120,000,000 Senior Inflation Linked Guaranteed Secured Bonds due ,000,000 Junior Inflation Linked Guaranteed Secured Bonds due 2079

Transcription

1 HHT PLC (incorporated in England and Wales with limited liability under the Companies Act 2006, registered number ) 120,000,000 Senior Inflation Linked Guaranteed Secured Bonds due ,000,000 Junior Inflation Linked Guaranteed Secured Bonds due 2079 unconditionally and irrevocably guaranteed by HEYLO HOUSING LIMITED (incorporated in England and Wales with limited liability under the Companies Act 2006, registered number ) Issue price: 100 per cent. The 120,000,000 Senior Inflation Linked Guaranteed Secured Bonds due 2049 (the Senior Bonds) and the 60,000,000 Junior Inflation Linked Guaranteed Secured Bonds due 2079 (the Junior Bonds and, together with the Senior Bonds, the Bonds) were issued by HHT plc (the Issuer) on 5th September, The payments of all amounts due in respect of the Bonds are unconditionally and irrevocably guaranteed by Heylo Housing Limited (the Guarantor). 95,400,000 in nominal amount of the Senior Bonds (the Retained Senior Bonds) and 47,700,000 in nominal amount of the Junior Bonds (the Retained Junior Bonds and, together with the Retained Senior Bonds, the Retained Bonds) were immediately purchased by or on behalf of the Issuer on the Issue Date (as defined below). An investment in the Bonds involves certain risks. For a discussion of these risks see "Risk Factors". The Senior Bonds bear interest on their Notional Amount (as defined below) at a rate of 1.57 per cent. per annum as adjusted by reference to the LPI Index (as defined below and subject to Condition 10 (Amendments to the Index)) from and including 5th September, The Junior Bonds bear interest on their Notional Amount at a rate of 2.70 per cent. per annum as adjusted by reference to the LPI Index (subject to Condition 10 (Amendments to the Index)) from and including 5th September, 2014, provided that, until the Final Senior Bond Redemption Date (as defined below), a proportion of this interest shall be capitalised as described in Condition 9 (Interest). Interest is payable semi-annually in arrear on 31st March and 30th September in each year from, and including, 31st March, 2015 to, and including, (i) in the case of the Senior Bonds, 30th September, 2049 and (ii) in the case of the Junior Bonds, 30th September, 2079 (each an Interest Payment Date). The Issuer may, at its option, redeem all (but not some only) of the Bonds at any time prior to the relevant Maturity Date (as defined below) at the higher of their Notional Amount and an amount calculated by reference to the yield on the relevant outstanding United Kingdom government index-linked benchmark gilt having the nearest duration to that of the Senior Bonds or the Junior Bonds, as applicable, together with accrued interest. The Issuer may also, at its option, redeem all (but not some only) of the Bonds at any time at their Notional Amount as adjusted by reference to the LPI Index, plus accrued interest, in the event of certain tax changes as described in Condition 12.3 (Redemption for Taxation Reasons) or certain index-related events as described in Condition 12.4 (Redemption for Index Reasons). The Issuer shall also, upon the direction of the requisite majority of Junior Bondholders given not later than 179 days following the occurrence of an Event of Default and subject to having received funds from the Junior Bondholders, redeem all (but not some only) of the Senior Bonds at their Notional Amount as adjusted by reference to the LPI Index plus accrued interest, subject to the provisions of Condition 12.6 (Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default). Unless previously redeemed, or purchased and cancelled, the Bonds will be redeemed in instalments on 31st March and 30th September in each year (a) in the case of the Senior Bonds, from, and including, 31st March, 2015 to, and including, 30th September, 2049 (the Senior Bonds Maturity Date) and (b) in the case of the Junior Bonds, from, and including, 31st March, 2050 to, and including, 30th September, 2079 (the Junior Bonds Maturity Date and, together with the Senior Bonds Maturity Date, each a Maturity Date) (each an Instalment Redemption Date) in the amounts specified in Condition 12.2 (Notional Amount) as adjusted by reference to the LPI Index. Application has been made to the Irish Stock Exchange for the approval of this document as Listing Particulars. Application has also been made to the Irish Stock Exchange for the Bonds to be admitted to the Official List and admitted to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. The Global Exchange Market is not a regulated market for the purposes of Directive 2004/39/EC. References in these Listing Particulars to the Bonds being listed (and all related references) shall mean that the Bonds have been admitted to the Official List and have been admitted to trading on the Global Exchange Market. The Bonds are issued in denominations of 100,000. The Senior Bonds and the Junior Bonds were each initially represented by a temporary global bond (the Senior Temporary Global Bond and the Junior Temporary Global Bond, respectively, and, together, the Temporary Global Bonds), without principal receipts or interest coupons, which were deposited on 5th September, 2014 (the Closing Date) with a common safekeeper for Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, société anonyme (Clearstream, Luxembourg). Interests in each Temporary Global Bond were exchangeable for interests in a permanent global bond (the Senior Permanent Global Bond and the Junior Permanent Global Bond, respectively, and, together, the Permanent Global Bonds and, together with the Temporary Global Bonds, the Global Bonds), without principal receipts or interest coupons, since 15th October, 2014 (the Exchange Date), upon certification as to non-u.s. beneficial ownership. Interests in the Permanent Global Bonds will be exchangeable for definitive 1

2 Bonds only in certain limited circumstances - see "Form of the Bonds, Summary of Provisions relating to the Bonds while in Global Form and Settlement". The date of these Listing Particulars is 11th December,

3 The Issuer and the Guarantor each accept responsibility for the information contained in these Listing Particulars. To the best of the knowledge of the Issuer and the Guarantor (each having taken all reasonable care to ensure that such is the case) the information contained in these Listing Particulars is in accordance with the facts and does not omit anything likely to affect the import of such information. Montagu Evans LLP (the Valuer) accepts responsibility for the information contained in the section entitled "Valuation Report" and, to the best of its knowledge (having taken all reasonable care to ensure that such is the case), such information is in accordance with the facts and does not omit anything likely to affect the import of such information. The figures referred to in the Valuation Report of the Valuer in the sections entitled "Market Commentary" and "Valuation Methodology" were obtained from The Royal Institution of Chartered Surveyors (RICS), The Bank of England, Moneyfacts, HM Revenue & Customs (HMRC), Nationwide and The Department for Communities and Local Government, respectively. The Issuer and the Guarantor each confirm that such figures have been accurately reproduced and that, as far as the Issuer and the Guarantor are aware and are able to ascertain from information published by RICS, The Bank of England, Moneyfacts, HMRC, Nationwide and The Department for Communities and Local Government, no facts have been omitted which would render the reproduced figures inaccurate or misleading. The Issuer and the Guarantor, having made all reasonable enquiries, confirm that these Listing Particulars contains all material information with respect to the Issuer, the Guarantor and the Bonds (including all information which, according to the particular nature of the Issuer, the Guarantor and the Bonds, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the Issuer and the Guarantor and of the rights attaching to the Bonds), that the information contained in these Listing Particulars is true and accurate in all material respects and is not misleading, that the opinions and intentions expressed in these Listing Particulars are honestly held and that there are no other facts the omission of which would make these Listing Particulars or any of such information or the expression of any such opinions or intentions misleading. Prudential Trustee Company Limited (the Bond Trustee) has not independently verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted by the Bond Trustee as to the accuracy or completeness of the information contained or incorporated in these Listing Particulars or any other information provided by the Issuer or the Guarantor in connection with the offering of the Bonds. The Bond Trustee does not accept any liability in relation to the information contained in these Listing Particulars or any other information provided by the Issuer or the Guarantor in connection with the offering of the Bonds or their distribution. No person is or has been authorised by the Issuer, the Guarantor or the Bond Trustee to give any information or to make any representation not contained in or not consistent with these Listing Particulars or any other information supplied in connection with the offering of the Bonds and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer, the Guarantor or the Bond Trustee. Neither these Listing Particulars nor any other information supplied in connection with the offering of the Bonds (a) is intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation by the Issuer, the Guarantor or the Bond Trustee that any recipient of these Listing Particulars or any other information supplied in connection with the offering of the Bonds should purchase any Bonds. Each investor contemplating purchasing any Bonds should make its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and/or the Guarantor. Neither these Listing Particulars nor any other 3

4 information supplied in connection with the offering of the Bonds constitutes an offer or invitation by or on behalf of the Issuer or the Guarantor or the Bond Trustee to any person to subscribe for or to purchase any Bonds. Neither the delivery of these Listing Particulars nor the offering, sale or delivery of the Bonds shall in any circumstances imply that the information contained herein concerning the Issuer and/or the Guarantor is correct at any time subsequent to the date hereof or that any other information supplied in connection with the Offering of the Bonds is correct as of any time subsequent to the date indicated in the document containing the same. The Bond Trustee expressly does not undertake to review the financial condition or affairs of the Issuer or the Guarantor during the life of the Bonds or to advise any investor in the Bonds of any information coming to their attention. The Bonds have not been and will not be registered under the United States Securities Act of 1933, as amended, (the Securities Act) and are subject to U.S. tax law requirements. Subject to certain exceptions, the Bonds may not be offered, sold or delivered within the United States or to U.S. persons. These Listing Particulars does not constitute an offer to sell or the solicitation of an offer to buy the Bonds in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such jurisdiction. The distribution of these Listing Particulars and the offer or sale of Bonds may be restricted by law in certain jurisdictions. The Issuer, the Guarantor and the Bond Trustee do not represent that these Listing Particulars may be lawfully distributed, or that the Bonds may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the Issuer, the Guarantor or the Bond Trustee which is intended to permit a public offering of the Bonds or the distribution of these Listing Particulars in any jurisdiction where action for that purpose is required. Accordingly, no Bonds may be offered or sold, directly or indirectly, and neither these Listing Particulars nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession these Listing Particulars or any Bonds may come must inform themselves about, and observe, any such restrictions on the distribution of these Listing Particulars and the offering and sale of Bonds. In particular, there are restrictions on the distribution of these Listing Particulars and the offer or sale of Bonds in the United States and the European Economic Area (including the United Kingdom). Prospective purchasers of Bonds should ensure that they understand the nature of the Bonds and the extent of their exposure to risk, that they have sufficient knowledge, experience and access to professional advisers to make their own legal, tax, accounting and financial evaluation of the merits and the risks of investment in the Bonds and that they consider the suitability of the Bonds as an investment in light of their own circumstances and financial condition. All references in this document to Sterling and refer to the currency of the United Kingdom. 4

5 CONTENTS Overview... 6 Risk Factors Conditions of the Bonds Form of the Bonds, Summary of Provisions relating to the Bonds while in Global Form and Settlement Use of Proceeds Description of the Issuer Description of Heylo Housing Limited Valuation Report Taxation Purchase and Sale General Information Page 5

6 OVERVIEW The following overview does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder of these Listing Particulars. This overview must be read as an introduction to these Listing Particulars and any decision to invest in the Bonds should be based on a consideration of these Listing Particulars as a whole. Words and expressions defined in "Form of the Bonds, Summary of Provisions relating to the Bonds while in Global Form and Settlement" and "Conditions of the Bonds" shall have the same meanings in this overview. Issuer: Guarantor and Chargor: Description of Bonds: HHT plc Heylo Housing Limited (Heylo) 120,000,000 Senior Inflation Linked Guaranteed Secured Bonds due 2049 (the Senior Bonds) and 60,000,000 Junior Inflation Linked Guaranteed Secured Bonds due 2079 (the Junior Bonds and, together with the Senior Bonds, the Bonds), issued by the Issuer on 5th September, 2014 (the Issue Date). The Senior Bonds and the Junior Bonds are each referred to as a Class. 95,400,000 in nominal amount of the Senior Bonds (the Retained Senior Bonds) and 47,700,000 in nominal amount of the Junior Bonds (the Retained Junior Bonds and, together with the Retained Senior Bonds, the Retained Bonds) were immediately purchased by or on behalf of the Issuer on the Issue Date. Status of the Bonds: Description and Status of the Guarantee: Priority of Payments: The Bonds, Receipts and Coupons constitute direct, unconditional, secured obligations of the Issuer. The Senior Bonds rank pari passu among themselves and in priority to the Junior Bonds. The Junior Bonds rank pari passu among themselves. The Bonds are unconditionally and irrevocably guaranteed by the Guarantor. The obligations of the Guarantor under the Guarantee are direct, unconditional and unsecured obligations of the Guarantor and rank pari passu and (save for certain obligations required to be preferred by law) equally with all other unsecured obligations (other than subordinated obligations, if any) of the Guarantor from time to time outstanding. Payments to be made by the Issuer and the Guarantor (both prior to and post the enforcement of the Security) shall be made in accordance with Condition 6 (Order of Payments). Payments of interest and principal in respect of the Senior Bonds are payable in priority to payments of interest and 6

7 principal in respect of the Junior Bonds. Issue Price: 100 per cent. Denominations: The Bonds are issued in denominations of 100,000. Use of Proceeds: The Issuer has been established for the purpose of raising finance for the Guarantor and the Heylo Group. The net proceeds of the issue of the Bonds have been (or, in the case of the Retained Bonds, the net proceeds of the sale of the Bonds to a third party (after deduction of expenses payable by the Issuer) shall be) advanced by the Issuer to the Guarantor to be applied for the purpose of its general funding requirements for the acquisition, maintenance and development of its property portfolio including, without limitation, the repayment of any grants in respect of its property portfolio. Form of Bonds: Interest: The Bonds are issued in bearer form as described in "Form of the Bonds, Summary of Provisions relating to the Bonds while in Global Form and Settlement". The Senior Bonds bear interest on their Notional Amount at a rate of 1.57 per cent. per annum as adjusted by reference to the LPI Index (subject to Condition 10 (Amendments to the Index)) from and including 5th September, The Junior Bonds bear interest on their Notional Amount at a rate of 2.70 per cent. per annum as adjusted by reference to the LPI Index (subject to Condition 10 (Amendments to the Index)) from and including 5th September, 2014, provided that, until the Final Senior Bond Redemption Date (and during a Junior Payment Block Period), a proportion (or all) of this interest shall be capitalised as described in Condition 9 (Interest). Interest will be payable semi-annually in arrear on 31st March and 30th September in each year from, and including, 31st March, 2015 to, and including, (i) in the case of the Senior Bonds, 30th September, 2049 and (ii) in the case of the Junior Bonds, 30th September, 2079, in each case subject to adjustment in accordance with Condition 11.5 (Payment only on a Presentation Date). Instalment Redemption: Unless previously redeemed or purchased and cancelled, the Issuer will redeem the Bonds in instalments in the amounts specified in Condition 12.2 (Notional Amount) as adjusted by reference to the LPI Index (subject to Condition 10 (Amendments to the Index)): (a) in the case of the Senior Bonds, on 31st March and 30th September in each year from, and including, 31st March, 2015 to, and including, 30th 7

8 September, 2049; and (b) in the case of the Junior Bonds, on 31st March and 30th September in each year from, and including, 31st March, 2050 to, and including, 30th September, Early Redemption at the Option of the Issuer: Early Redemption for Tax Reasons: Early Redemption for Index Reasons: Purchase: The Issuer may, at its option, redeem all (but not some only) of the Bonds on any following Interest Payment Date upon notice given in accordance with Condition 12.5 (Early Redemption at the Option of the Issuer) at the higher of their Notional Amount as adjusted by reference to the LPI Index and an amount calculated by reference to the yield on the relevant outstanding UK Government index-linked benchmark gilt having the nearest duration to that of the Bonds. The Issuer may also, at its option, redeem all (but not some only) of the Bonds on any Interest Payment Date at an amount equal to the Notional Amount as adjusted by reference to the LPI Index, if the Issuer satisfies the Bond Trustee that (a) the Issuer would be required to make a withholding or deduction on account of tax in respect of payments made by it in respect of the Bonds and would be required to pay additional amounts pursuant to Condition 13 (Taxation) or (b) the Guarantor would be unable for reasons outside its control to procure payment by the Issuer and in making payment itself would be required to pay such additional amounts. The Issuer may also, at its option, redeem all (but not some only) of the Bonds at an amount equal to the Notional Amount as adjusted by reference to the LPI Index, if (a) publication of the Index Figure is delayed for three consecutive months and the Bond Trustee has been notified that publication of the Index has ceased or (b) a right of redemption is offered to the holders of either Reference Gilt. The Retained Bonds were immediately purchased by the Issuer on the Issue Date. Each Obligor and any other member of the Heylo Group may also purchase Bonds in any manner and at any price. Any Bonds so purchased by an Obligor or any other member of the Heylo Group may be (but is not obliged to be) surrendered for cancellation. Retained Bonds: Pursuant to the terms of the Retained Bond Custody Agreement, the Retained Bond Custodian will hold the Retained Bonds on the Issuer's behalf (see "Retained Bond Custody Agreement" below), and the Issuer has instructed the Retained Bond Custodian to waive its rights to receive 8

9 payments (of interest, principal or otherwise (but excluding, for the avoidance of doubt, interest which is to be capitalised in the case of the Retained Junior Bonds)) on the Retained Bonds for so long as the Retained Bonds are held on the Issuer's behalf. Such waiver may not be revoked without the consent of the Bond Trustee. Pursuant to the Bond Trust Deed, the Issuer has covenanted with the Bond Trustee that it will, immediately prior to a sale of any Retained Bonds by the Issuer, deliver to the Bond Trustee a certificate in writing signed by two Authorised Signatories of the Issuer addressed to the Bond Trustee confirming that, immediately following the sale of such Retained Bonds, the Obligors will be in compliance with the Asset Cover Test. Security: Subject as follows, the Issuer's obligations in respect of the Bonds are secured, or will be secured, pursuant to Security Agreements by: (a) (b) (c) first fixed legal mortgages over all of the Chargor's right, title and interest from time to time in the Mortgaged Properties; first fixed charges over, inter alia, all plant and machinery which form part of the Mortgaged Property and the benefit of Insurances and all present and future licences, consents and authorisations in respect of thereof; and an assignment by way of security of the Chargor's rights, title and interest in and to certain agreements and covenants held by the Chargor. The security created pursuant to the Security Agreements is apportioned to the Bondholders and the other Secured Parties collectively on a Numerical Apportionment Basis, in accordance with and subject to the terms of the Security Trust Deed, such that a specific number of Units of the NAB Mortgaged Properties are allocated, collectively, to the Bondholders and the other Secured Parties. The basis of apportionment may only be changed to Specific Apportionment Basis in the limited circumstances, and in accordance with the procedures, specified in the Security Trust Deed. The Issuer's obligations in respect of the Bonds are also secured pursuant to the Bond Trust Deed by: (a) a charge by way of first fixed charge over all moneys and securities from time to time standing to the credit of the Charged Accounts and the Custody Accounts and all debts represented thereby; 9

10 (b) (c) an assignment by way of security of each Obligor's rights, title and interest arising under the Agency Agreement, the Account Agreement and the Custody Agreement; and a charge by way of first fixed charge over all sums held from time to time by the Paying Agents for the payment of principal, premium or interest in respect of the Bonds. Negative Pledge: Asset Cover Covenant: The Issuer has covenanted, pursuant and subject to Condition 7.2 (Negative Pledge and Disposals), for so long as any of the Bonds remain outstanding, not to create or permit to subsist, over any of the Fixed Security Assets, any mortgage or charge or any other security interest ranking in priority to, or pari passu with, the security created by or pursuant to the Bond Trust Deed or the Security Trust Deed (as applicable), excluding, for this purpose any security interest created by operation of law. Pursuant to Condition 7.3 (Asset Cover Covenant) each Obligor has covenanted, for so long as any of the Bonds remain outstanding, that it shall at all times ensure that the sum of: (a) (b) the Minimum Value of the Mortgaged Properties multiplied by the Bondholders' Security Percentage; and the Charged Cash, will not be less than the Accreted Aggregate Notional Amount (excluding, for this purpose, the Retained Bonds held by or on behalf of the Issuer). In calculating the Minimum Value of the Mortgaged Properties, a discount is applied in accordance with the definition thereof such that any value given in a valuation of Mortgaged Properties is divided by 120 and multiplied by 100. Valuations: Each Obligor has covenanted, pursuant to Condition 7.4 (Valuations), for so long as any of the Bonds remain outstanding, that: (a) it shall deliver (or procure the delivery of) a Full Valuation to the Bond Trustee at least once in every period of five calendar years (beginning in 2019) and, unless the Bond Trustee agrees otherwise, such Full Valuation must be delivered in the period between 30th September the date falling 60 days thereafter in each year that such Full Valuation is required to be delivered; and 10

11 (b) it shall deliver (or procure the delivery) to the Bond Trustee a Desk Top Valuation in the period between 30th September and the date falling 60 days thereafter in each year (beginning in 2015) other than a year in respect of which a Full Valuation is required to be delivered pursuant to paragraph (a) above. Addition and Release of Mortgaged Properties, Charged Cash and Permitted Investments: The Chargor may charge (and/or allocate) or release (and/or reallocate) Mortgaged Properties from the Security (and the Bond Trustee in its capacity as Representative shall consent to such charging (and/or allocation) or release (and/or reallocation) and execute an amended Apportionment Certificate to reflect the same) subject to, and in accordance with, the requirements set out in Condition 8 (Addition and Release of Mortgaged Properties, Apportionment, Charged Cash and Permitted Investments). Each Obligor may also, at any time, deposit money into its respective Charged Account to ensure compliance with the Asset Cover Test. The Obligors may only withdraw Charged Cash from their respective Charged Account if they are (at the relevant time), and will be (immediately following the withdrawal), in compliance with the Asset Cover Test. The Obligors may invest all or any part of their respective Charged Cash in Permitted Investments in accordance with the Custody Agreement. For the purpose of determining compliance with Condition 7.3 (Asset Cover Covenant), the value attributed to such Permitted Investments shall be the purchase price thereof. Any income received by an Obligor in respect of Permitted Investments shall be credited to such Obligor's Charged Account and may only be withdrawn in accordance with Condition 8.5 (Charged Cash). Other Covenants: Pursuant to Condition 7 (Covenants), each Obligor has covenanted, for so long as any of the Bonds remain outstanding, that: (a) (b) it shall ensure that the Gross DSCR (being the ratio of Total Payments Received less Senior Costs to Total Bond Payments) will not be less than 105 per cent. on any Debt Service Cover Testing Date; if the average of the Net DSCR (being the ratio of Total Payments Received less Total Property Acquisition Costs Funded From Cash less Senior Costs to Total Bond Payments) for each Debt Service Testing Date since the Issue Date is less than 110 per cent. on any Debt Service Cover Testing Date, the Guarantor shall cease to acquire 11

12 any further Properties unless and until the average of the Net DSCR for each Debt Service Testing Date since the Issue Date is equal to or greater than 110 per cent.; and (c) the terms of any senior secured indebtedness entered into by it shall have an asset cover test and a gross debt service ratio which is no less onerous than the corresponding provisions in the Bonds. Pursuant to Condition 7 (Covenants), the Guarantor has also covenanted, for so long as any of the Bonds remain outstanding, that: (a) (b) (c) it shall not undertake any Development except on terms previously approved by an Extraordinary Resolution; it shall not, except with the prior consent of the Bond Trustee, make payments to the Manager in respect of Incentive Operating Charges (as set out in the Management Agreement) under the Management Agreement or make payments to the Supervisor in respect of Deferred Supervisory Fee (as set out in the Supervisory Agreement) under the Supervisory Agreement unless payments of all amounts due in respect of the Bonds and pursuant to the Bond Trust Deed will be paid in respect of the immediately following Interest Payment Date and Instalment Redemption Date; and it shall not, except with the prior consent of the Bond Trustee, consent to any transfer, termination or novation of the Management Agreement or the Supervisory Agreement or any waiver, amendment or modification or any terms thereof relating to the payment of fees to the Manager or the Supervisor. Verification: Information Covenant: Pursuant to the Verification Agency Agreement, the Verification Agent shall (subject to receipt of such information as it requires from the Obligors and the Security Trustee) verify satisfaction of the Asset Cover Test and the covenants set out in Condition 7.5 (Gross Debt Service Cover Covenant) and Condition 7.6 (Surplus Cash Reinvestment Lock-Up) and shall confirm the same by countersigning each Compliance Certificate. The Issuer has also covenanted to deliver to the Bond Trustee (a) within 180 days after the end of each Financial Year, a copy of each Obligor's audited financial statements in respect of such Financial Year and (b) within 45 days after each Debt Service Cover Testing Date, a copy of the Compliance Certificate in respect of such Debt Service 12

13 Cover Testing Date, and, upon request by a Bondholder to the Issuer, to make copies of such documents available to any of the Bondholders at the Issuer's registered office. In addition to the rights of the Bondholders to convene a meeting pursuant to Condition 19 (Meetings of Bondholders, Modification and Waiver), at the request of the requisite majority of the Bondholders, the Issuer shall hold a meeting of the Bondholders to discuss the financial position of the Issuer, provided that the Issuer shall not be required to hold any such meeting more than once in any calendar year. Events of Default: Following an Event of Default, the Bond Trustee may, and if so requested by the holders of at least 50 per cent. in Notional Amount of the Controlling Class shall (subject to it being secured and/or indemnified and/or pre-funded to its satisfaction and as described in "Controlling Class" below and, upon certain events, the Bond Trustee having certified to the Issuer that such event is, in its opinion, materially prejudicial to the interests of the Bondholders), give notice to the Issuer and the Bonds shall become immediately due and repayable. The Events of Default include, inter alia, non-payment of any principal and interest due in respect of the Bonds, failure of the Issuer or the Guarantor to perform or observe any of its other obligations under the Conditions, the Bond Trust Deed and the Security Trust Deed, insolvency, unlawfulness, acceleration, or non-payment, in respect of other indebtedness in an aggregate amount equal to or in excess of 10,000,000 (or its equivalent) and the Guarantee ceasing to be in full force and effect. Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default: Meetings of Bondholders: The Issuer shall, upon the direction of the requisite majority of Junior Bondholders given not later than 179 days following the occurrence of an Event of Default and subject to having received funds from the Junior Bondholders, redeem all (but not some only) of the Senior Bonds at their Early Redemption Amount plus accrued interest. Immediately following such redemption the Issuer shall issue further bonds in the same amount and with the same terms as the Senior Bonds to the Junior Bondholders in accordance with Condition 12.6 (Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default). The Conditions of the Bonds contain provisions for calling meetings of Bondholders of each Class to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Bondholders of such Class including Bondholders of such Class who did not attend and vote at the relevant meeting and Bondholders of such Class 13

14 who voted in a manner contrary to the majority. The effectiveness of resolutions of either Class of Bondholders is subject to provisions regarding the impact of such resolutions on the other Class of Bondholders, as described in Condition 19.1 (Meetings of Bondholders). Controlling Class: For so long as any Senior Bonds are outstanding, the Senior Bonds shall be the Controlling Class and, otherwise, the Junior Bonds shall be the Controlling Class. The Conditions of the Bonds restrict the ability to direct the Bond Trustee (a) to declare the Bonds immediately due and repayable following an Event of Default and (b) to enforce the Security, to the requisite majority of the Controlling Class. In addition, for so long as any Senior Bonds are outstanding, the Bond Trustee may not exercise its discretion to declare the Bonds immediately due and repayable following an Event of Default if, at any time, a default in the payment of interest or principal is subsisting in respect of the Junior Bonds but, at such time, there is no such default subsisting in respect of the Senior Bonds. Modification, Waiver and Substitution: Tax: Risk Factors: The Bond Trustee may, without the consent of Bondholders, agree (a) to any modification of (subject to certain exceptions), or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of Bonds or (b) to the substitution of another company or other entity as principal debtor under any Bonds in place of the Issuer, in each case, in the circumstances and subject to the conditions described in Conditions 19.2 (Modification, Waiver and Authorisation) and 18 (Substitution) of the Conditions of the Bonds. All payments of principal and interest in respect of the Bonds will be made without withholding or deduction for taxes imposed by the United Kingdom or any political subdivision or any authority thereof or therein having power to tax unless such withholding or deduction is required by law. In the event that any such withholding or deduction is required, the Issuer shall, save in certain limited circumstances provided in Condition 13 (Taxation), be required to pay such additional amounts as will result in receipt by the Bondholders of such amounts as would have been received by them if no such withholding or deduction had been required. There are certain factors that may affect the Issuer's and the Guarantor's ability to fulfil its obligations under the Bonds and the Guarantee, respectively. These are set out under "Risk Factors" below and include factors which may affect 14

