Exhibit 4.5.2
Dated [ ] September 2003
--------------------------
GRANITE FINANCE FUNDING LIMITED
as Funding
THE BANK OF NEW YORK
as Security Trustee
GRANITE MORTGAGES 03-3 PLC
as Current Issuer
NORTHERN ROCK PLC
as Current Issuer Start-up Loan Provider
- and -
OTHERS
- -----------------------------------------------------------------------------
ISSUER DEED OF ACCESSION
- -----------------------------------------------------------------------------
SIDLEY AUSTIN BROWN & WOOD
1 THREADNEEDLE STREET
LONDON EC2R 8AQ
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
CONTENTS
1. Interpretation.........................................................3
2. Representations and Warranties.........................................3
3. Accession..............................................................4
4. Funding Security.......................................................5
5. Title Guarantee........................................................6
6. Application............................................................6
7. Scope of the Funding Deed of Charge....................................7
8. Notices and Acknowledgements...........................................7
9. Amendment to the Funding Priority of Payments..........................8
10. Notices and Demands....................................................8
11. Non Petition Covenant..................................................9
12. Third Party Rights.....................................................9
13. Execution in Counterparts..............................................9
14. Governing Law and Jurisdiction; Appropriate Forum.....................10
SCHEDULE I Utilisation of Issuer Reserves..................................16
APPENDIX 1 Amended and Restated Funding Priority of Payments................17
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THIS DEED OF ACCESSION is made on [ ] September 2003
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited liability company incorporated under the laws of Jersey whose
London branch is at 4 Royal Mint Court, London EC3N 4HJ;
(2) THE BANK OF NEW YORK, a New York banking corporation whose London
branch address is at 48th Floor, One Canada Square, London E14 5AL
United Kingdom, in its capacity as Security Trustee;
(3) THE BANK OF NEW YORK, a New York banking corporation whose London
branch address is at 48th Floor, One Canada Square, London E14 5AL
United Kingdom, (1) in its separate capacities as Note Trustee in
respect of the Previous Issuers and (2) in its capacity as note trustee
under the Current Issuer Trust Deed and the Current Issuer Deed of
Charge (the "Current Issuer Note Trustee" which expression shall
include such person and all other persons for the time being acting as
the note trustee or note trustees pursuant to those deeds);
(4) GRANITE MORTGAGES 01-1 PLC (registered number 4129652), 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;
(5) GRANITE MORTGAGES 01-2 PLC (registered number 4270015), 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;
(6) GRANITE MORTGAGES 02-1 PLC (registered number 4340767), 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;
(7) 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;
(8) GRANITE MORTGAGES 03-1 PLC (registered number 4598035), 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;
(9) GRANITE MORTGAGES 03-2 PLC (registered number 4684567), 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.
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(10) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited liability company incorporated under the laws of Jersey whose
registered office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX
Channel Islands in its capacity as Mortgages Trustee;
(11) 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 Cash Manager;
(12) LLOYDS TSB BANK PLC, acting through its office at City Office, Bailey
Drive, Gillingham Business Park, Kent ME8 0LS, in its capacity as
Account Bank and acting through its office at 25 Monument Street,
London EC3R 8BQ in its capacity as Funding GIC Provider;
(13) MOURANT & CO. CAPITAL (SPV) LIMITED, a private limited company
incorporated under the laws of England and Wales whose registered
office is 4 Royal Mint Court, London EC3N 4HJ, in its capacity as
Corporate Services Provider;
(14) NORTHERN ROCK PLC (registered number 03273685), acting through its
office at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL,
in its capacity (1) as the Previous Start-up Loan Provider, and (2) as
Current Issuer Start-up Loan Provider;
(15) GRANITE MORTGAGES 03-3 PLC (registered number 4823268), 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.
NOW THIS DEED OF ACCESSION WITNESSES AS FOLLOWS
WHEREAS:
(A) Pursuant to the terms of the Current Issuer Intercompany Loan
Confirmation, the Current Issuer has agreed to make available to
Funding the Current Issuer Intercompany Loan.
(B) Pursuant to the terms of the Current Issuer Start-up Loan Agreement,
the Current Issuer Start-up Loan Provider has agreed to grant to
Funding the Current Issuer Start-up Loan.
(C) This Deed is supplemental to the Funding Deed of Charge, pursuant to
which Funding agreed to provide the Security Trustee with the benefit
of the security described in the Funding Deed of Charge to secure
Funding's obligations to the Funding Secured Creditors.
