DATED [_____] SEPTEMBER, 2002
GRANITE MORTGAGES 02-2 PLC
as Current Issuer
- AND -
THE BANK OF NEW YORK
as Note Trustee
- AND -
OTHERS
- --------------------------------------------------------------------------------
ISSUER DEED OF CHARGE
- --------------------------------------------------------------------------------
SIDLEY AUSTIN BROWN & WOOD
1 THREADNEEDLE STREET
LONDON EC2R 8AW
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
REF: 30507-13/546941
CONTENTS
CLAUSE PAGE NO.
1. Interpretation........................................................2
2. Covenant to Pay and to Perform........................................3
3. Current Issuer Security...............................................4
4. Release of Current Issuer Charged Property............................9
5. Declaration of Trust.................................................10
6. Restrictions on Exercise of Certain Rights...........................10
7. Enforcement..........................................................13
8. Upon Enforcement.....................................................16
9. Receiver.............................................................18
10. Further Assurance and Power of Attorney..............................21
11. Crystallisation......................................................23
12. Provisions relating to the Security..................................24
13. Protection of Third Parties..........................................25
14. Set-Off..............................................................26
15. Representations and Covenants........................................26
16. Note Trustee Provisions..............................................31
17. Modification and Waiver..............................................32
18. Miscellaneous Provisions.............................................33
19. Rights cumulative....................................................34
20. Assignment...........................................................35
21. Non Petition Covenant; Corporate Obligations.........................35
22. Notices..............................................................35
23. Third Party Rights...................................................36
24. Execution in Counterparts; Severability..............................37
25. Governing Law and Jurisdiction; Appropriate Forum....................37
SCHEDULE 1 FORM OF SECURITY POWER OF ATTORNEY................................38
SCHEDULE 2 CURRENT ISSUER POST-ENFORCEMENT PRIORITY OF PAYMENTS..............41
SCHEDULE 3 FORM OF NOTICE OF ASSIGNMENT......................................44
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THIS DEED OF CHARGE is made on [_____] September, 2002
BETWEEN:
(1) GRANITE MORTGAGES 02-2 PLC (registered number 4482804) a public limited
company incorporated under the laws of England and Wales whose registered
office is at Fifth Floor, 100 Wood Street, London EC2V 7EX as Current
Issuer;
(2) THE BANK OF NEW YORK, a New York banking corporation whose London branch
address is at One Canada Square, 48th Floor, London E14 5AL, United
Kingdom, in its capacity as Note Trustee;
(3) CITIBANK, N.A., acting through its office at 5 Carmelite Street, London
EC4Y OPA, in its capacity as Principal Paying Agent;
(4) CITIBANK, N.A., acting through its office at 5 Carmelite Street, London
EC4Y OPA, in its capacity as Agent Bank;
(5) CITIBANK, N.A., acting through its office at 5 Carmelite Street, London
EC4Y 0PA, in its capacity as Registrar;
(6) CITIBANK, N.A., acting through its office at 5 Carmelite Street, London
EC4Y OPA, in its capacity as Transfer Agent;
(7) CITIBANK, N.A., acting through its office at 5 Carmelite Street, London
EC4Y OPA, in its capacity as Account Bank;
(8) CITIBANK, N.A., acting through its office at 111 Wall Street, 14th Floor,
Zone 3, New York, N.Y. 10043, U.S.A., in its capacity as US Paying Agent;
(9) NORTHERN ROCK PLC (registered number 03273685) a public limited company
incorporated under the laws of England and Wales whose registered office is
at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL, in its
capacity as Current Issuer Cash Manager;
(10) NORTHERN ROCK PLC (registered number 03273685) a public limited company
incorporated under the laws of England and Wales whose registered office is
at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL, in its
capacity as Basis Rate Swap Provider;
(11) [_____], whose registered office is at [_____] in its capacity as Dollar
Currency Swap Provider;
(12) [_____], whose registered office is at [_____] in its capacity as Euro
Currency Swap Provider;
(13) LAW DEBENTURE CORPORATE SERVICES LIMITED (registered number 3388362) a
private limited company incorporated under the laws of England and Wales
whose
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registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX as
the Corporate Services Provider.
WHEREAS:
(A) This Deed secures and will secure, inter alia, the Current Issuer Secured
Obligations.
(B) The Current Issuer will on the date of this Current Issuer Deed of Charge
issue the Current Issuer Notes pursuant to the Current Issuer Trust Deed.
(C) The Paying Agents, the Agent Bank, the Registrar and the Transfer Agent
have agreed to provide certain agency services on behalf of the Current
Issuer for the benefit of the Noteholders on the terms set out in the
Current Issuer Paying Agent and Agent Bank Agreement.
(D) The Current Issuer Cash Manager has agreed to act as cash manager and to
provide certain administration and cash management services to the Current
Issuer on the terms set out in the Current Issuer Cash Management
Agreement.
(E) The Account Bank has agreed to provide certain bank account services to the
Current Issuer on the terms set out in the Current Issuer Bank Account
Agreement.
(F) The Dollar Currency Swap Provider has agreed to enter into dollar/sterling
currency swaps with the Current Issuer in relation to Dollar Notes on the
terms set out in the Current Issuer Dollar Currency Swap Agreements.
(G) The Euro Currency Swap Provider has agreed to enter into euro/sterling
currency swaps with the Current Issuer in relation to the Euro Notes on the
terms set out in the Current Issuer Euro Currency Swap Agreements.
(I) The Basis Rate Swap Provider has agreed to enter into an interest rate swap
with the Current Issuer on the terms set out in the Current Issuer Basis
Rate Swap Agreement.
(J) The Corporate Services Provider has agreed to act as corporate services
provider to, inter alios, the Current Issuer on the terms set out in the
Current Issuer Corporate Services Agreement.
(K) This Current Issuer Deed of Charge is supplemental to the Current Issuer
Trust Deed of even date herewith and made between the Current Issuer and
the Note Trustee relating to the issuance of the Current Issuer Notes.
NOW THIS DEED WITNESSES AS FOLLOWS:
1. INTERPRETATION
1.1 DEFINITIONS: The provisions of:
(a) the Master Definitions Schedule as amended and restated by (and
appearing as Appendix 1 to) the Master Definitions Schedule [Third]
Amendment Deed made on
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[_____] September, 2002 between, among others, the Seller, Funding and
the Mortgages Trustee, and
(b) the Issuer Master Definitions Schedule signed for the purposes of
identification by Sidley Austin Brown & Wood and Allen & Overy on
[_____] September, 2002,
(as the same have been and may be amended, varied or supplemented from time
to time with the consent of the parties hereto) are expressly and
specifically incorporated into and shall apply to this Agreement.
The Issuer Master Definitions Schedule specified above shall prevail to the
extent that it conflicts with the Master Definitions Schedule.
1.2 CONSTRUCTION: In this Current Issuer Deed of Charge, except where the
context otherwise requires:
(a) the terms of the Current Issuer Trust Deed and of any agreement in
existence at the date hereof between the parties hereto are
incorporated in this Current Issuer Deed of Charge but (unless
otherwise expressly provided for herein) only to the extent required
to ensure that any proposed disposition of the Current Issuer Charged
Property contained in this Current Issuer Deed of Charge is a valid
disposition in accordance with Section 2(1) of the Law of Property
(Miscellaneous Provisions) Act 1989;
(b) a reference in this Current Issuer Deed of Charge to any property,
assets, undertakings or rights includes, unless the context otherwise
requires, present and future property, assets, undertakings or rights;
and
(c) "THIS CURRENT ISSUER DEED OF CHARGE" means this Current Issuer Deed of
Charge and all the Schedules hereto (as from time to time modified
and/or supplemented in accordance with the provisions set out herein)
and each other document or deed entered into pursuant hereto (as from
time to time modified/and or supplemented as aforesaid) and expressed
to be supplemental hereto.
2. COVENANT TO PAY AND TO PERFORM
Subject to the provisions of the Current Issuer Transaction Documents
(including, in the case of the Current Issuer Notes, to Clause 2 (Covenant
to Repay etc.) of the Current Issuer Trust Deed), the Current Issuer
covenants with and undertakes to the Note Trustee for itself and as trustee
for the Current Issuer Secured Creditors that it will:
(a) duly and punctually pay and discharge all monies and liabilities
whatsoever which now are or at any time hereafter may (whether before
or after demand) become due and payable by the Current Issuer to the
Note Trustee (whether for its own account or as trustee for the
Current Issuer Secured Creditors) or to any of the other Current
Issuer Secured Creditors, whether actually or contingently, under this
Current Issuer Deed of Charge and/or any of the other Current Issuer
Transaction Documents (including without limitation the Current Issuer
Notes); and
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(b) observe, perform and satisfy all its other obligations and liabilities
under this Current Issuer Deed of Charge and/or any of the other
Current Issuer Transaction Documents (including without limitation the
Current Issuer Notes),
PROVIDED THAT every payment in respect of any Current Issuer Transaction
Document made to the relevant Current Issuer Secured Creditor in the manner
provided in such Current Issuer Transaction Document shall operate in
satisfaction pro tanto of the relative covenant by the Current Issuer in
this Clause 2 (Covenant to Pay and Perform).
3. CURRENT ISSUER SECURITY
3.1 FUNDING CHARGED PROPERTY:
(a) The Current Issuer, by way of first fixed security for the payment or
discharge of the Current Issuer Secured Obligations, subject to Clause
4 (Release of Current Issuer Charged Property), hereby assigns to the
Note Trustee, save to the extent that any of the Current Issuer's
rights and claims in respect thereof derive from property which is
situated in Jersey at any relevant time, all of its right, title,
benefit and interest and all claims, present and future, in and to,
the security and all property, assets and rights and claims held on
trust by the Security Trustee for the payment or discharge of the
relevant Funding Secured Obligations pursuant to the Funding Deed of
Charge including all rights to receive payment of any amount which may
become payable to the Current Issuer thereunder and all rights to
serve notices and/or make demands thereunder and/or to take such steps
as are required to cause payments to become due and payable thereunder
and all rights of action in respect of any breach thereof and all
rights to receive damages or obtain relief in respect thereof and the
proceeds of any of the foregoing, TO HOLD the same unto the Note
Trustee absolutely; and
(b) To the intent that the Note Trustee shall have a security interest in
accordance with the Security Interests (Jersey) Law 1983 (the "JERSEY
SECURITY LAW") (and as secured party for the purposes of such law) for
payment or discharge of the Current Issuer Secured Obligations,
subject to Clause 4 (Release of Current Issuer Charged Property), the
Current Issuer (as debtor for the purposes of the Jersey Security Law)
hereby assigns to the extent that the same may be situate in Jersey at
any relevant time to the Note Trustee all of its right, title, benefit
and interest and all claims, present and future, in and to, the
security and all property, assets and rights and claims held on trust
by the Security Trustee for the payment or discharge of the relevant
Funding Secured Obligations pursuant to the Funding Deed of Charge
including all rights to receive payment of any amount which may become
payable to the Current Issuer thereunder and all rights to serve
notices and/or make demands thereunder and/or to take such steps as
are required to cause payments to become due and payable thereunder
and all rights of action in respect of any breach thereof and all
rights to receive damages or obtain relief in respect thereof and the
proceeds of any of the foregoing, TO HOLD the same unto the Note
Trustee absolutely.
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3.2 CONTRACTUAL RIGHTS:
(a) The Current Issuer, by way of first fixed security for the payment or
discharge of the Current Issuer Secured Obligations, subject to Clause 4
(Release of Current Issuer Charged Property), hereby assigns to the Note
Trustee, save to the extent that any of the Current Issuer's rights and
claims in respect thereof derive from property which is situated in Jersey
at any relevant time, all of its right, title, benefit and interest,
present and future, in, to and under:
(i) the Current Issuer Intercompany Loan Agreement;
(ii) (to the extent not assigned pursuant to Clause 3.1(a)) the Funding
Deed of Charge (including, for the avoidance of doubt, the Current
Issuer Deed of Accession);
(iii) the Current Issuer Swap Agreements;
(iv) the Current Issuer Bank Account Agreement;
(v) the Current Issuer Cash Management Agreement;
(vi) the Current Issuer Paying Agent and Agent Bank Agreement;
(vii) the Current Issuer Trust Deed;
(viii) the Current Issuer Notes;
(ix) the Current Issuer Underwriting Agreement;
(x) the Current Issuer Subscription Agreement;
(xi) the Current Issuer Post-Enforcement Call Option Agreement;
(xii) the Current Issuer Corporate Services Agreement; and
(xiii) each other Current Issuer Transaction Document (other than this
Current Issuer Deed of Charge) entered into or to be entered into
by the Current Issuer pursuant to or in connection with any of the
documents set out in paragraphs (i) through (xii) above (including
any agreement entered into by the Current Issuer as a replacement
of any of the above agreements upon the termination of such
agreement),
including, without limitation, all rights to receive payment of any amounts
which may become payable to the Current Issuer thereunder and all payments
received by the Current Issuer thereunder including, without limitation,
all rights to serve notices and/or make demands thereunder and/or to take
such steps as are required to cause payments to become due and payable
thereunder and all rights of action in respect of any breach thereof and
all rights to receive damages or obtain relief in respect thereof
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and the proceeds of any of the foregoing, TO HOLD the same unto the Note
Trustee absolutely.