15 the Issuer's ability to fulfil its obligations under the Bonds, factors which may affect the Guarantor's ability to fulfil its obligations under the Guarantee, factors which are material for the purpose of assessing the market risks associated with the Bonds, risks relating to the Guarantee, risks relating to the security for the Bonds and risks related to the market generally. See "Risk Factors" below. Listing and admission to trading: No Rating: Bond Trustee, Security Trustee and Verification Agent: Principal Paying Agent, Account Bank, Custodian and Retained Bond Custodian: Selling Restrictions: Governing Law: Application has been made to the Irish Stock Exchange for the Bonds to be admitted to the Official List and admitted to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. None of the Issuer, the Guarantor or the Bonds are rated by any rating agency. Prudential Trustee Company Limited The Bank of New York Mellon, London Branch The Bonds have not been and will not be registered under the Securities Act and, subject to certain exceptions, may not be offered or sold within the United States. The Bonds may be sold in other jurisdictions only in compliance with applicable laws and regulations. The Bonds and any non-contractual obligations arising out of or in connection with them will be governed by, and construed in accordance with, English law. 15

16 RISK FACTORS Each of the Issuer and the Guarantor believes that the following factors may affect its ability to fulfil its obligations under the Bonds. Most of these factors are contingencies which may or may not occur and neither the Issuer nor the Guarantor is in a position to express a view on the likelihood of any such contingency occurring. In addition, factors which are material for the purpose of assessing the market risks associated with the Bonds are described below. Each of the Issuer and the Guarantor believes that the factors described below represent the principal risks inherent in investing in the Bonds, but the inability of the Issuer or the Guarantor to pay interest, principal or other amounts on or in connection with the Bonds may occur for other reasons which may not be considered significant risks by the Issuer and the Guarantor based on information currently available to them or which they may not currently be able to anticipate. Prospective investors should also read the detailed information set out elsewhere in these Listing Particulars and reach their own views prior to making any investment decision. Factors that may affect the Issuer's ability to fulfil its obligations under the Bonds The Issuer is dependent on the Guarantor and the other members of the Heylo Group: The Issuer has been established for the purpose of raising finance for the Guarantor and any other future members of the Heylo Group. It has no business operations other than the issuance of the Bonds (and other indebtedness), and the on-lending of the proceeds thereof to the Guarantor and such other future members of the Heylo Group. The Issuer's only source of income is, therefore, monies received from the Guarantor and (to the extent that there are any future members of the Heylo Group) the other members of the Heylo Group. Consequently, the Issuer, and therefore payments by the Issuer in respect of the Bonds, will be subject to the credit risk of the Guarantor and the other members of the Heylo Group. The Issuer, and therefore payments by the Issuer in respect of the Bonds, are therefore subject to the risk of delays in the receipt, or risk of defaults, of such payments. There can be no assurance that the levels or timeliness of payments received from the Guarantor and the other members of the Heylo Group will be adequate to ensure fulfilment of the Issuer's obligations in respect of the Bonds on each Interest Payment Date, on each Instalment Redemption Date or on the Maturity Date (or any other date on which the Bonds are to be redeemed). However, the Issuer believes that, since the Issuer and the Guarantor are, and the other members of the Heylo Group will be, serviced by the same treasury team, any delay as a result of administrative risk is minimal. Factors that may affect the Guarantor's ability to fulfil its obligations under the Guarantee Rental Income and Housing Benefit: A small proportion (less than 10 per cent. as at the Issue Date) of the rent received by the Guarantor is derived from housing benefit payable by local authorities. If the Government were to reduce or cease to pay housing benefit, then this may accordingly have an adverse impact on the payment of rent, as the tenants would have to pay a higher proportion of the rent themselves. Payments of housing benefit by local authorities may be delayed as a result of, among other things, the need to establish a new claimant's entitlement thereto. The receipt of rental payments by the Guarantor, as landlord, may be delayed by the failure of the claimant to regularly pay rent which is due in addition to the housing benefit and/or, in circumstances where the housing benefit is not paid directly to the landlord, a failure to pass on the housing benefit payments to the landlord. The Welfare Reform Act 2012, which received royal assent on 8th March, 2012, sets out significant changes in the provision of welfare benefits. Universal Credit, which is currently in a wider roll-out between 2014 and 2017, will be a single means-tested benefit paid to those of working age (in and out of work) that will 16

17 include an amount in respect of housing costs which will replace housing benefit. Currently it is possible for tenants to consent to their housing benefit being paid directly to their landlord and it has been acknowledged by the Government that some households may go into rent arrears as a consequence of the introduction of Universal Credit and the related plans to introduce payment of the housing element of Universal Credit directly to claimants as the default position. Universal Credit will be paid to tenants in a single monthly payment in arrears. From mid-april 2013, certain welfare benefits are (and Universal Credit, once introduced, will be) capped at a maximum level of around 26,000 per year for couples and lone parents or 18,200 per year for single people without children. The Government's updated impact assessment on the introduction of the benefit cap indicates that around 56,000 households will have their benefits reduced by the new policy in 2013/2014 and 58,000 households will have their benefits reduced by the new policy in 2014/2015. Caps have already been introduced to the Local Housing Allowance, which applies to those living in the private rented sector and this is primarily affecting those living in central London and the South East. Currently these caps do not apply directly to tenants living within social housing, but the Guarantor anticipates that, in practice, local authorities may not pay out benefit above the level of the caps and are setting their Affordable Rent accordingly. New occupation size criteria apply to working age applicants' housing benefit claims relating to social housing as from 1st April, The new arrangements allow each of certain defined categories of people (such defined categories being, (a) a couple, (b) an adult (over 16), (c) two children of the same sex, (d) two children under the age of 10, (e) any other child and (f) a non-resident overnight carer) to be entitled to one bedroom. Where a household has one extra bedroom, their housing benefit will be reduced by 14 per cent. Where there are two or more extra rooms, the reduction will be 25 per cent. The Government's impact assessment published in mid-2012 indicated that around 660,000 claimants were expected to be affected by the new measure and some households are expected to go into arrears as a result of this reduction in housing benefit entitlement, which may have a knock-on effect on levels of rent arrears for landlords. In order to allay the fears of landlords and their lenders, the Department of Work and Pensions (the DWP) has agreed to safeguard landlords' income by putting in place protection mechanisms to allow for the payment of rent directly to landlords if tenants are vulnerable or fall into arrears of rent above a certain level. The DWP has set up a support and exceptions working group to look at which vulnerable claimants will fall within the support group and will be assessing the results of the pilot projects to identify the approach to arrears, which could be based on the length of time for which arrears have been outstanding or the amount of arrears. Changes to the structure of the benefit system (including the system of monthly in arrear payments to tenants which will require tenants to budget for their own expenditure) may affect the ability of claimants of housing benefit to pay their rent and also affect the ability of the Guarantor to meet its payment obligations under the Guarantee. Given the small proportion of rent received by the Guarantor's derived from housing benefit, the Guarantor estimates that less than 10 per cent. of its tenants will be affected by the benefit cap, the "under occupation" measures outlined above or the new proposals on Universal Credit. As a result of the reforms proposed by the Government, certain rating agencies have published reports which comment on the likely effects, and Moody's Investors Service Limited has downgraded the credit ratings of many housing providers and some councils. The reports highlight that changes to the sector and proposed changes to the benefits system are significant. These changes may increase the risks associated with an investment in the Bonds. Non-Payment Risks: A significant number of the tenants of the Guarantor's properties do not receive housing benefit and are therefore personally responsible for the rental payments on the relevant occupied properties. There is a risk of non-payment for those tenants who are not in receipt of full or partial housing 17

18 benefit. In the event that any such tenants fail to pay rent in full or fail to pay rent in full on a timely basis, this could also affect the ability of the Guarantor to meet its payment obligations on a timely basis under the Guarantee. The Guarantor currently has systems in place which would identify any non-payment by tenants in a timely manner. If tenants were to fail to pay rent in full on a timely basis, the Guarantor would take action to recover the debt up to and including eviction and so the likely outcome would be an increase in tenant turnover and hence higher voids. Furthermore, the risk of tenants failing to pass on housing benefit payments to their landlord is mitigated by the DWP's protection mechanisms which allow for payments of rent to be made directly to landlords if tenants are vulnerable or if they fall into arrears above a certain level. Shared Ownership and Outright Sales Risk: Shared ownership income is generated on subsequent sales of further "tranches" or "staircasings". There is also the risk that if a tenant of a shared ownership property borrows monies through a mortgage from a commercial lender (having obtained consent from the Guarantor) then that lender's mortgage may take priority ahead of the security arrangements in place under the Security Trust Deed. However, if that commercial lender were to enforce its security following a tenant defaulting on its mortgage, such lender could staircase (i.e. purchase a portion of the freehold property) up to 100 per cent, in order to be able to sell the whole leasehold interest in which case the Guarantor as landlord could receive such staircasing payments from the commercial lender. If the price for the full 100 per cent, receivable on sale is not sufficient to meet the principal outstanding (plus 12 months interest and other statutorily permitted costs) then the shortfall will remain as a debt due to the landlord from the defaulting leaseholder. Housing Market Downturn Risk: As set out in the Valuation Report, the valuation of the Guarantor's properties is assessed using a discounted cash flow valuation of the projected future income streams, both rent and staircasing, arising from the property leases. Falls in house prices may therefore affect both the income arising from the properties as well as the portfolio valuation over time, either of which could affect the ability of the Guarantor to meet its payment obligations on a timely basis under the Guarantee or its ability to satisfy any asset cover covenants which it is required to maintain pursuant to the terms of the Bonds. Management of Staircasing: The Guarantor's intention is for the proceeds of staircasing to be reinvested such that the net effect on the portfolio is minimised. To the extent staircasing rates increase and the Guarantor is not able to manage this rate down, the long term RPI linked contractual income stream may not be sustained and the returns derived from the cash balances held by the Guarantor from the staircasing proceeds may not be as much as the rental income forgone. Mortgage Market Disruption: The majority of shared owners in respect of the Mortgaged Properties take out some level of mortgage to finance the purchase of their initial share and as such, a reduction in mortgage lender appetite to provide this type of product could lead to a reduction in the volume of staircasing and/or resales of the Mortgaged Properties. Although the Guarantor does not rely on staircasing receipts to service its obligations (assuming rent is paid) it does form part of its active management of the portfolio for assisting shared owners in financial difficulty and any disruption in the mortgage market may impact on the ability of the Guarantor to meet payments due under the Guarantor. Operational Risk: Residential property investment is subject to varying degrees of market and operational risk. Market risks which may impact upon the rental market include the risk of changes to Government regulation, including, but not limited to, regulation relating to taxation, landlords and tenants and welfare benefits. Furthermore, the maintenance of existing properties and acquisition of additional properties may be subject to the availability of finance facilities and the costs of facilities, interest rates and inflation may also have an effect. Under the leases that apply in respect of shared ownership properties, responsibility for 18

19 maintenance of shared ownership units lies with the relevant tenant with the landlord being responsible for management and maintenance of the shared estate. Among other things, market risks may impact upon the expenses incurred by the Guarantor associated with existing residential properties, rental income produced by these properties, the value of its existing investments, its ability to sell shared ownership properties and its ability to acquire additional units. This could, in turn, impact upon the Guarantor's cash flow and its ability to satisfy any asset cover covenants which it is required to maintain pursuant to the terms of existing facility arrangements. Operational risks may result from major systems failure or breaches in systems security (although the Guarantor has prepared business continuity plans in order to mitigate against this, it is dependent upon its technologies in order to deliver business processes) and the consequences of theft, fraud, health and safety and environmental issues, natural disaster and acts of terrorism. These events could result in financial loss to the Guarantor and the Issuer. Litigation Risk: There can be no assurance that the Guarantor or the Issuer will not, in the future, be subject to a claim which may have a material impact upon its revenue or business. To date, no claims have been made against the Guarantor or the Issuer of any nature. The Guarantor and the Issuer have the benefit of insurance for, among others, employer's liability, directors' liability, public liability, and professional indemnity at a level which the management of the Guarantor considers to be prudent for the type of business in which the Guarantor is engaged. Termination of Management Arrangements: The Guarantor has entered into management contracts in respect of the management of certain properties by The Guinness Housing Association Limited and also the provision of financial and accounting services by Assettrust Housing Management Limited. It is possible that performance issues under the management arrangements mean that either the service providers or the Guarantor would be entitled to terminate the management agreements, which would require the Guarantor to source alternative providers or bring the services in-house. The Guarantor would need to recruit personnel to manage the services in-house, which would have a cost associated with it which may not be offset by the savings in payment of management services fees. This could, in turn, impact on the Guarantor's cash flow and its ability to meet its payment obligations on a timely basis under the Guarantee. Factors which are material for the purpose of assessing the market risks associated with the Bonds Liability under the Bonds: The Bonds are obligations of the Issuer and the Guarantor only and do not establish any liability or other obligation of any other person mentioned in these Listing Particulars. The Bonds constitute direct, general, secured obligations of the Issuer. Interest and principal payments linked to the LPI Index: The interest and redemption amounts payable in respect of the Bonds will be adjusted by reference to movements in the LPI Index over certain periods. The LPI Index is calculated by reference to RPI. A decrease or a lower than expected increase in RPI over the relevant period will reduce the interest or redemption amounts payable in respect of the Bonds (subject to the minimum amount payable). The historical experience of RPI should not be viewed as an indication of future performance of RPI during the term of the Bonds. Accordingly, each potential investor should consult its own financial and legal advisers about the risk entailed by an investment in any the Bonds and the suitability of the Bonds in light of its particular circumstances. Moreover, the methodology used by the Office for National Statistics (ONS) for calculating RPI may change over time which may affect the actual RPI figure. Consequently, the amount of interest payable on each Interest Payment Date and/or the amount of principal to be repaid each Instalment Redemption Date may increase, or decrease, as a result of such a change to the RPI figure. 19

20 If the Index ceases to be published or where there is a fundamental change in the rules governing the Index, adjustments to such Index may be made, or a substitute index may be agreed. If an adjustment to the Index cannot be made or any substitute for the Index found then, in specified circumstances, the Issuer may redeem the Bonds early. See Conditions 10 (Amendments to the Index) and 12.4 (Redemption for Index Reasons) for further detail. The application of Conditions 10 (Amendments to the Index) and 12.4 (Redemption for Index Reasons) may have a positive or negative impact on the amount of interest payable on each interest payment date and/or the amount to be repaid upon, or the timing of, any redemption of the Bonds. Subordination of the Junior Bonds: Payments of interest and principal in respect of the Junior Bonds are fully subordinated to payments of interest and principal in respect of the Senior Bonds. In the event that amounts available to the Issuer and the Guarantor, or amounts realised upon enforcement of the Security, are insufficient to pay interest and principal on the Bonds in full, interest and principal in respect of the Junior Bonds will be payable only after (and to the extent of funds available) such amounts have been applied in payment of interest and principal on the Senior Bonds. Controlling Class: The requisite majority of the holders of the Controlling Class will be entitled to require the Bond Trustee (a) to declare the Bonds immediately due and repayable following an Event of Default and (b) to enforce the Security. For so long as there are Senior Bonds outstanding, the exercise or non-exercise of such rights by the holders of the Senior Bonds (as the Controlling Class) could be adverse to the interests of the holders of the Junior Bonds and the holders of the Senior Bonds will have no obligation to consider the effect of any such exercise or non-exercise on the holders of the Junior Bonds. However, in the event that the holders of the Senior Bonds do not exercise their right to declare the Bonds immediately due and repayable following an Event of Default, the requisite majority of Junior Bondholders may, within a specified period following the occurrence of an Event of Default, require the Issuer to redeem all (but not some only) of the Senior Bonds at their Notional Amount as adjusted by reference to the LPI Index, plus accrued interest, and issue bonds in the same amount and with the same terms as the Senior Bonds to the Junior Bondholders in accordance with Condition 12.6 (Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default). Blocking of payments to Junior Bondholders: Following the enforcement of the Security payments of interest that would otherwise be required to be paid in respect of the Junior Bonds shall instead be capitalised for so long as any Senior Bonds are outstanding. In addition, for so long as any Senior Bonds are outstanding, the Bond Trustee may not exercise its discretion to declare the Bonds immediately due and repayable following an Event of Default if, at any time, a default in the payment of interest or principal is subsisting in respect of the Junior Bonds but, at such time, there is no such default subsisting in respect of the Senior Bonds. Consequently, in certain circumstances the holders of the Junior Bonds will not receive interest payments in respect of their Bonds when these are otherwise expected. Potential Conflicts of Interest: The Bond Trustee, the Security Trustee, the Paying Agents, the Account Bank, the Custodian, the Retained Bond Custodian and the Verification Agent (together with the Issuer and the Guarantor, the Relevant Parties) and their affiliates in the course of each of their respective businesses may provide services to other Relevant Parties and to third parties and in the course of the provision of such services it is possible that conflicts of interest may arise between such Relevant Parties and their affiliates or between such Relevant Parties and their affiliates and such third parties. Each of the Relevant Parties (other than the Issuer and the Guarantor) and their affiliates may provide such services and enter into arrangements with any person without regard to or constraint as a result of any such conflicts of interest arising as a result of it being a Relevant Party. Redemption prior to maturity: In the event that the Bonds become repayable prior to maturity either following an Event of Default (as defined in Condition 15 (Events of Default and Enforcement)), due to taxation (pursuant to Condition 12.3 (Redemption for Taxation Reasons)), for indexation reasons (pursuant to 20

21 Condition 12.4 (Redemption for Index Reasons)) or upon the direction of the Junior Bondholders following an Event of Default (pursuant to Condition 12.6 (Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default)), the Bonds (or, in the case of a redemption pursuant to Condition 12.6, the Senior Bonds) will be redeemed in full at their Notional Amount as adjusted by reference to the LPI Index, plus accrued interest. In such circumstances it may not be possible for an investor to reinvest the redemption proceeds at an effective rate of interest as high as the interest rate on the Bonds. Furthermore, the optional redemption feature of the Bonds is likely to limit their market value as the market value generally will not rise substantially above the price at which they can be redeemed. Modification, waivers and substitution: The Conditions of the Bonds and the Bond Trust Deed contain provisions for calling meetings of Bondholders of each Class to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Bondholders of such Class, including Bondholders of such Class who did not attend and vote at the relevant meeting and Bondholders of such Class who voted in a manner contrary to the majority. The Conditions of the Bonds and the Bond Trust Deed also provide that the Bond Trustee may, without the consent of Bondholders or any Secured Party (i) agree to any modification (except as stated in the Bond Trust Deed) of, or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of Bonds or the Bond Trust Deed or any other Transaction Document or (ii) determine without the consent of the Bondholders or the other Secured Parties that any Potential Event of Default or Event of Default shall not be treated as such or (iii) agree to the substitution of another company or other entity as principal debtor under the Bonds in place of the Issuer, in the circumstances described in the Conditions, provided, in each case, that the Bond Trustee is of the opinion that to do so would not be materially prejudicial to the interest of Bondholders. Change in Law: The Conditions of the Bonds are based on English law, regulatory and administrative practice in effect as at the issue date of the Bonds, and have due regard to the expected tax treatment of all relevant entities under United Kingdom tax law and the published practice of HM Revenue & Customs in force or applied in the United Kingdom as at such issue date. No assurance can be given as to the impact of any possible change to English law, regulatory or administrative practice in the United Kingdom, or to United Kingdom tax law, or the interpretation or administration thereof, or to the published practice of HM Revenue & Customs as applied in the United Kingdom after the issue date of the Bonds. European Monetary Union: It is possible that, prior to the repayment in full of the Bonds, the United Kingdom may become a participating member state in the European Economic and Monetary Union and that the Euro will become the lawful currency of the United Kingdom. The introduction of the Euro could be accompanied by a volatile exchange rate and/or interest rate environment which could adversely affect holders of the Bonds. It cannot be said with certainty what effect the adoption of the Euro by the United Kingdom (if it occurs) will have on the holders of the Bonds. Taxation: Under the Conditions of the Bonds (see Condition 13 (Taxation)), the Issuer is not entitled to make any deduction or withholding on account of tax from payments in respect of the Bonds unless such withholding or deduction is required by law. In the event that any deduction or withholding on account of tax is required by law, the Issuer shall be required (except in the limited circumstances set out in Condition 13 (Taxation)) to pay such additional amounts as will result in the receipt by the Bondholders of such amounts as would have been received by them if no such withholding or deduction had been required. Where the deduction or withholding is required as a result of a change in applicable law or regulations, the Issuer may exercise its option to redeem the Bonds in full on the next Interest Payment Date at the Notional Amount as adjusted by reference to the LPI Index, plus accrued interest, pursuant to Condition 12.3 (Redemption for Taxation Reasons)). As mentioned above, in such circumstances an investor may not be able to reinvest the redemption proceeds in a comparable security at an effective interest rate as high as that of the Bonds. 21

22 For a description of the current United Kingdom law and practice relating to withholding tax treatment of the Bonds, see "Taxation" below. EU Savings Directive: Under EC Council Directive 2003/48/EC (the Directive) on the taxation of savings income, Member States are required to provide to the tax authorities of other Member States details of certain payments of interest or similar income paid or secured by a person established in a Member State to or for the benefit of an individual resident in another Member State or certain limited types of entities established in another Member State. On 24th March, 2014, the Council of the European Union adopted a Council Directive amending and broadening the scope of the requirements described above. Member States are required to apply these new requirements from 1st January, The changes will expand the range of payments covered by the Directive, in particular to include additional types of income payable on securities. The Directive will also expand the circumstances in which payments that indirectly benefit an individual resident in a Member State must be reported. This approach will apply to payments made to, or secured for, persons, entities or legal arrangements (including trusts) where certain conditions are satisfied, and may in some cases apply where the person, entity or arrangement is established or effectively managed outside of the European Union. For a transitional period, Luxembourg and Austria are required (unless during that period they elect otherwise) to operate a withholding system in relation to such payments. The changes referred to above will broaden the types of payments subject to withholding in those Member States which still operate a withholding system when they are implemented. In April 2013, the Luxembourg Government announced its intention to abolish the withholding system with effect from 1st January, 2015, in favour of automatic information exchange under the Directive. The end of the transitional period is dependent upon the conclusion of certain other agreements relating to information exchange with certain other countries. A number of non-eu countries and territories including Switzerland have adopted similar measures (a withholding system in the case of Switzerland). If a payment were to be made or collected through a Member State which has opted for a withholding system and an amount of, or in respect of, tax were to be withheld from that payment, neither the Issuer, the Guarantor nor any Paying Agent nor any other person would be obliged to pay additional amounts with respect to any Bond as a result of the imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in a Member State that is not obliged to withhold or deduct tax pursuant to the Directive. Regulatory initiatives may result in increased regulatory capital requirements and/or decreased liquidity in respect of the Bonds: In Europe, the U.S. and elsewhere there is increased political and regulatory scrutiny of the asset-backed securities industry. This has resulted in a raft of measures for increased regulation which are currently at various stages of implementation and which may have an adverse impact on the regulatory capital charge to certain investors in securitisation exposures and/or the incentives for certain investors to hold asset-backed securities, and may thereby affect the liquidity of such securities. Investors in the Bonds are responsible for analysing their own regulatory position and the Obligors do not make any representation to any prospective investor or purchaser of the Bonds regarding the regulatory capital treatment of their investment on the Issue Date or at any time in the future. In particular, investors should be aware of the EU risk retention and due diligence requirements which currently apply, or are expected to apply in the future, in respect of various types of EU regulated investors including credit institutions, authorised alternative investment fund managers, investment firms, insurance and reinsurance undertakings and UCITS funds. Amongst other things, such requirements restrict a relevant investor from investing in asset-backed securities unless (a) that investor is able to demonstrate that it has undertaken certain due diligence in respect of various matters including its bond position, the underlying assets and (in the case of certain types of investors) the relevant sponsor or originator and (b) the originator, sponsor or original lender in respect of the relevant securitisation has explicitly disclosed to the investor that 22

23 it will retain, on an on-going basis, a net economic interest of not less than 5 per cent. in respect of certain specified credit risk tranches or asset exposures. Failure to comply with one or more of the requirements may result in penalties for relevant investors and/or have a negative impact on the price and liquidity of the Notes in the secondary market. Neither the Obligors nor any other entity has committed to retain a material net economic interest in relation to this transaction. Investors in the Bonds are responsible for analysing their own regulatory position and the Issuer is not responsible for informing Bondholders of the effects of changes to risk-weighting or any new regulatory capital measures. Investors should consult their own advisers as to the regulatory capital requirements in respect of the Bonds and as to the consequences to and effect on them of any changes to regulatory regimes. No predictions can be made as to the precise effects of such matters on any Bondholder or otherwise. Risks relating to the Guarantee If both the Issuer and the Guarantor default on their obligations to make payments on or to repay the Bonds or to make payments under the Guarantee, as applicable, and there are insufficient funds to repay all amounts outstanding under the Bonds, as well as having a secured claim against the Issuer, Bondholders will have unsecured claims for any outstanding amount against the Guarantor under the Guarantee. That unsecured claim will rank behind the claims of any secured creditors of the Guarantor. Bondholders will not have any direct claim for such outstanding amount against any subsidiary of the Guarantor (other than the Issuer). Generally, creditors of a subsidiary will be entitled to the assets of that subsidiary before any of those assets can be distributed to its direct or indirect shareholders (in this case including the Guarantor) upon its liquidation or winding up. These creditors may include secured creditors who have the benefit of security over the assets of the relevant subsidiary in priority to unsecured creditors. The Guarantor's claims to the assets of the subsidiaries that provide financial support to it are subordinated to the creditors of those subsidiaries (including the Issuer in respect of issue proceeds on-lent to any relevant subsidiary). 'Subordinated' in this context means that, in the event of a winding up or insolvency of any of the Guarantor's subsidiaries, any creditors of that subsidiary would have preferential claims to the assets of that subsidiary ahead of any creditors of the Guarantor. In the event that members of the Heylo Group are unable or unwilling to remit funds to the Guarantor, the Guarantor's ability to fulfil its commitments to Bondholders to make payments under the Guarantee may be adversely affected. Risks Relating to the Security of the Bonds Considerations relating to the Security: The Bonds are secured by the Security granted, pursuant to the Bond Trust Deed and the Security Trust Deed, in favour of the Bond Trustee and the Security Trustee, as applicable, for the benefit of the Bondholders and such security includes first fixed legal mortgages over the Mortgaged Properties. The validity of any security given by the Chargor in connection with additions and substitutions of Mortgaged Properties may depend on the solvency of the Chargor at the time of the grant. Change of apportionment basis of Mortgaged Properties: The Security Trust Deed apportions security to the Bondholders on a "Numerical Apportionment Basis". This means that a specific number of units within the portfolio of Mortgaged Properties are allocated to the Bondholders in accordance with the terms of the Security Trust Deed. The basis of apportionment may only be changed to "Specific Apportionment Basis" in the limited circumstances, and in accordance with the procedures, specified in the Security Trust Deed. For so long as the Bondholders' security is apportioned on a Numerical Apportionment Basis, the value of the security apportioned in respect of the Bonds will be determined by reference to a percentage of the total value of the portfolio of Mortgaged Properties that are apportioned on a Numerical Apportionment Basis. 23

