Exhibit 1.1
EXECUTION COPY
UNDERWRITING AGREEMENT
dated May 18, 2006
GRANITE MASTER ISSUER PLC
and
NORTHERN ROCK PLC
and
GRANITE FINANCE FUNDING 2 LIMITED
and
GRANITE FINANCE TRUSTEES LIMITED
and
BARCLAYS CAPITAL INC.
and
J.P. MORGAN SECURITIES INC.
and
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
and
CITIGROUP GLOBAL MARKETS LIMITED
and
CREDIT SUISSE SECURITIES (EUROPE) LIMITED
and
DEUTSCHE BANK SECURITIES INC.
and
LEHMAN BROTHERS INC.
and
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
relating to GRANITE MASTER ISSUER PLC
U.S. $810,000,000 Series 2006-2 Class A1 Notes due April 2031
U.S. $1,275,000,000 Series 2006-2 Class A4 Notes due December 2054
U.S. $29,000,000 Series 2006-2 Class B1 Notes due December 2054
U.S. $36,000,000 Series 2006-2 Class B2 Notes due December 2054
U.S. $25,000,000 Series 2006-2 Class M1 Notes due December 2054
U.S. $25,000,000 Series 2006-2 Class M2 Notes due December 2054
U.S. $75,000,000 Series 2006-2 Class C1 Notes due December 2054
SIDLEY AUSTIN
WOOLGATE EXCHANGE
25 BASINGHALL STREET
LONDON, EC2V 5HA
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
CONTENTS
Clause Page
1. Agreement to Issue and Subscribe.....................................5
2. Stabilization........................................................8
3. Agreements by the Underwriters.......................................8
4. Listing.............................................................16
5. Representations and Warranties of the Master Issuer.................16
6. Representations and Warranties of Funding 2 and the Mortgages
Trustee.............................................................22
7. Representations and Warranties of NRPLC.............................27
8. Covenants of the Master Issuer, Funding 2, the Mortgages
Trustee and NRPLC...................................................30
9. Conditions Precedent................................................39
10. Expenses............................................................43
11. Indemnification.....................................................44
12. Termination.........................................................48
13. Survival of Representations and Obligations.........................49
14. Notices.............................................................49
15. Time................................................................51
16. Non Petition and Limited Recourse...................................51
17. Governing Law and Jurisdiction......................................52
18. Counterparts........................................................52
19. Authority of the Lead Underwriters..................................52
20. Successors..........................................................53
Schedule 1 ..............................................................S-1
THIS UNDERWRITING AGREEMENT (this "Agreement") is made as of May 18, 2006
BETWEEN:
(1) GRANITE MASTER ISSUER PLC, 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 (the "Master Issuer");
(2) NORTHERN ROCK PLC, 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 ("NRPLC");
(3) GRANITE FINANCE FUNDING 2 LIMITED, 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 ("Funding 2");
(4) GRANITE FINANCE TRUSTEES LIMITED, a private limited company incorporated
under the laws of Jersey, Channel Islands, whose registered office is at
22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands (the
"Mortgages Trustee");
(5) BARCLAYS CAPITAL INC., a corporation organized under the laws of the State
of Connecticut, whose registered office is at 200 Park Avenue, New York,
New York 10166, J.P. MORGAN SECURITIES INC., a corporation organized under
the laws of the State of New York, whose registered office is at 270 Park
Avenue, New York, New York 10019, and MORGAN STANLEY & CO. INTERNATIONAL
LIMITED, a private limited company incorporated under the laws of England
and Wales, whose registered office is 25 Cabot Square, Canary Wharf,
London E14 4QA (the "Lead Underwriters"); and
(6) CITIGROUP GLOBAL MARKETS LIMITED, a limited liability company incorporated
under the laws of England and Wales, whose registered office is at
Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB, CREDIT
SUISSE SECURITIES (EUROPE) LIMITED, a private limited liability company
incorporated under the laws of England and Wales, whose registered office
is at One Cabot Square, London E14 4QJ, DEUTSCHE BANK SECURITIES INC., a
Delaware corporation, whose registered office is at 60 Wall Street, New
York, New York 10019, LEHMAN BROTHERS INC., a corporation organized under
the laws of the State of Delaware, whose registered office is at 2711
Centerville Road, Wilmington, Delaware 19808, and MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, a corporation organized under the laws of the
State of Delaware, whose registered office is at c/o The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801 (together with the
Lead Underwriters, the "Underwriters" and each an "Underwriter").
WHEREAS:
(A) The Master Issuer proposes to issue and sell to the Underwriters the
mortgage-backed notes of the series and class specified in Schedule 1
hereto and described in Clause 1.3 hereof (the "US Notes" as set forth on
the cover page of the Prospectus Supplement).
(B) The US Notes will be issued in U.S. dollars and in minimum denominations
of $100,000 and integral multiples of $1,000 in excess thereof. The US
Notes will be issued on the date and at the time specified in the
Prospectus Supplement, which date and time may be changed by agreement
between the Master Issuer and the Lead Underwriters on behalf of the
Underwriters (such date and time of delivery of and payment for such US
Notes being
hereinafter referred to as the "Closing Date"). The issue of the US Notes
is referred to in this Agreement as the "Issue".
(C) Simultaneously with the Issue, the Master Issuer intends to issue other
classes and series of notes (the "Reg S Notes", and together with the US
Notes, the "Notes") specified in the subscription agreement dated as of
the date hereof (the "Subscription Agreement") among the Master Issuer,
NRPLC, Funding 2, the Mortgages Trustee and the respective dealers named
therein (the "Dealers"). Such Dealers have agreed to subscribe and pay for
the Reg S Notes upon the terms and subject to the conditions contained in
the Subscription Agreement and the programme agreement dated as of January
19, 2005 (the "Programme Date"), as amended by a Deed of Amendment dated
August 26, 2005, among the Master Issuer, NRPLC, Funding 2, the Mortgages
Trustee and the respective dealers named therein (the "Programme
Agreement").
(D) The Notes will be constituted by, issued subject to and have the benefit
of a supplemental trust deed to the Issuer Trust Deed (the "Supplemental
Issuer Trust Deed") to be entered into on or before the Closing Date
between the Master Issuer and The Bank of New York, London Branch as
trustee for the Noteholders (the "Note Trustee").
(E) The Notes (together with the Master Issuer's obligations to its other
creditors) will be secured by the benefit of security interests created
under a deed of charge and assignment by way of security dated the
Programme Date, which includes any deed of accession entered into in
connection therewith or supplement thereto (the "Issuer Deed of Charge")
by the Master Issuer, The Bank of New York (in its separate capacities as
the Note Trustee and the Issuer Security Trustee), Citibank, N.A. (in its
separate capacities as the Principal Paying Agent, the US Paying Agent,
the Registrar, the Transfer Agent, an Issuer Account Bank and the Agent
Bank), NRPLC (in its separate capacities as the Issuer Cash Manager, the
Issuer GIC Provider, an Issuer Account Bank and the Start-up Loan
Provider), and Law Debenture Corporate Services Limited in its capacity as
the Corporate Services Provider. The deed of accession to the Issuer Deed
of Charge to be entered into on the Closing Date is herein referred to as
the "Issuer Deed of Accession".
(F) Payments of principal of, and interest on, the US Notes will be made by
the Master Issuer to the US Paying Agent and by the US Paying Agent to
Noteholders on behalf of the Master Issuer under a paying agent and agent
bank agreement entered into on or before the Programme Date (the "Issuer
Paying Agent and Agent Bank Agreement") among the Master Issuer, the Note
Trustee, the Issuer Security Trustee, the Agent Bank, the Principal Paying
Agent, the US Paying Agent, the Transfer Agent and the Registrar.
(G) Each class of the US Notes will be in fully registered permanent global
form. The Registrar will maintain a register in respect of the US Notes in
accordance with the Issuer Paying Agent and Agent Bank Agreement. The
global note certificates representing the US Notes (the "Dollar Global
Note Certificates") will be deposited on behalf of the beneficial owners
of the US Notes with Citibank N.A. in New York, as custodian for, and
registered in the name of Cede & Co. as nominee of, The Depository Trust
Company ("DTC").
(H) The Master Issuer will use an amount in Sterling equal to the gross
proceeds of the Issue as well as an amount in Sterling equal to the gross
proceeds of the Reg S Notes issue to make advances (each a loan tranche)
to Funding 2 pursuant to the terms of the global intercompany loan
agreement entered into on or before the Programme Date among the Master
Issuer, Funding 2, the Agent Bank and The Bank of New York, London Branch
in its capacity as security trustee (the "Funding 2 Security Trustee")
(the "Global Intercompany Loan Agreement" and each loan tranche made
thereunder, a "Loan Tranche"). Reference to the
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Global Intercompany Loan Agreement shall include reference to a loan
tranche supplement in respect of the Global Intercompany Loan Agreement to
be entered into on or about the Closing Date among Funding 2, the Master
Issuer, the Funding 2 Security Trustee and the Agent Bank, as amended,
restated, novated, verified or supplemented from time to time and shall
include any additional and/or replacement intercompany loan terms and
conditions entered into from time to time in accordance with the Legal
Agreements.
(I) Funding 2 will pay the proceeds of each Loan Tranche to the Mortgages
Trustee (or to its order) in consideration for the increase of its
beneficial share of a trust portfolio made up of, amongst other things,
first residential mortgage loans (the "Mortgage Loans") and an interest in
the related insurances and their related security (together, the "Related
Security").
(J) On March 26, 2001, NRPLC assigned the initial portfolio of Mortgage Loans
and their Related Security to the Mortgages Trustee and may assign further
Mortgage Loans on subsequent assignment dates pursuant to a mortgage sale
agreement dated 26th March, 2001 among NRPLC, the Mortgages Trustee,
Funding 2 and the Funding 2 Security Trustee (the "Mortgage Sale
Agreement"). Each of the Mortgages Trustee and Funding 2 has appointed
NRPLC as administrator to service the Mortgage Loans and their Related
Security pursuant to an Administration Agreement dated 26th March, 2001
(the "Administration Agreement").
(K) The Mortgages Trustee holds the Mortgage Loans and their Related Security
on a bare trust in undivided shares for the benefit of Funding, Funding 2
and NRPLC pursuant to the mortgages trust deed dated 26th March, 2001
entered into by NRPLC, Funding, Funding 2 and the Mortgages Trustee (the
"Mortgages Trust Deed"). The Mortgages Trustee also entered into a
guaranteed investment contract dated on or about May 26, 2004 in respect
of its principal bank account (the "Mortgages Trustee Guaranteed
Investment Contract"), among the Mortgages Trustee, the Security Trustee,
the Cash Manager and NRPLC (in its capacity as the Mortgages Trustee GIC
Provider).
(L) Funding 2's obligations to the Master Issuer under the Global Intercompany
Loan Agreement and to Funding 2's other creditors are secured by the
benefit of security interests created by a deed of charge and assignment
dated the Programme Date, which will include any deed of accession to be
entered into in connection therewith or supplement thereto (the "Funding 2
Deed of Charge"), by and among Funding 2, the Master Issuer, the Mortgages
Trustee, the Funding 2 Security Trustee, the Issuer Security Trustee, Law
Debenture Corporate Services Limited and NRPLC (in its separate capacities
as Cash Manager, Account Bank, Funding 2 Basis Rate Swap Provider and
Funding 2 GIC Provider).
(M) In connection with Funding 2's purchase of a beneficial interest in a
mortgage portfolio and the issue of certain notes by the Master Issuer,
Funding 2, in addition to the documents described above, entered into on
the Programme Date (1) a cash management agreement with the Cash Manager,
the Mortgages Trustee, the Seller, Funding and the Funding 2 Security
Trustee (the "Cash Management Agreement"); (2) a bank account agreement
with the Account Banks, the Funding 2 Security Trustee and the Cash
Manager (the "Funding 2 Bank Account Agreement"); (3) a guaranteed
investment contract with, inter alios, NRPLC as Funding 2 GIC Provider and
Cash Manager and the Funding 2 Security Trustee (the "Funding 2 Guaranteed
Investment Contract"); (4) a corporate services agreement (the "Corporate
Services Agreement") with, inter alios, Law Debenture Corporate Services
Limited as corporate services provider to Funding 2 and the Master Issuer;
and (5) an ISDA Master Agreement including the Schedule thereto and
confirmations thereunder in the respect of the Funding 2 (mortgage rates)
basis rate swap and Funding 2 (LIBOR rate) basis rate swap with Funding 2,
the Basis Rate Swap Provider and the Note Trustee (the "Basis Rate Swap
Agreements").
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(N) In connection with the Issue, the Master Issuer will also execute and
deliver, on or before the Closing Date, (1) the Global Note Certificates
relating to each class of the Notes; (2) a start-up loan tranche
supplement with the Start-up Loan Provider and the Issuer Security Trustee
(the "Start-Up Loan Tranche Supplement"); (3) an ISDA Master Agreement,
including the Schedule thereto and confirmations thereunder in respect of
Dollar/Sterling currency swaps with the relevant Issuer Swap Provider(s)
and the Note Trustee (the "Dollar Currency Swap Agreements"); and (4) an
ISDA Master Agreement, including the Schedule thereto and confirmations
thereunder in respect of Euro/Sterling currency swaps with the relevant
Issuer Swap Provider(s) and the Note Trustee (the "Euro Currency Swap
Agreements" and together with the Dollar Currency Swap Agreements, the
"Currency Swap Agreements").
(O) In connection with the Issue, the Master Issuer has executed and
delivered, on or before the Programme Date, (1) the Corporate Services
Agreement; (2) a cash management agreement between the Master Issuer, the
Issuer Cash Manager and the Issuer Security Trustee (the "Issuer Cash
Management Agreement"); (3) a bank account agreement between the Master
Issuer, the Issuer Security Trustee, the Issuer Cash Manager, the Issuer
GIC Account Bank and the Issuer Transaction Account Bank (the "Issuer Bank
Account Agreement"); (4) a post-enforcement call option agreement (the
"Post-Enforcement Call Option Agreement") between the Master Issuer, the
Note Trustee and GPCH Limited; and (5) a start-up loan agreement with the
Start-up Loan Provider, the Master Issuer and the Issuer Security Trustee
(the "Start-Up Loan Agreement").
(P) As required, the Master Issuer, Funding 2, the Mortgages Trustee and/or
NRPLC will enter into any other relevant documents to be signed and
delivered on or before the Closing Date (such documents, together with the
Mortgage Sale Agreement, the Mortgages Trust Deed, the Administration
Agreement, the Mortgages Trustee Guaranteed Investment Contract, the
Global Intercompany Loan Agreement, the Post-Enforcement Call Option
Agreement, the Funding 2 Guaranteed Investment Contract, the Cash
Management Agreement, the Funding 2 Bank Account Agreement, the Collection
Bank Agreement, the Start-up Loan Agreement, the Start-up Loan Tranche
Supplement, the Funding 2 Deed of Charge, the Basis Rate Swap Agreements,
the Issuer Deed of Charge (as amended by the Issuer Deed of Accession),
the Supplemental Issuer Trust Deed, the Issuer Cash Management Agreement,
the Issuer Paying Agent and Agent Bank Agreement, the Issuer Bank Account
Agreement, the Corporate Services Agreement, the Currency Swap Agreements,
this Agreement, the Programme Agreement and the Subscription Agreement,
each as they have been or may be amended, restated, varied or supplemented
from time to time are collectively referred to herein as the "Legal
Agreements").
(Q) The Master Issuer (together with Funding 2 and the Mortgages Trustee) has
prepared a registration statement on Form S-3, including a prospectus
relating to the US Notes and additional series of notes, for the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of the offering and sale thereof from time to time in accordance
with Rule 415 under the Securities Act. At or prior to the time when sales
to purchasers of the US Notes were first made by the Underwriters, which
was approximately 4:00 p.m. (GMT +01:00, London) on May 16, 2006 (the
"Time of Sale"), the Master Issuer (together with Funding 2 and the
Mortgages Trustee) had prepared the following information (when read
together, the "Time of Sale Information"): (i) the Preliminary Prospectus
Supplement dated May 2, 2006 to the Base Prospectus (as defined below)
(together, along with information referred to under the caption "Static
Pool Data" in Annex D therein regardless of whether it is deemed a part of
the Registration Statement or Prospectus, the "Preliminary Prospectus")
and (ii) the Preliminary Term Sheet dated May 3, 2006 (the "Term Sheet").
If, subsequent to the Time of Sale and prior to the Closing Date, the
Preliminary Prospectus included an untrue statement of material fact or
omitted to state a material fact necessary in order to make the
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statements therein, in the light of the circumstances under which they
were made, not misleading, and as a result investors in the US Notes may
terminate their old "Contracts of Sale" (within the meaning of Rule 159
under the Securities Act) for any US Notes and the Underwriters enter into
new Contracts of Sale with investors in the US Notes, then "Time of Sale
Information" will refer to the information conveyed to investors at the
time of entry into the first such new Contract of Sale, in an amended
Preliminary Prospectus, together with an amended Term Sheet, approved by
the Master Issuer (together with Funding 2 and the Mortgages Trustee) and
the Lead Underwriters that corrects such material misstatements or
omissions (a "Corrected Prospectus") and "Time of Sale" will refer to the
time and date on which such new Contracts of Sale were entered into.
