuers to be downgraded. The Cash Manager may
apply any early termination payment received from the Funding 1 Swap
Provider pursuant to the Funding 1 Swap for such purpose.
6.3 COMPUTATIONS UNDER FUNDING 2 SWAP
On each Calculation Date, the Cash Manager shall determine, in
accordance with the terms of the Funding 2 Swap, in respect of the
relevant Calculation Period:
(a) the Average Fixed Rate Loan Balance, the Average Variable Rate
Loan Balance and the Average Tracker Rate Loan Balance (each
as defined in the Funding 2 Swap Agreement);
(b) the weighted average of the fixed rates of interest charged to
borrowers of Fixed Rate Loans;
(c) the Tracker Swap Rate; and
(d) the Variable Rate Swap SVR,
and shall notify Funding 2 and the Funding 2 Security Trustee of such
amounts, balances and rates.
6.4 TERMINATION OF FUNDING 2 SWAP
If on or prior to the date of the earlier of either (a) the reduction
of the aggregate principal amount outstanding of all Loan Tranches
(other than the Start-Up Loan Tranches) under the Master Intercompany
Loan Agreement to zero or (b) the service of a Master Intercompany
Loan Acceleration Notice, the Funding 2 Swap is terminated, then the
Cash Manager (on behalf of Funding 2 and the Funding 2 Security
Trustee) shall purchase a new hedge against the possible variance
between (i) the Mortgages Trustee Variable Base Rate payable on the
Variable Rate Loans, the fixed rates of interest payable on the Fixed
Rate Loans and the Tracker Swap Rate and (ii) a LIBOR-based rate for
three-month sterling deposits, on terms acceptable to Funding 2 and
the Rating Agencies with a new Funding 2 swap provider whom the Rating
Agencies have previously confirmed in writing will not cause the then
current rating of any Notes of the Master Issuer to be downgraded. The
Cash Manager may apply any early termination payment received from the
Funding 2 Swap Provider pursuant to the Funding 2 Swap for such
purpose.
7. NO LIABILITY
Save as otherwise provided in this Agreement, the Cash Manager shall
have no liability for the obligations of any of the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee or the Funding 2
Security Trustee under any of the Transaction Documents or otherwise
and nothing herein shall constitute a guarantee, or similar
obligation, by the Cash Manager of either the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee or the Funding 2
Security Trustee in respect of any of them.
8. COSTS AND EXPENSES
8.1 Subject to and in accordance with the Funding 1 Priority of Payments
and the Funding 2 Priority of Payments (as applicable), each of
Funding 1 and Funding 2 will on each Funding 1 Interest Payment Date
and Funding 2 Interest Payment Date (respectively) reimburse the Cash
Manager a pro rata
10
share (based on the principal amount outstanding on the previous
Funding 1 Interest Payment Date and Funding 2 Interest Payment Date
(respectively) under the Funding 1 Intercompany Loans and the Master
Intercompany Loan (respectively) after any repayments of principal on
such date) for all out-of-pocket costs, expenses and charges (together
with any amounts in respect of Irrecoverable VAT due thereon) properly
incurred by the Cash Manager in the performance of the Cash Management
Services including any such costs, expenses or charges not reimbursed
to the Cash Manager on any previous Funding 1 Interest Payment Date
and Funding 2 Interest Payment Date (respectively) and the Cash
Manager shall (if applicable) supply Funding 1 and Funding 2 with an
appropriate VAT invoice issued by the Cash Manager or, if the Cash
Manager has treated the relevant cost, expense or charge as a
disbursement for VAT purposes, by the person making the supply.
8.2 Unless and until otherwise agreed by the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee in writing (notified to the Cash Manager), the Mortgages
Trustee shall not be responsible for reimbursing the Cash Manager for
the out-of-pocket costs, expenses and charges (together with any
amounts in respect of Irrecoverable VAT due thereon) referred to in
Clause 8.1 above.
9. INFORMATION
9.1 USE OF I.T. SYSTEMS
(a) The Cash Manager represents and warrants that at the date hereof in
respect of the software which is to be used by the Cash Manager in
providing the Cash Management Services it has in place all necessary
licences and/or consents from the respective licensor or licensors (if
any) of such software.
(b) The Cash Manager undertakes that it shall for the duration of this
Agreement, use reasonable endeavours to:
(i) ensure that the licences and/or consents referred to in
paragraph (a) are maintained in full force and effect; and
(ii) except in so far as it would breach any other of its legal
obligations, grant to any person to whom it may sub-contract
or delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as the
Mortgages Trustee and/or Funding 1 and Funding 2 elect as a
substitute cash manager in accordance with the terms of this
Agreement a licence to use any proprietary software together
with any updates which may be made thereto from time to time.
(c) The Cash Manager shall use reasonable endeavours to maintain in
working order the information technology systems used by the Cash
Manager in providing the Cash Management Services.
(d) The Cash Manager shall pass to any person to whom it may sub-contract
or delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as the
Mortgages Trustee and/or Funding 1 and Funding 2 elect as a substitute
cash manager in accordance with the terms of this Agreement the
benefit of any warranties in relation to the software insofar as the
same are capable of assignment.
9.2 BANK ACCOUNT STATEMENTS
The Cash Manager shall take all reasonable steps to ensure that it
receives:
(a) a monthly bank statement in relation to the Mortgages Trustee
GIC Account (and any additional or supplemental bank account
of the Mortgages Trustee) and that it furnishes a
11
copy of such statement to the Mortgages Trustee, each of the
Beneficiaries, the Funding 1 Security Trustee and the Funding
2 Security Trustee;
(b) monthly bank statements in relation to each of the Funding 1
Transaction Account and the Funding 1 GIC Account (and any
additional or supplemental bank account of Funding 1) and that
it furnishes a copy of such statements to Funding 1 and the
Funding 1 Security Trustee; and
(c) monthly bank statements in relation to each of the Funding 2
Transaction Account and the Funding 2 GIC Account (and any
additional or supplemental bank account of Funding 2) and that
it furnishes a copy of such statements to Funding 2 and the
Funding 2 Security Trustee.
9.3 ACCESS TO BOOKS AND RECORDS
Subject to all applicable laws, the Cash Manager shall permit the
Auditors of the Mortgages Trustee, Funding 1 and Funding 2 and any
other person nominated by the Funding 1 Security Trustee and/or
Funding 2 Security Trustee or the Beneficiaries (to whom the Cash
Manager has no reasonable objection) at any time during normal office
hours upon reasonable notice to have access, or procure that such
person or persons are granted access, to all books of record and
account relating to the Cash Management Services provided by the Cash
Manager and related matters in accordance with this Agreement.
9.4 STATUTORY OBLIGATIONS
The Cash Manager will use its reasonable endeavours, on behalf of the
Mortgages Trustee, Funding 1 and Funding 2, to prepare or procure the
preparation of and file all reports, annual returns, financial
statements, statutory forms and other returns which each of the
Mortgages Trustee, Funding 1 and Funding 2 is required by law to
prepare and file. Subject to approval thereof by the directors of the
Mortgages Trustee, Funding 1 or Funding 2 (as appropriate), the Cash
Manager shall cause such accounts to be audited by the Auditors and
shall procure so far as it is able so to do that the Auditors shall
make a report thereon as required by law and copies of all such
documents shall be delivered to the Mortgages Trustee, the Funding 1
Security Trustee, the Funding 2 Security Trustee, Funding 1 and
Funding 2 (as appropriate) and the Rating Agencies as soon as
practicable after the end of each accounting reference period of the
Mortgages Trustee, Funding 1 or Funding 2 (as appropriate).
9.5 INFORMATION COVENANTS
(a) The Cash Manager shall provide a quarterly report in, or substantially
in, the form set out in Schedule 3 in respect of Funding 1 to any
Funding 1 Issuer, Funding 1, the Funding 1 Security Trustee, the
Seller and the Rating Agencies and a quarterly report in, or
substantially in the form set out in Schedule 4 in respect of Funding
2 to the Master Issuer, Funding 2, the Funding 2 Security Trustee, the
Seller and the Rating Agencies.
(b) The Cash Manager shall provide, or procure the provision of, to the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee, the Funding 2 Security Trustee and the Rating Agencies copies
of any annual returns or financial statements referred to in Clause
9.4 as soon as reasonably practicable after the preparation thereof.
(c) The Cash Manager shall notify the Rating Agencies in writing of the
details of (i) any material amendment to the Transaction Documents,
(ii) the occurrence of an Intercompany Loan Event of Default, Master
Intercompany Loan Event of Default, Potential Intercompany Loan Event
of Default or Potential Master Intercompany Loan Event of Default and
(iii) any other information relating to
12
the Cash Manager as the Rating Agencies and/or the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee may reasonably request
in connection with its obligations under this Agreement, PROVIDED THAT
neither the Funding 1 Security Trustee nor the Funding 2 Security
Trustee shall make such a request more than once every three months
unless, in the belief of the Funding 1 Security Trustee and/or the
Funding 2 Security Trustee, an Intercompany Loan Event of Default or a
Master Intercompany Loan Event of Default (respectively) and/or a Note
Event of Default in respect of any Funding 1 Issuer or the Master
Issuer (respectively) or Cash Manager Termination Event (as defined in
Clause 13.1) shall have occurred and is continuing or a Potential
Intercompany Loan Event of Default or Potential Master Intercompany
Loan Event of Default (respectively) and/or a Potential Note Event of
Default in respect of any Funding 1 Issuer or the Master Issuer
(respectively) shall have occurred and is continuing PROVIDED FURTHER
THAT such request does not adversely interfere with the Cash Manager's
day to day provision of the Cash Management Services under the other
terms of this Agreement.