(b) To the intent that the Note Trustee shall have a security interest in
accordance with the Jersey Security Law (and as secured party for the
purposes of such law) for payment or discharge of the Current Issuer
Secured Obligations, subject to Clause 4 (Release of Current Issuer Charged
Property), the Current Issuer (as debtor for the purposes of the Jersey
Security Law) hereby assigns to the extent that the same may be situate in
Jersey at any relevant time to the Note Trustee all of its right, title,
benefit and interest, present and future, in, to and under:
(i) the Current Issuer Intercompany Loan Agreement;
(ii) (to the extent not assigned pursuant to Clause 3.1(a)) the Funding
Deed of Charge (including, for the avoidance of doubt, the Current
Issuer Deed of Accession);
(iii) the Current Issuer Swap Agreements;
(iv) the Current Issuer Bank Account Agreement;
(v) the Current Issuer Cash Management Agreement;
(vi) the Current Issuer Paying Agent and Agent Bank Agreement;
(vii) the Current Issuer Trust Deed;
(viii) the Current Issuer Notes;
(ix) the Current Issuer Underwriting Agreement;
(x) the Current Issuer Subscription Agreement;
(xi) the Current Issuer Post-Enforcement Call Option Agreement;
(xii) the Current Issuer Corporate Services Agreement; and
(xiii) each other Current Issuer Transaction Document (other than this
Current Issuer Deed of Charge) entered into or to be entered into by
the Current Issuer pursuant to or in connection with any of the
documents set out in paragraphs (i) through (xii) above (including
any agreement entered into by the Current Issuer as a replacement of
any of the above agreements upon the termination of such agreement),
including, without limitation, all rights to receive payment of any amounts
which may become payable to the Current Issuer thereunder and all payments
received by the Current Issuer thereunder including, without limitation,
all rights to serve notices and/or make demands thereunder and/or to take
such steps as are required to cause payments to become due and payable
thereunder and all rights of action in respect of
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any breach thereof and all rights to receive damages or obtain relief in
respect thereof and the proceeds of any of the foregoing, TO HOLD the same
unto the Note Trustee absolutely.
3.3 ACCOUNTS: The Current Issuer, by way of first fixed security for the
payment or discharge of the Current Issuer Secured Obligations, subject to
Clause 4 (Release of Current Issuer Charged Property), hereby assigns in
favour of the Note Trustee all of its rights, title, benefit and interest,
present and future, in and to:
(a) the Current Issuer Transaction Accounts; and
(b) each other account (if any) in which the Current Issuer may at any
time have or acquire any right, title, benefit or interest,
and all monies now or at any time hereafter standing to the credit thereof
and the debts represented by them together with all rights and claims
relating or attached thereto including, without limitation, the right to
interest and the proceeds of any of the foregoing, TO HOLD the same unto
the Note Trustee absolutely.
3.4 AUTHORISED INVESTMENTS: The Current Issuer, by way of first fixed charge
for the payment or discharge of the Current Issuer Secured Obligations,
subject to Clause 4 (Release of Current Issuer Charged Property), hereby
charges in favour of the Note Trustee all of its right, title, benefit and
interest, present and future in, to and under any Authorised Investment
purchased using monies standing to the credit of any Current Issuer Bank
Account for the time being owned by it and all rights in respect of or
ancillary to such Authorised Investments, including the right to income and
the proceeds of any of the foregoing, TO HOLD the same unto the Note
Trustee absolutely.
3.5 FLOATING CHARGE: The Current Issuer, by way of first floating charge for
the payment or discharge of the Current Issuer Secured Obligations, subject
to Clause 4 (Release of Current Issuer Charged Property), hereby charges in
favour of the Note Trustee the whole of its undertaking and all its
property, assets and rights, whatsoever and wheresoever, both present and
future, including without limitation its uncalled capital, other than any
property or assets for the time being the subject of a fixed charge or
effectively assigned pursuant to any of the foregoing provisions of this
Clause 3 (Current Issuer Security).
3.6 TITLE GUARANTEE: Each of the dispositions of, assignments of and charges
over property effected in or pursuant to this Clause 3 (Current Issuer
Security) is made with full title guarantee.
3.7 FURTHER ACQUIRED ITEMS: For the avoidance of doubt, it is hereby confirmed
that the Security Interests (including the Jersey Security Interests)
created under or pursuant to Clauses 3.1 (Funding Charged Property) to
Clause 3.4 (Authorised Investments) (inclusive) are intended to be specific
and fixed assignments, or specific and fixed charges over (as the case may
be) the property and assets to which they relate, both present and future,
including property and assets which are acquired after the date hereof.
3.8 NO TRANSFER OF OBLIGATIONS: Notwithstanding anything else in this Current
Issuer Deed of
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Charge, it is hereby agreed that dispositions of property effected in or
pursuant to this Clause 3 (Current Issuer Security) do not transfer
obligations, and nothing herein shall be construed as a transfer of
obligations to, the Note Trustee.
3.9 NOTICE AND ACKNOWLEDGEMENT:
(a) The execution of this Current Issuer Deed of Charge by any Current
Issuer Secured Creditor shall constitute express notice to such
Current Issuer Secured Creditor of the assignments, charges and
Security Interests (including the Jersey Security Interests) made by
the Current Issuer pursuant to this Clause 3 (Current Issuer
Security).
(b) By its execution of this Current Issuer Deed of Charge each Current
Issuer Secured Creditor acknowledges and consents to the assignments,
charges and Security Interests (including the Jersey Security
Interests) made or granted by the Current Issuer under this Clause 3
(Current Issuer Security) and also acknowledges that as at the date
hereof it has not received from any other person notice of any
assignment or charge of any property the subject of such Security
Interests.
(c) Notwithstanding the assignments, charges and Security Interests
granted under or pursuant to this Clause 3 (Current Issuer Security)
and subject as provided otherwise in this Current Issuer Deed of
Charge, each of the parties hereto acknowledges that:
(i) each Current Issuer Secured Creditor and each other party to any
Current Issuer Transaction Document may continue to make all
payments becoming due to the Current Issuer under any Current
Issuer Transaction Document in the manner envisaged by such
Current Issuer Transaction Document until the receipt of written
notice from the Note Trustee or any Receiver requiring payments
to be made otherwise; and
(ii) until the Current Issuer Security becomes enforceable in
accordance with Clause 7.2 (Enforceable), the Current Issuer
shall be entitled to exercise its rights, powers and discretions
and perform its obligations in relation to the Current Issuer
Charged Property and under the Current Issuer Transaction
Documents in accordance with the provisions of the Current Issuer
Transaction Documents.
3.10 NOTE TRUSTEE'S DISCRETION IN RELATION TO CURRENT ISSUER CHARGED PROPERTY:
Without prejudice to any other rights of the Note Trustee after the
security created under this Current Issuer Deed of Charge has become
enforceable and subject to the terms of the Current Issuer Transaction
Documents, the Note Trustee may from time to time at any time after any
part or parts of the Current Issuer Security becomes enforceable:
(a) enter into, make, execute, sign, deliver and do all such contracts,
agreements, deeds, receipts, payments, assignments, transfers,
conveyances, assurances and things and bring, prosecute, enforce,
defend and abandon all such actions, suits and proceedings in relation
to the Current Issuer Charged Property as it may think expedient;
8
(b) exercise or refrain from exercising, in such manner as in its absolute
discretion the Note Trustee shall think fit, all or any of the rights,
powers, authorities, discretions or remedies of the Current Issuer
under or in relation to the Current Issuer Charged Property or
incidental to the ownership thereof and, in particular but without
limiting the generality of the foregoing, exercise all rights to vote
or to give any consent or notification or make any declaration in
relation to such Current Issuer Charged Property. For the avoidance of
doubt, the Note Trustee shall not be required to have regard to the
interests of the Current Issuer in the exercise or non-exercise of any
such rights, powers, authorities, discretions and remedies or to
comply with any direction given by the Current Issuer in relation
thereto; and
(c) demand, sue for and take any advice or institute any proceedings to
recover or obtain payment of any amounts which may then be due and
payable to the Current Issuer but which remains unpaid under or in
respect of the Current Issuer Charged Property or any part thereof
either in its own name or in the name of the Current Issuer.
4. RELEASE OF CURRENT ISSUER CHARGED PROPERTY
4.1 RELEASE, REASSIGNMENT OR DISCHARGE: Upon the irrevocable and unconditional
payment in full or discharge (or any combination of the foregoing) of all
the Current Issuer Secured Obligations and upon the Note Trustee being
satisfied that the Current Issuer is under no further actual or contingent
obligation under this Current Issuer Deed of Charge or any other Current
Issuer Transaction Document, the Note Trustee shall, at the request and
cost of the Current Issuer, release, reassign and/or discharge from the
Security Interests (including the Jersey Security Interests) all of the
Current Issuer Charged Property to, or to the order of, the Current Issuer;
provided that where any such release, re-assignment or discharge is made in
whole or in part on the faith of any payment, security or other disposition
which is avoided or which must be repaid on bankruptcy, liquidation or
otherwise, the security constituted by this Current Issuer Deed of Charge
and the liability of the Current Issuer hereunder shall continue as if
there had been no such release, re-assignment or discharge.
4.2 DISPOSAL OF AUTHORISED INVESTMENTS: On the making at any time by the
Current Issuer Cash Manager on behalf of the Current Issuer of a disposal
of any Authorised Investment charged pursuant to Clause 3.4 (Authorised
Investments), the Note Trustee shall, if so requested by and at the sole
cost and expense of the Current Issuer, but without the Note Trustee being
responsible for any loss, costs, claims or liabilities whatsoever
occasioned by so acting upon such request, release, reassign or discharge
from the Security Interests constituted by or pursuant to this Current
Issuer Deed of Charge the relevant Authorised Investments, provided that in
the case of a disposal of an Authorised Investment, the proceeds of such
disposal are paid by the Current Issuer into the Current Issuer Bank
Accounts from which the monies to make such Authorised Investment were
originally drawn, subject to and in accordance with the provisions of this
Current Issuer Deed of Charge and the Current Issuer Transaction Documents.
4.3 WITHDRAWALS FROM CURRENT ISSUER BANK ACCOUNTS: Subject to and in accordance
with this Current Issuer Deed of Charge and the other Current Issuer
Transaction Documents, the Current Issuer Cash Manager, on behalf of the
Current Issuer and the Note Trustee, is
9
permitted pursuant to Clause 6 (Restrictions on Exercise of Certain Rights)
from time to time to withdraw amounts from the Current Issuer Bank Accounts
in order to apply such amounts in accordance with the relevant Current
Issuer Priority of Payments. Any amount so withdrawn shall be released from
the Security Interests (including the Jersey Security Interests) created
under this Current Issuer Deed of Charge provided that such amount is
applied in accordance with and subject to the relevant Current Issuer
Priority of Payments.
5. DECLARATION OF TRUST
Each of the Current Issuer Secured Creditors declares the Note Trustee as
trustee of, and the Note Trustee hereby declares that it holds on trust for
the Current Issuer Secured Creditors, upon and subject to the terms and
conditions of this Current Issuer Deed of Charge, all of the covenants,
undertakings and representations made to the Note Trustee under this
Current Issuer Deed of Charge and any other Current Issuer Transaction
Document and all of the charges, assignments, security and Security
Interests made or given to the Note Trustee or to be made or given to it
for the purpose of securing the Current Issuer Secured Obligations under or
pursuant to this Current Issuer Deed of Charge or any other Current Issuer
Transaction Document.
6. RESTRICTIONS ON EXERCISE OF CERTAIN RIGHTS
6.1 PAYMENTS TO CURRENT ISSUER BANK ACCOUNTS: At all times prior to the
release, re-assignment and/or discharge of the Current Issuer Security
pursuant to Clause 4 (Release of the Current Issuer Charged Property), the
Current Issuer shall save as otherwise provided in the Current Issuer
Transaction Documents or unless the Note Trustee otherwise agrees in
writing (and then only on such terms and in such manner as the Note Trustee
may require) procure that the Current Issuer Bank Accounts shall from time
to time be credited with all amounts received by the Current Issuer under
or in respect of the Current Issuer Transaction Documents, including
without limitation the following payments:
(a) amounts received by the Current Issuer from or on behalf of Funding
pursuant to the provisions of the Current Issuer Intercompany Loan
Agreement;
(b) interest received on the Current Issuer Bank Accounts;
(c) amounts received by the Current Issuer from the Basis Rate Swap
Provider under the Current Issuer Basis Rate Swap Agreement;
(d) amounts received by the Current Issuer from the Dollar Currency Swap
Provider under the Current Issuer Dollar Currency Swap Agreements;
(e) amounts received by the Current Issuer from the Euro Currency Swap
Provider under the Current Issuer Euro Currency Swap Agreements;
(f) income received by the Current Issuer in respect of the proceeds of
any Authorised Investments;
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(g) amounts received by the Current Issuer from the Security Trustee or a
Receiver following the service of an Intercompany Loan Enforcement
Notice; and
(h) such other payments received by the Current Issuer as are, or ought in
accordance with this Current Issuer Deed of Charge to be, comprised in
the Current Issuer Charged Property.
6.2 NO WITHDRAWAL FROM CURRENT ISSUER BANK ACCOUNTS: At all times during the
subsistence of the Current Issuer Security, the Current Issuer shall not be
entitled to withdraw or transfer from any Current Issuer Bank Account any
monies standing to the credit thereof or direct any payment to be made
therefrom to any person save to the extent expressly permitted under this
Current Issuer Deed of Charge without the Note Trustee's prior written
consent.
6.3 PERMITTED WITHDRAWALS FROM CURRENT ISSUER BANK ACCOUNTS; AUTHORISED
INVESTMENTS:
(a) The Current Issuer covenants with the Note Trustee that the amounts
standing to the credit of the Current Issuer Bank Accounts may only be
withdrawn in accordance with this Clause 6.3 (Permitted Withdrawals
from Current Issuer Bank Accounts; Authorised Investments) or
otherwise with the Note Trustee's prior written consent.
(b) On any day during an Interest Period prior to the security becoming
enforceable pursuant to Clause 7.2 (Enforceable), the Current Issuer
and the Note Trustee hereby authorise the Current Issuer Cash Manager
to withdraw such monies from the Current Issuer Transaction Accounts
as are to be applied on such date to meet any amounts then due and
payable by the Current Issuer to third parties in accordance with item
(C) of the Current Issuer Pre-Enforcement Revenue Priority of Payments
provided that such monies are applied in making such payments on
behalf of the Current Issuer. For the purpose of this paragraph (b),
the remaining provisions of this Clause 6.3 (Permitted Withdrawals
from Current Issuer Bank Accounts; Authorised Investments), Clause 6.4
(Current Issuer Pre-Enforcement Revenue Priority of Payments) and
Clause 6.5 (Current Issuer Pre-Enforcement Principal Priority of
Payments), the Current Issuer Cash Manager shall be entitled to assume
that the Current Issuer Security is not enforceable pursuant to Clause
7.2 (Enforceable) unless it has received notice from the Current
Issuer or the Note Trustee or is otherwise aware that the Current
Issuer Security has become so enforceable and shall not be liable to
the Note Trustee, the Current Issuer or any other Current Issuer
Secured Creditor for making payments based on this assumption.
