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Matters requiring Extraordinary Resolution

Broadly speaking, the following matters require an Extraordinary Resolution.

  • Series Reserved Matter;

  • [List others].

Relationship between Series of Covered Bondholders

In connection with the exercise by it of any of its trusts, powers and discretions, the Bond Trustee and the Security Trustee shall have regard to the general interests of the holders of the Covered Bonds of each Series as a class. An Extraordinary Resolution passed at any meeting of the holders of the Covered Bonds of a Series shall, subject as provided above, be binding on all the holders of the Covered Bonds of such Series, whether or not they are present at the meeting. The Bond Trustee may convene a single meeting of the holders of Covered Bonds of more than one Series if in the opinion of the Bond Trustee there is no conflict between the holders of such Covered Bonds.

Relationship between Covered Bondholders and other Secured Creditors

In exercising any of its powers, trusts, authorities and discretions under the Trust Deed, the Covered Bonds, the Receipts or the Coupons or any other Transaction Document, the Bond Trustee shall only have regard to the interests of the holders of the Covered Bonds while any Covered Bonds are outstanding and shall not have regard to the interests of any other Secured Creditors.

In exercising any of its powers, trusts, authorities and discretions under the Deed of Charge, the Security Trustee shall only have regard to the interests of the holders of the Covered Bonds while any Covered Bonds are outstanding and shall not have regard to the interests of any other Secured Creditors.



Provision of Information to the Covered Bondholders

[Information in respect of the underlying Mortgage Portfolio will be provided to the investors on a quarterly basis.]

[The [Cash Manager/Servicer] will further provide an investor report on a [quarterly] basis containing information in relation to the Covered Bonds and the Asset Coverage Test.]



Communication with Covered Bondholders

Any notice to be given by the Issuer or the Bond Trustee to Covered Bondholders shall be given in the following manner:

  • So long as the Covered Bonds are held in the Clearing Systems, by delivering to the relevant Clearing System for communication by it to Covered Bondholders; and

  • So long as the Covered Bonds are listed on a stock exchange or admitted to listing by any other relevant authority, by publication of such notice in a daily newspaper in accordance with the requirements of the relevant stock exchange or relevant authority; [and]

  • [Specify others].

[Other rules may apply for Bearer Definitive and Registered Definitive Covered Bonds].

[Please set out any other key features of the Covered Bondholder rights particular for this transaction which are not described in this section]

CREDIT STRUCTURE AND CASHFLOW

Please refer to the sections entitled "Credit Structure" and "Cashflows" for further detail in respect of the credit structure and cash flow of the transaction

Visio 2543078




Credit Support

There are a number of features of the Programme which enhance the likelihood of timely and, as applicable, ultimate payments to holders of the Covered Bonds, as follows:

  • the Covered Bond Guarantee provides credit support to the Issuer;

  • [the Pre-Maturity Test is intended to provide liquidity to the LLP in relation to amounts of principal due on the Final Maturity Date of the Hard Bullet Covered Bonds;]

  • the Asset Coverage Test is intended to test the asset coverage of the LLP's assets in respect of the Covered Bonds at all times;

  • the Amortisation Test is intended to test the asset coverage of the LLP's assets in respect of the Covered Bonds following the occurrence of an Issuer Event of Default, service of an Issuer Acceleration Notice on the Issuer and service of a Notice to Pay on the LLP;

  • a Reserve Fund will be established to trap Available Revenue Receipts; and

  • the GIC Provider has agreed to pay a variable rate of interest on all amounts held by the LLP in the GIC Account at a rate of [•]% per annum; [and]

  • [list any others if relevant].

Payments by the Issuer

Until a Notice to Pay[, an Asset Coverage Test Breach Notice (which has not been revoked)] or an LLP Acceleration Notice is served on the LLP, the Covered Bonds will be obligations of the Issuer only. The Issuer is liable to make payments when due on the Covered Bonds, whether or not it has received any corresponding payment from the LLP.

Available Funds of the LLP

The LLP will have Available Revenue Funds and Available Principal Funds available to it. Prior to service of a Notice to Pay [or an Asset Coverage Test Breach Notice (which has not been revoked)] on the LLP, Available Revenue Funds and Available Principal Funds will be applied by the LLP to make payments of interest and principal payments to the Issuer under the Intercompany Loan Agreement. Following the service of a Notice to Pay [or an Asset Coverage Test Breach Notice] on the LLP, Available Revenue Funds and Available Principal Funds will be applied by the LLP to meet its payment obligations under the Covered Bonds and the other Transaction Documents.