(d) The Cash Manager shall, at the request of the Funding 1 Security
Trustee or the Funding 2 Security Trustee, furnish the Funding 1
Security Trustee, the Funding 2 Security Trustee and the Rating
Agencies with such other information relating to its business and
financial condition as it may be reasonable for the Funding 1 Security
Trustee and/or the Funding 2 Security Trustee to request in connection
with this Agreement, PROVIDED THAT such request does not adversely
interfere with the Cash Manager's day to day provision of the Cash
Management Services under the other terms of this Agreement.
10. REMUNERATION
10.1 FEE PAYABLE
Funding 1 and Funding 2 shall pay to the Cash Manager for the Cash
Management Services provided to it hereunder a cash management fee
(the CASH MANAGEMENT FEE) (inclusive of VAT) which:
(a) in the case of Funding 1, shall be 0.025% per annum of the
aggregate principal amount outstanding under the Funding 1
Intercompany Loans on the previous Funding 1 Interest Payment
Date after any repayments of principal on such date;
(b) in the case of Funding 2, shall be 0.025% per annum of the
aggregate principal amount outstanding of the Rated Loan
Tranches and the Subordinated Loan Tranches under the Master
Intercompany Loan on the previous Funding 2 Interest Payment
Date after any repayment of principal on such date; and
(c) in each case, be calculated in relation to each Funding 1
Interest Period or Funding 2 Interest Period (as applicable)
on the basis of the number of days elapsed and a 365 day year.
10.2 PAYMENT OF FEE
The cash management fee referred to in Clause 10.1 shall be paid to
the Cash Manager in arrear:
(a) by Funding 1 on each Funding 1 Interest Payment Date in the
manner contemplated by and in accordance with the provisions
of the applicable Funding 1 Priority of Payments; and
(b) by Funding 2 on each Funding 2 Interest Payment Date in the
manner contemplated by and in accordance with the provisions
of the applicable Funding 2 Priority of Payments.
13
11. COVENANTS OF CASH MANAGER
11.1 COVENANTS
The Cash Manager hereby covenants with and undertakes to each of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee and the Funding 2 Security Trustee that without prejudice to
any of its specific obligations hereunder:
(a) it will devote all due skill, care and diligence to the
performance of its obligations and the exercise of its
discretions hereunder;
(b) it will comply with any proper directions, orders and
instructions which the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee or the Funding 2 Security
Trustee may from time to time give to it in accordance with
the provisions of this Agreement and, in the event of any
conflict, those of the Funding Security 1 Trustee and the
Funding 2 Security Trustee shall prevail;
(c) it will use its reasonable endeavours to keep in force all
licences, approvals, authorisations and consents which may be
necessary in connection with the performance of the Cash
Management Services and prepare and submit all necessary
applications and requests for any further approval,
authorisation, consent or licence required in connection with
the performance of the Cash Management Services;
(d) save as otherwise agreed with the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee, it will provide free of charge to the
Mortgages Trustee, Funding 1 and Funding 2 during normal
office hours office space, facilities, equipment and staff
sufficient to fulfil the obligations of the Mortgages Trustee,
Funding 1 and Funding 2 under this Agreement;
(e) it will not knowingly fail to comply with any legal
requirements in the performance of the Cash Management
Services;
(f) it will make all payments required to be made by it pursuant
to this Agreement on the due date for payment thereof for
value on such day without set-off (including, without
limitation, in respect of any fees owed to it) or
counterclaim; and
(g) it will not without the prior written consent of the Funding 1
Security Trustee and the Funding 2 Security Trustee amend or
terminate any of the Transaction Documents save in accordance
with their terms.
11.2 DURATION OF COVENANTS
The covenants of the Cash Manager in Clause 11.1 shall remain in force
until this Agreement is terminated but without prejudice to any right
or remedy of the Mortgages Trustee and/or Funding 1 and/or Funding 2
and/or the Funding 1 Security Trustee and/or the Funding 2 Security
Trustee arising from breach of any such covenant prior to the date of
termination of this Agreement.
12. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Cash Manager from
rendering or performing services similar to those provided for in this
Agreement to or for itself or other persons, firms or companies or
from carrying on business similar to or in competition with the
business of the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee.
14
13. TERMINATION
13.1 CASH MANAGER TERMINATION EVENTS
If any of the following events (CASH MANAGER TERMINATION EVENTS) shall
occur:
(a) default is made by the Cash Manager in the payment on the due
date of any payment due and payable by it under this Agreement
or in the performance of its obligations under Clauses 4.5 and
4.6 and such default continues unremedied for a period of
three London Business Days after the earlier of the Cash
Manager becoming aware of such default; or
(b) default is made by the Cash Manager in the performance or
observance of any of its other covenants and obligations under
this Agreement, which in the reasonable opinion of the Funding
1 Security Trustee and/or the Funding 2 Security Trustee (as
applicable) is materially prejudicial to the interests of the
Funding 1 Secured Creditors (in the case of Funding 1) or the
Funding 2 Secured Creditors (in the case of Funding 2) and
such default continues unremedied for a period of 20 London
Business Days after the earlier of the Cash Manager becoming
aware of such default and receipt by the Cash Manager of
written notice from the Funding 1 Security Trustee and/or the
Funding 2 Security Trustee (as applicable) requiring the same
to be remedied; or
(c) an Insolvency Event occurs,
then Funding 1 and/or Funding 2 and/or the Funding 1 Security Trustee
and/or the Funding 2 Security Trustee may at once or at any time
thereafter while such default continues by notice in writing to the
Cash Manager terminate its appointment as Cash Manager under this
Agreement with effect from a date (not earlier than the date of the
notice) specified in the notice.
13.2 RESIGNATION OF CASH MANAGER
The appointment of the Cash Manager under this Agreement may be
terminated upon the expiry of not less than 12 months' notice of
termination given by the Cash Manager to the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee PROVIDED THAT:
(a) the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee and the Funding 2 Security Trustee consent in
writing to such termination;
(b) a substitute cash manager shall be appointed, such appointment
to be effective not later than the date of such termination;
(c) such substitute cash manager has cash management experience
and is approved by the Mortgages Trustee, Funding 1, Funding
2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee;
15
(d) the substitute cash manager enters into an agreement
substantially on the same terms as the relevant provisions of
this Agreement and the Cash Manager shall not be released from
its obligations under the relevant provisions of this
Agreement until such substitute cash manager has entered into
such new agreement and the rights of the Mortgages Trustee,
Funding 1 and Funding 2 under such agreement are charged in
favour of the Funding 1 Security Trustee and the Funding 2
Security Trustee (as applicable) on terms satisfactory to the
Funding 1 Security Trustee and the Funding 2 Security Trustee;
and
(e) the then current ratings of the Notes are not adversely
affected as a result thereof, unless otherwise agreed by an
Extraordinary Resolution of the holders of each class of the
Notes of each Funding 1 Issuer or the Master Issuer, as
applicable.
13.3 EFFECT OF TERMINATION
(a) On and after termination of the appointment of the Cash Manager under
this Agreement pursuant to this Clause 13, all authority and power of
the Cash Manager under this Agreement shall be terminated and be of no
further effect and the Cash Manager shall not thereafter hold itself
out in any way as the agent of the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee or the Funding 2 Security
Trustee pursuant to this Agreement.
(b) Upon termination of the appointment of the Cash Manager under this
Agreement pursuant to this Clause 13, the Cash Manager shall:
(i) forthwith deliver (and in the meantime hold on trust for, and
to the order of, the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee or the Funding 2 Security
Trustee, as the case may be) to the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee or the Funding 2
Security Trustee, as the case may be or as it shall direct,
all books of account, papers, records, registers,
correspondence and documents in its possession or under its
control relating to the affairs of or belongings of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee, as the
case may be (if practicable, on the date of receipt), any
monies then held by the Cash Manager on behalf of the
Mortgages Trustee, Funding 1, Funding 2, the Funding 1
Security Trustee or the Funding 2 Security Trustee and any
other assets of the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee and the Funding 2 Security
Trustee;
(ii) take such further action as the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee or the Funding 2
Security Trustee, as the case may be, may reasonably direct at
the expense of the Mortgages Trustee, Funding 1, Funding 2,
the Funding 1 Security Trustee or the Funding 2 Security
Trustee, as the case may be (including in relation to the
appointment of a substitute cash manager), provided that the
Mortgages Trustee, the Funding 1 Security Trustee or the
Funding 2 Security Trustee, as the case may be, shall not be
required to take or direct to be taken such further action
unless it has been indemnified to its satisfaction (and in the
event of a conflict between the directions of Funding 1,
Funding 2, the Funding 1 Security Trustee, the Funding 2
Security Trustee and the Mortgages Trustee, the directions of
the Funding 1 Security Trustee and the Funding 2 Security
Trustee shall prevail);
(iii) provide all relevant information contained on computer records
in the form of magnetic tape, together with details of the
layout of the files encoded on such magnetic tapes; and
(iv) co-operate and consult with and assist the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee or the
Funding 2 Security Trustee or its nominee, as the case may be
(which shall, for the avoidance of doubt, include any Receiver
appointed by it), for
16
the purposes of explaining the file layouts and the format of
the magnetic tapes generally containing such computer records
on the computer system to the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee or the Funding 2
Security Trustee or such nominee, as the case may be.
