Exhibit 4.4.1
Execution Version
Dated 19 January 2005
GRANITE MASTER ISSUER PLC
THE BANK OF NEW YORK
as Note Trustee and Issuer Security Trustee
- and -
OTHERS
---------------------------
ISSUER DEED OF CHARGE
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SIDLEY AUSTIN BROWN & WOOD
WOOLGATE EXCHANGE
25 BASINGHALL STREET
LONDON EC2V 5HA
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
REF:30507-30040/679744
CONTENTS
1. Interpretation............................................................2
2. Issuer Security...........................................................3
3. Release of Issuer Charged Property........................................6
4. Declaration of Trust......................................................7
5. Restrictions on Exercise of Certain Rights................................7
6. Enforcement..............................................................11
7. Upon Enforcement.........................................................14
8. Receiver.................................................................17
9. Further Assurance and Power of Attorney..................................22
10. Crystallisation..........................................................23
11. Provisions relating to the Security......................................25
12. Protection of Third Parties..............................................26
13. Set-Off..................................................................27
14. Representations and Covenants............................................27
15. Supplement to Trustee Acts...............................................32
16. Appointment, Removal and Retirement......................................41
17. Remuneration and Indemnification of Issuer Security Trustee..............43
18. Modification and Waiver..................................................45
19. Miscellaneous Provisions.................................................47
20. Rights cumulative........................................................47
21. Assignment...............................................................48
22. Non Petition Covenant; Corporate Obligations.............................48
23. Notices..................................................................48
24. Third Party Rights.......................................................49
25. Execution in Counterparts; Severability..................................49
26. Governing Law and Jurisdiction; Appropriate Forum........................49
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SCHEDULE 1 FORM OF SECURITY POWER OF ATTORNEY................................54
SCHEDULE 2 ISSUER PRIORITY OF PAYMENTS.......................................57
SCHEDULE 3 FORM OF NOTICE OF ASSIGNMENT......................................66
SCHEDULE 4 ISSUER RESERVE FUND...............................................69
SCHEDULE 5 FORM OF ACCESSION UNDERTAKING.....................................71
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THIS DEED OF CHARGE is made on 19 January 2005
BETWEEN:
(1) GRANITE MASTER ISSUER PLC (registered number 5250668) a public
limited company incorporated under the laws of England and Wales
whose registered office is at Fifth Floor, 100 Wood Street, London
EC2V 7EX as Master Issuer;
(2) THE BANK OF NEW YORK, a New York banking corporation acting through
its London office at 48th Floor, One Canada Square, London E14 5AL in
its capacity as (1) Issuer Security Trustee and (2) Note Trustee;
(3) CITIBANK, N.A., acting through its office at 5 Carmelite Street,
London EC4Y 0PA, in its capacity as (1) Principal Paying Agent, (2)
Agent Bank, (3) Registrar, (4) Transfer Agent and (5) an Issuer
Account Bank;
(4) CITIBANK, N.A., acting through its office at 14th Floor, 388
Greenwich Street, New York, N.Y. 10013, U.S.A., in its capacity as US
Paying Agent;
(5) NORTHERN ROCK PLC (registered number 03273685) a public limited
company incorporated under the laws of England and Wales whose
registered office is at Northern Rock House, Gosforth, Newcastle upon
Tyne NE3 4PL, in its capacity as (1) Issuer Cash Manager, (2) an
Issuer Account Bank and (3) Start-Up Loan Provider; and
(6) LAW DEBENTURE CORPORATE SERVICES LIMITED (registered number 3388362)
a private limited company incorporated under the laws of England and
Wales whose registered office is at Fifth Floor, 100 Wood Street,
London EC2V 7EX as the Corporate Services Provider.
WHEREAS:
(A) This Deed secures and will secure, inter alia, the Issuer Secured
Obligations.
(B) The Master Issuer may, from time to time, issue Series of Issuer
Notes pursuant to the Issuer Trust Deed.
(C) The Paying Agents, the Agent Bank, the Registrar and the Transfer
Agent have agreed to provide certain agency services on behalf of the
Master Issuer for the benefit of the Noteholders on the terms set out
in the Issuer Paying Agent and Agent Bank Agreement.
(D) The Issuer Cash Manager has agreed to act as cash manager and to
provide certain administration and cash management services to the
Master Issuer on the terms set out in the Issuer Cash Management
Agreement.
(E) The Issuer Account Banks have agreed to provide certain bank account
services to the Master Issuer on the terms set out in the Issuer Bank
Account Agreement.
(F) The Issuer GIC Provider has agreed to provide certain guaranteed
investment services to the Master Issuer on the terms set out in the
Issuer Bank Account Agreement.
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(G) The Start-Up Loan Provider has agreed to make available Start-Up Loan
Tranches to the Master Issuer on the terms set out in the Start-Up
Loan Agreement.
(H) The Corporate Services Provider has agreed to act as corporate
services provider to, inter alios, the Master Issuer on the terms set
out in the Corporate Services Agreement.
(I) This Deed is supplemental to the Issuer Trust Deed of even date
herewith and made between the Master Issuer and the Note Trustee
relating to the issuance of the Issuer Notes.
(J) New Issuer Secured Creditors, including, but not restricted to, any
Issuer Swap Provider may accede to this Deed from time to time on the
terms set out herein.
NOW THIS DEED WITNESSES AS FOLLOWS:
1. Interpretation
1.1 Definitions: The provisions of:
(a) the Programme Master Definitions Schedule signed for the
purposes of identification by Sidley Austin Brown & Wood and
Allen & Overy LLP on 19 January 2005, and
(b) the Issuer Master Definitions Schedule signed for the
purposes of identification by Sidley Austin Brown & Wood and
Allen & Overy LLP on 19 January 2005,
(as the same have been and may be amended, varied or supplemented
from time to time with the consent of the parties hereto) are
expressly and specifically incorporated into and shall apply to this
Deed.
The Issuer Master Definitions Schedule specified above shall prevail
to the extent that it conflicts with the Programme Master Definitions
Schedule.
1.2 Construction: In this Deed, except where the context otherwise
requires:
(a) a reference in this Deed to any property, assets,
undertakings or rights includes, unless the context
otherwise requires, present and future property, assets,
undertakings or rights;
(b) "this Issuer Deed of Charge", "this Deed of Charge" or "this
Deed" means this Deed and all the Schedules hereto (as from
time to time modified and/or supplemented in accordance with
the provisions set out herein) and all Deeds of Accession
entered into under or pursuant to this Deed and each other
document or deed entered into pursuant hereto (as from time
to time modified/and or supplemented as aforesaid) and
expressed to be supplemental hereto;
(c) reference to any agreement or other document (including any
of the Issuer Transaction Documents) shall be deemed also to
refer to such agreement or document as amended, varied,
supplemented or novated from time to time;
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(d) references to any person shall include references to his
successors, transferees and assigns and any person deriving
the title under or through him; and
(e) any reference to a Receiver shall be to the Receiver
appointed by the Issuer Security Trustee, pursuant to the
terms of this Deed.
2. Issuer Security
2.1 Issuer Charged Property:
The Master Issuer, by way of first fixed security for the payment or
discharge of the Issuer Secured Obligations, subject to Clause 3
(Release of Issuer Charged Property), hereby assigns to the Issuer
Security Trustee, all of its right, title, benefit and interest and
all claims, present and future, in, to and under the security and all
property, assets, rights and claims held on trust by the Funding 2
Security Trustee for the payment or discharge of the relevant Funding
2 Secured Obligations pursuant to the Funding 2 Deed of Charge
including all rights to receive payment of any amount which may
become payable to the Master Issuer thereunder and all rights to
serve notices and/or make demands thereunder and/or to take such
steps as are required to cause payments to become due and payable
thereunder and all rights of action in respect of any breach thereof
and all rights to receive damages or obtain relief in respect thereof
and the proceeds of any of the foregoing, TO HOLD the same unto the
Issuer Security Trustee absolutely.
2.2 Contractual rights:
(a) The Master Issuer, by way of first fixed security for the
payment or discharge of the Issuer Secured Obligations,
subject to Clause 3 (Release of Issuer Charged Property),
hereby assigns to the Issuer Security Trustee, all of its
right, title, benefit and interest, present and future, in,
to and under each of the Issuer Transaction Documents (other
than this Deed and provided that the assignment of the
right, title, benefit and interest of the Master Issuer
under each Issuer Swap Agreement shall be subject to the
rights of set-off and netting provided therein) including,
without limitation, all rights to receive payment of any
amounts which may become payable to the Master Issuer
thereunder and all payments received by the Master Issuer
thereunder, all rights to serve notices and/or make demands
thereunder and/or to take such steps as are required to
cause payments to become due and payable thereunder and all
rights of action in respect of any breach thereof and all
rights to receive damages or obtain relief in respect
thereof and the proceeds of any of the foregoing, TO HOLD
the same unto the Issuer Security Trustee absolutely.
2.3 Accounts: The Master Issuer, by way of first fixed security for the
payment or discharge of the Issuer Secured Obligations, subject to
Clause 3 (Release of Issuer Charged Property), hereby charges in
favour of the Issuer Security Trustee all of its rights, title,
benefit and interest, present and future, in, to and under:
(a) each Issuer Bank Account;
(b) any Issuer Swap Collateral Account; and
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(c) each other account (if any) in which the Master Issuer may
at any time have or acquire any right, title, benefit or
interest,
and all monies or securities now or at any time hereafter standing to
the credit thereof and the debts represented by them together with
all rights and claims relating or attached thereto including, without
limitation, the right to interest or other income or distributions
and the proceeds of any of the foregoing.
2.4 Authorised Investments and Swap Collateral: The Master Issuer, by way
of first fixed security for the payment or discharge of the Issuer
Secured Obligations, subject to Clause 3 (Release of Issuer Charged
Property), hereby charges in favour of the Issuer Security Trustee
all of its right, title, benefit and interest, present and future in,
to and under:
(a) any Authorised Investment purchased using monies standing to
the credit of any Issuer Bank Account; and
(b) any Swap Collateral in the form of securities,
for the time being owned by it and all rights in respect of or
ancillary to such Authorised Investments and such Swap Collateral,
including the right to income and distributions and the proceeds of
any of the foregoing.
2.5 Floating Charge: The Master Issuer, by way of first floating security
for the payment or discharge of the Issuer Secured Obligations,
subject to Clause 3 (Release of Issuer Charged Property), hereby
charges in favour of the Issuer Security Trustee the whole of its
undertaking and all its property, assets and rights, whatsoever and
wheresoever, both present and future, including without limitation
its uncalled capital, other than any property or assets for the time
being the subject of a fixed charge or effectively assigned pursuant
to any of the foregoing provisions of this Clause 2 (Issuer Security)
and/or any Deed of Accession.
2.6 Title Guarantee: Each of the dispositions of, assignments of or
charges over property effected in or pursuant to this Deed is made
with full title guarantee.
2.7 Further Acquired Items: For the avoidance of doubt, it is hereby
confirmed that the Security Interests created under or pursuant to
Clauses 2.1 (Funding 2 Charged Property) to Clause 2.4 (Authorised
Investments and Swap Collateral) (inclusive) are intended to be
specific and fixed assignments, or specific and fixed charges over
(as the case may be) the property and assets to which they relate,
both present and future, including property and assets which are
acquired after the date hereof.
2.8 No Transfer of Obligations: Notwithstanding anything else in this
Deed, it is hereby agreed that dispositions of property effected in
or pursuant to this Clause 2 (Issuer Security) do not transfer
obligations and nothing herein shall be construed as a transfer of
obligations to the Issuer Security Trustee.
2.9 Notice and Acknowledgement:
(a) The execution of this Deed and/or any Deed of Accession by
any Issuer Secured Creditor shall constitute express notice
to such Issuer Secured
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Creditor of the assignments, charges and any other Security
Interests made by the Master Issuer pursuant to this Deed.
(b) By its execution of this Deed and/or any Deed of Accession
each Issuer Secured Creditor acknowledges and consents to
the Issuer Security and also acknowledges that as at the
date hereof it has not received from any other person notice
of any assignment, charge or other Security Interest of the
Issuer Charged Property.
(c) Notwithstanding the Issuer Security and subject as provided
otherwise in this Deed, each of the parties hereto
acknowledges that:
(i) each Issuer Secured Creditor and each other party
to any Issuer Transaction Document may continue to
make all payments becoming due to the Master Issuer
under any Issuer Transaction Document in the manner
envisaged by such Issuer Transaction Document until
the receipt of written notice from the Issuer
Security Trustee or any Receiver requiring payments
to be made otherwise; and
(ii) until the Issuer Security becomes enforceable in
accordance with Clause 6.2 (Enforceable), the
Master Issuer shall be entitled to exercise its
rights, powers and discretions and perform its
obligations in relation to the Issuer Charged
Property and under the Issuer Transaction Documents
in accordance with the provisions of the Issuer
Transaction Documents.
2.10 Issuer Security Trustee's Discretion in relation to Issuer Charged
Property:
Without prejudice to any other rights of the Issuer Security Trustee
after the Issuer Security has become enforceable and subject to the
terms of the Issuer Transaction Documents, the Issuer Security
Trustee may from time to time at any time after any part or parts of
the Issuer Security becomes enforceable:
(a) enter into, make, execute, sign, deliver and do all such
contracts, agreements, deeds, receipts, payments,
assignments, transfers, conveyances, assurances and things
and bring, prosecute, enforce, defend and abandon all such
actions, suits and proceedings in relation to the Issuer
Charged Property as it may think expedient;
(b) exercise or refrain from exercising, in such manner as in
its absolute discretion the Issuer Security Trustee shall
think fit, all or any of the rights, powers, authorities,
discretions or remedies of the Master Issuer under or in
relation to the Issuer Charged Property or incidental to the
ownership thereof and, in particular but without limiting
the generality of the foregoing, exercise all rights to vote
or to give any consent or notification or make any
declaration in relation to such Issuer Charged Property. For
the avoidance of doubt, the Issuer Security Trustee shall
not be required to have regard to the interests of the
Master Issuer in the exercise or non-exercise of any such
rights, powers, authorities, discretions and remedies or to
comply with any direction given by the Master Issuer in
relation thereto; and
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(c) demand, sue for and take any advice or institute any
proceedings to recover or obtain payment of any amounts
which may then be due and payable to the Master Issuer but
which remains unpaid under or in respect of the Issuer
Charged Property or any part thereof either in its own name
or in the name of the Master Issuer.
2.11 Accession of New Issuer Secured Creditors: As a condition precedent
to any Series of Issuer Notes issued under the Programme, any New
Issuer Secured Creditor shall accede to the terms of this Deed by
executing an Accession Undertaking in the form or substantially in
the form set out in Schedule 5 (Form of Accession Undertaking) to
this Deed.
3. Release of Issuer Charged Property
3.1 Release, Reassignment or Discharge: Upon the irrevocable and
unconditional payment in full or discharge (or any combination of the
foregoing) of all the Issuer Secured Obligations and upon the Issuer
Security Trustee being satisfied that the Master Issuer is under no
further actual or contingent obligation under this Deed or any other
Issuer Transaction Document, the Issuer Security Trustee shall, at
the request and cost of the Master Issuer, release, reassign and/or
discharge from the Issuer Security all of the Issuer Charged Property
to, or to the order of, the Master Issuer; provided that where any
such release, re-assignment or discharge is made in whole or in part
on the faith of any payment, security or other disposition which is
avoided or which must be repaid on bankruptcy, liquidation or
otherwise, the security constituted by this Deed and the liability of
the Master Issuer hereunder shall continue as if there had been no
such release, re-assignment or discharge.
3.2 Disposal of Authorised Investments and Swap Collateral: On the making
at any time by the Issuer Cash Manager on behalf of the Master Issuer
of a disposal of any Authorised Investment or Swap Collateral in the
form of securities charged pursuant to Clause 2.4 (Authorised
Investments and Swap Collateral), the Issuer Security Trustee shall,
if so requested by and at the sole cost and expense of the Master
Issuer, but without the Issuer Security Trustee being responsible for
any loss, costs, claims or liabilities whatsoever occasioned by so
acting upon such request, release, reassign or discharge from the
Issuer Security the relevant Authorised Investments or Swap
Collateral, provided that in the case of a disposal of an Authorised
Investment, the proceeds of such disposal are paid by the Master
Issuer into the Issuer Bank Accounts from which the monies to make
such Authorised Investment were originally drawn and, that in the
case of Swap Collateral, the proceeds of such disposal are paid by
the Master Issuer into the relevant Issuer Swap Collateral Cash
Account or Issuer Bank Account (as appropriate in accordance with the
Issuer Cash Management Agreement) subject to and in accordance with
the provisions of this Deed and the Issuer Transaction Documents.
3.3 Withdrawals from Issuer Bank Accounts and Issuer Swap Collateral
Accounts: Subject to and in accordance with this Deed and the other
Issuer Transaction Documents, the Issuer Cash Manager, on behalf of
the Master Issuer and the Issuer Security Trustee, is permitted
pursuant to Clause 5 (Restrictions on Exercise of Certain Rights)
from time to time to withdraw amounts from the Issuer Bank Accounts
in order to apply such amounts in accordance with the relevant Issuer
Priority of Payments and from time to time to withdraw amounts or
securities from
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the Issuer Swap Collateral Accounts in order to apply such amounts or
securities in accordance with the Issuer Cash Management Agreement.
Any amount or securities so withdrawn shall be released from the
Issuer Security provided that any amount withdrawn from the Issuer
Bank Accounts is applied in accordance with and subject to the
relevant Issuer Priority of Payments.
4. Declaration of Trust
Each of the Issuer Secured Creditors declares the Issuer Security
Trustee as trustee of, and the Issuer Security Trustee hereby
declares that it holds on trust for the Issuer Secured Creditors,
upon and subject to the terms and conditions of this Deed, all of the
covenants, undertakings and representations made to the Issuer
Security Trustee under this Deed and any other Issuer Transaction
Document and all of the charges, assignments and other Security
Interests made or given to the Issuer Security Trustee to be made or
given to it for the purpose of securing the Issuer Secured
Obligations under or pursuant to this Deed or any other Issuer
Transaction Document.
5. Restrictions on Exercise of Certain Rights
5.1 Payments to Issuer Bank Accounts and Issuer Swap Collateral Accounts:
At all times prior to the release, re-assignment and/or discharge of
the Issuer Security pursuant to Clause 3 (Release of the Issuer
Charged Property), the Master Issuer shall save as otherwise provided
in the Issuer Transaction Documents or unless the Issuer Security
Trustee otherwise agrees in writing (and then only on such terms and
in such manner as the Issuer Security Trustee may require) procure
that:
(a) the Issuer Bank Accounts shall from time to time be credited
with all amounts (excluding Swap Collateral) received by the
Master Issuer under or in respect of the Issuer Transaction
Documents, including without limitation the following
payments:
(i) amounts received by the Master Issuer from or on
behalf of Funding 2 pursuant to the provisions of
the Global Intercompany Loan Agreement;
(ii) interest received on the Issuer Bank Accounts;
(iii) amounts received by the Master Issuer from any
Issuer Swap Provider under any Issuer Swap
Agreement (excluding Swap Collateral);
(iv) income received by the Master Issuer in respect of
the proceeds of any Authorised Investments;
(v) amounts received by the Master Issuer from the
Funding 2 Security Trustee or a Receiver following
the service of a Funding 2 Intercompany Loan
Enforcement Notice;
(vi) such other payments received by the Master Issuer
as are, or ought in accordance with this Deed to
be, comprised in the Issuer Charged Property;
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(vii) the proceeds of any issuance of Issuer Notes
pending application in accordance with the terms of
the Global Intercompany Loan Agreement;
(b) all Swap Collateral delivered to the Master Issuer (if any)
pursuant to any Issuer Swap Agreement will be deposited into
an Issuer Swap Collateral Account; and
(c) the Issuer Reserve Fund is deposited into the Issuer GIC
Account.
5.2 No withdrawal from Issuer Bank Accounts and Issuer Swap Collateral
Accounts: At all times during the subsistence of the Issuer Security,
the Master Issuer shall not be entitled to withdraw or transfer from
any Issuer Bank Account or Issuer Swap Collateral Account any monies
or securities standing to the credit thereof or direct any payment to
be made therefrom to any person save to the extent expressly
permitted under the Issuer Transaction Documents without the Issuer
Security Trustee's prior written consent.
5.3 Permitted Withdrawals from Issuer Bank Accounts and Issuer Swap
Collateral Accounts; Authorised Investments:
(a) The Master Issuer covenants with the Issuer Security Trustee
that the amounts standing to the credit of the Issuer Bank
Accounts and any Swap Collateral standing to the credit of
an Issuer Swap Collateral Account may only be withdrawn in
accordance with this Clause 5.3 (Permitted Withdrawals from
Issuer Bank Accounts and Issuer Swap Collateral Accounts;
Authorised Investments) or otherwise with the Issuer
Security Trustee's prior written consent.
(b) On any day during an Interest Period prior to the Issuer
Security becoming enforceable pursuant to Clause 6.2
(Enforceable), the Master Issuer and the Issuer Security
Trustee hereby authorise the Issuer Cash Manager to withdraw
such monies from the Issuer Transaction Account as are to be
applied on such date to meet any amounts then due and
payable by the Master Issuer to third parties in accordance
with item (C) of the Issuer Pre-Enforcement Revenue Priority
of Payments provided that such monies are applied in making
such payments on behalf of the Master Issuer. For the
purpose of this paragraph (b), the remaining provisions of
this Clause 5.3 (Permitted Withdrawals from Issuer Bank
Accounts and Issuer Swap Collateral Accounts; Authorised
Investments), Clause 5.4 (Issuer Pre-Enforcement Revenue
Priority of Payments) and Clause 5.5 (Issuer Pre-Enforcement
Principal Priority of Payments), the Issuer Cash Manager
shall be entitled to assume that the Issuer Security is not
enforceable pursuant to Clause 6.2 (Enforceable) unless it
has received notice from the Master Issuer or the Issuer
Security Trustee or is otherwise aware that the Issuer
Security has become so enforceable and shall not be liable
to the Issuer Security Trustee, the Master Issuer or any
other Issuer Secured Creditor for making payments based on
this assumption.