(c) The Note Trustee hereby authorises the Current Issuer Cash Manager,
prior to the security becoming enforceable pursuant to Clause 7.2
(Enforceable), to make withdrawals from the relevant Current Issuer
Bank Account for the purposes of acquiring Authorised Investments
provided that all amounts received in respect of the Authorised
Investments (including earnings thereon) shall be deposited into the
relevant Current Issuer Bank Account from which they were originally
drawn.
6.4 CURRENT ISSUER PRE-ENFORCEMENT REVENUE PRIORITY OF PAYMENTS: On each
Payment Date prior to the Current Issuer Security becoming enforceable
pursuant to Clause 7.2
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(Enforceable), the Note Trustee hereby authorises the Current Issuer or the
Current Issuer Cash Manager in its place to withdraw Current Issuer
Available Revenue Receipts standing to the credit of the Current Issuer
Transaction Accounts and to apply such monies in accordance with the
provisions and the order of priority of the Current Issuer Pre-Enforcement
Revenue Priority of Payments (as the same may be amended or varied from
time to time) as set out in Schedule 2 (Cash Management and Maintenance of
Ledgers) to the Current Issuer Cash Management Agreement.
6.5 CURRENT ISSUER PRE-ENFORCEMENT PRINCIPAL PRIORITY OF PAYMENTS: On each
Payment Date prior to the Current Issuer Security becoming enforceable
pursuant to Clause 7.2 (Enforceable), the Note Trustee hereby authorises
the Current Issuer or the Current Issuer Cash Manager in its place to
withdraw Current Issuer Available Principal Receipts standing to the credit
of the Current Issuer Transaction Accounts and to apply such monies in
accordance with the order of priority of the Current Issuer Pre-Enforcement
Principal Priority of Payments (as the same may be amended or varied from
time to time) as set out in Schedule 2 (Cash Management and Maintenance of
Ledgers) to the Current Issuer Cash Management Agreement.
6.6 NO ENFORCEMENT BY CURRENT ISSUER SECURED CREDITORS: Each of the Current
Issuer Secured Creditors (other than the Note Trustee acting on behalf of
the Noteholders and any Receiver) hereby agrees with the Current Issuer and
the Note Trustee that:
(a) only the Note Trustee may enforce the security created in favour of
the Note Trustee by this Current Issuer Deed of Charge in accordance
with the provisions hereof;
(b) notwithstanding any other provision of this Current Issuer Deed of
Charge or any other Current Issuer Transaction Document no sum due or
owing to any Current Issuer Secured Creditor or to the Note Trustee
(whether for itself or on behalf of the Current Issuer Secured
Creditors) from or by the Current Issuer under this Current Issuer
Deed of Charge or any other Current Issuer Transaction Document shall
be payable by the Current Issuer except to the extent that the Current
Issuer or (following enforcement of the Current Issuer Security) the
Note Trustee has sufficient funds available to it (and, in the case of
the Note Trustee, as a result of the realisation of that security) to
pay such sum subject to and in accordance with the relevant Current
Issuer Priority of Payments and provided that all liabilities of the
Current Issuer required to be paid in priority thereto or pari passu
therewith pursuant to such Current Issuer Priority of Payments have
been paid, discharged and/or otherwise provided for in full PROVIDED
THAT this paragraph (b) shall not apply to and shall not limit the
obligations of the Current Issuer to the Noteholders under the Current
Issuer Notes and this Current Issuer Deed of Charge; and
(c) it shall not take any steps for the purpose of recovering any of the
Current Issuer Secured Obligations (including, without limitation, by
exercising any rights of set-off) or enforcing any rights arising out
of the Current Issuer Transaction Documents against the Current Issuer
and it shall not take any steps or legal proceedings for the
winding-up, dissolution or reorganisation of, or the institution of
insolvency proceedings against, the Current Issuer or for the
appointment of a receiver,
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administrator, liquidator or similar officer of the Current Issuer in
respect of any or all of its revenues and assets,
PROVIDED THAT
(i) in the case of any Noteholder, this provision shall be subject to
Clause 7.2 (Only Note Trustee to Enforce) of the Current Issuer
Trust Deed; and
(ii) in the case of any other Current Issuer Secured Creditor and
subject to there being no Current Issuer Note then outstanding,
if the Note Trustee having become bound to do so subject to and
in accordance with the terms of this Current Issuer Deed of
Charge and the Current Issuer Transaction Documents, fails to
serve a Current Issuer Note Enforcement Notice and/or, to take
any steps or proceedings to enforce the security created
hereunder within 30 days of becoming so bound and such failure is
continuing, each such other Current Issuer Secured Creditor shall
be entitled to take such steps and proceedings to enforce its
rights arising out of the relevant Current Issuer Transaction
Document as it shall deem necessary other than the presentation
of a petition for the winding up, dissolution or reorganisation
of, or the institution of insolvency proceedings against, the
Current Issuer or the appointment of an administrator or
liquidator of the Current Issuer.
6.7 ACKNOWLEDGEMENT OF NOTE TRUSTEE: The Note Trustee hereby acknowledges and
agrees that save with respect to the obligations of the Current Issuer to
the Noteholders under the Current Issuer Notes and this Current Issuer Deed
of Charge which are not limited under paragraph (b) of Clause 6.6 (No
Enforcement by Current Issuer Secured Creditors) or under this Clause 6.7
(Acknowledgement of Note Trustee) and notwithstanding any other provision
of this Current Issuer Deed of Charge or any other Current Issuer
Transaction Document, no sum due or owing to any Current Issuer Secured
Creditor or to the Note Trustee (whether for itself or on behalf of the
Current Issuer Secured Creditors) from or by the Current Issuer under this
Current Issuer Deed of Charge or any other Current Issuer Transaction
Document shall be payable by the Current Issuer except to the extent that
the Current Issuer has sufficient funds available or (following enforcement
of the Current Issuer Security) the Note Trustee has realised sufficient
funds from the Current Issuer Security to pay such sum subject to and in
accordance with the relevant Current Issuer Priority of Payments and
provided that all liabilities of the Current Issuer required to be paid in
priority thereto or pari passu therewith pursuant to such Current Issuer
Priority of Payments have been paid, discharged and/or otherwise provided
for in full.
7. ENFORCEMENT
7.1 NOTIFICATION: The Note Trustee shall, if practicable, give prior
notification to the Seller, Funding, the Cash Manager and the Current
Issuer Cash Manager of the Note Trustee's intention to enforce the security
created by this Current Issuer Deed of Charge. However, the failure of the
Note Trustee to provide such notification shall not in any way prejudice
the ability of the Note Trustee to enforce the security created by this
Current Issuer Deed of Charge.
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7.2 ENFORCEABLE:
(a) Without prejudice to the provisions of Clause 9 (Receiver) the
security created under this Current Issuer Deed of Charge shall become
immediately enforceable and the power of sale and other powers
conferred by Section 101 of the 1925 Act, as varied or amended by this
Current Issuer Deed of Charge, shall be exercisable by the Note
Trustee:
(i) at any time when any Current Issuer Note remains outstanding, in
accordance with and subject to, Clause 6 (Enforcement) and
Clause 7 (Proceedings, Action and Indemnification) of the
Current Issuer Trust Deed which shall, as necessary, be
incorporated in and apply, mutatis mutandis, to this Current
Issuer Deed of Charge (and for that purpose references therein
to "this Trust Deed" or "these presents" shall be construed as
references to this Current Issuer Deed of Charge); or
(ii) if there are no Current Issuer Notes outstanding, following a
default in payment of any other Current Issuer Secured
Obligations on its due date or within any applicable grace
period following such due date stated in the relevant Current
Issuer Transaction Document but subject always to any limited
recourse provisions stated therein and to Clause 6.6 (No
Enforcement by Current Issuer Secured Creditors) hereof; or
(iii) upon the service on Funding by the Security Trustee of an
Intercompany Loan Enforcement Notice.
(b) For the purposes of the Jersey Security Interests, upon the occurrence
of any of the events specified in Clause 7.2 (a) (i), (ii) or (iii)
(which shall constitute events of default for the purposes of the
Jersey Security Interests in accordance with the Jersey Security Law)
the Note Trustee shall have the right to give notice (the "CURRENT
ISSUER JERSEY ENFORCEMENT NOTICE") to the Current Issuer in accordance
with the Jersey Security Law and the power of sale of the Current
Issuer Jersey Secured Property shall become exercisable without the
order of the Jersey court in accordance with the Jersey Security Law
so that the Jersey Security Interests shall be enforceable in
accordance with the provisions of the Jersey Security Law.
7.3 POWER OF SALE:
(a) Notwithstanding any other provision of this Current Issuer Deed of
Charge, the Current Issuer Secured Obligations shall be deemed to have
become due and payable for the purposes of Section 101 of the 1925 Act
and Article 8 of the Jersey Security Law and (to the extent
applicable) the statutory power of sale and of appointing a receiver
and other powers which are conferred on mortgagees under the 1925 Act
as varied or extended by this Current Issuer Deed of Charge shall be
deemed to arise immediately after execution of this Current Issuer
Deed of Charge.
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(b) Section 103 of the 1925 Act shall not apply to this Current Issuer
Deed of Charge and forthwith after the security has become enforceable
in accordance with Clause 7.2 (Enforceable) the statutory power of
sale, as extended by this Current Issuer Deed of Charge, and all other
powers shall become immediately exercisable without notice to the
Current Issuer and the provisions of the 1925 Act regulating the power
of sale shall, so far as they relate to the Current Issuer Charged
Property, be varied and extended accordingly.
7.4 LAW OF PROPERTY ACT 1925: Subject, in the case of the Current Issuer Jersey
Secured Property, to the provisions of the Jersey Security Law, the
provisions of the 1925 Act relating to the power of sale and the other
powers conferred by Section 101(1) and (2) are hereby extended in relation
to the Current Issuer as if such extensions were contained in the 1925 Act
such that at any time after the security constituted by this Current Issuer
Deed of Charge has become enforceable in accordance with Clause 7.2
(Enforceable) above, the Note Trustee may in its absolute discretion:
(a) make demand in the name of the Current Issuer Secured Creditors or in
its own right for any monies and liabilities in respect of the Current
Issuer Charged Property;
(b) enforce any rights it may have in respect of the whole or any part of
the Current Issuer Charged Property in such manner and upon such terms
as the Note Trustee shall think fit;
(c) take possession of, get in and collect the Current Issuer Charged
Property and perfect interests comprised therein;
(d) (subject to any restrictions under or in respect of the relevant
Current Issuer Charged Property) sell, transfer, convey, dispose of,
vary or otherwise deal with, and also grant any option to purchase,
and effect exchanges of, the whole or any part of Current Issuer
Charged Property or any interest therein in such manner, for such
consideration (if any) and generally upon such terms (including by
deferred payment or payment by instalments) as it may think fit and/or
to concur in any of the foregoing (and nothing shall preclude any such
disposal being made to a Current Issuer Secured Creditor);
(e) carry out any transaction, scheme or arrangement which the Note
Trustee may, in its absolute discretion, consider appropriate with a
view to or in connection with the sale of the Current Issuer Charged
Property;
(f) do all or any of the things or exercise all or any of the powers,
authorities and discretions conferred expressly or by implication on
any Receiver under Clause 9.6 (Powers of the Receiver) or otherwise
under this Current Issuer Deed of Charge; and/or
(g) exercise all or any of the powers conferred on mortgagees by the 1925
Act as varied or extended by this Current Issuer Deed of Charge and
any other rights and remedies that may be conferred by statute or
common law or in equity on mortgagees or receivers.
15
8. UPON ENFORCEMENT
8.1 SERVICE OF A CURRENT ISSUER NOTE ENFORCEMENT NOTICE: Without prejudice to
the effectiveness of any service of a Current Issuer Note Enforcement
Notice, the Note Trustee shall as soon as is practicable notify each of the
following parties of the enforcement of the Current Issuer Security
(whether by service of a copy of any Current Issuer Note Enforcement Notice
or otherwise):
(a) the Seller;
(b) Funding;
(c) the Account Bank, the Cash Manager and the Current Issuer Cash
Manager;
(d) the Paying Agents and the other Agents under the Current Issuer Paying
Agent and Agent Bank Agreement;
(e) the Current Issuer Swap Providers;
(f) the Corporate Services Provider; and
(g) each other Current Issuer Secured Creditor.
8.2 CRYSTALLISATION: From and including the date when the Note Trustee serves a
Current Issuer Note Enforcement Notice (which has not been withdrawn) on
the Current Issuer:
(a) notwithstanding any provision hereof or of any other Current Issuer
Transaction Document no amount may be withdrawn from the Current
Issuer Bank Accounts except with the prior written consent of the Note
Trustee; and
(b) if not already crystallised, any charge created by this Current Issuer
Deed of Charge which is a floating charge shall crystallise.
8.3 CURRENT ISSUER POST-ENFORCEMENT PRIORITY OF PAYMENTS: At any time after the
security created by this Current Issuer Deed of Charge has become
enforceable in accordance with Clause 7.2 (Enforceable) and provided that
the relevant Current Issuer Note Event of Default has not been waived in
accordance with the provisions of this Current Issuer Deed of Charge,
Current Issuer Available Revenue Receipts, Current Issuer Available
Principal Receipts and all other monies paid to or received or recovered by
or on behalf of the Current Issuer or the Note Trustee or any Receiver
appointed on its behalf, including all proceeds following any sale,
realisation or enforcement of the security created under this Current
Issuer Deed of Charge and all amounts not previously distributed and/or
standing to the credit of any Current Issuer Bank Account shall (if not
already received by the Note Trustee) be paid to and held by the Note
Trustee on trust to apply the same (save to the extent otherwise required
by applicable law) in accordance with the order of priority of the Current
Issuer Post-
16
Enforcement Priority of Payments (as the same may be amended or varied from
time to time) as set out on the date hereof in Schedule 2 (Current Issuer
Post-Enforcement Priority of Payments) to this Current Issuer Deed of
Charge.