13.4 NOTICE OF EVENT OF DEFAULT
The Cash Manager shall deliver to the Mortgages Trustee, Funding 1,
Funding 2, the Funding 1 Security Trustee and the Funding 2 Security
Trustee as soon as reasonably practicable but in any event within
three London Business Days of becoming aware thereof a notice of any
Cash Manager Termination Event or any event which with the giving of
notice or expiry of any grace period or certification, as specified in
such Cash Manager Termination Event would constitute the same or any
Intercompany Loan Event of Default or Master Intercompany Loan Event
of Default or any Potential Intercompany Loan Event of Default or
Potential Master Intercompany Loan Event of Default.
13.5 GENERAL PROVISIONS RELATING TO TERMINATION
(a) Termination of this Agreement or the appointment of the Cash Manager
under this Agreement shall be without prejudice to the liabilities of
the Mortgages Trustee, Funding 1, Funding 2, the Funding 1 Security
Trustee and the Funding 2 Security Trustee to the Cash Manager or vice
versa incurred before the date of such termination. The Cash Manager
shall have no right of set-off or any lien in respect of such amounts
against amounts held by it on behalf of the Mortgages Trustee, Funding
1, Funding 2, the Funding 1 Security Trustee or the Funding 2 Security
Trustee.
(b) This Agreement shall terminate automatically at such time as Funding 1
and Funding 2 have no further interest in the Trust Property and the
Intercompany Loans and the Master Intercompany Loan have been fully
repaid or Funding 1's obligations under the Intercompany Loans and
Funding 2's obligations under the Master Intercompany Loan Agreement
have been otherwise discharged.
(c) On termination of the appointment of the Cash Manager under the
provisions of this Clause 13, the Cash Manager shall be entitled to
receive all fees and other monies accrued up to (but excluding) the
date of termination but shall not be entitled to any other or further
compensation. Such monies so receivable by the Cash Manager shall be
paid by the Mortgages Trustee, on the dates on which they would
otherwise have fallen due hereunder and under the terms of the Funding
1 Deed of Charge. For the avoidance of doubt, such termination shall
not affect the Cash Manager's rights to receive payment of all amounts
(if any) due to it from the Mortgages Trustee, Funding 1 or Funding 2
other than under this Agreement.
(d) Any provision of this Agreement which is stated to continue after
termination of the Agreement shall remain in full force and effect
notwithstanding termination.
14. FURTHER ASSURANCE
14.1 CO-OPERATION, ETC.
The parties hereto agree that they will co-operate fully to do all
such further acts and things and execute any further documents as may
be necessary or desirable to give full effect to the arrangements
contemplated by this Agreement.
14.2 POWERS OF ATTORNEY
Without prejudice to the generality of Clause 14.1, the Mortgages
Trustee, Funding 1, Funding 2, the Funding 1 Security Trustee and the
Funding 2 Security Trustee shall upon request by the Cash Manager
forthwith give to the Cash Manager such further powers of attorney or
other written
17
authorisations, mandates or instruments as are necessary to enable the
Cash Manager to perform the Cash Management Services.
14.3 CHANGE OF THE FUNDING 1 SECURITY TRUSTEE OR THE FUNDING 2 SECURITY
TRUSTEE
In the event that there is any change in the identity of the Funding 1
Security Trustee or the Funding 2 Security Trustee or an additional
Funding 1 Security Trustee or an additional Funding 2 Security Trustee
is appointed in accordance with the Funding 1 Deed of Charge or the
Funding 2 Deed of Charge, as the case may be, the Cash Manager shall
execute such documents with any other parties to this Agreement and
take such actions as such new Funding 1 Security Trustee or such new
Funding 2 Security Trustee may reasonably require for the purposes of
vesting in such new Funding 1 Security Trustee or such new Funding 2
Security Trustee the rights of the Funding 1 Security Trustee and the
Funding 2 Security Trustee, as the case may be, under this Agreement
and under the Funding 1 Deed of Charge and the Funding 2 Deed of
Charge, as the case may be, and releasing the retiring Funding 1
Security Trustee or the retiring Funding 2 Security Trustee from
further obligations thereunder and while any of the Notes of any
Funding 1 Issuer or the Master Issuer, as the case may be, remains
outstanding shall give notice thereof to the Rating Agencies.
14.4 NO OBLIGATION ON THE FUNDING 1 SECURITY TRUSTEE OR THE FUNDING 2
SECURITY TRUSTEE
Nothing herein contained shall impose any obligation or liability on
the Funding 1 Security Trustee or the Funding 2 Security Trustee to
assume or perform any of the obligations of the Mortgages Trustee,
Funding 1, Funding 2 or the Cash Manager hereunder or render either
the Funding 1 Security Trustee or the Funding 2 Security Trustee
liable for any breach thereof.
15. MISCELLANEOUS
15.1 NO SET-OFF
Each of the Seller and the Cash Manager agrees that it will not:
(a) set off or purport to set off any amount which any of the
Mortgages Trustee, Funding 1 or Funding 2 is or will become
obliged to pay to it under this Agreement against any amount
from time to time standing to the credit of or to be credited
to the Mortgages Trustee GIC Account, any Funding 1 Bank
Account or any Funding 2 Bank Account or any replacement or
additional bank account of any of the Mortgages Trustee,
Funding 1 or Funding 2; or
(b) make or exercise any claims or demands, any rights of
counterclaim or any other equities against or withhold payment
of any and all sums of money which may at any time and from
time to time be standing to the credit of the Mortgages
Trustee GIC Account, any Funding 1 Bank Account or any Funding
2 Bank Account or any replacement of additional bank accounts
of any of the Mortgages Trustee, Funding 1 or Funding 2.
15.2 NO PETITION
The Cash Manager agrees that for so long as any Notes of any Funding 1
Issuer or the Master Issuer are outstanding it will not petition or
commence proceedings for the administration (including, for the
avoidance of doubt, the filing of documents with the court or the
service of a notice of intention to appoint an administrator) or
winding up of the Mortgages Trustee, Funding 1, Funding 2 or any
Funding 1 Issuer or the Master Issuer or participate in any ex parte
proceedings with regard thereto.
18
15.3 NO RECOURSE
(a) In relation to all sums due and payable by the Mortgages Trustee,
Funding 1 or Funding 2 to the Cash Manager, the Cash Manager agrees
that it shall have recourse only to sums paid to or received by (or on
behalf of) the Mortgages Trustee, Funding 1 and Funding 2 pursuant to
the provisions of the Transaction Documents.
(b) For the avoidance of doubt, neither the Funding 1 Security Trustee nor
the Funding 2 Security Trustee shall be liable to pay any amounts due
under Clause 8, and without prejudice to the obligations of the
Mortgages Trustee, Funding 1 or Funding 2, as the case may be, or any
receiver appointed pursuant to the Funding 1 Deed of Charge or the
Funding 2 Deed of Charge, as the case may be, in respect of such
amounts.
(c) Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of the Funding 1 Security Trustee and the
Funding 2 Security Trustee under or in connection with this Agreement
(other than their respective obligations under Clause 14) shall
automatically terminate upon the discharge in full (in the case of the
Funding 1 Security Trustee) of the Funding 1 Secured Obligations and
(in the case of the Funding 2 Security Trustee) the Funding 2 Secured
Obligations, PROVIDED THAT this shall be without prejudice to any
claims in respect of such obligations and rights arising on or prior
to such date.
16. CONFIDENTIALITY
During the continuance of this Agreement or after its termination,
each of the Mortgages Trustee, the Cash Manager, the Seller, Funding
1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee shall use its best endeavours not to disclose to any
person, firm or company whatsoever any information relating to the
business, finances or other matters of a confidential nature of any
other party hereto of which it may exclusively by virtue of being
party to the Transaction Documents have become possessed and shall use
all reasonable endeavours to prevent any such disclosure as aforesaid,
PROVIDED HOWEVER that the provisions of this Clause 16 shall not
apply:
(a) to any information already known to the recipient otherwise
than as a result of entering into any of the Transaction
Documents;
(b) to any information subsequently received by the recipient
which it would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge
otherwise than as a result of the conduct of the recipient;
(d) to any extent that the recipient is required to disclose the
same pursuant to any law or order of any court of competent
jurisdiction or pursuant to any direction, request or
requirement (whether or not having the force of law) of any
central bank or any governmental or other authority
(including, without limitation, any official bank examiners or
regulators);
(e) to the extent that the recipient needs to disclose the same
for determining the existence of, or declaring, a Note Event
of Default, an Intercompany Loan Event of Default, a Master
Intercompany Loan Event of Default or a Cash Manager
Termination Event, the protection or enforcement of any of its
rights under any of the Transaction Documents or in connection
herewith or therewith or for the purpose of discharging, in
such manner as it thinks fit, its duties under or in
connection with such agreements in each case to such persons
as require to be informed of such information for such
purposes; or
19
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt issued or to be issued by any Funding 1
Issuer, any New Issuer or the Master Issuer) to any Rating
Agency or any prospective new cash manager or prospective new
security trustee.