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(D) The terms of the Funding Deed of Charge permit Funding to secure its
obligations to a New Funding Secured Creditor thereunder and (where
such New Funding Secured Creditor is a New Issuer) permit Funding to
create certain Security Interests in favour of the Security Trustee for
the benefit of such New Funding Secured Creditor.
(E) The Current Issuer Start-up Loan Provider and the Current Issuer, each
of whom is a New Funding Secured Creditor, have agreed to enter into
this Deed of Accession (this "Deed") to accede to the provisions of the
Funding Deed of Charge.
(F) The Current Issuer Note Trustee has agreed to enter into this Deed to
accede to the provisions of the Funding Deed of Charge.
(G) The Funding Secured Creditors have agreed to enter into this Deed to,
among other things, acknowledge and agree to such accessions, permit
any consequential changes to the Funding Priority of Payments set out
in Part I, Part II and Part III of Schedule 3 of the Funding Deed of
Charge as are required and any other amendment as may be required to
give effect to this Deed and to acknowledge the Security Interests
created hereunder.
1. Interpretation
The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Sixth Amendment Deed made on [ ] September 2003 between,
among others, the Seller, Funding and the Mortgages Trustee (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.
2. Representations and Warranties
2.1 The Current Issuer hereby represents and warrants to the Security
Trustee and each of the Funding Secured Creditors in respect of itself
that as of the date of this Deed:
(a) pursuant to the terms of the Current Issuer Intercompany Loan
Agreement, Funding has agreed to pay to the Current Issuer fees,
interest and principal in accordance with the terms of the
Current Issuer Intercompany Loan Agreement; and
(b) the Current Issuer Intercompany Loan Agreement expressly
provides that all amounts due from Funding thereunder are to be
secured by or pursuant to the Funding Deed of Charge.
2.2 The Current Issuer Start-up Loan Provider hereby represents and
warrants to the Security Trustee and each of the Funding Secured
Creditors in respect of itself that as of the date of this Deed:
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(a) Funding has agreed to pay interest and repay principal to the
Current Issuer Start-up Loan Provider in accordance with the
terms of the Current Issuer Start-up Loan Agreement; and
(b) the Current Issuer Start-up Loan Agreement expressly provides
that all amounts due from Funding thereunder are to be secured
by or pursuant to the Funding Deed of Charge.
2.3 Funding hereby represents and warrants to the Security Trustee and each
of the Funding Secured Creditors that as at the date of this Deed, the
conditions to incurring further secured financial indebtedness set out
in Clause 2.2 (New Intercompany Loan Agreements) of the Intercompany
Loan Terms and Conditions are satisfied.
3. Accession
3.1 In consideration of the Current Issuer New Funding Secured Creditors
being accepted as Funding Secured Creditors for the purposes of the
Funding Deed of Charge by the parties thereto as from the date of this
Deed, each of the Current Issuer New Funding Secured Creditors:
(a) confirms that as from the date of this Deed, it will become and
intends to be a party to the Funding Deed of Charge as a Funding
Secured Creditor;
(b) undertakes to comply with and be bound by all of the provisions
of the Master Definitions Schedule and the Current Issuer Master
Definitions Schedule (as the same may be amended, varied or
restated from time to time) and the Funding Deed of Charge in
its capacity as a Funding Secured Creditor, as if it had been an
original party thereto;
(c) undertakes to perform, comply with and be bound by all of the
provisions of the Funding Deed of Charge in its capacity as a
Funding Secured Creditor, as if it had been an original party
thereto including, without limitation, Clause 20.3 (Funding
Secured Creditors), Clause 8.3 (Funding Post-Enforcement
Priority of Payments), Clause 8.6 (Security Trustee Rights upon
Enforcement) and Clause 6 (Restrictions on Exercise of Certain
Rights); and
(d) agrees that the Security Trustee shall be the Security Trustee
of the Funding Deed of Charge for all Funding Secured Creditors
upon and subject to the terms set out in the Funding Deed of
Charge.
3.2 The Current Issuer Note Trustee:
(a) confirms that as of the date of this Deed, it becomes and
intends to be party to the Funding Deed of Charge; and
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(b) agrees to comply with and be bound by the provisions of the
Funding Deed of Charge relating to the Note Trustee and agrees
that all references to the Note Trustee in the Funding Deed of
Charge and this Deed shall be construed as including the note
trustee under the Current Issuer Deed of Charge and Current
Issuer Trust Deed.