IT IS AGREED as follows:
1. AGREEMENT TO ISSUE AND SUBSCRIBE
1.1 Definitions and Interpretation
(a) Capitalized terms used herein and not otherwise defined herein or
pursuant hereto, unless the context otherwise requires, shall have
the meanings given to them in the Programme Master Definitions
Schedule signed for the purposes of identification only by Sidley
Austin Brown & Wood and Allen & Overy LLP on the Programme Date and
the Issuer Master Definitions Schedule signed for the purposes of
identification only by Sidley Austin Brown & Wood and Allen & Overy
LLP on the Programme Date (each as amended, varied or supplemented
from time to time). In the event of a conflict between the Programme
Master Definitions Schedule and the Issuer Master Definitions
Schedule, the Issuer Master Definitions Schedule will control.
(b) In this Agreement:
(i) words denoting the singular number only shall include the
plural number also and vice versa;
(ii) words denoting one gender only shall include the other
genders;
(iii) words denoting persons only shall include firms and
corporations and vice versa;
(iv) references to any statutory provision shall be deemed also to
refer to any statutory modification or re-enactment thereof or
any statutory instrument, order or regulation made thereunder
or under any such re-enactment;
(v) references to any agreement or other document (including any
of the Legal Agreements) shall be deemed also to refer to such
agreement or document as amended, varied, supplemented,
restated or novated from time to time;
(vi) clause, paragraph and schedule headings are for ease of
reference only;
(vii) reference to a statute shall be construed as a reference to
such statute as the same may have been, or may from time to
time be, amended or re-enacted to the extent such amendment or
re-enactment is substantially to the same effect as such
statute on the date hereof;
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(viii)reference to a time of day, unless otherwise specified, shall
be construed as a reference to London time; and
(ix) references to any person shall include references to his
successors, transferees and assigns and any person deriving
title under or through him.
1.2 Offering
Each of the Master Issuer, Funding 2 and the Mortgages Trustee understands
that the Underwriters have offered and will offer the US Notes upon the
terms set forth in the Time of Sale Information and the Prospectus, and in
compliance with all applicable laws and regulations.
1.3 Purchase and Sale
Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in this Agreement, the Master
Issuer agrees to issue and sell the US Notes on the Closing Date to the
Underwriters as hereinafter provided, and each Underwriter agrees to
purchase, severally and not jointly, from the Master Issuer the respective
principal amount of the US Notes set forth opposite such Underwriter's
name in Schedule 1 hereto at a price equal to the aggregate of 100 per
cent. of the aggregate principal amount of the Series 2006-2 Class A1
Notes, 100 per cent. of the aggregate principal amount of the Series
2006-2 Class A4 Notes, 100 per cent. of the aggregate principal amount of
the Series 2006-2 Class B1 Notes, 100 per cent. of the aggregate principal
amount of the Series 2006-2 Class B2 Notes, 100 per cent. of the aggregate
principal amount of the Series 2006-2 Class M1 Notes, 100 per cent. of the
aggregate principal amount of the Series 2006-2 Class M2 Notes and 100 per
cent. of the aggregate principal amount of the Series 2006-2 Class C1
Notes (the "Issue Price"). The Series 2006-2 Class A1 Notes, Series 2006-2
Class A4 Notes, Series 2006-2 Class B1 Notes, Series 2006-2 Class B2
Notes, Series 2006-2 Class M1 Notes, Series 2006-2 Class M2 Notes and
Series 2006-2 Class C1 Notes are collectively referred to as the "US
Notes".
The Master Issuer acknowledges and agrees that each of the Underwriters in
providing investment banking services to the Master Issuer in connection
with the offering, including in acting pursuant to the terms of this
Agreement, has acted and is acting as an arm's-length counterparty and not
as a fiduciary and the Master Issuer does not intend any of the
Underwriters to act in any capacity other than as an arm's-length
counterparty, including as a fiduciary or in any other position of higher
trust.
1.4 Commissions
In consideration of the obligations undertaken herein by the Underwriters,
the Master Issuer agrees to pay to the Underwriters a selling commission
(the "Selling Commission") of 0.01900 per cent. of the aggregate principal
amount of the Series 2006-2 Class A1 Notes, 0.03800 per cent. of the
aggregate principal amount of the Series 2006-2 Class A4 Notes, 0.06017
per cent. of the aggregate principal amount of the Series 2006-2 Class B1
Notes, 0.06650 per cent. of the aggregate principal amount of the Series
2006-2 Class B2 Notes, 0.06650 per cent. of the aggregate principal amount
of the Series 2006-2 Class M1 Notes, 0.07600 per cent. of the aggregate
principal amount of the Series 2006-2 Class M2 Notes and 0.09500 per cent.
of the aggregate principal amount of the Series 2006-2 Class C1 Notes and
a combined management and underwriting commission (the "Management and
Underwriting Commission") of 0.03800 per cent. of the aggregate principal
amount of the Series 2006-2 Class A1 Notes, 0.07600 per cent. of the
aggregate principal amount of the Series 2006-2 Class A4 Notes, 0.12033
per cent. of the aggregate principal amount of the
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Series 2006-2 Class B1 Notes, 0.13300 per cent. of the aggregate principal
amount of the Series 2006-2 Class B2 Notes, 0.13300 per cent. of the
aggregate principal amount of the Series 2006-2 Class M1 Notes, 0.15200
per cent. of the aggregate principal amount of the Series 2006-2 Class M2
Notes and 0.19000 per cent. of the aggregate principal amount of the
Series 2006-2 Class C1 Notes.
The Master Issuer undertakes and covenants that on the Closing Date it
will pay to the Lead Underwriters on behalf of the Underwriters the
aggregate Selling Commission and aggregate Management and Underwriting
Commission calculated in accordance with this Clause 1.4.
1.5 Delivery and Payment
No later than 3:00 p.m. (London time) on the Closing Date, the Master
Issuer will (a) cause the Global Note Certificate for each of the US Notes
to be registered in the name of Cede & Co. as nominee for DTC for credit
on the Closing Date to the account of the Lead Underwriters with DTC or to
such other account with DTC as the Lead Underwriters may direct; and (b)
deliver the Global Note Certificate for each of the US Notes duly executed
on behalf of the Master Issuer and authenticated in accordance with the
Paying Agent and Agent Bank Agreement to Citibank N.A., as custodian for
DTC.
Against delivery of the US Notes (i) the Underwriters will pay to the Lead
Underwriters the gross underwriting proceeds for the US Notes and (ii) the
Lead Underwriters will pay to the Master Issuer or to a third party, as
directed by the Master Issuer, the gross underwriting proceeds for the US
Notes. Payment for the US Notes shall be made by the Lead Underwriters in
Dollars in immediately available funds to the account of the Master
Issuer, account number 10861537, or to such other accounts as the Master
Issuer may direct, and shall be evidenced by a confirmation from the Lead
Underwriters that they have so made that payment to the Master Issuer.
1.6 The Legal Agreements
To the extent that each of the Master Issuer, Funding 2, the Mortgages
Trustee and NRPLC is a signatory to the Legal Agreements, each will on or
before the Closing Date, have entered into or enter into each of the Legal
Agreements to which it is a party, substantially in the form of the draft
reviewed by Allen & Overy LLP and Sidley Austin (any draft of any document
so reviewed being called an "agreed form"), with such amendments as the
Lead Underwriters, on behalf of the Underwriters, may agree with the
Master Issuer and, if it is a signatory, Funding 2, the Mortgages Trustee
and/or NRPLC.
1.7 The Notes
The Notes will be issued on the Closing Date in accordance with the terms
of the Supplemental Issuer Trust Deed and will be in, or substantially in,
the form set out therein.
1.8 Prospectus
The Master Issuer confirms that it has prepared the Term Sheet, the
Preliminary Prospectus and the Prospectus for use in connection with the
issue of the US Notes and hereby authorizes the Underwriters to distribute
copies of the Prospectus in connection with the offering and sale of the
US Notes, copies of the Preliminary Prospectus, together with the Term
Sheet, having already been distributed with the consent of the Master
Issuer.
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1.9 Authority to Offer
The Master Issuer confirms that it has authorized the Lead Underwriters to
offer the US Notes on its behalf to the Underwriters for subscription at
the Issue Price subject to signature of this Agreement. Subject to Clause
3.2(a), the Master Issuer acknowledges and agrees that the Underwriters
may offer and sell US Notes to or through any affiliate of an Underwriter
and that any such affiliate may offer and sell US Notes purchased by it to
or through any Underwriter.
2. STABILIZATION
2.1 Stabilization
(a) In connection with the issue of the US Notes, the Underwriter(s) (if
any) named as the stabilizing underwriter(s) (the "Stabilizing
Underwriter(s)") (or persons acting on behalf of any Stabilizing
Underwriter) in the Prospectus Supplement may over-allot US Notes
(provided that the aggregate principal amount of US Notes allotted
does not exceed 105 per cent. of the aggregate principal amount of
the US Notes) or effect transactions with a view to supporting the
market price of the US Notes at a level higher than that which might
otherwise prevail. Any stabilization will be conducted in accordance
with applicable regulations.
(b) The Master Issuer confirms that it has not issued and will not
issue, without the prior consent of the Stabilizing Underwriter(s)
(if any) (such consent not to be unreasonably withheld), any press
or other public announcement referring to the proposed issue of US
Notes unless the announcement adequately discloses that stabilizing
action may take place in relation to the US Notes to be issued.
(c) The Master Issuer authorises the Stabilizing Underwriter(s) to make
all appropriate announcements in relation to any stabilization or
ancillary stabilization action taken in respect of the US Notes.
2.2 Stabilization Profits and Losses
As between the Master Issuer and the Stabilizing Underwriter any loss
resulting from stabilization transactions entered into by the Stabilizing
Underwriter pursuant to Clause 2.1 shall be borne, and any profit arising
therefrom shall be retained, by the Stabilizing Underwriter for its own
account.
3. AGREEMENTS BY THE UNDERWRITERS
3.1 Default of Underwriters
(a) If any Underwriter shall default on its obligation to purchase US
Notes which it has agreed to purchase hereunder, the non-defaulting
Underwriters may in their discretion arrange to purchase, or for
another party or other parties reasonably satisfactory to NRPLC to
purchase, such US Notes on the terms contained herein. If within
thirty-six hours after such default by any Underwriter, the
non-defaulting Underwriters do not arrange for the purchase of such
US Notes, then NRPLC shall be entitled to a further period of
thirty-six hours within which to procure another party or other
parties satisfactory to the non-defaulting Underwriters to purchase
such US Notes on such terms. In the event that, within the
respective prescribed periods, the Lead Underwriters on behalf of
the non-defaulting Underwriters notify NRPLC that the
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non-defaulting Underwriters have so arranged for the purchase of
such US Notes, or NRPLC notifies the non-defaulting Underwriters
that it has so arranged for the purchase of such US Notes, the
non-defaulting Underwriters or NRPLC shall have the right to
postpone the Closing Date for a period of time agreed by the Lead
Underwriters and NRPLC acting reasonably, in order to effect
whatever changes may thereby be made necessary in any documents or
arrangements relating to the offering and sale of the US Notes. Any
substitute purchaser of US Notes pursuant to this paragraph shall be
deemed to be an Underwriter, for purposes of this Agreement, in
connection with the offering and sale of the US Notes.
(b) If, after giving effect to any arrangements for the purchase of US
Notes of a defaulting Underwriter by the non-defaulting
Underwriters, as provided in Clause 3.1(a) above, the aggregate
principal amount of the US Notes which remains unpurchased does not
exceed ten per cent. of the aggregate principal amount of the US
Notes, NRPLC shall have the right to require each non-defaulting
Underwriter to purchase the principal amount of the US Notes which
such Underwriter agreed to purchase hereunder and, in addition to
require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of the US Notes which such
Underwriter agreed to purchase hereunder) of the principal amount of
the US Notes of such defaulting Underwriter for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
principal amount of the US Notes of a defaulting Underwriter by the
non-defaulting Underwriters as provided in Clause 3.1(a) above, the
aggregate principal amount of the US Notes which remains unpurchased
exceeds ten per cent. of the aggregate principal amount of the US
Notes, or if NRPLC shall not exercise the right described in Clause
3.1(b) above to require non-defaulting Underwriters to purchase the
US Notes of a defaulting Underwriter, then this Agreement shall
thereupon terminate, without liability on the part of the
non-defaulting Underwriters; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
3.2 Selling
Each Underwriter severally (and not jointly) agrees as follows:
(a) United States
It is understood that several Underwriters propose to offer the US
Notes for sale to the public in the United States as set forth in
the Time of Sale Information and the Prospectus. Any Underwriters
that are not U.S. registered broker dealers will offer and sell the
US Notes in the United States only through U.S. registered broker
dealers.
(b) United Kingdom
Each Underwriter represents and agrees that:
(1) in relation to any US Notes which have a maturity of less than
one year, (i) it is a person whose ordinary activities involve
it in acquiring, holding, managing or disposing of investments
(as principal or agent) for the purposes of its business and
(ii) it has not offered or sold and will not offer or sell any
9
US notes other than to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purposes of their
businesses or who it is reasonable to expect will acquire,
hold, manage or dispose of investments (as principal or agent)
for the purposes of their businesses where the issue of the US
notes would otherwise constitute a contravention of Section 19
of the FSMA by the Master Issuer;
(2) it has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the
meaning of Section 21 of the FSMA) received by it in
connection with the issue or sale of any US Notes in
circumstances in which Section 21(1) of the FSMA does not
apply to the Master Issuer; and
(3) it has complied and will comply with all applicable provisions
of the FSMA with respect to anything done by it in relation to
the Notes in, from or otherwise involving the United Kingdom.
(c) Italy
Each of the Underwriters represents and agrees that offering of the
US Notes has not been cleared by CONSOB (the Italian Securities
Exchange Commission) pursuant to Italian securities legislation and,
accordingly, each of the Underwriters represents and agrees that no
US Notes may be offered, sold or delivered, nor may copies of the
Prospectus or of any other document relating to the US Notes be
distributed in the Republic of Italy, except:
(i) to professional investors ("operatori qualificati"), as
defined in Article 31, second paragraph, of CONSOB Regulation
No. 11522 of 1 July, 1998, as amended; or
(ii) in circumstances which are exempted from the rules on
solicitation of investments pursuant to Article 100 of
Legislative Decree No. 58 of 24 February, 1998 (the "Financial
Services Act") and Article 33, first paragraph, of CONSOB
Regulation No. 11971 of 14 May, 1999, as amended.
Each of the Underwriters represents and agrees that any offer, sale
or delivery of the US Notes or distribution of copies of the
Prospectus or any other document relating to the US Notes in the
Republic of Italy under (i) or (ii) above must be:
(a) made by an investment firm, bank or financial intermediary
permitted to conduct such activities in the Republic of Italy
in accordance with the Financial Services Act and Legislative
Decree No. 385 of 1 September, 1993 (the "Banking Act"), as
amended;
(b) in compliance with Article 129 of the Banking Act and the
implementing guidelines of the Bank of Italy pursuant to
which the issue or the offer of securities in the Republic
of Italy may need to be preceded and followed by an
appropriate notice to be filed with the Bank of Italy
depending, inter alia, on the aggregate value of the
securities issued or offered in the Republic of Italy and
their characteristics; and
10
(c) in accordance with any other applicable laws and regulations.
(d) Ireland
Each Underwriter represents and agrees that:
(i) in respect of a local offer (within the meaning of section
38(1) of the Investment Funds, Companies and Miscellaneous
Provisions Act 2005 of Ireland) of US Notes in Ireland, it has
complied and will comply with section 49 of the Investment
Funds, Companies and Miscellaneous Provisions Act 2005 of
Ireland;
(ii) it has complied and will comply with all applicable provisions
of the Investment Intermediaries Acts, 1995 to 2000 of Ireland
(as amended) with respect to anything done by it in relation
to the US Notes or operating in, or otherwise involving,
Ireland and, in the case of an underwriter acting under and
within the terms of an authorisation to do so for the purposes
of EU Council Directive 93/22/EEC of 10 May 1993 (as amended
or extended), it has complied with any codes of conduct made
under the Investment Intermediaries Acts, 1995 to 2000 of
Ireland (as amended) and, in the case of an underwriter acting
within the terms of an authorisation granted to it for the
purposes of EU Council Directive 2000/12/EC of 20 March 2000
(as amended or extended), it has complied with any codes of
conduct or practice made under Section 117(1) of the Central
Bank Act, 1989 of Ireland (as amended); and
(iii) in connection with offers or sales of US Notes, it has only
issued or passed on, and will only issue or pass on, in
Ireland, any document received by it in connection with the
issue of such US Notes to persons who are persons to whom the
documents may otherwise lawfully be issued or passed on.
(e) France
Each Underwriter represents and agrees that:
(i) it has only made and will only make an offer of the US
Notes to the public (appel public a l'epargne) in France in
the period beginning (a) when a prospectus in relation to
those US Notes has been approved by the Autorite des
marches financiers (AMF), on the date of such publication
or, (b) when a prospectus has been approved in another
Member State of the European Economic Area which has
implemented the EU Prospectus Directive 2003/71/EC, on the
date of notification of such approval to the AMF, all in
accordance with articles L.412-1 and L.621-8 of the French
Code monetaire et financier and the Reglement general of
the AMF, and ending at the latest on the date which is 12
months after the date of such publication; or
(ii) it has only made and will only make an offer of US Notes to
the public in France (appel public a l'epargne) and/or it has
only required and will only require the admission to trading
on Euronext Paris S.A. in circumstances which do not require
the publication by the offeror of a prospectus pursuant to
articles L.411-2 and L.412-1 of the French Code monetaire et
financier; and
11
(iii) otherwise, it has not offered or sold and will not offer or
sell, directly or indirectly, US Notes to the public in
France, and has not distributed or caused to be distributed
and will not distribute or cause to be distributed to the
public in France, this document or any other offering material
relating to the US Notes, and that such offers, sales and
distributions have been and shall only be made in France to
(i) providers of investment services relating to portfolio
management for the account of third parties, and/or (ii)
qualified investors (investisseurs qualifies), all as defined
in, and in accordance with, articles L.411-1, L.411-2, D.411-1
of the French Code monetaire et financier.