17. NOTICES
Any notices to be given pursuant to this Agreement to any of the
parties hereto shall be sufficiently served if sent by prepaid first
class post, by hand or facsimile transmission and shall be deemed to
be given (in the case of facsimile transmission) when despatched,
(where delivered by hand) on the day of delivery if delivered before
17.00 hours on a London Business Day or on the next London Business
Day if delivered thereafter or on a day which is not a London Business
Day 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 Cash Manager: to Bank of Scotland plc,
Halifax Division, Level 3, Lovell Park, 0 Xxxxxx Xxxx Xxxx,
Xxxxx XX0 0XX (facsimile number x00 (0) 000 000 0000) for the
attention of the Head of Mortgage Securitisation with a copy
to Bank of Scotland plc, Treasury Division, 00 Xxx Xxxxx
Xxxxxx, Xxxxxx XX0X 0XX (facsimile number +44 (0) 20 7574
8303) for the attention of Head of Mortgage Securitisation and
Covered Bonds;
(b) in the case of the Mortgages Trustee: to Permanent Mortgages
Trustee Limited, Esplanade, St Helier, Jersey JE1 OBD, Channel
Islands (facsimile number x00 (0) 0000 000000) for the
attention of the Secretary with a copy to Bank of Scotland
plc, Treasury Division, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX
(facsimile number x00 (0) 00 0000 0000) for the attention of
Head of Mortgage and Securitisation and Covered Bonds;
(c) in the case of the Seller: to Bank of Scotland plc, Halifax
Division, Level 3, Lovell Park, 0 Xxxxxx Xxxx Xxxx, Xxxxx XX0
0XX (facsimile number x00 (0) 000 000 0000) for the attention
of the Head of Mortgage Securitisation; with a copy to Bank of
Scotland plc, Treasury Division, 00 Xxx Xxxxx Xxxxxx, Xxxxxx
XX0X 0XX (facsimile number x00 (0) 00 0000 0000) for the
attention of Head of Mortgage Securitisation and Covered
Bonds;
(d) in the case of Funding 1: to Permanent Funding (No. 1)
Limited, 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile
number x00 (000) 0000 0000) for the attention of the
Secretary; with a copy to Bank of Scotland plc, Treasury
Division, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile
number x00 (000) 0000 0000) for the attention of Head of
Mortgage Securitisation and Covered Bonds;
(e) in the case of Funding 2: to Permanent Funding (No. 2)
Limited, 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX (facsimile
number x00 (000) 0000 0000) for the attention of the
Secretary; with a copy to Bank of Scotland plc, Treasury
Division, 00 Xxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile
number x00 (000) 0000 0000) for the attention of Head of
Mortgage Securitisation and Covered Bonds; and
(f) in the case of the Funding 1 Security Trustee and the Funding
2 Security Trustee: to The Bank of Xxx Xxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxx X00 0XX (facsimile number x00 (0) 00 0000 0000)
for the attention of Corporate Trust Administration - ABS/MBS,
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.
20
18. NO PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any partnership
between any of the parties.
19. ASSIGNMENT
19.1 ASSIGNMENT BY THE MORTGAGES TRUSTEE, FUNDING 1 AND FUNDING 2
None of the Mortgages Trustee, Funding 1 nor Funding 2 may assign or
transfer any of its respective rights and obligations under this
Agreement without the prior written consent of:
(a) in the case of the Mortgages Trustee, each of the
Beneficiaries, the Funding 1 Security Trustee and the Funding
2 Security Trustee;
(b) in the case of Funding 1, the Funding 1 Security Trustee and
the Cash Manager; and
(c) in the case of Funding 2, the Funding 2 Security Trustee and
the Cash Manager,
except that Funding 1 may assign its respective rights hereunder
without such consent pursuant to the Funding 1 Deed of Charge and
Funding 2 may assign its respective rights hereunder without such
consent pursuant to the Funding 2 Deed of Charge.
19.2 NO ASSIGNMENT BY CASH MANAGER
The Cash Manager may not assign or transfer any of its rights and
obligations under this Agreement without the prior written consent of
the Mortgages Trustee, each of the Beneficiaries, the Funding 1
Security Trustee and the Funding 2 Security Trustee.
20. AMENDMENTS AND CONSENTS
20.1 Subject to Clause 2, Clause 3 and Clause 4 of the Controlling
Beneficiary Deed (as applicable) and (in the case of Funding 1) Clause
25 of the Funding 1 Deed of Charge and (in the case of Funding 2)
Clause 12 of the Funding 2 Deed of Charge, no amendment or waiver of
any provision of this Agreement shall be effective unless the same
shall be in writing and signed by (or by some person duly authorised
by) each of the parties to this Agreement. In the case of a waiver,
such waiver shall be effective only in the specific instance and as
against the party or parties giving it for the specific purpose for
which it is given. No single or partial exercise of, or failure or
delay in exercising, any right under this Agreement shall constitute a
waiver or preclude any other or further exercise of that or any other
right.
20.2 Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee will each exercise all rights, powers, benefits
and/or discretions conferred on it under this Agreement (including,
without limitation, in giving its consent, approval or authorisation
to any event, matter or thing requested hereunder) in accordance with
Clauses 2, 3 and 4 of the Controlling Beneficiary Deed (as applicable)
and (in the case of Funding 1) Clause 25 of the Funding 1 Deed of
Charge and (in the case of Funding 2) Clause 12 of the Funding 2 Deed
of Charge.
21. EXCLUSION OF THIRD PARTY RIGHTS
The parties to this Agreement do not intend that any term of this
Agreement should be enforced, by virtue of the Contracts (Rights of
Third Parties) Xxx 0000, by any person who is not a party to this
Agreement.
21
22. COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually
or by facsimile) each of which, when executed and delivered, shall
constitute an original, but all the counterparts shall together
constitute but one and the same instrument provided, however, that
this Agreement shall have no force or effect until it is executed by
the last party to execute the same and shall be deemed to have been
executed and delivered in the place where such last party executed
this Agreement.
23. SEVERABILITY
Where any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations
under this Agreement, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
24. GOVERNING LAW AND SUBMISSION TO JURISDICTION
24.1 This Agreement is governed by, and shall be construed in accordance
with, the laws of England.
24.2 Each party to this Agreement hereby irrevocably submits to the
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 at 00 Xxxxx Xx. Xxxxx'x, Xxxxxx XX0X 0XX as
its agent for the service of process.
IN WITNESS whereof the parties have caused this Agreement to be executed and
delivered as a deed the day and year first before written.