4. Funding Security
4.1 Funding, by way of first fixed security for the payment or discharge of
that portion of the Funding Secured Obligations which represent the
obligations and liabilities of Funding to the Current Issuer under the
Current Issuer Intercompany Loan Agreement, subject to Clause 4
(Release of Funding Charged Property) of the Funding Deed of Charge,
hereby:
(a) assigns by way of first fixed security to the Security Trustee
for the benefit of the Current Issuer all of its right, title,
benefit and interest, present and future, in, to and under:
(i) the Funding (Current Issuer) Bank Account Agreement; and
(ii) the Funding (Current Issuer) Guaranteed Investment
Contract,
including all rights to receive payment of any amounts which may
become payable to Funding thereunder and all payments received by
Funding 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 and the proceeds of any of the
foregoing, TO HOLD the same unto the Security Trustee
absolutely;
(b) assigns by way of first fixed security in favour of the Security
Trustee for the benefit of the Current Issuer all of its rights,
title, benefit and interest, present and future, in and to all
monies now or at any time hereafter standing to the credit of
the Funding (Current Issuer) GIC Account 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 Security Trustee absolutely; and
(c) charges by way of first fixed security to the Security Trustee
for the benefit of the Current Issuer 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 the Funding (Current Issuer) GIC Account and all
rights in respect of or ancillary to such Authorised
Investments, including the right to
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income and the proceeds of any of the foregoing, TO HOLD the
same unto the Security Trustee absolutely.
4.2 (a) Funding, by way of first fixed security for the payment or
discharge of the Funding Secured Obligations, subject to Clause
4 (Release of Funding Charged Property) of the Funding Deed of
Charge, hereby assigns to the Security Trustee, save to the
extent that the same may be situate in Jersey at any relevant
time, all of its right, title, benefit and interest, present and
future, in, to and under the Current Issuer Start-up Loan
Agreement, including, without limitation, all rights to receive
payment of any amounts which may become payable to Funding
thereunder and all payments received by Funding 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, 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 Security Trustee
absolutely.
(b) To the intent that the Security Trustee shall have a security
interest in accordance with the Jersey Security Law (and as
secured party for the purposes of such law) for the payment or
discharge of the Funding Secured Obligations, subject to Clause
4 (Release of Funding Charged Property) of the Funding Deed of
Charge, Funding (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 Security Trustee
all of its right, title, benefit and interest, present and
future, in, to and under the Current Issuer Start-up Loan
Agreement, including, without limitation, all rights to receive
payment of any amounts which may become payable to Funding
thereunder and all payments received by Funding 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, 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 Security Trustee
absolutely.
5. Title Guarantee
Each of the dispositions of, assignments of and charges over,
property effected in or pursuant to Clause 4 (Accounts for Issuers)
is made with full title guarantee.
6. Application
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Prior to and following enforcement of the Funding Security all amounts
at any time held by Funding, the Cash Manager or the Security Trustee in
respect of the security created under this Deed shall be held and/or
applied by such person subject to and in accordance with the relevant
provisions of the Funding Deed of Charge.
7. Scope of the Funding Deed of Charge
Funding, the Current Issuer New Funding Secured Creditors and the
Funding Secured Creditors (including the Security Trustee) hereby agree
that for the relevant purposes under the Funding Deed of Charge and the
Master Definitions Schedule:
(a) the Current Issuer Intercompany Loan Agreement shall be treated
as a Funding Transaction Document;
(b) the Current Issuer Start-up Loan Agreement shall be treated as a
Funding Transaction Document;
(c) the Funding (Current Issuer) Bank Account Agreement shall be
treated as a Funding Transaction Document;
(d) the Funding (Current Issuer) Guaranteed Investment Contract
shall be treated as a Funding Transaction Document;
(e) the property and assets of Funding expressed to be assigned or
charged pursuant to this Deed shall constitute Funding Charged
Property; and
(f) each of the Current Issuer New Funding Secured Creditors shall
be treated as a Funding Secured Creditor.
8. Notices and Acknowledgements
(a) The execution of this Deed by the Current Issuer New Funding
Secured Creditors shall constitute notice to such Current Issuer
New Funding Secured Creditors of the assignments made by Funding
pursuant to Clause 3 (Funding Security) of the Funding Deed of
Charge. The execution of this Deed by each other Funding Secured
Creditor shall constitute notice to such Funding Secured
Creditor of the assignments made by Funding pursuant to this
Deed.