(f) The Netherlands
Each Underwriter represents and agrees that it has not and will not,
directly or indirectly, offer or sell any US Notes (including rights
representing an interest in a global note) to individuals or legal
entities who or which are established, domiciled or have their
residence in The Netherlands (Dutch Residents) other than to the
following entities (hereinafter referred to as Professional Market
Parties or PMPs) provided they acquire the US Notes for their own
account and trade or invest in securities in the conduct of a
business or profession:
(i) anyone who is subject to supervision of the Dutch Central
Bank, the Dutch Authority for the Financial Markets or a
supervisory authority from another member state and who is
authorised to be active on the financial markets;
(ii) anyone who otherwise performs a regulated activity on the
financial markets;
(iii) the State of the Netherlands, the Dutch Central Bank, a
central government body, a central bank, Dutch regional and
local governments and comparable foreign decentralised
government bodies, international treaty organisations and
supranational organisations;
(iv) a company or entity which, according to its last annual
(consolidated) accounts, meets at least two of the following
three criteria: an average number of employees during the
financial year of at least 250, a total balance sheet of at
least (euro)43,000,000 and an annual net turnover of at least
(euro)50,000,000;
(v) a company or entity with its statutory seat in the Netherlands
other than a company as referred to in (iv) above, which has
requested the Dutch Authority for the Financial Markets to be
treated as a Professional Market Party;
(vi) a natural person, living in the Netherlands, who has requested
the Dutch Authority for the Financial Markets to be treated as
a Professional Market Party, and who meets at least two of the
following three criteria: the person has carried out
transactions of a significant size on securities markets at an
average frequency of, at least, ten per quarter over the
previous four quarters; the size of the securities portfolio
is at least (euro)500,000 and the person works or has worked
for at least one year in the financial sector in a
professional position which requires knowledge of securities
investment;
(vii) a company or entity whose only purpose is investing in
securities;
12
(viii) a company or entity whose purpose is to acquire assets and
issue asset backed securities;
(ix) an enterprises or entity with total assets of at least
(euro)500,000,000 (or the equivalent thereof in another
currency) as per the balance sheet as of the year end
preceding the obtaining of the repayable funds;
(x) an enterprise, entity or individual with net assets of at
least (euro)10,000,000 (or the equivalent thereof in another
currency) as of the year end preceding the obtaining of the
repayable funds who has been active in the financial markets
on average twice a month over a period of at least two
consecutive years preceding the obtaining of the repayable
funds;
(xi) a subsidiary of any of the persons or entities referred to
under (i)-(viii) above, provided such subsidiaries are subject
to consolidated supervision; and
(xii) an enterprise or entity which has a rating from a rating
agency that, in the opinion of the Dutch Central Bank, has
sufficient expertise, or which issues securities that have a
rating from a rating agency that, in the opinion of the Dutch
Central Bank, has sufficient expertise.
(g) Japan
The US Notes have not been and will not be registered under the
Securities and Exchange Law of Japan and each Underwriter agrees
that it will not, directly or indirectly, offer or sell any US Notes
in Japan or to any resident of Japan except pursuant to an exemption
from the registration requirements of, and otherwise in compliance
with, the Securities and Exchange Law of Japan, and furthermore it
has undertaken that any securities dealer to whom it initially sells
any US Notes will represent and agree that it has not, directly or
indirectly, re-offered or resold and will not, directly or
indirectly, re-offer or resell any US Notes in Japan or to any
resident of Japan except pursuant to an exemption from the
registration requirements of, and otherwise in compliance with, the
Securities and Exchange Law of Japan. As used in this paragraph,
"resident of Japan" means any person having his place or domicile or
residence in Japan, any corporation or other legal entity organized
under the laws of Japan except for its branches or other offices
located outside Japan and, with respect to any corporation or other
legal entity organized under a law other than Japanese law, its
branches and offices located in Japan.
(h) Korea
Each Underwriter represents and agrees that the US Notes have not
been and will not be offered, delivered or sold directly or
indirectly in Korea or to any resident of Korea or to others for
re-offering or resale directly or indirectly in Korea or to any
resident of Korea except as otherwise permitted under applicable
Korean laws and regulations. Each Underwriter has undertaken to
ensure that any securities dealer to which it sells US Notes
confirms that it is purchasing such US Note as principal and agrees
with such Underwriter that it will comply with the restrictions set
out in this paragraph (h).
(i) Hong Kong
Each Underwriter represents and agrees that:
13
(1) it has not offered or sold, and will not offer or sell, in
Hong Kong, by means of any document, any US Note other than
(i) in circumstances which do not constitute an offer to the
public within the meaning of the Companies Ordinance (Cap.32,
Laws of Hong Kong), or (ii) to "professional investors" within
the meaning of the Securities and Futures Ordinance (Cap.571,
Laws of Hong Kong) and any rules made thereunder, or (iii) in
other circumstances which do not result in the document being
a "prospectus" within the meaning of the Companies Ordinance
(Cap.32, Laws of Hong Kong); and
(2) it has not issued, or had in its possession for the purpose of
issue (in each case whether in Hong Kong or elsewhere), any
advertisement, invitation or document relating to the US Notes
which is directed at, or the contents of which are likely to
be accessed or read by, the public in Hong Kong (except if
permitted to do so under the laws of Hong Kong) other than
with respect to the US Notes which are or are intended to be
disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities
and Futures Ordinance (Cap.571, Laws of Hong Kong) and any
rules made thereunder.
(j) Singapore
The Prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore under the Securities and Futures
Act, Chapter 289 of Singapore (the "Securities and Futures Act").
Accordingly, each Underwriter represents and agrees that the US
Notes may not be offered or sold or made the subject of an
invitation for subscription or purchase nor may the Prospectus or
any other document or material in connection with the offer or sale
or invitation for subscription or purchase of any US Notes
recirculated or distributed, whether directly or indirectly, to any
person in Singapore other than (i) to an institutional investor
pursuant to Section 274 of the Securities and Futures Act, (ii) to a
relevant person, or any person pursuant to Section 275(1A) of the
Securities and Futures Act, and in accordance with the conditions
specified in Section 275 of the Securities and Futures Act, or (iii)
pursuant to, and in accordance with the conditions of, any other
applicable provision of the Securities and Futures Act.
Each of the following relevant persons specified in Section 275 of
the Securities and Futures Act which has subscribed or purchased US
Notes, namely a person who is:
(1) a corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or
(2) a trust (where the trustee is not an accredited investor)
whose sole purpose is to hold investments and each beneficiary
is an accredited investor,
should note that shares, debentures and units of shares and
debentures of that corporation or the beneficiaries' rights and
interest in that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the US Notes under
Section 275 of the Securities and Futures Act except:
(i) to an institutional investor under Section 274 of the
Securities and Futures Act or to a relevant person, or any
person pursuant to Section 275(1A) of the
14
Securities and Futures Act, and in accordance with the
conditions, specified in Section 275 of the Securities and
Futures Act;
(ii) where no consideration is given for the transfer; or
(iii) by operation of law;
(k) Taiwan
Each Underwriter represents and agrees that the US Notes have not
been and will not be offered in Taiwan and may only be offered and
sold to Taiwan resident investors from outside Taiwan in such manner
as complies with Taiwan securities laws and regulations applicable
to such cross border activities.
(l) People's Republic of China
Each Underwriter represents and agrees that neither it nor any of
its affiliates has offered or sold or will offer or sell any of the
US Notes in the People's Republic of China (excluding Hong Kong,
Macau and Taiwan) as part of the initial distribution of the US
Notes.
(m) Other
For each jurisdiction outside the United States and the United
Kingdom (a "Relevant Jurisdiction"), neither the Master Issuer nor
any Underwriter represents that US Notes may at any time lawfully be
sold in compliance with any application, registration or other
requirement in any Relevant Jurisdiction by the Master Issuer or any
Underwriter (other than as described above), or pursuant to any
exemption available thereunder, or assume any responsibility for
facilitating such sale.
Each Underwriter represents and agrees that it has complied and will
comply with all applicable securities laws and regulations in force
in any Relevant Jurisdiction in which it purchases, offers, sells or
delivers US Notes or has in its possession or distributes the
Prospectus or any other offering material, in all cases at its own
expense, and it will obtain any consent, approval or permission
required by it for the purchase, offer, sale or delivery by it of US
Notes under the laws and regulations in force in any Relevant
Jurisdiction to which it is subject or in which it makes such
purchases, offers, sales or deliveries and the Master Issuer shall
have not responsibility for them, in all cases at its own expense.
Each Underwriter represents and agrees that it has not and will not
directly or indirectly offer, sell or deliver any US Notes or
distribute or publish any prospectus, form of application, offering
circular, advertisement or other offering material except under
circumstances that will, to the best of its knowledge and belief,
result in compliance with any applicable laws and regulations, and
all offers, sales and deliveries of US Notes by it will be made on
the same terms.
Each Underwriter agrees that it will, unless prohibited by
applicable law, furnish to each person to whom it offers or sells US
Notes a copy of the Prospectus, as then amended or supplemented or,
unless delivery of the Prospectus is required by applicable law,
inform each such person that a copy will be made available upon
request. Each Underwriter is not authorized to give any information
or to make any representation not contained in the Prospectus in
connection with the offer and sale of US Notes to which the
Prospectus relates.
15
4. LISTING
4.1 Application for Listing
The Master Issuer confirms that it has authorized the Lead Underwriters to
make or cause to be made at the Master Issuer's expense applications on
the Master Issuer's behalf for the Notes to be listed on the Official List
and for the Notes to be admitted to trading on the London Stock Exchange
plc's Gilt Edged and Fixed Interest Market or such other Market of the
London Stock Exchange plc as shall be designated as a "regulated market"
within the meaning of Directive 93/22/EC (the "Market").
4.2 Supply of Information
The Master Issuer agrees to supply to the Lead Underwriters for delivery
to the UK Listing Authority and the London Stock Exchange copies of the
Prospectus and such other documents, information and undertakings as may
be required for the purpose of obtaining such listing and admission to
trading.
4.3 Maintenance of Listing
The Master Issuer agrees to use its reasonable endeavors to maintain a
listing of the US Notes on the Official List and the admission of the
Notes to trading on the Market for as long as any of the US Notes are
outstanding and to pay all fees and supply all further documents,
information and undertakings and publish all advertisements or other
material as may be necessary for such purpose. However, if such listing or
admission to trading becomes impossible, the Master Issuer will obtain,
and will thereafter use its best endeavors to maintain, a quotation for,
or listing of, the US Notes on or by such other stock exchange, competent
listing authority and/or quotation system as is commonly used for the
quotation or listing of debt securities as it may decide with the approval
of the Lead Underwriters (such approval not to be unreasonably withheld or
delayed).
5. REPRESENTATIONS AND WARRANTIES OF THE MASTER ISSUER
The Master Issuer represents and warrants to, and agrees with, Funding 2,
the Mortgages Trustee, the Underwriters and each of them that:
(a) The Registration Statement
A registration statement on Form S-3 (File No.s 333-133279,
333-133279-02 and 333-133279-01) relating to the US Notes has been
filed by the Master Issuer (together with Funding 2 and the
Mortgages Trustee) with the United States Securities and Exchange
Commission ("Commission") and has become effective and is still
effective as of the date hereof under the Securities Act. No stop
order suspending the effectiveness of the Registration Statement has
been issued under the Securities Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of
the Master Issuer, are threatened by the Commission.
The Master Issuer (together with Funding 2 and the Mortgages
Trustee) has filed with the Commission the Preliminary Prospectus
(as hereinafter defined) and it has done so within the applicable
period of time required under the Securities Act and the rules and
regulations of the Commission under the Securities Act (the "Rules
and Regulations"). The Master Issuer (together with Funding 2 and
the Mortgages Trustee) will file with the Commission pursuant to
Rule 424(b) of the Rules and
16
Regulations, promptly upon or after the execution and delivery of
this Agreement, a prospectus supplement dated May 18, 2006 (together
with information referred to under the caption "Static Pool Data" in
Annex D therein regardless of whether it is deemed a part of the
Registration Statement or Prospectus, the "Prospectus Supplement")
to the prospectus dated April 24, 2006 (the "Base Prospectus"),
relating to the US Notes and the method of distribution thereof.
Such registration statement, including exhibits thereto, and such
prospectus, as amended or supplemented to the date hereof, and as
further supplemented by the Prospectus Supplement, are hereinafter
referred to as the "Registration Statement" and the "Prospectus",
respectively. Any reference herein to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement, the Base
Prospectus or the Prospectus Supplement shall include, without
limitation, any document filed under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Base Prospectus and the
Prospectus Supplement, as the case may be, deemed to be incorporated
therein pursuant to the Securities Act.
The conditions to the use of a registration statement on Form S-3
under the Securities Act have been satisfied. The Registration
Statement, at the time it became effective, any post-effective
amendment thereto, at the time it became effective, the Preliminary
Prospectus, as of its date, and the Prospectus, as of the date of
the Prospectus Supplement, complied and on the Closing Date will
comply in all material respects with the applicable requirements of
the Securities Act and the Rules and Regulations and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder.
(b) No Material Misstatements or Omissions
(I) The Registration Statement, as of the applicable effective date
as to each part of the Registration Statement and any amendment
thereto pursuant to Rule 430B(f)(2) under the Securities Act, did
not include any untrue statement of a material fact and did not omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that the Master Issuer makes no representations, warranties
or agreements as to: (i) that part of the Registration Statement
which constitutes the Statement of Eligibility and Qualification
(Form T-1) of the Note Trustee under the Trust Indenture Act, and
(ii) statements or omissions in the Registration Statement made in
reliance upon and in conformity with information furnished in
writing to the Master Issuer by or on behalf of any Underwriter
through the Lead Underwriters specifically for inclusion therein, it
being agreed that the only such information consists of the
statements under the heading "Underwriting" in the Preliminary
Prospectus, the Time of Sale Information and the Prospectus that
specify (A) the list of Underwriters and their respective
participation in the sale of the US Notes, (B) the sentences related
to concessions and reallowances and (C) the paragraphs related to
short sales, stabilization, short covering transactions and penalty
bids (such information, the "Underwriter Information");
(II) the Preliminary Prospectus (except for the omission of any
pricing related information and any information relating to an
Issuer Swap Provider), as of its date and as of the Time of Sale,
did not contain an untrue statement of a material fact and did not
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that the Master
Issuer makes no representations, warranties or
17
agreements as to statements or omissions in the Preliminary
Prospectus made in reliance upon and in conformity with the
Underwriter Information;
(III) the Time of Sale Information (except for the omission of any
pricing related information and any information relating to an
Issuer Swap Provider), as of the Time of Sale, did not, and as of
the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Master Issuer makes no representations, warranties or agreements as
to statements or omissions in the Time of Sale Information made in
reliance upon and in conformity with Underwriter Information;
(IV) the Master Issuer was not, as of any date on or after which a
bona fide offer (as used in Rule 164(h)(2) under the Securities Act)
of the US Notes was made, an "ineligible issuer", as defined in Rule
405 under the Securities Act;
(V) the Prospectus, as of the date of the Prospectus Supplement and
as of the Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that the Master Issuer makes no representations,
warranties or agreements as to statements or omissions in the
Prospectus (or any amendment or supplement thereto) made in reliance
upon and in conformity with the Underwriter Information; and
(VI) the documents incorporated by reference in the Preliminary
Prospectus and the Prospectus, when they were filed with the
Commission under the Exchange Act, conformed in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(c) Incorporation, Capacity and Authorization
The Master Issuer is a public limited company duly incorporated and
validly existing under the laws of England and Wales, with full
power and capacity to conduct its business as described in the
Prospectus, to create and issue the Notes, to execute this Agreement
and the other Legal Agreements to which it is a party and to
undertake and perform the obligations expressed to be assumed by it
herein and therein; and has taken all necessary action to approve
and authorize the same; and the Master Issuer is lawfully qualified
to do business in England and Wales. The Master Issuer has not taken
any corporate action nor (to the best of its knowledge and belief)
have any other steps been taken or legal proceedings been started or
threatened against it for its winding-up, dissolution or
reorganization or for the appointment of a receiver, administrator,
administrative receiver or similar officer of it or of any or all of
its assets or revenues.
(d) Validity of Legal Agreements
This Agreement has been duly authorized, executed and delivered by
the Master Issuer and constitutes, and the other Legal Agreements to
which the Master Issuer is a
18
party have been duly authorized by the Master Issuer and on the
Closing Date will constitute, legal, valid and binding obligations
of the Master Issuer, enforceable against the Master Issuer in
accordance with their respective terms, subject as to enforceability
to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation or other similar laws
affecting the enforcement of creditors rights generally and to
general equitable principles.