24 Environmental Considerations: Under relevant UK environmental legislation, liability for environmental matters can be imposed on the "owner" or "person in control" of land. The term "owner" is not specifically defined and could include anyone with a proprietary interest in a property, which could include a representative of a trustee as a mortgagee in possession (in respect of which see the risk factor entitled "Mortgagee in Possession Liability" below). Environmental laws may impose liability on the owner for clean-up costs if a property is or becomes contaminated. The Chargor may therefore be liable for the entire amount of the clean-up and redemption costs for a contaminated site regardless of whether the contamination was caused by it or not. These costs may be significant. In addition, the presence of hazardous or toxic substances, or the failure to adequately remedy adverse environmental conditions at a Mortgaged Property, may adversely affect the market value of the Mortgaged Property, as well as the Chargor's ability to sell, lease or refinance the Mortgaged Property. Any environmental liability imposed on the Chargor could also affect its ability (in its capacity as Guarantor) to meet its payment obligations under the Guarantee. Sufficiency of Insurance: Although each Mortgaged Property is required to be insured at appropriate levels and against customary risks, there can be no assurance that any loss incurred will be of a type covered by such insurance, nor can there be any assurance that the loss will not exceed the limits of such insurance. Any reduction in income or any loss or damage caused to a Mortgaged Property not adequately covered by insurance could result in a shortfall in funds available to meet the Chargor's payment obligations (in its capacity as Guarantor) under the Guarantee. Fixed charges may take effect under English law as floating charges: Pursuant to the Bond Trust Deed, the Obligors have purported to grant a fixed charge over, amongst other things, all their respective rights and benefits under their respective Charged Accounts. The laws of England and Wales relating to the characterisation of fixed charges are unsettled. The fixed charges purported to be granted by the Obligors (other than assignment of security) may take effect under English law only as floating charges if, for example, it is determined that the Bond Trustee or the Security Trustee, as applicable, does not exert sufficient control over the charged assets for the security to be said to "fix" over those assets. If the charges take effect as floating charges instead of fixed charges, then the claims of the Bond Trustee or the Security Trustee, as the case may be, will be subject to claims which are given priority over a floating charge by law, including, amongst other things, prior charges, certain subsequent charges, the expenses of any winding up or administration and the claims of preferential creditors. Claims of Creditors of the Issuer and the Guarantor other than Secured Parties: Under English law, any creditor (who has not entered into non-petition clauses) would (save where an administrator has been appointed, where applicable) be able to commence insolvency or winding up proceedings against the Issuer or the Guarantor in respect of any unpaid debt. Mortgagee in Possession Liability: There is a risk that the Security Trustee may be deemed to be a mortgagee in possession if it physically enters into possession of a Mortgaged Property or performs an act of control or influence which may amount to possession, such as submitting a demand direct to tenants requiring them to pay rents to the Security Trustee. The consequence of being a mortgagee in possession would be that the Security Trustee may be obliged to account to the Chargor for the income obtained from the Mortgaged Property, be liable for any damage to the Mortgaged Property, have a limited liability to repair the Mortgaged Property and, in certain circumstances, may be obliged to make improvements or incur financial liabilities in respect of the Mortgaged Property. A mortgagee in possession may also be liable to a tenant for any mismanagement of the relevant property and may incur liabilities to third parties in nuisance and negligence and, under certain statutes (including environmental legislation), the liabilities of a property owner. Pursuant to the Security Trust Deed, the Chargor is required to indemnify the Security Trustee against all liabilities and expenses suffered or incurred by it. The obligation to indemnify the Security Trustee may mean that there is a shortfall in funds available to pay all amounts due and owing under the Bonds. 24

25 Valuation Risk: The Royal Institution of Chartered Surveyors "Red Book" methodology for valuation of affordable housing is a discounted cashflow of the expected future rental income and capital receipts from the properties. As a result, the valuation of affordable housing can vary significantly from the vacant possession value of the same property, both positively and negatively. Given the majority of shared owners take out some level of mortgage to finance the purchase of their initial share, a reduction in mortgage lender appetite to provide this type of product could lead to a reduction in the volume of staircasing and/or resales within the portfolio. Although the Guarantor does not rely on staircasing receipts to ensure that it would be able to satisfy its payment obligations under the Guarantee (assuming rent is paid) it does form part of its active management of the portfolio for assisting shared owners in financial difficulty. Type of Valuations: The Mortgaged Properties will have the benefit of a Desk Top Valuation or, subject to certain thresholds being exceeded, a Full Valuation. A Desk Top Valuation will refresh the financial and key assumptions driving the portfolio valuation and is not likely to include a physical inspection of the exterior or interior of the property. A Full Valuation will include an inspection of the exterior of the property (either physically or virtually) but not the interior. There is a risk that the values may be adversely impacted due to the interior and/or exterior of the properties not being inspected. However, the Issuer and the Chargor believes that the risk of this is minimal due to a combination of the nature of shared ownership property leases where repair and insurance are tenant obligations and the tenant having an ownership stake in the property. Investment of Charged Cash in Permitted Investments: Each Obligor may invest its Charged Cash in Permitted Investments in accordance with the Custody Agreement. Although Permitted Investments are limited to highly rated securities which satisfy certain specified criteria, following the enforcement of the Security, the Bond Trustee may be required to liquidate such Permitted Investments to make payments in accordance with Condition 6.3 (Security Assets) at a time when the disposal proceeds of such Permitted Investments is less than the price paid by the relevant Obligor upon the acquisition thereof. Any losses in respect of the Permitted Investments will reduce the amounts available to satisfy the payment obligations in respect of the Bonds. In addition, for the purpose of calculating the Obligors' compliance with the Asset Cover Test, the value of such Permitted Investments will be the purchase price thereof and no Obligor shall be required to monitor the market value of such Permitted Investments. Consequently, the value attributed to the Permitted Investments for this purpose may be more than the realisable value from time to time. In the event that the enforcement of the Security takes place at a time when the Permitted Investments have been acquired with the Charged Cash or otherwise charged by an Obligor as security, the value of the proceeds of enforcement of the Property Security, together with such amounts, may be insufficient to enable the Issuer to pay its obligations under the Bonds in full. Risks Relating to the Market Generally Potential Limited Liquidity: The Bonds may not have an established market. There can be no assurance of a secondary market for the Bonds or the continued liquidity of such market if one develops. The development or continued liquidity of any secondary market for the Bonds will be affected by a number of factors such as the state of credit markets in general and the creditworthiness of the Issuer and the Guarantor, as well as other factors such as the time remaining to the maturity of the Bonds. Global economic disruption: Bondholders should be aware of the prevailing and widely reported global credit market conditions (which continue to some extent at the date hereof), whereby there is a general lack of liquidity in the secondary market for instruments similar to the Bonds, concerns over the liquidity of major banks and building societies and the consequent effects on the general economy and the housing 25

26 market. The Issuer cannot predict when these circumstances will change and, if and when they do, whether conditions of general market illiquidity for the Bonds and instruments similar to the Bonds will be available in the future. Exchange rate risks and exchange controls: The Issuer will pay principal and interest on the Bonds in Sterling. This presents certain risks relating to currency conversions if an investor's financial activities are denominated principally in a currency or currency unit (the Investor's Currency) other than Sterling. These include the risk that exchange rates may significantly change (including changes due to devaluation of Sterling or revaluation of the Investor's Currency) and the risk that authorities with jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in the value of the Investor's Currency relative to Sterling would decrease (1) the Investor's Currency-equivalent yield on the Bonds, (2) the Investor's Currency-equivalent value of the principal payable on the Bonds and (3) the Investor's Currency-equivalent market value of the Bonds. Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal. Legal investment considerations may restrict certain investments: The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (1) the Bonds are legal investments for it, (2) the Bonds can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge of the Bonds. Financial institutions should consult their legal advisers or the appropriate regulators to determine the appropriate treatment of the Bonds under any applicable risk-based capital or similar rules. 26

27 CONDITIONS OF THE BONDS The following is the text of the Conditions of the Bonds which will be endorsed on the Bonds in definitive form. Bonds in definitive form will only be issued in certain limited circumstances. For a summary of the provisions relating to the Bonds in global form see "Form of the Bonds, Summary of Provisions relating to the Bonds while in Global Form and Settlement" below. The 120,000,000 Senior Inflation Linked Guaranteed Secured Bonds due 2049 (the Senior Bonds) and the 60,000,000 Junior Inflation Linked Guaranteed Secured Bonds due 2079 (the Junior Bonds and, together with the Senior Bonds, the Bonds, which expression shall in these Conditions, unless the context otherwise requires, include any further bonds issued pursuant to Condition 21 (Further Issues) and forming a single series with the Senior Bonds or the Junior Bonds) of HHT plc (the Issuer) are constituted by a Bond Trust Deed dated 5th September, 2014 (as modified and/or amended and/or supplemented and/or restated from time to time, the Bond Trust Deed) made between the Issuer, Heylo Housing Limited as guarantor and chargor (the Guarantor and the Chargor, respectively) and Prudential Trustee Company Limited (the Bond Trustee, which expression shall include its successor(s)) as trustee for the holders of the Senior Bonds (the Senior Bondholders) and the Junior Bonds (the Junior Bondholders and, together with the Senior Bondholders, the Bondholders), the holders of the principal receipts appertaining to the Bonds (the Receiptholders and Receipts respectively) and the holders of the interest coupons appertaining to the Bonds (the Couponholders and the Coupons respectively, which expressions shall, unless the context otherwise requires, include the talons for further interest coupons (the Talons) and the holders of the Talons). The Bondholders have the benefit of security allocated to them pursuant to a Security Trust Deed dated 5th September, 2014 (as modified and/or amended and/or supplemented and/or restated from time to time, the Security Trust Deed) made between the Issuer, the Chargor and Prudential Trustee Company Limited as security trustee for, inter alios, the Bondholders (the Security Trustee, which expression shall include any successor(s)). The Bonds also have the benefit of an Agency Agreement dated 5th September, 2014 (as modified and/or amended and/or supplemented and/or restated from time to time, the Agency Agreement) made between the Issuer, the Guarantor, the Bond Trustee, The Bank of New York Mellon, London Branch as principal paying agent (the Principal Paying Agent, which expression shall include any successor agent), the other paying agents named therein (together with the Principal Paying Agent, the Paying Agents, which expression shall include any additional or successor paying agents) and HHT plc (in such capacity the Determination Agent, which expression shall include any duly appointed successor determination agent). Copies of the Bond Trust Deed, the Security Trust Deed, the Security Agreements (as defined below) and the Agency Agreement are available for inspection during normal business hours by the Bondholders, the Receiptholders and the Couponholders at the registered office for the time being of the Bond Trustee, being at the date of issue of the Bonds at Laurence Pountney Hill, London EC4R 0HH, and at the specified office of each of the Paying Agents, in each case, with reasonable notice to the Bond Trustee or such Paying Agent, as the case may be. The Bondholders, the Receiptholders and the Couponholders are deemed to have notice of, and are bound by and entitled to the benefit of, all the provisions of the Bond Trust Deed, the Security Trust Deed, the Security Agreements and the Agency Agreement applicable to them. The statements in these Conditions include summaries of, and are subject to, the detailed provisions of and definitions in the Bond Trust Deed and the Security Trust Deed. 1. DEFINITIONS Words and expressions defined in the Bond Trust Deed, the Security Trust Deed or the Agency Agreement shall have the same meanings where used in the Conditions unless the context otherwise requires or unless otherwise stated. 27

28 In these Conditions: Account Agreement means the Account Agreement dated 5th September, 2014 and made between the Issuer, the Guarantor, the Chargor, the Bond Trustee and the Account Bank, as modified and/or amended and/or supplemented and/or restated from time to time; Account Bank means The Bank of New York Mellon, London Branch as account bank under the Account Agreement and any successor account bank appointed thereunder; Accreted Aggregate Notional Amount means, at any time, the aggregate Notional Amount in respect of all Bonds then outstanding for the relevant period multiplied by LPI Index (t) ; Additional Property Conditions Precedent means the documents listed in Schedule 2 (Additional Property Conditions Precedent) to the Security Trust Deed; Appointee means any attorney, manager, agent, delegate, nominee, custodian, receiver or other person appointed by the Bond Trustee under, or pursuant to, these Conditions or the Bond Trust Deed; Apportionment Certificate means, in relation to the Bond Beneficiaries, the certificate to the Representative (as signed by the Chargor and countersigned by the Security Trustee and the Representative) which sets out the number of Units which are allocated in favour of the Bond Beneficiaries in relation to all monies, liabilities and obligations whatsoever (actual or contingent) payable, owing, due or incurred by the Issuer to the Bond Beneficiaries pursuant to the Bond Trust Deed, the Bonds, the Receipts, the Coupons and the other Transaction Documents, as amended and redelivered from time to time, and which is substantially in the form set out in Schedule 3 to the Security Trust Deed; Approved Tenancy Agreement means a tenancy agreement, shared ownership lease or licence substantially in line with the guidelines of the Regulator or in such other form as may be approved by the Security Trustee; Asset Cover Test means the financial covenant in Condition 7.3 (Asset Cover Covenant); Authorised Signatory means, in respect of each Obligor, a director, board member, the secretary or any senior executive officer of such Obligor; Base Index Figure means (subject to Condition 10 (Amendments to the Index)) 256 (being the Index Figure applicable to July 2014); Beneficiaries has the meaning given to it in the Security Trust Deed; Bond Beneficiaries means, collectively, the Bondholders and the other Secured Parties; Bondholders' Apportioned Part means (a) for so long as the Property Security is apportioned on a Numerical Apportionment Basis, the number of Units allocated to the Bond Beneficiaries in relation to the Bonds and the Transaction Documents from time to time on a Numerical Apportionment Basis pursuant to the Security Trust Deed and (b) in the event that the basis of apportionment is changed to Specific Apportionment Basis, the SAB Charged Properties; Bondholders' Security Percentage means (a) for so long as the Property Security is apportioned on a Numerical Apportionment Basis, the Bondholders' Apportioned Part divided by the total number of Units comprising the NAB Mortgaged Properties (expressed as a percentage) and (b) in the event that the basis of apportionment is changed to Specific Apportionment Basis, 100 per cent.; 28

29 Business Day means a day (other than a Saturday, Sunday or public holiday) on which commercial banks and foreign exchange markets settle payments are open for general business (including dealing in foreign exchange and foreign currency deposits) in London; Charged Account means each account in the name of an Obligor established pursuant to the Account Agreement which is charged in favour of the Bond Trustee pursuant to the Bond Trust Deed; Charged Cash means, at any time, the aggregate of all amounts standing to the credit of the Charged Accounts at such time and, to the extent invested in Permitted Investments in accordance with the Custody Agreement, such Permitted Investments and any income received by any Obligor in respect of such Permitted Investments, provided, however, that for the purpose of determining the compliance of the Obligors with the Asset Cover Test, the value attributed to such Permitted Investments shall be the purchase price thereof; Class means the Senior Bonds or the Junior Bonds, as the context so requires; Compliance Certificate means a certificate, signed by two Authorised Signatories of each Obligor and countersigned on behalf of the Verification Agent, substantially in the form set out in Schedule 5 (Form of Compliance Certificate) to the Bond Trust Deed setting out, inter alia, calculations in respect of (a) the Asset Cover Test, (b) the Gross DSCR and (c) the Net DSCR; Controlling Class means (a) for so long as any Senior Bonds are outstanding, the Senior Bonds and (b) otherwise, the Junior Bonds; Custodian means The Bank of New York Mellon, London Branch as custodian under the Custody Agreement and any successor custodian appointed thereunder; Custody Account means each account in the name of an Obligor established pursuant to the Custody Agreement which is charged in favour of the Bond Trustee pursuant to the Bond Trust Deed; Custody Agreement means the Custody Agreement dated 5th September, 2014 and made between the Issuer, the Guarantor, the Chargor, the Bond Trustee and the Custodian, as modified and/or amended and/or supplemented and/or restated from time to time; Debt Service Cover Testing Date means 31st March and 30th September in each year from, and including 31st March, 2015 (or, in respect of Condition 7.5 (Gross Debt Service Cover Covenant), 30th September, 2015) to, and including, 31st March, 2079; Desk Top Valuation means, in relation to the Mortgaged Properties, a valuation (or valuations, taken together) of those properties conducted in accordance with the same methodology as a Full Valuation addressed to, inter alios, the Bond Trustee provided by a Valuer on a "desk-top" basis; Development means construction activities of any kind or the acquisition of any Property other than Property that contains units of residential accommodation; Early Redemption Amount means, at any time and in respect of each 100,000 in original nominal amount of Bonds, an amount equal to the Notional Amount for the relevant period multiplied by LPI Index (t) ; Early Redemption Date means any date on which Bonds will be redeemed in accordance with Condition 12.3 (Redemption for Taxation Reasons), Condition 12.4 (Redemption for Index Reasons), Condition 12.5 (Early Redemption at the Option of the Issuer), Condition 12.6 (Redemption of 29

30 Senior Bonds at the option of Junior Bondholders following an Event of Default) or Condition 15 (Events of Default and Enforcement); Enforcement Event means any event, howsoever described, specified in a Finance Document (as defined in the Security Trust Deed) as an event upon the occurrence of which the relevant Beneficiary or group of Beneficiaries to whom such Finance Document relates becomes entitled: (a) (b) (c) to call for early repayment of all or any secured liabilities under such Finance Documents; and/or to terminate all or any of the transactions entered into pursuant to such Finance Documents (but excluding any interest rate arrangement entered into by the relevant Beneficiary to which an Obligor is not a party unless such Beneficiary becomes entitled to terminate the same as a consequence of a default (howsoever described) by such Obligor under the terms of the Finance Document prior to the scheduled maturity date thereof); and/or to require the Security Trustee to enforce any of the Security Documents constituting such Beneficiary's Apportioned Part (as defined in the Security Trust Deed); EUV-SH means a valuation made on the basis of existing use value for social housing ("EUV-SH") as defined by UKVS1.13 Valuations for registered social landlords of the RICS Valuation Professional Standards January 2014 (or, if a subsequent edition of the RICS Valuation Standards has been published at the relevant time, the relevant valuation standard of the then most recently published edition of RICS Valuation Standards) or, if the RICS Valuation Standards are no longer published at such time, on a basis agreed between the Issuer, the Chargor, the Security Trustee and a Valuer; Event of Default has the meaning given to it in Condition 15.1 (Events of Default and Enforcement); Extraordinary Resolution has the meaning given to it in Condition 19.1 (Meetings of Bondholders); Final Senior Bond Redemption Date means the earlier of (a) the final Instalment Redemption Date in respect of the Senior Bonds and (b) the date when the Senior Bonds are otherwise redeemed, or purchased and cancelled, in full; Financial Year means each 12 month period ending on 31st March (or, in respect of the Issuer's first Financial Year, the period commencing on its date of incorporation and ending on 31st March, 2015); Fixed Security Assets has the meaning given to it in Condition 5.4 (Security Assets); Fixtures means, in relation to any Mortgaged Property, all fixtures and fittings (including trade fixtures and fittings) and fixed plant and machinery from time to time thereon owned by the Chargor; Full Valuation means, in relation to the Mortgaged Properties or the New Additional Properties, a valuation (or valuations, taken together) of those properties addressed to, inter alios, the Bond Trustee provided by a Valuer showing the Value of the Mortgaged Properties and/or the New Additional Properties, as applicable, on the basis of EUV-SH or, where agreed between the Bond Trustee, the Issuer and the Chargor, a letter from the relevant Valuer confirming that there have been no material changes in respect of a previous Full Valuation given by such Valuer in respect of such properties; 30

31 Gross DSCR means, in respect of each Debt Service Cover Test Date: (a) (i) the Total Payments Received, less (ii) the Senior Costs, divided by, (b) the Total Bond Payments, expressed as a percentage; Gross Real Redemption Yield means a yield expressed as a percentage and calculated by the Indexation Adviser on the basis set out by the United Kingdom Debt Management Office in the paper "Formulae for Calculating Gilt Prices from Yields" page 12, Section One: Price/Yield Formulae (Index-linked Gilts (3-Month Indexation Lag)) (published on 8th June, 1998 and updated on 15th January, 2002 and 16th March, 2005) (as amended or supplemented from time to time); Group Parent means Heylo Housing Limited and any entity with which the Group Parent may merge or be consolidated with at any time; Heylo Group means the Group Parent and any other present or future, direct or indirect, subsidiaries of the Group Parent (which includes, for the avoidance of doubt, any entity with which the Group Parent may merge or be consolidated with at any time); Housing and Regeneration Act means the Housing and Regeneration Act 2008 (as amended from time to time); Index or Index Figure means (subject to Condition 10 (Amendments to the Index)), the UK Retail Price Index (for all items) published by the Office for National Statistics (January 1987 = 100) or any comparable index which may replace the UK Retail Price Index for the purpose of calculating the amount payable on repayment of the Reference Gilt; Index (t-n) means, in respect of each Interest Payment Date, Instalment Redemption Date, Early Redemption Date or Debt Service Cover Testing Date, (subject to Condition 10 (Amendments to the Index)) the Index published for the nth month prior to the month in which such Interest Payment Date, Instalment Redemption Date, Early Redemption Date or Debt Service Cover Testing Date, as the case may be, falls; Indexation Adviser has the meaning given to it in the definition of "Reference Gilt"; Instalment Amount means, in respect of each Instalment Redemption Date and each 100,000 in original nominal amount of each Class of Bonds, an amount equal to: [Notional (t) Notional (t+1) ] x LPI Index (t) ; Instalment Redemption Date means 31st March and 30th September in each year: (a) (b) in the case of the Senior Bonds, from, and including 31st March, 2015 to, and including, 30th September, 2049; and in the case of the Junior Bonds, from, and including 31st March, 2050 to, and including, 30th September, 2079; 31

32 Insurances means all contracts and policies of insurance of whatever nature which are from time to time taken out by or with the authority and on behalf of the Chargor in connection with the Mortgaged Property; Interest Payment Date means 31st March and 30th September in each year from, and including 31st March, 2015: (a) in the case of the Senior Bonds, to, and including, 30th September, 2049; and (b) in the case of the Junior Bonds, to, and including, 30th September, Interest Period means the period from and including the Interest Commencement Date to but excluding the first Interest Payment Date, and each successive period from and including an Interest Payment Date to but excluding the next succeeding Interest Payment Date. Issue Date means 5th September, 2014; Junior Payment Block Period means the period from, and including, the date on which the Security (or any part of it) is enforced to, but excluding, the Final Senior Bond Redemption Date; Letting Documents means any lease, tenancy or licence to occupy, or any agreement for any of the same, from time to time granted or entered into by the Chargor or any predecessor in title of the Chargor to which a Mortgaged Property may be subject from time to time and any licence, consent or approval given thereunder; LPI (t) means: (a) in respect of each Interest Payment Date (other than the first Interest Payment Date), Instalment Redemption Date or Debt Service Cover Testing Date, as applicable: Index (t - 3) Max 1, ; Index (t - 9) (b) in respect of the first Interest Payment Date: Index (t 3) Max 1, ; and Base Index Figure (c) in respect of any Early Redemption Date: Index (t 3) Max 1,, Index (t - x) where x means the sum of the number of whole months from the previous Instalment Redemption Date or Interest Payment Date or (if none) the Issue Date plus 3; LPI Index (t) means, in respect of each Interest Payment Date, each Instalment Redemption Date, each Early Redemption Date and each Debt Service Cover Testing Date: n LPI t ; t 1 32

33 Management Agreement means the Management Agreement dated on or around 28th August, 2014 and made between the Guarantor and the Manager; Manager means Assettrust Housing Management Limited as manager under the Management Agreement and any successor manager appointed thereunder; Minimum Value means: A 120 x 100 where: A = the Value of the residential Mortgaged Properties determined on the basis of EUV-SH; Moody's means Moody's Investors Service Limited or any successor thereto; Mortgaged Properties means, at any time, any property over which the Chargor has granted a valid and effective first priority legal mortgage or fixed charge pursuant to a Security Agreement and which has been allocated for (among others, for so long as the security is apportioned on a Numerical Apportionment Basis) the benefit of the Bond Beneficiaries pursuant to the Security Trust Deed; NAB Beneficiaries means each Beneficiary which has been allocated Mortgaged Properties pursuant to the Security Trust Deed on a Numerical Apportionment Basis; NAB Mortgaged Properties means the aggregate number of Units comprising the Mortgaged Properties which have been apportioned to the NAB Beneficiaries pursuant to the Security Trust Deed; Net DSCR means, in respect of each Debt Service Cover Test Date: (a) (i) the Total Payments Received, less (ii) (iii) the Total Property Acquisitions Costs Funded From Cash, less the Senior Costs, divided by, (b) the Total Bond Payments, expressed as a percentage; New Additional Properties has the meaning given to it in Condition 8.1 (Addition of New Mortgaged Properties); New Property Approval Certificate means a certificate, signed by two Authorised Signatories of an Obligor, substantially in the form set out in Schedule 6 (Form of New Property Approval Certificate) to the Bond Trust Deed; Notional (t) means, in respect of any Instalment Redemption Date and each Class of Bonds, the Notional Amount of such Class of Bonds for the period ending on such Instalment Redemption Date; 33

34 Notional (t+1) means, in respect of any Instalment Redemption Date and each Class of Bonds, the Notional Amount of such Class of Bonds for the period immediately following such Instalment Redemption Date; Notional Amount has the meaning given to it in Condition 12.2 (Notional Amount); Numerical Apportionment Basis has the meaning given to it in the Security Trust Deed; Obligor means the Issuer, the Guarantor and/or the Chargor, as applicable, and Obligors shall mean each of them; Permitted Investments shall consist of: (a) direct obligations of the United Kingdom or of any agency or instrumentality of the United Kingdom which are fully and expressly guaranteed by the United Kingdom, provided that the United Kingdom is rated at least: (i) (A) "AA" from S&P; (B) (C) "Aa2" from Moody's; or any other equivalent rating given by a credit rating agency registered under Regulation (EU) No 1060/2009 (an Equivalent Rating), (together, the Permitted Investments Minimum Long-Term Rating), in the case of long-term debt obligations; or (ii) (A) "A-1" from S&P; (B) (C) "P-1" from Moody's; or an Equivalent Rating, (together, the Permitted Investments Minimum Short-Term Rating), in the case of commercial paper and short-term debt obligations; (b) demand and time deposits in, certificates of deposit of and bankers' acceptances issued by any depositary institution or trust company (including the Account Bank) with, in each case, a maturity date of no more than 360 days and subject to supervision and examination by governmental banking authorities, provided that the commercial paper and/or the debt obligations of such depositary institution or trust company (or, in the case of the principal depositary institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of the investment have: (i) (i) a long-term senior unsecured debt credit rating of at least the Permitted Investments Minimum Long-Term Rating; or a short-term debt or issuer (as applicable) credit rating of at least the Permitted Investments Minimum Short-Term Rating; (c) securities bearing interest or sold at a discount to the face amount thereof issued by any corporation that has a credit rating of not less than the Permitted Investments Long-Term Rating at the time of such investment or contractual commitment providing for such investment; 34