(b) By its execution of this Deed, each of the Current Issuer New
Funding Secured Creditors acknowledges that it has notice of and
consents to the assignments, charges and Security Interests
(including the Jersey Security Interests) made or granted by
Funding pursuant to Clause 3 (Funding Security) of the Funding
Deed of Charge and also acknowledges that as at the date hereof
it has not received from any other person any notice of any
assignment or charge of any of the property the subject of such
Security Interests. By its
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execution of this Deed, each other Funding Secured Creditor
acknowledges that it has notice of and consents to the
assignments, charges and Security Interests made or granted by
Funding pursuant to this Deed and also acknowledges that as at
the date hereof it has not received from any other person any
notice of any assignment or charge of any of the property the
subject of such Security Interests.
(c) Notwithstanding the assignments and charges granted pursuant to
Clause 3 (Funding Security) of the Funding Deed of Charge or
pursuant to this Deed, the parties hereto acknowledge that,
subject as provided otherwise in the Funding Deed of Charge,
each Funding Secured Creditor and each other party to any
Funding Transaction Document may continue to make all payments
becoming due to Funding under any Funding Transaction Document
in the manner envisaged by such Funding Transaction Document
until the receipt of written notice from the Security Trustee or
any Receiver requiring payments to be made otherwise.
9. Amendment to the Funding Priority of Payments
The Funding Secured Creditors agree to amend and restate the Funding
Priority of Payments set out in Part I and Part II of Schedule 3 of
the Funding Deed of Charge in accordance with Appendix 1 hereto.
10. Notices and Demands
Any notice or communication under or in connection with this Deed
shall be given in the manner and at the times set out in Clause 24
(Notices) of the Funding Deed of Charge. For the purposes of such
Clause 24 (Notices), as at the date of this Deed the relevant contact
details for the Current Issuer are:
Granite Mortgages 03-3 plc
Fifth Floor
100 Wood Street
London EC2V 7EX
For the attention of: The Company Secretary
Telephone: +44 020 7606 5451
Facsimile: +44 020 7606 0643
and for the Current Issuer Start-up Loan Provider are:
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Northern Rock PLC
Northern Rock House
Gosforth
Newcastle upon Tyne
NE3 4PL
For the attention of: The Group Secretary
Facsimile: +44 (0)191 213 2203
and for the Current Issuer Note Trustee are:
The Bank of New York
48th Floor, One Canada Square
London E14 5AL
For the attention of: Corporate Trust (Global Structured
Finance)
Facsimile: +44 (020) 7964 6399.
11. Non Petition Covenant
Each of the parties hereto hereby agrees that it shall not institute
against Funding, the Mortgages Trustee or any Issuer any winding-up,
administration, insolvency or similar proceedings in any jurisdiction
for so long as any sum is outstanding under any Intercompany Loan
Agreement of any Issuer or for two years plus one day since the last
day on which any such sum was outstanding provided that the Security
Trustee may prove or lodge a claim in the event of a liquidation
initiated by any other person. The provisions of Clause 6 (Restrictions
on Exercise of Certain Rights) of the Funding Deed of Charge shall
prevail in the event that and to the extent that they conflict with the
provisions of this Clause.
12. Third Party Rights
A person who is not a party to this Deed may not enforce any of its
terms under the Contracts (Rights of Third Parties) Act 1999, but this
shall not affect any right or remedy of a third party which exists or
is available apart from that Act.
13. Execution in 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.
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14. Governing Law and Jurisdiction; Appropriate Forum
14.1 This Deed is governed by and shall be construed in accordance with
English law save that those parts of this Deed concerned with the
creation, subsistence or enforcement of Jersey Security Interests shall
be governed by and in accordance with Jersey law.
14.2 Each of the parties hereto irrevocably agrees that the courts of
England shall have jurisdiction to hear and determine any suit, action
or proceeding, and to settle any disputes, which may arise out of or in
connection with this Deed and, for such purposes, irrevocably submits
to the jurisdiction of such courts.
14.3 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.
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DULY EXECUTED AND DELIVERED AS A DEED by each of the parties hereto or on its
behalf on the date appearing on page one.