(e) Validity of Notes
The creation, sale and issue of the Notes have been duly authorized
by the Master Issuer and, when executed and authenticated in
accordance with the Supplemental Issuer Trust Deed and the Issuer
Paying Agent and Agent Bank Agreement, the Notes will constitute
legal, valid and binding obligations of the Master Issuer and, upon
effectiveness of the Registration Statement, the Supplemental Issuer
Trust Deed will have been duly qualified under the Trust Indenture
Act.
(f) Consents
All consents, approvals, authorizations and other orders of all
United States and United Kingdom regulatory authorities required for
the creation, issue and offering of the Notes by the Master Issuer
or in connection with the execution and performance by the Master
Issuer of the transactions contemplated by the Legal Agreements or
the compliance by the Master Issuer with the terms of the Notes and
the Legal Agreements as the case may be, except for (i) such
consents, approvals, authorizations, registrations or qualifications
as may be required under applicable United States state securities,
Blue Sky or similar laws in connection with the purchase and
distribution of the Notes by the Underwriters and (ii) those which
will on the Closing Date be, in full force and effect.
(g) Compliance
The authorization of the Notes and the granting of security
interests in relation thereto under the Issuer Deed of Charge (as
amended by the Deed of Accession), the offering and issue of the
Notes on the terms and conditions of this Agreement, the
Supplemental Issuer Trust Deed and the Prospectus, the execution and
delivery of the Legal Agreements to which it is a party and the
implementation of the transactions contemplated by such Legal
Agreements and compliance with the terms of the Legal Agreements to
which it is a party do not, and will not, (i) conflict with, or
result in a breach of, any of the terms or provisions of, or
constitute a default under, the Memorandum and Articles of
Association of the Master Issuer or any agreement or instrument to
which the Master Issuer is a party or by which any of its assets or
properties is bound; (ii) infringe any applicable law, rule,
regulation, judgment, order or decree of any government,
governmental body or court having jurisdiction over the Master
Issuer or any of its assets or properties; or (iii) result in the
creation or imposition of any mortgage, charge, pledge, lien or
other security interest on any of its assets or properties, other
than those created in, or imposed by, the Legal Agreements
themselves.
(h) Accountants
PricewaterhouseCoopers LLP are a registered public accounting firm
and independent with respect to the Master Issuer within the meaning
of the Securities Act.
19
(i) Taxation
Save as described in the legal opinions referred to in Clause 9.1(d)
of this Agreement, no stamp or other similar duty is assessable or
payable in the United Kingdom, and no withholding or deduction for
or on account of any taxes, duties, assessments or governmental
charges of whatever nature is imposed or made for or on account of
any income, registration, transfer or turnover taxes, customs or
other duties or taxes of any kind in connection with the
authorization, execution or delivery of the Legal Agreements or with
the authorization, issue, sale or delivery of the Notes and (except
as disclosed in the Prospectus) the performance of the Master
Issuer's, Funding 2's and/or, as the case may be, the Mortgages
Trustee's obligations under the Legal Agreements and the Notes. This
warranty does not apply to any United Kingdom corporation tax on net
income, profits or gains received or receivable which may be levied,
collected, withheld or assessed in connection with the
authorization, execution or delivery of the Legal Agreements or with
the authorization, issue, sale or delivery of the Notes.
(j) Breach of other agreements
The Master Issuer is not in breach of or in default under any
agreement to which it is a party or which is binding on it or any of
its assets or revenues.
(k) Events of Default
No event has occurred or circumstance arisen which, had the Notes
already been issued, would (whether or not with the giving of notice
and/or the passage of time and/or the fulfillment of any other
requirement) constitute an Event of Default as set out in the
Conditions of the Notes.
(l) No Subsidiaries
The Master Issuer has no subsidiaries or subsidiary undertakings
within the meanings of Sections 258 and 736 of the Companies Act
1985.
(m) Granite Finance Holdings Limited
The Funding Issuers, the Master Issuer, Funding, Funding 2, the
Mortgages Trustee and GPCH Limited are the only subsidiaries or
subsidiary undertakings of Granite Finance Holdings Limited within
the meanings of Sections 258 and 736 of the Companies Act 1985.
(n) No Activities
The Master Issuer has not engaged in any activities since its
incorporation other than (i) those incidental to any registration or
re-registration as a public limited company under the Companies Acts
1985 and 1989 and various changes to its directors, secretary,
registered office, Memorandum and Articles of Association; (ii) the
authorization and execution of the Legal Agreements to which it is a
party; (iii) the activities referred to or contemplated in the Legal
Agreements to which it is a party and (iv) the authorization and
issue by it of the Notes. The Master Issuer has not prepared any
accounts and has neither paid any dividends nor made any
distributions since the date of its incorporation.
20
(o) Prospectus Rules
The Reg S Prospectus has been (i) approved by the UK Listing
Authority as an approved prospectus for the purposes of Section
85(2) of the FSMA and the Prospectus Rules; and (ii) published in
accordance with the Prospectus Rules.
(p) Litigation
There are no pending actions, suits or proceedings against or
affecting the Master Issuer which could individually or in the
aggregate have an adverse effect on the condition (financial or
other), prospects, results of operations or general affairs of the
Master Issuer or could adversely affect the ability of the Master
Issuer to perform its obligations under the Legal Agreements or the
Notes or which are otherwise material in the context of the issue or
offering of the Notes and, to the best of the Master Issuer's
knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(q) No Prior Security
Save as set out in any of the Legal Agreements, there exists no
mortgage, lien, pledge or other charge on or over the assets of the
Master Issuer and, other than the Legal Agreements, the Master
Issuer has not entered into any indenture or trust deed.
(r) Security for the Notes
The Notes and the obligations of the Master Issuer under the
Supplemental Issuer Trust Deed will be secured in the manner
provided in the Issuer Deed of Charge (as amended by the Issuer Deed
of Accession) and with the benefit of the charges, covenants and
other security interests provided for therein including, without
limitation, (i) an assignment by way of first fixed security of the
Master Issuer's rights and claims in respect of all security and
other rights held on trust by the Funding 2 Security Trustee
pursuant to the Funding 2 Deed of Charge, (ii) an assignment by way
of first fixed security of the Master Issuer's right, title,
interest and benefit in the Global Intercompany Loan Agreement, the
Currency Swap Agreements, the Funding 2 Deed of Charge, the
Supplemental Issuer Trust Deed, the Notes, the Issuer Paying Agent
and Agent Bank Agreement, the Issuer Cash Management Agreement, the
Corporate Services Agreement, the Issuer Bank Account Agreement, the
Post-Enforcement Call Option Agreement, this Agreement, the
Programme Agreement, the Subscription Agreement and any other
agreements to which the Master Issuer is a party; (iii) an
assignment by way of first fixed charge over the Issuer Bank
Accounts; (iv) a first fixed charge (which may take effect as a
floating charge) over the Master Issuer's right, title, interest and
benefit to any Authorized Investments made with moneys standing to
the credit of any of the Issuer Bank Accounts; and (v) a first
ranking floating charge over the whole of the assets and undertaking
of the Master Issuer which are not otherwise effectively subject to
any fixed charge or assignment by way of security.
(s) Investment Company Act
The Master Issuer is not an "investment company" as defined in the
U.S. Investment Company Act of 1940, as amended (the "Investment
Company Act"), and the offer and sale of the US Notes in the United
States will not subject the Master Issuer to registration under, or
result in a violation of, the Investment Company Act.
21
(t) United States Income Tax
The Master Issuer will not engage in any activities in the United
States (directly or through agents), derive any income from United
States sources as determined under the U.S. Internal Revenue Code of
1986, as amended (the "Code"), or 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 the Code.
(u) Legal Agreements
The representations and warranties given by the Master Issuer in the
Legal Agreements are true and accurate, and the description of the
Legal Agreements as set out in the Prospectus is true and correct
in all material respects.
Unless otherwise indicated, the representations and warranties set out in
this Clause 5 shall be made on the date of the Prospectus and, if
different, the date of this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF FUNDING 2 AND THE MORTGAGES TRUSTEE
Each of Funding 2 and the Mortgages Trustee severally represents and
warrants (in respect of itself only) to, and agrees with, the Underwriters
and each of them that:
(a) The Registration Statement
The Registration Statement has been filed by Funding 2 and the
Mortgages Trustee (together with the Master Issuer) with the
Commission and has become effective and is still effective as of the
date hereof under the Securities Act. No stop order suspending the
effectiveness of the Registration Statement has been issued under
the Securities Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of Funding 2 and the
Mortgages Trustee, are threatened by the Commission.
Funding 2 and the Mortgages Trustee (together with the Master
Issuer) have filed with the Commission the Preliminary Prospectus
and they have done so within the applicable period of time required
under the Securities Act and the Rules and Regulations. Funding 2
and the Mortgages Trustee (together with the Master Issuer) will
file with the Commission the Prospectus pursuant to Rule 424(b) of
the Rules and Regulations, promptly upon or after the execution and
delivery of this Agreement.
The conditions to the use of a registration statement on Form S-3
under the Securities Act have been satisfied. The Registration
Statement, at the time it became effective, any post-effective
amendment thereto, at the time it became effective, the Preliminary
Prospectus, as of its date, and the Prospectus, as of the date of
the Prospectus Supplement, complied and on the Closing Date will
comply in all material respects with the applicable requirements of
the Act and the Rules and Regulations and the Trust Indenture Act
and the rules and regulations of the Commission thereunder.
(b) No Material Misstatements or Omissions
(I) The Registration Statement, as of the applicable effective date
as to each part of the Registration Statement and any amendment
thereto pursuant to Rule 430B(f)(2)
22
under the Act, did not include any untrue statement of a material
fact and did not omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that neither Funding 2 nor the
Mortgages Trustee makes any representations, warranties or
agreements as to: (i) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification (Form
T-1) of the Note Trustee under the Trust Indenture Act, and (ii)
statements or omissions in the Registration Statement made in
reliance upon and in conformity with the Underwriter Information;
(II) the Preliminary Prospectus (except for the omission of any
pricing related information and any information relating to an
Issuer Swap Provider), as of its date and as of the Time of Sale,
did not contain an untrue statement of a material fact and did not
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that neither
Funding 2 nor the Mortgages Trustee makes any representations,
warranties or agreements as to statements or omissions in the
Preliminary Prospectus made in reliance upon and in conformity with
the Underwriter Information;
(III) the Time of Sale Information (except for the omission of any
pricing related information and any information relating to an
Issuer Swap Provider), as of the Time of Sale, did not, and as of
the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that
neither Funding 2 nor the Mortgages Trustee makes representations,
warranties or agreements as to statements or omissions in the Time
of Sale Information made in reliance upon and in conformity with
Underwriter Information;
(IV) the Prospectus, as of the date of the Prospectus Supplement and
as of the Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that neither Funding 2 nor the Mortgages Trustee
makes any representations, warranties or agreements as to statements
or omissions in the Prospectus (or any amendment or supplement
thereto) made in reliance upon and in conformity with the
Underwriter Information; and
(V) the documents incorporated by reference in the Preliminary
Prospectus and the Prospectus, when they were filed with the
Commission under the Exchange Act, conformed in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(c) Incorporation, Capacity and Authorization
(I) Funding 2 is a private limited company duly incorporated and
validly existing under the laws of England and Wales, with full
power and capacity to conduct its business as described in the
Prospectus, to execute this Agreement and the other Legal Agreements
to which it is a party and to undertake and perform the obligations
23
expressed to be assumed by it herein and therein; and has taken all
necessary action to approve and authorize the same; and Funding 2 is
lawfully qualified to do business in England and Wales. Funding 2
has not taken any corporate action nor (to the best of its knowledge
and belief) have any other steps been taken or legal proceedings
been started or threatened against it for its winding-up,
dissolution or reorganization or for the appointment of a receiver,
administrator, administrative receiver or similar officer of it or
of any or all of its assets or revenues; and
(II) The Mortgages Trustee is duly incorporated and validly existing
under the laws of Jersey, Channel Islands, with full power and
authority to conduct its business as described in the Prospectus, is
lawfully qualified to do business in Jersey and has full power and
capacity to execute this Agreement and the other Legal Agreements to
which it is a party, and to undertake and perform the obligations
expressed to be assumed by it herein and therein; and it has taken
all necessary action to approve and authorize the same. The
Mortgages Trustee has not taken any corporate action nor (to the
best of its knowledge and belief) have any other steps been taken or
legal proceedings been started or threatened against it for its
winding-up, dissolution or reorganization or for the appointment of
a receiver, administrator, administrative receiver or similar
officer of it or of any or all of its assets or revenues.
(d) Validity of Legal Agreements
This Agreement has been duly authorized, executed and delivered by
each of Funding 2 and the Mortgages Trustee and constitutes, and the
other Legal Agreements to which Funding 2 and the Mortgages Trustee
are a party have been duly authorized by each of Funding 2 and the
Mortgages Trustee and on the Closing Date will constitute, legal,
valid and binding obligations of each of Funding 2 and the Mortgages
Trustee, enforceable against each of Funding 2 and the Mortgages
Trustee in accordance with their respective terms, subject as to
enforceability to applicable bankruptcy, insolvency, reorganization,
conservatorship, receivership, liquidation or other similar laws
affecting the enforcement of creditors rights generally and to
general equitable principles.
(e) Consents
All consents, approvals, authorizations and other orders of all
United States, Jersey, Channel Islands and United Kingdom regulatory
authorities required in connection with the execution of and
performance by Funding 2 and/or the Mortgages Trustee of the
transactions contemplated by the Legal Agreements to which Funding 2
and/or the Mortgages Trustee, as the case may be, is a party or the
compliance by each of them with the terms of the Legal Agreements
are, or will on the Closing Date be, in full force and effect.
(f) Compliance
The authorization of the terms and conditions of this Agreement, the
execution and delivery of the Legal Agreements to which Funding 2
and/or, as the case may be, the Mortgages Trustee is party and the
implementation of the transactions contemplated by such Legal
Agreements and compliance with the terms of the Legal Agreements do
not, and will not, (i) conflict with, or result in a breach of, any
of the terms or provisions of, or constitute a default under, the
Memorandum and Articles of Association of Funding 2 or the Mortgages
Trustee or any agreement or instrument to which Funding 2 or the
Mortgages Trustee is a party or by which any of its assets or
24
properties is bound; (ii) infringe any applicable law, rule,
regulation, judgment, order or decree of any government,
governmental body or court having jurisdiction over either Funding 2
or the Mortgages Trustee or any of its assets or properties; or
(iii) result in the creation or imposition of any mortgage, charge,
pledge, lien or other security interest on any of its or their
assets or properties, other than those created in, or imposed by,
the Legal Agreements themselves.
(g) Breach of other agreements
Neither Funding 2 nor the Mortgages Trustee is in breach of or in
default under any agreement to which it is a party or which is
binding on it or any of its assets or revenues.
(h) Events of Default
No event has occurred or circumstance arisen which, had the Global
Intercompany Loan Agreement been entered into, would (whether or not
with the giving of notice and/or the passage of time and/or the
fulfillment of any other requirement) constitute a Funding 2
Intercompany Loan Event of Default as set out in the Global
Intercompany Loan Agreement.
(i) No Subsidiaries
The Mortgages Trustee does not have any subsidiaries or subsidiary
undertakings within the meanings of Sections 258 and 736 of the
Companies Act 1985. Funding 2 does not have any subsidiaries or
subsidiary undertakings within the meanings of Sections 258 and 736
of the Companies Act 1985 save for the Master Issuer.
(j) No Activities
(I) Funding 2 has not engaged in any activities since its
incorporation other than (i) those incidental to any registration or
re-registration as a private limited company under the Companies
Acts 1985 and 1989 and various changes to its directors, secretary,
registered office, Memorandum and Articles of Association; (ii) the
authorization, execution and in certain cases, amendment, of the
Legal Agreements to which each is a party; (iii) the activities
referred to or contemplated in the Legal Agreements; and (iv) the
filing of a notification by it under the Data Protection Act 1998
(the "DPA") and the application for a standard license under the
Consumer Credit Act 1974. Funding 2 has not prepared any accounts
and has neither paid any dividends nor made any distributions since
the date of its incorporation; and
(II) The Mortgages Trustee has not engaged in any activities since
its incorporation other than (i) those incidental to any
registration as a private limited company under the laws of Jersey
and (if any) various changes to its directors, secretary, registered
office, Memorandum and Articles of Association; (ii) the
authorization, execution and in certain cases, amendment, of the
Legal Agreements to which each is a party; (iii) the activities
referred to or contemplated in the Legal Agreements or in the
Prospectus; (iv) the activities undertaken in connection with the
establishment of the Mortgages Trust pursuant to the Mortgages Trust
Deed; (v) the filing of a notification by the Mortgages Trustee
under the DPA and the application for a standard license under the
Consumer Credit Act 1974; and (vi) any activities in connection with
or incidental to the issue of notes by the Funding Issuers and the
issue of the Notes by the Master Issuer. The Mortgages Trustee has
not prepared any
25
accounts and has neither paid any dividends nor made any
distributions since the date of its incorporation.
(k) Beneficial Owner
As of April 24, 2006, following the completion of the assignment of
the New Mortgage Portfolio to the Mortgages Trustee pursuant to and
in accordance with the Mortgage Sale Agreement and pursuant to and
in accordance with the terms of the Mortgages Trust Deed, the
Mortgages Trustee has held the New Mortgage Portfolio, and has held
and will continue to hold, the Mortgage Portfolio on a bare trust
for the benefit of Funding, Funding 2 and NRPLC in undivided shares
absolutely.