Available Revenue Funds will, broadly, include the following:

  • Revenue Receipts received during the immediately preceding Collection Period;

  • interest payable to the LLP on its bank accounts and income from any Authorised Investments and/or Substitution Assets during the relevant Collection Period;

  • amounts received by the LLP under the relevant Swap Agreements;

  • amounts standing to the credit of the Reserve Fund during the relevant Collection Period;

  • any other net income of the Issuer received during the immediately preceding Collection Period of a revenue nature; [and]

  • [list others if relevant],

less:

  • Third Party Amounts.

Available Principal Funds will, broadly, include all Principal Receipts received by the LLP during the immediately preceding Collection Period (including consideration paid by the Seller in respect of the repurchase of the Mortgage Loans and their Related Security, recoveries received by the LLP following the enforcement of the relevant Mortgage Loan, the proceeds of any sale of Selected Mortgage Loans, and receipt of realisation proceeds of the Related Security), any Cash Capital Contributions received from a Member, and amounts in respect of principal received by the LLP under the Currency Swap Agreement. [List others if relevant].

Breach of the Asset Coverage Test

[Option 1: if Programme has Asset Coverage Breach Test Notice features] [A breach of the Asset Coverage Test on a Calculation Date which is not remedied by the immediately succeeding Calculation Date will require the Bond Trustee to serve an Asset Coverage Test Breach Notice on the LLP. The Asset Coverage Test Breach Notice will be revoked if, on any Calculation Date falling on or prior to the [third] Calculation Date following service of an Asset Coverage Test Breach Notice, the Asset Coverage Test is satisfied and neither a Notice to Pay nor an LLP Acceleration Notice has been served.

If an Asset Coverage Test Breach Notice has been served and not revoked on or before the third Calculation Date after service of such Asset Coverage Test Breach Notice, then an Issuer Event of Default shall occur and the Bond Trustee shall be entitled (and, in certain circumstances, may be required) to serve an Issuer Acceleration Notice on the Issuer. Following service of an Issuer Acceleration Notice, the Trustee must serve a Notice to Pay on the LLP.






For so long as an Asset Coverage Test Breach Notice is outstanding and has not been revoked, the LLP may not borrow any new Term Advances (and the Issuer may not make any new Term Advances) under the Intercompany Loan Agreement.]

[or]

[Option 2: if Programme does not have Asset Coverage Breach Test Notice features] [A breach of the Asset Coverage Test on a Calculation Date which is not remedied by the immediately succeeding Calculation Date will constitute an Issuer Event of Default and the Bond Trustee shall be entitled (and, in certain circumstances, may be required) to serve an Issuer Acceleration Notice on the Issuer and the LLP.]

Following service of an Issuer Acceleration Notice on the Issuer and the LLP, the Bond Trustee must serve a Notice to Pay on the LLP.






Summary of Priorities of Payments

Below is a summary of the Priorities of Payments. [Cross refer to section of the prospectus containing further information on this].




A

B

C

Prior to the occurrence of any of the events in columns B or C:

From (and including) service of an Issuer Acceleration Notice, [an Asset Coverage Test Breach Notice (which has not been revoked)] or a Notice to Pay (prior to service of an LLP Acceleration Notice and/or realisation of the Security and/or commencement of winding up proceedings against the LLP):

From (and including) the occurrence of an LLP Event of Default:

Pre-Acceleration Priorities of Payments

Guarantee Priority of Payments

Post-Enforcement Priority of Payments

Revenue

Principal

  1. Trustees

  1. Pre-Maturity Liquidity Ledger, if the Pre-Maturity Test has been failed

  1. Trustees

  1. Satisfaction of any expenses permitted by Regulations 27, 28 and/or 29 of the RCB Regulations to be paid in priority to the amounts identified as payable under item (ii) below

  1. Agent Bank and Paying Agents

  1. Acquisition of New Mortgage Loans to ensure compliance with the Asset Coverage Test

  1. Agent Bank and Paying Agents

  1. Pro rata and pari passu to:

    1. Trustees

    2. Agent Bank and Paying Agents

    3. Senior expenses, e.g. Servicer, Cash Manager, LLP Account Bank, Corporate Services Provider

    4. TRS Provider/Interest Rate Swap Provider/Basis Swap Provider

    5. Covered Bond Swap Provider and Scheduled Interest and Scheduled Principal to the Bond Trustee or the Principal Paying Agent

  1. Senior expenses, for example, Servicer, Cash Manager, LLP Account Bank, Corporate Services Provider, Asset Monitor (excluding Indemnity Amounts)

  1. Deposit into LLP GIC Account to ensure compliance with the Asset Coverage Test

  1. Senior expenses, for example, Servicer, Cash Manager, LLP Account Bank, Corporate Services Provider, Asset Monitor (excluding Indemnity Amounts)