35 (d) (e) commercial paper or other short-term obligations having, at the time of such investment, a credit rating of not less than the Permitted Investments Minimum Short-Term Rating that are either (i) bearing interest, or (ii) sold at a discount to the face amount thereof and with a maturity of not more than 360 days from their date of issuance; provided, however, that if such security has a maturity of longer than 360 days, the issuer thereof must also have, at the time of such investment, a long-term credit rating of not less than the Permitted Investments Minimum Long-Term Rating; and off-shore money market funds rated, at all times, "AAA" or "AAAm-G" by S&P, "Aaa/MRI+" by Moody's or an Equivalent Rating, provided that, in the case of (a) to (d) above, such investment shall be an investment which is an obligation of the United Kingdom or a company incorporated in the United Kingdom, and (i) in all cases, such investment shall be an investment which is denominated in Sterling and (ii) in all such cases other than where the Permitted Investment is a Reference Gilt, such investment shall have a maturity which is not later than 30th September, Potential Event of Default means any condition, event or act which, with the lapse of time and/or the issue, making or giving of any notice, certification, declaration, demand, determination and/or request and/or the taking of any similar action and/or the forming of an opinion and/or the fulfilment of any similar condition, would constitute an Event of Default; Property means any estates or interests in any freehold, heritable or leasehold property wheresoever situate now or in future and any buildings, fixtures, fittings and fixed plant and machinery from time to time thereon; Property Release Certificate means a certificate, signed by two Authorised Signatories of an Obligor, substantially in the form set out in Schedule 7 (Form of Property Release Certificate) to the Bond Trust Deed; Property Security has the meaning given to it in Condition 5.1 (Property Security); Rate of Interest has the meaning given to it in 9.3 (Rate of Interest); Reference Gilt means: (a) in respect of the Senior Bonds, 0¾% Index-linked Treasury Gilt 2034; and (b) in respect of the Junior Bonds, 0⅛% Index-linked Treasury Gilt 2068, or, in each case, if such gilt is not in existence, such other index-linked UK government gilt determined to be appropriate by a gilt-edged market maker or other adviser selected by the Issuer and approved by the Bond Trustee (an Indexation Adviser); Regulator means the Regulation Committee of the Homes and Communities Agency constituted pursuant to the Housing and Regeneration Act, as amended by the Localism Act 2011, or any similar future authority or authorities carrying on substantially the same regulatory and/or supervisory functions; Reference Date means the date which is two Business Days prior to the despatch of the notice of redemption under Condition 12.5 (Early Redemption at the Option of the Issuer); Relevant Date means, in respect of any payment, the date on which the payment first becomes due but, if the full amount of the money payable has not been received by the Principal Paying Agent or 35

36 the Bond Trustee on or before the due date, it means the date on which, the full amount of the money having been so received, notice to that effect has been duly given to the Bondholders by the Issuer in accordance with Condition 17 (Notices); Relevant Jurisdiction means the United Kingdom or any political subdivision or any authority thereof or therein having power to tax or any other jurisdiction or any political subdivision or any authority thereof or therein having power to tax to which the Issuer or the Guarantor, as the case may be, becomes subject in respect of payments made by it of principal and interest on the Bonds and Coupons; Representative means the Bond Trustee in its capacity as Representative for the Bond Beneficiaries pursuant to the Security Trust Deed; Retained Bond Custodian means The Bank of New York Mellon, London Branch as custodian pursuant to the Retained Bond Custody Agreement or any successor custodian appointed thereunder; Retained Bond Custody Agreement means the custody agreement relating to the Retained Bonds dated 5th September, 2014 and made between the Issuer, the Bond Trustee and the Retained Bond Custodian, as modified and/or amended and/or supplemented and/or restated from time to time; Retained Bonds means the Retained Senior Bonds and/or the Retained Junior Bonds, as the case may be; Retained Junior Bonds means 47,700,000 in nominal amount of the Junior Bonds purchased by the Issuer on the Issue Date; Retained Senior Bonds means 95,400,000 in nominal amount of the Senior Bonds purchased by the Issuer on the Issue Date; Right to Buy means the right of a tenant of a property: (a) (b) (c) to buy that property from the Chargor under section 180 of the Housing and Regeneration Act or under Part V of the Housing Act 1985 (or any similar right replacing those rights) or under any contract conferring such a right and including, without limitation, such rights preserved notwithstanding any previous transfers of that property to the Chargor from any local authority; to acquire an interest in that property from the Chargor by means of a shared-ownership lease where the terms of any such lease comply with the regulatory requirements of the Regulator or have been approved by the Chargor; or to buy or acquire an interest in that property from the Chargor under any voluntary scheme approved by the Chargor; Rules means, in respect of each Obligor, the rules or articles of association of that Obligor, as amended from time to time; S&P means Standard & Poor's Rating Services or any successor thereto; SAB Mortgaged Properties means the aggregate number of Units apportioned to the Bond Beneficiaries pursuant to the Security Trust Deed on a Specific Apportionment Basis; Secured Parties means the Bond Trustee and the Security Trustee (in each case for itself and on behalf of the Bondholders, the Receiptholders and the Couponholders), the Principal Paying Agent, 36

37 the other Paying Agents, the Determination Agent (in the event that this is not the Issuer), the Account Bank, the Custodian, the Retained Bond Custodian and the Verification Agent; Security has the meaning given to it in Condition 5.4 (Security Assets); Security Assets has the meaning given to it in Condition 5.4 (Security Assets); Security Agreement means (a) the Security Agreement dated 5th September, 2014 between the Chargor and the Security Trustee pursuant to which the Chargor provides collateral security in respect of the Issuer's obligations under the Bonds, the Receipts, the Coupons and the other Transaction Documents and (b) any additional agreement entered into between the Chargor and the Security Trustee substantially in the form set out in the Security Trust Deed pursuant to which the Chargor provides collateral security in respect of the Issuer's obligations under the Bonds, the Receipts, the Coupons and the other Transaction Documents; Security Documents means the Security Trust Deed and each Security Agreement; Senior Costs means, in respect of each Debt Service Cover Testing Date, all expenditure payable by the Guarantor (whether or not actually paid) in the 12 month period ending on such Debt Service Cover Testing Date, other than (a) any such expenditure which is subordinated in payment to any amounts which were or (following enforcement of the Guarantee) would have been payable by it in respect of any moneys and other liabilities payable or owing to the Secured Parties under the Bonds, the Bond Trust Deed and the other Transaction Documents in that period and (b) any costs and expenses in respect of the acquisition of a Property; Shared Equity Property means any residential accommodation acquired by the Chargor then being occupied on shared equity terms or in respect of which the Chargor grants a lease on shared equity terms meaning that a share in the value of the property is secured by way of a charge to the Chargor allowing the Chargor to receive rent from the tenant and share in the proceeds of any disposal of the property; Shared Equity Sale means the disposal of the whole of any interest in a Unit of residential accommodation by the Chargor or the discharge of security held by the Chargor over the whole or any interest in a Unit of residential accommodation by the Chargor which immediately before disposal, was compromised in a Shared Equity Property. Shared Ownership Property means any residential accommodation acquired by the Chargor then being occupied on shared ownership terms or in respect of which the Chargor grants a lease on shared ownership terms so that the Chargor holds, or is intending to hold upon disposal on shared ownership terms, less than 100 per cent. of the beneficial (or heritable) interest in that property and the purchaser of the balance of that beneficial (or heritable) interest has the right to acquire a further portion of the Chargor's retained beneficial (or heritable) interest; Shared Ownership Sale means the disposal of the whole or any interest in a Unit of residential accommodation by the Chargor (or of the retained interest of the Chargor in any Unit of residential accommodation) which, immediately before the disposal, was comprised in a Shared Ownership Property; Social HomeBuy has the meaning given to that term in the Local Authorities (Capital Finance and Accounting) (Amendment) (England) Regulations 2006; Specific Apportionment Basis has the meaning given to it in the Security Trust Deed; 37

38 Statutory Disposal means a Shared Ownership Sale, a Shared Equity Sale, the exercise of a Right to Buy or a Social HomeBuy disposal; Statutory Disposal Certificate means a certificate, signed by two Authorised Signatories of an Obligor, substantially in the form set out in Schedule 8 (Form of Statutory Disposal Certificate) to the Bond Trust Deed; Supervisor means Internos Global Investors Limited as supervisor under the Supervisory Agreement and any successor manager appointed thereunder; Supervisory Agreement means the Supervisory Agreement dated 28th August, 2014 and made between the Guarantor, the Issuer and the Supervisor; Taxes has the meaning given to it in Condition 13.1 (Payment without Withholding); Total Bond Payments means, in respect of each Debt Service Cover Testing Date, the aggregate amount of interest and principal paid by the Issuer or the Guarantor (or, to the extent not paid, accrued) in respect of the Bonds for the 12 month period ending on (and including) such Debt Service Cover Testing Date (and excluding, for the avoidance of doubt, the Debt Service Cover Testing Date falling on or around the beginning of such 12 month period) (for the avoidance of doubt, excluding any accreted Notional Amounts payable after the end of such 12 month period and excluding any interest which has been or is to be capitalised in respect of the Junior Bonds); Total Payments Received means, in respect of each Debt Service Cover Testing Date, the sum of all income actually received by the Guarantor in the 12 month period ending on such Debt Service Cover Testing Date including, without limitation: (a) (b) all income received by (or on behalf of) the Guarantor from its Properties (including, for the avoidance of doubt, any disposal proceeds received in respect of any of its Properties or any part of the Guarantor's interest in any Properties); and any interest, coupons or other distributions on cash or securities owned by the Guarantor; Total Property Acquisitions Costs Funded From Cash means, in respect of each Debt Service Cover Testing Date, the sum of the acquisition price together with all costs associated with the acquisition of all Properties acquired by the Guarantor in the 12 month period ending on such Debt Service Cover Testing Date for cash or cash equivalents (whether payable at the date of such acquisition or otherwise); Transaction Documents means the Bond Trust Deed, the Security Trust Deed, the Security Agreements, the Agency Agreement, the Account Agreement, the Custody Agreement, the Retained Bond Custody Agreement and the Verification Agency Agreement; Transaction Party means any person who is a party to a Transaction Document; Units means, at any time, a Mortgaged Property or part thereof in relation to which there is or, when let, there would be a separate rental contract entered into with the Chargor and Units means all such Mortgaged Properties or parts thereof; Valuation means a Full Valuation and/or a Desk Top Valuation, as applicable; Value means, at any time and in relation to the Mortgaged Properties, the value of those properties as shown in the then latest Full Valuation or Desk Top Valuation (including, for the avoidance of doubt, any Valuation prepared on or around the Issue Date) on the basis of EUV-SH (provided that if 38

39 any Mortgaged Property or part thereof is sold pursuant to a Right to Buy, the Value of the relevant Mortgaged Property shall, for the purposes of this definition and with effect from the date of the relevant sale or release, be zero (if the entire relevant Mortgaged Property has been sold) or (if only part of the Chargor's interest in the relevant Mortgaged Property has been sold) shall be the proportion of the value of the Mortgaged Property which has not been sold pursuant to the relevant Right to Buy); Valuer means Montagu Evans and/or such other reputable firm of surveyors which is a member of the Royal Institute of Chartered Surveyors as may be appointed by the Issuer from time to time; Verification Agency Agreement means the Verification Agency Agreement dated 5th September, 2014 and made between the Issuer, the Guarantor, the Chargor, the Bond Trustee, the Security Trustee and the Verification Agent, as modified and/or amended and/or supplemented and/or restated from time to time; and Verification Agent means Prudential Trustee Company Limited as verification agent under the Verification Agency Agreement and any successor verification agent appointed thereunder. 2. FORM, DENOMINATION AND TITLE The Bonds are in bearer form, serially numbered, in the denomination of 100,000, with Receipts, Coupons and Talons attached on issue. Title to the Bonds, Receipts and Coupons will pass by delivery. The Issuer, the Guarantor, any Paying Agent and the Bond Trustee will (except as otherwise required by law) deem and treat the bearer of any Bond, Receipt or Coupon as the absolute owner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereon or notice of any previous loss or theft thereof) for all purposes. 3. STATUS OF THE BONDS, RECEIPTS AND COUPONS The Bonds, Receipts and the Coupons are direct and unconditional obligations of the Issuer, secured in the manner set out in Condition 5 (Security). The Senior Bonds will rank pari passu without any preference or priority amongst themselves and in priority to the Junior Bonds. The Junior Bonds will rank pari passu without any preference or priority amongst themselves. 4. GUARANTEE 4.1 Guarantee The payment of the principal and interest in respect of the Bonds and all other moneys payable by the Issuer under or pursuant to the Bond Trust Deed has been unconditionally and irrevocably guaranteed by the Guarantor (the Guarantee) in the Bond Trust Deed. 4.2 Status of the Guarantee The obligations of the Guarantor under the Guarantee constitute direct, unconditional and unsecured obligations of the Guarantor and rank and will rank pari passu with all other outstanding unsecured and unsubordinated obligations of the Guarantor, present and future, but, in the event of insolvency, only to the extent permitted by applicable laws relating to creditors' rights. 39

40 5. SECURITY 5.1 Property Security Subject to Condition 5.2 (Apportionment of Property Security), the Issuer's obligations in respect of the Bonds are secured (subject as provided in these Conditions, the Bond Trust Deed and the Security Documents) pursuant to each Security Agreement in favour of the Security Trustee for the benefit of itself and the Bond Beneficiaries as follows: (a) (b) by way of first fixed legal mortgage by the Chargor over the Mortgaged Properties specified therein together with all buildings and Fixtures, erections and structures thereon or in the course of construction thereon, the proceeds of sale of all or any part thereof and (so far as the same are capable of being mortgaged) the benefit of any covenants for title given or entered into by any predecessor in title of the Chargor and any monies paid or payable in respect of such covenants; by way of first fixed charge by the Chargor over: (i) (ii) (iii) (iv) all fixed plant and machinery now or in the future owned by the Chargor and its interest in any fixed plant or machinery in its possession, in each case which form part of the Mortgaged Property; all benefits in respect of the Insurances and all claims and returns of premiums in respect of the Mortgaged Property; the benefit of all present and future licenses, consents and authorisations (statutory or otherwise) held in connection with the Fixed Security Assets specified therein and the use of any of the Fixed Security Assets specified therein and the right to recover and receive all compensation which may at any time become payable to it in respect thereof; and if and in so far as the legal mortgage set forth in paragraph (a) above or the assignments set out in paragraph (c) below shall for any reason be ineffective as legal mortgages or assignments, the assets referred to therein; and (c) by an assignment by way of security of the Chargor's rights, title and interest in and to: (i) (ii) (iii) the personal agreements and covenants by the tenants, lessees, licensees or other parties under the Letting Documents and by all guarantors and all security held by the Chargor from time to time, whether present or future, in respect of the obligations of the tenants, lessees, licensees or other parties under the Letting Documents (including, without limiting the generality of the foregoing, all moneys due and owing to the Chargor or which may become due and owing to the Chargor or which may become due and owing to the Chargor at any time in the future in connection therewith); all agreements, now or from time to time entered into or to be entered into for the sale, letting or other disposal or realisation of the whole or any part of the Fixed Security Assets specified therein (including, without limitation the generality of the foregoing, all moneys due and owing to the Chargor or which may become due and owing to the Chargor at any time in the future in connection therewith); all agreements, contracts, deeds, licences, undertakings, guarantees, covenants, warranties, representations and other documents (including all documents entered 40

41 into now or in the future so as to enable the Chargor to perfect its rights under each such agreement, contract, deed, licence, undertaking, guarantee, covenant, warranty, representation or other document) entered into by or given to the Chargor in respect of the Mortgaged Properties and all claims, remedies, awards or judgments paid or payable to the Chargor (including, without limitation, all liquidated and ascertained damages payable to the Chargor under the above) in each case relating to the Mortgaged Properties; (iv) (v) (vi) (vii) all licences held now or in the future in connection with any Mortgaged Properties and also the right to recover and receive all compensation which may at any time become payable to the Chargor in relation to each Mortgaged Property; all rights and claims to which the Chargor is now or may hereafter become entitled in relation to any development, construction project, redevelopment, refurbishment, repair or improvement of or on each Mortgaged Property; all guarantees, warranties, bonds and representations given or made or which may be given or made by and any rights or remedies against all or any of the designers, builders, contractors, surveyors, valuers, professional advisers, sub-contractors, manufacturers, suppliers and installers of any Fixtures in respect of each Mortgaged Property; and all rental income and disposal proceeds unless already assigned pursuant to (i), (ii) or (iii) above in each case relating to the Mortgaged Properties specified therein and the right to make demand for and receive the same, provided always that, unless and until an Enforcement Event has occurred and is continuing (but subject to the terms of the Transaction Documents), the Chargor shall be entitled to exercise all its rights and claims under or in connection with the agreements and covenants referred to in paragraphs (i) to (vii) above, and provided further that the Bond Trustee shall not give, or require the Chargor to give, any notice of assignment contained in this paragraph (c) to any person unless and until an Enforcement Event has occurred and is continuing. The security created by the Chargor pursuant to the Security Documents referred to above, and/or any deed or document supplemental thereto (being the security which has been allocated for the benefit of the Bond Beneficiaries), is referred to herein as the Property Security. 5.2 Apportionment of Property Security The security created pursuant to the Security Agreements will be apportioned to the Bond Beneficiaries on a Numerical Apportionment Basis in accordance with, and subject to the terms of the Security Trust Deed, such that a specific number of Units of the NAB Mortgaged Properties will be allocated to the Bond Beneficiaries. The basis of apportionment may only be changed to Specific Apportionment Basis in the limited circumstances, and in accordance with the procedures, specified in the Security Trust Deed. In particular, the basis of the Bondholders' apportionment may only be changed upon the request of the Bond Trustee or each of the other NAB Beneficiaries upon the security under the Security Documents in respect of the NAB Mortgaged Properties becoming enforceable. For so long as the Property Security is apportioned on a Numerical Apportionment Basis, all references to the Mortgaged Properties in these Conditions shall, for the avoidance of doubt, be a reference to the NAB Mortgaged Properties. In the event that the basis of apportionment is changed 41

42 to Specific Apportionment Basis, all references to the Mortgaged Properties in these Conditions shall, for the avoidance of doubt, be a reference to the SAB Mortgaged Properties. 5.3 Non-Property Security The Issuer's obligations in respect of the Bonds are also secured (subject as provided in these Conditions and the Bond Trust Deed) pursuant to the Bond Trust Deed in favour of the Bond Trustee for the benefit of itself and the Bond Beneficiaries as follows: (a) (b) (c) by a charge by way of first fixed charge by each Obligor over all moneys and securities from time to time standing to the credit of its respective Charged Account and its respective Custody Account and all debts represented thereby; by an assignment by each Obligor by way of security of all of its respective rights, title and interest arising under the Agency Agreement, the Account Agreement, the Custody Agreement and the Verification Agency Agreement; and by a charge by way of first floating charge by each Obligor over all its respective undertakings, properties and assets, both present and future, wheresoever situated, (including any uncalled capital). Paragraph 14 of Schedule B1 to the Insolvency Act 1986 shall apply to such floating charges, provided always that, unless and until an Event of Default has occurred and is continuing (but subject to the terms of the Transaction Documents), each Obligor shall be entitled to exercise all their respective rights and claims under or in connection with the agreements referred to in paragraph (b) above. 5.4 Security Assets The property charged and assigned pursuant to both the Security Documents and the Bond Trust Deed referred to above, together with any other property or assets held by and/or assigned to the Security Trustee (and allocated for the benefit of the Bond Beneficiaries) or the Bond Trustee and/or any deed or document supplemental thereto, is referred to herein as the Security Assets and the security created thereby (including, for the avoidance of doubt, the Property Security) is referred to herein as the Security. The Security Assets, other than those listed in Condition 5.3(c) only, are referred to herein as the Fixed Security Assets. 6. ORDER OF PAYMENTS 6.1 Pre-enforcement Prior to the enforcement of the Security, all monies available to the Issuer (or, if applicable, the Guarantor) on each Interest Payment Date, Instalment Redemption Date and Early Redemption Date shall be applied in the following order of priority: (a) (b) first, in payment or satisfaction of the fees, costs, charges, expenses and liabilities incurred by the Bond Trustee or any Appointee in the performance of its duties and exercise of its discretion under the Bond Trust Deed (including the Bond Trustee's remuneration); second, in payment of all amounts owing to the Paying Agents under the Agency Agreement, the Account Bank under the Account Agreement, the Custodian under the Custody Agreement, the Retained Bond Custodian under the Retained Bond Custody Agreement and the Verification Agent under the Verification Agency Agreement on a pro rata and pari passu basis; 42

43 (c) (d) (e) (f) (g) third, in payment, on a pro rata and pari passu basis, to the Senior Bondholders of any interest due and payable in respect of the Senior Bonds; fourth, in payment on a pro rata and pari passu basis, to the Senior Bondholders of any principal due and payable in respect of the Senior Bonds; fifth, in payment, on a pro rata and pari passu basis, to the Junior Bondholders of any interest due and payable in respect of the Junior Bonds; sixth, in payment on a pro rata and pari passu basis, to the Junior Bondholders of any principal due and payable in respect of the Junior Bonds; and seventh, in payment of the surplus (if any) to the Issuer or any other person entitled thereto. 6.2 Property Security Following the enforcement of the Property Security, the net proceeds of enforcement of the Property Security shall be applied in the following order of priority: (a) (b) first, in payment or satisfaction of the fees, costs, charges, expenses and liabilities incurred by the Security Trustee and any receiver, attorney or agent in connection with the performance of its duties and exercise of its discretion under the Security Documents, including any repairs, maintenance, management or servicing of the Mortgaged Properties (including the costs of realising the Property Security and the Security Trustee's and such receiver's, attorney's or agent 's remuneration); and second, in payment to the Bond Trustee, in its capacity as Representative (and, for so long as the Property Security is apportioned on a Numerical Apportionment Basis, the other NAB Beneficiaries on a pari passu basis by reference to their apportioned parts) for application in accordance with Condition 6.3 (Security Assets). 6.3 Security Assets Following the enforcement of the Security, all monies standing to the credit of the Charged Accounts and the Custody Accounts and the net proceeds of enforcement of the Security (in respect of the Property Security, following application as set out in accordance with Condition 6.2 (Property Security)) shall be applied in the following order of priority: (a) (b) (c) (d) first, in payment or satisfaction of the fees, costs, charges, expenses and liabilities incurred by the Bond Trustee, any Appointee or any receiver in the performance of its duties and exercise of its discretion under the Bond Trust Deed (including the costs of realising the Security and the Bond Trustee's and such receiver's remuneration); second, in payment of all amounts owing to the Paying Agents under the Agency Agreement, the Account Bank under the Account Agreement, the Custodian under the Custody Agreement, the Retained Bond Custodian under the Retained Bond Custody Agreement and the Verification Agent under the Verification Agency Agreement on a pro rata and pari passu basis; third, in payment, on a pro rata and pari passu basis, to the Senior Bondholders of any interest due and payable in respect of the Senior Bonds; fourth, in payment on a pro rata and pari passu basis, to the Senior Bondholders of any principal due and payable in respect of the Senior Bonds; 43

44 (e) (f) (g) fifth, in payment, on a pro rata and pari passu basis, to the Junior Bondholders of any interest due and payable in respect of the Junior Bonds; sixth, in payment on a pro rata and pari passu basis, to the Junior Bondholders of any principal due and payable in respect of the Junior Bonds; and seventh, in payment of the surplus (if any) to the Issuer or any other person entitled thereto. 7. COVENANTS 7.1 General Covenant In addition to the covenants of the Issuer set out in the Bond Trust Deed, for so long as any of the Bonds remain outstanding, the Issuer covenants that it will not, without the prior consent in writing of the Bond Trustee, engage in any activity or do anything other than: (a) (b) carry out the business of a company which has as its purpose raising finance and on-lending such finance for the benefit of the Guarantor and/or other members of the Heylo Group (including, without limitation, as envisaged by the Transaction Documents); and perform any act incidental to or necessary in connection with (a) above. 7.2 Negative Pledge and Disposals Each Obligor covenants, in each case for so long as any of the Bonds remain outstanding, not to create or permit to subsist, over any of the Fixed Security Assets, any mortgage or charge or any other security interest ranking in priority to, or pari passu with, the Security, excluding, for this purpose any security interest created by operation of law. Each Obligor also covenants that it shall not, save as expressly permitted by the Bond Trust Deed and/or the Security Trust Deed, sell, transfer, grant or lease or otherwise dispose of all or any part of the Fixed Security Assets without the prior written consent of the Bond Trustee or (in respect of the Property Security) the Security Trustee (other than, in the case of the Chargor, the grant of lettings with tenancy agreements in the form of an Approved Tenancy Agreement or on terms which confer no fewer material rights on the Chargor as the lessor or licensor and impose no material obligations on the Chargor additional to those set out in an Approved Tenancy Agreement). For the avoidance of doubt, nothing in this Condition shall restrict (a) a tenant of, and holder of an interest in, a Shared Ownership Property or a Shared Equity Property creating a mortgage or charge or any other security interest in respect of, and to the extent of, its interest in such Shared Ownership Property or Shared Equity Property, as applicable, or (b) the grant of lettings in respect of social rented Properties on open market terms in circumstances the relevant local authority has failed to nominate a tenant in respect thereof within any applicable time period. 7.3 Asset Cover Covenant Each Obligor covenants, for so long as any of the Bonds remain outstanding, that it shall at all times ensure that the sum of: (a) (b) the Minimum Value of the Mortgaged Properties multiplied by the Bondholders' Security Percentage; and the Charged Cash, 44

45 will not be less than the Accreted Aggregate Notional Amount of the Bonds (excluding, for this purpose, any Retained Bonds held by or on behalf of the Issuer). 7.4 Valuations Each Obligor covenants, for so long as any of the Bonds remain outstanding, that: (a) (b) it shall deliver (or procure delivery of) a Full Valuation to the Bond Trustee at least once in every period of five calendar years (beginning in 2019) and, unless the Bond Trustee agrees otherwise, such Full Valuation must be delivered in the period between 30th September and the date falling 60 days thereafter in each year that such Full Valuation is required to be delivered; and it shall deliver (or procure delivery) to the Bond Trustee a Desk Top Valuation in the period between 30th September and the date falling 60 days thereafter in each year (beginning in 2015) other than a year in respect of which a Full Valuation is required to be delivered pursuant to paragraph (a) above. Each Valuation shall set out in reasonable detail the Value of the Mortgaged Properties as at a date no more than three months prior to the date of delivery of the Valuation. 7.5 Gross Debt Service Cover Covenant Each Obligor covenants, for so long as any of the Bonds remain outstanding, that it shall ensure that the Gross DSCR will not be less than 105 per cent on any Debt Service Cover Testing Date. 7.6 Surplus Cash Reinvestment Lock-Up Each Obligor covenants that, for so long as any of the Bonds remain outstanding, if, on any Debt Service Cover Testing Date, the average of the Net DSCR for each Debt Service Testing Date since the Issue Date is less than 110 per cent. the Guarantor shall cease to acquire any further Properties unless and until the average of the Net DSCR for each Debt Service Testing Date since the Issue Date is equal to or greater than 110 per cent Development Covenant For so long as any of the Bonds remain outstanding, the Guarantor shall not undertake any Development except on terms previously approved by an Extraordinary Resolution. 7.8 Future Issuance Covenant Each Obligor covenants, for so long as any of the Bonds remain outstanding, that the terms of any senior secured indebtedness entered into by it on or after the Issue Date shall include an asset cover test and a gross debt service ratio test which, in each case, is no less onerous on such Obligor than those set out in Condition 7.3 (Asset Cover Covenant) and Condition 7.5 (Gross Debt Service Cover Covenant) above. 7.9 Management Agreement Covenant For so long as any of the Bonds remain outstanding, the Guarantor covenants that it shall not: (a) make any payment in respect of Incentive Operating Charges (as set out in the Management Agreement) to the Manager under the Management Agreement other than in circumstances where the Guarantor (assuming it will be required to do so pursuant to the Guarantee) will, 45