(c) The Issuer Security Trustee hereby authorises the Issuer
Cash Manager, prior to the Issuer Security becoming
enforceable pursuant to Clause 6.2 (Enforceable), to make
withdrawals from:
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(i) the relevant Issuer Bank Account for the purposes
of acquiring Authorised Investments provided that
all amounts received in respect of the Authorised
Investments (including earnings thereon) shall be
deposited into the relevant Issuer Bank Account
from which they were originally drawn; and
(ii) the relevant Issuer Swap Collateral Account for the
purpose of (1) returning Swap Collateral to an
Issuer Swap Provider pursuant to the terms of the
relevant Issuer Swap Agreement; or (2) transferring
Swap Collateral to the relevant Issuer Transaction
Account pursuant to the terms of the relevant
Issuer Swap Agreement and the Issuer Cash
Management Agreement.
(d) On each Monthly Payment Date prior to the Issuer Security
becoming enforceable pursuant to clause 6.2 (Enforceable)
the Issuer Security Trustee hereby authorises the Issuer
Cash Manager to transfer from the Issuer GIC Account to the
relevant Issuer Transaction Account such amounts that are to
be applied as Issuer Available Revenue Receipts on such date
in accordance with this Deed.
5.4 Issuer Pre-Enforcement Revenue Priority of Payments: On each Monthly
Payment Date, prior to the Issuer Security becoming enforceable
pursuant to Clause 6.2 (Enforceable), the Issuer Security Trustee
hereby authorises the Master Issuer or the Issuer Cash Manager in its
place to withdraw Issuer Available Revenue Receipts standing to the
credit of the Issuer Transaction Accounts and to apply such monies in
accordance with the provisions and the order of priority of the
Issuer Pre-Enforcement Revenue Priority of Payments.
5.5 Issuer Pre-Enforcement Principal Priority of Payments: On each
Monthly Payment Date prior to the Issuer Security becoming
enforceable pursuant to Clause 6.2 (Enforceable), the Issuer Security
Trustee hereby authorises the Master Issuer or the Issuer Cash
Manager in its place to withdraw Issuer Available Principal Receipts
standing to the credit of the Issuer Transaction Accounts and to
apply such monies in accordance with the order of priority of the
Issuer Pre-Enforcement Principal Priority of Payments.
5.6 Amendment to Issuer Priority of Payments: On the issuance of Issuer
Notes on any Closing Date or the making available of any Loan
Tranches by the Master Issuer to Funding 2, if any amendment to the
Issuer Priority of Payments is required as a result thereof, then,
subject to the parties to this Deed agreeing the necessary amendments
to the priority of payments, the parties to this Deed, together with
any person entering into a Deed of Accession, shall set out the new
Issuer Priority of Payments accordingly in a schedule to that Deed of
Accession. The new Issuer Priority of Payments so amended shall
supersede those set out in Schedule 2 (Issuer Priority of Payments)
to this Deed.
5.7 No Enforcement by Issuer Secured Creditors: Each of the Issuer
Secured Creditors (other than the Issuer Security Trustee and the
Note Trustee (acting on behalf of the Noteholders) and any Receiver)
hereby agrees with the Master Issuer and the Issuer Security Trustee
that:
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(a) only the Issuer Security Trustee may enforce the Issuer
Security in accordance with the provisions hereof;
(b) notwithstanding any other provision of this Deed or any
other Issuer Transaction Document no sum due or owing to any
Issuer Secured Creditor or to the Issuer Security Trustee
(whether for itself or on behalf of the Issuer Secured
Creditors) from or by the Master Issuer under this Deed or
any other Issuer Transaction Document shall be payable by
the Master Issuer except to the extent that the Master
Issuer or (following enforcement of the Master Issuer
Security) the Issuer Security Trustee has sufficient funds
available to it (and, in the case of the Issuer Security
Trustee, as a result of the realisation of that security) to
pay such sum subject to and in accordance with the relevant
Issuer Priority of Payments and provided that all
liabilities of the Issuer required to be paid in priority
thereto or pari passu therewith pursuant to such Issuer
Priority of Payments have been paid, discharged and/or
otherwise provided for in full PROVIDED THAT this paragraph
(b) shall not apply to and shall not limit the obligations
of the Master Issuer to the Noteholders under the Issuer
Notes, the Issuer Trust Deed and this Deed; and
(c) it shall not take any steps for the purpose of recovering
any of the Issuer Secured Obligations (including, without
limitation, by exercising any rights of set-off) or
enforcing any rights arising out of the Issuer Transaction
Documents against the Master Issuer and it shall not take
any steps or legal proceedings for the winding-up,
dissolution or reorganisation of, or the institution of
insolvency proceedings against, the Master Issuer or for the
appointment of a receiver, administrator, administrative
receiver, liquidator or similar officer of the Master Issuer
in respect of any or all of its revenues and assets,
PROVIDED THAT
(i) in the case of any Noteholder, this provision shall
be subject to Clause 6.2 (Only Note Trustee to
Enforce) of the Issuer Trust Deed; and
(ii) in the case of any other Issuer Secured Creditor
and subject to there being no Issuer Note then
outstanding, if the Issuer Security Trustee having
become bound to do so subject to and in accordance
with the terms of this Deed and the Issuer
Transaction Documents, fails to take any steps or
proceedings to enforce the security created
hereunder within 30 days of becoming so bound and
such failure is continuing, each such other Issuer
Secured Creditor shall be entitled to take such
steps and proceedings to enforce its rights arising
out of the relevant Issuer Transaction Document as
it shall deem necessary other than the presentation
of a petition or making an application for the
winding up, dissolution or reorganisation of, or
the institution of insolvency proceedings against,
the Master Issuer or the appointment of a receiver,
an administrator, administrative receiver or
liquidator of the Master Issuer.
5.8 Acknowledgement of Issuer Security Trustee: The Issuer Security
Trustee hereby acknowledges and agrees that save with respect to the
obligations of the Master Issuer
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to the Noteholders under the Issuer Notes, the Issuer Trust Deed and
this Deed which are not limited under paragraph (b) of Clause 5.7 (No
Enforcement by Issuer Secured Creditors) or under this Clause 5.8
(Acknowledgement of Issuer Security Trustee) and notwithstanding any
other provision of this Deed or any other Issuer Transaction
Document, no sum due or owing to any Issuer Secured Creditor or to
the Issuer Security Trustee (whether for itself or on behalf of the
Issuer Secured Creditors) from or by the Master Issuer under this
Deed or any other Issuer Transaction Document shall be payable by the
Master Issuer except to the extent that the Master Issuer has
sufficient funds available or (following enforcement of the Issuer
Security) the Issuer Security Trustee has realised sufficient funds
from the Issuer Security to pay such sum subject to and in accordance
with the relevant Issuer Priority of Payments and provided that all
liabilities of the Master Issuer required to be paid in priority
thereto or pari passu therewith pursuant to such Issuer Priority of
Payments have been paid, discharged and/or otherwise provided for in
full.
5.9 Utilisation of Issuer Reserves: The Master Issuer and the Issuer Cash
Manager shall procure that, subject to and in accordance with the
Issuer Priority of Payments, amounts standing to the credit of the
Issuer Reserve Ledger shall only be debited for the purposes as
specified in paragraph 1 of Schedule 4 (Issuer Reserve Fund).
5.10 Adjustment of Issuer Reserves: The Issuer Reserve Minimum Amount, the
Programme Reserve Required Amount and the Programme Reserve Required
Percentage may be adjusted in accordance with paragraph 2 of Schedule
4 (Issuer Reserve Fund).
5.11 VAT: If any sums which are payable by the Master Issuer under Clause
5.4 (Issuer Pre-Enforcement Revenue Priority of Payments) or Clause
5.5 (Issuer Pre-Enforcement Principal Priority of Payments) of this
Deed are subject to VAT, the Master Issuer shall, to the extent it is
not already obliged by another clause in this Deed to make such
payment of the amount in respect of VAT, make payment of the amount
in respect of VAT to the relevant person in accordance with the order
of priorities set out in those clauses.
6. Enforcement
6.1 Notification: The Issuer Security Trustee shall, if practicable, give
prior notification to the Seller, Funding 2, the Cash Manager and the
Issuer Cash Manager of the Issuer Security Trustee's intention to
enforce the Issuer Security. However, the failure of the Issuer
Security Trustee to provide such notification shall not in any way
prejudice the ability of the Issuer Security Trustee to enforce the
Issuer Security.
6.2 Enforceable:
Without prejudice to the provisions of Clause 8 (Receiver) the Issuer
Security shall become immediately enforceable and the power of sale
and other powers conferred by Section 101 of the 1925 Act, as varied
or amended by this Deed, shall be exercisable by the Issuer Security
Trustee:
(a) at any time following the service of an Issuer Enforcement
Notice (which has not been withdrawn);
11
(b) at any time following the failure to redeem a Series and
Class of Issuer Notes at the aggregate amount outstanding
(together with accrued and unpaid interest) on the date
specified for such redemption in a notice of redemption
(provided that such notice is in respect of all Issuer Notes
then outstanding) served on the Note Trustee and the
Noteholders by the Master Issuer in accordance with
Conditions 5(D), 5(E) or 5(F); or
(c) if there are no Issuer Notes outstanding, following a
default in payment of any other Issuer Secured Obligations
on its due date or within any applicable grace period
following such due date stated in the relevant Issuer
Transaction Document but subject always to any limited
recourse provisions stated therein and to Clause 5.7 (No
Enforcement by Issuer Secured Creditors) hereof.
6.3 Power of Sale:
(a) Notwithstanding any other provision of this Deed, the Issuer
Secured Obligations shall be deemed to have become due and
payable for the purposes of Section 101 of the 1925 Act and
(to the extent applicable) the statutory power of sale and
of appointing a receiver and other powers which are
conferred on mortgagees under the 1925 Act as varied or
extended by this Deed shall be deemed to arise immediately
after execution of this Deed.
(b) Section 103 of the 1925 Act shall not apply to this Deed and
forthwith after the Issuer Security has become enforceable
in accordance with Clause 6.2 (Enforceable) the statutory
power of sale, as extended by this Deed, and all other
powers shall become immediately exercisable without notice
to the Master Issuer and the provisions of the 1925 Act
regulating the power of sale shall, so far as they relate to
the Issuer Charged Property, be varied and extended
accordingly.
6.4 Discretionary Enforcement: Subject to the provisions of this Deed,
the Issuer Security Trustee may at any time, at its discretion and
without notice, take such proceedings and/or other action as it may
think fit against, or in relation to, the Master Issuer or any other
party to any of the Issuer Transaction Documents to enforce their
obligations under any of the Issuer Transaction Documents. Subject to
the provisions of this Deed, at any time after the Issuer Security
has become enforceable in accordance with Clause 6.2 (Enforceable),
the Issuer Security Trustee may, at its discretion and without
notice, take such steps as it may think fit to enforce the Issuer
Security.
6.5 Mandatory Enforcement: The Issuer Security Trustee shall not, and
shall not be bound to, take any proceedings, actions or steps under
or in connection with any of the Issuer Transaction Documents
(including, without limitation, any steps to enforce the Issuer
Security) unless:
(a) it shall have been directed to do so by the Note Trustee
acting in accordance with the provisions of this Deed and
the Issuer Trust Deed; or
(b) if there are no Issuer Notes outstanding, it shall have been
directed to do so by the Issuer Secured Creditor which ranks
highest in the Issuer Post-Enforcement Priority of Payments,
12
and in either case, it shall have been indemnified and/or secured to
its satisfaction against all Liabilities to which it may become
liable or which may be incurred by it in connection therewith.
6.6 Law of Property Act 1925: The provisions of the 1925 Act relating to
the power of sale and the other powers conferred by Section 101(1)
and (2) are hereby extended in relation to the Master Issuer as if
such extensions were contained in the 1925 Act such that at any time
after the Issuer Security has become enforceable in accordance with
Clause 6.2 (Enforceable) above, the Issuer Security Trustee may in
its absolute discretion:
(a) make demand in the name of the Issuer Secured Creditors or
in its own right for any monies and liabilities in respect
of the Issuer Charged Property;
(b) enforce any rights it may have in respect of the whole or
any part of the Issuer Charged Property in such manner and
upon such terms as the Issuer Security Trustee shall think
fit;
(c) take possession of, get in and collect the Issuer Charged
Property and perfect interests comprised therein;
(d) (subject to any restrictions under or in respect of the
relevant Issuer Charged Property) sell, transfer, convey,
dispose of, vary or otherwise deal with, and also grant any
option to purchase, and effect exchanges of, the whole or
any part of Issuer Charged Property or any interest therein
in such manner, for such consideration (if any) and
generally upon such terms (including by deferred payment or
payment by instalments) as it may think fit and/or to concur
in any of the foregoing (and nothing shall preclude any such
disposal being made to a Issuer Secured Creditor);
(e) carry out any transaction, scheme or arrangement which the
Issuer Security Trustee may, in its absolute discretion,
consider appropriate with a view to or in connection with
the sale of the Issuer Charged Property;
(f) do all or any of the things or exercise all or any of the
powers, authorities and discretions conferred expressly or
by implication on any Receiver under Clause 8.6 (Powers of
the Receiver) or otherwise under this Deed; and/or
(g) exercise all or any of the powers conferred on mortgagees by
the 1925 Act as varied or extended by this Deed and any
other rights and remedies that may be conferred by statute
or common law or in equity on mortgagees or receivers.
6.7 Authorised Investments: Any monies which under the trusts of this
Deed ought to or may be invested by the Issuer Security Trustee (or
the Issuer Cash Manager on its behalf) after the Issuer Security has
become enforceable in accordance with Clause 6.2 (Enforceable) may be
invested in the name or under the control of the Issuer Security
Trustee in any Authorised Investments and the Issuer Security Trustee
may at any time vary or transfer (or direct the Cash Manager to vary
or transfer) any of such Authorised Investments for or into other
such Authorised Investments as the Issuer Security Trustee in its
absolute discretion may determine, and shall not be responsible for
any loss occasioned by reason of any such investments whether by
13
depreciation in value or otherwise, provided that such Authorised
Investments were made in accordance with the foregoing provisions. If
a bank or institution with which any monies placed on deposit in
accordance with this clause is the Issuer Security Trustee or a
subsidiary, holding or associated company of the Issuer Security
Trustee, it need only account for an amount of interest equal to the
amount of interest which would, at then current rates, be payable by
it on such a deposit to an independent customer.
7. Upon Enforcement
7.1 Service of an Issuer Enforcement Notice: Without prejudice to the
effectiveness of any service of an Issuer Enforcement Notice, in the
event that an Issuer Enforcement Notice has been served (and not
withdrawn) by the Note Trustee on the Master Issuer and the Issuer
Security Trustee or the Issuer Security has otherwise become
enforceable, the Issuer Security Trustee shall as soon as is
practicable notify each of the following parties of the enforcement
of the Issuer Security (whether by service of a copy of any Issuer
Enforcement Notice or otherwise):
(a) the Seller;
(b) Funding 2;
(c) the Account Bank, the Cash Manager and the Issuer Cash
Manager;
(d) the Paying Agents and the other Agents under the Issuer
Paying Agent and Agent Bank Agreement;
(e) any Issuer Swap Provider;
(f) the Corporate Services Provider; and
(g) each other Issuer Secured Creditor.
7.2 Crystallisation: From and including the date when the Note Trustee
serves an Issuer Enforcement Notice (which has not been withdrawn) on
the Master Issuer or the Issuer Security has otherwise become
enforceable:
(a) notwithstanding any provision hereof or of any other Issuer
Transaction Document no amount may be withdrawn from the
Issuer Bank Accounts except with the prior written consent
of the Issuer Security Trustee; and
(b) if not already crystallised, but subject to any prohibition
or restriction imposed by law, any charge created by this
Deed which is a floating charge shall crystallise, provided
that the floating charge created by this Deed shall not be
crystallised solely as a result of obtaining a moratorium
(or anything done with a view to obtaining a moratorium)
under the Insolvency Act 2000 except with leave of the
court.
7.3 Issuer Post-Enforcement Priority of Payments: At any time after the
Issuer Security has become enforceable in accordance with Clause 6.2
(Enforceable) and (if applicable) provided that the Issuer
Enforcement Notice has not been withdrawn, the relevant Issuer
Available Revenue Receipts, Issuer Available Principal Receipts and
14
all other monies (excluding Swap Collateral standing to the credit of
the Issuer Swap Collateral Accounts) paid to or received or recovered
by or on behalf of the Master Issuer or the Issuer Security Trustee
or any Receiver appointed on its behalf, including all proceeds
following any sale, realisation of the Issuer Charged Property or
other enforcement of the Issuer Security and all amounts (excluding
Swap Collateral standing to the credit of the Issuer Swap Collateral
Accounts) not previously distributed and/or standing to the credit of
any Issuer Bank Account shall (if not already received by the Issuer
Security Trustee) be paid to and held by the Issuer Security Trustee
on trust to apply the same (save to the extent otherwise required by
applicable law) in accordance with the order of priority of the
Issuer Post-Enforcement Priority of Payments and subject to the other
rules set out in Schedule 2.
7.4 Certification of Amounts:
(a) The Issuer Security Trustee shall be entitled to rely on
(and to accept as conclusive evidence save in the case of
manifest error) a certificate from each Issuer Secured
Creditor as to the amounts owed to such Issuer Secured
Creditor under the Issuer Transaction Documents. The Issuer
Security Trustee shall not take into account for the purpose
of the application of moneys in accordance with the Issuer
Post-Enforcement Priority of Payments any amounts of which
it has not been notified by the intended recipient on or
prior to the date in question.
(b) Each Issuer Secured Creditor will, at all times, promptly
provide the Issuer Security Trustee and/or any Receiver on
request with a certificate setting out detailed information
as to the amount of the Issuer Secured Obligations to which
such Issuer Secured Creditor is entitled and such other
information as the Issuer Security Trustee and/or any
Receiver may require to enable or facilitate the Issuer
Security Trustee and/or any Receiver to perform its
functions hereunder or under any of the Issuer Transaction
Documents, such certificate to be in a form required by the
Issuer Security Trustee and/or any Receiver. In determining
the respective entitlements of the Issuer Secured Creditors
hereunder, such certificates shall be binding on all of the
Issuer Secured Creditors.
7.5 Retention Account: If the Issuer Security Trustee enforces the Issuer
Security at a time when either no amounts or not all amounts owing in
respect of the Issuer Secured Obligations have become due and payable
or any of the Issuer Secured Obligations are at such time contingent
or future, the Issuer Security Trustee or a Receiver may, for so long
as no such amounts or not all such amounts have become due and
payable or any of the Issuer Secured Obligations are at such time
contingent or future, pay any monies referred to in Clause 7.3
(Issuer Post-Enforcement Priority of Payments), as the case may be,
into, and retain such monies in, an interest-bearing account (a
"retention account") to be held by it as security and applied by it
in accordance with Clause 7.3 (Issuer Post-Enforcement Priority of
Payments) as and when any of the amounts referred to therein become
due and payable.
7.6 Issuer Security Trustee Rights upon Enforcement: In addition to any
other rights expressly provided herein, for the period commencing
upon the service of an Issuer Enforcement Notice and terminating upon
the notification to the Issuer Secured
15
Creditors by the Issuer Security Trustee that all Issuer Secured
Obligations have been satisfied in full or that such Issuer
Enforcement Notice has been withdrawn:
(a) (provided such Issuer Secured Creditor has received a copy
of, or other notice of the service on the Master Issuer of,
any such Issuer Enforcement Notice) each Issuer Secured
Creditor agrees that it will pay to the Issuer Security
Trustee or the Receiver, as the case may be, all monies
received or recovered by such Issuer Secured Creditor
(whether by way of set-off or otherwise) in order that such
amounts may be applied by the Issuer Security Trustee in
accordance with Clause 7.3 (Issuer Post-Enforcement Priority
of Payments);
(b) save as otherwise expressly provided in this Deed or as
required by the Issuer Security Trustee, all payments under
or arising from this Deed and all amounts payable to the
Master Issuer by any party to this Deed under any Issuer
Transaction Document shall be paid to the Issuer Security
Trustee or to its order;
(c) save as otherwise expressly provided in this Deed, all
rights or remedies provided for by this Deed or available at
law or in equity to the Issuer Secured Creditors are
exercisable by the Issuer Security Trustee;
(d) save as otherwise expressly provided in this Deed, all
rights to compel performance of the Issuer Transaction
Documents are exercisable by the Issuer Security Trustee;
and
(e) all payments in respect of the Issuer Secured Obligations
shall operate in satisfaction pro tanto of the Master
Issuer's covenants to the relevant Issuer Secured Creditors.