Funding
Executed by
GRANITE FINANCE FUNDING LIMITED
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary Director
Name
----------------------------------------------
By
----------------------------------------------
Director/Secretary
Name
----------------------------------------------
The Security Trustee/The Note Trustee in respect of the Previous Issuers
and the Current Issuer Note Trustee
Executed by
THE BANK OF NEW YORK
as its deed as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised signatories
Name
----------------------------------------------
Executed by
GRANITE MORTGAGES 01-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -------------------------------------------
and by another of its directors/its secretary Director
Name
--------------------------------------------
By
--------------------------------------------
Director/Secretary
Name
--------------------------------------------
11
Executed by
GRANITE MORTGAGES 01-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -------------------------------------------
and by another of its directors/its secretary Director
Name
--------------------------------------------
By
--------------------------------------------
Director/Secretary
Name
-------------------------------------------
Executed by
GRANITE MORTGAGES 02-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -----------------------------------------
and by another of its directors/its secretary Director
Name
-----------------------------------------
By
-------------------------------------------
Director/Secretary
Name
------------------------------------------
Executed by
GRANITE MORTGAGES 02-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -----------------------------------------
and by another of its directors/its secretary Director
Name
-----------------------------------------
By
-------------------------------------------
Director/Secretary
Name
------------------------------------------
12
Executed by
GRANITE MORTGAGES 03-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -----------------------------------------
and by another of its directors/its secretary Director
Name
-----------------------------------------
By
-------------------------------------------
Director/Secretary
Name
------------------------------------------
Executed by
GRANITE MORTGAGES 03-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -----------------------------------------
and by another of its directors/its secretary Director
Name
-----------------------------------------
By
-------------------------------------------
Director/Secretary
Name
------------------------------------------
Current Issuer
Executed by
GRANITE MORTGAGES 03-3 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors -----------------------------------------
and by another of its directors/its secretary Director
Name
-----------------------------------------
By
-------------------------------------------
Director/Secretary
Name
------------------------------------------
The Cash Manager, the Previous Start-up Loan Provider and
the Current Issuer Start-up Loan Provider
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Executed by
NORTHERN ROCK PLC By
as its deed as follows: -------------------------------------------
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories
Name
-------------------------------------------
Signature
----------------------------------------------
Witness
Full name
----------------------------------------------
Occupation Solicitor
----------------------------------------------
Address c/o Sidley Austin Brown & Wood
----------------------------------------------
1 Threadneedle Street
----------------------------------------------
London EC2R 8AW
----------------------------------------------
The Corporate Services Provider
Executed by
MOURANT & CO. CAPITAL (SPV) LIMITED
as its deed as follows: By
Signed for and on its behalf by one of its directors ---------------------------------------
and by another of its directors/its secretary Director
Name
---------------------------------------
By
-----------------------------------------
Director/Secretary
Name
----------------------------------------
The Account Bank and the Funding GIC Provider
Executed by
LLOYDS TSB BANK PLC By
as its deed as follows: -----------------------------------------
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories
Name
-------------------------------------------
Signature
----------------------------------------------
Witness
Full name
----------------------------------------------
Occupation Solicitor
----------------------------------------------
Address c/o Sidley Austin Brown & Wood
----------------------------------------------
1 Threadneedle Street
----------------------------------------------
London EC2R 8AW
----------------------------------------------
The Mortgages Trustee
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Executed by
GRANITE FINANCE TRUSTEES LIMITED
as its deed as follows: By
Signed for and on its behalf by one of its directors -----------------------------------------
and by another of its directors/its secretary Director
Name
-----------------------------------------
By
-------------------------------------------
Director/Secretary
Name
------------------------------------------
15
SCHEDULE I
Utilisation of Issuer Reserves
Reserves for Current Issuer
1. Current Issuer Reserve Fund:
1.1 Prior to enforcement of the Current Issuer Security, the
Current Issuer Reserve Fund shall only be applied on any Payment Date
to increase that portion of Funding Available Revenue Receipts which
are allocated to the Current Issuer to make payments of interest and
fees due under the Current Issuer Intercompany Loan.
1.2 Following enforcement of the Current Issuer Security, to the
extent not applied on a Payment Date in accordance with 1.1 above,
amounts standing to the credit of the Current Issuer Reserve Fund
Ledger shall only be applied in making payments of principal due
under the Current Issuer Intercompany Loan (but not in respect of any
other Intercompany Loan of any other Issuer) .
2. Current Issuer Liquidity Reserve Fund:
2.1 Prior to enforcement of the Current Issuer Security, the
Current Issuer Liquidity Reserve Fund (if any is required to be
established) shall only be applied on any Payment Date to:
(a) increase that portion of Funding Available Revenue
Receipts which are allocated to the Current Issuer to pay
amounts due under the Current Issuer Intercompany Loan, but
only to the extent necessary to fund the payment by the
Current Issuer of interest and fees due on the relevant
Payment Date in respect of the Class A Notes and/or the
Class B Notes and/or the Class M Notes and to credit the
Class A Principal Deficiency Sub Ledger; and
(b) (provided that there are no Class A Notes outstanding)
increase Funding Available Revenue Receipts which are
allocated to the Current Issuer to pay interest
and fees due on the Current Issuer Intercompany Loan.
