Exhibit 4.8
EXECUTION COPY
AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT
17
OCTOBER 2006
HALIFAX 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)
ALLEN
& OVERY
ALLEN & OVERY LLP
<PAGE>
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..............................................13
12. Services
Non-Exclusive.................................................14
13.
Termination............................................................14
14. Further
Assurance......................................................17
15.
Miscellaneous..........................................................17
16.
Confidentiality........................................................18
17.
Notices................................................................19
18. No
Partnership.........................................................20
19.
Assignment.............................................................20
20. Amendments
and Consents................................................20
21. Amendments
and Consents......................ERROR! BOOKMARK NOT DEFINED.
22. Exclusion of
Third Party Rights........................................21
23.
Counterparts...........................................................21
24.
Severability...........................................................21
25. Governing
Law and Submission to Jurisdiction...........................21
SCHEDULE
1. The
Cash Management
Services...........................................22
2. Cash
Management and Maintenance of
Ledgers.............................24
3. Form of
Funding 1 Quarterly
Report.....................................35
4. Form of
Funding 2 Quarterly
Report.....................................37
Signatories..................................................................39
<PAGE>
THIS AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT (this
AGREEMENT) is made on
17 October 2006
BETWEEN:
(1) HALIFAX PLC,
a public limited company incorporated under the laws of
England
and Wales whose registered office is at Trinity Road, Halifax,
West
Yorkshire HX1 2RG, in its capacity as CASH MANAGER;
(2) HALIFAX PLC,
a public limited company incorporated under the laws of
England
and Wales whose registered office is at Trinity Road, Halifax,
West
Yorkshire HX1 2RG, in its capacity as SELLER of the Loans and one
of
the
BENEFICIARIES;
(3) PERMANENT
MORTGAGES TRUSTEE LIMITED (registered number 83116), a private
company
incorporated under the laws of Jersey, Channel Islands whose
registered
office is at 47 Esplanade, St. Helier, Jersey, JE1 0BD,
Channel
Islands, in its capacity as the MORTGAGES TRUSTEE;
(4) PERMANENT
FUNDING (NO. 1) LIMITED (registered number 4267660), a private
limited
company incorporated under the laws of England and Wales whose
registered
office is at 35 Great St. Helen's London EC3A 6AP, in its
capacity
as FUNDING 1 and one of the BENEFICIARIES;
(5) 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 35 Great St. Helen's London EC3A 6AP, in its
capacity
as FUNDING 2 and one of the BENEFICIARIES;
(6) THE BANK OF
NEW YORK, a New York banking corporation acting through its
offices at
48th Floor, One Canada Square, London E14 5AL, acting in its
capacity
as 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
(7) THE BANK OF
NEW YORK, a New York banking corporation acting through its
offices at
48th Floor, One Canada Square, London E14 5AL, acting in its
capacity
as 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, 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 holds the assigned mortgage loans as bare trustee for
Funding 1,
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 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) The Cash
Manager has agreed to provide Cash Management Services to the
Mortgages
Trustee, Funding 1 and Funding 1 Security Trustee on the terms
and
subject to the conditions contained in the
1
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Cash
Management Agreement made on 12 June 2002 and, as of the
Programme
Date, to
Funding 2 and the Funding 2 Security Trustee as amended and
restated
on 22 March 2006 (the CASH MANAGEMENT AGREEMENT) in relation
to,
inter
alia, the Trust Property.
(D) The parties
to the Cash Management Agreement, Funding 2 and the Funding 2
Security
Trustee have agreed to amend and restate the terms of that
Agreement
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 17
October
2006 (as the same may be amended, varied or supplemented from
time to
time with the consent of the parties to this Agreement) (the
MASTER
DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
specifically incorporated into this Agreement and, accordingly,
the
expressions defined in the Master Definitions and Construction
Schedule
(as so
amended, varied or supplemented from time to time) shall,
except
where the
context otherwise requires and save where otherwise defined
herein,
have the same meanings in this Agreement, including the
Recitals
hereto and
this Agreement shall be construed in accordance with the
interpretation provisions set out in clause 2 of the Master
Definitions
and
Construction Schedule.
1.2 This
Agreement amends and restates the Cash Management Agreement made
on
14 June
2002 as amended and restated on 22 March 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
<PAGE>
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 (i) the Cash Manager
failing to
make a payment in its capacity as Servicer, Funding 1 Swap
Provider,
Funding 2 Swap Provider or in any
3
<PAGE>
other
capacity under the Transaction Documents, or (ii) 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
<PAGE>
(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
<PAGE>
(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 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 comprised, on the Programme Date, five 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 and the BB 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
<PAGE>
(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
<PAGE>
(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
Clause
2 of the
Funding 2 Start-Up Loan Agreement for the purposes of funding
the
Funding 2 General Reserve Fund (or any other similar reserve
fund)
and (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) 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 such credit.
(m) 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
(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
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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 (i) the reduction of
the
aggregate principal amount outstanding of all Intercompany Loans
to
zero or
(ii) the service of an Intercompany Loan Acceleration Notice,
the
Funding 1
Swap is terminated, then the Cash Manager (on behalf of Funding
1 and the
Funding 1 Security Trustee) shall purchase a new hedge against
the
possible variance between (1) 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 (2) 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.
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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 (i) the reduction of
the
aggregate principal amount outstanding of all Loan Tranches under
the
Master
Intercompany Loan Agreement to zero or (ii) 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 (1) 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 (2) 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 Mortgages Trust Revenue Priority of
Payments,
the Funding 1 Priority of Payments and the Funding 2 Priority
of
Payments (as applicable), each of the Mortgages Trustee, Funding 1
and
Funding 2
will on each Distribution Date, Funding 1 Interest Payment Date
and
Funding 2 Interest Payment Date (respectively) reimburse the
Cash
Manager
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
to it including any such costs, expenses or charges not
reimbursed
to the Cash Manager on any previous Distribution Date, Funding
1 Interest
Payment Date and Funding 2 Interest Payment Date
(respectively) and the Cash Manager shall supply the Mortgages
Trustee,
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.
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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 be
solely 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 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.
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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 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.
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<PAGE>
(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
The
Mortgages Trustee, Funding 1 and Funding 2 shall pay to the
Cash
Manager
for the Cash Management Services provided to it hereunder a
cash
management
fee which shall be agreed in writing between the Mortgages
Trustee,
Funding 1, Funding 2, the Funding 1 Security Trustee, the
Funding 2
Security Trustee and the Cash Manager from time to time.
10.2 PAYMENT OF
FEE
The cash
management fee referred to in Clause 10.1 shall be paid to the
Cash
Manager in arrear on each Distribution Date in the manner
contemplated by and in accordance with the provisions of the
Mortgages
Trustee
Revenue Priority of Payments.
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