7.7 Swap Collateral: Notwithstanding the foregoing provisions of this
Clause 7 (Upon Enforcement), at any time after the Issuer Security
has become enforceable in accordance with Clause 6.2 (Enforceable)
and provided that an Issuer Enforcement Notice has not been
withdrawn:
(a) all Swap Collateral delivered to or received or recovered by
or on behalf of the Master Issuer or the Issuer Security
Trustee or any Receiver appointed on its behalf pursuant to
any Issuer Swap Agreement will be deposited into an Issuer
Swap Collateral Account; and
(b) Swap Collateral may only be withdrawn from the relevant
Issuer Swap Collateral Account for the purpose of (A)
returning Swap Collateral to an Issuer Swap Provider
pursuant to the terms of the applicable Issuer Swap
Agreement or (B) applying Swap Collateral in or towards
satisfaction of such Issuer Swap Provider's obligations
under the applicable Issuer Swap Agreement.
7.8 Sub-Ledger Balances: Notwithstanding the other provisions of this
Deed:
(a) prior to the enforcement of the Issuer Security, any amount
credited to or standing to the credit of any sub-ledger to
the Issuer Revenue Ledger and/or the Issuer Principal Ledger
in respect of a Series and Class of Issuer Notes
16
shall be held on trust by the Master Issuer and the Issuer
Security Trustee for the Noteholders of such Issuer Notes
and may only be applied:
(i) in relation to amounts credited to or standing to
the credit of the sub-ledger to the Issuer Revenue
Ledger for such Issuer Notes, subject to and in
accordance with the Issuer Pre-Enforcement Revenue
Priority of Payments and the rules for relating to
the maintenance of such ledgers set out in
paragraph 6 of Schedule 2 (Cash Management and
Maintenance of Ledgers) to the Issuer Cash
Management Agreement;
(ii) in relation to amounts credited to or standing to
the credit of the sub-ledger to the Issuer
Principal Ledger for such Issuer Notes, subject to
and in accordance with the Issuer Pre-Enforcement
Principal Priority of Payments and the rules for
relating to the maintenance of such ledgers set out
in paragraph 7 of Schedule 2 (Cash Management and
Maintenance of Ledgers) to the Issuer Cash
Management Agreement; and
(b) following the enforcement of the Issuer Security, any amount
credited to or standing to the credit of the sub-ledger to
the Issuer Revenue Ledger and/or the Issuer Principal Ledger
for such Issuer Notes on the date that the Issuer Security
is enforced shall be held on trust by the Master Issuer and
the Issuer Security Trustee for the Noteholders of such
Issuer Notes and may only be applied to pay the interest,
principal and other amounts due in respect of such Issuer
Notes or any shortfall in the amounts available to pay items
(A) to (C) under the Issuer Post-Enforcement Priority of
Payments and, unless and until such interest, principal and
other amounts due in respect of such Issuer Notes are paid
in full, may not be applied in payment of interest,
principal and other amounts due in respect of any other
Notes or any other amounts then due and payable by the
Master Issuer.
7.9 Swap Replacement Premium: Notwithstanding the foregoing provisions of
Clause 6 (Enforcement) and this Clause 7 (Upon Enforcement), any Swap
Replacement Premium received by the Master Issuer from a replacement
Swap Provider upon entry into a swap agreement replacing an Issuer
Swap Agreement shall firstly be applied in payment of any termination
payment due and payable to the Issuer Swap Provider following the
termination of the Issuer Swap Agreement. Any amount of such Swap
Replacement Premium not applied in or towards payment of such
termination payment will form part of Issuer Available Revenue
Receipts.
8. Receiver
8.1 Appointment: At any time after the Issuer Security constituted
hereunder becomes enforceable, and whether or not the Issuer Security
Trustee has taken possession of the Issuer Charged Property, the
Issuer Security Trustee may, in addition to all statutory and other
powers of appointment or otherwise, appoint, by writing or by deed,
such person or persons (including an officer or officers of the
Issuer Security Trustee) as the Issuer Security Trustee thinks fit to
be a receiver, a receiver and manager or an administrative receiver
of the Issuer Charged Property or any part thereof (each a
"Receiver") and, in the case of an appointment of more than one
person, to act together or independently of the other or others.
17
8.2 Removal and Replacement: Except as otherwise required by statute, the
Issuer Security Trustee may by writing or by deed remove a Receiver
appointed by it whether or not appointing another in its place and
may also appoint another Receiver or to act with any other Receiver
or to replace any Receiver who resigns, retires or otherwise ceases
to hold office.
8.3 Extension of Appointment: The exclusion of any part of the Issuer
Charged Property from the appointment of the Receiver shall not
preclude the Issuer Security Trustee from subsequently extending its
appointment (or that of the Receiver replacing it) to that part of
the Issuer Charged Property or appointing another Receiver over any
other part of the Issuer Charged Property.
8.4 Agent of Master Issuer: The Receiver shall, so far as the law
permits, be the agent of the Master Issuer and (subject to any
restriction or limitation imposed by law) the Master Issuer alone
shall be responsible for the Receiver's contracts, engagements, acts,
omissions, misconduct, negligence or default and for liabilities
incurred by it; and in no circumstances whatsoever shall the Issuer
Security Trustee or any Issuer Secured Creditor be in any way
responsible for or incur any liability in connection with its
contracts, engagements, acts, omissions, misconduct, negligence or
default, and if a liquidator of the Master Issuer shall be appointed,
the Receiver shall act as principal and not as agent for the Issuer
Security Trustee. Notwithstanding the generality of the foregoing,
such Receiver shall in the exercise of its powers, authorities and
discretions conform to the regulations or directions (if any) from
time to time made and given by the Issuer Security Trustee.
8.5 Remuneration: Subject as provided otherwise by applicable law, the
remuneration of the Receiver shall be fixed by the Issuer Security
Trustee and may be or include a commission calculated by reference to
the gross amount of all monies received or otherwise. Such
remuneration (and such commission (if any)) shall be payable
hereunder by the Master Issuer alone subject always to Clause 7.3
(Issuer Post-Enforcement Priority of Payments) and the amount of such
remuneration shall form part of the Issuer Secured Obligations and
shall accordingly be secured by the Issuer Security.
8.6 Powers of the Receiver: The Receiver of the Master Issuer, in
addition to any powers conferred on an administrative receiver,
receiver, manager or receiver and manager by statute or common law,
shall have the power to:
(a) take possession of, get in and collect the Issuer Charged
Property;
(b) (subject to any restrictions under or in respect of relevant
Issuer Charged Property) sell, transfer, convey, license,
release or otherwise dispose of vary or deal with, and also
grant any option to purchase, and effect exchanges of, the
whole or any part of the Issuer Charged Property or any
interest therein and grant or accept surrenders, disclaimers
and variations in relation to or otherwise affecting the
Issuer Charged Property in each case in such manner, for
such consideration (if any) and generally upon such terms
(including by deferred payment of payment by instalments) as
it may think fit and/or concur in any of the foregoing (and
nothing shall preclude any such disposal being made to a
Issuer Secured Creditor);
18
(c) carry out any transaction, scheme or arrangement which it
may, in its absolute discretion, consider appropriate with a
view to or in connection with the sale of the Issuer Charged
Property;
(d) insure the Issuer Charged Property against such risks and
for such amounts as it may consider prudent and obtain bonds
and performance guarantees;
(e) otherwise protect, maintain or improve, the Issuer Charged
Property or any part thereof in any manner and for any
purpose whatsoever as it shall think fit;
(f) transfer all or any of the Issuer Charged Property and/or
any of the liabilities to any other company or body
corporate, whether or not formed or acquired for the purpose
(and whether or not a subsidiary or associated company of
the Issuer Security Trustee or any other party to the Issuer
Transaction Documents) and to form a subsidiary or
subsidiaries of the Master Issuer;
(g) carry on and manage or concur in managing or appoint a
manager of, the whole or any part of the business of the
Master Issuer in such manner as it shall in its absolute
discretion think fit including the power to enter into any
contract and to perform, repudiate, rescind or vary any
contract to which the Master Issuer is a party;
(h) sell or concur in selling the whole or any part of the
Master Issuer's business whether as a going concern or
otherwise;
(i) appoint, dismiss, engage or vary the terms of employment of
any employees, managers, agents or advisers of the Master
Issuer upon such terms as to remuneration and otherwise for
such periods as it may in its absolute discretion think fit;
(j) in connection with the exercise or proposed exercise of any
of its powers or in order to obtain payment of its
remuneration or reimbursement of its expenses (in each case,
whether or not already due), borrow or raise money from any
person, without security or on the security of the Issuer
Charged Property (either in priority to the Issuer Security
or otherwise) and generally in such manner and on such terms
as it may think fit;
(k) bring, defend, submit to arbitration, negotiate, compromise,
enforce, abandon and settle actions, suits, claims and
proceedings concerning or affecting the Issuer Charged
Property or the Issuer Security;
(l) exercise any powers, discretions, voting, conversion or
other rights or entitlements in relation to any of the
Issuer Charged Property or incidental to the ownership of or
rights in or to any of the Issuer Charged Property and to
complete or effect any transaction entered into by the
Master Issuer or disclaim, abandon or modify all or any of
the outstanding contracts or arrangements of the Master
Issuer relating to or affecting the Issuer Charged Property;
(m) generally carry out, or cause to be carried out any
transaction or scheme or arrangement whatsoever, whether
similar or not to any of the foregoing, in
19
relation to the Issuer Charged Property which it may
consider expedient as effectual as if it were solely and
absolutely entitled to the Issuer Charged Property;
(n) in connection with the exercise of any of its powers,
execute or do, or cause or authorise to be executed or done,
on behalf of or in the name of the Master Issuer or
otherwise, as it may think fit, all documents, acts or
things which it may consider appropriate;
(o) redeem, discharge or compromise any security whether or not
having priority to the security created hereunder;
(p) enter into covenants, guarantees, commitments, indemnities
and other obligations or liabilities as it shall think fit;
(q) pay and discharge out of the profits and income of the
Issuer Charged Property and the monies to be made by it
carrying on any such business as aforesaid the expenses in
and about the carrying on and management of such business or
in the exercise of any of the powers conferred by Clause 8
(Receivers) or otherwise in respect of the Issuer Charged
Property and all outgoings which it shall think fit to pay
and to apply the residue of the said profits, income or
monies in the manner provided by Clause 7.3 (Issuer
Post-Enforcement Priority of Payments); and
(r) exercise any other powers, rights and/or remedies that may
be available at law or in equity including the powers
referred to in Schedule 1 (and where applicable Schedule 2)
of the Insolvency Act 1986.
8.7 Security: The Issuer Security Trustee may from time to time and at
any time require any such Receiver to give security for the due
performance of its duties and may fix the nature and amount of the
security to be so given but the Issuer Security Trustee shall not be
bound in any such case to require any such security.
8.8 Application by Receiver: Save so far as otherwise directed by the
Issuer Security Trustee, all monies from time to time received by
such Receiver shall be paid over to the Issuer Security Trustee to be
held by it on the trusts declared under this Deed and to be
distributed in accordance with Clause 7.3 (Issuer Post-Enforcement
Priority of Payments).
8.9 Payment to Receiver: The Issuer Security Trustee may pay over to such
Receiver any monies constituting part of the Issuer Charged Property
for the same to be applied for the purposes of this Deed by such
Receiver and the Issuer Security Trustee may from time to time
determine what funds the Receiver shall be at liberty to keep in hand
with a view to the performance of its duties as such Receiver.
8.10 No Restrictions: None of the restrictions imposed by the 1925 Act in
relation to the appointment of receivers or the giving of notice or
otherwise shall apply in relation to the Receiver.
20
8.11 Appointment of Administrator:
(a) Subject to any relevant provisions of the Insolvency Act
1986, the Issuer Security Trustee may, by any instrument or
deed of appointment, appoint one or more persons to be the
administrator of the Master Issuer at any time after:
(i) the service of an Issuer Enforcement Notice; or
(ii) being requested to do so by the Master Issuer; or
(iii) any application having been made to the court for
an administration order under the Insolvency Act
1986; or
(iv) any person having ceased to be an administrator as
a result of any event specified in paragraph 90 of
Schedule B1 to the Insolvency Act 1986; or
(v) any notice of intention to appoint an administrator
having been given by any person or persons entitled
to make such appointment under the Insolvency Act
1986.
(b) Where any such appointment is made at a time when an
administrator continues in office, the administrator shall
act either jointly or concurrently with the administrator
previously appointed hereunder, as the appointment
specifies.
(c) Subject to any applicable order of the court, the Issuer
Security Trustee may replace any administrator, or seek an
order replacing the administrator, in any manner allowed by
the Insolvency Act 1986.
(d) Where the administrator was appointed by the Issuer Security
Trustee under paragraph 14 of Schedule B1 to the Insolvency
Act 1986, the Issuer Security Trustee may, by notice in
writing to the Master Issuer, replace the administrator in
accordance with paragraph 92 of Schedule B1 to the
Insolvency Act 1986.
(e) Every such appointment shall take effect at the time and in
the manner specified by the Insolvency Act 1986.
(f) If at any time and by virtue of any such appointment(s) any
two or more persons shall hold office as administrators of
the same assets or income, such administrators may act
jointly or concurrently as the appointment specifies so
that, if appointed to act concurrently, each one of such
administrators shall be entitled (unless the contrary shall
be stated in any of the deed(s) or other instrument(s)
appointing them) to exercise all the functions conferred on
an administrator by the Insolvency Act 1986.
(g) Every administrator shall have all the powers of an
administrator under the Insolvency Act 1986.
21
(h) In exercising his functions hereunder and under the
Insolvency Act 1986, the administrator acts as agent of the
Master Issuer and does not act as agent of the Issuer
Security Trustee.
(i) Every administrator shall be entitled to remuneration for
his services in the manner fixed by or pursuant to the
Insolvency Act 1986 or the Insolvency Rules 1986.
8.12 Administration:
(a) Upon application being made to a court of competent
jurisdiction for an administration order or the service of a
notice of intention to appoint an administrator or the
filing of documents with the court for the appointment of an
administrator in relation to the Master Issuer or other
order having substantially the same effect to be made on
application by a creditor or creditors of the Master Issuer,
the Issuer Security Trustee shall, (except in the
circumstances where the Issuer Security Trustee has taken
steps to appoint an administrator in accordance with Clause
8.11 (Appointment of an Administrator)), subject to it being
indemnified and/or secured to its satisfaction, as soon as
practicable appoint a Receiver in accordance with this Deed
(who shall, to the extent permitted by law, be an
"administrative receiver" under Section 29 (2) of the
Insolvency Act 1986) of the whole of the Issuer Charged
Property and, in the case of any application to the court or
petition the Issuer Security Trustee shall instruct the
Receiver to attend at the hearing of the application or
petition and take such steps as are necessary to prevent the
appointment of an administrator. The Issuer Secured
Creditors shall co-operate and do all acts and enter into
such further documents, deeds or agreements as the Issuer
Security Trustee may deem necessary or desirable to ensure
that an administration order is not made or that an
administrator is not otherwise appointed and that an
administrative receiver is appointed.
(b) Paragraph 14 of Schedule B1 to the Insolvency Act 1986
applies to the floating charge created hereunder.
9. Further Assurance and Power of Attorney
9.1 Further Assurance: The Master Issuer covenants with and undertakes to
the Issuer Security Trustee from time to time (notwithstanding that
the security may not have become enforceable and/or the Note Trustee
may not have served any Issuer Enforcement Notice) upon demand:
(a) to execute, at the Master Issuer's cost, any document or do
any act or thing which the Issuer Security Trustee or any
Receiver may specify (including executing such Security
Interests over its rights in and over the Issuer Charged
Property and any other assets of the Master Issuer in such
form as the Issuer Security Trustee and/or any Receiver may
require) with a view to:
(i) registering, perfecting, protecting or improving
any charge or security or Security Interest created
or intended to be created by or pursuant to this
Deed (including any act or document which may be
required or desirable under the laws of any
jurisdiction in which any property or
22
assets may be located in order to confer on the
Issuer Security Trustee security over such property
and assets equivalent or similar to the security
intended to be conferred by or pursuant to this
Deed) and in such form as the Issuer Security
Trustee or the Receiver may specify; and/or
(ii) facilitating the realisation of or enforcement of
rights of, all or any part of the Issuer Charged
Property or the exercise, or proposed exercise, of
any of the powers, duties or discretions vested or
intended to be vested in the Issuer Security
Trustee or such Receiver by or pursuant to this
Deed or doing any act or thing deemed necessary by
the Issuer Security Trustee or the Receiver;
(b) to give or join in giving or procure the giving of any
notices to any persons and obtain or procure that there is
obtained any necessary acknowledgements in relation to such
notices, all in such form, as the Issuer Security Trustee or
the Receiver may require at the cost of the Master Issuer,
and for the purpose of this Clause 9.1 (Further Assurance) a
certificate in writing signed by the Issuer Security Trustee to the
effect that any particular assurance or thing is required by it shall
be conclusive evidence of that fact provided that the Master Issuer
shall not be obliged to execute any such documentation or take any
other action or steps to the extent that it would breach a
restriction in any agreement to which it is a party (save where the
other parties hereto agree to such breach) or conflict with any
applicable law.
9.2 Execution of Power of Attorney: Immediately upon execution of this
Deed, the Master Issuer shall execute and deliver to the Issuer
Security Trustee the power of attorney in or substantially in the
form set out in Schedule 1 (Form of Security Power of Attorney).
9.3 Issuer Charged Property on Trust: To the extent permitted to do so
under the Issuer Transaction Documents, for the purpose of giving
effect to this Deed, the Master Issuer hereby declares that, after
service of an Issuer Enforcement Notice, it will hold all the Issuer
Charged Property (subject to the right of redemption) upon trust to
convey, assign or otherwise deal with such Issuer Charged Property in
such manner and to such person as the Issuer Security Trustee shall
direct pursuant to this Deed, and declares that it shall be lawful
for the Issuer Security Trustee to appoint a new trustee or trustees
of the Issuer Charged Property in place of the Master Issuer.
10. Crystallisation
10.1 Notice: In addition and without prejudice to any other event
resulting in a crystallisation of the floating charge created by this
Deed or any other right the Issuer Security Trustee may have, but
subject to any prohibition or restriction imposed by law, the Issuer
Security Trustee may, by notice in writing to the Master Issuer,
declare that the floating charge hereby created shall be converted
into first specific fixed charges over such of the undertaking,
property and assets of the Master Issuer as the Issuer Security
Trustee may specify in such notice at any time if:
(a) a Note Event of Default or a Potential Note Event of Default
has occurred; or
23
(b) the Issuer Security Trustee believes that the Issuer Charged
Property or any part thereof is in danger of being seized or
sold under any form of distress, execution or diligence
levied or is otherwise in jeopardy; or
(c) the Issuer Security Trustee considers that it is desirable
in order to protect the priority of the security created by
this Deed,
provided that the floating charge created by this Deed may not be
converted into a fixed charge or charges solely as a result of the
obtaining of a moratorium (or anything done with a view to obtaining
a moratorium) under the Insolvency Act 2000 except with the leave of
the court.
10.2 Automatic Crystallisation: In addition and without prejudice to any
other event resulting in a crystallisation of the floating charge
contained herein and without prejudice to any rule of law which may
have a similar effect, but subject to any prohibition or restriction
imposed by applicable law, the floating charge created under this
Deed shall automatically and without notice be converted with
immediate effect into a fixed charge as regards:
(a) all property, assets or undertaking of the Master Issuer
subject to the floating charge, upon:
(i) the Master Issuer ceasing to carry on its business
or a material part thereof as a going concern;
(ii) the presentation of a petition for or the making of
an application for the compulsory winding-up of the
Master Issuer;
(iii) the convening of a meeting for the passing of a
resolution for the voluntary winding-up of the
Master Issuer;
(iv) the making of an application for an administration
order or the filing of documents with the court for
the appointment of an administrator or the service
of a notice of intention to appoint an
administrator in relation to the Master Issuer;
(v) the presentation or making of an application for a
warrant of execution, writ of fieri facias,
garnishee order or charging order in respect of any
of the assets of the Master Issuer subject to the
floating charge;
(vi) the occurrence of a Note Event of Default or, if
there are no Issuer Notes outstanding, following a
default in payment of any other Issuer Secured
Obligations on its due date or within any
applicable grace period following such due date
stated in the relevant Issuer Transaction Document;
and/or
(b) any property, assets or undertaking of the Master Issuer,
which become subject to an Encumbrance in favour of any
person other than the Issuer Security Trustee or which
is/are the subject of a sale, transfer or other disposition,
in either case, contrary to the covenants and undertakings
contained in the Issuer Transaction Documents, immediately
prior to such Encumbrance arising or such sale, transfer or
other disposition being made,
24
provided that the floating charge created by this Deed may not be
converted into a fixed charge or charges solely as a result of the
obtaining of a moratorium (or anything done with a view to obtaining
a moratorium) under the Insolvency Act 2000 except with the leave of
the court.
11. Provisions relating to the Security
11.1 Continuing Security: The Issuer Security shall be:
(a) in addition to and independent of and shall not operate so
as to prejudice or affect or merge in any other security,
right of recourse or other right whatsoever which may be
held by any of the Issuer Secured Creditors or the Issuer
Security Trustee on their behalf in respect of the whole or
any part of the Issuer Secured Obligations and shall not be
affected by any release, reassignment or discharge of such
other security; and
(b) a continuing security for the Issuer Secured Obligations and
shall remain in force as continuing security for the Issuer
Secured Creditors and shall not be considered as satisfied
or discharged by any intermediate payment or settlement of
the whole or any part of the Issuer Secured Obligations or
the existence at any time of a credit balance on any current
or other account or any other matter or thing whatsoever.
11.2 Consolidation: Section 93 of the 1925 Act shall not apply in relation
to any of the Issuer Security.