46 following any such payment of Incentive Operating Charges to the Manager, be able to make payment in full in respect of all principal and interest on the Bonds and all other moneys payable by the Issuer pursuant to the Bond Trust Deed on the immediately following Interest Payment Date and the immediately following Instalment Redemption Date; and (b) consent to any transfer, termination or novation of the Management Agreement or any waiver, amendment or modification of any terms thereof relating to the payment of fees to the Manager, in each case except with the prior written consent of the Bond Trustee Supervisory Agreement Covenant For so long as any of the Bonds remain outstanding, the Guarantor covenants that it shall not: (a) (b) make any payment in respect of Deferred Supervisory Fee (as set out in the Supervisory Agreement) to the Supervisor under the Supervisory Agreement other than in circumstances where the Guarantor (assuming it will be required to do so pursuant to the Guarantee) will, following any such payment of Deferred Supervisory Fee to the Supervisor, be able to make payment in full in respect of all principal and interest on the Bonds and all other moneys payable by the Issuer pursuant to the Bond Trust Deed on the immediately following Interest Payment Date and the immediately following Instalment Redemption Date; and consent to any transfer, termination or novation of the Supervisory Agreement or any waiver, amendment or modification of any terms thereof relating to the payment of fees to the Supervisor, except with the prior written consent of the Bond Trustee Information Covenant For so long as any of the Bonds remain outstanding, the Issuer shall: (a) (b) send to the Bond Trustee (i) not later than 180 days after the end of each Financial Year, a copy of each Obligor's audited financial statements in respect of such Financial Year and (ii) within 45 days after each Debt Service Cover Testing Date, a copy of the Compliance Certificate in respect of such Debt Service Cover Testing Date, and, upon request by any Bondholder to the Issuer, make the same available to such Bondholder at the Issuer's registered office during normal business hours; at the request of Bondholders holding not less than 33 per cent. in Notional Amount of the Bonds for the time being outstanding, convene a meeting of the Bondholders to discuss the financial position of the Issuer, the Guarantor and the Heylo Group, provided, however, that the Issuer shall not be required to convene any such meeting pursuant to this Condition 7.11(b) more than once in any calendar year. Upon the request of Bondholders to convene any such meeting, as aforesaid, the Issuer shall notify all Bondholders of the date (which such date shall be no more than 21 days following such request), time and place of the meeting in accordance with Condition 17 (Notices). The Issuer shall act in good faith in addressing any questions regarding the financial position of the Issuer, the Guarantor and the Heylo Group raised at any such meeting, provided, however, that the Issuer shall not be obliged to disclose any information which it, in its absolute discretion, considers to be of a confidential nature. For the avoidance of doubt, the provisions of this Condition 7.11(b) are in addition to the meetings provisions set out in Condition 19 (Meetings of Bondholders, Modification and Waiver). 46

47 7.12 Verification The Verification Agent shall, subject to receipt of such information as it requires from the Obligors and the Security Trustee, verify satisfaction of the Asset Cover Test and the covenants set out in Condition 7.5 (Gross Debt Service Cover Covenant) and Condition 7.6 (Surplus Cash Reinvestment Lock-Up) and shall confirm the same by countersigning each Compliance Certificate. 8. ADDITION AND RELEASE OF MORTGAGED PROPERTIES, APPORTIONMENT, CHARGED CASH AND PERMITTED INVESTMENTS 8.1 Addition of New Mortgaged Properties The Chargor may charge additional Properties pursuant to the Security Documents and allocate such additional Properties as Mortgaged Properties (the New Additional Properties) for the benefit of the Bond Beneficiaries (and the Bond Trustee in its capacity as Representative shall consent (without requiring the consent or sanction of the Bondholders or any other Secured Party) to such charging and allocation and execute an amended Apportionment Certificate to reflect the same) subject to: (a) (b) the delivery by the Chargor to the Security Trustee of the condition precedent documents specified in Schedule 2 to the Security Trust Deed in a form satisfactory to the Security Trustee in respect of the charging of such New Additional Properties; and the delivery by the Issuer (or the Chargor on its behalf) to the Bond Trustee of: (i) (ii) a completed New Property Approval Certificate certifying that, inter alia, the New Additional Properties are residential properties with long-dated inflation linked rental income; and a Valuation in relation to the New Additional Properties prepared by the Valuer dated no earlier than three months prior to the date on which the New Additional Properties are to be charged. For the purpose of Condition 8.1(b)(ii) above, the Valuation shall be a Desk-Top Valuation unless the Value of such New Additional Properties (when aggregated with the Value of all New Additional Properties charged pursuant to this Condition 8.1 since the date of the most recent Full Valuation) is equal to or exceeds 10 per cent. of the then outstanding aggregate Notional Amount of the Bonds, in which case the Issuer (or the Chargor on its behalf) shall deliver to the Bond Trustee a Full Valuation. Such Full Valuation shall include Values in respect of the New Additional Properties to be charged and all other New Additional Properties charged pursuant to this Condition 8.1 since the date of the most recent Full Valuation. 8.2 Release and/or reallocation of Mortgaged Properties The Chargor may release (and reallocate, if applicable) any one or more of the Mortgaged Properties from the Security and the Bond Trustee (in its capacity as Representative) shall agree (without requiring the consent or sanction of the Bondholders or any other Secured Party) to such release (and reallocation, if applicable), provided that, in the case of any reallocation or if such release would require an adjustment to the Bondholders' Apportioned Part, the Issuer delivers (or procures that the Chargor delivers) to the Bond Trustee a completed Property Release Certificate, certifying that the Obligors are (as at the date of the Property Release Certificate) in compliance with the Asset Cover Test, that, immediately following such release and/or reallocation, the Obligors will be in compliance with the Asset Cover Test and that no Event of Default or Potential Event of Default has occurred and is continuing. 47

48 8.3 Statutory Disposals The Chargor shall have the right to withdraw Mortgaged Properties from the Security pursuant to any Statutory Disposal without the need for the consent of the Security Trustee or the Bond Trustee (in its capacity as Representative) provided that, if such release would require an adjustment to the Bondholders' Apportioned Part, an Obligor delivers to the Bond Trustee as soon as reasonably practicable after the Obligor has received notice of such Statutory Disposal, a completed Statutory Disposal Certificate, certifying that the relevant withdrawal relates to a Statutory Disposal. Without prejudice to the aforementioned right to withdraw Mortgaged Properties from the Security pursuant to any Statutory Disposal, each Obligor covenants that, if following such withdrawal the Obligors will no longer be in compliance with the Asset Cover Test, it shall, as soon as practicable thereafter (and, in any event, prior to the expiry of the applicable grace period in Condition 15.1(c)) (a) charge and/or allocate (or procure that another Obligor charges and/or allocates) additional properties as Mortgaged Properties pursuant to Condition 8.1 (Addition of New Mortgaged Properties) and/or (b) deposit (or procure that another Obligor deposits) money into its Charged Account pursuant to Condition 8.5 (Charged Cash) in an aggregate amount sufficient to ensure that the Obligors will be in compliance with the Asset Cover Test. 8.4 Apportionment Without prejudice to the other provisions of this Condition 8, the Bond Trustee shall agree (and shall be deemed to have confirmed to the Security Trustee under the Security Trust Deed its agreement) to any adjustment of the Bondholders' Apportioned Part provided that the Obligors would continue to be in compliance with the Asset Cover Test immediately after such adjustment. 8.5 Charged Cash Any Obligor may, at any time, deposit money, or procure that another Obligor deposits money, into its respective Charged Account to ensure compliance with the Asset Cover Test. Each Obligor may only withdraw Charged Cash from its respective Charged Account if: (a) (b) the Obligors are, at the relevant time, in compliance with the Asset Cover Test and no Event of Default or Potential Event of Default has occurred and is continuing; and either: (i) (ii) such Charged Cash is to be applied by an Obligor in the acquisition of a property which is to be charged pursuant to the Security Documents and allocated for the benefit of the Bond Beneficiaries and, immediately following the acquisition, charging and allocation of such property, the Obligors will be in compliance with the Asset Cover Test; or such Charged Cash is to be used for any other purpose permitted by its Rules and, immediately following the withdrawal, the Obligors will be in compliance with the Asset Cover Test. For these purposes, the Bond Trustee may call for and shall be at liberty to accept a certificate signed by any two Authorised Signatories of the relevant Obligor (including, for the avoidance of doubt, a Compliance Certificate), as sufficient evidence that (a) the Obligors are, at the relevant time, in compliance with the Asset Cover Test and that no Event of Default of Potential Event of Default has occurred and is continuing and/or (b) the requirements of (i) or (ii) above, as the case may be, are met. 48

49 8.6 Permitted Investments Any Obligor may invest all or any part of its Charged Cash in Permitted Investments in accordance with the Custody Agreement. For the purpose of determining compliance with Condition 7.3 (Asset Cover Covenant), (a) the value attributed to such Permitted Investments shall be the purchase price thereof and no Obligor nor the Bond Trustee shall be required to monitor the value of any Permitted Investments in which any Charged Cash is invested and (b) the Bond Trustee shall not be required to monitor whether any investment is a Permitted Investment. Any income received by any Obligor in respect of Permitted Investments shall be credited to such Obligor's Charged Account and may only be withdrawn in accordance with Condition 8.5 (Charged Cash). 9. INTEREST 9.1 Interest Payment Dates The Bonds bear interest on their Notional Amount from and including 5th September, 2014 (the Interest Commencement Date) at the Rate of Interest, and interest will (subject as follows) be payable on each Interest Payment Date. Prior to the Final Senior Bond Redemption Date, interest in respect of the Junior Bonds shall be (a) payable on each Interest Payment Date in an amount equal to the Payable Interest Amount and (b) capitalised and added to the Notional Amount (without double counting in respect of the Notional Amounts specified in Condition 12.2 (Notional Amount)) on each Interest Payment Date in an amount equal to the Capitalised Interest Amount. 9.2 Interest Accrual Each Bond will cease to bear interest from and including the due date for redemption unless, upon due presentation, payment of the principal in respect of the Bond is improperly withheld or refused or unless default is otherwise made in respect of the payment, in which event interest shall continue to accrue as provided in the Bond Trust Deed. 9.3 Rate of Interest The rate of interest payable in respect of each Interest Period (the Rate of Interest) will be calculated by the Determination Agent, at or as soon as practicable after the Rate of Interest is capable of being determined, as: (a) in respect of the Senior Bonds, the product of 1.57 per cent. and LPI Index (t) ; and (b) in respect of the Junior Bonds, the product of 2.70 per cent. and LPI Index (t), provided that, in respect of the Junior Bonds: (i) prior to the Final Senior Bond Redemption Date, the Rate of Interest shall (subject to (ii) below) be separately calculated as: (x) (y) the product of 0.70 per cent. and LPI Index (t) (being the Rate of Payable Interest); and 2.00 per cent. (being the Rate of Capitalised Interest); and (ii) during a Junior Payment Block Period, the Rate of Interest shall be separately calculated as: 49

50 (x) (y) zero (being the Rate of Payable Interest); and 2.70 per cent. (being the Rate of Capitalised Interest). 9.4 Payable Interest Amount and Capitalised Interest Amount The Determination Agent shall, as soon as practicable after calculating the Rate of Interest, determine the Sterling amount (the Payable Interest Amount) payable in respect of interest on the Notional Amount in respect of each 100,000 in original nominal amount of each Class of Bonds for the relevant Interest Period. The Payable Interest Amount shall be determined by (a) applying the Rate of Interest (or, in respect of the Junior Bonds prior to the Final Senior Bond Redemption Date, the Rate of Payable Interest) to such Notional Amount in respect of each 100,000 in original nominal amount of the relevant Class of Bonds, (b) multiplying the sum by (i) the actual number of days in the period from (and including) the date from which interest begins to accrue (the Accrual Date) to (but excluding) the date on which it falls due divided by (ii) the actual number of days from and including the Accrual Date to (but excluding) the next following Interest Payment Date multiplied by 2, and (c) rounding the resultant figure to the nearest penny (half a pence being rounded upwards). Prior to the Final Senior Bond Redemption Date, the Determination Agent shall, determine the Sterling amount (the Capitalised Interest Amount) payable in respect of interest on the Notional Amount in respect of each 100,000 in original nominal amount of the Junior Bonds for the relevant Interest Period. The Capitalised Interest Amount shall be determined by (a) applying the Rate of Capitalised Interest to such Notional Amount in respect of each 100,000 in original nominal amount of the Junior Bonds, (b) multiplying the sum by (i) the actual number of days in the period from (and including) the Accrual Date to (but excluding) the date on which it falls due divided by (ii) the actual number of days from and including the Accrual Date to (but excluding) the next following Interest Payment Date multiplied by 2 and (c) rounding the resultant figure to the nearest penny (half a pence being rounded upwards). 9.5 Publication of Rate of Interest, Payable Interest Amount and Capitalised Interest Amount The Determination Agent shall cause the Rate of Interest, the Payable Interest Amount and (for each period prior to the Final Senior Bond Redemption Date) the Capitalised Interest Amount for each Interest Period and the relative Interest Payment Date to be notified to the Issuer (where the Issuer is not also the Determination Agent), the Guarantor, the Principal Paying Agent, the Bond Trustee and to any stock exchange or other relevant authority on which the Bonds are at the relevant time listed and to be published in accordance with Condition 17 (Notices) as soon as possible after their determination, and in no event later than the second Business Day thereafter. 9.6 Determination by the Bond Trustee The Bond Trustee (or an agent appointed by the Bond Trustee at the expense of the Issuer) shall, if the Determination Agent defaults at any time in its obligation to determine the Rate of Interest, Payable Interest Amount and/or Capitalised Interest Amount in accordance with the above provisions, determine the Rate of Interest, Payable Interest Amount and/or Capitalised Interest Amount, as applicable, the Rate of Interest at such rate as, in its absolute discretion (having such regard as it shall think fit to the procedure described above), it shall deem fair and reasonable in all the circumstances and the Payable Interest Amount and Capitalised Interest Amount in the manner provided in Condition 9.4 and any such determination shall be deemed to be a determination by the Determination Agent. 50

51 9.7 Notifications, etc. to be Final All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of the provisions of this Condition, whether by the Determination Agent or the Bond Trustee, will (in the absence of wilful default, bad faith or manifest error) be binding on the Issuer, the Guarantor, the Bond Trustee, the Determination Agent, the Paying Agents and all Bondholders, Receiptholders and Couponholders and (in the absence of wilful default or bad faith) no liability to the Issuer, the Guarantor, the Bondholders, the Receiptholders or the Couponholders shall attach to the Determination Agent or, if applicable, the Bond Trustee in connection with the exercise or non-exercise by either of them of their powers, duties and discretions under this Condition AMENDMENTS TO THE INDEX 10.1 Changes in Circumstances affecting the Index: change in base If at any time and from time to time the Index is changed by the substitution of a new base therefor, then with effect from the month from and including that in which such substitution takes effect: (a) (b) the definition of "Index" and "Index Figure" shall be deemed to refer to the new month in substitution for January 1987 (or, as the case may be, to such other month as may have been substituted therefor); and the new Base Index Figure and each new Index (t-3) and Index (t-9) shall be the product of the existing Base Index Figure or each existing Index (t-3) and Index (t-9), respectively, and the Index Figure for the date on which such substitution takes effect, divided by the Index Figure for the date immediately preceding the date on which such substitution takes effect Changes in Circumstances affecting the Index: delay in publication of the Index If the Index Figure relating to any month (the relevant month) which is required to be taken into account for the purposes of the determination of the Index Figure for any date is not published on or before the 14th Business Day before the date on which such payment is due (the date for payment), the Index Figure applicable to the relevant month shall be: (a) (b) such substitute index figure (if any) as the Bond Trustee considers (acting solely on the advice of the Indexation Adviser) to have been published by the United Kingdom Debt Management Office or the Bank of England, as the case may be, for the purposes of indexation of payments on the Reference Gilts or, failing such publication, on any one or more issues of index-linked UK government gilt selected by the Indexation Adviser (and approved by the Bond Trustee (acting solely on the advice of the Indexation Adviser)); or if no such determination is made by such Indexation Adviser within seven days, the Index Figure last published (or, if later, the substitute index figure last determined pursuant to paragraph (a) above) before the date for payment Application of Changes Where the provisions of Condition 10.2 apply, the determination of the Indexation Adviser as to the Index Figure applicable to the month in which the date for payment falls or the date for payment, as the case may be, shall be conclusive and binding. If, an Index Figure having been applied pursuant to Condition 10.2(b), the Index Figure relating to the relevant month or relevant calculation month, as the case may be, is subsequently published while the Bonds are still outstanding, then: 51

52 (a) (b) in relation to a payment of principal or interest in respect of the Bonds other than upon final redemption of the Bonds, the principal or interest (as the case may be) next payable after the date of such subsequent publication shall be increased or reduced, as the case may be, by an amount equal to the shortfall or excess, as the case may be, of the amount of the relevant payment made on the basis of the Index Figure applicable by virtue of Condition 10.2(b) below or above the amount of the relevant payment that would have been due if the Index Figure subsequently published had been published on or before the 14th Business Day before the date for payment; and in relation to a payment of principal or interest upon final redemption, no subsequent adjustment to amounts paid will be made Cessation of or Fundamental Changes to the Index If: (a) (b) the Bond Trustee has been notified by the Determination Agent that the Index has ceased to be published; or the Bond Trustee receives written notice of any change made to the coverage or the basic calculation of the Index which constitutes a fundamental change which would, in the opinion of the Bond Trustee (acting solely on the advice of the Indexation Adviser), be materially prejudicial to the interests of the Bondholders, the Bond Trustee will give written notice of such occurrence to the Issuer and the Guarantor, and the Issuer or the Guarantor and the Bond Trustee (acting solely on the advice of the Indexation Adviser) together shall seek to agree for the purpose of the Bonds one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Issuer, the Guarantor and the Bondholders in no better and no worse position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made. If the Issuer, the Guarantor and the Bond Trustee (acting solely on the advice of the Indexation Adviser) fail to reach agreement as mentioned above within 20 Business Days following the giving of notice as mentioned in the immediately preceding paragraph to this paragraph, a bank or other person in London shall be appointed by the Issuer, the Guarantor and the Bond Trustee or, failing agreement on and the making of such appointment within 20 Business Days following the expiry of the 20 Business Day period referred to above, by the Bond Trustee (acting solely on the advice of the Indexation Adviser) (in each case, such bank or other person so appointed being referred to as the Expert), to determine for the purpose of the Bonds one or more adjustments to the Index or a substitute index (with or without adjustments) with the intention that the same should leave the Issuer, the Guarantor and the Bondholders in no better and no worse position than they would have been had the Index not ceased to be published or the relevant fundamental change not been made. Any Expert so appointed shall act as an expert and not as an arbitrator and all fees, costs and expenses of the Expert and of any Indexation Adviser and of any of the Issuer, the Guarantor and the Bond Trustee in connection with such appointment shall be borne by the Issuer or the Guarantor. The Index shall be adjusted or replaced by a substitute index as agreed by the Issuer, the Guarantor and the Bond Trustee (acting solely on the advice of the Indexation Adviser) or as determined by the Expert pursuant to the foregoing paragraphs, as the case may be, and references in these Conditions to the Index and to any Index Figure shall be deemed amended in such manner as the Bond Trustee (acting solely on the advice of the Indexation Adviser), the Issuer and the Guarantor agree are appropriate to give effect to such adjustment or replacement. Such amendments shall be effective from the date of such notification and binding upon the Issuer, the Guarantor, the Bond Trustee and 52

53 the Bondholders, and the Issuer and the Guarantor shall give notice to the Bondholders in accordance with Condition 17 (Notices) of such amendments as promptly as practicable following such notification. The Bond Trustee shall not be required to take any action under this Condition 10 unless it shall first have been indemnified and/or secured and/or prefunded to its satisfaction. 11. PAYMENTS AND EXCHANGES OF TALONS 11.1 Payments in respect of Bonds, Receipts and Coupons Subject as follows, payments of principal and interest in respect of each Bond will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the Bond. Payments of interest on an Interest Payment Date will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Coupon, in each case at the specified office outside the United States of any of the Paying Agents. Payments of instalments of principal on an Instalment Redemption Date (other than the Instalment Redemption Date falling on the Maturity Date) will be made against presentation and surrender (or, in the case of part payment only, endorsement) of the relevant Receipt, in each case at the specified office outside the United States of any of the Paying Agents. Each Receipt must be presented for payment together with the Bond to which it appertains. Receipts presented without the Bond to which they appertain do not constitute valid obligations of the Issuer Method of Payment Payments will be made by credit or transfer to an account in Sterling maintained by the payee with or, at the option of the payee, by a cheque in Sterling drawn on, a bank in London Missing Unmatured Receipts or Coupons Each Bond should be presented for payment together with all relative unmatured Receipts and Coupons (which expression shall, for the avoidance of doubt, include Coupons falling to be issued on exchange of matured Talons). Upon the date on which any Bond becomes due and payable, all unmatured Coupons appertaining to the Bond (whether or not attached) shall become void and no payment shall be made in respect of such Coupons Payments subject to Applicable Laws Payments in respect of principal and interest on the Bonds are subject in all cases to any fiscal or other laws and regulations applicable thereto in the place of payment Payment only on a Presentation Date A holder shall be entitled to present a Bond, Receipt or Coupon for payment only on a Presentation Date and shall not, except as provided in Condition 9 (Interest), be entitled to any further interest or other payment if a Presentation Date is after the due date. Presentation Date means a day which (subject to Condition 14 (Prescription)): (a) is, or falls after, the relevant due date; 53

54 (b) (c) is a Business Day in the place of the specified office of the Paying Agent at which the Bond, Receipt or Coupon is presented for payment; and in the case of payment by credit or transfer to a Sterling account in London, is a Business Day in London. In this Condition, Business Day means, in relation to any place, a day on which commercial banks and foreign exchange markets settle payments and are open for general business (including dealing in foreign exchange and foreign currency deposits) in that place Exchange of Talons On and after the Interest Payment Date on which the final Coupon comprised in any Coupon sheet matures, the Talon comprised in the Coupon sheet may be surrendered at the specified office of any Paying Agent in exchange for a further Coupon sheet (including any appropriate further Talon), subject to the provisions of Condition 14 (Prescription). Each Talon shall, for the purposes of these Conditions, be deemed to mature on the Interest Payment Date on which the final Coupon comprised in the relative Coupon sheet matures Initial Paying Agents The names of the initial Paying Agents and their initial specified offices are set out at the end of these Conditions. The Issuer and the Guarantor reserve the right, subject to the prior written approval of the Bond Trustee, at any time to vary or terminate the appointment of any Paying Agent and to appoint additional or other Paying Agents provided that: (a) (b) (c) there will at all times be a Principal Paying Agent; there will at all times be at least one Paying Agent (which may be the Principal Paying Agent) having its specified office in a European city; and the Issuer undertakes to maintain a Paying Agent in a Member State of the European Union that is not obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such Directive. Notice of any termination or appointment and of any changes in specified offices will be given to the Bondholders promptly by the Issuer in accordance with Condition 17 (Notices). In acting under the Agency Agreement, the Paying Agents act solely as agents of the Issuer and the Guarantor and, in certain circumstances specified therein, of the Bond Trustee and do not assume any obligation to, or relationship of agency or trust with, any Bondholders or Couponholders. The Agency Agreement contains provisions permitting any entity into which any Paying Agent is merged or converted or with which it is consolidated or to which it transfers all or substantially all of its assets to become the successor paying agent. 12. REDEMPTION AND PURCHASE 12.1 Redemption in Instalments Unless previously redeemed or purchased and cancelled as provided below, the Issuer will redeem the Bonds of each Class at an amount equal to the Instalment Amount on each Instalment Redemption Date. 54

55 12.2 Notional Amount Subject as follows in respect of the Junior Bonds, the Notional Amount for each period ending on an Instalment Redemption Date in respect of each 100,000 in nominal amount of each Class of Bonds shall be the amount set out below: Previous Instalment Redemption Date Instalment Redemption Date Senior Bonds Notional (t) Junior Bonds Notional (t) 31st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , ,

56 31st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , , st March, th September, , , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March, , st March, th September, , th September, st March,

57 The Notional Amount specified above in respect of the Junior Bonds reflects the interest to be capitalised pursuant to, and in accordance with, Condition 9 (Interest) and assumes that the Senior Bonds remain outstanding until the final Senior Bond Instalment Redemption Date (being 30th September, 2049) and no Junior Payment Block Period occurs. In the event that the Senior Bonds are purchased and cancelled in full prior to this date, interest will cease to be capitalised in respect of the Junior Bonds and the Notional Amount of the Junior Bonds will be adjusted accordingly in respect of future periods. Upon the occurrence of a Junior Payment Block Period, interest will be capitalised in full respect of the Junior Bonds and the Notional Amount of the Junior Bonds will be adjusted accordingly in respect of future periods. In either such event, the Determination Agent shall cause the adjusted Notional Amounts to be notified to the Issuer (where the Issuer is not also the Determination Agent), the Guarantor, the Principal Paying Agent, the Bond Trustee and to any stock exchange or other relevant authority on which the Bonds are at the relevant time listed and to be published in accordance with Condition 17 (Notices) as soon as possible after the Final Senior Note Redemption Date or the commencement and end of the Junior Payment Block Period, as applicable, and in no event later than the second Business Day thereafter Redemption for Taxation Reasons If the Issuer satisfies the Bond Trustee immediately before the giving of the notice referred to below that: (a) (b) as a result of any change in, or amendment to, the laws or regulations of the Relevant Jurisdiction, or any change in the application or official interpretation of the laws or regulations of the Relevant Jurisdiction, which change or amendment becomes effective after 5th September, 2014, on the next Interest Payment Date either (i) the Issuer would be required to pay additional amounts as provided or referred to in Condition 13 (Taxation) or (ii) the Guarantor would be unable for reasons outside its control to procure payment by the Issuer and in making payment itself would be required to pay such additional amounts; and the requirement cannot be avoided by the Issuer or, as the case may be, the Guarantor taking reasonable measures available to it, the Issuer may at its option, having given not less than 30 nor more than 60 days' notice to the Bondholders in accordance with Condition 17 (Notices) (which notice shall be irrevocable), redeem all the Bonds, but not some only, on the next Interest Payment Date at the Early Redemption Amount, together with interest accrued but unpaid up to and including the date of redemption, provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest date on which the Issuer or, as the case may be, the Guarantor would be required to pay such additional amounts, were a payment in respect of the Bonds then be due. Prior to the publication of any notice of redemption pursuant to this Condition 12.3, the Issuer shall deliver to the Bond Trustee a certificate signed by two Authorised Signatories of the Issuer or, as the case may be, the Guarantor stating that the requirement referred to in (a) above will apply on the next Interest Payment Date and cannot be avoided by the Issuer or, as the case may be, the Guarantor taking reasonable measures available to it, and the Bond Trustee shall be entitled to accept the certificate as sufficient evidence of the satisfaction of the conditions precedent set out above, in which event it shall be conclusive and binding on the Bondholders, the Receiptholders and the Couponholders. 57

58 12.4 Redemption for Index Reasons If either: (a) (b) the Index Figure for three consecutive months is required to be determined on the basis of an Index Figure previously published as provided in Condition 10.2 (Changes in Circumstances affecting the Index: delay in publication of the Index) and the Bond Trustee has been notified by the Determination Agent that publication of the Index has ceased; or notice is published by Her Majesty's Treasury, or on its behalf, following a change in relation to the Index, offering a right of redemption to the holders of either Reference Gilt, and (in either case) no amendment or substitution of the Index shall have been advised by the Indexation Adviser to the Issuer or the Guarantor and such circumstances are continuing, the Issuer may, upon giving not more than 60 nor less than 30 days' notice to the Bond Trustee, the Paying Agents and, in accordance with Condition 17 (Notices), the Bondholders, redeem all, but not some only, of the Bonds at the Early Redemption Amount, together with interest accrued but unpaid up to and including the date of redemption Early Redemption at the Option of the Issuer The Issuer may, at any time, having given: (a) (b) not less than 15 nor more than 30 days' notice to the Bondholders in accordance with Condition 17 (Notices); and notice to the Bond Trustee and the Principal Paying Agent not less than 15 days before the giving of the notice referred to in (a), (which notices shall be irrevocable and shall specify the date fixed for redemption), redeem all (but not some only) of the Bonds on any following Interest Payment Date. Redemption of each Class of Bonds pursuant to this Condition 12.5 shall be made at the higher of the following: (i) (ii) the Early Redemption Amount; and the price determined to be appropriate (without any additional indexation beyond the implicit indexation in such determined price) by a financial adviser in London (selected by the Issuer and approved by the Bond Trustee) as being the price at which the Gross Real Redemption Yield on the Bonds on the Reference Date is equal to the Gross Real Redemption Yield at 3.00 pm (London time) on the Reference Date on the relevant Reference Gilt, in each case, plus accrued but unpaid interest Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default The Issuer shall, having given not less than 10 days' notice to the Senior Bondholders in accordance with Condition 17 (Notices), redeem all (but not some only) of the Senior Bonds at their Early Redemption Amount, together with interest accrued but unpaid up to and including the date of redemption, following an Event of Default, provided that: 58