8.4 CERTIFICATION OF AMOUNTS:
(a) The Note Trustee shall be entitled to rely on (and to accept as
conclusive evidence save in the case of manifest error) a certificate
from each Current Issuer Secured Creditor as to the amounts owed to
such Current Issuer Secured Creditor under the Current Issuer
Transaction Documents. The Note Trustee shall not take into account
for the purpose of the application of moneys in accordance with the
Current Issuer Post-Enforcement Priority of Payments any amounts of
which it has not been notified by the intended recipient on or prior
to the date in question.
(b) Each Current Issuer Secured Creditor will, at all times, promptly
provide the Note Trustee and/or any Receiver on request with a
certificate setting out detailed information as to the amount of the
Current Issuer Secured Obligations to which such Current Issuer
Secured Creditor is entitled and such other information as the Note
Trustee and/or any Receiver may require to enable or facilitate the
Note Trustee and/or any Receiver to perform its functions hereunder or
under any of the Current Issuer Transaction Documents, such
certificate to be in a form required by the Note Trustee and/or any
Receiver. In determining the respective entitlements of the Current
Issuer Secured Creditors hereunder, such certificates shall be binding
on all of the Current Issuer Secured Creditors.
8.5 RETENTION ACCOUNT: If the Note Trustee enforces the security created under
this Current Issuer Deed of Charge at a time when either no amounts or not
all amounts owing in respect of the Current Issuer Secured Obligations have
become due and payable or any of the Current Issuer Secured Obligations are
at such time contingent or future, the Note Trustee or a Receiver may, for
so long as no such amounts or not all such amounts have become due and
payable or any of the Current Issuer Secured Obligations are at such time
contingent or future, pay any monies referred to in Clause 8.3 (Current
Issuer Post-Enforcement Priority of Payments), as the case may be, into,
and retain such monies in, an interest-bearing account (a "RETENTION
ACCOUNT") to be held by it as security and applied by it in accordance with
Clause 8.3 (Current Issuer Post-Enforcement Priority of Payments) as and
when any of the amounts referred to therein become due and payable.
8.6 NOTE TRUSTEE RIGHTS UPON ENFORCEMENT: In addition to any other rights
expressly provided herein, for the period commencing upon the service of a
Current Issuer Note Enforcement Notice and terminating upon the
notification to the Current Issuer Secured Creditors by the Note Trustee
that all Current Issuer Secured Obligations have been satisfied in full:
(a) (provided such Current Issuer Secured Creditor has received a copy of,
or other notice of the service on the Current Issuer of, any such
Current Issuer Note Enforcement Notice) each Current Issuer Secured
Creditor agrees that it will pay to the Note Trustee or the Receiver,
as the case may be, all monies received or recovered by such Current
Issuer Secured Creditor (whether by way of set-off or
17
otherwise) in order that such amounts may be applied by the Note
Trustee in accordance with Clause 8.3 (Current Issuer Post-Enforcement
Priority of Payments);
(b) save as otherwise expressly provided in this Current Issuer Deed of
Charge or as required by the Note Trustee, all payments under or
arising from this Current Issuer Deed of Charge and all amounts
payable to the Current Issuer by any party to this Current Issuer Deed
of Charge under any Current Issuer Transaction Document shall be paid
to the Note Trustee or to its order;
(c) save as otherwise expressly provided in this Current Issuer Deed of
Charge, all rights or remedies provided for by this Current Issuer
Deed of Charge or available at law or in equity to the Current Issuer
Secured Creditors are exercisable by the Note Trustee;
(d) save as otherwise expressly provided in this Current Issuer Deed of
Charge, all rights to compel performance of the Current Issuer
Transaction Documents are exercisable by the Note Trustee; and
(e) all payments in respect of the Current Issuer Secured Obligations
shall operate in satisfaction pro tanto of the Current Issuer's
covenants to the relevant Current Issuer Secured Creditors.
9. RECEIVER
9.1 APPOINTMENT: At any time after the security constituted hereunder becomes
enforceable, and whether or not the Note Trustee has taken possession of
the Current Issuer Charged Property, the Note Trustee may appoint, by
writing or by deed, such person or persons (including an officer or
officers of the Note Trustee) as the Note Trustee thinks fit to be a
receiver, a receiver and manager or an administrative receiver of the
Current Issuer Charged Property or any part thereof (each a "RECEIVER")
and, in the case of an appointment of more than one person, to act together
or independently of the other or others.
9.2 REMOVAL AND REPLACEMENT: Except as otherwise required by statute, the Note
Trustee may by writing or by deed remove a Receiver and appoint another in
its place or to act with a Receiver and the Note Trustee may apply to the
court for an order removing an administrative receiver.
9.3 EXTENSION OF APPOINTMENT: The exclusion of any part of the Current Issuer
Charged Property from the appointment of the Receiver shall not preclude
the Note Trustee from subsequently extending its appointment (or that of
the Receiver replacing it) to that part of the Current Issuer Charged
Property or appointing another Receiver over any other part of the Current
Issuer Charged Property.
9.4 AGENT OF CURRENT ISSUER: The Receiver shall, so far as the law permits, be
the agent of the Current Issuer and the Current Issuer alone shall be
responsible for the Receiver's contracts, engagements, acts, omissions,
misconduct, negligence or default and for liabilities incurred by it; and
in no circumstances whatsoever shall the Note Trustee or any Current Issuer
Secured Creditor be in any way responsible for or incur any liability in
connection with its contracts, engagements, acts, omissions, misconduct,
negligence or default, and if a liquidator of the
18
Current Issuer shall be appointed, the Receiver shall act as principal and
not as agent for the Note Trustee. Notwithstanding the generality of the
foregoing, such Receiver shall in the exercise of its powers, authorities
and discretions conform to the regulations or directions (if any) from time
to time made and given by the Note Trustee.
9.5 REMUNERATION: Subject as provided otherwise by applicable law, the
remuneration of the Receiver shall be fixed by the Note Trustee and may be
or include a commission calculated by reference to the gross amount of all
monies received or otherwise. Such remuneration and such commission (if
any) shall be payable hereunder by the Current Issuer alone subject always
to Clause 8.3 (Current Issuer Post-Enforcement Priority of Payments) and
the amount of such remuneration shall form part of the Current Issuer
Secured Obligations and shall accordingly be secured on the Current Issuer
Charged Property under the security created by this Current Issuer Deed of
Charge.
9.6 POWERS OF THE RECEIVER: Subject, in the case of the Current Issuer Jersey
Secured Property, to the provisions of the Jersey Security Law, the
Receiver of the Current Issuer, in addition to any powers conferred on an
administrative receiver, receiver, manager or receiver and manager by
statute or common law, shall have the power to:
(a) take possession of, get in and collect the Current Issuer Charged
Property;
(b) (subject to any restrictions under or in respect of relevant Current
Issuer Charged Property) sell, transfer, convey, license, release or
otherwise dispose of vary or deal with, and also grant any option to
purchase, and effect exchanges of, the whole or any part of the
Current Issuer Charged Property or any interest therein and grant or
accept surrenders, disclaimers and variations in relation to or
otherwise affecting the Current Issuer Charged Property in each case
in such manner, for such consideration (if any) and generally upon
such terms (including by deferred payment of payment by instalments)
as it may think fit and/or concur in any of the foregoing (and nothing
shall preclude any such disposal being made to a Current Issuer
Secured Creditor);
(c) carry out any transaction, scheme or arrangement which it may, in its
absolute discretion, consider appropriate with a view to or in
connection with the sale of the Current Issuer Charged Property;
(d) insure the Current Issuer Charged Property against such risks and for
such amounts as it may consider prudent and obtain bonds and
performance guarantees;
(e) otherwise protect, maintain or improve, the Current Issuer Charged
Property or any part thereof in any manner and for any purpose
whatsoever as it shall think fit;
(f) transfer all or any of the Current Issuer Charged Property and/or any
of the liabilities to any other company or body corporate, whether or
not formed or acquired for the purpose (and whether or not a
subsidiary or associated company of the Note Trustee or any other
party to the Current Issuer Transaction Documents) and to form a
subsidiary or subsidiaries of the Current Issuer;
19
(g) carry on and manage or concur in managing or appoint a manager of, the
whole or any part of the business of the Current Issuer in such manner
as it shall in its absolute discretion think fit including the power
to enter into any contract and to perform, repudiate, rescind or vary
any contract to which the Current Issuer is a party;
(h) sell or concur in selling the whole or any part of the Current
Issuer's business whether as a going concern or otherwise;
(i) appoint, dismiss, engage or vary the terms of employment of any
employees, managers, agents or advisers of the Current Issuer upon
such terms as to remuneration and otherwise for such periods as it may
in its absolute discretion think fit;
(j) in connection with the exercise or proposed exercise of any of its
powers or in order to obtain payment of its remuneration or
reimbursement of its expenses (in each case, whether or not already
due), borrow or raise money from any person, without security or on
the security of the Current Issuer Charged Property (either in
priority to the security constituted by this Current Issuer Deed of
Charge or otherwise) and generally in such manner and on such terms as
it may think fit;
(k) bring, defend, submit to arbitration, negotiate, compromise, enforce,
abandon and settle actions, suits, claims and proceedings concerning
or affecting the Current Issuer Charged Property or the security
created under this Current Issuer Deed of Charge;
(l) exercise any powers, discretions, voting, conversion or other rights
or entitlements in relation to any of the Current Issuer Charged
Property or incidental to the ownership of or rights in or to any of
the Current Issuer Charged Property and to complete or effect any
transaction entered into by the Current Issuer or disclaim, abandon or
modify all or any of the outstanding contracts or arrangements of the
Current Issuer relating to or affecting the Current Issuer Charged
Property;
(m) generally carry out, or cause to be carried out any transaction or
scheme or arrangement whatsoever, whether similar or not to any of the
foregoing, in relation to the Current Issuer Charged Property which it
may consider expedient as effectual as if it were solely and
absolutely entitled to the Current Issuer Charged Property;
(n) in connection with the exercise of any of its powers, execute or do,
or cause or authorise to be executed or done, on behalf of or in the
name of the Current Issuer or otherwise, as it may think fit, all
documents, acts or things which it may consider appropriate;
(o) redeem, discharge or compromise any security whether or not having
priority to the security created hereunder;
(p) enter into covenants, guarantees, commitments, indemnities and other
obligations or liabilities as it shall think fit;
20
(q) pay and discharge out of the profits and income of the Current Issuer
Charged Property and the monies to be made by it carrying on any such
business as aforesaid the expenses in and about the carrying on and
management of such business or in the exercise of any of the powers
conferred by Clause 9 (Receivers) or otherwise in respect of the
Current Issuer Charged Property and all outgoings which it shall think
fit to pay and to apply the residue of the said profits, income or
monies in the manner provided by Clause 8.3 (Current Issuer
Post-Enforcement Priority of Payments); and
(r) exercise any other powers, rights and/or remedies that may be
available at law or in equity including the powers referred to in
Section 1 of the Insolvency Act 1986.
9.7 SECURITY: The Note Trustee may from time to time and at any time require
any such Receiver to give security for the due performance of its duties
and may fix the nature and amount of the security to be so given but the
Note Trustee shall not be bound in any such case to require any such
security.
9.8 APPLICATION BY RECEIVER: Save so far as otherwise directed by the Note
Trustee, all monies from time to time received by such Receiver shall be
paid over to the Note Trustee to be held by it on the trusts declared under
this Current Issuer Deed of Charge and to be distributed in accordance with
Clause 8.3 (Current Issuer Post-Enforcement Priority of Payments).
9.9 PAYMENT TO RECEIVER: The Note Trustee may pay over to such Receiver any
monies constituting part of the Current Issuer Charged Property for the
same to be applied for the purposes of this Current Issuer Deed of Charge
by such Receiver and the Note Trustee may from time to time determine what
funds the Receiver shall be at liberty to keep in hand with a view to the
performance of its duties as such Receiver.
9.10 NO RESTRICTIONS: None of the restrictions imposed by the 1925 Act in
relation to the appointment of receivers or the giving of notice or
otherwise shall apply in relation to the Receiver.
9.11 PETITION FOR ADMINISTRATION: Upon receipt of notice of a petition to a
court of competent jurisdiction for an administration order in relation to
the Current Issuer or other order having substantially the same effect to
be made on application by a creditor or creditors of the Current Issuer,
the Note Trustee shall, subject to it being indemnified to its
satisfaction, as soon as practicable appoint a Receiver in accordance with
this Current Issuer Deed of Charge (who shall, to the extent permitted by
law, be an "administrative receiver" under Section 29 (2) of the Insolvency
Act 1986) of the whole of the Current Issuer Charged Property and the Note
Trustee shall instruct the Receiver to attend at the hearing of the
petition and take such steps as are necessary to prevent the appointment of
an administrator. The Current Issuer Secured Creditors shall co-operate and
do all acts and enter into such further documents, deeds or agreements as
the Note Trustee may deem necessary or desirable to ensure that an
administration order is not made and that an administrative receiver is
appointed.