11.3 Ruling Off: If the Issuer Security Trustee receives notice of any
Encumbrance affecting the whole or any part of the Issuer Charged
Property or any security granted hereunder in contravention of the
provisions hereof:
(a) the Issuer Security Trustee may open a new account in the name of
the Master Issuer and, if it does not, it shall nevertheless be
deemed to have done so at the time it received such notice; and
(b) all payments made by the Master Issuer to the Issuer Security
Trustee after the Issuer Security Trustee receives such notice
shall be credited or deemed to have been credited to the new
account, and in no circumstances whatsoever shall operate to
reduce the Issuer Secured Obligations as at the time the Issuer
Security Trustee received such notice.
11.4 Avoidance of Payments: Any settlement, discharge or release between
(a) the Master Issuer and (b) the Issuer Security Trustee or any
Receiver (the "Relevant Person(s)") shall be conditional upon no
security or payment granted or made to the Relevant Person(s) by the
Master Issuer or any other person being avoided or reduced by virtue
of any provisions or enactments relating to bankruptcy, insolvency or
liquidation for the time being in force and, in the event of such
security or payment being so avoided or reduced, the Relevant
Person(s) shall be entitled to recover the value or amount of such
security or payment from the Master Issuer and from the security
subsequently as if such settlement, discharge or release had not
occurred.
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11.5 Retention of Charges: If the Issuer Security Trustee shall have
reasonable grounds for believing that the Master Issuer may be
insolvent or deemed to be insolvent pursuant to the provisions of the
Insolvency Act 1986 (and production of a solvency certificate of a
duly authorised officer of the Master Issuer shall be prima facie
evidence of the solvency of the Master Issuer) as at the date of any
payment made by the Master Issuer to the Issuer Security Trustee and
that as a result, such payment may be capable of being avoided or
clawed back, the Issuer Security Trustee shall be at liberty to
retain the charges contained in or created pursuant to this Deed
until the expiry of a period of one month plus such statutory period
within which any assurance, security, guarantee or payment can be
avoided or invalidated after the payment and discharge in full of all
Issuer Secured Obligations notwithstanding any release, settlement,
discharge or arrangement which may be given or made by the Issuer
Security Trustee on, or as a consequence of, such payment or
discharge of liability provided that, if at any time within such
period, a petition or an application shall be presented to a
competent court for an order for the winding up or the making of an
administration order in respect of the Master Issuer, or if the
Master Issuer shall commence to be wound up or to go into
administration or any analogous proceedings shall be commenced by or
against the Master Issuer, as the case may be, the Issuer Security
Trustee shall be at liberty to continue to retain such security for
such further period as the Issuer Security Trustee may determine and
such security shall be deemed to continue to have been held as
security for the payment and discharge to the Issuer Security Trustee
of all Issuer Secured Obligations.
11.6 Possession: Entry into possession of the Issuer Charged Property or
any part thereof shall not render the Issuer Security Trustee or any
Receiver of the Master Issuer liable to account as mortgagee or
creditor in possession for anything except actual receipts. If and
whenever the Issuer Security Trustee or the Receiver enters into
possession of the Issuer Charged Property, it shall be entitled at
any time to go out of such possession.
11.7 Change of Name, etc.: This Deed shall remain valid and enforceable
notwithstanding any change in the name, composition or constitution
of the Issuer Security Trustee or the Master Issuer or any
amalgamation, merger or consolidation by the Issuer Security Trustee
or the Master Issuer, with any other corporation (whether, in the
case of the Master Issuer, permitted under the Issuer Transaction
Documents or not).
12. Protection of Third Parties
12.1 No Enquiry: No purchaser from, or other person dealing with, the
Issuer Security Trustee or a Receiver shall be concerned to enquire
whether any of the powers exercised or purported to be exercised
under this Deed has arisen or become exercisable, whether the Issuer
Secured Obligations remain outstanding or have become payable,
whether the Issuer Security Trustee or the Receiver is authorised to
act or as to the propriety or validity of the exercise or purported
exercise of any power; and the title and the position of such a
purchaser or other person shall not be impeachable by reference to
any of those matters and all the protection to purchasers contained
in Sections 104 and 107 of the 1925 Act shall apply to any person
purchasing from or dealing with the Issuer Security Trustee or any
such Receiver.
12.2 Receipts to Current Parties: Upon any sale, calling in, collection,
enforcement or other realisation of the Issuer Charged Property in
accordance with the terms hereof
26
and upon any other dealing or transaction under or pursuant to this
Deed, the receipt of the Issuer Security Trustee or any Receiver
shall be an absolute and a conclusive discharge to a purchaser or
other person dealing with the Issuer Security Trustee or such
Receiver and shall relieve it of any obligation to see to the
application of any monies paid to or by the direction of the Issuer
Security Trustee or such Receiver.
13. Set-Off
The Issuer Security Trustee may at any time after the security
created under this Deed has become enforceable in accordance with
Clause 6.2 (Enforceable) without notice and notwithstanding any
settlement of account or other matter whatsoever combine or
consolidate all or any existing accounts of the Master Issuer whether
in its own name or jointly with others and held by it or any Issuer
Secured Creditor and may set-off or transfer all or any part of any
credit balance or any sum standing to the credit of any such account
(whether or not the same is due to the Master Issuer from the Issuer
Security Trustee or relevant Issuer Secured Creditor and whether or
not the credit balance and the account in debit or the Issuer Secured
Obligations are expressed in the same currency in which case the
Issuer Security Trustee is hereby authorised to effect any necessary
conversions at its prevailing rates of exchange) in or towards
satisfaction of any of the Issuer Secured Obligations (and on or at
any time after the Issuer Security has become enforceable in
accordance with Clause 6.2 (Enforceable) the Issuer Security Trustee
may make such application notwithstanding any specified maturity of
any deposits), but subject always to the Issuer Priority of Payments,
and may in its absolute discretion estimate the amount of any
liability of the Master Issuer which is contingent or unascertained
and thereafter set-off such estimated amount and no amount shall be
payable by the Issuer Security Trustee to the Master Issuer unless
and until all the Issuer Secured Obligations have been ascertained
and fully repaid or discharged.
14. Representations and Covenants
14.1 Representations and Warranties:
(a) The Master Issuer hereby represents to the Issuer Security
Trustee that it is, as of the date hereof, the beneficial
owner of all of the Issuer Charged Property free and clear
of all liens, claims, charges or Encumbrances except for the
Issuer Security and undertakes that it will retain all
rights associated with ownership of the Issuer Charged
Property free and clear of all liens, claims, charges,
Encumbrances except for the Issuer Security.
(b) The Master Issuer represents that it has taken all necessary
steps to enable it to create the Issuer Security in respect
of the Issuer Charged Property in accordance with this Deed
and has taken no action or steps which will or may prejudice
its right, title and interest in, to and under the Issuer
Charged Property.
(c) The Master Issuer represents that its Centre of Main
Interests (as defined in the EU Regulation) is in the United
Kingdom.
14.2 Negative Covenants: The Master Issuer hereby undertakes that, for so
long as any Issuer Secured Obligation remains outstanding, the Master
Issuer shall not, save to the
27
extent contemplated or provided in the Issuer Transaction Documents
or unless it has obtained the prior written consent of the Issuer
Security Trustee:
(a) open or maintain any bank account or deposit account with
any bank or any other financial institution other than the
Issuer Bank Accounts or the Issuer Swap Collateral Accounts
or close the Issuer Bank Accounts or the Issuer Swap
Collateral Accounts;
(b) either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily
or involuntarily, sell, transfer, lease or otherwise dispose
of or grant any option over all or any part of its property,
assets or undertaking or any interest, estate, right, title
or benefit therein or agree or purport to do any of the
foregoing;
(c) create or permit to subsist any Security Interest (unless
arising by operation of law) over or in respect of any of
its property, assets (including any uncalled capital) or
undertaking, present or future provided that on the issuance
of Issuer Notes on any Closing Date, the making available of
any Loan Tranches by the Master Issuer to Funding 2 or if
any new Funding 2 Intercompany Loans are made available by a
new Funding 2 Issuer to Funding 2 in accordance with the
terms of the Transaction Documents, the Master Issuer shall
be entitled to create the Security Interests (if any)
contemplated under the applicable Deed of Accession;
(d) incur any indebtedness in respect of borrowed money
whatsoever or give any guarantee or indemnity in respect of
any indebtedness of or of any obligation or any person;
(e) pay any dividend or make any other distribution to its
shareholder or issue any further shares;
(f) consolidate or merge with any other person or convey or
transfer its properties or assets substantially as an
entirety to any other person;
(g) make or consent to any amendment to, or variation of or
agree to waive or authorise any breach of, any provision of
any of the Issuer Transaction Documents or permit any person
whose obligations form part of the Issuer Charged Property
to be released from its respective obligations;
(h) offer to surrender to any company any amounts which are
available for surrender by way of group relief within
Chapter IV of Part X of the Income and Corporation Taxes Act
1988 except for full payment at the current applicable rate
of corporation tax applied to the surrendered amount and
payable at the date when corporation tax is due to be paid
by the claimant or would be due in the absence of the
surrender;
(i) do any act or thing the effect of which would be to make the
Master Issuer resident in any jurisdiction other than the
United Kingdom;
28
(j) permit any person other than the Master Issuer and the
Issuer Security Trustee to have any equitable interest in
any of its property, assets or undertakings or any interest,
estate, right, title or benefit therein;
(k) purchase or otherwise acquire any Note or Notes (including
the Issuer Notes);
(l) engage in any activities in the United States (directly or
through agents), nor derive any income from United States
sources as determined under United States income tax
principles and will not hold any property if doing so would
cause it to be engaged or deemed to be engaged in a trade or
business within the United States as determined under United
States tax principles;
(m) establish any branches or other establishments (being any
place of operations where a company carries on
non-transitory economic activity with human means and goods
as defined in Article 2(h) of the EU Insolvency Regulation)
in any jurisdiction other than in England and shall procure
that its management, the place at which the meetings of its
directors are held and the place where the interests of the
Master Issuer are administered on a regular basis, is
England;
(n) hold shares or possess voting power in or in relation to any
company, or possess any power to secure, by virtue of any
powers conferred by the articles of association or other
document regulating any company, control over any company;
or
(o) have any employees.
14.3 Positive covenants: The Master Issuer covenants and undertakes with
the Issuer Security Trustee for the benefit of the Issuer Secured
Creditors that it shall:
(a) Registration of Security: file or procure the filing with
the Registrar of Companies pursuant to Chapter I of Part XII
of the Companies Act 1985 of duly completed Forms 395
together with an executed original of this Deed and the
required fee within 21 days after the date of this Deed;
(b) Notice of Assignment: on the date hereof join with the
Issuer Security Trustee in giving notice of the assignments
and the security created under or pursuant to this Deed to
Funding 2, the Funding 2 Security Trustee and each other
party to any Issuer Transaction Document not being a party
to this Deed and on any date hereafter (to the extent only
that such notice and acknowledgement is not given under or
pursuant to this Deed) join with the Issuer Security Trustee
in giving notice of the assignments and the security created
under this Deed to any party to an Issuer Transaction
Document entered into by the Master Issuer after the date
hereof in each case in the form (or substantially in the
form) set out in Schedule 3 (Form of Notice of Assignment);
(c) Accounts: cause to be prepared and certified by the Auditors
of the Master Issuer in respect of each Financial Year,
accounts in such form as will comply with relevant legal and
accounting requirements for the time being and all
requirements for the time being of any stock exchange on
which the Issuer Notes are listed and, in particular, cause
to be prepared and certified by the
29
auditors in respect of each of its financial years, accounts
which are in accordance with a basis of accounting that
satisfies the definition of "UK generally accepted
accounting practice" contained in sub-section 50(4) of the
Finance Act 2004;
(d) Books and Records: at all times keep or procure the keeping
of such books of account and records as may be necessary to
comply with all applicable laws and so as to enable accounts
of the Master Issuer to be prepared and allow the Issuer
Security Trustee and any person or persons appointed by the
Issuer Security Trustee free access to such books of account
and records at all reasonable times during normal business
hours upon reasonable notice in writing, provided that such
inspection shall only be for the purposes of carrying out
its duties under this Deed and any information so obtained
shall only be used and passed on to any other person for the
purpose of the Issuer Security Trustee carrying out its
duties under this Deed;
(e) Notice of Note Event of Default: give notice in writing to
the Issuer Security Trustee forthwith upon becoming aware of
the occurrence of any Note Event of Default or Potential
Note Event of Default including the status of any such
default or matter and what action the Master Issuer is
taking or proposes to take with respect thereto, without
waiting for the Issuer Security Trustee to take any action;
(f) Administration: immediately on receipt or notice of the same
supply the Issuer Security Trustee full details of any
application to the court for an administration order under
paragraph 10 of Schedule B1 of the Insolvency Act made in
respect of the Master Issuer and (without prejudice to
paragraph 12(2) of Schedule B1 to the Insolvency Act) of any
actual or proposed appointment of an administrator by the
holder of a qualifying floating charge (within the meaning
of paragraph 14 of Schedule B1 to the Insolvency Act) or
(without prejudice to paragraph 26(1) of Schedule B1 to the
Insolvency Act) by the Master Issuer or its directors.
(g) Certificates Relating to Financial Information: give to the
Issuer Security Trustee (a) within seven days after demand
by the Issuer Security Trustee therefor and (b) (without the
necessity for any such demand) promptly after the
publication of its audited accounts in respect of each
Financial Year commencing with the Financial Year first
ending after the date hereof and in any event not later than
180 days after the end of each such Financial Year a
certificate signed by two directors of the Master Issuer to
the effect that as at a date not more than seven days before
delivering such certificate (the "certification date") there
did not exist and had not existed since the certification
date of the previous certificate (or in the case of the
first such certificate the date hereof) any Note Event of
Default or any Potential Note Event of Default (or if such
then exists or existed specifying the same) and that during
the period from and including the certification date of the
last such certificate (or in the case of the first such
certificate the date hereof) to and including the
certification date of such certificate the Master Issuer has
complied with all its obligations contained in this Deed and
each of the other Issuer Transaction Documents or (if such
is not the case) specifying the respects in which it has not
so complied;
30
(h) Further Assurances: so far as permitted by applicable law,
at all times execute all such further documents and do all
such further acts and things as may be necessary at any time
or times in the opinion of the Issuer Security Trustee to
give effect to this Deed and the other Issuer Transaction
Documents;
(i) Compliance with Issuer Transaction Documents: observe and
comply with its obligations and use its reasonable
endeavours to procure that each other party to any of the
Issuer Transaction Documents complies with and performs all
its respective obligations under each Issuer Transaction
Document and notify the Issuer Security Trustee forthwith
upon becoming aware of any breach by any such other party to
any Issuer Transaction Document;
(j) Information: so far as permitted by applicable law, give or
procure to be given to the Issuer Security Trustee such
opinions, certificates, information and evidence as it shall
require and in such form as it shall require (including
without limitation the procurement by the Master Issuer of
all such certificates called for by the Issuer Security
Trustee pursuant to this Deed) for the purpose of the
discharge or exercise of the duties, trusts, powers,
authorities and discretions vested in it under this Deed or
by operation of law;
(k) Taxes: duly and promptly pay and discharge all Taxes imposed
upon it or its assets unless such Taxes are, in the opinion
of the Issuer Security Trustee, being contested in good
faith by the Master Issuer;
(l) Swap Transactions: treat each Issuer Swap Transaction in its
accounts as a "derivative financial instrument" for the
purposes of Financial Reporting Standard 13 (as from time to
time amended) and any replacement of it following the
convergence of UK GAAP and IFRS;
(m) Issuer Swap Agreements: in the event of termination of any
Transaction (as defined in an Issuer Swap Agreement) under
an Issuer Swap Agreement, notify the Security Trustee and
the Rating Agencies and use its best efforts to enter into a
replacement of that Transaction upon terms acceptable to the
Rating Agencies and the Issuer Security Trustee with an
Issuer Swap provider whom the Rating Agencies have
previously confirmed in writing to the Master Issuer and the
Issuer Security Trustee will not cause the then-current
ratings of the Issuer Notes to be downgraded, withdrawn or
qualified;
(n) Bank Accounts: in the event of termination of the Issuer
Bank Account Agreement, subject to and in accordance with
the provisions of the Issuer Bank Account Agreement use its
reasonable endeavours to enter into a replacement bank
account agreement;
(o) Cash Management Agreement: in the event of termination of
the Issuer Cash Management Agreement, subject to and in
accordance with the provisions of the Issuer Cash Management
Agreement, use its reasonable endeavours to enter into a
replacement cash management agreement;
(p) Centre of Main Interests: the Master Issuer shall have its
Centre of Main Interests (as defined in the EU Regulation)
in the UK; and
31
(q) Separate Issuer Swap Transactions: the Master Issuer shall,
where an Issuer Swap is required in relation to a Series and
Class of Notes, enter into an Issuer Swap Agreement which is
separate and distinct from each other Issuer Swap Agreement
to which the Master Issuer is then a party;
In addition to the foregoing, the Master Issuer hereby covenants with
each of the Issuer Swap Providers, that it shall not make any
amendment or modification to, or exercise any waiver in respect of,
the Issuer Cash Management Agreement which would be adversely
prejudicial to the interests of any Issuer Swap Provider, without the
prior written consent of the affected Issuer Swap Provider save that
to the extent required, such consent shall not be unreasonably
withheld or delayed.
15. Supplement to Trustee Acts
15.1 Section 1 of the Trustees Act 2000 shall not apply to the duties of
the Issuer Security Trustee in relation to the trusts constituted by
this Deed. Where there are any inconsistencies between the Trustee
Acts and the provisions of this Deed, the provisions of this Deed
shall, to the extent allowed by law, prevail and, in the case of any
such inconsistency with the Trustee Act 2000, the provisions of this
Deed shall constitute a restriction or exclusion for the purposes of
that Act. The Issuer Security Trustee shall have all the powers
conferred upon trustees by the Trustee Acts and by way of supplement
thereto it is expressly declared as set out in the remaining
provisions of this Clause 15 (Supplement to Trustee Acts).
15.2 Reliance on Information:
(a) The Issuer Security Trustee may in relation to this Deed or
any other Issuer Transaction Document act and rely upon the
opinion or advice of, or a certificate or a report or any
information (whether addressed to the Issuer Security
Trustee or not) obtained from, any lawyer, banker, valuer,
surveyor, securities company, broker, auctioneer, accountant
or other expert in the United Kingdom or elsewhere, whether
obtained by the Master Issuer, the Issuer Security Trustee
or otherwise, whether or not any of the aforesaid or any
engagement letter or other document entered into by the
Issuer Security Trustee and the relevant person in
connection therewith contains any monetary or other limit on
the liability of the relevant person and the Issuer Security
Trustee shall not be responsible for any loss occasioned by
so acting or relying on. Any such opinion, advice,
certificate or information may be sent or obtained by
letter, facsimile reproduction or in any other form and the
Issuer Security Trustee shall not be liable for acting in
good faith on any opinion, advice, certificate or
information purporting to be so conveyed although the same
shall contain some error or shall not be authentic provided
that such error or lack of authenticity is not manifest.
(b) The Issuer Security Trustee may call for and shall be
entitled to rely upon a certificate, reasonably believed by
it to be genuine, of the Master Issuer or any other person
in respect of every matter and circumstance for which a
certificate is expressly provided for under this Deed, the
Conditions or any other Issuer Transaction Document and to
call for and rely upon a certificate of the Agent Bank, any
Paying Agent, Registrar, Transfer Agent, any Reference Bank
or any other person reasonably believed by it to be genuine
as
32
to any other fact or matter prima facie within the knowledge
of such Agent Bank, Paying Agent, Registrar, Transfer Agent,
Reference Bank or such other person as sufficient evidence
thereof and the Issuer Security Trustee shall not be bound
in any such case to call for further evidence or be
responsible for any Liability or inconvenience that may be
caused by it failing to do so.
(c) The Issuer Security Trustee shall be entitled to act on any
directions provided in accordance with Clause 15.13 (Issuer
Security Trustee to act on directions) without further
enquiry and to assume that any such directions are given in
accordance with the provisions of this Deed and the Issuer
Security Trustee shall not be liable to any person for any
action taken or omitted under or in connection with this
Deed in accordance with any such directions. The Issuer
Security Trustee shall be entitled to act upon any notice,
request or other communication of any party to this Deed for
the purposes of this Deed or any of the Issuer Transaction
Documents if such notice, request or other communication
purports to be signed or sent by or on behalf of any
authorised signatory of such party.
15.3 Powers and Duties:
(a) The Issuer Security Trustee shall not have any
responsibility for or have any duty to make any
investigation in respect of or in any way be liable
whatsoever for the nature, status, creditworthiness or
solvency of the Master Issuer. Each Issuer Secured Creditor
and each other Issuer Secured Creditor shall be solely
responsible for making its own independent appraisal of and
investigation into the financial condition,
creditworthiness, affairs, status and nature of the Master
Issuer and the Issuer Security Trustee shall not at any time
have any responsibility for the same and each Issuer Secured
Creditor and other Issuer Secured Creditors shall not rely
on the Issuer Security Trustee in respect thereof.
(b) The Issuer Security Trustee shall not be responsible for the
execution, legality, effectiveness, adequacy, genuineness,
validity or enforceability or admissibility in evidence of
any Issuer Transaction Document or any other document
entered into in connection therewith or any security thereby
constituted or purported to be constituted thereby nor shall
it be responsible or liable to any person because of any
invalidity of any provision of such documents or the
unenforceability thereof, whether arising from statute, law
or decision of any court.