(l) Litigation
There are no pending actions, suits or proceedings against or
affecting Funding 2 or the Mortgages Trustee which could
individually or in the aggregate have an adverse effect on the
condition (financial or otherwise), prospects, results of operations
or general affairs of the Mortgages Trustee or Funding 2 (as the
case may be) or could adversely affect the ability of the Mortgages
Trustee or Funding 2 (as the case may be) to perform their
respective obligations under the Legal Agreements, or which are
otherwise material in the context of the transaction contemplated by
the Prospectus and, to the best of the knowledge of Funding 2 and
the Mortgages Trustee, no such actions, suits or proceedings are
threatened or contemplated.
(m) No Prior Security
Save as set out in any of the Legal Agreements there exists no
mortgage, lien, pledge or other charge on or over the assets of
Funding 2 or the Mortgages Trustee and, other than the Legal
Agreements, neither Funding 2 nor the Mortgages Trustee has entered
into any indenture or trust deed.
(n) Security for the Loan Tranches under the Global Loan Facility
Funding 2's obligations under, inter alia, the Global Intercompany
Loan Agreement will be secured in the manner provided in the Funding
2 Deed of Charge and with the benefit of the charges, covenants and
other security provided for therein including, without limitation,
(i) a first fixed charge over and assignment by way of security of
Funding 2's share of the Trust Property (as defined in the Mortgages
Trust Deed); (ii) an assignment by way of first fixed security of
all of Funding 2's right, title, interest and benefit in the
Mortgage Sale Agreement, the Mortgages Trust Deed, the
Administration Agreement, the Global Intercompany Loan Agreement,
the Start-Up Loan Agreement, the Funding 2 Guaranteed Investment
Contract, the Corporate Services Agreement, the Cash Management
Agreement, the Funding 2 Bank Account Agreement and any other of the
Legal Agreements (excluding all of Funding 2's right, title,
interest and benefit in the Funding 2 Deed of Charge) to which
Funding 2 is a party); (iii) a first fixed charge (which may take
effect as a floating charge) of Funding 2's right, title, interest
and benefit in the Funding 2 Bank Accounts; (iv) a first fixed
charge (which may take effect as a floating charge) of Funding 2's
right, title, interest and benefit in all Authorized Investments
purchased with moneys standing to the credit of the Funding 2 Bank
Accounts; and (v) a first floating charge over all the assets and
the undertaking of Funding 2 which are not effectively subject to a
fixed charge or assignment by way of security (including all the
assets and undertakings of Funding 2 which are situated in or
governed by the laws of Scotland).
26
(o) Investment Company Act
Neither Funding 2 nor the Mortgages Trustee is an "investment
company" as defined in the Investment Company Act, and the offer and
sale of the Notes in the United States will not subject Funding 2 or
the Mortgages Trustee to registration under, or result in a
violation of, the Investment Company Act.
(p) United States Income Tax
Neither Funding 2 nor the Mortgages Trustee will engage in any
activities in the United States (directly or through agents), derive
any income from United States sources as determined under the Code,
or 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 the Code.
(q) Accountants
PricewaterhouseCoopers LLP are a registered public accounting firm
and independent with respect to Funding 2 within the meaning of the
Securities Act.
(r) Legal Agreements
The representations and warranties given by Funding 2 and the
Mortgages Trustee in the Legal Agreements are true and accurate, and
the description of the Legal Agreements as set out in the Prospectus
is true and correct in all material respect.
Unless otherwise indicated, the representations and warranties set out in
this Clause 6 shall be made on the date of the Prospectus and, if
different, the date of this Agreement.
7. REPRESENTATIONS AND WARRANTIES OF NRPLC
NRPLC represents and warrants to, and agrees with, the Underwriters and
each of them and, in the case of the matters referred to in Clause 7(f)
below, to and with the Mortgages Trustee that:
(a) Incorporation, Capacity and Authorization
It is a public limited company duly incorporated and validly
existing under the laws of England and Wales, with full power and
authority to conduct its business as described in the Prospectus, to
execute this Agreement and the Legal Agreements to which it is a
party and to undertake and perform the obligations expressed to be
assumed by it herein and therein and has taken all necessary action
to approve and authorize the same and is lawfully qualified to do
business in England and Wales; and NRPLC has not taken any corporate
action nor (to the best of its knowledge and belief) have any other
steps been taken or legal proceedings been started or threatened
against it for its winding-up, dissolution or reorganization or for
the appointment of a receiver, administrator, administrative
receiver or similar officer of it or of any or all of its assets or
revenues; and it is not in liquidation.
(b) Validity of Legal Agreements
This Agreement has been duly authorized, executed and delivered by
NRPLC and constitutes, and the other Legal Agreements to which NRPLC
is a party will be duly
27
authorized by NRPLC prior to the Closing Date and on the Closing
Date will constitute, legal, valid and binding obligations of NRPLC,
enforceable against NRPLC in accordance with their respective terms,
subject as to enforceability to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation or other
similar laws affecting the enforcement of creditors rights generally
and to general equitable principles.
(c) Related Security
NRPLC has not received notice of, and no solicitor employed in the
NRPLC Solicitors' Department is actually aware of, any material
litigation or claim, of any pending material litigation or claim,
calling into question NRPLC's title to any Related Security or the
value of any security therefor or its right to assign any such
Related Security to the Mortgages Trustee.
(d) Consents
All consents, approvals and authorizations of all United Kingdom
regulatory authorities required on the part of NRPLC for or in
connection with the execution and performance of the transactions
contemplated by the Legal Agreements to which NRPLC is a party have
been, or will be prior to the Closing Date be, obtained and are, or
will prior to the Closing Date be, in full force and effect
including, without limiting the generality of the foregoing, NRPLC
having received a standard license under the Consumer Credit Act
1974 and NRPLC being registered under the DPA.
(e) Compliance
The authorization of the terms and conditions of this Agreement, the
execution and delivery of the Legal Agreements to which NRPLC is a
party, the implementation of the transactions contemplated by such
Legal Agreements and compliance with the terms of such Legal
Agreements do not and will not (i) conflict with, or result in a
breach of, any of the terms or provisions of, or constitute a
default under, the Memorandum and Articles of Association of NRPLC,
or any agreement or instrument to which NRPLC is a party or by which
it or any of its assets or properties is bound, where such breach or
default might have a material adverse effect in the context of the
issue of the Notes; or (ii) infringe any existing applicable law,
rule, regulation, judgment, order or decree of any government,
governmental body or court having jurisdiction over NRPLC or any of
its assets or properties; or (iii) result in the creation or
imposition of any mortgage, charge, pledge, lien or other security
interest on any of its assets or properties, other than those
created in, or imposed by, the Legal Agreements themselves.
(f) No Material Misstatements or Omissions
(I) The conditions to the use of a registration statement on Form
S-3 under the Securities Act have been satisfied. The Registration
Statement, at the time it became effective, any post-effective
amendment thereto, at the time it became effective, the Preliminary
Prospectus, as of its date, and the Prospectus, as of the date of
the Prospectus Supplement, complied and on the Closing Date will
comply in all material respects with the applicable requirements of
the Securities Act and the Rules and Regulations and the Trust
Indenture Act and the rules and regulations of the Commission
thereunder. The Registration Statement, as of the applicable
effective date as to each part of the Registration Statement and any
amendment thereto
28
pursuant to Rule 430B(f)(2) under the Act, did not include any
untrue statement of a material fact and did not omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that NRPLC
makes no representations, warranties or agreements as to: (i) that
part of the Registration Statement which constitutes the Statement
of Eligibility and Qualification (Form T-1) of the Note Trustee
under the Trust Indenture Act, and (ii) statements or omissions in
the Registration Statement made in reliance upon and in conformity
with the Underwriter Information;
(II) the Preliminary Prospectus (except for the omission of any
pricing related information and any information relating to an
Issuer Swap Provider), as of its date and as of the Time of Sale,
did not contain an untrue statement of a material fact and did not
omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that NRPLC makes
no representations, warranties or agreements as to statements or
omissions in the Preliminary Prospectus made in reliance upon and in
conformity with the Underwriter Information;
(III) the Time of Sale Information (except for the omission of any
pricing related information and any information relating to an
Issuer Swap Provider), as of the Time of Sale, did not, and as of
the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that NRPLC
makes no representations, warranties or agreements as to statements
or omissions in the Time of Sale Information made in reliance upon
and in conformity with the Underwriter Information;
(IV) the Prospectus, as of the date of the Prospectus Supplement and
as of the Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however, that NRPLC makes no representations, warranties
or agreements as to statements or omissions in the Prospectus (or
any amendment or supplement thereto) made in reliance upon and in
conformity with the Underwriter Information; and
(V) the documents incorporated by reference in the Preliminary
Prospectus and the Prospectus, when they were filed with the
Commission under the Exchange Act, conformed in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder.
(g) Beneficial Owner
As of April 24, 2006, following the completion of the assignment of
the New Mortgage Portfolio to the Mortgages Trustee pursuant to and
in accordance with the Mortgage Sale Agreement and pursuant to and
in accordance with the terms of the Mortgages Trust Deed, the
Mortgages Trustee has held the New Mortgage Portfolio and has held
and will continue to hold the Mortgage Portfolio on a bare trust for
the benefit of Funding, Funding 2 and NRPLC in undivided shares
absolutely.
29
(h) Litigation
It is not a party to, and no solicitor in NRPLC's Solicitors'
Department is actually aware of, any actions, suits or proceedings
in relation to claims or amounts which could, if determined
adversely to NRPLC, materially adversely affect NRPLC's ability to
perform its obligations under the Legal Agreements.
(i) Mortgage Sale Agreement and Mortgages Trust Deed
The representations and warranties given by NRPLC in the Mortgage
Sale Agreement are true and accurate in all material respects as
when stated to be made and the representations and warranties given
by NRPLC in the Mortgages Trust Deed are true and accurate in all
material respects as when stated to be made.
Unless otherwise indicated, the representations and warranties set out in
this Clause 7 shall be made on the date of the Prospectus and, if
different, the date of this Agreement.
8. COVENANTS OF THE MASTER ISSUER, FUNDING 2, THE MORTGAGES TRUSTEE AND
NRPLC
8.1 Each of the Master Issuer and, where expressly provided, Funding 2, the
Mortgages Trustee and NRPLC severally (and not jointly) covenants to, and
agrees each for itself with, the Underwriters and each of them that:
(a) The Registration Statement
The Master Issuer, Funding 2 and the Mortgages Trustee will (i) file
with the Commission the final Prospectus (in a form approved by the
Lead Underwriters) pursuant to Rule 424(b) under the Securities Act
not later than the relevant time period prescribed therein, (ii)
make no further amendment to the Registration Statement or
supplement to the Prospectus prior to the Closing Date except as
permitted herein, (iii) advise the Lead Underwriters, promptly after
they receive notice thereof, of the time, during the period a
Prospectus is required to be delivered in connection with the offer
and sale of the US Notes, when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed with the
Commission, (iv) furnish the Lead Underwriters with copies thereof
for their review prior to filing and not to file any such proposed
amendment or supplement to which the Lead Underwriters reasonably
object and (v) provide evidence satisfactory to the Lead
Underwriters of such timely filing(s).
(b) Signed Prospectus
The Master Issuer will deliver to the Underwriters, without charge,
on the date of this Agreement and during the Prospectus Delivery
Period, such number of copies of the Prospectus (including all
amendments and supplements thereto) as the Underwriters may
reasonably request, and the Master Issuer will furnish to the Lead
Underwriters on the date of this Agreement four copies of the
Prospectus signed by a duly authorized director of the Master
Issuer. The Master Issuer will also promptly furnish each
Underwriter (to the extent not already furnished) and its counsel
one signed copy of the Registration Statement as originally filed
and each amendment or supplement thereto, including all consents and
exhibits filed therewith and all documents incorporated by reference
therein. As used herein, the term "Prospectus
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Delivery Period" means such period of time after the first date of
the public offering of the US Notes as in the opinion of counsel for
the Underwriters a prospectus relating to the US Notes is required
by law to be delivered in connection with sales of the US Notes by
any Underwriter or dealer.
(c) Notify Material Omission
If, during such period of time after the first date of the public
offering of the US Notes that a prospectus is required by law to be
delivered in connection with offers and sales by the Underwriters or
any dealer, (i) any event shall have occurred as a result of which
the Prospectus, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is
delivered, not misleading, or (ii) if for any other reason it shall
be necessary to amend or supplement the Registration Statement or
the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Registration Statement or the
Prospectus in order to comply with the Securities Act or the
Exchange Act, then the Master Issuer will promptly (A) notify the
Underwriters, (B) prepare and file with the Commission any amendment
or supplement to the Registration Statement or the Prospectus which
corrects such statement or omission or effects such compliance, and
(C) furnish without charge to the Underwriters as many copies as the
Lead Underwriters may reasonably request of an amended Prospectus or
a supplement to the Prospectus which will correct such statement or
omission or effect such compliance. The provisions of Clauses 5(a),
5(b), 5(c), 5(o), 6(a), 6(b), 6(c), 7(a) and 7(f) shall be deemed to
be repeated by, as applicable, the Master Issuer, Funding 2, the
Mortgages Trustee and NRPLC (as applicable) as of the date of each
such amended or supplemented Prospectus on the basis that each
reference to "Prospectus" in such provisions of Clauses 5, 6 and 7
shall be deemed to be a reference to the Prospectus as amended or
supplemented as of such date.
(d) Notify Change
Without prejudice to its obligations under Clause 8.1(c), the Master
Issuer will notify the Underwriters promptly of any change affecting
any of its representations, warranties, covenants, agreements or
indemnities in this Agreement at any time prior to payment of the
gross underwriting proceeds for the Notes being made to the Master
Issuer on the Closing Date and will take such steps as may be
reasonably requested by the Lead Underwriters to remedy and/or
publicize the same.
(e) Official Announcements
Between the date of this Agreement and the Closing Date (both dates
inclusive) none of NRPLC, the Master Issuer, Funding 2 or the
Mortgages Trustee will, without the prior approval of the Lead
Underwriters on behalf of the Underwriters (such approval not to be
unreasonably withheld or delayed), make any official announcement
which would have an adverse effect on the marketability of the US
Notes.
(f) Stamp Duty
(i) The Master Issuer will pay any stamp duty, issue,
registration, documentary or other taxes of a similar nature
and duties that it is required to pay under any obligation in
the Legal Agreements to which it is a party payable in the
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United Kingdom, Belgium, Luxembourg or the United States,
including interest and penalties, in connection with the
creation, issue, distribution and offering of the Notes, or in
connection with the execution, delivery or enforcement of any
of the Legal Agreements to which it is a party together with
any value added, turnover or similar tax payable in respect of
that amount (and references in this Agreement to such amount
shall be deemed to include any such taxes so payable in
addition to it);
(ii) Funding 2 will pay any stamp duty, issue, registration,
documentary or other taxes of a similar nature and duties that
it is required to pay under any obligation in the Legal
Agreements to which it is a party payable in the United
Kingdom or the United States, including interest and
penalties, or in connection with the execution, delivery or
enforcement of any of the Legal Agreements to which it is a
party (other than in respect of the execution, delivery or
enforcement of the Mortgages Trust Deed and any Legal
Agreement to which the Master Issuer is a party) together with
any value added, turnover or similar tax payable in respect of
that amount (and references in this Agreement to such amount
shall be deemed to include any such taxes so payable in
addition to it); and
(iii) The Mortgages Trustee will pay any stamp duty, issue,
registration, documentary or other taxes of a similar nature
and duties that it is required to pay under any obligation in
the Legal Agreements to which it is a party payable in the
United Kingdom, Jersey, Channel Islands or the United States,
including interest and penalties, or in connection with the
execution, delivery or enforcement of the Mortgages Trust Deed
(including any amendment thereto) and the Mortgage Sale
Agreement (including any amendment thereto) (together with any
value added, turnover or similar tax payable in respect of
that amount (and references in this Agreement to such amount
shall be deemed to include any such taxes so payable in
addition to it)) but will be promptly reimbursed an amount
equal to any such payments by the Beneficiaries in accordance
with the terms of the Mortgages Trust Deed.
(g) United States Income Tax
The Master Issuer will not engage in any activities in the United
States (directly or through agents), will not derive any income from
United States sources as determined under the Code 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 the Code.
(h) Payment of Fees, Charges, Costs and Duties
(i) Without prejudice to the generality of Clause 10.1, the Master
Issuer will pay all and any fees, charges, costs and duties
and any stamp and other similar taxes or duties that it is
required to pay under the Legal Agreements to which it is a
party, including interest and penalties, arising from or in
connection with the creation of the security for the Notes and
the obligations of the Master Issuer under the Supplemental
Issuer Trust Deed and for the other amounts to be secured as
contemplated by the Issuer Deed of Charge (as amended by the
Issuer Deed of Accession), and the perfection of such security
at any time;
32
(ii) Without prejudice to the generality of Clause 10.1, Funding 2
will pay all and any fees, charges, costs and duties and any
stamp and other similar taxes or duties that it is required to
pay under the Legal Agreements to which it is a party,
including interest and penalties, arising from or in
connection with the creation of the security for the Loan
Tranches under the Global Loan Facility and for the other
amounts to be secured as contemplated by the Funding 2 Deed of
Charge and the perfection of such security at any time; and
(iii) Without prejudice to the generality of Clause 10.1, the
Mortgages Trustee will pay all and any fees, charges, costs
and duties and any stamp and other similar taxes or duties
that it is required to pay under the Legal Agreements to which
it is a party, including interest and penalties, arising from
or in connection with the purchase of the Related Security
(and related property and rights) excluding H.M. Land Registry
fees and/or Registers of Scotland fees (as applicable) (it
being agreed that registration or recording at H.M. Land
Registry and/or the Registers of Scotland (as applicable) of
the transfer of the Related Security to the Mortgages Trustee
will not be applied for except in the circumstances specified
in the Administration Agreement); but on the basis that the
Mortgages Trustee will be reimbursed such fees, charges, costs
and duties and any stamp and other similar taxes or duties
(including interest and penalties) by the Beneficiaries
pursuant to the terms of the Mortgages Trust Deed.