22
SCHEDULE 1
THE CASH MANAGEMENT SERVICES
The Cash Manager shall:
(a) make the determinations set out in Schedule 2 hereto;
(b) operate the Mortgages Trustee GIC Account, the Funding 1 GIC Account,
the Funding 1 Transaction Account, the Funding 2 GIC Account, the
Funding 2 Transaction Account or any other Bank Account and ensure
that payments are made into and from such accounts in accordance with
this Agreement, the Mortgages Trust Deed, the Funding 1 Deed of
Charge, the Funding 2 Deed of Charge, the Bank Account Agreement, the
Mortgages Trustee Guaranteed Investment Contract, the Funding 1
Guaranteed Investment Contract, the Funding 2 Guaranteed Investment
Contract and any other applicable Transaction Document PROVIDED
HOWEVER THAT nothing herein shall require the Cash Manager to make
funds available to the Mortgages Trustee, Funding 1 or Funding 2 to
enable such payments to be made other than as expressly required by
the provisions of this Agreement;
(c) keep records for all taxation purposes (including, without limitation
VAT);
(d) assist the auditors of the Mortgages Trustee, Funding 1 and Funding 2
and provide such information to them as they may reasonably request
for the purpose of carrying out their duties as auditors;
(e) make all filings, give all notices and make all registrations and
other notifications required in the day-to-day operation of the
respective businesses of the Mortgages Trustee, Funding 1 and Funding
2 or required to be given by the Mortgages Trustee, Funding 1 or
Funding 2 pursuant to the Transaction Documents;
(f) arrange for all payments due to be made by the Mortgages Trustee
and/or Funding 1 and/or Funding 2 under any of the Transaction
Documents, PROVIDED THAT such monies are at the relevant time
available to the Mortgages Trustee and/or Funding 1 and/or Funding 2
and PROVIDED FURTHER that nothing herein shall constitute a guarantee
by the Cash Manager of all or any of the obligations of the Mortgages
Trustee, Funding 1 or Funding 2 under any of the Transaction
Documents;
(g) without prejudice to the role of and in conjunction with the relevant
Corporate Services Provider under the relevant Corporate Services
Agreement, keep general books of account and records of the Mortgages
Trustee, Funding 1 and Funding 2; provide accounting services,
including reviewing receipts and payments, supervising and assisting
in the preparation of interim statements and final accounts and
supervising and assisting in the preparation of Tax returns;
(h) without prejudice to the role of and in conjunction with the relevant
Corporate Services Provider under the relevant Corporate Services
Agreement, provide or procure the provision of company secretarial and
administration services to the Mortgages Trustee, Funding 1 and
Funding 2 including the keeping of all registers and the making of all
returns and filings required by applicable law or by US or UK
regulatory authorities (including the Securities and Exchange
Commission), co-operate in the convening of board and general meetings
and provide registered office facilities;
(i) itself on behalf of the Mortgages Trustee, Funding 1 and Funding 2,
PROVIDED THAT such monies are at the relevant time available to the
Mortgages Trustee, Funding 1 and Funding 2, pay all the out-of-pocket
expenses of the Mortgages Trustee, Funding 1 and Funding 2, incurred
by the Cash
23
Manager on behalf of the Mortgages Trustee, Funding 1 and Funding 2,
as the case may be, in the performance of the Cash Manager's duties
hereunder including without limitation:
(i) all Taxes which may be due or payable by the Mortgages
Trustee, Funding 1 and Funding 2;
(ii) all registration, transfer, filing and other fees and other
charges payable in respect of the sale by the Seller of the
Portfolio to the Mortgages Trustee;
(iii) all fees payable to the London Stock Exchange plc;
(iv) all necessary filing and other fees in compliance with
regulatory requirements;
(v) all legal and audit fees and other professional advisory fees;
(vi) all communication expenses including postage, courier and
telephone charges; and
(vii) all premiums payable by the Mortgages Trustee in respect of
the Insurance Policies;
(j) at the request of Funding 1 or Funding 2, as the case may be (but also
with the prior written consent of the Funding 1 Security Trustee or
the Funding 2 Security Trustee, as the case may be), invest monies
standing from time to time to the credit of the Funding 1 GIC Account
and the Funding 1 Liquidity Stand-by Account (if any) or the Funding 2
GIC Account, as the case may be, in Authorised Investments, subject to
the following provisions:
(i) any such Authorised Investment shall be made in the joint
names of the Funding 1 Security Trustee and Funding 1 or the
Funding 2 Security Trustee and Funding 2, as the case may be;
(ii) any costs properly and reasonably incurred in making and
changing Authorised Investments will be reimbursed to the Cash
Manager, the Funding 1 Security Trustee and the Funding 2
Security Trustee by Funding 1 or Funding 2, as the case may
be;
(iii) all income or other distributions arising on, or proceeds
following the disposal or maturity of, Authorised Investments
shall be credited to the Funding 1 GIC Account or the Funding
2 GIC Account, as the case may be; and
(iv) the Funding 1 Security Trustee, the Funding 2 Security Trustee
and the Cash Manager shall not be responsible (save where any
loss results from the Funding 1 Security Trustee's, the
Funding 2 Security Trustee's or the Cash Manager's, as the
case may be, own fraud, wilful default or negligence or that
of their respective officers or employees) for any loss
occasioned by reason of any such Authorised Investments
whether by depreciation in value or otherwise provided that
such Authorised Investments were made in accordance with the
above provisions;
(k) determine the Loan Tranche Interest Amount payable in respect of each
Subordinated Loan Tranche and each Start-Up Loan Tranche for the
relevant Loan Tranche Interest Period in accordance with Clause 7.2 of
the Master Intercompany Loan Agreement.
24
SCHEDULE 2
CASH MANAGEMENT AND MAINTENANCE OF LEDGERS
1. DETERMINATION
1.1 On each Calculation Date based on the amount of monies standing to the
credit of the Mortgages Trustee GIC Account as at close of business on
the London Business Day immediately preceding the relevant Calculation
Date, the Cash Manager shall determine each of the following:
(a) the amount of Principal Receipts and Revenue Receipts received
during the preceding Calculation Period; and
(b) the amount of Mortgages Trust Available Revenue Receipts and
Mortgages Trust Available Principal Receipts to be distributed
to Funding 1, Funding 2 and to the Seller on the Distribution
Date immediately following the relevant Calculation Date.
1.2 On each Calculation Date, the Cash Manager shall determine each of the
following:
(a) the amount of any Losses incurred on the Loans in the period
from the immediately preceding Calculation Date to the
relevant Calculation Date;
(b) the Funding 1 Share, the Seller Share, the Funding 2 Share,
the Funding 1 Share Percentage, the Funding 2 Share Percentage
and the Seller Share Percentage in accordance with clause 8 of
the Mortgages Trust Deed; and
(c) the Minimum Seller Share in accordance with clause 9.2 of the
Mortgages Trust Deed.
1.3 Four Business Days prior to each Funding 1 Interest Payment Date the
Cash Manager shall determine each of the following:
(a) the amount of any Funding 1 Available Revenue Receipts to be
applied on the following Funding 1 Interest Payment Date in
accordance with the Funding 1 Pre-Enforcement Revenue Priority
of Payments;
(b) the amount of any Funding 1 Available Principal Receipts to be
applied on the following Funding 1 Interest Payment Date in
accordance with the Funding 1 Principal Priority of Payments;
and
(c) the amount of any Funding 1 Income Deficit.
1.4 Four Business Days prior to each Funding 2 Interest Payment Date the
Cash Manager shall determine each of the following:
(a) the amount of any Funding 2 Available Revenue Receipts to be
applied on the following Funding 2 Interest Payment Date in
accordance with the Funding 2 Pre-Enforcement Revenue Priority
of Payments;
(b) the amount of any Funding 2 Available Principal Receipts to be
applied on the following Funding 2 Interest Payment Date in
accordance with the Funding 2 Principal Priority of Payments;
and
(c) the amount of any Funding 2 Income Deficit.
25
1.5 The Cash Manager shall make all the determinations referred to in
paragraphs 1.1 to 1.4 above on the basis of the following assumptions:
(a) that the amount of any Losses will not increase;
(b) that any debit balance on the Funding 1 Principal Deficiency
Ledger or the Funding 2 Principal Deficiency Ledger, as the
case may be, will not increase; and
(c) such other assumptions (including without limitation as to the
amount of any payments or provisions to be made in accordance
with the applicable Funding 1 Priority of Payments or the
Funding 2 Priority of Payments, as the case may be) as the
Cash Manager considers appropriate.
The Cash Manager shall on request notify the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee in writing of any such other assumptions and shall
take account of any representations made by the Mortgages Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
Security Trustee (as the case may be) in relation thereto.
1.6 The Cash Manager shall, if necessary, perform all currency conversions
free of charge, cost or expense at the relevant exchange rate (for the
purposes of any calculations referred to above, ((a)) all percentages
resulting from such calculations will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point (e.g. 9.876541%
being rounded down to 9.87654%) and ((b)) any currency amounts used in
or resulting from such calculations will be rounded in accordance with
the relevant market practice).
1.7 Each determination made in accordance with this paragraph 1 shall (in
the absence of bad faith, wilful default, negligence and manifest
error) be final and binding on all persons.
2. PRIORITY OF PAYMENTS FOR MORTGAGES TRUST AVAILABLE REVENUE RECEIPTS
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date withdraw Cash from
the Mortgages Trustee GIC Account and/or, in the case of sums to be
provided for, retain Cash in the amounts required (to the extent that
such withdrawal does not cause the Mortgages Trustee GIC Account to
become overdrawn or, if any amounts are retained by way of provision
for the relevant liability and are thus not withdrawn, to the extent
that withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn) in an aggregate
amount equal to the Mortgages Trust Available Revenue Receipts on each
Distribution Date. The withdrawal shall be used to make the payments
and provisions in the order of priority set out in clause 10.2 of the
Mortgages Trust Deed (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full).
3. PRIORITY OF PAYMENTS FOR MORTGAGES TRUST AVAILABLE PRINCIPAL RECEIPTS
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date, withdraw Cash
from the Mortgages Trustee GIC Account (to the extent only that such
withdrawal does not cause the Mortgages Trustee GIC Account to become
overdrawn) in an aggregate amount equal to the Mortgages Trust
Available Principal Receipts on each Distribution Date to make the
payments in the order of priority set out in clause 11 of the
Mortgages Trust Deed.
26
4. PRIORITY OF PAYMENTS FOR FUNDING 1 AVAILABLE REVENUE RECEIPTS
Funding 1 Available Revenue Receipts will be applied by the Cash
Manager on each Funding 1 Interest Payment Date until enforcement of
the Funding 1 Security pursuant to the Funding 1 Deed of Charge or
until such time as there are no amounts outstanding under any
Intercompany Loan Agreement, in making such payments and provisions in
the order of priority set out in the Funding 1 Pre-Enforcement Revenue
Priority of Payments (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full) as
set out in Part 1 of Schedule 3 to the Funding 1 Deed of Charge (as
the same may be amended, varied or restated from time to time).
5. PRIORITY OF PAYMENTS FOR FUNDING 1 AVAILABLE PRINCIPAL RECEIPTS
Funding 1 Available Principal Receipts will be applied by the Cash
Manager on each Funding 1 Interest Payment Date until enforcement of
the Funding 1 Security pursuant to the Funding 1 Deed of Charge or
until such time as there are no amounts outstanding under any
Intercompany Loan Agreement, in making such payments and provisions in
the order of priority (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full)
set out in Part 2 of Schedule 3 to the Funding 1 Deed of Charge.