(c) The Issuer Security Trustee shall not be responsible for the
scope or accuracy of any recitals, statements, warranty,
representation or covenant of any party (other than the
Issuer Security Trustee) contained herein or in any other
Issuer Transaction Document or any other document entered
into in connection therewith and shall assume the accuracy
and correctness thereof.
(d) The Issuer Security Trustee may accept without enquiry,
requisition or objection such title as the Master Issuer may
have to the Issuer Charged Property or as Funding 2 may have
to the Funding 2 Charged Property or any part thereof from
time to time and shall not be required to investigate or
make any enquiry into or be liable for any defect in the
title of the Master Issuer to
33
the Issuer Charged Property or of Funding 2 to the Funding 2
Charged Property or any part thereof from time to time
whether or not any defect was known to the Issuer Security
Trustee or might have been discovered upon examination,
inquiry or investigation and whether or not capable of
remedy.
(e) The Issuer Security Trustee shall not be bound to give
notice to any person of the execution of this Deed, nor
shall it have any duty to make any investigation in respect
of or in any way be liable whatsoever for the registration,
filing, protection or perfection of the Issuer Security or
the priority of the Issuer Security created thereby and
shall not be liable for any failure, omission or defect in
perfecting, protecting, procuring the registration of or
further assuring the security created or purported to be
created thereby.
(f) The Issuer Security Trustee shall not have any duty to make
any investigation in respect of or in any way be liable
whatsoever for the failure to call for delivery of documents
of title to or require any transfers, legal mortgages,
charges or other further assurances in relation to any of
the assets the subject matter of any of this Deed or any
other document.
(g) The Issuer Security Trustee shall be under no obligation to
monitor or supervise and shall not have any duty to make any
investigation in respect of or in any way be liable
whatsoever for the performance or observance by the Master
Issuer or any other person of the provisions of this Deed or
any other Issuer Transaction Document and shall be entitled
to assume that each person is properly performing and
complying with its obligations hereunder.
(h) The Issuer Security Trustee shall not have any
responsibility for or have any duty to make any
investigation in respect of or in any way be liable
whatsoever for the existence, accuracy or sufficiency of any
legal or other opinions, searches, reports, certificates,
valuations or investigations delivered or obtained or
required to be delivered or obtained at any time in
connection with the Issuer Charged Property or any Issuer
Transaction Document.
(i) The Issuer Security Trustee shall have no responsibility
whatsoever to any Issuer Secured Creditor as regards any
deficiency which might arise because the Issuer Security
Trustee is subject to any Tax in respect of the Issuer
Charged Property or any part thereof or any income therefrom
or any proceeds thereof or is required by law to make any
withholding or deduction from any payment to any Issuer
Secured Creditor.
(j) The Issuer Security Trustee will not be responsible or
liable for any inadequacy or unfitness of any Issuer Charged
Property as security or any decline in value of any loss
realised upon any disposition of the Issuer Charged
Property.
(k) The Issuer Security Trustee shall not be responsible for,
nor shall it have any liability with respect to, any loss or
theft of the Issuer Charged Property.
(l) The Issuer Security Trustee shall not be liable or
responsible for any loss, cost, damage, expense or
inconvenience which may result from anything done or
34
omitted to be done by it under this Deed or under any of the
other Issuer Transaction Documents.
(m) The Issuer Security Trustee may appoint and pay any person
to act as a custodian or nominee on any terms in relation to
such assets of the trust as the Issuer Security Trustee may
determine, including for the purpose of depositing with a
custodian this Deed or any Issuer Transaction Document and
the Issuer Security Trustee shall not be responsible for any
loss, liability, expense, demand, cost, claim or proceedings
incurred by reason of the misconduct, omission or default on
the part of any person appointed by it hereunder or be bound
to supervise the proceedings or acts of any such person.
(n) The Issuer Security Trustee shall (save as expressly
otherwise provided in this Deed or in any other Issuer
Transaction Document) as regards all rights, powers,
authorities and discretions vested in it by this Deed or any
other Issuer Transaction Document, or by operation of law,
have absolute and uncontrolled discretion as to the exercise
or non-exercise thereof and the Issuer Security Trustee
shall not be responsible for any liability that may result
from the exercise or non-exercise thereof but whenever the
Issuer Security Trustee is under the provisions of this Deed
bound to act at the request or direction of any party, the
Issuer Security Trustee shall nevertheless not be so bound
unless first indemnified and/or provided with security to
its satisfaction against all actions, proceedings, claims
and demands to which it may render itself liable and all
costs, charges, damages, expenses and Liabilities which it
may incur by so doing.
(o) The Issuer Security Trustee as between itself and the Issuer
Secured Creditors or any of them shall have full power to
determine all questions and doubts arising in relation to
any of the provisions of this Deed and/or any other Issuer
Transaction Document and every such determination, whether
made upon a question actually raised or implied in the acts
or proceedings of the Issuer Security Trustee, shall be
conclusive and shall bind the Issuer Security Trustee and
the Issuer Secured Creditors.
(p) The Issuer Security Trustee shall not be responsible for any
liability occasioned to the Issuer Charged Property however
caused, whether by an act or omission of the Master Issuer
or any other party to the Issuer Transaction Documents or
any other person (including any bank, broker, depositary,
warehouseman or other intermediary or any clearing system or
operator thereof) or otherwise irrespective of whether the
Issuer Charged Property is held by or to the order of any
such persons.
(q) The Issuer Security Trustee shall not be responsible for the
receipt or application by the Master Issuer of any amounts
under the Funding 2 Intercompany Loan.
(r) In connection with the exercise by it of any of its trusts,
powers, authorities and discretions under this Deed
(including without limitation any power to authorise any
amendment or to waive any breach or to make any
determination) the Issuer Security Trustee shall:
35
(i) whilst the Notes are outstanding, act only at the
direction of the Note Trustee.
(ii) at any time after the redemption in full of the
Issuer Notes, it shall have regard to the interest
of the Issuer Secured Creditor which ranks next
highest under the Issuer Post-Enforcement Priority
of Payments;
(iii) it shall not have regard to, or be in any way
liable for, the consequences of any exercise
thereof for any other person.
In all cases, the Issuer Security Trustee will only be
obliged to act if it is indemnified and/or secured to its
satisfaction.
(s) The Issuer Security Trustee may determine whether or not a
default in the performance by the Master Issuer of any
obligation under the provisions of this Deed or any other
Issuer Transaction Document or a default in the performance
by Funding 2 of any obligation under the Funding 2
Intercompany Loan Agreement is capable of remedy and/or
whether the same is materially prejudicial to the interests
of the Issuer Secured Creditors or any of them and if the
Issuer Security Trustee shall certify that any such default
is, in its opinion, not capable of remedy and/or materially
prejudicial to the interests of the Issuer Secured Creditors
or any of them, such certificate shall be conclusive and
binding upon the Master Issuer and the Issuer Secured
Creditors. (t) The Issuer Security Trustee may, in the
conduct of its trust business, instead of acting personally,
employ and pay an agent on any terms, whether or not a
lawyer or other professional person, to transact or conduct,
or concur in transacting or conducting, any business and to
do or concur in doing all acts required to be done by the
Issuer Security Trustee (including the receipt and payment
of monies).
(u) In relation to any asset held by the Issuer Security Trustee
under this Deed, the Issuer Security Trustee may appoint any
person to act as its nominee on any terms.
(v) Any trustee of this Deed being a lawyer, accountant, broker
or other person engaged in any profession or business shall
be entitled to charge and be paid all usual professional and
other charges for business transacted and acts done by him
or his firm in connection with the trusts of this Deed and
the other Issuer Transaction Documents and also his charges
in addition to disbursements for all other work and business
done and all time spent by him or his firm in connection
with matters arising in connection with this Deed and the
other Issuer Transaction Documents, including matters which
might or should have been attended to in person by a trustee
not being a banker, lawyer, broker or other professional
person.
(w) The Issuer Security Trustee may, in the execution of all or
any of the trusts, powers, authorities and discretions
vested in it by this Deed or any of the other Issuer
Transaction Documents, act by responsible officers or a
responsible officer for the time being of the Issuer
Security Trustee. The Issuer Security
36
Trustee may also, whenever it thinks expedient in the
interests of the Issuer Secured Creditors, whether by power
of attorney or otherwise, delegate to any person or persons
all or any of the trusts, rights, powers, duties,
authorities and discretions vested in it by this Deed or any
of the other Issuer Transaction Documents. Any such
delegation may be made upon such terms and subject to such
conditions and subject to such regulations (including power
to sub-delegate) as the Issuer Security Trustee may think
fit in the interests of the Issuer Secured Creditors. The
Issuer Security Trustee shall give prompt notice to the
Master Issuer of the appointment of any delegate as
aforesaid and shall procure that any delegate shall also
give prompt notice of the appointment of any sub-delegate to
the Master Issuer.
(x) If the Issuer Security Trustee exercises reasonable care in
selecting any custodian, agent, delegate, nominee or any
other person appointed under this Clause 15.3 (Powers and
Duties) (each, an "Appointee") it will not have any
obligation to supervise such Appointee or be responsible for
any loss, liability, costs, claim, proceedings or expenses
incurred by reason of such Appointee's misconduct, omission
or default or the misconduct, omission or default of any
substitute lawfully appointed by such Appointee.
(y) Where it is necessary or desirable for any purpose in
connection with this Deed to convert any sum from one
currency to another it shall (unless otherwise provided by
this Deed or required by law) be converted at such rate or
rates in accordance with such method and as at such date for
the determination of such rate of exchange, as may be
specified by the Issuer Security Trustee in its absolute
discretion but having regard to rates of exchange if
available and the Issuer Security Trustee shall not be
liable for any loss occasioned by the said conversion under
this paragraph (w) and any rate mentioned and date so
specified shall be binding on the Issuer Secured Creditors.
(z) Any consent given by the Issuer Security Trustee for the
purposes of this Deed or any of the other Issuer Transaction
Documents may be given on such terms and subject to such
conditions (if any) as the Issuer Security Trustee thinks
fit and may be given retrospectively. The Issuer Security
Trustee may (subject to the provisions of Clause 15.13) give
any consent or approval, exercise any power, authority or
discretion or take any similar action (whether or not such
consent, approval, power, authority, discretion or action is
specifically referred to in this Deed) if it is satisfied
that the interests of the Issuer Secured Creditors will not
be materially prejudiced thereby.
(aa) The Issuer Security Trustee shall not be liable for any
error of judgment made in good faith by any officer or
employee of the Issuer Security Trustee assigned by the
Issuer Security Trustee to administer its corporate trust
matters.
(bb) The Issuer Security Trustee shall not (unless required by
law or ordered to do so by a court of competent
jurisdiction) be required to disclose to any Issuer Secured
Creditor or any other person any information made available
to the Issuer Security Trustee by the Master Issuer or any
other person in connection with the trusts of this Deed or
any other Issuer Transaction Documents and no
37
Issuer Secured Creditor or any other person shall be
entitled to take any action to obtain from the Issuer
Security Trustee any such information. The Issuer Security
Trustee shall not be responsible for exercising the rights
of any of the parties under the Issuer Transaction Documents
or considering the basis upon which the approvals or
consents are granted by any of the parties under the Issuer
Transaction Documents.
(cc) Notwithstanding anything else in this Deed, the Issuer Notes
or any other Issuer Transaction Document, the Issuer
Security Trustee may refrain from doing anything which would
or might in its opinion be contrary to any law of any
jurisdiction or any directive or regulation of any
governmental agency or which would or might otherwise render
it liable to any person and may do anything which is, in its
opinion, necessary to comply with any such law, directive or
regulation.
(dd) Without prejudice to the right of the Issuer Security
Trustee to require and/or accept any other evidence, the
Issuer Security Trustee may accept as conclusive evidence of
any fact or matter in relation to the Master Issuer or
required to be certified by the Master Issuer under the
Conditions, a certificate signed by two directors of the
Master Issuer and the Issuer Security Trustee shall not be
bound in any such case to call for further evidence or be
responsible for any liability that may be occasioned by it
or any other person acting on such certificate.
(ee) If an Event of Default occurs and is continuing and if it is
known to an Authorised Officer of the Issuer Security
Trustee, the Issuer Security Trustee shall mail to each
Issuer Secured Creditor notice of such Note Event of Default
within 90 days after it occurs.
(ff) The powers conferred by this Deed upon the Issuer Security
Trustee or any Receiver shall be in addition to and not in
substitution for any powers which may from time to time be
conferred on the Issuer Security Trustee or any such
Receiver by statute or under common law.
(gg) The Issuer Security Trustee has no duties or
responsibilities except those expressly set out in this Deed
or in the other Issuer Transaction Documents.
(hh) Without prejudice to the provisions of any Issuer
Transaction Documents relating to insurance, the Issuer
Security Trustee shall not be under any obligation to insure
any of the Issuer Charged Property or the Funding 2 Charged
Property or any deeds or documents of title or other
evidence in respect of the Issuer Charged Property or the
Funding 2 Charged Property or to require any other person to
maintain any such insurance or monitor the adequacy of any
such insurance and shall not be responsible for any
liability which may be suffered by any person as a result of
the lack of or inadequacy of any such insurance.
15.4 No Financial Liability: Notwithstanding any other provision of this
Deed or of any other Issuer Transaction Document, nothing shall
require the Issuer Security Trustee to risk its own funds or
otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers or
otherwise in
38
connection with this Deed or any other Issuer Transaction Document
(including, without limitation, forming any opinion or employing any
legal, financial or other adviser), if it shall believe that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it. The Issuer Security Trustee shall not
be responsible for exercising the rights of any of the parties under
the Issuer Transaction Documents or considering the basis upon which
the approvals or consents are granted by any of the parties under the
Issuer Transaction Documents.
15.5 Ascertaining Default: The Issuer Security Trustee shall not be
responsible or liable for:
(a) exercising any rights or powers which are assigned to it by
any party to the Issuer Transaction Documents, including,
without limitation, any servicing, administration and
management functions in relation to the Mortgage Loans and
shall not be liable to any person for the exercise or
non-exercise of any such rights and powers;
(b) ascertaining whether a default has occurred under the terms
of any of the Issuer Transaction Documents and, save where
otherwise specifically provided in the Issuer Transaction
Documents, nor is the Issuer Security Trustee responsible
for taking any action in connection with any such default or
alleged default;
15.6 Rating of Issuer Notes: The Issuer Security Trustee shall have no
responsibility for the maintenance of any rating of the Issuer Notes
by the Rating Agencies or any other credit-rating agency or any other
person.
15.7 Delivery of Certificates: The Issuer Security Trustee shall have no
liability whatsoever for any loss, cost damages or expenses directly
or indirectly suffered or incurred by the Master Issuer, any Issuer
Secured Creditor or any other person as a result of the delivery by
the Issuer Security Trustee of a certificate, or the omission by it
to deliver a certificate, to the Master Issuer as to material
prejudice, on the basis of an opinion formed by it in good faith.
15.8 Assumption of No Default: The Issuer Security Trustee shall not be
bound to ascertain whether any Note Event of Default or Potential
Note Event of Default has happened and, until it shall have actual
knowledge or express notice to the contrary, the Issuer Security
Trustee shall be entitled to assume that no such Note Event of
Default or Potential Note Event of Default has happened and that the
Master Issuer is observing and performing all the obligations on its
part under the Issuer Notes and this Deed and no event has happened
as a consequence of which any Issuer Notes may become repayable.
15.9 Assumption of no Intercompany Loan Default: The Issuer Security
Trustee shall not be bound to ascertain whether any Funding 2
Intercompany Loan Event of Default or Potential Funding 2
Intercompany Loan Event of Default has happened and, until it shall
have actual knowledge or express notice to the contrary, the Issuer
Security Trustee shall be entitled to assume that no such Funding 2
Intercompany Loan Event of Default or Potential Funding 2
Intercompany Loan Event of Default has happened and that Funding 2 is
observing and performing all the obligations on its part;
39
The Issuer Security Trustee shall not be bound to ascertain whether
any Issuer Cash Manager Termination Event or any event which with the
giving of notice or expiry of any grace period or certification as
specified in such Issuer Cash Manager Termination Event would
constitute the same has happened and, until it shall receive express
notice to the contrary pursuant to Clause 11.4 (Note of Event of
Default) of the Issuer Cash Management Agreement, the Issuer Security
Trustee shall be entitled to assume that no such Issuer Cash Manager
Termination Event or such other event as described above has happened
and that the Issuer Cash Manager is observing and performing its
obligations contained in the Issuer Cash Management Agreement.
The Issuer Security Trustee shall not be bound to ascertain whether
any Termination Event under the Issuer Bank Account Agreement or any
event which with the giving of notice or expiry of any grace period
or certification as specified in the Issuer Bank Account Agreement,
would constitute the same has happened and, until it shall receive
express notice to the contrary pursuant to Clause 8 (Termination) of
the Issuer Bank Account Agreement, the Issuer Security Trustee shall
be entitled to assume that no such termination event under the Issuer
Bank Account Agreement or such other event as described above has
happened and that the Account Bank is observing and performing its
obligations contained in the Issuer Bank Account Agreement.
15.10 Commercial Transactions: The Issuer Security Trustee shall not, and
no director, officer or employee of any corporation being an Issuer
Security Trustee hereof shall by reason of the fiduciary position of
the Issuer Security Trustee be in any way precluded from making any
commercial contracts or entering into any commercial transactions
with any party to the Issuer Transaction Documents, whether directly
or through any subsidiary or associated company, or from accepting
the trusteeship of any other debenture stock, debentures or
securities of any party to the Issuer Transaction Documents, and
without prejudice to the generality of these provisions, it is
expressly declared that such contracts and transactions include any
contract or transaction in relation to the placing, underwriting,
purchasing, subscribing for or dealing with or lending monies upon or
making payments in respect of or any stock, shares, debenture stock,
debentures or other securities of any party to the Issuer Transaction
Documents or any contract of banking or insurance of any party to the
Issuer Transaction Documents and neither the Issuer Security Trustee
nor any such director, officer or employee shall be accountable to
any Issuer Secured Creditor or to any party to the Issuer Transaction
Documents for any profit, fees, commissions, interest, discounts or
share of brokerage earned, arising or resulting from any such
contracts or transactions, and the Issuer Security Trustee and any
such director, officer or employee shall also be at liberty to retain
the same without accounting therefor.
15.11 Issuer Security Trustee Liable for Negligence etc.: Notwithstanding
any other provision of this Deed, none of the provisions of this Deed
shall, in any case in which the Issuer Security Trustee has failed to
show the degree of care and diligence required of it as trustee under
this Deed having regard to the provisions of this Deed conferring on
the Issuer Security Trustee any powers, authorities or discretions,
relieve the Issuer Security Trustee from or indemnify the Issuer
Security Trustee against any liabilities which by virtue of any rule
of law would otherwise attach to it in respect of any negligence,
default, breach of duty or breach of trust of which it may be guilty
in relation to its duties under this Deed.
40
15.12 Issuer Security Trustee to act on directions: Notwithstanding any
other provision in any other Issuer Transaction Document, each of the
Issuer Secured Creditors and the Master Issuer acknowledges that when
exercising its opinion and/or when exercising the rights, benefits,
power, trusts, authorities, discretions and obligations expressed to
be granted by this Deed, the other Issuer Transaction Documents or by
operation of law, the Issuer Security Trustee shall, for so long as
there are any Issuer Notes outstanding, act only at the request or
directions received from the Note Trustee and shall not be
responsible for any Liability or inconveniences that may result from
the exercise or non-exercise thereof (including any Liability
occasioned by any delay or failure on the part of the Note Trustee(s)
to make any such request or give any such discretion provided that:
(a) if there is a conflict between the interests (as directed by
the Note Trustee(s)) of holders of Issuer Notes issued by
more than one Noteholder or a conflict in directions
received from the Note Trustee(s), the Issuer Security
Trustee shall have regard only to the interests or
directions, as applicable, of the Note Trustee or Note
Trustee(s) acting as trustees in respect of the holders of
the highest ranking class of Issuer Notes outstanding (the
"Principal Directions"); and
(b) if there is any conflict between the Principal Directions,
due to more than one Noteholder having Issuer Notes of the
same class as their highest ranking class, the Issuer
Security Trustee shall have regard only to the Principal
Directions of the Note Trustee(s) representing the holders
of the greatest aggregate principal amount outstanding of
the highest ranking class of Issuer Notes, and for this
purpose, the principal amount outstanding of any Issuer Note
not denominated in Sterling shall be converted into Sterling
at the rate specified in the relevant swap agreement
applicable to such Issuer Note or, if at the relevant time
there is no such currency swap agreement in effect, at the
"spot rate" at which the relevant currency is converted into
Sterling on the foreign exchange markets.
16. Appointment, Removal and Retirement
16.1 Power of Master Issuer: Subject to the provisions of this Clause 16
(Appointment, Removal and Retirement), the power of appointing a new
Issuer Security Trustee in place of an existing Issuer Security
Trustee shall be vested in the Master Issuer but such appointment or
removal must (i) be approved by (save to the extent otherwise
provided in the Conditions) an Extraordinary Resolution of the Class
A Noteholders, the Class B Noteholders, the Class M Noteholders, the
Class C Noteholders and the Class D Noteholders then outstanding, and
(ii) be approved in writing by each other Issuer Secured Creditor
(such approval not be unreasonably withheld or delayed). A trust
corporation may be appointed sole trustee hereof but subject thereto
there shall be at least two trustees hereof, one at least of which
shall be a trust corporation. Any appointment of a new Issuer
Security Trustee and any retirement of an existing Issuer Security
Trustee hereof shall as soon as practicable thereafter be notified by
the Master Issuer to the Issuer Secured Creditors. Any new Issuer
Security Trustee must meet the requirements set out in Clause 16.5
(Retirement or Removal Not Effective).