59 (a) the Issuer is directed to do so (on not less than 10 days' notice) by the holders of at least 50 per cent. in Notional Amount of the Junior Bondholders not later than 179 days following the occurrence of such Event of Default; (b) (c) (d) the Issuer shall have received from the Junior Bondholders, not later than the date such notice is given by the Issuer to Senior Bondholders, cleared funds in an amount equal to that required to redeem all Senior Bonds pursuant to this Condition 12.6; immediately following such redemption, the Issuer shall issue further bonds in the same amount and with the same terms as the Senior Bonds (including the Notional Amount thereof as at the date of redemption) to the Junior Bondholders (and shall make all consequential amendments to these Conditions and the Transaction Documents to give effect to such further issue); and if requested to do so by the holders of at least 50 per cent. in Notional Amount of the Junior Bondholders, the Issuer shall (subject to being secured and/or indemnified and/or prefunded to its satisfaction by the Junior Bonds) use all reasonable endeavours to obtain a listing of such further bonds on a recognised stock exchange (as defined in section 1005 of the Income Tax Act 2007) Purchases Each Obligor or any other member of the Heylo Group may at any time purchase Bonds of the Controlling Class (provided that all unmatured Receipts and Coupons appertaining to such Bonds are purchased with such Bonds) in any manner and at any price. Following any such purchase, such Obligor or such other member of the Heylo Group, as the case may be, may (but is not obliged to) surrender the Bonds to the Issuer for cancellation Cancellations All Bonds (a) redeemed by the Issuer pursuant to Condition 12.3 (Redemption for Taxation Reasons), Condition 12.4 (Redemption for Index Reasons), Condition 12.5 (Early Redemption at the Option of the Issuer) or Condition 12.6 (Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default) or (b) purchased by an Obligor or any other member of the Heylo Group pursuant 12.7 (Purchases) and surrendered for cancellation, shall be cancelled and may not be issued or resold Notices Final Upon the expiry of any notice as is referred to in Condition 12.3 (Redemption for Taxation Reasons), Condition 12.4 (Redemption for Index Reasons), Condition 12.5 (Early Redemption at the Option of the Issuer) or Condition 12.6 (Redemption of Senior Bonds at the option of Junior Bondholders following an Event of Default) the Issuer shall be bound to redeem the Bonds to which the notice refers in accordance with the terms of such Condition. 13. TAXATION 13.1 Payment without Withholding All payments in respect of the Bonds, Receipts or Coupons by or on behalf of the Issuer or the Guarantor shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (Taxes) imposed or levied by or on behalf of the Relevant Jurisdiction, unless the withholding or deduction of the Taxes is required by law. In that event, the Issuer or, as the case may be, the Guarantor will pay such 59

60 additional amounts as may be necessary in order that the net amounts received by the Bondholders, Receiptholders and Couponholders after the withholding or deduction shall equal the respective amounts which would have been receivable in respect of the Bonds, the Receipts or, as the case may be, the Coupons in the absence of the withholding or deduction; except that no additional amounts shall be payable in relation to any payment in respect of any Bond, Receipt or Coupon: (a) (b) (c) (d) presented for payment by or on behalf of, a holder who is liable to the Taxes in respect of the Bond, Receipt or Coupon by reason of his having some connection with the Relevant Jurisdiction other than the mere holding of the Bond, Receipt or Coupon; or where such withholding or deduction is imposed on a payment to an individual and is required to be made pursuant to European Council Directive 2003/48/EC or any law implementing or complying with, or introduced in order to conform to, such Directive; or presented for payment by or on behalf of a holder who would have been able to avoid such withholding or deduction by presenting the relevant Bond, Receipt or Coupon to another Paying Agent in a Member State of the European Union; or presented for payment more than 30 days after the Relevant Date except to the extent that a holder would have been entitled to additional amounts on presenting the same for payment on the last day of the period of 30 days assuming, whether or not such is in fact the case, that day to have been a Presentation Date (as defined in Condition 11 (Payments and Exchanges of Talons)) Additional Amounts Any reference in these Conditions to any amounts in respect of the Bonds shall be deemed also to refer to any additional amounts which may be payable under this Condition or under any undertakings given in addition to, or in substitution for, this Condition pursuant to the Bond Trust Deed. 14. PRESCRIPTION The Bonds, Receipts and Coupons will become void unless presented for payment within a period of ten years (in the case of principal and premium) and five years (in the case of interest) after the Relevant Date therefor. There shall not be included in any Coupon sheet issued upon exchange of a Talon any Coupon which would be void upon issue under this Condition 14 or Condition 11 (Payments and Exchanges of Talons). 15. EVENTS OF DEFAULT AND ENFORCEMENT 15.1 Events of Default The Bond Trustee at its discretion may, and if so requested in writing by the holders of at least 50 per cent. in Notional Amount of the Controlling Class or if so directed by an Extraordinary Resolution shall ((i) subject in each case to being secured and/or indemnified and/or prefunded to its satisfaction and (ii) provided that, for so long as any Senior Bonds are outstanding, the Bond Trustee shall not exercise such discretion if, at any time, a default as referred to in paragraph (a) below is subsisting in respect of the Junior Bonds but, at such time, there is no such default subsisting in respect of the Senior Bonds), (but, in the case of the happening of any of the events described in subparagraphs (b), (d) and (i) below, only if the Bond Trustee shall have certified in writing to the Issuer and the Guarantor that such event is, in its opinion, materially prejudicial to the interests of the Bondholders) give notice in writing to the Issuer and the Guarantor that the Bonds are, and they shall accordingly forthwith become, immediately due and repayable at the Early Redemption Amount, 60

61 together with accrued interest as provided in the Bond Trust Deed, if any of the following events (each an Event of Default) shall occur: (a) (b) default is made in the payment of any principal or interest due in respect of the Bonds or any of them and the default continues for a period of seven days in the case of principal and fourteen days in the case of interest; or the Issuer or the Guarantor fails to perform or observe any of its other obligations under, or in respect of, the Conditions (other than in respect of Condition 7.3 (Asset Cover Covenant)), the Bond Trust Deed or the Security Trust Deed or if any representation given by any Obligor to the Bond Trustee in the Bond Trust Deed or to the Security Trustee in the Security Trust Deed is found to be untrue, incorrect or misleading as at the time it was given and (except in any case where, in the opinion of the Bond Trustee, the failure or inaccuracy is incapable of remedy when no such continuation or notice as is hereinafter mentioned will be required) the failure or inaccuracy continues for the period of 30 days next following the service by the Bond Trustee on the Issuer or the Guarantor (as the case may be) of notice requiring the same to be remedied; or (c) the Obligors fail to perform or observe their respective obligations under Conditions 7.3 (Asset Cover Covenant) and (except in any case where, in the opinion of the Bond Trustee, the failure is incapable of remedy when no such continuation or notice as is hereinafter mentioned will be required) the failure continues for the period of 60 days next following the service by the Bond Trustee on the Issuer of notice requiring the same to be remedied; or (d) (A) any other present or future indebtedness of the Issuer or the Guarantor for or in respect of moneys borrowed or raised becomes due and payable prior to its stated maturity by reason of any actual or potential default, event of default or the like (howsoever described); or (B) (C) any such indebtedness is not paid when due or, as the case may be, within any originally applicable grace period; or the Issuer or the Guarantor fails to pay when due any amount payable by it under any present or future guarantee for, or indemnity in respect of, any moneys borrowed or raised, provided that the aggregate amount of the relevant indebtedness, guarantees and indemnities in respect of which one or more of the events mentioned above in (A), (B) or (C) above have occurred equals or exceeds 10,000,000 or its equivalent in other currencies (as reasonably determined by the Bond Trustee); or (e) (f) (g) any order is made by any competent court or resolution passed for the winding up or dissolution of the Issuer or the Guarantor save for the purposes of a reorganisation on terms previously approved in writing by the Bond Trustee or by an Extraordinary Resolution; or the Issuer or the Guarantor ceases or threatens to cease to carry on the whole or, in the opinion of the Bond Trustee, a substantial part of its business, save for the purposes of a reorganisation on terms previously approved in writing by the Bond Trustee or by an Extraordinary Resolution; or the Issuer or the Guarantor stops or threatens to stop payment of, or is unable to, or admits inability to, pay, its debts (or any class of its debts) as they fall due or is deemed unable to pay its debts pursuant to or for the purposes of any applicable law, or is adjudicated or found bankrupt or insolvent; or 61

62 (h) (A) proceedings are initiated against the Issuer or the Guarantor under any applicable liquidation, insolvency, composition, reorganisation or other similar laws or an application is made (or documents filed with a court) for the appointment of a receiver, liquidator, manager or other similar official, or a receiver, liquidator, manager or other similar official is appointed, in relation to the Issuer or the Guarantor or, as the case may be, in relation to all or substantially all of the undertaking or assets of the Issuer or the Guarantor or an encumbrancer takes possession of all or substantially all of the undertaking or assets of the Issuer or the Guarantor, or a distress, execution, attachment, sequestration or other process is levied, enforced upon, sued out or put in force against all or substantially all of the undertaking or assets of the Issuer; and (B) in any such case (other than the appointment of an administrator (if applicable)) is not discharged within l4 days, save for the purposes of a reorganisation on terms previously approved in writing by the Bond Trustee or by an Extraordinary Resolution; or (i) (j) (k) (l) the Issuer or the Guarantor initiates or consents to judicial proceedings relating to itself under any applicable liquidation, insolvency, composition, reorganisation or other similar laws (including the obtaining of a moratorium); or the Issuer or the Guarantor makes a conveyance or assignment for the benefit of, or enters into any composition or other arrangement with, its creditors generally (or any class of its creditors) or any meeting is convened to consider a proposal for an arrangement or composition with its creditors generally (or any class of its creditors) save for the purposes of a reorganisation on terms previously approved in writing by the Bond Trustee or by an Extraordinary Resolution; or it is or will become unlawful for the Issuer or the Guarantor to perform or comply with any of its obligations under or in respect of the Bonds, the Bond Trust Deed or the Security Trust Deed; or the Guarantee ceases to be, or is claimed by the Issuer or the Guarantor not to be, in full force and effect Enforcement The Bond Trustee may at any time, at its discretion and without notice, take such proceedings and/or other steps or action (including lodging an appeal in any proceedings) against or in relation to any Obligor as it may think fit to enforce the provisions of the Bond Trust Deed, the Bonds, the Receipts, the Coupons and/or any of the other Transaction Documents or otherwise or (in its capacity as Representative) to direct the Security Trustee to take such proceedings and/or other steps or action (including lodging an appeal in any proceedings) against or in relation to the Chargor as it may think fit to enforce the provisions of the Security Trust Deed, but it shall not be bound to take any such proceedings or other steps or action in relation to the Bond Trust Deed, the Bonds, the Receipts, the Coupons or any of the other Transaction Documents or otherwise or to direct the Security Trustee, as aforesaid, unless (a) it shall have been so directed by an Extraordinary Resolution of the Bondholders of the Controlling Class or so requested in writing by the holders of at least 50 per cent. in Notional Amount of the Controlling Class and (b) it shall have been secured and/or indemnified and/or prefunded to its satisfaction. 62

63 The Bond Trustee may refrain from taking any action in any jurisdiction if the taking of such action in that jurisdiction would, in its opinion based upon legal advice in the relevant jurisdiction, be contrary to any law of that jurisdiction. Furthermore, the Bond Trustee may also refrain from taking such action if it would otherwise render it liable to any person in that jurisdiction or if, in its opinion based upon such legal advice, it would not have the power to do the relevant thing in that jurisdiction by virtue of any applicable law in that jurisdiction or if it is determined by any court or other competent authority in that jurisdiction that it does not have such power. No Bondholder, Receiptholder, Couponholder or any Secured Party (other than the Bond Trustee) shall be entitled (i) to take any steps or action against any Obligor to enforce the performance of any of the provisions of the Bond Trust Deed, the Bonds, the Receipts the Coupons or any of the other Transaction Documents; (ii) to take any steps or action against the Chargor (or direct the Security Trustee to take any steps or action against the Chargor) to enforce the performance of the provisions of the Security Trust Deed; or (iii) to take any other action (including lodging an appeal in any proceedings) in respect of or concerning any Obligor, in each case unless the Bond Trustee, having become bound so to take any such steps, actions or proceedings, fails so to do within a reasonable period and the failure shall be continuing. 16. REPLACEMENT OF BONDS, RECEIPTS, COUPONS AND TALONS Should any Bond, Receipt, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed it may be replaced at the specified office of the Principal Paying Agent (subject to all applicable laws and the requirements of the Irish Stock Exchange) upon payment by the claimant of such costs and expenses as may be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer may reasonably require. Mutilated or defaced Bonds, Receipts, Coupons or Talons must be surrendered before replacements will be issued. 17. NOTICES All notices regarding the Bonds will be deemed to be validly given if published in a leading English language daily newspaper of general circulation in London. It is expected that any such publication in a newspaper will be made in the Financial Times in London. The Issuer shall also ensure that notices are duly published in a manner which complies with the rules and regulations of any stock exchange or other relevant authority on which the Bonds are for the time being listed or by which they have been admitted to trading. Any such notice will be deemed to have been given on the date of the first publication or, where required to be published in more than one newspaper, on the date of the first publication in all required newspapers. If, in the opinion of the Bond Trustee, publication as provided above is not practicable, a notice shall be validly given if published in another leading daily English language newspaper with general circulation in Europe. Notices to be given by any Bondholder shall be in writing and given by lodging the same, together with the relative Bond or Bonds, with the Principal Paying Agent. Receiptholders and Couponholders will be deemed for all purposes to have notice of the contents of any notice given to the Bondholders in accordance with this Condition 17 (Notices). 18. SUBSTITUTION The Bond Trust Deed contains provisions permitting the Bond Trustee, subject as follows and subject to any required amendment of the Bond Trust Deed, without the consent of the Bondholders, the Receiptholders or the Couponholders or any Secured Party, to agree with the Obligors to the substitution in place of the Issuer (or of any previous substitute under this Condition) as the principal 63

64 debtor under the Bonds, the Receipts, the Coupons and the Bond Trust Deed of another company or other entity subject to: (a) (b) (c) except in the case of substitution of the Issuer with the Guarantor, the Bonds remaining unconditionally and irrevocably guaranteed by the Guarantor; the Bond Trustee being satisfied that the interests of the Bondholders will not be materially prejudiced by the substitution; and certain other conditions set out in the Bond Trust Deed being complied with. Any such substitution shall be notified to the Bondholders in accordance with Condition 17 (Notices) as soon as practicable thereafter. 19. MEETINGS OF BONDHOLDERS, MODIFICATION AND WAIVER 19.1 Meetings of Bondholders The Bond Trust Deed contains provisions for convening meetings of the Bondholders of each Class to consider any matter affecting their interests, including the sanctioning by Extraordinary Resolution of a modification of the Bonds, the Receipts, the Coupons or any of the provisions of the Transaction Documents. Such a meeting may be convened by the Issuer or the Bond Trustee and shall be convened by the Issuer if required in writing by Bondholders holding not less than ten per cent. in Notional Amount of the Bonds of such Class for the time being remaining outstanding. The quorum at any such meeting for passing an Extraordinary Resolution is one or more persons holding or representing in aggregate more than 50 per cent. of the Notional Amount of the Bonds of such Class for the time being outstanding, or at any adjourned meeting one or more persons being or representing Bondholders of such Class whatever the Notional Amount of the Bonds so held or represented, except that at any meeting the business of which includes any matter defined in the Bond Trust Deed as a Basic Terms Modification, including, inter alia, modifying the date of payment of any instalment of principal of the Bonds of such Class or any date for payment of interest thereon, reducing or cancelling the amount of principal or the rate of interest payable in respect of the Bonds of such Class, altering the currency of payment of the Bonds, the Receipts or the Coupons of such Class, modifying the financial covenants in Conditions 7.3 (Asset Cover Covenant), 7.5 (Gross Debt Service Cover Covenant) or 7.6 (Surplus Cash Reinvestment Lock-Up) or any provisions relating to the Security, the quorum shall be one or more persons holding or representing in aggregate not less than 75 per cent. in Notional Amount of the Bonds of such Class for the time being outstanding, or at any such adjourned meeting one or more persons holding or representing in aggregate not less than 25 per cent. in Notional Amount of the Bonds of such Class for the time being outstanding. The Bond Trust Deed provides that (a) a resolution passed at a meeting duly convened and held in accordance with the Bond Trust Deed by a majority consisting of not less than 75 per cent. of the votes cast on such resolution, (b) a resolution in writing signed by or on behalf of the holders of not less than 75 per cent. in Notional Amount of the Bonds of such Class for the time being outstanding or (c) consent given by way of electronic consents through the relevant clearing system(s) (in a form satisfactory to the Bond Trustee) by or on behalf of the holders of not less than 75 per cent. in Notional Amount of the Bonds of such Class for the time being outstanding, shall, in each case, be effective as an Extraordinary Resolution of the Bondholders of such Class. An Extraordinary Resolution passed by the Bondholders of such Class shall be binding on all the Bondholders of such Class, whether or not (in the case of Extraordinary Resolutions passed at any meeting) they are present at any meeting and whether or not they voted on the resolution, and on all Receiptholders and all Couponholders. 64

65 The Bond Trust Deed contains provisions to the effect, inter alia, that: (a) (b) an Extraordinary Resolution passed at any meeting of the Senior Bondholders shall be binding on the Junior Bondholders irrespective of the effect upon them, except an Extraordinary Resolution to sanction a modification of certain provisions of these Conditions or the Transaction Documents, which will not take effect unless the Bond Trustee is of the opinion that it would not be materially prejudicial to the interests of the Junior Bondholders or it shall have been sanctioned by Extraordinary Resolutions of the Junior Bondholders; and an Extraordinary Resolution (other than an Extraordinary Resolution referred to in paragraph (a) above) passed at any meeting of Junior Bondholders shall not be effective for any purpose unless either: (i) (ii) the Bond Trustee is of the opinion that it would not be materially prejudicial to the interests of the Senior Bondholders; or it is sanctioned by an Extraordinary Resolution of the Senior Bondholders Modification, Waiver, Authorisation and Determination The Bond Trustee may agree, without the consent of the Bondholders, Receiptholders, Couponholders or any Secured Party, to any modification (except as stated in the Bond Trust Deed) of, or to the waiver or authorisation of any breach or proposed breach of, any of the provisions of the Bonds, the Bond Trust Deed or any other Transaction Document, or determine, without any such consent as aforesaid, that any Potential Event of Default or Event of Default shall not be treated as such, where, in any such case, it is not, in the opinion of the Bond Trustee, materially prejudicial to the interests of the Bondholders so to do or may agree, without any such consent as aforesaid, to any modification which, in the opinion of the Bond Trustee, is of a formal, minor or technical nature or to correct a manifest error or an error which is, in the opinion of the Bond Trustee, proven. Any such modification, waiver, authorisation, determination or substitution shall be binding on the Bondholders, the Receiptholders, the Couponholders and the Secured Parties and (unless the Bond Trustee agrees otherwise) shall be notified by the Issuer to the Bondholders as soon as practicable thereafter in accordance with Condition 17 (Notices) Bond Trustee to have regard to interests of Bondholders as a class In connection with the exercise by it of any of its trusts, powers, authorities and discretions (including, without limitation, any modification, waiver, authorisation, determination or substitution), the Bond Trustee shall have regard to the general interests of the holders of each Class as a class but shall not have regard to any interests arising from circumstances particular to individual Bondholders, Receiptholders or Couponholders (whatever their number) and, in particular but without limitation, shall not have regard to the consequences of any such exercise for individual Bondholders, Receiptholders or Couponholders (whatever their number) resulting from their being for any purpose domiciled or resident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or any political sub-division thereof and the Bond Trustee shall not be entitled to require, nor shall any Bondholder, Receiptholder or Couponholder be entitled to claim, from the Issuer, the Guarantor, the Bond Trustee or any other person any indemnification or payment in respect of any tax consequences of any such exercise upon individual Bondholders, Receiptholders or Couponholders except to the extent already provided for in Condition 13 (Taxation) and/or any undertaking given in addition to, or in substitution for, Condition 13 (Taxation) pursuant to the Bond Trust Deed. 65

66 20. INDEMNIFICATION AND PROTECTION OF THE BOND TRUSTEE AND THE SECURITY TRUSTEE AND BOND TRUSTEE AND SECURITY TRUSTEE CONTRACTING WITH THE ISSUER The Bond Trust Deed and the Security Trust Deed contain provisions for the indemnification of the Bond Trustee and the Security Trustee, respectively, and for their relief from responsibility and liability towards the Issuer, the Bondholders, the Receiptholders, the Couponholders and the Secured Parties, including (a) provisions relieving them from taking action unless secured and/or indemnified and/or prefunded to their satisfaction and (b) provisions limiting or excluding their liability in certain circumstances. The Bond Trustee and the Security Trustee are each exempted from any liability in respect of any loss, diminution in value or theft of all or any part of the Security Assets, from any obligation to insure all or any part of the Security Assets (including, in either such case, any documents evidencing, constituting or representing the same or transferring any rights, benefits and/or obligations thereunder), or to procure the same to be insured. The Bond Trust Deed and the Security Trust Deed also contain provisions pursuant to which the Bond Trustee and the Security Trustee, respectively, are entitled, inter alia, (a) to enter into or be interested in any contract or financial or other transaction or arrangement with the Issuer or any other Transaction Party or any person or body corporate associated with the Issuer or any Transaction Party and (b) to accept or hold the trusteeship of any other trust deed constituting or securing any other securities issued by or relating to the Issuer or any Transaction Party or any such person or body corporate so associated or any other office of profit under the Issuer or any Transaction Party or any such person or body corporate so associated. Neither the Bond Trustee nor the Security Trustee shall be bound to take any step or action in connection with the Bond Trust Deed or the Bonds or the Security Trust Deed, as applicable, or obligations arising pursuant thereto or pursuant to the other Transaction Documents, where it is not satisfied that it is indemnified and/or secured and/or prefunded against all its liabilities and costs incurred in connection with such step or action and may demand, prior to taking any such step or action, that there be paid to it in advance such sums as it considers (without prejudice to any further demand) shall be sufficient so as to indemnify it. Neither the Bond Trustee nor the Security Trustee shall have any responsibility for the validity, sufficiency or enforceability of the Security. Neither the Bond Trustee nor the Security Trustee shall be responsible for monitoring the compliance by any of the other Transaction Parties with their obligations under the Transaction Documents. 21. FURTHER ISSUES The Issuer shall be at liberty from time to time without the consent of the Bondholders, Receiptholders or Couponholders to create and issue further bonds having terms and conditions (and backed by the same assets) the same as the Bonds or the same in all respects save for the amount and date of the first payment of interest and instalment of principal thereon and so that the same shall be consolidated and form a single series with the outstanding Bonds. Any further bonds so created and issued shall be constituted by a trust deed supplemental to the Bond Trust Deed. 22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 No person shall have any right to enforce any term or condition of this Bond under the Contracts (Rights of Third Parties) Act 1999, but this does not affect any right or remedy of any person which exists or is available apart from that Act. 66

67 23. GOVERNING LAW The Bond Trust Deed (including the Guarantee), the Security Trust Deed, the Security Agreements, the Agency Agreement, the Account Agreement, the Custody Agreement, the Verification Agency Agreement, the Bonds, the Receipts and the Coupons, and any non-contractual obligations or matters arising from or in connection with them, shall be governed by, and construed in accordance with, English law. 24. SUBMISSION TO JURISDICTION Each Obligor has, in the Bond Trust Deed and the Security Trust Deed, irrevocably agreed for the benefit of the Bond Trustee and the Security Trustee (as applicable), the Bondholders, the Receiptholders and the Couponholders that the courts of England are to have exclusive jurisdiction to settle any disputes that may arise out of or in connection with the Bond Trust Deed, the Security Trust Deed, the Bonds, the Receipts or the Coupons (including a dispute relating to non-contractual obligations arising out of or in connection with the Bond Trust Deed, the Security Trust Deed, the Bonds, the Receipts or the Coupons) and accordingly has submitted to the exclusive jurisdiction of the English courts. Each Obligor has, in the Bond Trust Deed and the Security Trust Deed, waived any objection to the courts of England on the grounds that they are an inconvenient or inappropriate forum. The Bond Trustee, the Security Trustee, the Bondholders, the Receiptholders and the Couponholders may take any suit, action or proceeding arising out of or in connection with the Bond Trust Deed, the Security Trust Deed, the Bonds, the Receipts or the Coupons respectively (including any suit, action or proceedings relating to any non-contractual obligations arising out of or in connection with the Bond Trust Deed, the Security Trust Deed, the Bonds, the Receipts or the Coupons) (together referred to as Proceedings) against any Obligor in any other court of competent jurisdiction and concurrent Proceedings in any number of jurisdictions. 67

68 FORM OF THE BONDS, SUMMARY OF PROVISIONS RELATING TO THE BONDS WHILE IN GLOBAL FORM AND SETTLEMENT Form of the Bonds Form, Exchange and Payments The Bonds are in bearer new global note (NGN) form. Each Class of Bonds was initially issued in the form of a temporary global bond (the Senior Temporary Global Bond and the Junior Temporary Global Bond, respectively, and, together, the Temporary Global Bonds). The Temporary Global Bonds were delivered on or prior to the issue date of the Bonds to a common safekeeper for Euroclear Bank S.A./N.V. (Euroclear) and/or Clearstream Banking, société anonyme (Clearstream, Luxembourg). The Bonds are intended to be held in a manner which will allow Eurosystem eligibility. This means that the Bonds were deposited with Euroclear or Clearstream, Luxembourg as common safekeeper and does not necessarily mean that the Bonds will be recognised as eligible collateral for Eurosystem monetary policy and intra-day credit operations by the Eurosystem at any or all times during their life. Bondholders should note that the European Central Bank has applied a temporary extension of Eurosystem eligibility to Sterling denominated securities. However, should this extension cease at any time during the life of the Bonds, the Bonds will not be in a form which can be recognised as eligible collateral. Whilst the Bonds are represented by a Temporary Global Bond, payments of principal, interest (if any) and any other amount payable in respect of the Bonds due prior to the Exchange Date (as defined below) will be made only to the extent that certification (in a form to be provided) to the effect that the beneficial owners of interests in such Temporary Global Bond are not U.S. persons or persons who have purchased for resale to any U.S. person, as required by U.S. Treasury regulations, has been received by Euroclear and/or Clearstream, Luxembourg and Euroclear and/or Clearstream, Luxembourg, as applicable, has given a like certification (based on the certifications it has received) to the Principal Paying Agent. Since the date (the Exchange Date) which is 40 days after the Temporary Global Bonds were issued, interests in each Temporary Global Bond have been exchangeable (free of charge) upon a request as described therein for interests recorded in the records of Euroclear or Clearstream, Luxembourg, as the case may be, in a permanent global bond (the Senior Permanent Global Bond and the Junior Permanent Global Bond, respectively, and, together, the Permanent Global Bonds and, together with the Temporary Global Bonds, the Global Bonds), against certification of beneficial ownership as described above unless such certification has already been given. The holder of each Temporary Global Bond is not entitled to collect any payment of interest, principal or other amount due since the Exchange Date unless, upon due certification, exchange of such Temporary Global Bond for an interest in the relevant Permanent Global Bond is improperly withheld or refused. Payments of principal, interest (if any) or any other amounts on the Permanent Global Bonds will be made through Euroclear and/or Clearstream, Luxembourg without any requirement for certification. On each occasion of a payment in respect of a Global Bond the Principal Paying Agent shall instruct Euroclear and Clearstream, Luxembourg to make appropriate entries in their records to reflect such payment. The Permanent Global Bonds will be exchangeable (free of charge), in whole but not in part, for definitive Bonds with principal receipts, interest coupons and talons attached only upon the occurrence of an Exchange Event. For these purposes, Exchange Event means that (i) an Event of Default (as defined in Condition 15.1 (Events of Default)) has occurred and is continuing, or (ii) the Issuer has been notified that both Euroclear and Clearstream, Luxembourg have been closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise) or have announced an intention permanently to cease business or have in fact done so and no successor clearing system satisfactory to the Bond Trustee is available or (iii) 68