10. FURTHER ASSURANCE AND POWER OF ATTORNEY
10.1 FURTHER ASSURANCE: The Current Issuer covenants with and undertakes to the
Note Trustee
21
from time to time (notwithstanding that the security may not have become
enforceable and the Note Trustee may not have served any Current Issuer
Note Enforcement Notice) upon demand:
(a) to execute, at the Current Issuer's cost, any document or do any act
or thing which the Note Trustee or any Receiver may specify (including
executing such Security Interests over its rights in and over the
Current Issuer Charged Property and any other assets of the Current
Issuer in such form as the Note Trustee and/or any Receiver may
require) with a view to:
(i) registering, perfecting, protecting or improving any charge or
security or Security Interest (including any Jersey Security
Interest) created or intended to be created by or pursuant to
this Current Issuer Deed of Charge (including any act or document
which may be required or desirable under the laws of any
jurisdiction in which any property or assets may be located in
order to confer on the Note Trustee security over such property
and assets equivalent or similar to the security intended to be
conferred by or pursuant to this Current Issuer Deed of Charge)
and in such form as the Note Trustee or the Receiver may specify;
and/or
(ii) facilitating the realisation of or enforcement of rights of, all
or any part of the Current Issuer Charged Property (including any
Current Issuer Jersey Secured Property) or the exercise, or
proposed exercise, of any of the powers, duties or discretions
vested or intended to be vested in the Note Trustee or such
Receiver by or pursuant to this Current Issuer Deed of Charge or
doing any act or thing deemed necessary by the Note Trustee or
the Receiver;
(b) to give or join in giving or procure the giving of any notices to any
persons and obtain or procure that there is obtained any necessary
acknowledgements in relation to such notices, all in such form, as the
Note Trustee or the Receiver may require at the cost of the Current
Issuer,
and for the purpose of this Clause 10.1 (Further Assurance) a certificate
in writing signed by the Note Trustee to the effect that any particular
assurance or thing is required by it shall be conclusive evidence of that
fact provided that the Current Issuer shall not be obliged to execute any
such documentation or take any other action or steps to the extent that it
would breach a restriction in any agreement to which it is a party or
conflict with any applicable law.
10.2 EXECUTION OF POWER OF ATTORNEY: Immediately upon execution of this Current
Issuer Deed of Charge, the Current Issuer shall execute and deliver to the
Note Trustee the power of attorney in or substantially in the form set out
in Schedule 1 (Form of Security Power of Attorney).
10.3 CURRENT ISSUER CHARGED PROPERTY ON TRUST: To the extent permitted to do so
under the Current Issuer Transaction Documents, for the purpose of giving
effect to this Current Issuer Deed of Charge, the Current Issuer hereby
declares that, after service of a Current Issuer Note Enforcement Notice,
it will hold all the Current Issuer Charged Property (subject to the right
of redemption) upon trust to convey, assign or otherwise deal with such
Current Issuer
22
Charged Property in such manner and to such person as the Note Trustee
shall direct pursuant to this Current Issuer Deed of Charge, and declares
that it shall be lawful for the Note Trustee to appoint a new trustee or
trustees of the Current Issuer Charged Property in place of the Current
Issuer.
11. CRYSTALLISATION
11.1 NOTICE: In addition and without prejudice to any other event resulting in a
crystallisation of the floating charges created by this Current Issuer Deed
of Charge or any other right the Note Trustee may have, the Note Trustee
may, by notice in writing to the Current Issuer, declare that the floating
charges hereby created shall be converted into first specific fixed charges
over such of the undertaking, property and assets of the Current Issuer as
the Note Trustee may specify in such notice at any time if:
(a) a Current Issuer Note Event of Default or a Current Issuer Potential
Note Event of Default has occurred; or
(b) the Note Trustee believes that the Current Issuer Charged Property or
any part thereof is in danger of being seized or sold under any form
of distress, execution or diligence levied or is otherwise in
jeopardy; or
(c) the Note Trustee considers that it is desirable in order to protect
the priority of the security created by this Current Issuer Deed of
Charge.
11.2 AUTOMATIC CRYSTALLISATION: In addition and without prejudice to any other
event resulting in a crystallisation of the floating charge contained
herein and without prejudice to any rule of law which may have a similar
effect, the floating charge created under this Current Issuer Deed of
Charge shall automatically and without notice be converted with immediate
effect into a fixed charge as regards:
(a) all property, assets or undertaking of the Current Issuer subject to
the floating charge, upon:
(i) the presentation of a petition for the compulsory winding-up of
the Current Issuer;
(ii) the convening of a meeting for the passing of a resolution for
the voluntary winding-up of the Current Issuer;
(iii) the presentation of a petition for the making of an
administration order in relation to the Current Issuer;
(iv) the presentation or making of an application for a warrant of
execution, writ of fieri facias, garnishee order or charging
order in respect of any of the assets of the Current Issuer
subject to the floating charge;
(v) the occurrence of a Current Issuer Note Event of Default; and/or
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(b) any property, assets or undertaking of the Current Issuer, which
become subject to an Encumbrance in favour of any person other than
the Note Trustee or which is/are the subject of a sale, transfer or
other disposition, in either case, contrary to the covenants and
undertakings contained in the Current Issuer Transaction Documents,
immediately prior to such Encumbrance arising or such sale, transfer
or other disposition being made.
12. PROVISIONS RELATING TO THE SECURITY
12.1 CONTINUING SECURITY: The security created under or pursuant to this Current
Issuer Deed of Charge shall be:
(a) in addition to and independent of and shall not operate so as to
prejudice or affect or merge in any other security, right of recourse
or other right whatsoever which may be held by any of the Current
Issuer Secured Creditors or the Note Trustee on their behalf in
respect of the whole or any part of the Current Issuer Secured
Obligations and shall not be affected by any release, reassignment or
discharge of such other security; and
(b) a continuing security for the Current Issuer Secured Obligations and
shall remain in force as continuing security for the Current Issuer
Secured Creditors and shall not be considered as satisfied or
discharged by any intermediate payment or settlement of the whole or
any part of the Current Issuer Secured Obligations or the existence at
any time of a credit balance on any current or other account or any
other matter or thing whatsoever.
12.2 CONSOLIDATION: Section 93 of the 1925 Act shall not apply in relation to
any of the charges contained in this Current Issuer Deed of Charge.
12.3 RULING OFF: If the Note Trustee receives notice of any Encumbrance
affecting the whole or any part of the Current Issuer Charged Property or
any security granted hereunder in contravention of the provisions hereof:
(a) the Note Trustee may open a new account in the name of the Current
Issuer and, if it does not, it shall nevertheless be deemed to have
done so at the time it received such notice; and
(b) all payments made by the Current Issuer to the Note Trustee after the
Note Trustee receives such notice shall be credited or deemed to have
been credited to the new account, and in no circumstances whatsoever
shall operate to reduce the Current Issuer Secured Obligations as at
the time the Note Trustee received such notice.
12.4 AVOIDANCE OF PAYMENTS: Any settlement, discharge or release between (a) the
Current Issuer and (b) the Note Trustee or any Receiver (the "RELEVANT
PERSON(S)") shall be conditional upon no security or payment granted or
made to the Relevant Person(s) by the Current Issuer or any other person
being avoided or reduced by virtue of any provisions or enactments relating
to bankruptcy, insolvency or liquidation for the time being in force and,
in the event of such security or payment being so avoided or reduced, the
Relevant Person(s) shall be
24
entitled to recover the value or amount of such security or payment from
the Current Issuer and from the security subsequently as if such
settlement, discharge or release had not occurred.
12.5 RETENTION OF CHARGES: If the Note Trustee shall have reasonable grounds for
believing that the Current Issuer may be insolvent or deemed to be
insolvent pursuant to the provisions of the Insolvency Act 1986 (and
production of a solvency certificate of a duly authorised officer of the
Current Issuer shall be prima facie evidence of the solvency of the Current
Issuer) as at the date of any payment made by the Current Issuer to the
Note Trustee and that as a result, such payment may be capable of being
avoided or clawed back, the Note Trustee shall be at liberty to retain the
charges contained in or created pursuant to this Current Issuer Deed of
Charge until the expiry of a period of one month plus such statutory period
within which any assurance, security, guarantee or payment can be avoided
or invalidated after the payment and discharge in full of all Current
Issuer Secured Obligations notwithstanding any release, settlement,
discharge or arrangement which may be given or made by the Note Trustee on,
or as a consequence of, such payment or discharge of liability provided
that, if at any time within such period, a petition shall be presented to a
competent court for an order for the winding up or the making of an
administration order in respect of the Current Issuer, or if the Current
Issuer shall commence to be wound up or to go into administration or any
analogous proceedings shall be commenced by or against the Current Issuer,
as the case may be, the Note Trustee shall be at liberty to continue to
retain such security for such further period as the Note Trustee may
determine and such security shall be deemed to continue to have been held
as security for the payment and discharge to the Note Trustee of all
Current Issuer Secured Obligations.
12.6 POSSESSION: Entry into possession of the Current Issuer Charged Property or
any part thereof shall not render the Note Trustee or any Receiver of the
Current Issuer liable to account as mortgagee in possession for anything
except actual receipts. If and whenever the Note Trustee or the Receiver
enters into possession of the Current Issuer Charged Property, it shall be
entitled at any time to go out of such possession.
12.7 CHANGE OF NAME, ETC.: This Deed shall remain valid and enforceable
notwithstanding any change in the name, composition or constitution of the
Note Trustee or the Current Issuer or any amalgamation, merger or
consolidation by the Note Trustee or the Current Issuer, with any other
corporation (whether, in the case of the Current Issuer, permitted under
the Current Issuer Transaction Documents or not).
13. PROTECTION OF THIRD PARTIES
13.1 NO ENQUIRY: No purchaser from, or other person dealing with, the Note
Trustee or a Receiver shall be concerned to enquire whether any of the
powers exercised or purported to be exercised under this Current Issuer
Deed of Charge has arisen or become exercisable, whether the Current Issuer
Secured Obligations remain outstanding or have become payable, whether the
Note Trustee or the Receiver is authorised to act or as to the propriety or
validity of the exercise or purported exercise of any power; and the title
and the position of such a purchaser or other person shall not be
impeachable by reference to any of those matters and all the protection to
purchasers contained in Sections 104 and 107 of the 1925 Act shall apply
25
to any person purchasing from or dealing with the Note Trustee or any such
Receiver.
13.2 RECEIPTS TO CURRENT PARTIES: Upon any sale, calling in, collection,
enforcement or other realisation of the Current Issuer Charged Property in
accordance with the terms hereof and upon any other dealing or transaction
under or pursuant to this Current Issuer Deed of Charge, the receipt of the
Note Trustee or any Receiver shall be an absolute and a conclusive
discharge to a purchaser or other person dealing with the Note Trustee or
such Receiver and shall relieve it of any obligation to see to the
application of any monies paid to or by the direction of the Note Trustee
or such Receiver.
14. SET-OFF
The Note Trustee may at any time after the security created under this
Current Issuer Deed of Charge has become enforceable in accordance with
Clause 7.2 (Enforceable) without notice and notwithstanding any settlement
of account or other matter whatsoever combine or consolidate all or any
existing accounts of the Current Issuer whether in its own name or jointly
with others and held by it or any Current Issuer Secured Creditor and may
set-off or transfer all or any part of any credit balance or any sum
standing to the credit of any such account (whether or not the same is due
to the Current Issuer from the Note Trustee or relevant Current Issuer
Secured Creditor and whether or not the credit balance and the account in
debit or the Current Issuer Secured Obligations are expressed in the same
currency in which case the Note Trustee is hereby authorised to effect any
necessary conversions at its prevailing rates of exchange) in or towards
satisfaction of any of the Current Issuer Secured Obligations (and on or at
any time after the security created under this Current Issuer Deed of
Charge has become enforceable in accordance with Clause 7.2 (Enforceable)
the Security Trustee may make such application notwithstanding any
specified maturity of any deposits), but subject always to the Current
Issuer Priority of Payments, and may in its absolute discretion estimate
the amount of any liability of the Current Issuer which is contingent or
unascertained and thereafter set-off such estimated amount and no amount
shall be payable by the Note Trustee to the Current Issuer unless and until
all the Current Issuer Secured Obligations have been ascertained and fully
repaid or discharged.
15. REPRESENTATIONS AND COVENANTS
15.1 REPRESENTATIONS AND WARRANTIES:
(a) The Current Issuer hereby represents to the Note Trustee that it is,
as of the date hereof, the beneficial owner of all of the Current
Issuer Charged Property free and clear of all liens, claims, charges
or Encumbrances except those specifically created by this Current
Issuer Deed of Charge and undertakes that it will retain all rights
associated with ownership of the Current Issuer Charged Property free
and clear of all liens, claims, charges, Encumbrances except those
specifically created by this Current Issuer Deed of Charge or any
other Current Issuer Transaction Document.
(b) The Current Issuer represents that it has taken all necessary steps to
enable it to create the Security Interests in respect of the Current
Issuer Charged Property in accordance with this Current Issuer Deed of
Charge and has taken no action or steps which will
26
or may prejudice its right, title and interest in, to and under the
Current Issuer Charged Property.
15.2 NEGATIVE COVENANTS: The Current Issuer hereby undertakes that, for so long
as any Current Issuer Secured Obligation remains outstanding, the Current
Issuer shall not, save to the extent contemplated or provided in the
Current Issuer Transaction Documents or unless it has obtained the prior
written consent of the Note Trustee:
(a) open or maintain any bank account or deposit account with any bank or
any other financial institution other than the Current Issuer Bank
Accounts or close the Current Issuer Bank Accounts;
(b) either in a single transaction or in a series of transactions, whether
related or not and whether voluntarily or involuntarily, sell,
transfer, lease or otherwise dispose of or grant any option over all
or any part of its property, assets or undertaking or any interest,
estate, right, title or benefit therein or agree or purport to do any
of the foregoing;
(c) create or permit to subsist any Security Interest (unless arising by
operation of law) over or in respect of any of its property, assets
(including any uncalled capital) or undertaking, present or future;
(d) incur any indebtedness in respect of borrowed money whatsoever or give
any guarantee or indemnity in respect of any indebtedness of or of any
obligation or any person;
(e) pay any dividend or make any other distribution to its shareholder or
issue any further shares;
(f) consolidate or merge with any other person or convey or transfer its
properties or assets substantially as an entirety to any other person;
(g) consent to any amendment to, or variation of or agree to waive or
authorise any breach of any provision of any of the Current Issuer
Transaction Documents or permit any person whose obligations form part
of the Current Issuer Charged Property to be released from its
respective obligations;
(h) offer to surrender to any company any amounts which are available for
surrender by way of group relief within Chapter IV of Part X of the
Income and Corporation Taxes Act 1988 except for full payment at the
current applicable rate of corporation tax applied to the surrendered
amount and payable at the date when corporation tax is due to be paid
by the claimant or would be due in the absence of the surrender;
(i) do any act or thing the effect of which would be to make the Current
Issuer resident in any jurisdiction other than the United Kingdom;
27
(j) permit any person other than the Current Issuer and the Note Trustee
to have any equitable interest in any of its property, assets or
undertakings or any interest, estate, right, title or benefit therein;
(k) purchase or otherwise acquire any Note or Notes (including the Current
Issuer Notes); or
(l) engage in any activities in the United States (directly or through
agents), nor derive any income from United States sources as
determined under United States income tax principles and will not hold
any property if doing so would cause it to be engaged or deemed to be
engaged in a trade or business within the United States as determined
under United States tax principles.