16.2 Powers of Issuer Security Trustee to appoint: Notwithstanding the
provisions of Clause 16.1 (Power of Master Issuer), the Issuer
Security Trustee may (as attorney
41
for the Master Issuer) upon giving prior notice to the Master Issuer
but without the consent of the Master Issuer or the Issuer Secured
Creditors appoint any person established or resident in any
jurisdiction (whether a trust corporation or not) to act either as a
separate trustee or as a co-trustee jointly with the Issuer Security
Trustee:
(a) if the Issuer Security Trustee considers such appointment to
be in the interests of the Issuer Secured Creditors (or any
of them); or
(b) for the purposes of conforming to any legal requirements,
restrictions or Conditions in any jurisdiction in which any
particular act or acts is or are to be performed; or
(c) for the purposes of obtaining a judgment in any jurisdiction
or the enforcement in any jurisdiction of either a judgment
already obtained or any of the provisions of these presents
or any of the other Issuer Transaction Documents against the
Master Issuer or any other party thereto.
The Master Issuer hereby irrevocably appoints the Issuer Security
Trustee to be its attorney in its name and on its behalf to execute
any such instrument of appointment. Such a person shall (subject
always to the provisions of these presents and any other Issuer
Transaction Document to which the Issuer Security Trustee is a party)
have such trusts, powers, authorities and discretions (not exceeding
those conferred on the Issuer Security Trustee by these presents or
any of the other Issuer Transaction Documents to which the Issuer
Security Trustee is a party) and such duties and obligations as shall
be conferred or imposed on it by the instrument of appointment. The
Issuer Security Trustee shall have power in like manner to remove any
such person. Such proper remuneration as the Issuer Security Trustee
may pay to any such person, together with any attributable costs,
charges and expenses incurred by it in performing its function as
such separate trustee or co-trustee, shall for the purposes of these
presents be treated as costs, charges and expenses incurred by the
Issuer Security Trustee.
16.3 Multiple Trustees: Whenever there shall be more than two trustees
hereof, the majority of such trustees shall (provided such majority
includes a trust corporation) be competent to execute and exercise
all the trusts, powers, authorities and discretions vested by these
presents and any of the other Issuer Transaction Documents in the
Issuer Security Trustee generally.
16.4 Retirement or Removal of Issuer Security Trustee: Subject as provided
in Clause 16.5 (Retirement or Removal not Effective), any Issuer
Security Trustee for the time being of this Deed may retire at any
time upon giving not less than three months' prior notice in writing
to the Master Issuer without assigning any reason therefor and
without being responsible for any costs resulting from such
retirement.
16.5 Retirement or Removal not Effective: The retirement or removal of any
Issuer Security Trustee shall not become effective unless there
remains at least one trustee hereof being a trust corporation in
office upon such retirement or removal. The Master Issuer covenants
that, in the event of a trustee (being a sole trustee or the only
trust corporation) giving notice or being removed under Clause 16.4
(Retirement or Removal of Issuer Security Trustee) it shall use its
best endeavours to procure a new Issuer Security Trustee of these
presents (being a trust corporation) to be appointed as
42
soon as reasonably practicable thereafter (for the avoidance of
doubt, on the same terms as these presents). If within 30 days of
having given notice of its intention to retire, the Master Issuer has
failed to appoint a replacement Issuer Security Trustee, the outgoing
Issuer Security Trustee will be entitled to appoint its successor
provided that the Rating Agencies confirm that the then ratings of
the Issuer Notes shall not be either reduced, qualified or withdrawn
as a result of such appointment.
16.6 Funding 2 Security Trustee, Note Trustee and Issuer Security Trustee:
If the Issuer Security Trustee retires or is removed in accordance
with the provisions of this Clause 16 (Appointment, Removal and
Retirement) then the Funding 2 Security Trustee, each Note Trustee
and each other Issuer Security Trustee shall retire at the same time
in accordance with the provisions of the Funding 2 Deed of Charge,
the applicable Issuer Trust Deed and the applicable Issuer Deed of
Charge. If the Funding 2 Security Trustee retires or is removed in
accordance with the provisions of the Funding 2 Deed of Charge, a
Note Trustee retires or is removed in accordance with the provisions
of the applicable Issuer Trust Deed and/or another Issuer Security
Trustee retires or is removed in accordance with the provisions of
the applicable Issuer Deed of Charge, then the Issuer Security
Trustee shall retire at the same time in accordance with the
provisions of this Clause 16 (Appointment, Removal and Retirement).
In each case the successor Issuer Security Trustee, the Funding 2
Security Trustee, each successor Note Trustee and each other
successor Issuer Security Trustee shall be the same person or
persons.
17. Remuneration and Indemnification of Issuer Security Trustee
17.1 Normal Remuneration: The Master Issuer shall (subject as hereinafter
provided) pay to the Issuer Security Trustee remuneration of such
amount as shall from time to time be agreed by the Master Issuer and
the Issuer Security Trustee. The rate of remuneration in force from
time to time may upon the final redemption of the whole of the Issuer
Notes of any Series be reduced by such amount as shall be agreed
between the Master Issuer and the Issuer Security Trustee, such
reduced remuneration to be calculated from such date as shall be
agreed as aforesaid. Such remuneration shall be payable in priority
to payments to Noteholders and other Issuer Secured Creditors on each
Monthly Payment Date subject to and in accordance with the relevant
Issuer Priority of Payments. Such remuneration shall accrue from day
to day and be payable up to and including the date when, all the
Issuer Notes having become due for redemption, the redemption monies
and interest thereon to the date of redemption have been paid to the
Principal Paying Agent or, as the case may be, the Issuer Security
Trustee PROVIDED THAT if upon due presentation of any Note
Certificate or any cheque payment of the monies due in respect
thereof is improperly withheld or refused, remuneration will commence
again to accrue until payment to Noteholders is made.
17.2 Extra Remuneration: In the event of the occurrence of a Note Event of
Default or the Issuer Security Trustee considering it expedient or
necessary or being requested by the Master Issuer to undertake duties
which the Issuer Security Trustee and the Master Issuer agree to be
of an exceptional nature or otherwise outside the scope of the normal
duties of the Issuer Security Trustee under this Deed, the Master
Issuer shall pay to the Issuer Security Trustee such additional
remuneration as shall be agreed between them;
43
17.3 Failure to Agree: In the event of the Issuer Security Trustee and the
Master Issuer failing to agree:
(a) (in a case to which Clause 17.1 (Normal Remuneration)
applies) upon normal remuneration; or
(b) (in a case to which Clause 17.2 (Extra Remuneration)
applies) upon whether such duties shall be of an exceptional
nature or otherwise outside the scope of the normal duties
of the Issuer Security Trustee under these presents, or upon
such additional remuneration;
such matters shall be determined by an investment bank (acting as an
expert and not as an arbitrator) selected by the Issuer Security
Trustee and approved by the Master Issuer or, failing such approval,
nominated (on the application of the Issuer Security Trustee) by the
President for the time being of The Law Society of England and Wales
(the expenses involved in such nomination and the fees of such
investment bank being payable by the Master Issuer) and the
determination of any such investment bank shall be final and binding
upon the Issuer Security Trustee and the Master Issuer.
17.4 Expenses: In addition to the remuneration hereunder, the Master
Issuer shall on written request, pay all other costs, charges and
expenses (against production of invoices) which the Issuer Security
Trustee may properly incur in relation to:
(a) the negotiation, preparation and execution of, the exercise
of its powers and discretions and the performance of its
duties under these presents and any other Issuer Transaction
Documents including, but not limited to legal and travelling
expenses; and
(b) any other action taken by or on behalf of the Issuer
Security Trustee to enforce the obligations of the Master
Issuer under or resolving any doubt in respect of these
presents and/or any of the other Issuer Transaction
Documents.
17.5 Indemnity: The Master Issuer shall indemnify the Issuer Security
Trustee in respect of all Liabilities to which it (or any person
appointed by it hereunder) may be or become liable or which may be
properly incurred by it (or any such person as aforesaid) in the
execution or purported execution of any of its trusts, powers,
authorities and discretions hereunder or its functions under any such
appointment or in respect of any other matter or thing done or
omitted in any way relating to these presents and any of the other
Issuer Transaction Documents provided that it is expressly stated
that Clause 15.12 (Issuer Security Trustee Liable for Negligence
etc.) shall apply in relation to these provisions.
17.6 Stamp Duties: The Master Issuer shall pay all stamp duties and other
duties or taxes of a similar nature, including for the avoidance of
doubt any duty levied under the Stamp Act 1891 as amended and
supplemented, (if any) payable in the United Kingdom on or arising
out of or in consequence of:
(a) the execution and delivery of this Deed and any other Issuer
Transaction Document to which the Issuer Security Trustee is
a party; and
44
(b) any action in any jurisdiction taken by or on behalf of the
Issuer Security Trustee. If the Issuer Security Trustee (or
any Noteholder or Issuer Secured Creditor) where permitted
under these presents or the Issuer Trust Deed to do so shall
take any proceedings against the Master Issuer in any other
jurisdiction and if for the purpose of any such proceedings,
this Deed is taken into any such jurisdiction and any stamp
duties or other duties or taxes become payable thereon in
any such jurisdiction, the Master Issuer will pay (or
reimburse the person making payment of) such stamp duties or
other duties or taxes (including interest or penalties).
17.7 VAT: The Master Issuer shall in addition pay to the Issuer Security
Trustee an amount equal to any value added tax or similar tax
chargeable in respect of its remuneration under this Deed.
17.8 Interest: Subject as provided in Clause 17.9 (Payment), all sums
payable by the Master Issuer under this Clause 17 (Remuneration and
Indemnification of Issuer Security Trustee) shall be payable on
demand or, in the case of any remuneration payable under Clause 17.1
(Normal Remuneration) on the due date specified therein and shall
carry interest at the rate per annum, which is one per cent. per
annum above the base rate from time to time of the National
Westminster Bank Plc from the date on which they were paid, charged
or incurred by the Issuer Security Trustee or, in the case of
remuneration, the due date for payment thereof, to the date of actual
payment, and in all other cases shall (if not paid on the date
specified in such demand or, if later, within three days after such
demand and, in either case, the Issuer Security Trustee so requires)
carry interest at such rate from the date specified in such demand.
17.9 Payment: Notwithstanding the other provisions of this Deed, any
amount owing by the Master Issuer pursuant to this Clause 17
(Remuneration and Indemnification of Issuer Security Trustee) shall
only be payable by the Master Issuer subject to and in accordance
with the applicable Issuer Priority of Payments which applies at such
time.
17.10 Survival: Unless otherwise specifically stated in any discharge of
this Deed, the provisions of this Clause 17 (Remuneration and
Indemnification of Issuer Security Trustee) shall continue in full
force and effect notwithstanding such discharge.
18. Modification and Waiver
18.1 Modification: Subject as expressly provided otherwise in any Issuer
Transaction Document, the Issuer Security Trustee may (subject to the
provisions of Clause 15.13 (Issuer Security Trustee to act on
directions)) from time to time and without the consent or sanction of
the Noteholders or any other Issuer Secured Creditor (other than the
Note Trustee (if it is a party to the relevant document)) at any time
concur with any person in making or sanctioning any modification or
amendment to any of the Issuer Transaction Documents:
(a) provided that the Issuer Security Trustee is of the opinion
that such modification would not be materially prejudicial
to the interests of any Issuer Secured Creditors;
45
(b) which in the opinion of the Issuer Security Trustee such
modification is of a formal, minor or technical nature or to
correct an error established as such to the satisfaction of
the Issuer Security Trustee; or
(c) which it may be necessary to make or which are required by
the Rating Agencies in respect of any person who has
executed a Deed of Accession pursuant to Clause 2 (Issuer
Security) hereto.
For the purposes of this Clause 18.1 (Modification), a proposed
modification will not materially harm the interest of any Issuer
Secured Creditors solely as a result of any Funding 2 Issuer
executing a Deed of Accession pursuant to Clause 2.11 (New
Intercompany Loan) of the Funding 2 Deed of Charge or the execution
of a Deed of Accession.
Any such modification may be made on such terms and subject to such
conditions (if any) as the Issuer Security Trustee may determine,
shall be binding upon the Master Issuer and the Issuer Secured
Creditors and, unless the Issuer Security Trustee agrees otherwise,
shall be notified by the Master Issuer to the Noteholders in
accordance with the Conditions and to the other Issuer Secured
Creditors as soon as practicable thereafter. So long as any of the
Issuer Notes are rated by the Rating Agencies, the Master Issuer
shall notify the Rating Agencies in writing as soon as reasonably
practicable thereafter of any modification to the provisions of this
Deed, the Issuer Notes, the Issuer Trust Deed or any of the other
Issuer Transaction Documents. Each of the Issuer Secured Creditors
agrees from time to time to do and perform such other and further
acts and execute and deliver any and all such other instruments as
may be required to carry out and effect the intent and purpose of
this Clause 18.1 (Modification and Waiver)).
18.2 Waiver: Subject as expressly provided otherwise in the Issuer Notes
or in any other Transaction Document and to Clause 15.13 (Issuer
Security Trustee to act at directions), the Issuer Security Trustee
may from time to time and at any time without the consent or sanction
of the Noteholders or any other Issuer Secured Creditor and without
prejudice to its rights in respect of any subsequent breach, but only
if and in so far as in its opinion the interests of the Issuer
Secured Creditors would not be materially prejudiced thereby waive or
authorise any breach or proposed breach by the Master Issuer or any
other party thereto of any of the covenants or provisions contained
in this Deed or in any of the other Transaction Documents PROVIDED
ALWAYS THAT the Issuer Security Trustee shall not exercise any powers
conferred on it by this Clause 18.2 (Waiver) in contravention of any
express direction or request given in accordance with Clause 15.9
(Assumption of no Intercompany Loan Default) (but so that no such
direction or request shall affect any waiver, authorisation or
determination previously given or made). Any such waiver,
authorisation or determination:
(a) may be given or made on such terms and subject to such
conditions (if any) as the Issuer Security Trustee may
determine;
(b) shall be binding on the Noteholders and the other Issuer
Secured Creditors; and
46
(c) if, but only if, the Issuer Security Trustee shall so
require, shall be notified by the Master Issuer to the
Noteholders in accordance with the Conditions and to the
other Issuer Secured Creditors as soon as practicable
thereafter.
19. Miscellaneous Provisions
19.1 Evidence of Indebtedness: In any action, proceedings or claim
relating to this Deed or the Issuer Security, a statement as to any
amount due to any Issuer Secured Creditor or of the Issuer Secured
Obligations or any part thereof or a statement of any amounts which
have been notified to the Issuer Security Trustee as being amounts
due to any Issuer Secured Creditor which is certified as being
correct by an officer of the Issuer Security Trustee or an officer of
the relevant Issuer Secured Creditor shall, save in the case of
manifest error, be conclusive evidence that such amount is in fact
due and payable.
19.2 Liability: All the liabilities and obligations of the Master Issuer
under or by virtue of this Deed shall not be impaired by:
(a) any failure of this Deed to be legal, valid, binding and
enforceable as regards the Master Issuer whether as a result
of a lack of corporate powers or of directors' authority,
defective execution or for any other reason whatsoever;
(b) any giving of time, forbearance, indulgence or waiver as
regards the Master Issuer;
(c) a discharge or release of the Master Issuer; or
(d) any other matter or event whatsoever whether similar to the
foregoing or not which might have the effect of impairing
all or any of its liabilities or obligations except proper
and valid payment or discharge of all Issuer Secured
Obligations and amounts whatsoever which this Deed provides
are to be paid by the Master Issuer or an absolute discharge
or release of the Master Issuer signed by the Issuer Secured
Creditors and the Issuer Security Trustee.
19.3 Issuer Secured Creditors: Each Issuer Secured Creditor shall be bound
by the provisions of this Deed as if it contained covenants by each
Issuer Secured Creditor in favour of the Issuer Security Trustee and
every other Issuer Secured Creditor to observe and be bound by all
the provisions of this Deed expressed to apply to the Issuer Secured
Creditors.
20. Rights cumulative
The respective rights of the Note Trustee, the Issuer Security
Trustee, the Issuer Secured Creditors and any Receiver to this Deed
are cumulative and may be exercised as often as each considers
appropriate and are in addition to their respective rights under the
general law. No failure on the part of the Note Trustee, the Issuer
Security Trustee, the Issuer Secured Creditors or any Receiver to
exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or
the exercise of any other right. The remedies in this Deed are
cumulative and not exclusive of any remedies provided by law.
47
21. Assignment
None of the Issuer Secured Creditors may assign, encumber or transfer
all or any part of its rights or benefits and/or transfer its
obligations under this Deed without the prior written consent of the
Issuer Security Trustee.
22. Non Petition Covenant; Corporate Obligations
22.1 Corporate Obligations: To the extent permitted by law, no recourse
under any obligation, covenant, or agreement of any person contained
in this Deed shall be had against any shareholder, officer or
director of such person as such, by the enforcement of any assessment
or by any legal proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this Deed is a corporate
obligation of each person expressed to be a party hereto and no
personal liability shall attach to or be incurred by the
shareholders, officers, agents or directors of such person as such,
or any of them, under or by reason of any of the obligations,
covenants or agreements of such person contained in this Deed, or
implied therefrom, and that any and all personal liability for
breaches by such person of any of such obligations, covenants or
agreements, either under any applicable law or by statute or
constitution, of every such shareholder, officer, agent or director
is hereby expressly waived by each person expressed to be a party
hereto as a condition of and consideration for the execution of this
Deed.
23. Notices
Any notices or other communication or document to be given or
delivered pursuant to this Deed to any of the parties hereto shall be
sufficiently served if sent by prepaid first class post, by hand or
by facsimile transmission and shall be deemed to be given (in the
case of facsimile transmission) when despatched or (where delivered
by hand) on the day of delivery if delivered before 17.00 hours on a
London Business Day or on the next London Business Day if delivered
thereafter or (in the case of first class post) when it would be
received in the ordinary course of the post and shall be sent:
(a) in the case of the Master Issuer, to Granite Master Issuer
plc, Fifth Floor, 100 Wood Street, London EC2V 7EX
(facsimile number 020 7606 0643) for the attention of the
Company Secretary with a copy to Northern Rock plc, Northern
Rock House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile
number 0191 213 2203) for the attention of the Group
Secretary;
(b) in the case of the Note Trustee, to The Bank of New York,
48th Floor, One Canada Square, London E14 5AL, attention
Corporate Trust (Global Structured Finance) (facsimile
number 020 7964 6399);
(c) in the case of the Issuer Security Trustee, to the Bank of
New York, 48th Floor, One Canada Square, London E14 5AL,
attention Corporate Trust (Global Structured Finance)
(facsimile number 020 7964 6399);
(d) in the case of the Principal Paying Agent, the Agent Bank,
the Registrar, the Transfer Agent or the Account Bank, to
Citibank, N.A., 5 Carmelite Street, London, EC4Y 0PA for the
attention of [o];
48
(e) in the case of the Issuer Cash Manager to Northern Rock plc,
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
(facsimile number 0191 213 2203) for the attention of the
Group Secretary;
(f) in the case of the U.S. Paying Agent, to Citibank, N.A., 111
Wall Street, 14th Floor, 388 Greenwich Street, New York,
N.Y. 10013, U.S.A. (facsimile number 212 816 5527) for the
attention of Agency and Trust;
(g) in the case of the Corporate Services Provider, to Law
Debenture Corporate Services Limited, Fifth Floor, 100 Wood
Street, London EC2V 7EX (facsimile number 020 7606 0643) for
the attention of the Company Secretary;
(h) in the case of Moody's, to Moody's Investor Services, 1st
Floor, 2 Minster Court, Mincing Lane, London EC3R 7XB
(facsimile number 020 7772 5400) for the attention of RMBS
Monitoring, Structured Finance;
(i) in the case of S&P, to Standard & Poor's, 20 Canada Square,
Canary Wharf, London E14 5LH (facsimile number 020 7176
3598) for the attention of the Structured Finance
Surveillance Group; and
(j) in the case of Fitch, to Fitch Ratings Limited, Eldon House,
2 Eldon Street, London EC2M 7UA (facsimile number: 020 7417
6262) for the attention of European Structured Finance,
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by
any party to the others by fifteen days prior written notice in
accordance with the provisions of this Clause 23 (Notices).
24. Third Party Rights
A person who is not a party to this Deed may not enforce any of its
terms under the Contracts (Rights of Third Parties) Act 1999, but
this shall not affect any right or remedy of a third party which
exists or is available apart from that Act.
25. Execution in Counterparts; Severability
25.1 Counterparts: This Deed may be executed in any number of counterparts
(manually or by facsimile) and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall
constitute one and the same instrument.
25.2 Severability: Where any provision in or obligation under this Deed
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations under this Deed, or of such provision or obligation in
any other jurisdiction, shall not be affected or impaired thereby.
26. Governing Law and Jurisdiction; Appropriate Forum
26.1 Governing Law: This Deed is governed by, and shall be construed in
accordance with, English law.
49
26.2 Jurisdiction: Each of the parties hereto irrevocably agrees that the
courts of England shall have jurisdiction to hear and determine any
suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with this Deed and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
26.3 Appropriate Forum: Each of the parties hereto irrevocably waives any
objection which it might now or hereafter have to the courts of
England being nominated as the forum to hear and determine any
Proceedings and to settle any disputes, and agrees not to claim that
any such court is not a convenient or appropriate forum.