  1. Excluded Swap Termination Amounts

  1. Permitted unsecured creditors (such as the FSA, the Stock Exchange and the Rating Agencies)

  1. Payments of principal under the relevant Term Advance under the Intercompany Loan Agreement

  1. Permitted unsecured creditors (such as the FSA, the Stock Exchange and the Rating Agencies)

  1. Amounts outstanding under the Intercompany Loan Agreement

  1. TRS Provider/Interest Rate Swap Provider/Basis Swap Provider (other than Excluded Swap Termination Amounts)

  1. Capital Distribution to the Seller as a Member in the LLP

  1. TRS Provider/Interest Rate Swap Provider/Basis Swap Provider (other than Excluded Swap Termination Amounts)

  1. Indemnity amounts due to the Members



    1. Non principal amounts to the Covered Bond Swap Provider; and

    2. repayments under the Intercompany Loan Agreement




  1. Interest amounts to the Covered Bond Swap Provider and payment of scheduled interest in respect of the Covered Bonds

  1. Any remaining moneys will be applied towards payment to the Members pursuant to the LLP Deed

  1. Reserve Fund replenishment, if applicable




  1. Principal amounts to the Covered Bond Swap Provider and payment of scheduled principal in respect of the Covered Bonds




  1. Pre-Maturity Liquidity Ledger, if applicable




  1. Deposit into the LLP GIC Account to make the above payments on the following LLP Payment Date




  1. Payment into LLP GIC Account, if a Servicer Event of Default has occurred




  1. Excluded Swap Termination Amounts




  1. Excluded Swap Termination Amounts




  1. Repayment of advances under the Intercompany Loan Agreement (to the extent outstanding)




  1. Indemnity amounts due to:

    1. the Members; and

    2. the Asset Monitor




  1. Indemnity amounts due to the Members and the Asset Monitor




  1. Profits to Members




  1. Any moneys left over to be applied in accordance with the LLP Deed




  1. Deferred consideration












Changes to Pre-Acceleration Priorities of Payment following service of an Asset Coverage Test Breach Notice (which has not been revoked)

After service of an Asset Coverage Test Breach Notice (which has not been revoked) but prior to service of a Notice to Pay or an LLP Acceleration Notice, the LLP will apply Available Revenue Receipts and Available Principal Receipts as described in column A above subject to the following changed while any Covered Bonds remain outstanding:

    1. in respect of Available Revenue Receipts, no amounts will be paid:

      1. [to the Issuer under the Intercompany Loan Agreement set out in item 6(b) of column A above),

      2. into the Reserve Fund (as set out in item 7 of column A above),

      3. towards any indemnity amount due to the Members (as set out in item 11(a) of column A above) or any profit for the Members' interests in the LLP (as set out in item 12 of column A above); or

      4. towards any Deferred Consideration (as set out in item 13 of column A above)]; and

    2. [in respect of Available Principal Receipts, no payments will be made other than into the GIC Account[s] after exchange (if required) in accordance with the relevant Covered Bond Swap].

[Cross refer to section of the Prospectus containing further information on this.]

Bank Accounts and Cash Management

Collections of revenue and principal in respect of the Mortgage Loans in the Mortgage Portfolio are received by the Seller in its collection account. The majority of the interest payments and principal repayments are collected on [specify dates of the month]. The Seller (and, where relevant, the Servicer) is obliged to transfer collections in respect of the Mortgage Loans in the Mortgage Portfolio to the LLP GIC Account on a [daily/monthly] basis. On or prior to each LLP Payment Date, amounts will be transferred by the [Servicer/Cash Manager from the LLP GIC Account to the LLP Transaction Account to be applied in accordance with the relevant Priorities of Payments.

Summary of key Swap Terms

The [TRS/Interest Rate Swap/Basis Swap] has the following key commercial terms:

  • Swap Notional Amount: [•]

  • Issuer payment: [•]

  • Interest Rate/Basis Swap Provider payment: [•]

  • Frequency of payment: [•]

[If applicable] [The Covered Bond Swap [has/will have] the following key commercial terms:

  • Swap Notional Amount: [•]

  • Exchange rate: [•]

  • Issuer payment: [•]

  • Currency Swap Provider payment: [•]

  • Frequency of payment: [•]]

[Please set out any other key features of the credit structure particular for this transaction which are not described in this section]


TRIGGERS TABLES

Rating Triggers Table – Transaction Parties

Transaction Party:

Required Ratings/Triggers:

Possible effects of Trigger being breached include the following:

Issuer


[Describe rating trigger]

  • [Establish and maintain Reserve Fund]

[Describe rating trigger]

  • [Impact on component "X" of Asset Coverage Test]

[Describe rating trigger]

  • [Breach of the Pre-Maturity Test]

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



Seller/Originator

[Describe rating triggers for Perfection Events].