15.3 POSITIVE COVENANTS: The Current Issuer covenants and undertakes with the
Note Trustee for the benefit of the Current Issuer Secured Creditors that
it shall:
(a) Registration of Security: file or procure the filing with the
Registrar of Companies pursuant to Chapter I of Part XII of the
Companies Act 1985 of duly completed Forms 395 together with an
executed original of this Current Issuer Deed of Charge and the
required fee within 21 days after the date of this Current Issuer Deed
of Charge;
(b) Notice of Assignment: on the date hereof join with the Note Trustee in
giving notice of the assignments and the security created under or
pursuant to this Current Issuer Deed of Charge to Funding, the
Security Trustee and each other party to any Current Issuer
Transaction Document not being a party to this Current Issuer Deed of
Charge and for the purposes of the Jersey Security Interests to any
person from whom the Current Issuer would have been entitled to claim
the collateral (but for the Jersey Security Interests) and on any date
hereafter (to the extent only that such notice and acknowledgement is
not given under or pursuant to this Current Issuer Deed of Charge)
join with the Note Trustee in giving notice of the assignments and the
security created under this Current Issuer Deed of Charge to any party
to a Current Issuer Transaction Document entered into by the Current
Issuer after the date hereof and, for the purposes of the Jersey
Security Interests, to any person from whom the Current Issuer would
have been entitled to claim the collateral (but for the Jersey
Security Interests), in each case in the form (or substantially in the
form) set out in Schedule 3 (Form of Notice of Assignment);
(c) Accounts for Stock Exchange: cause to be prepared and certified by the
Auditors of the Current Issuer in respect of each Financial Year,
accounts in such form as will comply with relevant legal and
accounting requirements for the time being and all requirements for
the time being of any stock exchange on which the Current Issuer Notes
are listed;
(d) Books and Records: at all times keep or procure the keeping of such
books of account and records as may be necessary to comply with all
applicable laws and so as to enable accounts of the Current Issuer to
be prepared and allow the Note Trustee and
28
any person or persons appointed by the Note Trustee free access to
such books of account and records at all reasonable times during
normal business hours upon reasonable notice in writing, provided that
such inspection shall only be for the purposes of carrying out its
duties under this Current Issuer Deed of Charge and any information so
obtained shall only be used and passed on to any other person for the
purpose of the Note Trustee carrying out its duties under this Current
Issuer Deed of Charge;
(e) Notice of Current Issuer Note Event of Default: give notice in writing
to the Note Trustee forthwith upon becoming aware of the occurrence of
any Current Issuer Note Event of Default or Current Issuer Potential
Note Event of Default including the status of any such default or
matter and what action the Current Issuer is taking or proposes to
take with respect thereto, without waiting for the Note Trustee to
take any action;
(f) Certificates Relating to Financial Information: give to the Note
Trustee (a) within seven days after demand by the Note Trustee
therefor and (b) (without the necessity for any such demand) promptly
after the publication of its audited accounts in respect of each
Financial Year commencing with the Financial Year first ending after
the date hereof and in any event not later than 180 days after the end
of each such Financial Year a certificate signed by two directors of
the Current Issuer to the effect that as at a date not more than seven
days before delivering such certificate (the "CERTIFICATION DATE")
there did not exist and had not existed since the certification date
of the previous certificate (or in the case of the first such
certificate the date hereof) any Current Issuer Note Event of Default
or any Current Issuer Potential Note Event of Default (or if such then
exists or existed specifying the same) and that during the period from
and including the certification date of the last such certificate (or
in the case of the first such certificate the date hereof) to and
including the certification date of such certificate the Current
Issuer has complied with all its obligations contained in this Current
Issuer Deed of Charge and each of the other Current Issuer Transaction
Documents or (if such is not the case) specifying the respects in
which it has not so complied;
(g) Further Assurances: so far as permitted by applicable law, at all
times execute all such further documents and do all such further acts
and things as may be necessary at any time or times in the opinion of
the Note Trustee to give effect to this Current Issuer Deed of Charge
and the other Current Issuer Transaction Documents;
(h) Compliance with Current Issuer Transaction Documents: observe and
comply with its obligations and use its reasonable endeavours to
procure that each other party to any of the Current Issuer Transaction
Documents complies with and performs all its respective obligations
under each Current Issuer Transaction Document and not make any
amendment or modification to such agreement or agree to waive or
authorise any breach thereof without the prior written approval of the
Note Trustee and notify the Note Trustee forthwith upon becoming aware
of any breach by any such other party to any Current Issuer
Transaction Document;
29
(i) Information: so far as permitted by applicable law, give or procure to
be given to the Note Trustee such opinions, certificates, information
and evidence as it shall require and in such form as it shall require
(including without limitation the procurement by the Current Issuer of
all such certificates called for by the Note Trustee pursuant to this
Current Issuer Deed of Charge) for the purpose of the discharge or
exercise of the duties, trusts, powers, authorities and discretions
vested in it under this Current Issuer Deed of Charge or by operation
of law;
(j) Taxes: duly and promptly pay and discharge all Taxes imposed upon it
or its assets unless such Taxes are, in the opinion of the Note
Trustee, being contested in good faith by the Current Issuer;
(k) Basis Rate Swap Agreement: in the event of termination of the Current
Issuer Basis Rate Swap Agreement, notify the Note Trustee and the
Rating Agencies and use its best efforts to enter into a replacement
basis rate swap agreement upon terms acceptable to the Rating Agencies
and the Note Trustee with a basis rate swap provider whom the Rating
Agencies have previously confirmed in writing to the Current Issuer
and the Note Trustee will not cause the then-current ratings of the
Current Issuer Notes to be downgraded, withdrawn or qualified; and
(l) Currency Swap Agreements:
(i) Dollar Currency Swap Agreements: in the event of termination of
any Transaction (as defined in the Current Issuer Dollar Currency
Swap Agreements) under any Current Issuer Dollar Currency Swap
Agreement, notify the Note Trustee and the Rating Agencies and
use its best efforts to enter into a replacement of that
Transaction in respect of the Dollar Notes (or, as applicable,
the relevant class of the Dollar Notes) upon terms acceptable to
the Rating Agencies and the Note Trustee with a dollar currency
swap provider whom the Rating Agencies have previously confirmed
in writing to the Current Issuer and the Note Trustee will not
cause the then-current ratings of the Current Issuer Notes to be
downgraded, withdrawn or qualified;
(ii) Euro Currency Swap Agreements: in the event of termination of any
Transaction (as defined in the Current Issuer Euro Currency Swap
Agreements) under any Current Issuer Euro Currency Swap
Agreement, notify the Note Trustee and the Rating Agencies and
use its best efforts to enter into a replacement of that
Transaction in respect of the Euro Notes (or, as applicable, the
relevant class of the Euro Notes) upon terms acceptable to the
Rating Agencies and the Note Trustee with a euro currency swap
provider whom the Rating Agencies have previously confirmed in
writing to the Current Issuer and the Note Trustee will not cause
the then-current ratings of the Current Issuer Notes to be
downgraded, withdrawn or qualified;
(m) Bank Accounts: in the event of termination of the Current Issuer Bank
Account Agreement, subject to and in accordance with the provisions of
the Current Issuer
30
Bank Account Agreement use its reasonable endeavours to enter into a
replacement bank account agreement;
(n) Cash Management Agreement: in the event of termination of the Current
Issuer Cash Management Agreement, subject to and in accordance with
the provisions of the Current Issuer Cash Management Agreement, use
its reasonable endeavours to enter into a replacement cash management
agreement.
In addition to the foregoing, the Current Issuer hereby covenants with the
Basis Rate Swap Provider, the Dollar Currency Swap Provider and the Euro
Currency Swap Provider that it shall not make any amendment or modification
to, or exercise any waiver in respect of, the Current Issuer Cash
Management Agreement which would be adversely prejudicial to the interests
of the Dollar Currency Swap Provider or the Euro Currency Swap Provider
without the prior written consent of the Dollar Currency Swap Provider or
the Euro Currency Swap Provider (as the case may be) save that to the
extent required, such consent shall not be unreasonably withheld or
delayed.
16. NOTE TRUSTEE PROVISIONS
16.1 SUPPLEMENT TO TRUSTEE ACTS: It is hereby agreed that Clause 10 (Supplement
to Trustee Acts) of the Current Issuer Trust Deed shall be incorporated in
and shall apply, mutatis mutandis, to this Current Issuer Deed of Charge
(and for that purpose references therein to "these presents" shall be
construed as references to this Current Issuer Deed of Charge) provided
that for the purposes of paragraph (n) therein at any time after the
redemption in full of the Current Issuer Notes, the Note Trustee shall have
regard to the interests of the Current Issuer Secured Creditor which ranks
next highest under the Current Issuer Post-Enforcement Priority of Payment.
16.2 APPOINTMENT, REMOVAL AND RETIREMENT: It is hereby agreed that Clause 14
(Appointment, Removal and Retirement of Note Trustee) of the Current Issuer
Trust Deed shall be incorporated in and shall apply, mutatis mutandis, to
this Current Issuer Deed of Charge (and for that purpose references therein
to "these presents" shall be construed as references to this Current Issuer
Deed of Charge) provided that for the purposes of this Current Issuer Deed
of Charge it shall be an additional requirement that the Note Trustee under
this Current Issuer Deed of Charge shall be the same person or persons as
the Note Trustee under the Current Issuer Trust Deed.
16.3 REMUNERATION AND INDEMNIFICATION OF NOTE TRUSTEE: It is hereby agreed that
Clause 9 (Remuneration and Indemnification of Note Trustee) of the Current
Issuer Trust Deed shall be incorporated in and shall apply, mutatis
mutandis, to this Current Issuer Deed of Charge (and for that purpose
references therein to "these presents" shall be construed as references to
this Current Issuer Deed of Charge).
16.4 MEETINGS OF NOTEHOLDERS: It is hereby agreed that Schedule 4 (Provisions
for Meetings of Noteholders) of the Current Issuer Trust Deed shall be
incorporated in and shall apply, mutatis mutandis, to this Current Issuer
Deed of Charge (and for that purpose references therein to "these presents"
shall be construed as references to this Current Issuer Deed of Charge).
31
16.5 INVESTMENT OF MONEYS: It is hereby agreed that Clause 8.3 (Authorised
Investments) of the Current Issuer Trust Deed shall be incorporated in and
shall apply, mutatis mutandis, to this Current Issuer Deed of Charge.
16.6 ACKNOWLEDGEMENT: Each of the parties to this Current Issuer Deed of Charge
hereby acknowledges that it is bound by the provisions of the Current
Issuer Trust Deed which are incorporated by reference into this Current
Issuer Deed of Charge and confirms that it has received a copy of the
Current Issuer Trust Deed.
16.7 JERSEY LAW WAIVERS:
(a) Any right which at any time the Current Issuer 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 the Current Issuer
in respect of the obligations hereby assumed by the Current Issuer is
hereby abandoned and waived.
(b) The Current Issuer undertakes that if at any time any person
indemnified sues the Current Issuer in respect of any such obligations
and the person in respect of whose obligations the indemnity is given
is not sued also, the Current Issuer shall not claim that such person
be made a party to the proceedings and the Current Issuer 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 securities shall or shall not have been
observed.
(c) Any right which the Current Issuer 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.
17. MODIFICATION AND WAIVER
17.1 MODIFICATION: The Note Trustee may without the consent or sanction of the
Noteholders or any other Current Issuer Secured Creditor at any time and
from time to time concur with the Current Issuer in making any modification
(except a Basic Terms Modification (as defined in paragraph 1 of Schedule 4
(Provisions for Meetings of Noteholders) to the Current Issuer Trust Deed)
(i) to this Current Issuer Deed of Charge, the Current Issuer Notes, the
Current Issuer Trust Deed or to any of the other Transaction Documents
which in the opinion of the Note Trustee it may be proper to make PROVIDED
THAT the Note Trustee is of the opinion that such modification will not be
materially prejudicial to the interests of the Noteholders or (ii) to this
Current Issuer Deed of Charge, the Current Issuer Notes, the Current Issuer
Trust Deed or any of the other Transaction Documents if in the opinion of
the Note Trustee such modification is of a formal, minor or technical
nature or to correct a manifest error. For the
32
purposes of this Clause 17.1 (Modification), a proposed modification will
not materially harm the interest of any Noteholder solely as a result of
any New Issuer executing a Deed of Accession pursuant to Clause 3.12 (New
Intercompany Loans) of the Funding Deed of Charge or Clause 2.2 (New
Intercompany Loan Agreement) of the Intercompany Loan Terms and Conditions.
Any such modification may be made on such terms and subject to such
conditions (if any) as the Note Trustee may determine, shall be binding
upon the Current Issuer and the Current Issuer Secured Creditors and,
unless the Note Trustee agrees otherwise, shall be notified by the Current
Issuer to the Noteholders in accordance with the Conditions and to the
other Current Issuer Secured Creditors as soon as practicable thereafter.
So long as any of the Current Issuer Notes are rated by the Rating
Agencies, the Current Issuer shall notify the Rating Agencies in writing as
soon as reasonably practicable thereafter of any modification to the
provisions of this Current Issuer Deed of Charge, the Current Issuer Notes,
the Current Issuer Trust Deed or any of the other Current Issuer
Transaction Documents.