IN WITNESS of which this Deed has been executed by the parties hereto as a
deed which has been delivered on the date first appearing on page one.
50
EXECUTION PAGE
IN WITNESS WHEREOF this Deed has been executed as a deed and delivered by the
parties hereto on the day and year first above written.
as Master Issuer
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
GRANITE MASTER ISSUER PLC )
acting by two directors )
_________________________
for and on behalf of
LDC Securitisation Director No. 1 Limited
Director
Name:
_________________________
for and on behalf of
LDC Securitisation Director No. 2 Limited
Director
Name:
as Issuer Security Trustee and Note Trustee
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
THE BANK OF NEW YORK )
by its duly authorised signatory )
_______________________________
Name:
as Agent Bank, Issuer Account Bank, Principal Paying Agent, Registrar and
Transfer Agent
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
CITIBANK, N.A. )
by its duly authorised signatory )
_______________________________
Name:
51
as US Paying Agent
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
CITIBANK N.A. )
by its duly authorised signatory )
_______________________________
Name:
as Issuer Account Bank, Issuer Cash Manager and Start-Up Loan Provider
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
NORTHERN ROCK PLC )
by its duly authorised attorney )
_________________________
Name:
in the presence of:
Signature _________________________
Witness
Full name
Occupation Trainee Solicitor
Address c/o Sidley Austin Brown & Wood
Woolgate Exchange
25 Basinghall Street
London EC2V 5HA
52
as Corporate Services Provider
EXECUTED AND DELIVERED AS A DEED )
for and on behalf of )
LAW DEBENTURE CORPORATE )
SERVICES LIMITED )
acting by a director and its secretary )
_________________________
Director
Name:
_________________________
Secretary
Name:
53
SCHEDULE 1
FORM OF SECURITY POWER OF ATTORNEY
THIS POWER OF ATTORNEY is made on [o] by Granite Master Issuer plc (registered
number 5250668) a private limited liability company incorporated under the
laws of England and Wales whose registered office is at Fifth Floor, 100 Wood
Street, London EC2V 7EX (the "Principal").
WHEREAS
(1) By virtue of a Deed (as amended, varied, supplemented or novated from
time to time the "Issuer Deed of Charge") dated [o] January 2005
between Granite Master Issuer plc, The Bank of New York as Issuer
Security Trustee and others, provision was made for the execution by
the Principal of this Power of Attorney.
(2) Words and phrases in this Power of Attorney shall (save where
expressed to the contrary) have the same meanings respectively as the
words and phrases in the Issuer Deed of Charge.
NOW THIS POWER OF ATTORNEY WITNESSETH
1. The Principal hereby irrevocably (within the meaning of Section 4 of
the Powers of Attorney Act 1971) and by way of security for the
payment and performance of the Issuer Secured Obligations and the
covenants, conditions, obligations and undertakings on the part of
the Principal contained in the Issuer Deed of Charge and the other
Issuer Transaction Documents to which the Principal is a party from
time to time appoints The Bank of New York and any other person or
persons for the time being the Issuer Security Trustee or Issuer
Security Trustees of and under the Issuer Deed of Charge (the
"Attorney") and each and every person to whom the Issuer Security
Trustee shall from time to time have delegated the exercise of the
power of attorney conferred by this Power of Attorney (each a
"Delegate") and any receiver including any administrative receiver
and any manager (the "Receiver") and/or administrator (the
"Administrator") appointed from time to time by the Attorney or on
its behalf its true and lawful attorney for and in the Principal's
name or otherwise jointly and severally to sign, seal, execute,
deliver, perfect and do any assurance, act, matter or thing which the
Attorney, Delegate, Receiver or Administrator considers in each case
to be necessary for the protection or preservation of the Attorney's
and the Issuer Secured Creditors' interests and rights (as described
in the Issuer Deed of Charge) in and to the Issuer Charged Property
or which ought to be done by the Principal under the covenants,
undertakings and provisions contained in the Issuer Deed of Charge
and the other Issuer Transaction Documents to which the Principal is
a party from time to time and generally to in its name and on its
behalf to exercise all or any of the powers, authorities or
discretions conferred by or pursuant to the Issuer Deed of Charge on
the Issuer Security Trustee and/or any Receiver whether on or at any
time after the security has become enforceable in accordance with
Clause 6.2 (Enforceable) of the Issuer Deed of Charge or in any other
circumstances where the Attorney has become entitled to take any of
the steps referred to in the Issuer Deed of Charge including (without
limitation) any or all of the following:
54
(a) to do every act or thing which the Attorney, Delegate,
Receiver or Administrator may deem to be necessary, proper
or expedient for getting in any of the Issuer Charged
Property and/or fully and effectively vesting, transferring
or assigning the Issuer Charged Property or any part thereof
and/or the Principal's estate, right, title, benefit and/or
interest therein or thereto in or to the Attorney and its
successors in title or other person or persons entitled to
the benefit thereof or for carrying into effect any other
dealing with the Issuer Charged Property whatsoever
permitted under the Issuer Deed of Charge in the same manner
and as fully and effectively as the Principal could have
done;
(b) the power by writing under its hand by an officer of the
Attorney (including every Receiver appointed under the
Issuer Deed of Charge) from time to time to appoint a
substitute attorney (each a "Substitute") who shall have
power to act on behalf of the Principal as if that
Substitute shall have been originally appointed Attorney by
this Power of Attorney and/or to revoke any such appointment
at any time without assigning any reason therefor.
2. In favour of the Attorney, any Delegate, any Receiver and/or
Administrator and/or Substitute, or a person dealing with any of them
and the successors and assigns of such a person, all acts properly
done and documents executed or signed by the Attorney, a Delegate, a
Receiver, an Administrator or a Substitute in the purported exercise
of any power conferred by this Power of Attorney shall for all
purposes be valid and binding on the Principal and its successors and
assigns.
3. The Principal irrevocably and unconditionally undertakes to indemnify
the Attorney and each Delegate, Receiver and/or Administrator and/or
Substitute appointed from time to time by the Attorney and their
respective estates (each an "Indemnified Party") against all actions,
proceedings, claims, costs, expenses and liabilities of every
description arising from the exercise, or the purported exercise, of
any of the powers conferred by this Power of Attorney, save where the
same arises as the result of the fraud, negligence or wilful default
of the relevant Indemnified Party or its officers or employees.
4. The provisions of Clause 2 (Issuer Security) of the Issuer Deed of
Charge shall continue in force after the revocation or termination,
howsoever arising, of this Power of Attorney.
5. The laws of England and Wales shall apply to this Power of Attorney
and the interpretation thereof and to all acts of the Attorney and
each Delegate, Receiver and/or Administrator and/or Substitute
carried out or purported to be carried out under the terms hereof.
6. The Principal hereby agrees at all times hereafter to ratify and
confirm whatsoever the said Attorney or its attorney or attorneys or
any Delegate, Receiver or Administrator or Substitute shall properly
and lawfully do or cause to be done in and concerning the Issuer
Charged Property.
55
IN WITNESS whereof this Power of Attorney has been executed as a deed by the
Principal the day and year first before written.
EXECUTED AS A DEED by )
GRANITE MASTER ISSUER PLC )
acting by: )
Director
Name:
Title:
Director/Secretary
Name:
Title:
56
SCHEDULE 2
ISSUER PRIORITY OF PAYMENTS
1. Priority of Payments for Issuer Available Revenue Receipts Prior to
Enforcement of the Issuer Security
On each Monthly Payment Date, all Funding 2 Available Revenue
Receipts received by the Master Issuer from Funding 2:
(i) in respect of items (B), (S), (U) and (V) of the Funding 2
Pre-Enforcement Revenue Priority of Payments shall be
credited to the Issuer Expense Sub-Ledger; and
(ii) being interest paid on a Loan Tranche shall be credited to a
sub-ledger (in respect of the related Series and Class of
Issuer Notes) to the Issuer Revenue Ledger.
On each Distribution Date the Issuer Cash Manager will calculate
whether there will be an excess or a deficit of Issuer Available
Revenue Receipts to pay items (A) through (M) of the Issuer
Pre-Enforcement Revenue Priority of Payments
Issuer Available Revenue Receipts will be applied, as applicable:
(a) on each Monthly Payment Date; or
(b) on each day when due in respect of amounts due to third
parties pursuant to paragraph (C) below,
in each case prior to the enforcement of the Issuer Security pursuant
to this Deed of Charge or until such time as there are no Issuer
Secured Obligations outstanding, in making such payments and
provisions in the following order of priority (in each case only if
and to the extent that payments or provisions of a higher priority
have been made in full) (the "Issuer Pre-Enforcement Revenue Priority
of Payments"):
(A) first, in no order of priority among them but in proportion
to the respective amounts due, to pay amounts due to the
Note Trustee and the Issuer Security Trustee, together with
interest and (to the extent not already inclusive) VAT on
those amounts, and to provide for any amounts due or to
become due during the following Interest Period to the Note
Trustee or the Issuer Security Trustee, as applicable, under
the Issuer Trust Deed, this Deed of Charge or any other
Transaction Document to which the Master Issuer is a party;
(B) second, in no order of priority among them but in proportion
to the respective amounts due, to pay amounts due to the
Agent Bank, the Paying Agents, the Transfer Agent and the
Registrar together with interest and (to the extent not
already inclusive) VAT on those amounts, and to provide for
any costs, charges, liabilities and expenses due or to
become due during the following Interest Period to the Agent
Bank, the Paying Agents, the Transfer Agent and the
Registrar under the Issuer Paying Agent and Agent Bank
Agreement;
57
(C) third, to pay amounts due to any third party creditors of
the Master Issuer (other than those referred to later in
this order of priority of payments or in the Issuer
Pre-Enforcement Principal Priority of Payments), of which
the Issuer Cash Manager has notice prior to the relevant
Monthly Payment Date, which amounts have been incurred
without breach by the Master Issuer of the Transaction
Documents to which it is a party and for which payment has
not been provided for elsewhere and to provide for any such
amounts expected to become due and payable during the
following Interest Period by the Master Issuer and to pay or
discharge any liability of the Master Issuer for corporation
tax on any chargeable income or gain of the Master Issuer;
(D) fourth, in no order or priority among them but in proportion
to the respective amounts due, to pay amounts due to the
Issuer Cash Manager under the Issuer Cash Management
Agreement, the Corporate Services Provider under the
Corporate Services Agreement and the Issuer Account Bank
under the Issuer Bank Account Agreement together with (to
the extent not already inclusive) VAT on those amounts, and
to provide for any amounts due or to become due in the
immediately succeeding Interest Period, to the Issuer Cash
Manager under the Issuer Cash Management Agreement, to the
Corporate Services Provider under the Corporate Services
Agreement and to the Issuer Account Bank under the Issuer
Bank Account Agreement;
(E) fifth, from amounts (excluding principal) received by the
Master Issuer from Funding 2 in respect of each AAA Loan
Tranche (and, in respect of (ii) below, the amounts (if
any), excluding principal, received from the Issuer Swap
Provider(s) under the Issuer Swap Agreement(s) in respect of
the related Series and Class of Issuer Notes):
(i) to pay the amounts due and payable to the relevant
Issuer Swap Provider(s) (if any) in respect of the
related Series and Class of Class A Notes
(including any swap termination payment but
excluding any Issuer Swap Excluded Termination
Amount) in accordance with the terms of the
relevant Issuer Swap Agreement(s); and
(ii) to pay interest due and payable (if any) on the
related Series and Class of Class A Notes;
(F) sixth, from amounts (excluding principal) received by the
Master Issuer from Funding 2 in respect of each AA Loan
Tranche (and, in respect of (ii) below, the amounts (if
any), excluding principal, received from the Issuer Swap
Provider(s) under the Issuer Swap Agreement(s) in respect of
the related Series and Class of Issuer Notes):
(i) to pay the amounts due and payable to the relevant
Issuer Swap Provider(s) (if any) in respect of the
related Series and Class of Class B Notes
(including any swap termination payment but
excluding any Issuer Swap Excluded Termination
Amount) in accordance with the terms of the
relevant Issuer Swap Agreement(s);
(ii) to pay interest due and payable (if any) on the
related Series and Class of Class B Notes on such
Monthly Payment Date;
58
(G) seventh, from amounts (excluding principal) received by the
Master Issuer from Funding 2 in respect of each A Loan
Tranche (and, in respect of (ii) below, the amounts,
excluding principal, received from the Issuer Swap
Provider(s) under the Issuer Swap Agreement(s) in respect of
the related Series and Class of Notes):
(i) to pay the amounts due and payable to the relevant
Issuer Swap Provider(s) (if any) in respect of the
related Series and Class of Class M Notes
(including any swap termination payment but
excluding any Issuer Swap Excluded Termination
Amount) in accordance with the terms of the
relevant Issuer Swap Agreement(s);
(ii) to pay interest due and payable (if any) on the
related Series and Class of Class M Notes on such
Monthly Payment Date;
(H) eighth, from amounts (excluding principal) received by the
Master Issuer from Funding 2 in respect of each BBB Loan
Tranche (and, in respect of (ii) below, the amounts,
excluding principal, received from the Issuer Swap
Provider(s) under the Issuer Swap Agreement(s) in respect of
the related Series and Class of Issuer Notes):
(i) to pay the amounts due and payable to the relevant
Issuer Swap Provider(s) (if any) in respect of the
related Series and Class of Class C Notes
(including any swap termination payment but
excluding any Issuer Swap Excluded Termination
Amount) in accordance with the terms of the
relevant Issuer Swap Agreement(s);
(ii) to pay interest due and payable (if any) on the
related Series and Class of Class C Notes on such
Monthly Payment Date;
(I) ninth, from amounts (excluding principal) received by the
Master Issuer from Funding 2 in respect of each BB Loan
Tranche (and, in respect of (ii) below, the amounts (if
any), excluding principal, received from the Issuer Swap
Provider(s) under the Issuer Swap Agreement(s) in respect of
the related Series and Class of Issuer Notes):
(i) to pay the amounts due and payable to the relevant
Issuer Swap Provider(s) (if any) in respect of the
related Series and Class of Class D Notes
(including any swap termination payment but
excluding any Issuer Swap Excluded Termination
Amount) in accordance with the terms of the
relevant Issuer Swap Agreement(s);
(ii) to pay interest due and payable (if any) on the
related Series and Class of Class D Notes on such
Monthly Payment Date;
(J) tenth, in no order of priority among them but in proportion
to the respective amounts due, towards payment of:
(i) interest amounts due to the Start-Up Loan
Provider(s); and
59
(ii) principal amounts due to the Start-Up Loan
Provider(s) (to the extent of issuance fees
received from Funding 2 under the Global
Intercompany Loan Agreement);
(K) eleventh, after taking account of any replenishment of the
Issuer Reserve Fund on the relevant Monthly Payment Date
from Issuer Available Principal Receipts, to credit the
Issuer Reserve Ledger up to an amount no less than the
Issuer Reserve Required Amount;
(L) twelfth, on the Monthly Payment Date falling in December of
each year, to pay to the Issuer Account Bank an amount equal
to the amount of any debit balance in the Issuer Transaction
Account as permitted by the Issuer Account Bank and
outstanding at such Monthly Payment Date;
(M) thirteenth, in no order of priority among them but in
proportion to the respective amounts due, to pay any Issuer
Swap Excluded Termination Payments to the Issuer Swap
Provider(s);
(N) fourteenth, in no order of priority among them but in
proportion to the respective amounts due, towards payment of
principal amounts due to the Start-Up Loan Provider(s) under
the Start-Up Loan Agreement(s);
(O) fifteenth, to pay to the Master Issuer an amount equal to
0.01% per annum of the interest received under the Global
Intercompany Loan, which will be retained by the Master
Issuer as profit (which may, subject to applicable laws, be
paid to the shareholders of the Master Issuer as a
dividend), less corporation tax in respect of those profits
provided for or paid at item (C) above; and
(P) last, to pay amounts due to the Issuer GIC Provider under
the Issuer Guaranteed Investment Contract.
2. Distribution of Issuer Available Principal Receipts Prior to
Enforcement of the Issuer Security
On each Monthly Payment Date, all Funding 2 Available Principal
Receipts received by the Master Issuer from Funding 2 constituting
principal repayments on a Loan Tranche, will be credited to a
sub-ledger (in respect of a related Series and Class of Issuer Notes)
to the Issuer Principal Ledger.
Prior to the enforcement of the Issuer Security pursuant to this Deed
of Charge, or until such time as there are no Issuer Secured
Obligations outstanding, Issuer Available Principal Receipts will be
applied on each Monthly Payment Date in the following manner (the
"Issuer Pre-Enforcement Principal Priority of Payments"):
(A) to the extent that monies have been drawn from the Issuer
Reserve Fund to make Issuer Reserve Principal Payments,
towards the replenishment of the Issuer Reserve Fund up to
the Issuer Reserve Required Amount, such amount to be
debited to the Sub-Ledger(s) of the Series and Class(es) of
Issuer Notes in respect of which such Issuer Reserve
Principal Payments were made;
60
(B) The Class A Notes:
from principal amounts received by the Master Issuer from
Funding 2 in respect of each AAA Loan Tranche (and, in
respect of (ii) below, the principal amounts received (if
any) from the Issuer Swap Provider(s) under the relevant
Issuer Swap Agreement(s) in respect of the related Series
and Classes of Notes):
(i) to pay amounts due and payable (in respect of
principal) on such Monthly Payment Date to the
relevant Issuer Swap Provider(s) in respect of the
related Series and Class of Class A Notes in
accordance with the terms of the relevant Issuer
Swap Agreement(s); and
(ii) to pay amounts due and payable in respect of
principal (if any) on such Monthly Payment Date on
the related Series and Class of Class A Notes;
(C) The Class B Notes:
from principal amounts received by the Master Issuer from
Funding 2 in respect of each AA Loan Tranche (and, in
respect of (ii) below, the principal amounts received (if
any) from the Issuer Swap Provider(s) under the relevant
Issuer Swap Agreement(s) in respect of the related Series
and Classes of Notes):
(i) to pay amounts due and payable (in respect of
principal) on such Monthly Payment Date to the
relevant Issuer Swap Provider(s) in respect of the
related Series and Class of Class B Notes in
accordance with the terms of the relevant Issuer
Swap Agreement(s); and
(ii) to pay amounts due and payable in respect of
principal (if any) on such Monthly Payment Date on
the related Series and Class of Class B Notes;
(D) The Class M Notes:
from principal amounts received by the Master Issuer from
Funding 2 in respect of each A Loan Tranche (and, in respect
of (ii) below, the principal amounts received (if any) from
the Issuer Swap Provider(s) under the relevant Issuer Swap
Agreement(s) in respect of the related Series and Classes of
Notes):
(i) to pay amounts due and payable (in respect of
principal) on such Monthly Payment Date to the
relevant Issuer Swap Provider(s) in respect of the
related Series and Class of Class M Notes in
accordance with the terms of the relevant Issuer
Swap Agreement(s); and
(ii) to pay amounts due and payable in respect of
principal (if any) on such Monthly Payment Date on
the related Series and Class of Class M Notes;
61
(E) The Class C Notes:
from principal amounts received by the Master Issuer from
Funding 2 in respect of each BBB Loan Tranche (and, in
respect of (ii) below, the principal amounts received (if
any) from the Issuer Swap Provider(s) under the relevant
Issuer Swap Agreement(s) in respect of the related Series
and Class of Notes):
(i) to pay amounts due and payable (in respect of
principal) on such Monthly Payment Date to the
relevant Issuer Swap Provider(s) in respect of the
related Series and Class of Class C Notes in
accordance with the terms of the relevant Issuer
Swap Agreement(s); and
(ii) to pay amounts due and payable in respect of
principal (if any) on such Monthly Payment Date on
the related Series and Class of Class C Notes;
(F) The Class D Notes
from principal amounts received by the Master Issuer from
Funding 2 in respect of each BB Loan Tranche (and, in
respect of (ii) below, the principal amounts received (if
any) from the Issuer Swap Provider(s) under the relevant
Issuer Swap Agreement(s) in respect of the related Series
and Class of Notes):
(i) to pay amounts due and payable (in respect of
principal) on such Monthly Payment Date to the
relevant Issuer Swap Provider(s) in respect of the
related Series and Class of Class D Notes in
accordance with the terms of the relevant Issuer
Swap Agreement(s); and
(ii) to pay amounts due and payable in respect of
principal (if any) on such Monthly Payment Date on
the related Series and Class of Class D Notes.