(i) Perform All Required Actions
On or prior to the Closing Date each of NRPLC, the Master Issuer,
Funding 2 and the Mortgages Trustee will do all things reasonably
within each of their respective powers and required of each of them
on such date under the terms of the Legal Agreements to which each
is a party.
(j) Review of Related Security
NRPLC will deliver to the Lead Underwriters on or about the date of
this Agreement a letter (referred to as the auditors' pool audit
report) addressed to the Underwriters or their affiliates (relating
to the review by PricewaterhouseCoopers LLP of the Mortgage Loans
and their Related Security) dated on or about the date of this
Agreement in the agreed form addressed to NRPLC and the Underwriters
from PricewaterhouseCoopers LLP.
(k) Conditions Precedent
The Master Issuer will use all reasonable endeavors to procure
satisfaction on or before the Closing Date of the conditions
referred to in Clause 9 of this Agreement.
(l) Issuer Cash Management Agreement
The Master Issuer will use all reasonable endeavors to procure that
NRPLC complies with its obligations under the Issuer Cash Management
Agreement.
(m) Administration Agreement
Funding 2 and the Mortgages Trustee will use all reasonable
endeavors to procure that NRPLC complies with its obligations under
the Administration Agreement.
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(n) Charges and Security Interests
(i) The Master Issuer will procure that each of the charges and
other security interests created by or contained in the Issuer
Deed of Accession is registered within all applicable time
limits in all appropriate registers; and
(ii) Funding 2 will procure that each of the charges and other
security interests created by or contained in the Funding 2
Deed of Charge is registered within all applicable time limits
in all appropriate registers.
(o) Ratings
None of NRPLC, the Master Issuer, Funding 2 or the Mortgages Trustee
will take, or cause to be taken, any action and none of them will
permit any action to be taken which it knows or has reason to
believe would result in the US Notes not being assigned an AAA
rating for the Series 2006-2 Class A1 Notes and the Series 2006-2
Class A4 Notes, an AA rating for the Series 2006-2 Class B1 Notes
and the Series 2006-2 Class B2 Notes, an A rating for the Series
2006-2 Class M1 Notes and the Series 2006-2 Class M2 Notes and a BBB
rating for the Series 2006-2 Class C1 Notes by Fitch Ratings Ltd.
("Fitch Ratings"); an Aaa rating for the Series 2006-2 Class A1
Notes and the Series 2006-2 Class A4 Notes, an Aa3 rating for the
Series 2006-2 Class B1 Notes and the Series 2006-2 Class B2 Notes,
an A2 rating for the Series 2006-2 Class M1 Notes and the Series
2006-2 Class M2 Notes and a Baa2 rating for the Series 2006-2 Class
C1 Notes by Moody's Investors Service Limited ("Moody's"); and an
AAA rating for the Series 2006-2 Class A1 Notes and the Series
2006-2 Class A4 Notes, an AA rating for the Series 2006-2 Class B1
Notes and the Series 2006-2 Class B2 Notes, an A rating for the
Series 2006-2 Class M1 Notes and the Series 2006-2 Class M2 Notes
and a BBB rating for the Series 2006-2 Class C1 Notes by Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("Standard & Poor's").
(p) Legal Agreements
Prior to closing on the Closing Date none of NRPLC, the Master
Issuer, Funding 2 or the Mortgages Trustee will amend the terms of
the executed Legal Agreements, nor execute any of the other Legal
Agreements other than in the agreed form, without the consent of the
Lead Underwriters (such consent not to be unreasonably withheld or
delayed).
(q) Commission Filings
The Master Issuer, Funding 2 and the Mortgages Trustee will file, in
a timely manner, with the Commission during any period during which
a prospectus relating to the Notes is required to be delivered under
the Securities Act until three months after the Closing Date (the
"Marketing Period"), all documents (and any amendments to previously
filed documents) required to be filed by them pursuant to Sections
13(a), 13(c) or 15(d) of the Exchange Act; provided that none of the
Master Issuer, Funding 2 or the Mortgages Trustee will file any such
document or amendment unless the Master Issuer, Funding 2 and the
Mortgages Trustee have furnished the Lead Underwriters with copies
for their review prior to filing and none of them will file any such
proposed document or amendment until the Underwriters have been
consulted and given a reasonable opportunity to comment on such
document or amendment.
34
(r) Copies of Filings and Commission
If during the Marketing Period there is (i) any amendment to the
Registration Statement, (ii) any amendment or supplement to the
Prospectus, or (iii) any material document filed by the Master
Issuer, Funding 2 or the Mortgages Trustee with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
including but not limited to (A) any interim or any report submitted
to the Commission on Form 6-K ("Form 6-K") or Form 20-F ("Form
20-F") under the Exchange Act and the rules and regulations
thereunder or (B) any amendment of or supplement to any such
document, the Master Issuer, Funding 2 and the Mortgages Trustee, as
the case may be, will furnish a copy thereof to each Underwriter,
and counsel to the Underwriters.
(s) Notice to Underwriters of Certain Events
During the Marketing Period, the Master Issuer will advise the
Underwriters immediately (i) when any post-effective amendment to
the Registration Statement becomes effective, (ii) of any request by
the Commission whether written or oral, for an amendment or
supplement to the Registration Statement, to any Prospectus or to
any material document filed by the Master Issuer, Funding 2 or the
Mortgages Trustee with or submitted to the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act and the rules
and regulations thereunder or for any additional information and the
Master Issuer, Funding 2 and the Mortgages Trustee will afford the
Underwriters a reasonable opportunity to comment on any such
proposed amendment or supplement, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or the initiation or
threat of any stop order proceeding or of any challenge to the
accuracy or adequacy of the Prospectus or any document incorporated
by reference therein, (iv) of receipt by NRPLC or the Master Issuer
of any notification with respect to the suspension of the
qualification of the US Notes for sale in any jurisdiction or the
initiation or threat of any proceeding for that purpose and (v) of
any downgrading in the rating of the Notes or any debt securities of
NRPLC or the Master Issuer by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act), or if any such organisation shall have informed
NRPLC or the Master Issuer or made any public announcement that any
such organisation has under surveillance or review its rating of any
debt securities of NRPLC or the Master Issuer (other than an
announcement with positive implications of a possible upgrading, and
no implication of a possible downgrading of such rating) as soon as
such announcement is made or NRPLC or the Master Issuer is so
informed.
(t) Stop Orders
The Master Issuer will use its best efforts to prevent the issuance
of any stop order or the suspension of any qualification and if,
during the Marketing Period, the Commission shall issue a stop order
suspending the effectiveness of the Registration Statement or such
qualification of the US Notes for sale in any jurisdiction is
suspended, the Master Issuer will make every reasonable effort to
obtain the lifting of that order or suspension at the earliest
possible time.
35
(u) Blue Sky Qualifications
The Master Issuer will co-operate with the Underwriters to qualify
the US Notes for offering and sale under the securities laws of such
jurisdictions of the United States as the Underwriters may
designate, to maintain such qualifications in effect for as long as
may be required for the distribution of the US Notes and to file
such statements and reports as may be required by the laws of each
jurisdiction in which the US Notes have been qualified as above
provided that in connection therewith the Master Issuer shall not be
required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction or to take any
other action that would subject it to service of process in suits in
any jurisdiction other than those arising out of the offering or
sale of the US Notes in such jurisdiction or to register as a dealer
in securities or to become subject to taxation in any jurisdiction.
8.2 NRPLC covenants to and agrees with the Underwriters and each of them
that:
(a) Notify Change
NRPLC will notify the Underwriters promptly of any change affecting
any of its representations, warranties, covenants, agreements or
indemnities in this Agreement at any time prior to payment of the
gross underwriting proceeds of the Notes being made to the Master
Issuer on the Closing Date and will take such steps as may be
reasonably requested by the Lead Underwriters to remedy and/or
publicize the same. In the event that the Prospectus is amended or
supplemented pursuant to Clause 8.1(c) above, then the
representations and warranties contained in Clause 7(f) shall be
deemed to be repeated by NRPLC as of the date of such amended
Prospectus or supplement to the Prospectus, on the basis that each
reference to "Prospectus" in Clause 7(f) shall be deemed to be a
reference to the Prospectus as amended or supplemented as at such
date.
(b) Perform All Required Actions
On or prior to the Closing Date, NRPLC will do all things reasonably
within its power and required of it on such date under the terms of
the Legal Agreements to which it is a party.
(c) Legal Agreements
Prior to closing on the Closing Date NRPLC will not amend the terms
of any of the already executed Legal Agreements, nor execute any of
the other Legal Agreements other than in the agreed form, without
the consent of the Lead Underwriters (such consent not to be
unreasonably withheld or delayed).
8.3 Written Communications
(a) The following terms have the specified meanings for purposes of this
Agreement:
"Bloomberg Submission" means the pricing material (in electronic
form) sent via Bloomberg e-mail by the Underwriters to investors;
provided, that references to Bloomberg Submission in this Agreement
shall mean the final pricing information accurately displayed on
Bloomberg;
36
"Free Writing Prospectus" means and includes any information
relating to the US Notes disseminated by the Master Issuer or any
Underwriter that constitutes a "free writing prospectus" within the
meaning of Rule 405 under the Securities Act;
"Issuer Information" means (1) the information contained in any
Underwriter Free Writing Prospectus (as defined below) which
information is also included in the Preliminary Prospectus (other
than Underwriter Information), (2) information in the Preliminary
Prospectus or provided by the Master Issuer, Funding 2, the
Mortgages Trustee or NRPLC that is used to calculate or create any
Derived Information, in each case in its final form and as filed
under Rule 433 under the Securities Act and (3) any computer tape in
respect of the US Notes or the related Mortgage Loans furnished by
the Master Issuer, Funding 2, the Mortgages Trustee or NRPLC to any
Underwriter; and
"Derived Information" means such written information regarding the
US Notes as is disseminated by any Underwriter to a potential
investor, which information is neither (1) Issuer Information nor
(2) contained in the Registration Statement, the Preliminary
Prospectus, the Prospectus or any amendment or supplement to any of
them, taking into account information incorporated therein by
reference (other than information incorporated by reference from any
information regarding the US Notes that is disseminated by any
Underwriter to a potential investor).
(b) The Master Issuer will not disseminate to any potential investor any
information relating to the US Notes that constitutes a "written
communication" within the meaning of Rule 405 under the Securities
Act, other than the Time of Sale Information and the Prospectus,
unless the Master Issuer has obtained the prior consent of the Lead
Underwriters (which consent will not be unreasonably withheld).
(c) Neither the Master Issuer nor any Underwriter shall disseminate or
file with the Commission any information relating to the US Notes in
reliance on Rule 167 or 426 under the Securities Act, nor shall the
Master Issuer or any Underwriter disseminate any Underwriter Free
Writing Prospectus (as defined below) "in a manner reasonably
designed to lead to its broad unrestricted dissemination" within the
meaning of Rule 433(d) under the Securities Act.
(d) The Master Issuer and the Underwriters each agree that any Free
Writing Prospectus prepared by it shall comply in all material
respects with the Securities Act and the Rules and Regulations and
shall bear the following legend, or a substantially similar legend
that complies with Rule 433 under the Securities Act:
The issuing entity has filed a registration statement (including a
prospectus) with the Commission for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the
depositor has filed with the Commission for more complete
information about the issuing entity and this offering. You may get
these documents for free by visiting EDGAR on the Commission Web
site at www.sec.gov. Alternatively, the issuing entity, any
underwriter or any dealer participating in the offering will arrange
to send you the prospectus if you request it by calling toll-free
[_________].
(e) In the event the Master Issuer or NRPLC becomes aware that, as of
the Time of Sale, any Time of Sale Information contains or contained
any untrue statement of material fact or omits or omitted to state a
material fact necessary in order to make the statements contained
therein (when read in conjunction with all Time of Sale
37
Information) in the light of the circumstances under which they were
made, not misleading (a "Defective Prospectus"), the Master Issuer
or NRPLC shall promptly notify the Lead Underwriters of such untrue
statement or omission no later than one business day after discovery
and the Master Issuer shall, if requested by the Lead Underwriters,
prepare and deliver to the Underwriters a Corrected Prospectus.
(f) In the event that any Underwriter shall incur any costs to any
investor in connection with the reformation of the Contract of Sale
with such investor that received a Defective Prospectus, the Master
Issuer agrees to reimburse such Underwriter for such costs.
(g) Each Underwriter represents, warrants, covenants and agrees with
the Master Issuer that:
(i) Other than the Term Sheet, the Preliminary Prospectus and the
Prospectus, it has not made, used, prepared, authorized,
approved or referred to and will not prepare, make, use,
authorize, approve or refer to any "written communication" (as
defined in Rule 405 under the Securities Act) that constitutes
an offer to sell or solicitation of an offer to buy the US
Notes; provided, however, that (A) each Underwriter may
prepare and convey one or more "written communications" (as
defined in Rule 405 under the Securities Act) containing no
more than the following: (1) information included in the
Preliminary Prospectus with the consent of the Master Issuer,
(2) information relating to the class, size, rating, price,
CUSIPs, coupon, yield, spread, benchmark, status and/or legal
maturity date of the US Notes, the weighted average life,
expected final payment date, the trade date and payment window
of one or more classes of US Notes and any credit enhancement
expected to be provided with respect to the US Notes, (3) the
eligibility of the US Notes to be purchased by ERISA plans,
(4) a column or other entry showing the status of the
subscriptions for the US Notes (both for the issuance as a
whole and for each Underwriter's retention) and/or expected
pricing parameters of the US Notes and (5) any "ABS
informational and computational materials" as defined in Item
1101(a) of Regulation AB under the Securities Act (each such
written communication, an "Underwriter Free Writing
Prospectus"); (B) unless otherwise consented to by the Master
Issuer, no Underwriter Free Writing Prospectus shall be
conveyed if, as a result of such conveyance, the Master Issuer
shall be required to make any registration or other filing
solely as a result of such Underwriter Free Writing Prospectus
pursuant to Rule 433(d) under the Securities Act other than
the filing of the final terms of the US Notes pursuant to Rule
433(d)(5)(ii) of the Securities Act; and (C) each Underwriter
will be permitted to provide information (including the
Bloomberg Submission) customarily included in confirmations of
sale of securities and notices of allocations and information
delivered in compliance with Rule 134 under the Securities
Act.
(ii) If a Defective Prospectus has been corrected with a Corrected
Prospectus, it shall comply with the requirements for
reformation of the original Contract of Sale, as described in
Section IV.A.2.c. of the Commission's Securities Offering
Reform Release No. 33-8591.
(h) The Master Issuer agrees to file with the Commission when required
under the Rules and Regulations the following:
38
(i) any Free Writing Prospectus that is included in the Time of
Sale Information (any such Free Writing Prospectus, an "Issuer
Free Writing Prospectus");
(ii) subject to the Underwriters' compliance with Clause 8.3(g),
any Underwriter Free Writing Prospectus at the time required
to be filed; and
(iii) any Free Writing Prospectus for which the Master Issuer or any
person acting on its behalf provided, authorized or approved
information that is prepared and published or disseminated by
a person unaffiliated with the Master Issuer or any other
offering participant that is in the business of publishing,
radio or television broadcasting or otherwise disseminating
communications.
(i) NRPLC, Funding 2 and the Mortgages Trustee will cause any
Issuer Free Writing Prospectus with respect to the US Notes to
be filed with the Commission to the extent required by Rule
433 under the Securities Act.
(j) Notwithstanding the provisions of Clauses 8.3(h) and 8.3(i),
the Master Issuer, Funding 2, the Mortgages Trustee and NRPLC
will not be required to file any Free Writing Prospectus that
does not contain substantive changes from or additions to a
Free Writing Prospectus previously filed with the Commission.
9. CONDITIONS PRECEDENT
9.1 The obligation of the Underwriters under this Agreement to subscribe for
the US Notes is subject to the following conditions precedent:
(a) The Registration Statement
(i) If a post-effective amendment is required to be filed with the
Commission, such post-effective amendment shall have become
effective not later than 9:00 a.m. New York City time on the
date hereof;
(ii) If filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus, and any such
supplement, will be filed in the manner and within the
applicable time period prescribed for such filing by Rule
424(b) and in accordance with Clause 5(a) hereof; and
(iii) No stop order suspending the effectiveness of the Registration
Statement or any post-effective amendment shall be in effect,
and no proceedings for such purpose shall be pending before or
threatened by the Commission.
(b) Execution of Legal Agreements and the Global Notes
The execution and delivery by all parties thereto of the Legal
Agreements and the Global Notes representing each class of the US
Notes on or prior to the Closing Date.
(c) Admission to Trading
The US Notes having been admitted to the Official List, on the
Market and the London Stock Exchange having agreed to admission of
the US Notes to trading on the Market on or about the Closing Date.