  • Perfection Event takes place and legal title to the Mortgage Loans to be transferred to the LLP

The consequences of the relevant required rating being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



Basis/Interest Rate/TRS Swap Provider

[Describe rating trigger]

  • [providing collateral for its obligations]; or

  • [arranging for its obligations under the relevant Swap Agreement to be transferred to an entity with the required ratings]; or

  • [procuring a guarantee of its obligations], or

  • [Summarise others]

[Describe rating trigger]

  • Posting of collateral in accordance with the relevant credit support document

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



Covered Bond Swap Provider

[Describe rating trigger]

  • [providing collateral for its obligations]; or

  • [arranging for its obligations under the relevant Swap Agreement to be transferred to an entity with the required ratings]; or

  • [procuring a guarantee of its obligations], or

  • [Summarise others]

[Describe rating trigger]

  • Posting of collateral in accordance with the relevant credit support document

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



LLP Account Bank

[Describe rating trigger]

  • [Replacement of LLP Account Bank]

  • [Guarantee of LLP Account Bank's obligations]

  • [Summarise others]

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



GIC Provider

[Describe rating trigger]

  • [Replacement of GIC Provider]

  • [Guarantee of GIC Provider's obligations]

  • [Summarise others]

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



Servicer

[Describe rating trigger]

  • [Substitute Servicer appointed]

  • [Servicer appointment terminated and Standby Servicer steps in][If this item is applicable, please specify when standby Servicer would take over]

  • [Summarise others]

The consequences of the relevant required rating being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].


Cash Manager

[Describe rating trigger]

  • [Establishment of back-up cash management arrangements]

  • [Pre-funding payment obligations]

  • [The Asset Monitor will be required to conduct more frequent tests of the Cash Manager's calculations]

  • [Summarise others]

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



[Stand-by Swap Provider]

[Describe rating trigger/termination event (e.g. termination of the relevant swap on payment default of the relevant Swap Provider]

  • [The Stand by Swap will become effective and payments due under the Stand by Swap will be the same in all material respects to those under the relevant Swap Agreement]

  • [Summarise others]

The consequences of the relevant required ratings being breached are set out in more detail in [cross refer to section of the Prospectus containing further information on this].

[Specify time periods within which remedial action is required to be taken].



Non-Rating Triggers Table

Nature of Trigger:

Description of Trigger:

Consequence of Trigger:

Interest Rate Shortfall Test

[To be described] [Cross refer to section of Prospectus containing more information on this]

  • Further Mortgage Loans and their Related Security may be required to be sold to the LLP

Yield Shortfall Test

[To be described] [Cross refer to section of Prospectus containing more information on this]

  • Servicer to take necessary steps to increase the Standard Variable Rate and/or other discretionary rates or margins




Asset Coverage Test

[To be described] [Cross refer to section of Prospectus containing more information on this]

  • [Breach of the Asset Coverage Test which is not remedied on the next Calculation Date requires the Bond Trustee to serve an Asset Coverage Test Breach Notice on the LLP. If this breach is remedied by the [third] Calculation Date after the service of such notice, it will lead to an Issuer Event of Default] [or]

  • [Breach of the Asset Coverage Test for two consecutive months leads to Issuer Event of Default]

Issuer Event of Default

[To be described] [Cross refer to section of Prospectus containing more information on this]

  • Covered Bonds become accelerated as against the Issuer (but not against the LLP)

  • Notice to Pay served on the LLP

  • Following service of Notice to Pay, LLP starts making payments of Guaranteed Amounts under the Covered Bonds

Amortisation Test

[To be described] [Cross refer to section of Prospectus containing more information on this]

  • Breach of the Amortisation Test for two consecutive months leads to an LLP Event of Default

Pre-Maturity Liquidity Test

[To be described] [Cross refer to section of Prospectus containing more information on this]

  • Notice to Pay served on the LLP following a breach of the Pre Maturity Test, if certain actions are not taken within a specified period

[Others to be specified]

[To be described]

[To be described]

FEES

The table below sets out the principal on-going transaction fees.



Type of Fee

Amount of Fee

Priority in Cashflow

Frequency

Servicing Fees

[£][•] (inclusive of VAT)

Ahead of all outstanding Covered Bonds*

[•]

Cash Management Fees

[£][•] (inclusive of VAT)

Ahead of all outstanding Covered Bonds*

[•]

Trustee Fees

[£][•] (inclusive of VAT)

Ahead of all outstanding Covered Bonds**




Other fees and expenses of the LLP

Estimated at [£][•] each year (exclusive of VAT)

Ahead of all outstanding Covered Bonds*

[•]

* Post-enforcement these fees will rank pari passu with the Covered Bonds.

** Although post-enforcement these fees will rank pari passu with the Covered Bonds, this does not include any fees payable to a liquidator, administrator, administrative receiver, receiver or manager or to the trustee in connection with the expenses of the winding up, administration, administrative receivership or receivership.

UK-2543998-v5

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OFFICE



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