3. Distribution of Issuer Available Principal Receipts and Issuer
Available Revenue Receipts Following Enforcement of the Issuer
Security
Following enforcement of the Issuer Security, on each Monthly Payment
Date the Issuer Security Trustee (or the Issuer Cash Manager on its
behalf) will apply amounts received or recovered (excluding Swap
Collateral (if any) standing to the credit of the Issuer Swap
Collateral Accounts) as follows:
(A) first, in no order of priority among them but in proportion
to the amounts due to pay amounts due to the Note Trustee
and the Issuer Security Trustee (and any Receiver appointed
by the Issuer Security Trustee) together with the interest
and VAT on those amounts and to provide for any amounts then
due or to become due and payable to the Note Trustee and the
Issuer Security Trustee, and the Receiver under the
provisions of the Issuer Trust Deed, this Deed of Charge and
any other Transaction Document;
(B) second, to pay, in no order of priority among them but in
proportion to the respective amounts due, the Agent Bank,
the Paying Agents, the Transfer Agent and the Registrar,
together with interest and VAT on those amounts and to
provide for any costs, charges, liabilities and expenses
then due or to
62
become due and payable to them under the provisions of the
Paying Agent and Agent Bank Agreement;
(C) third, in no order of priority among them but in proportion
to the respective amounts due, towards payment of amounts
(together with VAT on those amounts) due and payable to the
Issuer Cash Manager under the Issuer Cash Management
Agreement, to the Corporate Services Provider under the
Corporate Services Agreement and to the Issuer Account Bank
under the Issuer Bank Account Agreement;
(D) fourth, subject to item (E) below, in no order of priority
among them but in proportion to the respective amounts due,
to pay amounts due to the Issuer Swap Providers for each
Series of Class A Notes (excluding any swap termination
payment);
(E) fifth, in no order of priority among them but in proportion
to the respective amounts due, to pay interest due or
overdue on, and to repay principal of, the applicable series
of Class A Notes and to pay any Swap Termination Payment due
to the Issuer Swap Provider for each Series of Class A Notes
(but excluding any Issuer Swap Excluded Termination Amount)
provided that if the amounts available for distribution
under this item (E) (on the assumption that no amounts are
due and payable under item (D) and no amounts are received
from any Issuer Swap Provider) would be insufficient to pay
the sterling equivalent of the amounts due and payable under
this item (E), the shortfall shall be divided amongst all
such amounts on a pro rata basis and the amount payable by
the Master Issuer to the Issuer Swap Provider in respect of
any Series of Class A Notes under item (D) above shall be
reduced by the amount of the shortfall applicable to that
Series of Class A Notes;
(F) sixth, subject to item (G) below, in no order of priority
among them but in proportion to the respective amounts due,
to pay amounts due to the Issuer Swap Providers for each
Series of Class B Notes (excluding any swap termination
payment);
(G) seventh, in no order of priority among them but in
proportion to the respective amounts due, to pay interest
due or overdue on, and to repay principal of, the applicable
Series of Class B Notes and to pay any Swap Termination
Payment due to the Issuer Swap Provider for each Series of
Class B Notes (but excluding any Issuer Swap Excluded
Termination Amount) provided that if the amounts available
for distribution under this item (G) (on the assumption that
no amounts are due and payable under item (F) and no amounts
are received from any Issuer Swap Provider) would be
insufficient to pay the sterling equivalent of the amounts
due and payable under this item (G), the shortfall shall be
divided amongst all such amounts on a pro rata basis and the
amount payable by the Master Issuer to the Issuer Swap
Provider in respect of the any Series of Class B Notes of
under item (F) above shall be reduced by the amount of the
shortfall applicable to that Series of Class B Notes;
(H) eighth, subject to item (I) below, in no order of priority
among them but in proportion to the respective amounts due,
to pay amounts due to the Issuer
63
Swap Providers for each Series of Class M Notes (excluding
any swap termination payment);
(I) ninth, in no order of priority among them but in proportion
to the respective amounts due, to pay interest due or
overdue on, and to repay principal of, the applicable Series
of Class M Notes and to pay any Swap Termination Payment due
to the Issuer Swap Provider for each Series of Class M Notes
(but excluding any Issuer Swap Excluded Termination Amount)
provided that if the amounts available for distribution
under this item (I) (on the assumption that no amounts are
due and payable under item (H) and no amounts are received
from any Issuer Swap Provider) would be insufficient to pay
the sterling equivalent of the amounts due and payable under
this item (I), the shortfall shall be divided amongst all
such amounts on a pro rata basis and the amount payable by
the Master Issuer to the Issuer Swap Provider in respect of
any Series of Class M Notes under item (H) above shall be
reduced by the amount of the shortfall applicable to that
Series of Class M Notes;
(J) tenth, subject to item (K) below, in no order of priority
among them but in proportion to the respective amounts due,
to pay amounts due to the Issuer Swap Providers for each
Series of Class C Notes (excluding any swap termination
payment);
(K) eleventh, in no order of priority among them but in
proportion to the respective amounts due, to pay interest
due or overdue on, and to repay principal of, the applicable
Series of Class C Notes and to pay any Swap Termination
Payment due to the Issuer Swap Provider for each Series of
Class C Notes (but excluding any Issuer Swap Excluded
Termination Amount) provided that if the amounts available
for distribution under this item (K) (on the assumption that
no amounts are due and payable under item (J) and no amounts
are received from any Issuer Swap Provider) would be
insufficient to pay the sterling equivalent of the amounts
due and payable under this item (K), the shortfall shall be
divided amongst all such amounts on a pro rata basis and the
amount payable by the Master Issuer to the Issuer Swap
Provider in respect of any Series of Class C Notes under
item (J) above shall be reduced by the amount of the
shortfall applicable to that Series of Class C Notes;
(L) twelfth, subject to item (M) below, in no order of priority
among them but in proportion to the respective amounts due,
to pay amounts due to the Issuer Swap Providers for each
Series of Class D Notes (excluding any swap termination
payment);
(M) thirteenth, in no order of priority among them but in
proportion to the respective amounts due, to pay interest
due or overdue on, and to repay principal of, the applicable
Series of Class D Notes and to pay any Swap Termination
Payment due to the Issuer Swap Provider for each Series of
Class D Notes (but excluding any Issuer Swap Excluded
Termination Amount) provided that if the amounts available
for distribution under this item (M) (on the assumption that
no amounts are due and payable under item (L) and no amounts
are received from any Issuer Swap Provider) would be
insufficient to pay the sterling equivalent of the amounts
due and payable under this item (M), the shortfall shall be
divided amongst such amounts on a pro rata basis
64
and the amount payable by the Master Issuer to the Issuer
Swap Provider in respect of any Series of Class D Notes
under item (L) above shall be reduced by the amount of the
shortfall applicable to that Series of Class D Notes;
(N) fourteenth, on the Monthly Payment Date falling in December
of each year, to pay to the Issuer Account Bank an amount
equal to the amount of any debit balance in the Issuer
Transaction Account as permitted by the Issuer Account Bank
and outstanding at such Monthly Payment Date;
(O) fifteenth, in no order of priority among them but in
proportion to the respective amounts due, towards payment
of:
(i) interest amounts due to the Start-Up Loan
Provider(s); and
(ii) principal amounts due to the Start-Up Loan
Provider(s) to the extent of issuance fees received
from Funding 2 under the Global Intercompany Loan
Agreement);
under the Start-Up Loan Agreement(s);
(P) sixteenth, in no order of priority among them but in
proportion to the respective amounts due, to pay any Issuer
Swap Excluded Termination Payments to the Issuer Swap
Providers;
(Q) seventeenth, in no order of priority among them but in
proportion to the respective amounts due, towards payment of
principal amounts due to the Start-Up Loan Provider(s) under
the Start-Up Loan Agreements;
(R) last, to pay any amount remaining following the application
of principal and revenue set forth in items (A) through (Q)
above, to the Master Issuer.
65
SCHEDULE 3
FORM OF NOTICE OF ASSIGNMENT
To: [Addressee(s)]
Granite Master Issuer plc - Assignment of rights under Issuer Transaction
Documents
[o]
Dear Sirs,
Terms and expressions used in this letter are as defined in a deed of charge
(the "Issuer Deed of Charge") between Granite Master Issuer plc (the "Master
Issuer"), The Bank of New York (the "Issuer Security Trustee") and others
dated [o].
We hereby give notice to each addressee of this letter that by assignment(s)
under or pursuant to the Issuer Deed of Charge, the Master Issuer has assigned
absolutely, by way of security for the payment and performance of certain
obligations of the Master Issuer described in the Issuer Deed of Charge (the
"Issuer Secured Obligations"), to the Issuer Security Trustee all its right,
title, benefit and interest under the [Agreement(s)] (the "Issuer Transaction
Documents") including its right, title interest and benefit in relation to
[describe property] and including, without limitation, all rights to receive
payment of any amounts which may become payable to the Master Issuer
thereunder, all payments received by the Master Issuer thereunder, all rights
to serve notices and/or make demands thereunder and/or to take such steps as
are required to cause payments to become due and payable thereunder and all
rights of action in respect of any breach thereof and all rights to receive
damages or obtain relief in respect thereof and the proceeds of any of the
foregoing, (hereinafter called "Relevant Issuer Property").
By signing the enclosed copy of this notice you acknowledge and consent to the
assignments and agree that:
(a) from the date of this notice you are obliged to and you will
pay all moneys which are or may become payable to the Master
Issuer under the aforesaid agreements to or to the order of
the Issuer Security Trustee; and
(b) you have not, at the date of this notice, received notice
that any third party has or will have any right of interest
whatsoever in the Relevant Issuer Property.
66
Notwithstanding the assignments made by the Master Issuer and referred to in
this notice, the Issuer Security Trustee hereby confirms and you further
acknowledge that:
(a) you may continue to make all payments becoming due to the
Master Issuer in respect of the Relevant Issuer Property in
the manner envisaged by the relevant Issuer Transaction
Document(s); and
(b) the Master Issuer shall be entitled to exercise its rights,
powers and discretions and perform its obligations in
relation to the Relevant Issuer Property and under the
Issuer Transaction Documents in accordance with the
provisions of the Issuer Transaction Documents,
but only until such time as you receive notice from the Issuer Security
Trustee to the contrary or to the effect that the security created under the
Issuer Deed of Charge has become enforceable, in which event from receipt of
such notice you agree that you will pay all monies becoming due and payable to
the Master Issuer in respect of the Relevant Issuer Property in accordance
with any instructions received from the Issuer Security Trustee.
This letter is governed by, and shall be construed in accordance with, English
law.
Please acknowledge receipt of this notice by executing and returning the copy
of this letter attached hereto.
Yours faithfully,
EXECUTED for and on behalf of )
GRANITE MASTER ISSUER PLC )
by: )
Authorised Signatory
Name:
Title:
67
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
Authorised Signatory
Name:
Title:
We acknowledge receipt of the above notice and the terms of the assignment
created by you in respect of the Relevant Issuer Property.
In respect of the [Agreement]:
For and on behalf of )
[Party to Issuer Transaction Document] )
by: )
Authorised Signatory
Name:
Title:
68
SCHEDULE 4
ISSUER RESERVE FUND
1. Utilisation of Issuer Reserves
1.1 Prior to the service of an Issuer Enforcement Notice, amounts
standing to the credit of the Issuer Reserve Fund may be utilised:
(a) through inclusion in the calculation of Issuer Available
Revenue Receipts, to help meet, and thereby satisfy, any
deficit in Issuer Available Revenue Receipts for interest
and fees under the Issuer Notes;
(b) to help meet expenses in connection with the issue of Issuer
Notes by the Master Issuer; and
(c) through inclusion in the calculation of Issuer Available
Principal Receipts, to help meet, and thereby satisfy, any
deficit in Issuer Available Principal Receipts for:
(i) prior to the occurrence of a Trigger Event,
repayment of principal due and payable in respect
of the Original Bullet Redemption Notes (which are
Class A Notes); and
(ii) on or after the occurrence of a Trigger Event,
repayment of principal due and payable in respect
of the Original Bullet Redemption Notes (which are
Class A Notes) on their respective Final Maturity
Dates only.
1.2 Following the service of an Issuer Enforcement Notice, to the extent
not applied on a Monthly Payment Date in accordance with paragraph 1
above, amounts standing to the credit of the Issuer Reserve Ledger
shall only be applied in making payments of principal due under the
Issuer Notes on any Monthly Payment Date.
2. Adjustment of Issuer Reserves
2.1 The Master Issuer may, at any time, adjust:
(a) the Issuer Reserve Minimum Amount or the method of computing
the Issuer Reserve Minimum Amount, without the consent of
any Issuer Secured Creditors, so long as it has an opinion
of counsel that for US federal income tax purposes:
(i) the change will not adversely affect the tax
characterisation as debt of any outstanding Series
and Class of Issuer Notes that were characterised
as debt at the time of their issuance; and
(ii) such change will not cause or constitute an event
in which gain or loss would be recognised by any
holder of such Issuer Notes;
69
(b) the Programme Reserve Required Percentage or the method of
computing the Programme Reserve Required Amount, without the
consent of any Issuer Secured Creditors, so long as the
Issuer Security Trustee and the Master Issuer obtain
confirmation from the Rating Agencies that such adjustments
will not cause a reduction, qualification or withdrawal of
the ratings of any outstanding Issuer Notes.
70
Exhibit 4.4.2
SCHEDULE 5
FORM OF ACCESSION UNDERTAKING
THIS DEED is made on [o]
BETWEEN:
(1) GRANITE MASTER ISSUER PLC (registered number 5250668) a public
limited company incorporated under the laws of England and Wales
whose registered office is at Fifth Floor, 100 Wood Street, London
EC2V 7EX as Master Issuer;
(2) THE BANK OF NEW YORK, a New York banking corporation whose London
branch address is at 48th Floor, One Canada Square, London E14 5AL,
United Kingdom, in its capacity as (1) Issuer Security Trustee and
(2) Note Trustee;
(3) CITIBANK, N.A., acting through its office at 5 Carmelite Street,
London EC4Y 0PA, in its capacity as (1) Principal Paying Agent, (2)
Agent Bank, (3) Registrar, (4) Transfer Agent and (5) Account Bank;
(4) CITIBANK, N.A., acting through its office at 111 Wall Street, 14th
Floor, 388 Greenwich Street, New York, N.Y. 10013, U.S.A., in its
capacity as US Paying Agent;
(5) NORTHERN ROCK PLC (registered number 03273685) a public limited
company incorporated under the laws of England and Wales whose
registered office is at Northern Rock House, Gosforth, Newcastle upon
Tyne NE3 4PL, in its capacity as (1) Issuer Cash Manager, (2) Issuer
GIC Provider and (3) Start-Up Loan Provider; and
(6) LAW DEBENTURE CORPORATE SERVICES LIMITED (registered number 3388362)
a private limited company incorporated under the laws of England and
Wales whose registered office is at Fifth Floor, 100 Wood Street,
London EC2V 7EX as the Corporate Services Provider; and
(7) [o] (in its capacity as [o], the "New Issuer Secured Creditor".
NOW THIS DEED WITNESSES AS FOLLOWS
WHEREAS
(A) Pursuant to the terms of [description of agreement] (the "Agreement")
dated [o] made between the Master Issuer and the New Issuer Secured
Creditor, the Master Issuer has agreed to [description of nature of
obligations of the Master Issuer under the Agreement].
(B) The Master Issuer has agreed to provide the Issuer Security Trustee
with the benefit of the security described in the Issuer Deed of
Charge to secure the Master Issuer's obligations to the Issuer
Secured Creditors.
(C) The terms of the Issuer Deed of Charge permit the Master Issuer to
secure its obligations to a New Issuer Secured Creditor thereunder.
71
(D) The New Issuer Secured Creditor has agreed to enter into this Deed to
accede to the provisions of the Issuer Deed of Charge.
(E) The Issuer Secured Creditors have agreed to enter into this Deed to,
inter alia, acknowledge and agree to such accession and to permit any
consequential changes to the Issuer Priority of Payments set out in
the Issuer Deed of Charge as are required and any other amendment as
may be required to give effect to this Accession Undertaking.
1. INTERPRETATION
The Programme Master Definitions Schedule signed for the purposes of
identification by Sidley Austin Brown & Wood and Allen & Overy LLP on
19 January, 2005 (as the same may have been and may be amended,
varied or supplemented from time to time with the consent of the
parties hereto) is expressly and specifically incorporated into and
shall apply to this Deed.
2. REPRESENTATIONS AND WARRANTIES
2.1 The New Secured Creditor hereby represents and warrants to the Issuer
Security Trustee and each of the Issuer Secured Creditors in respect
of itself that as of the date of this Deed pursuant to the terms of
the Agreement, the Master Issuer has agreed to pay to the New Secured
Creditor the amount (if any) [description in relation to the
Agreement].
2.2 The Master Issuer hereby represents and warrants to the Issuer
Security Trustee and each of the Issuer Secured Creditors that as at
the date of this Deed, the conditions to issuing further Issuer Notes
set out in the Programme Agreement are satisfied;
3. ACCESSION
In consideration of the New Issuer Secured Creditor being accepted as
an Issuer Secured Creditor for the purposes of the Issuer Deed of
Charge by the parties thereto as form the date of this Deed, the New
Issuer Secured Creditor:
(a) confirms that as from [o], it intends to be a party to the
Issuer Deed of Charge as an Issuer Secured Creditor;
(b) undertakes to comply with and be bound by all of the
provisions of the Master Definitions Schedule as amended and
restated by (and appearing as Appendix 1 to) the Master
Definitions Schedule [o]th Deed of Amendment (as the same
may have been and may be amended, varied or supplemented
from time to time) and the Issuer Deed of Charge in its
capacity as an Issuer Secured Creditor, as if it had been an
original party thereto.
(c) undertakes to perform, comply with and be bound by all of
the provisions of the Issuer Deed of Charge in its capacity
as a Issuer Secured Creditor, as if it had been an original
party thereto as provided in [relevant clauses relating to
Issuer Priority of Payment]; and
(d) agrees that the Issuer Security Trustee shall be the Issuer
Security Trustee of the Deed of Charge for all Issuer
Secured Creditors upon and subject to the
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terms set out in the Issuer Deed of Charge.
4. SCOPE OF THE DEED OF CHARGE
The Master Issuer, the New Issuer Secured Creditor and the Issuer
Security Trustee hereby agree that for the relevant purposes under
the Issuer Deed of Charge and the Master Definitions Schedule as
amended and restated by (and appearing as Appendix 1 to) the Master
Definitions Schedule [o]th Deed of Amendment:
(a) the Agreement shall be treated as an Issuer [Transaction
Document]; and
(b) the New Issuer Secured Creditor shall be treated as an
Issuer Secured Creditor.
5. AMENDMENT TO THE ISSUER PRIORITY OF PAYMENTS
To the extent necessary, the Issuer Secured Creditors agree to amend
and restate the Issuer Priority of Payments set out in this Deed.
6. APPLICATION
Prior to and following enforcement of the Security all amounts at any
time held by the Master Issuer, the Issuer Cash Manager or the Issuer
Security Trustee in respect of the security created under or pursuant
to this Deed shall be held and/or applied by such person subject to
and in accordance with the relevant provisions of the Issuer Cash
Management Agreement and the Issuer Deed of Charge.
7. NOTICES
Any notice or communication under or in connection with this Deed,
the Issuer Deed of Charge or the Programme Master Definitions
Schedule shall be given in the manner and at the times set out in
Clause 23 (Notices) of the Issuer Deed of Charge to the addresses
given in this Clause or at such other address as the recipient may
have notified to the other parties hereto and/or thereto in writing.
The address referred to in this Clause 7 for the New Issuer Secured
Creditor is:
[o]
For the attention of: [o]
Telephone: [o]
Facsimile: [o]
or such other address and/or numbers as the New Issuer Secured
Creditor may notify to the parties to the Deed of Charge in
accordance with the provisions thereof.
8. GOVERNING LAW
This Deed is governed by, and shall be construed in accordance with,
English law.
DULY EXECUTED AND DELIVERED AS A DEED by each of the parties hereto on its
behalf on the date appearing on page 1.
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New Issuer Secured Creditor
Executed by
[o]
as its deed as follows: By: __________________________________
Signed for and on its behalf Director
by one of its directors and by
another of its directors/its Name: ________________________________
secretary
By: __________________________________
Director/Secretary
Name: ________________________________
The Master Issuer
Executed by
GRANITE MASTER ISSUER PLC
as its deed as follows: By: __________________________________
Signed for and on its behalf for and on behalf of LDC
by one of its directors and by Securitisation Director No. 1
another of its directors/its Limited - Director
secretary
Name: ________________________________
By: __________________________________
for and on behalf of LDC
Securitisation Director No. 2
Limited - Director
Name: ________________________________
The Note Trustee
Executed by
THE BANK OF NEW YORK
as its deed as follows: By: __________________________________
Signed for and on its behalf Duly Authorised Attorney/Signatory
by one of its duly authorised
attorneys/signatories Name: ________________________________
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The Issuer Security Trustee
Executed by
THE BANK OF NEW YORK
as its deed as follows: By: __________________________________
Signed for and on its behalf Duly Authorised Attorney/Signatory
by one of its duly authorised
attorneys/signatories
Name: ________________________________
The Principal Paying Agent, the Agent Bank, the Registrar, the
Transfer Agent, and the Account Bank
Executed by
CITIBANK, N.A.
as follows: By:___________________________________
Signed for and on its behalf Duly Authorised Attorney/Signatory
by one of its duly authorised
attorneys/signatories
Name: ________________________________
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The US Paying Agent
Executed by
CITIBANK, N.A.
as follows: By: __________________________________
Signed for and on its behalf Duty Authorised Attorney/Signatory
by one of its duly authorised
attorneys/signatories
Name: ________________________________
The Issuer Cash Manager
Executed by
NORTHERN ROCK PLC
as its deed as follows: By: __________________________________
Signed for and on its behalf Duty Authorised Attorney/Signatory
by one of its duly authorised
attorneys/signatories
Name: ________________________________
Signature:___________________________
Witness
Full Name: __________________________
Occupation: Solicitor
Address: c/o Sidley Austin Brown & Wood
Woolgate Exchange
25 Basinghall Street
London EC2V 5HA
The Corporate Service Provider
Executed by
LAW DEBENTURE CORPORATE
SERVICES LIMITED By: __________________________________
as its deed as follows: Director
Signed for and on its behalf
by one of its directors and by Name: ________________________________
another of its directors/its
secretary
By: __________________________________
Director/Secretary
Name: ________________________________
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