6. FUNDING 1 INCOME DEFICIT/FUNDING 1 LIQUIDITY FACILITY
6.1 If the Cash Manager determines four Business Days prior to a Funding 1
Interest Payment Date that there will be a Funding 1 Income Deficit,
then the Cash Manager, on behalf of Funding 1, shall pay or provide
for such Funding 1 Income Deficit by applying Funding 1 Principal
Receipts (plus any part of the balance of the Funding 1 Cash
Accumulation Ledger which is not comprised in Funding 1 Available
Principal Receipts) to make good such Funding 1 Income Deficit, and
the Cash Manager shall make a corresponding entry in the relevant
Funding 1 Ledgers as described in paragraphs 13 and 18 below.
6.2 If the Cash Manager determines there are no (or insufficient) amounts
standing to the credit of the Funding 1 Principal Ledger and the Cash
Accumulation Ledger to cure the Funding 1 Income Deficit then on the
London Business Day immediately preceding a Funding 1 Interest Payment
Date the Cash Manager will, subject to paragraph 6.3 below, direct
Funding 1 to request a drawing pursuant to Clause 5.1 of the Funding 1
Liquidity Facility Agreement to apply towards such Funding 1 Income
Deficit.
6.3 A Funding 1 Liquidity Drawing may not be used to pay interest or
principal (as applicable) on the Term Advances if and to the extent
that there are funds standing to the credit of the Funding 1 Liquidity
Reserve Fund that are available to cure such Funding 1 Income Deficit
on such Funding 1 Interest Payment Date.
7. PRIORITY OF PAYMENTS FOR FUNDING 2 AVAILABLE REVENUE RECEIPTS
Funding 2 Available Revenue Receipts will be applied by the Cash
Manager on each Funding 2 Interest Payment Date until enforcement of
the Funding 2 Security pursuant to the Funding 2 Deed of Charge or
until such time as there are no amounts outstanding under the Master
Intercompany Loan Agreement, in making such payments and provisions in
the order of priority set out in the Funding 2 Pre-Enforcement Revenue
Priority of Payments (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full) as
set out in Part 1 of Schedule 3 to the Funding 2 Deed of Charge (as
the same may be amended, varied or restated from time to time).
27
8. PRIORITY OF PAYMENTS FOR FUNDING 2 AVAILABLE PRINCIPAL RECEIPTS
Funding 2 Available Principal Receipts will be applied by the Cash
Manager on each Funding 2 Interest Payment Date until enforcement of
the Funding 2 Security pursuant to the Funding 2 Deed of Charge or
until such time as there are no amounts outstanding under the Master
Intercompany Loan Agreement, in making such payments and provisions in
the order of priority (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full)
set out in Part 2 of Schedule 3 to the Funding 2 Deed of Charge.
9. FUNDING 2 INCOME DEFICIT
If the Cash Manager determines four Business Days prior to a Funding 2
Interest Payment Date that there will be a Funding 2 Income Deficit,
then the Cash Manager, on behalf of Funding 2, shall pay or provide
for such Funding 2 Income Deficit by applying Funding 2 Principal
Receipts (plus any part of the balance of the Funding 2 Cash
Accumulation Ledger which is not comprised in Funding 2 Available
Principal Receipts) to make good such Funding 2 Income Deficit, and
the Cash Manager shall make a corresponding entry in the relevant
Funding 2 Ledgers as described in paragraphs 13 and 25 below.
10. OTHER PAYMENTS
Each of the Beneficiaries and the Cash Manager agrees, and the
Mortgages Trustee concurs, that (save as otherwise specified below)
the following payments may be made from the Mortgages Trustee GIC
Account (to the extent that withdrawal of those amounts would not
cause the balance of the Mortgages Trustee GIC Account to become
overdrawn) on any date:
(a) if any amount has been received from a Borrower for the
express purpose of payment being made to a third party for the
provision of a service (including giving insurance cover) to
either that Borrower or the Seller or the Mortgages Trustee,
to pay such amount when due to such third party or, in the
case of the payment of an insurance premium, where such third
party and the Cash Manager have agreed that payment of
commission should be made by deduction from such insurance
premium, to pay such amount less such commissions when due to
such third party and to pay such commission to the Cash
Manager and to pay any premiums in respect of any Insurance
Policy or other insurance policy relating to any Loan
comprised in the Portfolio;
(b) to pay to any person (including the Cash Manager) any amounts
due arising from any overpayment by any person or arising from
any reimbursement by any person of any such overpayment
(including, for the avoidance of doubt, where arising from the
failure of a direct debit);
(c) to pay when due (but subject to any right to refuse or
withhold payment or of set-off that has arisen by reason of
the Borrower's breach of the terms of the relevant Mortgage or
Loan) any amount payable to a Borrower under the terms of the
Mortgage or the Loan to which that Borrower is a party, and to
pay when due any amount payable by the Mortgages Trustee to
the Seller pursuant to clauses 3.3, 4.4 and 5.2 of the
Mortgage Sale Agreement;
(d) to pay to the Seller any amounts (including, for the avoidance
of doubt, any Early Repayment Fees) received and held by the
Mortgages Trustee on trust for the Seller pursuant to clause 5
of the Mortgage Sale Agreement;
(e) to pay when due and payable any amounts due and payable by the
Mortgages Trustee to third parties and incurred without breach
by the Mortgages Trustee of the Mortgages Trust Deed and not
provided for payment elsewhere in this paragraph 7;
28
(f) to refund any amounts due arising from the rejection of any
payments in respect of a Loan and any other amounts which have
not been received by the Mortgages Trustee as cleared funds;
and
(g) to refund to the Seller any amounts which represent amounts
received from Borrowers but which do not form part of the
Mortgage Account balance or comprise unpaid interest as at the
relevant date and which are amounts owed by such Borrowers in
respect of the period prior to the date on which the Mortgage
Loan (together with its Related Security) relating to such
Mortgage Account was transferred to the Mortgages Trustee as
and when identified by the Cash Manager and if a Borrower
fails to pay the full amount that it owes, the Cash Manager
shall be obliged to refund to the Seller only such portion of
the amount which relates to any period prior to such transfer.
11. USE OF LEDGERS
The Cash Manager shall forthwith record monies received or payments
made by it on behalf of the Mortgages Trustee, Funding 1 or Funding 2
in the ledgers in the manner set out in this Agreement. If, at any
time, the Cash Manager is in any doubt as to which ledger a particular
amount should be credited or debited, it shall consult with the
Funding 1 Security Trustee and the Funding 2 Security Trustee (as
applicable) thereon.
Except in the case of the Funding 1 Principal Deficiency Ledger or the
Funding 2 Principal Deficiency Ledger, a debit item shall only be made
in respect of any of the Mortgages Trustee Ledgers, the Funding 1
Ledgers and the Funding 2 Ledgers and the corresponding payment or
transfer (if any) may only be made from the Mortgages Trustee GIC
Account, the Funding 1 GIC Account, the Funding 1 Transaction Account,
the Funding 2 GIC Account or the Funding 2 Transaction Account, as the
case may be, to the extent that such entry does not cause the relevant
ledger to have a debit balance. In the case of the Funding 1 Principal
Deficiency Ledger, each Funding 1 Principal Deficiency Sub-Ledger, the
Funding 2 Principal Deficiency Ledger and each Funding 2 Principal
Deficiency Sub-Ledger, a credit item shall only be made to the extent
that such entry does not cause such ledger to have a credit balance.
12. REVENUE LEDGER
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Revenue Ledger:
(i) all Revenue Receipts; and
(ii) all interest received by the Mortgages Trustee on the
Mortgages Trustee GIC Account; and
(b) any payment or provision made under paragraph 2 above shall be
debited to the Revenue Ledger.
13. PRINCIPAL LEDGER
The Cash Manager shall ensure that:
(a) all Principal Receipts shall be credited to the Principal
Ledger; and
(b) any payment or provision made under paragraph 3 above shall be
debited to the Principal Ledger.
29
14. LOSSES LEDGER
The Cash Manager shall ensure that all Losses shall be recorded in the
Losses Ledger.
15. FUNDING 1 SHARE/FUNDING 2 SHARE/SELLER SHARE LEDGER
The Cash Manager shall ensure that the Current Funding 1 Share and the
Current Funding 1 Share Percentage of the Trust Property, the Current
Funding 2 Share and the Current Funding 2 Share Percentage of the
Trust Property and the Current Seller Share and the Current Seller
Share Percentage of the Trust Property are recorded in the Funding 1
Share/Funding 2 Share/Seller Share Ledger on the Initial Closing Date
(in the case of Funding 1 and the Seller) and on the Programme Date
(in the case of Funding 2) and thereafter on each Distribution Date.
16. FUNDING 1 REVENUE LEDGER
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Funding 1
Revenue Ledger:
(i) all Funding 1 Revenue Receipts;
(ii) all interest received by Funding 1 in respect of the
Funding 1 Bank Accounts;
(iii) all amounts received by Funding 1 representing income
on any Funding 1 Authorised Investments;
(iv) all amounts (other than any early termination payment
which is to be used to acquire, if necessary, a new
swap) received by Funding 1 under the Funding 1 Swap
Agreement; and
(v) any amount debited to the Funding 1 Principal Ledger
under paragraph 18(b)(ii) below; and
(b) any payment or provision made under paragraph 4 above shall be
debited to the Funding 1 Revenue Ledger.