39
(d) Legal Opinions
On or prior to the Closing Date, there having been delivered to the
Master Issuer, the Underwriters, the Note Trustee and the Issuer
Security Trustee copies of the following, in form and substance
satisfactory to the Lead Underwriters, the Note Trustee, the Issuer
Security Trustee and the Rating Agencies, dated the Closing Date:
(i) Opinions of Sidley Austin, legal and tax advisers as to
English law and legal counsel as to US federal securities law
and New York law to NRPLC, addressed to NRPLC, the Mortgages
Trustee, Funding 2, the Master Issuer, the Underwriters, the
Dealers, the Note Trustee and the Issuer Security Trustee;
(ii) A disclosure letter of Sidley Austin, legal counsel as to US
federal securities law to NRPLC, addressed to the
Underwriters;
(iii) An opinion of Sidley Austin LLP, tax counsel as to US federal
income tax law, addressed to the Underwriters;
(iv) An opinion of Mourant du Feu & Jeune, legal advisers as to
Jersey law to the Mortgages Trustee, addressed to Funding 2,
the Mortgages Trustee, the Underwriters, the Dealers, the Note
Trustee and the Issuer Security Trustee;
(v) An opinion of Tods Murray LLP, legal and tax advisers as to
Scots law to NRPLC, addressed to NRPLC, the Mortgages Trustee,
Funding 2, the Master Issuer, the Underwriters, the Dealers,
the Note Trustee and the Issuer Security Trustee;
(vi) A disclosure letter of Allen & Overy LLP, legal advisers as to
US federal securities law to the Underwriters and the Dealers,
addressed to the Underwriters and the Dealers; and
(vii) An opinion of in-house counsel for each Issuer Swap Provider,
addressed to the Issuer, the Note Trustee, the Issuer Security
Trustee, NRPLC and the Underwriters.
(e) Auditors' Letter
There having been addressed and delivered to the Underwriters (i) a
letter, dated on or about the date of this Agreement, in form and
substance satisfactory to the Lead Underwriters, containing
statements and information of the type ordinarily included in
auditors' "comfort letters" with respect to certain financial,
statistical and other information contained in the Preliminary
Prospectus, the Term Sheet and the Prospectus from
PricewaterhouseCoopers LLP, and (ii) a letter (referred to as a
"bring down letter"), dated the Closing Date, in form and substance
satisfactory to the Lead Underwriters, containing statements with
respect to matters specified in sub-clause (i) above, in each case
from PricewaterhouseCoopers LLP.
(f) Additional Auditors' Letter
On or about the date of this Agreement, there having been addressed
and delivered to the Underwriters a letter, in form and substance
satisfactory to the Lead Underwriters, containing statements and
information of the type ordinarily included in auditors'
40
"comfort letters" with respect to certain financial, statistical and
other information contained in the Preliminary Prospectus and the
Prospectus from KPMG LLP.
(g) Certified Constitutional Documents
On or prior to the Closing Date, there having been delivered to the
Lead Underwriters on behalf of the Underwriters a copy, certified by
a duly authorized director or the company secretary of, as
applicable, the Master Issuer, Funding 2 and the Mortgages Trustee
of: (i) the Memorandum and Articles of Association of each of the
Master Issuer, Funding 2 and the Mortgages Trustee; (ii) the
resolution of the Board of Directors of each of the Master Issuer,
Funding 2 and the Mortgages Trustee authorizing the execution of
this Agreement and the other Legal Agreements and the entry into and
performance of the transactions contemplated thereby; and (iii) in
respect of the Master Issuer, the issue of the Notes and the entry
into and performance of the transactions contemplated thereby.
(h) Accuracy of Representations
At the Closing Date: (i) the representations and warranties of the
Master Issuer, Funding 2, the Mortgages Trustee and NRPLC in this
Agreement being true, accurate and correct at, and as if made on,
the Closing Date and the Master Issuer, Funding 2, the Mortgages
Trustee and NRPLC having performed all of their obligations in the
Legal Agreements to be performed on or before the Closing Date; and
(ii) there having been delivered to the Underwriters a certificate
to that effect signed by a duly authorized officer of, as
applicable, the Master Issuer, Funding 2, the Mortgages Trustee and
NRPLC, dated the Closing Date and confirming that, since the date of
this Agreement, there has been no adverse change, nor any
development involving a prospective adverse change, in or affecting
the operations, properties, financial condition or prospects of the
Master Issuer, Funding 2, the Mortgages Trustee or NRPLC which is
material in the context of the issue of the Notes.
(i) Circumstances for Termination
On or prior to the Closing Date, in the opinion of the Lead
Underwriters (after consultation with NRPLC, if practicable), none
of the circumstances described in Clause 12.1(c) or 12.1(d) having
arisen.
(j) Ratings
Receipt of notification from Fitch Ratings, Moody's and Standard &
Poor's that the ratings for the Notes described in the Prospectus
have been assigned either without conditions or subject only to the
execution and delivery on or before the Closing Date of the Legal
Agreements and legal opinions in all material respects in the form
in which they shall then have been executed and delivered on or
prior to the Closing Date, there not having been a public
announcement from any of the above rating agencies that such agency
has revised downwards or withdrawn or placed on review or
"creditwatch" with negative implications or with implications of a
possible change that does not indicate the direction of such
possible change (or other similar publication of formal review by
the relevant rating agency) any existing credit rating assigned to
the Notes or the long term debt of NRPLC.
41
(k) Other Issues
The Reg S Notes having been or being issued and subscribed and paid
for pursuant to the Subscription Agreement and the Programme
Agreement prior to or contemporaneously with the issue, subscription
and payment for the US Notes hereunder.
(l) Material Adverse Event
There not having been between the date of this Agreement and the
Closing Date any change or any development or event reasonably
likely to involve a prospective change which would, in the judgement
of the Lead Underwriters, be materially adverse to the financial or
trading condition of the Master Issuer, Funding 2, the Mortgages
Trustee or NRPLC from that set forth in the Time of Sale Information
or the Prospectus, or rendering untrue and incorrect any of the
representations and warranties contained in Clauses 5, 6 and 7 as
though the said representations and warranties had been given on the
Closing Date with reference to the facts and circumstances
prevailing at that date nor the failure of the Master Issuer,
Funding 2, the Mortgages Trustee or NRPLC to perform each and every
covenant to be performed by it pursuant to the Legal Agreements, the
Mortgage Loans and the Related Security on or prior to the Closing
Date.
(m) Solvency Certificates
(i) The Master Issuer having furnished or caused to be furnished
to the Underwriters and the Note Trustee a solvency
certificate, dated the Closing Date, of a duly authorized
director of the Master Issuer in the agreed form;
(ii) Funding 2 having furnished or caused to be furnished to the
Master Issuer, NRPLC and the Issuer Security Trustee a
solvency certificate, dated the Closing Date, of a duly
authorized director of Funding 2 in the agreed form;
(iii) The Mortgages Trustee having furnished or caused to be
furnished to the Underwriters, the Master Issuer, the Issuer
Security Trustee and NRPLC a solvency certificate, dated the
Closing Date, of a duly authorized director of the Mortgages
Trustee in the agreed form; and
(iv) NRPLC having furnished or caused to be furnished to the
Underwriters, the Master Issuer, the Issuer Security Trustee,
Funding 2 and the Mortgages Trustee a solvency certificate,
dated the Closing Date, of a duly authorized officer or
director of NRPLC in the agreed form.
(n) Mortgage Sale Agreement
All of the steps required by Clause 4 of the Mortgage Sale Agreement
for the purposes of the purchase of a New Mortgage Portfolio (as
defined therein) by the Mortgages Trustee from NRPLC on the
applicable Assignment Date and related rights to be acquired from
NRPLC pursuant thereto having been taken.
9.2 Prior to the Closing Date, there shall be furnished to the Lead
Underwriters such further information, certificates, opinions and
documents as the Lead Underwriters may reasonably request.
42
9.3 If any of the conditions specified in this Clause 9 have not been
fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in
this Agreement shall not be reasonably satisfactory in all material
respects in form and substance to the Lead Underwriters, this Agreement
and all obligations of the Underwriters hereunder may be cancelled
(provided, however, that the liability of the Master Issuer in relation to
expenses as provided under, or under any arrangements referred to in,
Clause 10 and any liability arising before or in relation to such
termination shall not be cancelled) at, or at any time prior to, the
Closing Date by the Lead Underwriters. Notice of such cancellation shall
be given to the Master Issuer in writing or by telephone or facsimile
confirmed in writing.
9.4 The Lead Underwriters, on behalf of the Underwriters, may, in their
discretion, waive compliance with the whole or any part of this Clause 9.
10. EXPENSES
10.1 General Expenses
The Master Issuer covenants to pay or cause to be paid the following
(together with (i) in respect of taxable supplies made to the Master
Issuer, any amount in respect of value added tax or similar tax payable in
respect thereof against production of a valid tax invoice and (ii) in
respect of taxable supplies made to a person other than the Master Issuer,
any amount in respect of Irrecoverable VAT (for the purposes of this
Agreement "Irrevocable VAT" means any amount in respect of VAT incurred by
a party to the Transaction Documents (for the purposes of this definition,
a "Relevant Party") as part of a payment in respect of which it is
entitled to be indemnified under the relevant Transaction Documents to the
extent that the Relevant Party does not or will not receive and retain a
credit or repayment of such VAT as input tax (as that expression is
defined in section 24(1) of the Value Added Tax Act 1994) for the
prescribed accounting period (as that expression is used in section 25(1)
of the Value Added Tax Act 1994) to which such input tax relates) or
similar tax payable in respect thereof against production of a valid tax
invoice): (a) the fees, disbursements and expenses of the Master Issuer's
legal advisers and accountants and all other expenses of the Master Issuer
in connection with the issue (including without limitation any filing fees
payable to the Commission in connection with the registration of the US
Notes under the Securities Act and any fees payable in connection with the
qualification of the US Notes for offering and sale pursuant to any NASD
regulatory provisions or under any applicable United States state
securities, Blue Sky or similar laws) and listing of the Notes (including
without limitation, any advertisements required in connection therewith);
the preparation and delivery of each class of the Notes in global form and
(if required) definitive form; the costs of the initial delivery and
distribution of the Notes (including, without limitation, transportation,
packaging and insurance) and the initial fees and expenses of The
Depository Trust Company in relation to the Notes (excluding any such fees
and expenses arising as a result of any transfer of the Notes); the
preparation and printing of the Time of Sale Information and the
Prospectus (in proof, preliminary and final form) and any amendments and
supplements thereto and the mailing and delivery of copies of this
Agreement to the Underwriters; (b) the cost of printing or reproducing the
Legal Agreements and any other documents prepared in connection with the
offering, issue and initial delivery of the Notes; (c) the fees and
expenses of the Note Trustee and the Issuer Security Trustee (including
fees and expenses of legal advisers to the Note Trustee and the Issuer
Security Trustee), the US Paying Agent and the Agent Bank in each case
reasonably incurred in connection with the preparation and execution of
the Legal Agreements and any other relevant documents and the issue of the
Notes and compliance with the Conditions of the Notes; (d) the fees and
expenses incurred or payable in connection with obtaining a rating for the
Notes from Fitch Ratings, Moody's and Standard & Poor's and
43
annual fees in connection with such rating or any other rating from such
institution for the Notes; (e) the fees and expenses payable in connection
with obtaining and maintaining the admission to trading of the Notes on
the Market; (f) reasonable out-of-pocket expenses (excluding legal
expenses) incurred by the Lead Underwriters on behalf of the Underwriters
in connection with the transactions contemplated hereby; and (g) any
reasonable amount in respect of the fees and disbursements of the
Underwriters' legal advisers in relation thereto.
10.2 Reimbursement
The Master Issuer will reimburse the Underwriters for all amounts in
connection with the issue of the Notes which it has agreed to pay pursuant
to Clause 10.1.
For the avoidance of doubt, references to costs and expenses in this
Agreement shall be deemed to include, in addition, references to any
irrecoverable UK value added tax payable in respect of such costs and
expenses.
10.3 Gross Underwriting Proceeds
The Master Issuer undertakes that on the Closing Date it will apply the
gross underwriting proceeds for the Notes forthwith in making the relevant
Loan Tranches to Funding 2 pursuant to the terms of the Global
Intercompany Loan Agreement. Funding 2 undertakes that it will apply the
proceeds of such Loan Tranches in accordance with Clause 4.1 (Purpose and
application of a Loan Tranche) of the Global Intercompany Loan Agreement.
11. INDEMNIFICATION
11.1 Issuer, Funding 2, Mortgages Trustee and NRPLC Indemnity
Each of the Master Issuer, Funding 2, the Mortgages Trustee and NRPLC
jointly and severally agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each an "Indemnified Person") against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of
them may become subject, including without limitation any such losses,
claims, damages or liabilities arising under the Securities Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Preliminary Prospectus, the
Prospectus, the Time of Sale Information, the Issuer Information or any
Issuer Free Writing Prospectus or any information provided by the Master
Issuer or NRPLC to any holder or prospective purchaser of US Notes (or in
any amendment thereof or supplement thereto) in the Registration
Statement, the Preliminary Prospectus, the Time of Sale Information, the
Prospectus, the Issuer Information or any Issuer Free Writing Prospectus
(or in any amendment thereof or supplement thereto) or arise out of or are
based upon the omission or alleged omission to state therein a material
fact (excluding the pricing related information and information relating
to an Issuer Swap Provider omitted from the Preliminary Prospectus and the
Time of Sale Information) required to be stated therein or necessary in
order to make the statements therein (in the case of the Term Sheet, when
considered together with the Preliminary Prospectus), in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such Indemnified Person, as incurred, for any legal or
other reasonable expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Master Issuer, Funding 2, the
44
Mortgages Trustee and NRPLC will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or
omission or alleged omission or any representation, warranty or covenant
made by NRPLC, the Master Issuer, Funding 2 or the Mortgages Trustee in
this Agreement, or made in (x) the Registration Statement, the Preliminary
Prospectus, the Time of Sale Information (excluding the pricing related
information and information relating to an Issuer Swap Provider omitted
from the Preliminary Prospectus and the Time of Sale Information), the
Prospectus, any Issuer Free Writing Prospectus or the Issuer Information
(or any amendment thereof or supplement thereto) in reliance upon and in
conformity with the Underwriter Information or (y) any Derived Information
or the Bloomberg Submission unless such untrue statement or alleged untrue
statement or omission or alleged omission made in any Derived Information
or the Bloomberg Submission results from an error or omission in the
Preliminary Prospectus, the Time of Sale Information, the Prospectus or
the Issuer Information. The Master Issuer, Funding 2, the Mortgages
Trustee and NRPLC further agree to reimburse each Underwriter and each
such controlling person for any legal and other expenses reasonably
incurred by such Underwriter or controlling person in investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action, as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Master
Issuer, Funding 2, the Mortgages Trustee and NRPLC may otherwise have to
any Underwriter or any controlling person of any Underwriter.
No Underwriter or controlling person of any Underwriter shall have any
duty or obligation, whether as fiduciary for any Indemnified Person or
otherwise, to recover any such payment or to account to any other person
for any amounts paid to it under this Clause 11.1.
The foregoing shall be subject to the following:
(a) Any right which at any time the Mortgages Trustee has under the
existing or future laws of Jersey whether by virtue of the droit de
discussion or otherwise to require that recourse be had to the
assets of any other person before any claim is enforced against such
person in respect of the obligations hereby assumed by such person
is hereby abandoned and waived.
(b) The Mortgages Trustee undertakes that if at any time any person
indemnified sues the Mortgages Trustee in respect of any such
obligations and the person in respect of whose obligations the
indemnity is given is not sued also, the Mortgages Trustee shall not
claim that such person be made a party to the proceedings and each
agrees to be bound by this indemnity whether or not it is made a
party to legal proceedings for the recovery of the amount due or
owing to the person indemnified, as aforesaid, by the person in
respect of whose obligations the indemnity is given and whether the
formalities required by any law of Jersey whether existing or future
in regard to the rights or obligations of sureties shall or shall
not have been observed.
(c) Any right which the Mortgages Trustee may have under the existing or
future laws of Jersey whether by virtue of the droit de division or
otherwise to require that any liability under this indemnity be
divided or apportioned with any other person or reduced in any
manner whatsoever is hereby abandoned and waived.
11.2 Underwriters' Indemnity
Each Underwriter, severally and not jointly, agrees to indemnify and hold
harmless the Master Issuer, Funding 2, the Mortgages Trustee and NRPLC,
each of their directors and each of their officers who signs the
Registration Statement, their employees and each person who
45
controls the Master Issuer or NRPLC within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, to the same
extent as the foregoing indemnity from the Master Issuer to each
Underwriter, but only with reference to (x) the Underwriter Information
furnished to the Master Issuer, Funding 2, the Mortgages Trustee or NRPLC
specifically for inclusion in the Registration Statement, the Preliminary
Prospectus, the Time of Sale Information or the Prospectus (or in any
amendment or supplement thereto) or (y) any Derived Information or the
Bloomberg Submission; provided, however, that the indemnity with respect
to clause (y) above shall not apply to any untrue statement or alleged
untrue statement or omission or alleged omission made in any Derived
Information or the Bloomberg Submission that results from an error or
omission in the Preliminary Prospectus, the Time of Sale Information, the
Prospectus or the Issuer Information. This indemnity agreement will be in
addition to any liability which any Underwriter may otherwise have.