17.2 WAIVER: Subject as expressly provided otherwise in the Current Issuer Notes
or in any other Transaction Document, the Note Trustee may from time to
time and at any time without the consent or sanction of the Noteholders or
any other Current Issuer Secured Creditor and without prejudice to its
rights in respect of any subsequent breach, but only if and in so far as in
its opinion the interests of the Noteholders shall not be materially
prejudiced thereby waive or authorise any breach or proposed breach by the
Current Issuer or any other party thereto of any of the covenants or
provisions contained in this Current Issuer Deed of Charge or in any of the
other Transaction Documents or determine that any Current Issuer Note Event
of Default shall not be treated as such for the purposes of this Current
Issuer Deed of Charge, the Current Issuer Notes and the Current Issuer
Trust Deed PROVIDED ALWAYS THAT the Note Trustee shall not exercise any
powers conferred on it by this Clause 17.2 (Waiver) in contravention of any
express direction given by Extraordinary Resolution or by a request in
writing of the relevant Noteholders in accordance with the Conditions (but
so that no such direction or request shall affect any waiver, authorisation
or determination previously given or made). Any such waiver, authorisation
or determination:
(a) may be given or made on such terms and subject to such conditions (if
any) as the Note Trustee may determine;
(b) shall be binding on the Noteholders and the other Current Issuer
Secured Creditors, if, but only if, the Note Trustee shall so require;
and
(c) shall be notified by the Current Issuer to the Noteholders in
accordance with the Conditions and to the other Current Issuer Secured
Creditors as soon as practicable thereafter.
The provisions of this Clause 17.2 (Waiver) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Current Issuer
Deed of Charge, the Current Issuer Notes and the Current Issuer Trust Deed
as permitted by the Trust Indenture Act.
33
18. MISCELLANEOUS PROVISIONS
18.1 EVIDENCE OF INDEBTEDNESS: In any action, proceedings or claim relating to
this Current Issuer Deed of Charge or the charges contained in this Current
Issuer Deed of Charge, a statement as to any amount due to any Current
Issuer Secured Creditor or of the Current Issuer Secured Obligations or any
part thereof or a statement of any amounts which have been notified to the
Note Trustee as being amounts due to any Current Issuer Secured Creditor
which is certified as being correct by an officer of the Note Trustee or an
officer of the relevant Current Issuer Secured Creditor shall, save in the
case of manifest error, be conclusive evidence that such amount is in fact
due and payable.
18.2 LIABILITY: All the liabilities and obligations of the Current Issuer under
or by virtue of this Current Issuer Deed of Charge shall not be impaired
by:
(a) any failure of this Current Issuer Deed of Charge to be legal, valid,
binding and enforceable as regards the Current Issuer whether as a
result of a lack of corporate powers or of directors' authority,
defective execution or for any other reason whatsoever;
(b) any giving of time, forbearance, indulgence or waiver as regards the
Current Issuer;
(c) a discharge or release of the Current Issuer; or
(d) any other matter or event whatsoever whether similar to the foregoing
or not which might have the effect of impairing all or any of its
liabilities or obligations except proper and valid payment or
discharge of all Current Issuer Secured Obligations and amounts
whatsoever which this Current Issuer Deed of Charge provides are to be
paid by the Current Issuer or an absolute discharge or release of the
Current Issuer signed by the Current Issuer Secured Creditors and the
Note Trustee.
18.3 CURRENT ISSUER SECURED CREDITORS: Each Current Issuer Secured Creditor
shall be bound by the provisions of this Current Issuer Deed of Charge as
if it contained covenants by each Current Issuer Secured Creditor in favour
of the Note Trustee and every other Current Issuer Secured Creditor to
observe and be bound by all the provisions of this Current Issuer Deed of
Charge expressed to apply to the Current Issuer Secured Creditors.
19. RIGHTS CUMULATIVE
The respective rights of the Note Trustee, the Current Issuer Secured
Creditors and any Receiver to this Current Issuer Deed of Charge are
cumulative and may be exercised as often as each considers appropriate and
are in addition to their respective rights under the general law. No
failure on the part of the Note Trustee, the Current Issuer Secured
Creditors or any Receiver to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies in this Current
Issuer Deed of Charge are cumulative and not exclusive of any remedies
provided by law.
34
20. ASSIGNMENT
None of the Current Issuer Secured Creditors may assign, encumber or
transfer all or any part of its rights or benefits and/or transfer its
obligations under this Current Issuer Deed of Charge without the prior
written consent of the Note Trustee.
21. NON PETITION COVENANT; CORPORATE OBLIGATIONS
21.1 NON PETITION: Each of the parties hereto hereby agrees that it shall not
institute against the Current Issuer any winding-up, administration,
insolvency or similar proceedings for so long as any sum is outstanding
under Current Issuer Notes or for two years plus one day since the last day
on which any such sum was outstanding provided that the Note Trustee may
prove or lodge a claim in the event of a liquidation initiated by any other
person.
21.2 CORPORATE OBLIGATIONS: To the extent permitted by law, no recourse under
any obligation, covenant, or agreement of any person contained in this
Current Issuer Deed of Charge shall be had against any shareholder, officer
or director of such person as such, by the enforcement of any assessment or
by any legal proceeding, by virtue of any statute or otherwise; it being
expressly agreed and understood that this Agreement is a corporate
obligation of each person expressed to be a party hereto and no personal
liability shall attach to or be incurred by the shareholders, officers,
agents or directors of such person as such, or any of them, under or by
reason of any of the obligations, covenants or agreements of such person
contained in this Current Issuer Deed of Charge, or implied therefrom, and
that any and all personal liability for breaches by such person of any of
such obligations, covenants or agreements, either under any applicable law
or by statute or constitution, of every such shareholder, officer, agent or
director is hereby expressly waived by each person expressed to be a party
hereto as a condition of and consideration for the execution of this
Current Issuer Deed of Charge.
22. NOTICES
Any notices or other communication or document to be given or delivered
pursuant to this Current Issuer Deed of Charge to any of the parties hereto
shall be sufficiently served if sent by prepaid first class post, by hand
or by facsimile transmission and shall be deemed to be given (in the case
of facsimile transmission) when despatched or (where delivered by hand) on
the day of delivery if delivered before 17.00 hours on a London Business
Day or on the next London Business Day if delivered thereafter or (in the
case of first class post) when it would be received in the ordinary course
of the post and shall be sent:
(a) in the case of the Current Issuer, to Granite Mortgages 02-2 plc,
Fifth Floor, 100 Wood Street, London EC2V 7EX (facsimile number 020
7606 0643) for the attention of the Company Secretary with a copy to
Northern Rock plc, Northern Rock House, Gosforth, Newcastle upon Tyne
NE3 4PL (facsimile number 0191 213 2203) for the attention of the
Group Secretary;
(b) in the case of the Note Trustee, to The Bank of New York, One Canada
Square, 48th Floor, London E14 5AL, attention Corporate Trust (Global
Structured Finance) (facsimile number 020 7964 6399);
35
(c) in the case of the Principal Paying Agent, the Agent Bank, the
Registrar, the Transfer Agent or the Account Bank, to Citibank, N.A.,
5 Carmelite Street, London, EC4Y OPA;
(d) in the case of the Current Issuer Cash Manager to Northern Rock plc,
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile
number 0191 213 2203) for the attention of the Group Secretary;
(e) in the case of the U.S. Paying Agent, to Citibank, N.A., 111 Wall
Street, 14th Floor, Zone 3, New York, N.Y. 10043, U.S.A. (facsimile
number 212 657 3862) for the attention of Global Agency and Trust;
(f) in the case of the Basis Rate Swap Provider, to Northern Rock plc,
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile
number 0191 213 2203) for the attention of the Group Secretary;
(g) in the case of the Dollar Currency Swap Provider to [______],
(facsimile number [______]) for the attention of the [______];
(h) in the case of the Euro Currency Swap Provider to [______], (facsimile
number [______]) for the attention of the [______];
(i) in the case of the Corporate Services Provider, to Law Debenture
Corporate Services Limited, Fifth Floor, 100 Wood Street, London EC2V
7EX (facsimile number 020 7606 0643) for the attention of the Company
Secretary;
(j) in the case of Moody's, to Moody's Investor Services, 1st Floor, 2
Minster Court, Mincing Lane, London EC3R 7XB (facsimile number 020
7772 5400) for the attention of David Harrison, Asset Backed Finance;
(k) in the case of S&P, to Standard & Poor's, Garden House, 18 Finsbury
Circus, London EC2M 7BP (facsimile number 020 7826 3598) for the
attention of the Structured Finance Surveillance Group; and
(l) in the case of Fitch, to Fitch Ratings Limited, Eldon House, 2 Eldon
Street, London EC2M 7UA (facsimile number: 020 7417 6262) for the
attention of European Structured Finance,
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party to
the others by fifteen days prior written notice in accordance with the
provisions of this Clause 22 (Notices).
23. THIRD PARTY RIGHTS
A person who is not a party to this Current Issuer Deed of Charge may not
enforce any of its terms under the Contracts (Rights of Third Parties) Act
1999, but this shall not affect any right or remedy of a third party which
exists or is available apart from that Act.
36
24. EXECUTION IN COUNTERPARTS; SEVERABILITY
24.1 COUNTERPARTS: This Deed may be executed in any number of counterparts
(manually or by facsimile) and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the
same instrument.
24.2 SEVERABILITY: Where any provision in or obligation under this Current
Issuer Deed of Charge shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations under this Current Issuer Deed of Charge, or of
such provision or obligation in any other jurisdiction, shall not be
affected or impaired thereby.
25. GOVERNING LAW AND JURISDICTION; APPROPRIATE FORUM
25.1 GOVERNING LAW: This Deed is governed by, and shall be construed in
accordance with, English law, save that those parts of this Current Issuer
Deed of Charge concerned with the creation, subsistence or enforcement of
the Jersey Security Interests shall be governed by, and shall be construed
in accordance with Jersey law.
25.2 JURISDICTION: Each of the parties hereto irrevocably agrees that the courts
of England shall have jurisdiction to hear and determine any suit, action
or proceeding, and to settle any disputes, which may arise out of or in
connection with this Current Issuer Deed of Charge and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
25.3 APPROPRIATE FORUM: Each of the parties hereto irrevocably waives any
objection which it might now or hereafter have to the courts of England
being nominated as the forum to hear and determine any Proceedings and to
settle any disputes, and agrees not to claim that any such court is not a
convenient or appropriate forum.
IN WITNESS of which this Current Issuer Deed of Charge has been executed by the
parties hereto as a deed which has been delivered on the date first appearing on
page one.
37
SCHEDULE 1
FORM OF SECURITY POWER OF ATTORNEY
THIS POWER OF ATTORNEY is made on [O] September, 2002 by Granite Mortgages 02-2
plc (registered number [O]) a private limited liability company incorporated
under the laws of England and Wales whose registered office is at Fifth Floor,
100 Wood Street, London EC2V 7EX (the "PRINCIPAL").
WHEREAS
(1) By virtue of a Deed (as amended, varied, supplemented or novated from time
to time the "CURRENT ISSUER DEED OF CHARGE") dated [O] September, 2002
between Granite Mortgages 02-2 plc, The Bank of New York as Note Trustee
and others, provision was made for the execution by the Principal of this
Power of Attorney.
(2) Words and phrases in this Power of Attorney shall (save where expressed to
the contrary) have the same meanings respectively as the words and phrases
in the Current Issuer Deed of Charge.
NOW THIS POWER OF ATTORNEY WITNESSETH
1. The Principal hereby irrevocably (within the meaning of Section 4 of the
Powers of Attorney Act 1971) and by way of security for the payment and
performance of the Current Issuer Secured Obligations and the covenants,
conditions, obligations and undertakings on the part of the Principal
contained in the Current Issuer Deed of Charge and the other Current Issuer
Transaction Documents to which the Principal is a party from time to time
appoints The Bank of New York and any other person or persons for the time
being the Note Trustee or Note Trustees of and under the Current Issuer
Deed of Charge (the "ATTORNEY") and each and every person to whom the Note
Trustee shall from time to time have delegated the exercise of the power of
attorney conferred by this Power of Attorney (each a "DELEGATE") and any
receiver including any administrative receiver and any manager (the
"RECEIVER") and/or administrator (the "ADMINISTRATOR") appointed from time
to time by the Attorney or on its behalf its true and lawful attorney for
and in the Principal's name or otherwise jointly and severally to sign,
seal, execute, deliver, perfect and do any assurance, act, matter or thing
which the Attorney, Delegate, Receiver or Administrator considers in each
case to be necessary for the protection or preservation of the Attorney's
and the Current Issuer Secured Creditors' interests and rights (as
described in the Current Issuer Deed of Charge) in and to the Current
Issuer Charged Property or which ought to be done by the Principal under
the covenants, undertakings and provisions contained in the Current Issuer
Deed of Charge and the other Current Issuer Transaction Documents to which
the Principal is a party from time to time and generally to in its name and
on its behalf to exercise all or any of the powers, authorities or
discretions conferred by or pursuant to the Current Issuer Deed of Charge
on the Note Trustee and/or any Receiver whether on or at any time after the
security has become enforceable in accordance with Clause 7.2 (Enforceable)
of the Current Issuer Deed of Charge or in any other circumstances where
the Attorney has become entitled to take any of the steps referred
38
to in the Current Issuer Deed of Charge including (without limitation) any
or all of the following:
(a) to do every act or thing which the Attorney, Delegate, Receiver or
Administrator may deem to be necessary, proper or expedient for
getting in any of the Current Issuer Charged Property and/or fully and
effectively vesting, transferring or assigning the Current Issuer
Charged Property or any part thereof and/or the Principal's estate,
right, title, benefit and/or interest therein or thereto in or to the
Attorney and its successors in title or other person or persons
entitled to the benefit thereof or for carrying into effect any other
dealing with the Current Issuer Charged Property whatsoever permitted
under the Current Issuer Deed of Charge in the same manner and as
fully and effectively as the Principal could have done;
(b) the power by writing under its hand by an officer of the Attorney
(including every Receiver appointed under the Current Issuer Deed of
Charge) from time to time to appoint a substitute attorney (each a
"SUBSTITUTE") who shall have power to act on behalf of the Principal
as if that Substitute shall have been originally appointed Attorney by
this Power of Attorney and/or to revoke any such appointment at any
time without assigning any reason therefor.
2. In favour of the Attorney, any Delegate, any Receiver and/or Administrator
and/or Substitute, or a person dealing with any of them and the successors
and assigns of such a person, all acts properly done and documents executed
or signed by the Attorney, a Delegate, a Receiver, an Administrator or a
Substitute in the purported exercise of any power conferred by this Power
of Attorney shall for all purposes be valid and binding on the Principal
and its successors and assigns.