17. FUNDING 1 LIQUIDITY FACILITY LEDGER
The Cash Manager shall ensure that:
(a) all Funding 1 Liquidity Facility Drawings shall be credited to
the Funding 1 Liquidity Facility Ledger; and
(b) all Funding 1 Liquidity Facility Repayments shall be noted on
the Funding 1 Liquidity Facility Ledger.
18. FUNDING 1 PRINCIPAL LEDGER
Without prejudice to paragraph 19 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding 1
Principal Ledger:
(i) all Funding 1 Principal Receipts; and
30
(ii) amounts credited to the Funding 1 Principal Deficiency
Ledger under paragraph 4 above and paragraph 19 below;
and
(b) the following amounts shall be debited to the Funding 1
Principal Ledger:
(i) the aggregate amount paid pursuant to paragraph 5
above (other than any remainder to be credited to the
Funding 1 Principal Ledger); and
(ii) on each Funding 1 Interest Payment Date, an amount
equal to the Funding 1 Income Deficit on such Funding
1 Interest Payment Date.
19. FUNDING 1 PRINCIPAL DEFICIENCY LEDGER
19.1 Without prejudice to paragraph 4 above, the Cash Manager shall ensure
that there shall be debited to the Funding 1 Principal Deficiency
Ledger:
(a) deficiencies arising from Losses which have been allocated to
the Funding 1 Share; and
(b) any amount required to be debited to the Funding 1 Principal
Ledger under paragraph 18(b)(ii) above.
19.2 The Cash Manager shall ensure that there shall be credited to the
Funding 1 Principal Deficiency Ledger any amount to be credited in
accordance with paragraph 4 above.
19.3 Amounts to be debited to the Funding 1 Principal Deficiency Ledger
shall be debited in the following order:
(a) first, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the lowest ranking Term
Advance Rating until the debit balance thereon is equal to the
then principal amount outstanding of the corresponding Term
Advance(s); and
(b) secondly, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the next lowest Term
Advance Rating until the debit balance thereon is equal to the
then principal amount outstanding of corresponding Term
Advance(s),
and so on until amounts are debited to the AAA Principal Deficiency
Sub Ledger, at which point there will be an Asset Trigger Event.
Losses on the Loans and/or the application of Funding 1 Available
Principal Receipts to pay interest on the Term Advances will not be
recorded on the Funding 1 Principal Deficiency Ledger to the extent
that the Funding 1 Share of the Trust Property together with amounts
standing to the credit of the Funding 1 Cash Accumulation Ledger and
the Funding 1 Principal Ledger, in aggregate, is greater than or equal
to the aggregate Outstanding Principal Balance of the Intercompany
Loans on the relevant Funding 1 Interest Payment Date, after taking
account of such Losses or the relevant application of Principal
Receipts.
19.4 Amounts to be credited to the Funding 1 Principal Deficiency Ledger
shall be credited in the following order:
(a) first, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the highest ranking
Term Advance Rating until the debit balance thereon is reduced
to zero;
31
(b) secondly, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the next highest
ranking Term Advance Rating until the debit balance thereon is
reduced to zero; and
(c) thirdly, to the Funding 1 Principal Deficiency Sub-Ledger
corresponding to the Term Advance with the next highest
ranking Term Advance Rating until the debit balance thereon is
reduced to zero,
and so on until the balance of the Funding 1 Principal Deficiency
Ledger is zero.
20. FUNDING 1 GENERAL RESERVE LEDGER
20.1 A tranche (if any) drawn down on a relevant Closing Date by Funding 1
pursuant to a Start-Up Loan Agreement for the purposes of funding the
Funding 1 General Reserve Fund (or any other similar reserve fund)
will be credited to the Funding 1 General Reserve Ledger.
20.2 Amounts shall be credited to the Funding 1 General Reserve Ledger in
accordance with the Funding 1 Priority of Payments above.
20.3 Amounts shall be debited to the Funding 1 General Reserve Ledger on
each Funding 1 Interest Payment Date in order to be applied in
accordance with the order of priority of payments set out in Schedule
3 to the Funding 1 Deed of Charge.
21. FUNDING 1 LIQUIDITY RESERVE LEDGER
21.1 Amounts shall be credited to the Funding 1 Liquidity Reserve Ledger in
accordance with the Funding 1 Priority of Payments above.
21.2 Amounts shall be debited to the Funding 1 Liquidity Reserve Ledger to
the extent permitted on each relevant Funding 1 Interest Payment Date
in order to be applied in accordance with the priority of payments set
out in Schedule 3 to the Funding 1 Deed of Charge.
22. INTERCOMPANY LOAN LEDGER
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Term Advances are recorded in
the Intercompany Loan Ledger.
23. FUNDING 1 CASH ACCUMULATION LEDGER
The Cash Manager shall ensure that all Funding 1 Principal Receipts
reserved by Funding 1 to pay the relevant Bullet Term Advances are
recorded on the Funding 1 Cash Accumulation Ledger.
24. FUNDING 2 REVENUE LEDGER
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Funding 2
Revenue Ledger:
(i) all Funding 2 Revenue Receipts;
(ii) all interest received by Funding 2 in respect of the
Funding 2 Bank Accounts;
(iii) all amounts received by Funding 2 representing income
on any Funding 2 Authorised Investments;
32
(iv) all amounts (other than any early termination payment
which is to be used to acquire, if necessary, a new
swap) received by Funding 2 under the Funding 2 Swap
Agreement; and
(v) any amount debited to the Funding 2 Principal Ledger
under paragraph 25(b)(ii) below; and
(b) any payment or provision made under paragraph 7 above shall be
debited to the Funding 2 Revenue Ledger.
25. FUNDING 2 PRINCIPAL LEDGER
Without prejudice to paragraph 26 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding 2
Principal Ledger:
(i) all Funding 2 Principal Receipts; and
(ii) amounts credited to the Funding 2 Principal Deficiency
Ledger under paragraph 7 above and paragraph 26 below;
and
(b) the following amounts shall be debited to the Funding 2
Principal Ledger:
(i) the aggregate amount paid pursuant to paragraph 8
above (other than any remainder to be credited to the
Funding 2 Principal Ledger); and
(ii) on each Funding 2 Interest Payment Date, an amount
equal to the Funding 2 Income Deficit on such Funding
2 Interest Payment Date.
26. FUNDING 2 PRINCIPAL DEFICIENCY LEDGER
26.1 Without prejudice to paragraph 7 above, the Cash Manager shall ensure
that there shall be debited to the Funding 2 Principal Deficiency
Ledger:
(a) deficiencies arising from Losses which have been allocated to
the Funding 2 Share;
(b) Funding 2 Available Principal Receipts allocated to fund the
Funding 2 Liquidity Reserve Fund up to the Funding 2 Liquidity
Reserve Required Amount pursuant to the applicable Funding 2
Pre-Enforcement Principal Priority of Payments; and
(c) any amount required to be debited to the Funding 2 Principal
Ledger under paragraph 25(b)(ii) above.
26.2 The Cash Manager shall ensure that there shall be credited to the
Funding 2 Principal Deficiency Ledger any amount to be credited in
accordance with paragraph 7 above.
26.3 Amounts to be debited to the Funding 2 Principal Deficiency Ledger
shall be debited in the following order:
(a) first, on the Funding 2 Subordinated Loan Tranche Principal
Deficiency Sub Ledger until the balance of the Funding 2
Subordinated Loan Tranche Principal Deficiency Sub Ledger is
equal to the aggregate principal amount outstanding of all
Subordinated Loan Tranches;
33
(b) second, on the Funding 2 BB Principal Deficiency Sub-Ledger
until the balance of the Funding 2 BB Principal Deficiency
Sub-Ledger is equal to the aggregate principal amount
outstanding of all BB Loan Tranches;
(c) third, on the Funding 2 BBB Principal Deficiency Sub-Ledger
until the balance of the Funding 2 BBB Principal Deficiency
Sub-Ledger is equal to the aggregate principal amount
outstanding of all BBB Loan Tranches;
(d) fourth, on the Funding 2 A Principal Deficiency Sub-Ledger
until the balance of the Funding 2 A Principal Deficiency
Sub-Ledger is equal to the aggregate principal amount
outstanding of all A Loan Tranches;
(e) fifth, on the Funding 2 AA Principal Deficiency Sub-Ledger
until the balance of the Funding 2 AA Principal Deficiency
Sub-Ledger is equal to the aggregate principal amount
outstanding of all AA Loan Tranches;
(f) sixth, on the Funding 2 AAA Principal Deficiency Sub-Ledger,
at which point there will be an Asset Trigger Event (unless
such losses are recorded when ((i)) the aggregate principal
amount outstanding of all Subordinated Loan Tranches, BB Loan
Tranches, BBB Loan Tranches, A Loan Tranches and AA Loan
Tranches is equal to zero and ((ii)) the sum of (A) the amount
standing to the credit of the Funding 2 General Reserve Ledger
and (B) the amount standing to the credit of the Funding 2
Revenue Ledger together with amounts determined and due to be
credited to the Funding 2 Revenue Ledger prior to the
immediately following Funding 2 Interest Payment Date after
such debit is made, is greater than the amount necessary to
pay the items in paragraphs (A) to (E) in the Funding 2
Pre-Enforcement Revenue Priority of Payments on the
immediately following Funding 2 Interest Payment Date after
such debit is made);
Losses on the Loans and/or the application of amounts standing to the
credit of the Funding 2 Principal Ledger and/or the Funding 2 Cash
Accumulation Ledger to pay interest and fees on the Master
Intercompany Loan will not be recorded on the Funding 2 Principal
Deficiency Ledger to the extent that the Funding 2 Share of the Trust
Property together with amounts standing to the credit of the Funding 2
Cash Accumulation Ledger and the Funding 2 Principal Ledger, in
aggregate, is greater than or equal to the aggregate Outstanding
Principal Balance of the Rated Loan Tranches and Subordinated Loan
Tranches under the Master Intercompany Loan Agreement on the relevant
Funding 2 Interest Payment Date, after taking account of such Losses
or the relevant application of Principal Receipts.