69 the Issuer has or will become subject to adverse tax consequences which would not be suffered were the Bonds represented by the Permanent Global Bonds in definitive form. The Issuer will promptly give notice to Bondholders in accordance with Condition 17 (Notices) if an Exchange Event occurs. In the event of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in a Permanent Global Bond) or the Bond Trustee may give notice to the Principal Paying Agent requesting exchange and, in the event of the occurrence of an Exchange Event as described in (iii) above, the Issuer may also give notice to the Principal Paying Agent requesting exchange. Any such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the Principal Paying Agent. Legend concerning United States persons The following legend will appear on all Bonds (other than the Temporary Global Bonds), principal receipts and interest coupons relating to the Bonds: "ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE." The sections referred to provide that United States holders, with certain exceptions, will not be entitled to deduct any loss on the Bonds, principal receipts or interest coupons and will not be entitled to capital gains treatment of any gain on any sale, disposition, redemption or payment of principal in respect of the Bonds, principal receipts or interest coupons. Summary of Provisions relating to the Bonds while in Global Form Notices For so long as all of the Bonds are represented by one or more of the Global Bonds and such Global Bond(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, notices to Bondholders (which includes, for this purpose, any annual financial statements or Compliance Certificate required to be made available pursuant to a request by any of the Bondholders pursuant to Condition 7.11 (Information Covenants)) may be given by delivery of the relevant notice to Euroclear and/or Clearstream, Luxembourg (as the case may be) for communication to the relative Accountholders (as defined below) rather than by publication as required by Condition 17 (Notices). Any such notice shall be deemed to have been given to the holders of the Bonds on the second day after the day on which such notice was delivered to Euroclear and/or Clearstream, Luxembourg (as the case may be) as aforesaid. For so long as all of the Bonds are represented by one or more of the Global Bonds and such Global Bond(s) is/are held on behalf of Euroclear and/or Clearstream, Luxembourg, notices to be given by any Bondholder may be given to the Principal Paying Agent through Euroclear and/or Clearstream, Luxembourg and otherwise in such manner as the Principal Paying Agent and Euroclear and/or Clearstream, Luxembourg, as the case may be, may approve for this purpose. Accountholders For so long as any of the Bonds is represented by a Global Bond held on behalf of Euroclear and/or Clearstream, Luxembourg, each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown in the records of Euroclear or of Clearstream, Luxembourg as the holder of a particular nominal amount of such Bonds (the Accountholder) (in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the nominal amount of such Bonds standing to the account of any person shall be conclusive and binding for all purposes save in the case of manifest error) shall be treated as the holder of such nominal amount of such Bonds for all purposes other than with respect 69

70 to the payment of principal or interest on such nominal amount of such Bonds, for which purpose the bearer of the relevant Global Bond shall be treated as the holder of such nominal amount of such Bonds in accordance with and subject to the terms of the relevant Global Bond and the expressions Bondholder and holder of Bonds and related expressions shall be construed accordingly. In determining whether a particular person is entitled to a particular nominal amount of Bonds as aforesaid, the Bond Trustee may rely on such evidence and/or information and/or certification as it shall, in its absolute discretion, think fit and, if it does so rely, such evidence and/or information and/or certification shall, in the absence of manifest error, be conclusive and binding on all concerned. Bonds which are represented by a Global Bond will be transferable only in accordance with the rules and procedures for the time being of Euroclear and Clearstream, Luxembourg, as the case may be. Prescription Claims against the Issuer in respect of principal and interest on the Bonds represented by a Global Bond will be prescribed after 10 years (in the case of principal) and five years (in the case of interest) from the Relevant Date. Instalment Redemption and Cancellation Reduction of the Notional Amount of any Global Bond following its redemption in one or more instalments, and cancellation of any Bond represented by a Global Bond and required by the Conditions of the Bonds to be cancelled following its redemption or purchase will be effected by entry in the records of Euroclear or Clearstream, Luxembourg, as the case may be. Junior Notes Capitalisation Increase of the Notional Amount of any Junior Bond represented by a Global Bond following the capitalisation of interest in accordance with the Conditions will be effected by the application of a pool factor in accordance with the normal rules and operating procedures of Euroclear and Clearstream, Luxembourg. Settlement Upon issue, the Bonds were deposited with Euroclear or Clearstream, Luxembourg as common safekeeper and interests in the Bonds credited to the Euroclear or Clearstream, Luxembourg accounts of the Purchaser (as defined below) and the Issuer (or their respective custodians). Secondary market sales of such interests will be conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream, Luxembourg and will be settled using the procedures applicable to conventional Eurobonds. 70

71 USE OF PROCEEDS The net proceeds of the issue of the Bonds have been (or, in the case of the Retained Bonds, the net proceeds of the sale of the Bonds to a third party (after deduction of expenses payable by the Issuer) shall be) advanced by the Issuer to the Guarantor to be applied for the purpose of its general funding requirements for the acquisition, maintenance and development of its property portfolio including, without limitation, the repayment of any grants in respect of its property portfolio. 71

72 RETAINED BOND CUSTODY AGREEMENT The Issuer has appointed The Bank of New York, London Branch as its Retained Bond Custodian pursuant to the Retained Bond Custody Agreement in relation to the issue of the Bonds. The following description of the Retained Bond Custody Agreement consists of a summary of certain provisions of the Retained Bond Custody Agreement and is qualified by reference to the detailed provisions thereof. The Retained Bond Custody Agreement is not, however, incorporated by reference into, and therefore does not form part of, these Listing Particulars. Definitions used in this section but not otherwise defined in these Listing Particulars have the meanings given to them in the Retained Bond Custody Agreement. Pursuant to the Retained Bond Custody Agreement, the Retained Bond Custodian shall, subject to receipt of such documents as it may require, open, in the name of the Issuer, the Retained Bond Custody Sub-Account and the Retained Bond Cash Sub-Account (together with the Retained Bond Custody Sub-Account, the Retained Bond Custody Account). Transfer of Retained Bonds Pursuant to the Retained Bond Custody Agreement, the Retained Bond Custodian shall not effect a transfer of any Retained Bonds except with the prior written consent of the Bond Trustee in the form of a Retained Bond Consent Letter which has been countersigned on behalf of the Bond Trustee. Payment Waiver Notwithstanding any other provision of the Retained Bond Custody Agreement to the contrary and subject to the following paragraph, the Issuer has, pursuant to the Retained Bond Custody Agreement, unconditionally and irrevocably: (a) (b) (c) waived its rights to receive payments of interest, principal or otherwise in respect of the Retained Bonds (but excluding, for the avoidance of doubt, interest which is to be capitalised in respect of the Retained Junior Bonds) and, for the avoidance of doubt, such waiver by the Issuer of such rights will continue to be effective following the occurrence of an Event of Default or Potential Event of Default; authorised the Retained Bond Custodian to disclose the waiver referred to in (a) above in respect of the Retained Bonds (and the Retained Bonds position with the Retained Bond Custodian) to the Principal Paying Agent and any applicable international clearing system for the Retained Bonds to ensure that the waiver of the right to receive payments of interest, principal or otherwise in respect of the Retained Bonds is effected; and directed the Retained Bond Custodian, in respect of each Retained Bond held by the Retained Bond Custodian on behalf of the Issuer in the Retained Bond Custody Sub-Account in definitive certificated form, (i) on each Interest Payment Date, to surrender the interest coupon for such Retained Bond corresponding to such Interest Payment Date to the Principal Paying Agent for cancellation, (ii) on each Instalment Redemption Date, to surrender the receipt for such Retained Bond corresponding to such Instalment Redemption Date to the Principal Paying Agent for cancellation and (iii) to surrender the definitive certificate representing such Retained Bond to the Principal Paying Agent for cancellation on any date on which the Retained Bonds are to be redeemed in full. 72

73 The Retained Bond Custodian and the Issuer have each acknowledged and agreed that the waiver, authorisation and direction provided by the Issuer as described above are irrevocable except with the prior written consent of the Bond Trustee in the form of a Retained Bond Consent Letter which has been countersigned on behalf of the Bond Trustee. Termination of Retained Bond Custody Agreement Either of the Issuer or the Retained Bond Custodian may terminate the Retained Bond Custody Agreement by giving to at least 60 days' written notice to the other party. Either of the Issuer or the Retained Bond Custodian may further terminate the Retained Bond Custody Agreement immediately upon notice to the other party upon the dissolution of that other party, or upon the commencement of any action or proceedings seeking liquidation (or equivalent) of that other party. Pursuant to the Retained Bond Custody Agreement, the Issuer has covenanted for the benefit of the Bond Trustee that, in the event that the Retained Bond Custody Agreement is terminated, it shall appoint a successor custodian to hold the Retained Bonds on substantially the same terms as the Retained Bond Custody Agreement, in particular, but without limitation to, the payment waiver and transfer restrictions applicable to the Retained Bonds, as described above. 73

74 DESCRIPTION OF THE ISSUER Incorporation and Status HHT plc (the Issuer) is a public limited company and was incorporated in England and Wales with registered number on 17th February, 2014 under the Companies Act The registered address of the Issuer is 5th Floor, One New Change, London EC4M 9AF. The telephone number of its registered address is The Issuer has no subsidiaries. Principal Activities The Issuer is a special purpose vehicle established for the purpose of issuing the Bonds and lending the proceeds thereof to the Guarantor to be applied in the achievement of the Guarantor's objects, in particular to fund the acquisition of portfolios of affordable housing properties. Directors The directors of the Issuer and their principal activities outside of the Issuer are as follows: Name Giles Mackay Nicholas McAlpine-Lee Chris Hewitt Steven Faber Trevor Castledine Principal activities outside the Issuer Director of Heylo Founder and director of Assettrust Housing Management Limited, Hometrack.co.uk Ltd and PXS Ltd Director of a number of property companies Director of Heylo Director of Assettrust Housing Management Limited Independent management consultant Director of Heylo Director of Assettrust Housing Management Limited Independent management consultant Director of Heylo Head of UK Markets at Internos Global Investors Limited, running The Local Shopping REIT, a real estate investment business listed on the main market of the London Stock Exchange that has externalised its management to Internos Global Investors Limited. Director of a number of property companies Director of Heylo Investment Manager at Lancashire County Council Pension Fund The business address of each of the above directors is 5th Floor, One New Change, London EC4M 9AF. The Secretary of the Issuer is Assettrust Housing Management Limited whose business address is at 5th Floor, One New Change, London EC4M 9AF. 74

75 Subject as follows, there are no potential conflicts of interest between any duties to the Issuer of the directors of the Issuer and their private interests and/or duties. Each of the directors of the Issuer is a board member Heylo which is the Guarantor and the Chargor in respect of the Bonds. Their duties to Heylo may conflict with their duties to the Issuer in determining matters regarding the Transaction Documents to which Heylo is a party. Steven Faber is an employee of Internos Global Investors Limited. His duties to Internos Global Investors Limited may conflict with his duties to Heylo in determining matters regarding the Supervisory Agreement to which the Issuer is a party. Each of Giles Mackay, Nicholas McAlpine-Lee and Chris Hewitt are also shareholders in Heylo, the parent of the Issuer and their interests as such may conflict with their duties as directors of Heylo. Trevor Castledine is an employee of Lancashire County Council, acting on behalf of the Lancashire County Council Pension Fund, which is a shareholder of Heylo, the Issuer's parent. Trevor Castledine's duties to the Issuer may conflict with his duties to Lancashire County Council as his employer. However, in accordance with the Issuer's Articles of Association, provided a director of the Issuer has disclosed the nature and extent of their interest (each, a Conflict) and the other directors have authorised such Conflict (such authorisation being deemed to have been given where the Conflict arises as a result of their connection with any parent or subsidiary of the Issuer) he or she may have such an interest and there is no restriction on such directors being able to vote at a board meeting of the Issuer. In addition, in acting in either capacity, they have an overriding duty to act in the best interests of the respective entity. The Issuer acts in conformity with its constitutional documents. The Issuer has no employees but has available to it, as a wholly owned subsidiary of Heylo, the treasury and business resources of Heylo to enable it to administer its business and perform its obligations. Share Capital and Major Shareholders The entire issued share capital of the Issuer comprises 50,000 ordinary shares of 1.00 each, all of which are paid up to 25 pence. Heylo holds all of the shares of the Issuer. Heylo, as parent, exercises control over the Issuer through its full ownership of the Issuer. Recent Developments There have been no recent events particular to the Issuer that are, to a material extent, relevant to the evaluation of the Issuer's solvency. Operations Since the date of incorporation, the Issuer has not commenced operations and no financial statements have been made up as at the date of these Listing Particulars. Determination Agent HHT plc acts as Determination Agent pursuant to, and in accordance with, the Agency Agreement for the purpose of determining the Rate of Interest, the Payable Interest Amount and the Capitalised Interest Amount, in each case, applicable to each Interest Period and the Instalment Amount in respect of each Instalment Redemption Date. 75

76 The appointment of the Determination Agent may be terminated on not less than 60 days' prior written notice, or without notice where it is incapable of acting or adjudged insolvent or it fails to determine the Rate of Interest, the Payable Interest Amount, the Capitalised Interest Amount or the Instalment Amount. The Determination Agent may also retire on not less than 60 days' prior written notice. Other than in respect of an immediate termination upon the Determination Agent being incapable of acting or adjudged insolvent, no such termination or resignation of the Determination Agent shall be effective upon the expiry of the relevant notice until a successor determination agent has been appointed. 76

77 DESCRIPTION OF HEYLO HOUSING LIMITED Incorporation and Status Heylo Housing Limited (Heylo) was incorporated on 10th July, 2014, is registered in England as a private limited company (Company Number ). The registered address of Heylo is 5th Floor, One New Change, London EC4M 9AF. The telephone number of its registered address is Heylo has no subsidiaries other than the Issuer. Principal Activities Heylo is a joint venture company between Internos Global Investments Limited, Lancashire County Council Pension Fund and the principals of Assettrust Housing Management Limited. Heylo's core activities are: (a) (b) the acquisition of freehold and long leasehold interests in shared ownership housing which has already been built, let and is subject to a partial ownership interest resting with the incumbent tenant; and the provision and management of social housing and accommodation. Heylo operates across England and Wales and concentrates on not-for-profit, social housing activities. These constitute in excess of 90 per cent of its activity by turnover. Board The board members (the Board) of Heylo and their principal activities outside of Heylo are as follows: Name Giles Mackay Nicholas McAlpine-Lee Chris Hewitt Steven Faber Principal activities outside Heylo Director of the Issuer Founder and director of Assettrust Housing Management Limited, Hometrack.co.uk Ltd and PXS Ltd Director of a number of property companies Director of the Issuer Director of Assettrust Housing Management Limited Independent management consultant Director of the Issuer Director of Assettrust Housing Management Limited Independent management consultant Director of the Issuer Head of UK Markets at Internos Global Investors Limited, running The Local Shopping REIT, a real estate investment business listed on the main market of the London Stock Exchange that has externalised 77

78 its management to Internos Global Investors Limited Director of a number of property companies Trevor Castledine Director of the Issuer Investment Manager at Lancashire County Council Pension Fund The business address of each of the above directors is 5th Floor, One New Change, London EC4M 9AF. The Secretary of Heylo is Assettrust Housing Management Limited whose business address is at 5th Floor, One New Change, London EC4M 9AF. Subject as follows, there are no potential conflicts of interest between any duties to Heylo of the directors of Heylo and their private interests and/or duties. Each of the board members of Heylo is a director of the Issuer. Their duties to the Issuer may conflict with their duties to Heylo in determining matters regarding the Transaction Documents to which the Issuer is a party. Each of Giles Mackay, Nicholas McAlpine-Lee and Chris Hewitt are directors of Assettrust Housing Management Limited. Their duties to Assettrust Housing Management Limited may conflict with their duties to Heylo in determining matters regarding the Management Agreement. Steven Faber is an employee of Internos Global Investors Limited. His duties to Internos Global Investors Limited may conflict with his duties to Heylo in determining matters regarding the Supervisory Agreement to which Heylo is a party. Each of Giles Mackay, Nicholas McAlpine-Lee and Chris Hewitt are also shareholders of Heylo and their interests as shareholders of Heylo may conflict with their duties as directors of Heylo. Trevor Castledine is an employee of Lancashire County Council, acting on behalf of the Lancashire County Council Pension Fund, which is a shareholder of Heylo. Trevor Castledine's duties to Heylo may conflict with his duties to Lancashire County Council as his employer. In accordance with Heylo's Articles of Association, provided a board member of Heylo has disclosed the nature and extent of their interest (each, a Conflict) and the board members have authorised such Conflict (such authorisation being deemed to have been given where the Conflict arises as a result of their connection with any parent or subsidiary of Heylo) he or she may have such an interest, however such directors shall not be able to vote at a board meeting of Heylo if the vote is in relation to such Conflict. In addition, in acting in either capacity, they have an overriding duty to act in the best interests of the respective entity. Share Capital and Major Shareholders The entire issued share capital of Heylo comprises 10,000 ordinary shares of 0.01 each, all of which are fully paid up. The major shareholders of Heylo are Giles Mackay, and Lancashire County Council, acting on behalf of the Lancashire County Council Pension Fund. Recent Developments There have been no recent events particular to Heylo that are, to a material extent, relevant to the evaluation of Heylo's solvency. 78

79 Corporate Governance The Board of Heylo is responsible for managing the affairs of the company. It meets a minimum of 4 times each year for regular business and can hold additional meetings to further appraise or develop strategy and concepts. The Board is responsible for Heylo's strategy and policy. It approves the acquisition of assets, their financing from cash or new liabilities and procures the operational, financial and property management services, monitors the performance of all contracts against key performance indicators and enforces the rights of Heylo under such arrangements including variation of services or termination if required. The Board of Heylo is responsible for the detailed review of Heylo's financial statements, the review of the effectiveness of the system of internal control, risk management and the appointment of its internal and external auditors, including the agreement of the scope of such auditors' work and the review of such auditors' reports. The Board of Heylo also obtains external specialist advice from time to time as necessary. Operations Heylo commenced operations on 5th September, 2014 upon issue of the Bonds and initial asset acquisition. Consequently, no financial statements have been made up as at the date of these Listing Particulars. Management Operations are delivered and managed through outsourced contracts, scrutinised and overseen via regular reporting and attendance of the Supervisor and representatives of the principal management contractor at Board meetings. Heylo procures management services from Assettrust Housing Management Limited (AHML) under a management agreement dated 28th August, 2014 between Heylo and AHML. AHML is a private limited company incorporated in England and Wales (Company Number ). The registered address of AHML is 5th Floor, One New Change, London EC4M 9AF. The AHML contract with Heylo is a long term, inflation linked, performance based, capped price contract to undertake asset and finance sourcing, corporate administration and reporting, corporate governance and regulatory compliance, provision of equipment and human resources, investor relations and company management. Heylo also currently procures property management services for certain properties from The Guinness Housing Association Limited and The Guinness Partnership Limited (together, Guinness) under a concession management agreement dated 28th August, 2014 between Heylo and Guinness (the CMA). The Guinness Housing Association Limited is a society incorporated in England and Wales under the Industrial and Provident Societies Act 1965 under registered number IP17017R and The Guinness Partnership Limited is a society incorporated in England and Wales under the Industrial and Provident Societies Act 1965 under registered number 31693R. Pursuant to the CMA, Guinness provide services in respect of property and customer management obligations including the rent and service charge collection and, in agreement with Heylo, actions taken in respect of non-payment, staircasing, re-sales, sub-letting, possession or any other form of enforcement, forbearance or similar activity. Guinness also monitor and seek compliance by any head landlords with any obligations in respect of the properties included within the CMA. 79

80 AHML oversees and enforces Heylo's rights under the CMA agreed between Heylo and Guinness and will oversee and enforce any similar future contracts entered into. Supervision Heylo is not a registered with, or regulated by, the regulation committee of the Homes and Communities Agency. However, Heylo and the Issuer have appointed Internos Global Investors Limited (the Supervisor) to undertake a supervisory role pursuant to a supervisory agreement dated 28th August, 2014 between Heylo, the Issuer and the Supervisor. The Supervisor is a company incorporated in England and Wales with registered number and is authorised and regulated by the Financial Conduct Authority with FCA registration number Pursuant to the Supervisory Agreement, the Supervisor provides oversight services to Heylo in respect of corporate governance and operational matters within Heylo, reporting annually to the Heylo Board. 80

81 VALUATION REPORT The Bonds are secured by, inter alia, an allocation of mortgaged properties from a shared security pool (together with Charged Cash). On an ongoing basis, the Chargor shall apportion such number of parts of the Mortgaged Properties between all the Beneficiaries (including the Bond Beneficiaries) as is appropriate. The following valuation report (the Valuation Report) therefore relates to the total shared security pool, an appropriate part of which is allocated to secure the Bonds. The Valuation Report was prepared by Montagu Evans LLP (Montagu Evans), Registered Chartered Surveyors, of 5 Bolton Street, London W1J 8BA (the Valuer). The Valuation Report is included in these Listing Particulars in the form and context in which it is included with the consent of the Valuer and the Valuer has authorised the contents of this section. The Valuer does not have a material interest in the Issuer, the Guarantor or the Chargor. Summary of valuations A summary of the values of the Mortgaged Properties in the total shared security pool set out in the Valuation Report is set out below: Units Total 344* 42,696,410 On the date of these Listing Particulars the Bondholders' Apportioned Part of the shared security pool is 344 units. Consequently, the Bondholders' Security Percentage is, on the date of these Listing Particulars, 100 per cent. and the value of the Mortgaged Properties allocated to the Bond Beneficiaries is, on the date of these Listing Particulars, 42,696,410. * The Valuation Report set out below values 303 units. In addition, the following 41 units (which are deemed to have a nil value) have been included within the shared security pool: 53,Peppermint Road, Hitchin, Herts SG5 1RY 33,Ambleside Court, Birtley, Durham DH3 2EB 41,Ambleside Court, Birtley, Durham DH3 2EB 42,Ambleside Court, Birtley, Durham DH3 2EB 7 Pall Mall House, Church Street, Manchester M4 1PN 10 Pall Mall House, Church Street, Manchester M4 1PN 12 Pall Mall House, Church Street, Manchester M4 1PN 13 Pall Mall House, Church Street, Manchester M4 1PN 18 Pall Mall House, Church Street, Manchester M4 1PN 21 Pall Mall House, Church Street, Manchester M4 1PN 22 Pall Mall House, Church Street, Manchester M4 1PN 26 Pall Mall House, Church Street, Manchester M4 1PN 37 Pall Mall House, Church Street, Manchester M4 1PN 38 Pall Mall House, Church Street, Manchester M4 1PN 39 Pall Mall House, Church Street, Manchester M4 1PN 42 Pall Mall House, Church Street, Manchester M4 1PN 43 Pall Mall House, Church Street, Manchester M4 1PN 55 Watling Gardens, Dunstable LU6 3FD 2 Delius, Woodlands Village, Manygates Lane, Wakefield West Yorkshire WF1 5HS Flat 37, 124 Commercial Road, Bournemouth, Dorset BH2 5AT 81

82 235 Terry Road, Coventry CV3 1PF 21 Jersey Close, Coventry CV3 1PP 17 Jersey Close, Coventry CV3 1PP 15 Jersey Close, Coventry CV3 1PP 14 Jersey Close, Coventry CV3 1PP 13 Jersey Close, Coventry CV3 1PP 11 Jersey Close, Coventry CV3 1PP 10 Jersey Close, Coventry CV3 1PP 9 Jersey Close, Coventry CV3 1PP 9 Sunbeam Way, Coventry CV3 1PG 4 The Carabiniers, Coventry CV3 1PW 8 The Carabiniers, Coventry CV3 1PW 9 The Carabiniers, Coventry CV3 1PW 11 The Carabiniers, Coventry CV3 1PW 10 The Carabiners, Coventry CV3 1PW 30 The Carabiners, Coventry CV3 1PW 18 The Carabiners, Coventry CV3 1PW 29 The Carabiners, Coventry CV3 1PW 19 The Carabiners, Coventry CV3 1PW 11 Dragoon Road, Coventry CV3 1PD 19 Dragoon Road, Coventry CV3 1PD 82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115 APPENDIX 1 INSTRUCTION LETTER APPENDIX 1

116 City of London Glasgow Edinburgh GH/nh/PS th January 2014 Chris Hewitt Esq Assettrust Housing Limited 6 th Floor Design Centre East Chelsea Harbour London SW10 0XF CHARTERED SURVEYORS 5 Bolton Street London London W1J 8BA Tel: Fax: Dear Chris, ASSETTRUST HOUSING ASSOCIATION PORTFOLIO VALUATION Further to our recent correspondence, I write to confirm our acceptance of Assettrust Housing Association (AHA) instructions to prepare a report and valuation setting out our opinion of the Existing Use Value for Social Housing (EUV-SH) of the above portfolio. We understand the valuation is to be provided for secured lending purposes in connection with the issue of inflation linked guaranteed secured bonds. I confirm our valuation will be prepared in accordance with the definition of EUV-SH as set out in RICS Valuation Professional Standards January 2014 and included in our Terms of Business attached to this letter which also outline the Basis of Valuation caveats upon which we will rely in this appointment. I further confirm that I am not aware of any conflicts of interest which may prejudice our instruction in this matter, and can advise that Montagu Evans holds professional indemnity insurance in the sum of 60,000,000 on an each and every claim basis. A copy of our policy can be provided upon request. As agreed, we will rely on information provided by AHA and their solicitors, Messrs Pinsent Masons LLP in respect of tenure and title details together with the rental income for each of the properties which comprise the portfolio. We will not be expected to verify the information provided. Whilst a large part of our valuation will be desk based, we will inspect externally a sample of at least 5% of the portfolio. Having regard to the above we agree to a fixed fee in the sum of 85,000 + VAT (eighty five thousand pounds plus VAT) to be paid upon submission of our report. In the unlikely the Issue is not concluded before 31 st March 2014, 50% of our fee will be due at that date with the balance payable at completion. I trust the above is acceptable and fairly reflects your instructions, but please do not hesitate to contact me should you wish to discuss any matter in greater detail or require additional information. I look forward to hearing from you. Yours sincerely, G Howes MRICS Montagu Evans LLP RICS Registered Valuer p:\job files\ps ps9999\ps assettrust housing portfolio\assettrust housing association engagement letter doc Montagu Evans LLP is a limited liability partnership registered in England and Wales with registered number OC Registered office 5 Bolton Street London W1J 8BA. A list of members names is available at the above address.