11.3 Proceedings
Promptly after receipt by an indemnified party under this Clause 11 of
notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party
under this Clause 11, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under Clause 11.1 or 11.2 above
unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event relieve
the indemnifying party from any obligation to any indemnified party other
than the indemnification obligation provided in Clause 11.1 or 11.2 above.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Clause 11 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided that each Underwriter, the
Underwriters as a group, or the Master Issuer, Funding 2, the Mortgages
Trustee and NRPLC, as the case may be, shall have the right to employ
separate counsel to represent such Underwriter and its controlling
persons, the Underwriters and their respective controlling persons or the
Master Issuer, Funding 2, the Mortgages Trustee and NRPLC and their
respective controlling persons, as the case may be, who may be subject to
liability arising out of any claim in respect of which indemnity may be
sought by such indemnified parties under this Clause 11 if in the
reasonable judgement of any Underwriter, the Underwriters acting together,
or any of the Master Issuer, Funding 2, the Mortgages Trustee and NRPLC,
as the case may be, it is advisable for such indemnified parties to be
represented by separate counsel, and in that event the fees and expenses
of such separate counsel (and local counsel) shall be paid by the
indemnifying party. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel selected by the
indemnifying party, the indemnifying party will not be liable to such
indemnified party under this Clause 11 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof unless (i) the indemnified party shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the preceding sentence (it being
understood, however that the indemnifying party shall not be liable for
the expenses of more than one such separate counsel (and local counsel)
representing the indemnified parties under Clause 11.1 or 11.2 hereof),
(ii) the indemnifying party has authorized (acting reasonably) the
employment of more than one such separate
46
counsel (and local counsel) representing the employed counsel satisfactory
to the indemnified party to represent the indemnified party, or (iii) the
indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall be only
in respect of the counsel referred to in such clause (i) or (iii). The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by this
Clause 11, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such
indemnifying party of such request and (ii) such indemnifying party shall
not have either reimbursed the indemnified party in accordance with such
request or objected to such request in writing prior to the date of such
settlement. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or
could have been a party and in respect of which indemnity could have been
sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
11.4 Contribution
In the event that the indemnity provided in Clause 11.1 or 11.2 is
unavailable to or insufficient to hold harmless an indemnified party for
any reason, the Master Issuer, NRPLC, Funding 2, the Mortgages Trustee and
the Underwriters severally agree to contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Master Issuer, NRPLC, Funding 2, the
Mortgages Trustee and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits
received by the Master Issuer, NRPLC, Funding 2, the Mortgages Trustee and
the Underwriters from the offering of the US Notes. If the allocation
provided by the immediately preceding sentence is unavailable for any
reason, the Master Issuer, NRPLC, Funding 2, the Mortgages Trustee and the
Underwriters severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Master Issuer, NRPLC, Funding 2, the Mortgages
Trustee and the Underwriters in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Master Issuer, Funding
2, the Mortgages Trustee and NRPLC shall be deemed to be equal to the
Issue Price (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total Selling Commissions
and the Management and Underwriting Commission, in each case as set forth
in Clause 1.4. Relative fault shall be determined by reference to among
other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Master Issuer, Funding 2, the
Mortgages Trustee or NRPLC on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Master Issuer, NRPLC, Funding 2, the Mortgages Trustee and
the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable consideration
referred to above. Notwithstanding the provisions of this Clause 11.4, no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled
47
to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Clause 11, each person who
controls an Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act and each director,
officer, employee and agent of an Underwriter shall have the same rights
to contribution as such Underwriter, and each person who controls the
Master Issuer, Funding 2, the Mortgages Trustee or NRPLC within the
meaning of either the Securities Act or the Exchange Act, each officer of
the Master Issuer who shall have signed the Registration Statement, each
employee and each director of the Master Issuer, Funding 2, the Mortgages
Trustee or NRPLC shall have the same rights to contribution as the Master
Issuer, Funding 2, the Mortgages Trustee or NRPLC, as the case may be,
subject in each case to the applicable terms and conditions of this Clause
11.4. Notwithstanding the foregoing, in no case shall the Underwriter
(except as may be provided in any agreement among Underwriters relating to
the offering of the Notes) be responsible for any amount in excess of the
Selling Commission or Management and Underwriting Commission applicable to
the Notes purchased by such Underwriter hereunder.
12. TERMINATION
12.1 Lead Underwriters' Ability to Terminate
Notwithstanding any other provision of this Agreement, the Lead
Underwriters on behalf of the Underwriters may, by notice to the Master
Issuer given at any time after the execution and delivery of this
Agreement and prior to the Closing Date, terminate this Agreement in any
of the following circumstances:
(a) if there shall have come to the notice of the Underwriters any
breach of, or any event rendering untrue or incorrect in any
material respect, any of the warranties and representations
contained in Clauses 5, 6 or 7 (or any deemed repetition thereof) or
failure to perform any of the Master Issuer's or NRPLC's covenants
or agreements in this Agreement in any material respect; or
(b) if any condition specified in Clause 9 has not been satisfied or
waived by the Lead Underwriters on behalf of the Underwriters; or
(c) if in the opinion of the Lead Underwriters, circumstances shall be
such as: (i) to prevent or to a material extent restrict payment for
the US Notes in the manner contemplated in this Agreement or (ii) to
a material extent prevent or restrict settlement of transactions in
the US Notes in the market or otherwise; or
(d) if in the opinion of the Lead Underwriters, there shall have been
(i) any change in national or international political, legal, tax or
regulatory conditions or (ii) any calamity or emergency, which has
in its view caused a substantial deterioration in the price and/or
value of the US Notes; or
(e) upon termination of the Subscription Agreement; or
(f) if (i) trading in securities generally on the New York Stock
Exchange, the American Stock Exchange, the Market or the
over-the-counter market shall have been suspended or minimum prices
shall have been established on such exchanges or such market; (ii) a
banking moratorium shall have been declared by US federal or New
York State or UK regulatory authorities; (iii) there shall have
occurred any change or any development involving a prospective
change, in or affecting particularly the business or properties of
the Master Issuer, Funding 2, the Mortgages Trustee or NRPLC, which
in the judgement of the Lead Underwriters materially impairs the
48
investment quality of the US Notes or makes it impracticable or
inadvisable to market the US Notes or (iv) if in the judgement of
the Lead Underwriters, it otherwise becomes impracticable or
inadvisable to proceed with the offering of the US Notes.
12.2 Consequences of Termination
Upon such notice being given this Agreement shall terminate and be of no
further effect and no party hereto shall be under any liability to any
other in respect of this Agreement except that (a) the Master Issuer shall
remain liable under Clause 10 for the payment of the costs and expenses
already incurred or incurred in consequence of such termination and (b)
(i) the indemnity agreement and contribution provisions set forth in
Clause 11, (ii) the obligations of the Master Issuer and NRPLC and the
representations and warranties of the Underwriters made in Clause 3.2(b)
of this Agreement, which would have continued in accordance with Clause 13
had the arrangements for the underwriting and issue of the US Notes been
completed, shall so continue.
13. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS
13.1 The representations, warranties, agreements, undertakings and indemnities
in this Agreement will continue in full force and effect notwithstanding
completion of the arrangements for the subscription and issue of the US
Notes or any investigation made by or on behalf of any Underwriter or any
controlling person or any of its representatives, directors, officers,
agents or employees or any of them.
13.2 Save for their respective responsibilities to comply with the relevant
representations set forth herein, neither the Master Issuer, Funding 2,
the Mortgages Trustee nor NRPLC shall have any responsibility in respect
of the legality of the Underwriters or other persons offering and selling
the US Notes in any jurisdiction or in respect of the US Notes qualifying
for sale in any jurisdiction.
14. NOTICES
14.1 All communications pursuant to this Agreement will be in writing and will
be delivered at or sent by facsimile transmission to the following
addresses:
(i) if to the Master Issuer,
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: The Company Secretary
Facsimile: +44 (0) 20 7606 0643
With a copy to:
Northern Rock House
Gosforth
Newcastle upon Tyne
NE3 4PL
Attention: Securitization, Risk Operations
Facsimile: +44 (0) 191 279 4929
49
(ii) if to NRPLC,
Northern Rock House
Gosforth
Newcastle upon Tyne
NE3 4PL
Attention: Securitization, Risk Operations
Facsimile: +44 (0) 191 279 4929
(iii) if to the Underwriters,
Barclays Capital Inc.
200 Park Avenue
New York, New York 10166
Attention: Transaction Management
Facsimile: + 1 212 412 7680
J.P. Morgan Securities Inc. 270 Park Avenue, 6th Floor New York, New
York 10017 Attention: ABS Syndicate Facsimile: + 1 212 834 6754
Morgan Stanley & Co. International Limited
20 Cabot Square
Canary Wharf
London E14 4QW
Attention: European Head of Securitised Product Group
Facsimile: +44 (0) 20 7056 0612
(iv) if to Funding 2,
Fifth Floor
100 Wood Street
London
EC2V 7EX
Attention: The Company Secretary
Facsimile: +44 (0) 20 7606 0643
(v) if to the Mortgages Trustee,
22 Grenville Street
St. Helier
Jersey
JE4 8PX
Attention: The Company Secretary
Facsimile: +44 (0) 1534 609 333
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14.2 Any communication so sent by letter shall take effect at the time of
actual delivery to the addressee, and any communication so sent by
facsimile transmission shall take effect upon acknowledgement of receipt
by the recipient. Any communication to be delivered to any party under
this Agreement which is to be sent by facsimile transmission will be
written legal evidence.
14.3 The Mortgages Trustee agrees that the process by which any proceedings in
England are begun may be secured on it by being delivered to Granite
Finance Trustees Limited c/o Mourant & Co. Capital (SPV) Limited, 69 Park
Lane, Croydon CR9 1TQ, or otherwise at the registered office of Mourant &
Co. Capital (SPV) Limited, attn: The Company Secretary. If such person is
not or ceases to be effectively appointed to accept service of process on
the Mortgages Trustee's behalf the Mortgages Trustee shall, on the written
demand of the Lead Underwriters, appoint a further person in England to
accept service of process on its behalf and, failing such appointment
within 15 days, the Lead Underwriters shall be entitled to appoint such a
person by written notice to the Mortgages Trustee. Nothing in this
sub-clause shall affect the right of the Lead Underwriters to serve
process in any other manner permitted by law.
15. TIME
Time shall be of the essence of this Agreement.
16. NON PETITION AND LIMITED RECOURSE
Each of the Underwriters agrees with the Master Issuer, Funding 2 and the
Mortgages Trustee, that it shall not, until the expiry of one year and one
day after the payment of all sums outstanding and owing under the Notes
(in respect of the Master Issuer) and until the expiry of one year and one
day after the payment of all sums outstanding and owing under any Loan
Tranche made to Funding 2 by the Master Issuer or any other company (in
respect of the Mortgages Trustee) take any corporate action or other steps
or legal proceedings for the winding-up, dissolution, arrangement,
reconstruction or re-organization or for the appointment of a liquidator,
receiver, manager, administrator, administrative receiver or similar
officer of the Master Issuer, the Mortgages Trustee or Funding 2 or any,
or all of, their respective assets or revenues.
Each of the Underwriters agrees with the Mortgages Trustee that to the
extent that any amounts due to such Underwriter from the Mortgages Trustee
hereunder exceed the assets of the Mortgages Trustee (excluding, for the
avoidance of doubt, the assets comprised in the Mortgages Trust) available
to pay such amounts and any other amounts due to other creditors of the
Mortgages Trustee then the claims of such Underwriter in relation to any
such excess amounts shall be extinguished and shall not thereafter revive.
To the extent permitted by law, no recourse under any obligation, covenant
or agreement of any person contained in this Agreement shall be had
against any shareholder, officer or director of the Master Issuer, Funding
2 or the Mortgages Trustee, by the enforcement of any assessment or by any
legal proceedings, by virtue of any statute or otherwise; it being
expressly agreed and understood that this Agreement is a corporate
obligation of each of the Master Issuer, Funding 2 and the Mortgages
Trustee 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 the Master Issuer,
Funding 2 or the Mortgages Trustee contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by such
person of any such obligations, covenants or agreements, either under any
applicable law
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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
Agreement.
17. GOVERNING LAW AND JURISDICTION
17.1 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the conflict of
laws provisions thereof.
17.2 Jurisdiction
Each of the parties hereto irrevocably agrees that, except as otherwise
set forth in this paragraph, any state or federal court sitting in the
City of New York shall have exclusive jurisdiction to hear and determine
any suit, action or proceeding and to settle any dispute arising out of or
relating to this Agreement and, for such purposes, irrevocably submits to
the jurisdiction of such courts. Each of the Mortgages Trustee, Funding 2,
the Master Issuer and NRPLC hereby appoints the CT Corporation System at
111 Eighth Avenue, New York, NY 10011, or, if otherwise, its principal
place of business in the City of New York from time to time, as its agent
for service of process and agrees that service of any process, summons,
notice or document by hand delivery or registered mail upon such agent
shall be effective service of process for any suit, action or proceeding
brought in any such court. Each of the Mortgages Trustee, Funding 2, the
Master Issuer and NRPLC irrevocably and unconditionally waives any
objection to the laying of venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum. Each of the
Mortgages Trustee, Funding 2, the Master Issuer and NRPLC agrees that a
final judgment in any such suit, action or proceeding brought in any such
court shall be conclusive and binding upon each of the Mortgages Trustee,
Funding 2, the Master Issuer and NRPLC and may be enforced in any other
court to whose jurisdiction each of the Mortgages Trustee, Funding 2, the
Master Issuer and NRPLC is or may in the future be subject, by suit upon
judgment. Each of the Mortgages Trustee, Funding 2, the Master Issuer and
NRPLC further agrees that nothing herein shall affect the Underwriters'
right to effect service of process in any other manner permitted by law or
to bring a suit, action or proceeding (including a proceeding for
enforcement of a judgment) in any other court or jurisdiction in
accordance with applicable law.
18. COUNTERPARTS
This Agreement may be executed in any number of counterparts (manually
or by facsimile) all of which, taken together, shall constitute one and
the same agreement and any party may enter into this Agreement by
executing a counterpart.
19. AUTHORITY OF THE LEAD UNDERWRITERS
Any action by the Underwriters hereunder may be taken by Barclays
Capital Inc., J.P. Morgan Securities Inc. and Morgan Stanley & Co.
International Limited as representatives on behalf of the Underwriters,
and any such action taken by Barclays Capital Inc., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. International Limited shall be
binding upon the Underwriters.
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20. SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon each of
the parties hereto, any controlling persons referred to herein and their
respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm
or corporation any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. No purchaser
of US Notes from the Underwriters shall be deemed to be a successor by
reason merely of such purchase.
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IN WITNESS WHEREOF this Agreement has been entered on the date stated at the
beginning.
GRANITE MASTER ISSUER PLC
By: /s/ Ian Bowden
NORTHERN ROCK PLC
By: /s/ Colin Taylor
GRANITE FINANCE FUNDING 2 LIMITED
By: /s/ Ian Bowden
GRANITE FINANCE TRUSTEES LIMITED
By: /s/ Dean Godwin
J.P. MORGAN SECURITIES INC.
For itself and on behalf of the several Underwriters listed in Schedule 1
hereto (other than Morgan Stanley & Co. International Limited)
By: /s/ Richard J. Perez
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By: /s/ Brent Williams
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SCHEDULE 1
- ----------------------------------------------------------------------------------------------------------------------
Underwriters $810,000,000 of Series $1,275,000,000 of Series
2006-2 Class A1 Notes 2006-2 Class A4 Notes
- ----------------------------------------------------------------------------------------------------------------------
Barclays Capital Inc. $227,000,000 $373,300,000
- ----------------------------------------------------------------------------------------------------------------------
J.P. Morgan Securities Inc. $227,000,000 $373,400,000
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley & Co. International Limited $227,000,000 $373,300,000
- ----------------------------------------------------------------------------------------------------------------------
Citigroup Global Markets Limited $25,800,000 $31,000,000
- ----------------------------------------------------------------------------------------------------------------------
Credit Suisse Securities (Europe) Limited $25,800,000 $31,000,000
- ----------------------------------------------------------------------------------------------------------------------
Deutsche Bank Securities Inc. $25,800,000 $31,000,000
- ----------------------------------------------------------------------------------------------------------------------
Lehman Brothers Inc. $25,800,000 $31,000,000
- ----------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner & Smith $25,800,000
Incorporated $31,000,000
- ----------------------------------------------------------------------------------------------------------------------
Total $810,000,000 $1,275,000,000
- ----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------
Underwriters $29,000,000 $36,000,000 $25,000,000 $25,000,000 $75,000,000
of Series of Series of Series of Series of Series
2006-2 Class 2006-2 Class 2006-2 Class 2006-2 Class 2006-2 Class
B1 Notes B2 Notes M1 Notes M2 Notes C1 Notes
- ----------------------------------------------------------------------------------------------------------------------
Barclays Capital Inc. $9,700,000 $12,000,000 $8,300,000 $8,300,000 $25,000,000
- ----------------------------------------------------------------------------------------------------------------------
J.P. Morgan Securities Inc. $9,700,000 $12,000,000 $8,300,000 $8,300,000 $25,000,000
- ----------------------------------------------------------------------------------------------------------------------
Morgan Stanley & Co. International Limited $9,600,000 $12,000,000 $8,400,000 $8,400,000 $25,000,000
- ----------------------------------------------------------------------------------------------------------------------
Total $29,000,000 $36,000,000 $25,000,000 $25,000,000 $75,000,000
- ----------------------------------------------------------------------------------------------------------------------
56