26.4 Amounts to be credited to the Funding 2 Principal Deficiency Ledger
shall be credited in the following order:
(a) first, in an amount necessary to reduce to zero the balance on
the Funding 2 AAA Principal Deficiency Sub-Ledger;
(b) second, provided that interest due on the AA Loan Tranches has
been paid, in an amount necessary to reduce to zero the
balance on the Funding 2 AA Principal Deficiency Sub-Ledger;
(c) third, provided that interest due on the A Loan Tranches has
been paid, in an amount to reduce to zero the balance on the
Funding 2 A Principal Deficiency Sub-Ledger;
(d) fourth, provided that interest due on the BBB Loan Tranches
has been paid, in an amount necessary to reduce to zero the
balance on the Funding 2 BBB Principal Deficiency Sub-Ledger;
34
(e) fifth, provided that interest due on the BB Loan Tranches has
been paid, in an amount necessary to reduce to zero the
balance on the BB Principal Deficiency Sub-Ledger; and
(f) sixth, provided that interest due on the Subordinated Loan
Tranches has been paid, in an amount necessary to reduce to
zero the balance on the Funding 2 Subordinated Loan Tranche
Principal Deficiency Sub Ledger.
27. FUNDING 2 GENERAL RESERVE LEDGER
27.1 An amount drawn down on a relevant Closing Date by Funding 2 pursuant
to a Funding 2 Start-Up Loan Agreement or of a Start-Up Loan Tranche
under the Master Intercompany Loan Agreement for the purposes of
funding the Funding 2 General Reserve Fund (or any other similar
reserve fund) will be credited to the Funding 2 General Reserve
Ledger.
27.2 Amounts shall be credited to the Funding 2 General Reserve Ledger in
accordance with the Funding 2 Priority of Payments above.
27.3 Amounts shall be debited to the Funding 2 General Reserve Ledger on
each Funding 2 Interest Payment Date in order to be applied in
accordance with the order of priority of payments set out in Schedule
3 to the Funding 2 Deed of Charge.
28. FUNDING 2 LIQUIDITY RESERVE LEDGER
28.1 Amounts shall be credited to the Funding 2 Liquidity Reserve Ledger in
accordance with the Funding 2 Priority of Payments above.
28.2 Amounts shall be debited to the Funding 2 Liquidity Reserve Ledger to
the extent permitted on each relevant Funding 2 Interest Payment Date
in order to be applied in accordance with the priority of payments set
out in Schedule 3 to the Funding 2 Deed of Charge.
29. MASTER INTERCOMPANY LOAN LEDGER
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Loan Tranches are recorded in
the Master Intercompany Loan Ledger.
30. FUNDING 2 CASH ACCUMULATION LEDGER
The Cash Manager shall ensure that all Funding 2 Principal Receipts
reserved by Funding 2 to pay the relevant Bullet Loan Tranches are
recorded on the Funding 2 Cash Accumulation Ledger.
31. START-UP LOAN REVENUE CONTRIBUTION LEDGER
31.1 The Cash Manager shall ensure that all amounts received by Funding 2
under a Funding 2 Start-Up Loan Agreement or a Start-Up Loan Tranche
under the Master Intercompany Loan Agreement or part thereof for the
purposes of contributing towards Funding 2 Available Revenue Receipts
on the Funding 2 Interest Payment Date immediately following the
relevant Closing Date are credited to the Start-Up Loan Revenue
Contribution Ledger.
31.2 The Cash Manager shall ensure that all amounts referred to in
paragraph 31.1 above are debited to the Start-Up Loan Revenue
Contribution Ledger on the Funding 2 Interest Payment Date immediately
following the Closing Date on which they were advanced for the purpose
described in paragraph 31.1 above.
35
SCHEDULE 3
FORM OF FUNDING 1 QUARTERLY REPORT
INTERCOMPANY LOANS BALANCES
[Balances]
Last quarter closing balance
Repayments
New Term Advances
CR to Cash Accumulation Ledger in period
CR to Principal Ledger in period
Closing balance
CASH ACCUMULATION LEDGER
Opening balance
Principal received
Principal paid
Closing balance
PRINCIPAL LEDGER
Opening balance
Principal received
CR from Principal Deficiency Ledger
Principal paid
Closing balance
AVAILABLE CREDIT ENHANCEMENT
General Reserve Fund at closing
Last quarter closing General Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing of balance of General Reserve Fund
Target of balance General Reserve Fund
36
PRINCIPAL DEFICIENCY LEDGER AAA AA BBB
Opening Principal Deficiency Ledger Balance
Losses this Quarter
Principal Deficiency Ledger top up from Revenue
Income
Closing Principal Deficiency Ledger Balance
SUBORDINATED LOAN OUTSTANDING
[Balances]
Last quarter closing outstanding
Accrued interest
Repayments Made
Closing balance
37
SCHEDULE 4
FORM OF FUNDING 2 QUARTERLY REPORT
MASTER INTERCOMPANY LOANS BALANCE
[Balance]
Last quarter closing balance
Repayments
New Loan Tranche
CR to Cash Accumulation Ledger in period
CR to Principal Ledger in period
Closing balance
CASH ACCUMULATION LEDGER
Opening balance
Principal received
Principal paid
Closing balance
PRINCIPAL LEDGER
Opening balance
Principal received
CR from Principal Deficiency Ledger
Principal paid
Closing balance
AVAILABLE CREDIT ENHANCEMENT
Funding 2 General Reserve Fund at Programme Date
Last quarter closing Funding 2 General Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing balance of Funding 2 General Reserve Fund
Target balance of Funding 2 General Reserve Fund
38
PRINCIPAL DEFICIENCY LEDGER AAA AA BBB
Opening Principal Deficiency Ledger balance
Losses this quarter
Principal Deficiency Ledger top up from Revenue
Receipts
Closing Principal Deficiency Ledger balance
SUBORDINATED LOANS OUTSTANDING
[Balances]
Last quarter closing outstanding
Accrued interest
Repayments made
Closing balance
39
SIGNATORIES
CASH MANAGER AND SELLER
EXECUTED as a DEED by )
BANK OF SCOTLAND PLC ) /s/ XXX XXXXXXX
acting by its attorney ) /s/ XXXXX XXXXXXXXX
in the presence of: )
Witness's signature: /s/ XXXXX XXXX
Name:
Address: XXXXX & XXXXX XXX
XXXXXX
X00 0XX
MORTGAGES TRUSTEE
EXECUTED as a DEED on behalf of )
PERMANENT MORTGAGES ) /s/ XXX XXXXXXX
TRUSTEE LIMITED, )
a company incorporated in Jersey, )
Channel Islands, by )
being a person who, )
in accordance with the laws of that )
territory is acting under the authority of )
the company in the presence of: )
Witness's signature: /s/ XXXXX XXXX
Name:
Address: XXXXX & XXXXX XXX
XXXXXX
X00 0XX
FUNDING 1
EXECUTED as a DEED by ) /s/ XXXXXXX XXXXXXX
PERMANENT FUNDING (NO. 1) ) /s/ XXXXXX XXXXXXXXX
LIMITED acting by two directors )
FUNDING 2
EXECUTED as a DEED by ) /s/ XXXXXXX XXXXXXX
PERMANENT FUNDING (NO. 2) ) /s/ XXXXXX XXXXXXXXX
LIMITED acting by two directors )
40
FUNDING 1 SECURITY TRUSTEE
EXECUTED as a DEED )
for and on behalf of ) /s/ XXXXXXX XXXXXX
THE BANK OF NEW YORK )
by its authorised signatory
in the presence of: )
Witness's signature: /s/ XXXXX XXXX
Name:
Address: XXXXX & XXXXX XXX
XXXXXX
X00 0XX
FUNDING 2 SECURITY TRUSTEE
EXECUTED as a DEED )
for and on behalf of ) /s/ XXXXXXX XXXXXX
THE BANK OF NEW YORK )
by its authorised signatory
in the presence of: )
Witness's signature: /s/ XXXXX XXXX
Name:
Address: XXXXX & XXXXX XXX
XXXXXX
X00 0XX
41