117 APPENDIX 2 TERMS OF BUSINESS APPENDIX 2

118 UMONTAGU EVANS LLP - TERMS OF BUSINESS CLIENT: Assettrust Housing Association Limited PROPERTY: Portfolio INSTRUCTION: Valuation of Bond Issue DATE: 29 th August INTRODUCTION 1.1 These terms of business apply to Montagu Evans LLP subsequently referred to as the LLP which has been instructed by the Client (as defined above) to render services for it as defined above under Job Instructions. Payment for those services will be due to the LLP, which is duly authorised to give a good and valid receipt for invoices for services supplied by it. 1.2 A UK limited liability partnership is a body corporate that has members and not partners. However, it is more usual for senior professionals to be referred to as partners and our members have decided they prefer to retain the traditional title of partner. Therefore, when we refer in these terms of business, or otherwise in the course of your dealings with us, to a person being a partner, that title means the person is a member of the LLP. The contract is subject to English Law, and will be interpreted in accordance therewith. 2. TERMS APPLICABLE TO THE CONTRACT 2.1 The Client is deemed to have accepted the Terms of Business of the LLP upon confirmation, either by the Client requesting the LLP to undertake the Instructions as set out above, or upon the LLP undertaking the Instructions as set out above. In the event that the Client subsequently withdraws the instructions to the LLP, the LLP shall be entitled to recover from the Client all reasonable disbursements and properly authorised expenses, if any, which have been incurred by the LLP. 2.2 We may decide to stop acting for you only with good reason. For example, if you do not pay an interim bill, or you give us instructions to proceed which conflict with our rules of professional conduct. We will notify you of any such decision. Further, we may assign the benefit of these Terms of Business to any partnership, or corporate entity that carries on the business of the LLP in succession to us. You will accept the performance of such assignee of the Terms of Business in substitution for the LLP. 1B3. CHARGES & PAYMENT 3.1 The LLP's fees and commission will be subject to applicable VAT and are as detailed in our letter to you of the same date as these Terms of Business. Unless stated otherwise in our letter, the Client will also indemnify the LLP against all reasonable disbursements, subsistence and travelling expenses as and when incurred. If work should prove abortive as a result of a Client's decision not to proceed, or as a result of extenuating circumstances outside the control of the Client or the LLP, abortive fees may be charged at 50% of the total fee level, or based on the hours spent and the hourly rates agreed at the time of the instruction. 3.2 The LLP will normally invoice for remuneration when the work is completed, or based upon the hours spent at the hourly rate agreed at the time of the instruction at which time we will send you a final invoice. Completion is defined as follows: Agency work - on possession, or legally binding agreement Rent reviews & lease renewals - on agreement of terms Valuation work on receipt of our final report Other work As defined in the attached letter. 3.3 An invoice submitted shall include in addition, expenses (where properly incurred) payable and applicable VAT on the total amount. Further, the invoice will deem to be agreed, unless the Client contests it within 28 days. Invoices are due for payment within 30 days and interest will be charged on late payment of invoices. 3.4 In the event that the LLP agrees to place orders for advice from counsel, approved marketing, advertising or planning fees, the LLP will invoice the Client for these as and when the LLP incurs those costs. Further, we will send you an interim bill for our services and expenses at appropriate intervals while the work is in progress. 4. EXCLUSIONS AND LIMITATIONS ON OUR LIABILITY 4.1 There is a risk that we will be prejudiced by a limitation or exclusion of liability which you agree with any other person (for example, another advisor) in connection with a matter in which we are advising you. This is because such a limitation or exclusion of liability might also operate to limit the amount which we could recover from that other person by way of contribution if we were required to pay you more than our proper share of the liability. Accordingly, in order that our position is not adversely affected by any limitation or exclusion of another person s liability, you agree that we will not be liable to you for any amount which we would have been able to recover from that other person by way of indemnity, contribution or otherwise but are unable to recover because you agreed, or are treated as having agreed, with them any limitation or exclusion on their liability. 4.2 You accept that we have an interest in limiting the personal liability and exposure to litigation of employees, consultants and partners. Having regard to that interest you accept that we are a limited liability entity and agree that you will not bring any claim personally against any individual employees, consultants or partners in respect of losses which you suffer or incur, directly or indirectly, in connection with our services. The provisions of this paragraph will not limit or exclude the liability of the LLP for the acts or omissions of our employees, consultants or partners. The provisions of this paragraph are intended for the benefit of our employees, consultants and partners provided that these Terms of Business may be varied from time to time, or terminated without the consent of all, or any of those persons. 2B5. OTHER CONDITIONS 5.1 A copy of our Complaints Procedure is available on request, however under professional regulations this Procedure does not apply where the job relates to Expert Witness advice. 5.2 We are required by data protection legislation to obtain your consent for processing information about you and your colleagues. We will process this information solely for the purposes of providing services to you. In addition, we may send you brochures and updates from time to time concerning the LLP and may invite you to conferences, or social events. Please let us know if you do not wish us to process information about you and your colleagues for these additional purposes. We will keep files and other papers relating to your matters for a reasonable period, after which we may dispose of them without notice to you. 5.3 We may be required by statutory and other legal requirements to disclose information to governmental or other regulatory authorities. In particular you should be aware that under anti-money laundering legislation we may be obliged to notify the National Criminal Intelligence Service if we know, or suspect, or have reasonable grounds for suspecting that you, or another person, is using the proceeds of crime. You should be aware that in those circumstances we might be precluded from seeking your consent, or informing you that we have made a notification, or disclosure. Montagu Evans Page 1 of 2

119 3B6. VALUATION ADVICE 6.1 The property/properties will be valued in accordance with the Royal Institution of Chartered Surveyors ( RICS ) requirements as set out in the current edition of The RICS Valuation Professional Standards (Global and UK). 6.2 Our report and valuation advice will be prepared for the Client, or its Bank, as stated in the letter of the same date. Further, the following are also stated in that letter: Purpose of valuation Property, (or properties) and their type Interest(s) to be valued Date of valuation Any special assumptions, or special instructions Whether we are acting as an independent or external valuer. 6.3 Neither the whole nor any part of our report and valuation, nor any reference thereto may be included in any published document, circular or statement, or published in any way without our written approval which may specify the form and context in which it may appear. 6.4 Our valuation is prepared in accordance with the definition of market value as set out in The RICS Professional Standards and we set out the definition below Market Value: The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.. Market Value is stated after the deduction of purchaser s costs including stamp duty at the prevailing rate. 6.5 Our valuation is prepared in accordance with the definition of market rent as set out in The RICS Professional Standards - and we set out the definition below: Market Rent: The estimated amount for which a property would be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. 6.6 We will rely upon information supplied to us by you, or your Solicitors in relation to the legal title and the terms of the occupational leases. 6.7 In addition, where it necessary to rely upon information provided by Local Authorities and Central Government Departments, informal enquiries only will be made and our advice will take into account information revealed as a result of such enquiries. 6.8 We will not carry out a building survey of the property, or a test of the building s services but will reflect in our valuation any defects, or items of disrepair noted during the course of our inspection, or brought to our attention. Our valuation is on the assumption that no high alumina cement or other deleterious materials have been used in the construction or alteration of the premises. 6.9 Our report is prepared on the assumption that no contamination exists and specifically excludes any contamination, unless instructed otherwise. professional advisors, on a case by case basis. As a general assumption, CPO compensation will be assumed taking into account current guidance, legislation and case law applicable to the individual case. 5B9 EXPERT WITNESS ADVICE 9.1 If a matter proceeds either to an expert, arbitration, inquiry, court or any other additional judicial body ( the Third Party ), an additional fee to cover the preparation for and attendance at contentious hearings is chargeable. This fee will normally be agreed with the client beforehand and, where time allows, confirmed in writing. At that stage our duty is then to the Third Party, rather then the client and the overall fee basis has to reflect this duty. Therefore, the fee basis can no longer normally be on an incentive, or contingency basis. Finally, Expert Witness advice is in part governed by the RICS Surveyors Acting as expert witnesses: RICS Practice Statement, and on request we will supply you with a copy. 6B10 AGENCY ADVICE 10.1 In providing agency advice, we will rely on the following assumptions and representations unless notified by the Client to the contrary All information provided the Client, the Client s professional advisor s, Local Authorities, other statutory bodies and investigating agents regarding the property is complete and correct. We must be advised by the Client to meet if there are any inaccuracies or changes in property information supplied to as to comply with the Property Misdescriptions Act The property is free from any onerous or unusual covenants, wayleaves and other restrictions or liabilities, which may affect the marketability of the property The property complies with all statutory requirements The property has been constructed and is occupied in accordance with valid planning and building regulation approval The property is not contaminated The LLP will have no management liability, or responsibility for the property, unless separately agreed. In particular, the Client will be responsible for the security and insurance arrangements of the property and will be responsible for the maintenance and repair, or for any damage to the property while unoccupied. The Client is advised to take preventative action to protect the property from adverse weather conditions and for securing the property We may hold keys to the property, and these may be loaned out to prospective tenants/purchasers. We accept no responsibility for the actions of any third parties, including prospective tenants/purchasers Any marketing report produced by us should not be construed, or relied upon as a valuation. The information contained in such a report may not have been prepared in accordance with The RICS Valuation Standards Global and UK Finally, under the Estates Agent Act 1979, we must disclose to any interested party, any personal interest. If the Client becomes aware of any such interest, we should be informed immediately. 4B7 RENT REVIEW & LEASE RENEWAL ADVICE 7.1 The client is to be responsible for instructions to his Solicitors for the preparation of serving any notices within prescribed times, which are required under the terms of the lease, or relevant statutes. 7B8 CPO ADVICE 8.1 The advice will be given in accordance with the basis of assumptions, terms and conditions agreed with you, and your other Montagu Evans Page 2 of 2

120 APPENDIX 3 PROPERTY SCHEDULE APPENDIX 3

121 Property Address Freehold/ Leasehold Noms Agreement? Subject to S106 Property Type. House/Flat Property Style. Det/Semi Number of Beds Current Tenant Ownership % Current Residual % Rent Figures Per Month Rent Figures Per Annum 11 Alveston Square, London, E18 1AQ Leasehold Y N Flat PURBUILT 2 40% 60% , % Alveston Square, London, E18 1AQ Leasehold Y N Flat PURBUILT 2 50% 50% , % Alveston Square, London, E18 1AQ Leasehold Y N Flat PURBUILT 2 50% 50% , % Alveston Square, London, E18 1AQ Leasehold Y N Flat PURBUILT 1 25% 75% , % Alveston Square, London, E18 1AQ Leasehold Y N Flat PURBUILT 1 50% 50% , % Kenbrook Road, Notts, NG15 8HR Freehold 0 Y ET PURBUILT 2 40% 60% , % Ryknield Road, Notts, NG15 8GN Freehold 0 Y MT PURBUILT 2 45% 55% , % Ryknield Road, Notts, NG15 8GN Freehold 0 Y ET PURBUILT 2 40% 60% , % Minerva Grove, Notts, NG15 8GW Freehold 0 Y H PURBUILT 2 75% 25% , % Minerva Grove, Notts, NG15 8GW Freehold Y H PURBUILT 2 75% 25% % Minerva Grove, Notts, NG15 8GW Freehold 0 Y H PURBUILT 2 67% 33% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y ET PURBUILT 2 40% 60% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y SD PURBUILT 3 50% 50% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y SD PURBUILT 3 40% 60% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y SD PURBUILT 2 46% 54% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y SD PURBUILT 2 55% 45% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y SD PURBUILT 3 53% 47% , % Maple Close, Beds, MK45 5EF Freehold Prioritise local people of Y SD PURBUILT 3 40% 60% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 2 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 2 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 2 50% 50% , % Peppermint Road, Hitchen, Herts, SG5 1RY Leasehold N Y Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 75% 25% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 70% 30% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 55% 45% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 60% 40% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 2 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % 117 Rent Inflator Years remaining on Lease

122 45 The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 75% 25% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leashold Y N Flat PURBUILT 2 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leasehold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leashold Y N Flat PURBUILT 1 50% 50% , % The Lock Building, 72 High Street,, London, E15 2BQ Leashold Y 0 Flat PURBUILT 1 50% 50% , % Houghton Close, Leicester, LE14 3QL Freehold N Y House PURBUILT 3 54% 46% , % Houghton Close, Leicester, LE14 3QL Freehold N Y ET PURBUILT 3 45% 55% , % Houghton Close, Leicester, LE14 3QL Freehold N y ET PURBUILT 3 75% 25% , % Ambleside Court, Durham, DH3 2EB Freehold N Y House PURBUILT 3 50% 50% , % Ambleside Court, Durham, DH3 2EB Freehold N Y H PURBUILT 3 60% 40% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 60% 40% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 60% 40% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 75% 25% % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 65% 35% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 50% 50% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 60% 40% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 50% 50% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 50% 50% , % Ambleside Court, Durham, DH3 2EB Freehold N Y Flat PURBUILT 2 50% 50% , % Bell Davies Road, Hampshire, PO14 2AY Freehold Y Y House PURBUILT 3 45% 55% , % Bell Davies Road, Hampshire, PO14 2AY Freehold Y Y House PURBUILT 3 50% 50% , % Buzzard Rise, Essex, IP14 4GB Freehold Y Y House PURBUILT 2 50% 50% , % Buzzard Rise, Essex, IP14 5JE Freehold Y Y House PURBUILT 2 50% 50% , % Battle Close, Nottinghamshire, NG13 8ZW Freehold Y Y House PURBUILT 2 50% 50% , % Battle Close, Nottinghamshire, NG13 8ZW Freehold Y Y House PURBUILT 2 85% 15% % Battle Close, Nottinghamshire, NG13 8ZW Freehold y Y House PURBUILT 2 75% 25% % Battle Close, Nottinghamshire, NG13 8ZW Freehold Y Y House PURBUILT 2 50% 50% , % Chipmunk Way, Nottinghamshire, NG13 8ZH Freehold Y Y House PURBUILT 2 55% 45% , % Chipmunk Way, Nottinghamshire, NG13 8ZH Freehold Y Y House PURBUILT 2 75% 25% % Chipmunk Way, Nottinghamshire, NG13 8ZH Freehold Y Y House PURBUILT 2 75% 25% % Chipmunk Way, Nottinghamshire, NG13 8ZH Freehold Y Y House PURBUILT 2 50% 50% , % Chipmunk Way, Nottinghamshire, NG13 8ZH Freehold Y Y House PURBUILT 2 50% 50% , % Edison Gardens, Leeds, LS20 9PW Freehold 0 0 House PURBUILT 2 50% 50% , % Swan Court, Leeds, LS20 9PN Freehold 0 0 House PURBUILT 2 50% 50% , % Edison Gardens, Leeds, LS20 9PW Freehold 0 0 House PURBUILT 2 50% 50% , % Swan Court, Leeds, LS20 9PN Freehold 0 0 House PURBUILT 2 75% 25% % Alva Close, Leeds, LS20 9PS Freehold 0 0 House PURBUILT 2 50% 50% , % Alva Close, Leeds, LS20 9PS Freehold 0 0 House PURBUILT 2 80% 20% % Alva Close, Leeds, LS20 9PS Freehold 0 0 House PURBUILT 2 75% 25% % Alva Close, Leeds, LS20 9PS Freehold 0 0 House PURBUILT 2 50% 50% , % Alva Close, Leeds, LS20 9PS Freehold 0 0 House PURBUILT 2 75% 25% % Alva Close, Leeds, LS20 9PS Freehold 0 0 House PURBUILT 2 55% 45% , % Edison Way, Leeds, LS20 9PX Freehold 0 0 House PURBUILT 2 60% 40% , % Alva Court, Leeds, LS20 9PZ Freehold 0 0 House PURBUILT 2 50% 50% , % 122

123 8 Faraday Netherfield Road, Leeds, LS20 9PY Freehold 0 0 House PURBUILT 2 50% 50% , % Alva Court, Leeds, LS20 9PZ Freehold 0 0 House PURBUILT 2 50% 50% , % 122 G06 Hodgeson House, London, E1 1NY Leasehold n/a 0 Flat PURBUILT 1 50% 50% , % 117 G02 Wilson Tower, London, E1 1AW Leasehold n/a 0 Flat PURBUILT 2 40% 60% , % Wilson Tower, London, E1 1AW Leasehold n/a 0 Flat PURBUILT 2 40% 60% , % Usbourne Way, Ibstock, LE676AH Freehold 0 0 House PURBUILT 2 70% 30% , % Usbourne Way, Ibstock, LE676AH Freehold 0 0 House PURBUILT 2 50% 50% , % Usbourne Way, Ibstock, LE676AH Freehold 0 0 FOG PURBUILT 1 65% 35% % Usbourne Way, Ibstock, LE676AH Freehold 0 0 FOG PURBUILT 2 65% 35% , % Horseshoe Close, Ibstock, LE676AL Freehold 0 0 House PURBUILT 2 50% 50% , % Horseshoe Close, Ibstock, LE676AL Freehold 0 0 House PURBUILT 2 85% 15% % Horseshoe Close, Ibstock, LE676AL Freehold 0 0 House PURBUILT 2 80% 20% % Otter Close, Ibstock, LE676AQ Freehold 0 0 House PURBUILT 2 70% 30% , % Otter Close, Ibstock, LE676AQ Freehold 0 0 House PURBUILT 2 80% 20% % Otter Close, Ibstock, LE676AQ Freehold 0 0 House PURBUILT 2 75% 25% % Otter Close, Ibstock, LE676AQ Freehold 0 0 FOG PURBUILT 2 70% 30% % Otter Close, Ibstock, LE676AQ Freehold 0 0 FOG PURBUILT 1 75% 25% % Otter Close, Ibstock, LE676AQ Freehold 0 0 House PURBUILT 2 70% 30% , % Otter Close, Ibstock, LE676AQ Freehold 0 0 House PURBUILT 2 80% 20% % Otter Close, Ibstock, LE676AQ Freehold 0 0 House PURBUILT 2 70% 30% , % Otter Close, Ibstock, LE676AQ Freehold 0 0 FOG PURBUILT 2 75% 25% % Usbourne Way, Ibstock, LE67 6AH Freehold 0 0 FOG PURBUILT 2 90% 10% % Usbourne Way, Ibstock, LE67 6AH Freehold 0 0 FOG PURBUILT 2 50% 50% , % The Lock Building, 72 High Street, London, E15 2BQ Leashold Y N Flat PURBUILT 2 50% 50% , % Usbourne Way, Ibstock, LE676AH Freehold FOG PURBUILT 50% 50% , % Usbourne Way, Ibstock, LE676AH Freehold FOG PURBUILT 50% 50% , % Pike Lane, Ibstock, LE67 6AP Freehold FOG PURBUILT 80% 20% % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 30% 70% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 50% 50% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 35% 65% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 35% 65% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 30% 70% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 25% 75% , % 118

124 27 Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 15% 85% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 13% 88% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 2 20% 80% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 40% 60% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 25% 75% , % Pall Mall House Church Street Manchester M4 1PN Leasehold N N Flatonverted Flat 1 13% 88% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y House HT Terraced 3 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y House HT Terraced 3 50% 50% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y House HT Terraced 3 30% 70% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y House HT Terraced 3 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y House HT Terraced 2 50% 50% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y House HT Terraced 2 30% 70% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 50% 50% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 13% 88% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 13% 88% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 30% 70% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 30% 70% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 60% 40% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 20% 80% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 40% 60% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 40% 60% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 30% 70% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 40% 60% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 15% 85% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 60% 40% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 25% 75% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 40% 60% , % Watling Gardens, Watling Gardens Dunstable Central Bedfordshire LU6 3FD Leasehold N Y Flatose Built Flat 2 30% 70% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 25% 75% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 10% 90% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 25% 75% , % 120

125 4 Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 13% 88% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 13% 88% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 20% 80% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 10% 90% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 30% 70% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 25% 75% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 10% 90% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 13% 88% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 25% 75% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 25% 75% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 13% 88% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 1 10% 90% , % Bennett, 1-17 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N N Flatose Built Flat 2 25% 75% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 30% 70% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 25% 75% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 13% 88% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 13% 88% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 40% 60% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 30% 70% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 35% 65% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 37% 63% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 30% 70% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 13% 88% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 50% 50% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 25% 75% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 50% 50% , % Read, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 10% 90% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 25% 75% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 13% 88% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 25% 75% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 25% 75% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 59% 41% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 25% 75% , % 120

126 16 Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 1 13% 88% , % Delius, 1-19 Woodlands Village, Manygates Lane Wakefield West Yorkshire WF1 5HS Leasehold N Y Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold Y Y Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 28% 72% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 20% 80% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold Y Y Flatose Built Flat 1 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 30% 70% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 30% 70% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % St Michaels Lane, 1-3 St Michaels Lane Bournemouth Dorset BH2 5AD Leasehold Y Y Flatose Built Flat 2 25% 75% , % St Michaels Lane, 1-3 St Michaels Lane Bournemouth Dorset BH2 5AD Leasehold N N Flatose Built Flat 3 10% 90% , % St Michaels Lane, 1-3 St Michaels Lane Bournemouth Dorset BH2 5AD Leasehold N N Flatose Built Flat 3 19% 81% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 28% 72% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 45% 55% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold Y Y Flatose Built Flat 1 30% 70% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold Y Y Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 33% 67% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold Y Y Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % 120

127 44 Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 50% 50% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 13% 88% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 15% 85% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 40% 60% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 30% 70% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 50% 50% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold Y Y Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Commercial Road, Commercial Road Bournemouth Dorset BH2 5AT Leasehold N N Flatose Built Flat 2 25% 75% , % Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% , Tregonwell Close, 1-15 Tregonwell Close Bournemouth Dorset BH2 5AE Leasehold Y Y Flatose Built Flat 2 0% 0% ,

128 APPENDIX 4 SHARED OWNERSHIP DCF APPENDIX 4

129 HEYLO HOUSING LIMITED PORTFOLIO - August 2014 Total Number of Units 303 Portfolio EUV-SH: 43,000,000 No. of Shared Ownership 288 No. of Social Rent 15 Discount Rate 5.50% 6.00% Calculation NPV 29,272,398 12,239,215 Shared Ownership Total NPV 41,511,612 Social Rent Total NPV 1,184,797 Total NPV 42,696,410 Say Value: 43,000,000 Year 3.310% 4.5% Rent (RPI %) Shared Ownership % Retained Rent Retained LL's Share of OMV Staircasing Receipts 1 1,093, % 1,093,958 34,406, , ,130,168 99% 1,118,866 35,594, , ,167,577 98% 1,144,225 36,824, , ,206,223 97% 1,170,037 38,096, , ,246,149 96% 1,196,303 39,413, , ,287,397 95% 1,223,027 40,774, , ,330,010 94% 1,250,209 42,183, , ,374,033 93% 1,277,851 43,641, , ,419,514 92% 1,305,952 45,148, , ,466,499 91% 1,334,514 46,708, , ,515,041 90% 1,363,537 48,322, , ,565,188 89% 1,393,018 49,992, , ,616,996 88% 1,422,957 51,719, , ,670,519 87% 1,453,351 53,506, , ,725,813 86% 1,484,199 55,354, , ,782,937 85% 1,515,497 57,267, , ,841,953 84% 1,547,240 59,246, , ,902,921 83% 1,579,425 61,293, , ,965,908 82% 1,612,044 63,410, , ,030,979 81% 1,645,093 65,601, , ,098,205 80% 1,678,564 67,868, , ,167,655 79% 1,712,448 70,212, , ,239,405 78% 1,746,736 72,638, , ,313,529 77% 1,781,417 75,148, , ,390,107 76% 1,816,481 77,744, , ,469,219 75% 1,851,915 80,430, , ,550,951 74% 1,887,703 83,209, , ,635,387 73% 1,923,833 86,084, , ,722,618 72% 1,960,285 89,058, , ,812,737 71% 1,997,043 92,135, , ,905,839 70% 2,034,087 95,319, , ,002,022 69% 2,071,395 98,612, , ,101,389 68% 2,108, ,019,522 1,020, ,204,045 67% 2,146, ,544,296 1,055, ,310,099 66% 2,184, ,190,852 1,091, ,419,663 65% 2,222, ,963,396 1,129, ,532,854 64% 2,261, ,866,281 1,168, ,649,791 63% 2,299, ,904,011 1,209, ,770,599 62% 2,337, ,081,245 1,250, ,895,406 61% 2,376, ,402,802 1,294, ,024,344 60% 2,414, ,873,669 1,338, ,157,550 59% 2,452, ,499,004 1,384, ,295,165 58% 2,491, ,284,144 1,432, ,437,335 57% 2,529, ,234,612 1,482, ,584,211 56% 2,567, ,356,117 1,533, ,735,948 55% 2,604, ,654,571 1,586, ,892,708 54% 2,642, ,136,087 1,641, ,054,656 53% 2,678, ,806,989 1,698, ,221,966 52% 2,715, ,673,820 1,756, ,394,813 51% 2,751, ,743,350 1,817, ,573,381 50% 2,786, ,022,583 1,880, ,757,860 49% 2,821, ,518,763 1,945, ,948,445 48% 2,855, ,239,387 2,012, ,145,339 47% 2,888, ,192,208 2,081, ,348,749 46% 2,920, ,385,248 2,153, ,558,893 45% 2,951, ,826,809 2,228, ,775,992 44% 2,981, ,525,475 2,305, ,000,278 43% 3,010, ,490,130 2,384, ,231,987 42% 3,037, ,729,964 2,467, ,471,365 41% 3,063, ,254,484 2,552, ,718,668 40% 3,087, ,073,527 2,640, ,974,156 39% 3,109, ,197,267 2,731, ,238,100 38% 3,130, ,636,233 2,826, ,510,781 37% 3,148, ,401,314 2,924, ,792,488 36% 3,165, ,503,780 3,025, ,083,519 35% 3,179, ,955,285 3,129, ,384,184 34% 3,190, ,767,891 3,237, ,694,800 33% 3,199, ,954,071 3,349, ,015,698 32% 3,205, ,526,734 3,465, ,347,218 31% 3,207, ,499,233 3,584, ,689,711 30% 3,206, ,885,382 3,708, ,043,540 29% 3,202, ,699,471 3,836, ,409,081 28% 3,194, ,956,288 3,969, ,786,722 27% 3,182, ,671,128 4,106, ,176,863 26% 3,165, ,859,815 4,248, ,579,917 25% 3,144, ,538,722 4,395, ,996,312 24% 3,119, ,724,785 4,547, ,426,490 23% 3,088, ,435,526 4,704, ,870,907 22% 3,051, ,689,074 4,866, ,330,034 21% 3,009, ,504,181 5,035, ,804,358 20% 2,960, ,900,251 5,209, ,294,382 19% 2,905, ,897,354 5,388, ,800,626 18% 2,844, ,516,258 5,575, ,323,627 17% 2,775, ,778,445 5,767, ,863,939 16% 2,698, ,706,140 5,967, ,422,135 15% 2,613, ,322,337 6,173, ,998,808 14% 2,519, ,650,824 6,386, ,594,568 13% 2,417, ,716,210 6,607, ,210,049 12% 2,305, ,543,955 6,835, ,845,901 11% 2,183, ,160,398 7,071, ,502,801 10% 2,050, ,592,790 7,315, ,181,443 9% 1,906, ,869,321 7,568, ,882,549 8% 1,750, ,019,156 7,830, ,606,861 7% 1,582, ,072,468 8,100, ,355,149 6% 1,401, ,060,472 8,380, ,128,204 5% 1,206, ,015,461 8,670, ,926,848 4% 997, ,970,845 8,969,708

130 APPENDIX 5 SOCIAL RENT DCF APPENDIX 5

131 Bournemouth Social Rent Year End of Yr Gross Rent Costs Voids Net Rent DCF Present Values Cumulative PV 1 30/04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , ,237.59

132 29 30/04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , /04/ , , , , , , Cumulative with Perpetuity Value 1,184,797 Present Value in Year 46 11,256

133 APPENDIX 6 SAMPLE PHOTOGRAPHS APPENDIX 6

134 Assettrust Sample Photographs Watling Gardens, Dunstable Pall Mall House, Church Street The Lock Building, 72 High Street Ambleside Court, Durham Bennett, Woodlands Village Commercial Road, Bournemouth