3. The Principal irrevocably and unconditionally undertakes to indemnify the
Attorney and each Delegate, Receiver and/or Administrator and/or Substitute
appointed from time to time by the Attorney and their respective estates
(each an "INDEMNIFIED PARTY") against all actions, proceedings, claims,
costs, expenses and liabilities of every description arising from the
exercise, or the purported exercise, of any of the powers conferred by this
Power of Attorney, save where the same arises as the result of the fraud,
negligence or wilful default of the relevant Indemnified Party or its
officers or employees.
4. The provisions of Clause 3 (Current Issuer Security) of the Current Issuer
Deed of Charge shall continue in force after the revocation or termination,
howsoever arising, of this Power of Attorney.
5. The laws of England and Wales shall apply to this Power of Attorney and the
interpretation thereof and to all acts of the Attorney and each Delegate,
Receiver and/or Administrator and/or Substitute carried out or purported to
be carried out under the terms hereof except that in relation to any action
taken by the Attorney, each Delegate, Receiver and/or Administrator/and or
Substitute in respect of the Jersey Security Interests or the Current
Issuer Jersey Secured Property, the laws of Jersey shall apply.
39
6. The Principal hereby agrees at all times hereafter to ratify and confirm
whatsoever the said Attorney or its attorney or attorneys or any Delegate,
Receiver or Administrator or Substitute shall properly and lawfully do or
cause to be done in and concerning the Current Issuer Charged Property.
IN WITNESS whereof this Power of Attorney has been executed as a deed by the
Principal the day and year first before written.
EXECUTED AS A DEED by )
GRANITE MORTGAGES 02-2 PLC )
acting by: )
- ---------------------------------
Director
Name:
Title:
- ---------------------------------
Director/Secretary
Name:
Title:
40
SCHEDULE 2
CURRENT ISSUER POST-ENFORCEMENT PRIORITY OF PAYMENTS
Following enforcement of the Issuer Security, on each Payment Date the Note
Trustee (or the Current Issuer Cash Manager on its behalf) will apply amounts
received or recovered as follows:
(A) first, to pay amounts due to the Note Trustee (and any Receiver
appointed by the Note Trustee) together with interest and (if
necessary) VAT on those amounts and to provide for any amounts then
due or to become due and payable to the Note Trustee and the Receiver
under the provisions of the Current Issuer Trust Deed, the Current
Issuer Deed of Charge and any other Transaction Document;
(B) second, to pay, in no order of priority between them but in proportion
to the respective amounts due, the Agent Bank, the Paying Agents, the
Transfer Agent and the Registrar, together with interest and (if
necessary) VAT on those amounts and to provide for any costs, charges,
liabilities and expenses then due or to become due and payable to them
under the provisions of the Current Issuer Paying Agent and Agent Bank
Agreement;
(C) third, in no order of priority between them but in proportion to the
respective amounts due, towards payment of amounts (together with (if
necessary) VAT on those amounts) due and payable to the Current Issuer
Cash Manager under the Current Issuer Cash Management Agreement and to
the Corporate Services Provider under the Current Issuer Corporate
Services Agreement and to the Account Bank under the Current Issuer
Bank Account Agreement;
(D) fourth, in no order of priority between them but in proportion to the
respective amounts due, to pay:
(i) amounts (including such part of any termination payment) due to
the Basis Rate Swap Provider (except for any termination payment
due and payable to the Basis Rate Swap Provider as a result of a
Basis Rate Swap Provider Default by that Basis Rate Swap
Provider);
(ii) amounts (including such part of any termination payment) due to
the Series 1 Class A1 Dollar Currency Swap Provider under the
Series 1 Class A1 Dollar Currency Swap (except for any
termination payment due and payable to that Swap Provider as a
result of a Dollar Currency Swap Provider Default by that Swap
Provider) and from amounts received from the Series 1 Class A1
Dollar Currency Swap Provider to pay interest due or overdue and
to repay principal on the Series 1 Class A1 Notes until the
Series 1 Class A1 Notes have been repaid in full;
(iii) amounts (including such part of any termination payment) due to
the Series 1 Class A2 Dollar Currency Swap Provider under the
Series 1 Class A2 Dollar Currency Swap (except for any
termination payment due and payable to that
41
Swap Provider as a result of a Dollar Currency Swap Provider
Default by that Swap Provider) and from amounts received from
the Series 1 Class A2 Dollar Currency Swap Provider to pay
interest due or overdue and to repay principal on the Series 1
Class A2 Notes until the Series 1 Class A2 Notes have been
repaid in full; and
(iv) amounts (including such part of any termination payment) due to
the Series 2 Class A Euro Currency Swap Provider under the
Series 2 Class A Euro Currency Swap (except for any termination
payment due and payable to that Swap Provider as a result of a
Euro Currency Swap Provider Default by that Swap Provider) and
from amounts received from the Series 2 Class A Euro Currency
Swap Provider to pay interest due or overdue and to repay
principal on the Series 2 Class A Notes until the Series 2 Class
A Notes have been repaid in full; and
(v) interest due or overdue and to repay principal on the Series 3
Class A Notes until those notes have been repaid in full;
(E) fifth, in no order of priority between them but in proportion to the
respective amounts due, to pay:
(i) amounts (including such part of any termination payment) due to
the Series 1 Class B Dollar Currency Swap Provider under the
Series 1 Class B Dollar Currency Swap (except for any
termination payment due and payable to that Swap Provider as a
result of a Dollar Currency Swap Provider Default by that Swap
Provider) and from amounts received from the Series 1 Class B
Dollar Currency Swap Provider to pay interest due or overdue and
to repay principal on the Series 1 Class B Notes until the
Series 1 Class B Notes have been repaid in full;
(ii) amounts (including such part of any termination payment) due to
the Series 2 Class B Euro Currency Swap Provider under the
Series 2 Class B Euro Currency Swap (except for any termination
payment due and payable to that Swap Provider as a result of a
Euro Currency Swap Provider Default by that Swap Provider) and
from amounts received from the Series 2 Class B Euro Currency
Swap Provider to pay interest due or overdue and to repay
principal on the Series 2 Class B Notes until the Series 2 Class
B Notes have been repaid in full; and
(iii) interest due or overdue and to repay principal on the Series 3
Class B Notes until those notes have been repaid in full;
(F) sixth, in no order of priority between them but in proportion to the
respective amounts due, to pay:
(i) amounts (including such part of any termination payment) due to
the Series 1 Class C Dollar Currency Swap Provider under the
Series 1 Class C Dollar
42
Currency Swap (except for any termination payment due and
payable to that Swap Provider as a result of a Dollar Currency
Swap Provider Default by that Swap Provider) and from amounts
received from the Series 1 Class C Dollar Currency Swap Provider
to pay interest due or overdue and to repay principal on the
Series 1 Class C Notes until the Series 1 Class C Notes have
been repaid in full;
(ii) amounts (including such part of any termination payment) due to
the Series 2 Class C Euro Currency Swap Provider under the
Series 2 Class C Euro Currency Swap (except for any termination
payment due and payable to that Swap Provider as a result of a
Euro Currency Swap Provider Default by that Swap Provider) and
from amounts received from the Series 2 Class C Euro Currency
Swap Provider to pay interest due or overdue and to repay
principal on the Series 2 Class C Notes until the Series 2 Class
C Notes have been repaid in full; and
(iii) interest due or overdue and to repay principal on the Series 3
Class C Notes until those notes have been repaid in full;
(G) seventh, to pay interest due or overdue and to repay principal on the
Series 3 Class D Notes until those notes have been repaid in full;
(H) eighth, in no order of priority between them but in proportion to the
respective amounts due, to pay any termination payment to:
(i) the Basis Rate Swap Provider following a Basis Rate Swap
Provider Default by the Basis Rate Swap Provider;
(ii) the Dollar Currency Swap Provider following a Dollar Currency
Swap Provider Default by the Dollar Currency Swap Provider;
(iii) the Euro Currency Swap Provider following a Euro Currency Swap
Provider Default by the Euro Currency Swap Provider; and
(I) last, to pay any amount remaining following the application of
principal and revenue set forth in paragraphs (A) through (H) above,
to the Current Issuer.
43
SCHEDULE 3
FORM OF NOTICE OF ASSIGNMENT
To: [Addressee(s)]
GRANITE MORTGAGES 02-2 PLC - ASSIGNMENT OF RIGHTS UNDER CURRENT ISSUER
TRANSACTION DOCUMENTS
[O] September, 2002
Dear Sirs,
Terms and expressions used in this letter are as defined in a deed of charge
(the "CURRENT ISSUER DEED OF CHARGE") between Granite Mortgages 02-2 plc (the
"CURRENT ISSUER"), The Bank of New York (the "NOTE TRUSTEE") and others dated
[O] September, 2002.
We hereby give notice to each addressee of this letter that by assignment(s)
under or pursuant to the Current Issuer Deed of Charge, the Current Issuer has
assigned absolutely, by way of security for the payment and performance of
certain obligations of the Current Issuer described in the Current Issuer Deed
of Charge (the "CURRENT ISSUER SECURED OBLIGATIONS"), to the Note Trustee all
its right, title, benefit and interest under the [Agreement(s)] (the "CURRENT
ISSUER TRANSACTION DOCUMENTS") [including its right, title interest and benefit
in relation to [describe property] and including, without limitation, all rights
to receive payment of any amounts which may become payable to the Current Issuer
thereunder, all payments received by the Current Issuer thereunder, all rights
to serve notices and/or make demands thereunder and/or to take such steps as are
required to cause payments to become due and payable thereunder and all rights
of action in respect of any breach thereof and all rights to receive damages or
obtain relief in respect thereof and the proceeds of any of the foregoing,
(hereinafter called "RELEVANT CURRENT ISSUER PROPERTY").
In relation to any of the Relevant Current Issuer Property which may be situated
in Jersey at any time, we hereby give notice for the purpose of the Security
Interests (Jersey) Law 1983 to each addressee of this letter that with the
intention of creating a security interest in accordance with such law in such
property in favour of the Note Trustee for the payment and performance of the
Current Issuer Secured Obligations, the Current Issuer has assigned all of its
rights, title, benefit and interest, present and future, in, to and under the
Relevant Current Issuer Property to the Note Trustee.
By signing the enclosed copy of this notice you acknowledge and consent to the
assignments and agree that:
(i) from the date of this notice you are obliged to and you will pay all
moneys which are or may become payable to the Current Issuer under the
aforesaid agreements to or to the order of the Note Trustee; and
(ii) you have not, at the date of this notice, received notice that any
third party has or will have any right of interest whatsoever in the
Relevant Current Issuer Property.
44
Notwithstanding the assignments made by the Current Issuer and referred to in
this notice, the Note Trustee hereby confirms and you further acknowledge that:
(b) you may continue to make all payments becoming due to the Current
Issuer in respect of the Relevant Current Issuer Property in the
manner envisaged by the relevant Current Issuer Transaction
Document(s); and
(c) the Current Issuer shall be entitled to exercise its rights, powers
and discretions and perform its obligations in relation to the
Relevant Current Issuer Property and under the Current Issuer
Transaction Documents in accordance with the provisions of the Current
Issuer Transaction Documents,
but only until such time as you receive notice from the Note Trustee to the
contrary or to the effect that the security created under the Current Issuer
Deed of Charge has become enforceable, in which event from receipt of such
notice you agree that you will pay all monies becoming due and payable to the
Current Issuer in respect of the Relevant Current Issuer Property in accordance
with any instructions received from the Note Trustee.
This letter is governed by, and shall be construed in accordance with, English
law, except that to the extent of any Relevant Current Issuer Property which may
be situated in Jersey at any time, it is governed by and shall be construed in
accordance with the laws of Jersey.
Please acknowledge receipt of this notice by executing and returning the copy of
this letter attached hereto.
Yours faithfully,
EXECUTED for and on behalf of )
GRANITE MORTGAGES 02-2 PLC )
by: )
- ---------------------------------
Authorised Signatory
Name:
Title:
45
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
- ---------------------------------
Authorised Signatory
Name:
Title:
We acknowledge receipt of the above notice and the terms of the assignment
created by you in respect of the Relevant Current Issuer Property.
In respect of the [Agreement]:
For and on behalf of )
[Party to Current Issuer Transaction Document] )
by: )
- ---------------------------------
Authorised Signatory
Name:
Title:
46
EXECUTION PAGE
THE CURRENT ISSUER
EXECUTED AS A DEED by )
GRANITE MORTGAGES 02-2 PLC )
acting by: )
Name:
Title:
Name:
Representing LDC Securitisation Director No. 1 Limited
Title:
THE NOTE TRUSTEE
EXECUTED AS A DEED for and )
on behalf of )
THE BANK OF NEW YORK )
by:
Name:
Title:
THE PRINCIPAL PAYING AGENT, THE AGENT BANK,
THE REGISTRAR, THE TRANSFER AGENT AND THE ACCOUNT BANK
EXECUTED AS A DEED for and on behalf of )
CITIBANK, N.A. )
by: )
Name:
Title:
47
THE US PAYING AGENT
EXECUTED AS A DEED for and on behalf of )
CITIBANK, N.A. )
by: )
Name:
Title:
THE DOLLAR CURRENCY SWAP PROVIDER
EXECUTED AS A DEED for and on behalf of )
[-----] )
by: )
Name:
Title:
THE EURO CURRENCY SWAP PROVIDER
EXECUTED AS A DEED for and on behalf of )
[-----] )
by: )
Name:
Title:
48
THE CURRENT ISSUER CASH MANAGER AND THE BASIS RATE SWAP PROVIDER
EXECUTED AS A DEED by )
)
)
as attorney for
NORTHERN ROCK PLC in the presence of:
Signature of Witness:
Name of Witness:
Occupation:
Address:
THE CORPORATE SERVICE PROVIDER
EXECUTED AS A DEED by )
LAW DEBENTURE CORPORATE )
SERVICES LIMITED )
acting by:
Name:
Title:
Name:
Title:
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