2.2 Following enforcement of the Current Issuer Security, to the
extent not applied on a Payment Date in accordance with 2.1 above,
amounts standing to the credit of the Current Issuer Liquidity
Reserve Ledger shall only be applied in making payments of principal
due under the Current Issuer Intercompany Loan (but not in respect of
any other Intercompany Loan of any other Issuer).
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APPENDIX 1
Amended and Restated Funding Priority of Payments
Part I
Funding Pre-Enforcement Revenue Priority of Payments
Distribution of Funding Available Revenue Receipts prior to Enforcement of the
Funding Security
On each Payment Date or, in respect of amounts due to third parties by Funding
under paragraph (B), when due, prior to enforcement of the Funding Security,
the Cash Manager will, subject to the rules for application of Funding
Available Revenue Receipts (set out below), apply Funding Available Revenue
Receipts in the following order of priority (the "Funding Pre-Enforcement
Revenue Priority of Payments"):
(A) first, to pay amounts due to the Security Trustee
(together with interest and (to the extent not already
inclusive) VAT on those amounts) and to provide for any
amounts due or to become due during the following Interest
Period to the Security Trustee, under the Funding Deed of
Charge or any other Transaction Document;
(B) second, to pay amounts due to any third party creditors of
Funding (other than those referred to later in this order of
priority of payments or in the Funding Pre-enforcement
Principal Priority of Payments) of which the Cash Manager
has notice prior to the relevant Payment Date, which amounts
have been incurred without breach by Funding of the
Transaction Documents to which it is a party (and for which
payment has not been provided for elsewhere) and to provide
for any such amounts expected to become due and payable by
Funding during the following Interest Period and to pay or
discharge any liability of Funding for corporation tax on
any chargeable income or gain of Funding;
(C) third, towards payment of amounts due to the Cash Manager
under the Cash Management Agreement (together with (to the
extent not already inclusive) VAT on those amounts);
(D) fourth, in no order of priority among them, but in
proportion to the respective amounts due, towards payment of
amounts, if any, due to the Account Bank under the terms of
the Bank Account Agreement and to the Corporate Services
Provider under the Corporate Services Agreement;
(E) fifth, to pay, in no order of priority among them, but in
proportion to the respective amounts due, to each Issuer an
amount up to its Issuer Allocable
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Revenue Receipts in respect of interest and fees due on that
Issuer's Intercompany Loan but not exceeding the aggregate
amount of, and to be applied in the amounts and priorities
set forth in, the Issuer Pre-Liquidity Payments for that
Issuer.
(F) sixth, to pay, in no order of priority among them, but in
proportion to the respective amounts due, such amount for
each Issuer up to its Issuer Allocable Revenue Receipts as
is necessary to replenish the Issuer Liquidity Reserve Fund,
if any, established in respect of that Issuer up to the
Issuer Liquidity Reserve Required Amount (but only to the
extent that monies have been drawn from the relevant Issuer
Liquidity Reserve Fund to pay interest and fees due under
the relevant Intercompany Loan and only to replenish the
Issuer Liquidity Reserve Fund of an Issuer to the extent
that there are Class A Notes issued by the such Issuer
outstanding on such Payment Date);
(G) seventh, to pay, in no order of priority among them, but in
proportion to the respective amounts due, to each Issuer an
amount up to its Issuer Allocable Revenue Receipts in
respect of interest and fees due on that Issuer's
Intercompany Loan but not exceeding the aggregate amount of,
and to be applied in the amounts and priorities set forth
in, the Issuer Post-Liquidity Payments for that Issuer;
(H) eighth, to pay, in no order of priority among them, but in
proportion to the respective amounts due, such amount for
each Issuer up to its Issuer Allocable Revenue Receipts as
is necessary to fund the Issuer Reserve Fund established in
respect of that Issuer up to the Issuer Reserve Required
Amount or to replenish such Issuer Reserve Fund up to the
related Issuer Reserve Required Amount (to the extent that
monies have been drawn from such Issuer Reserve Fund to pay
interest and fees under the relevant Intercompany Loan);
(I) ninth, to pay in no order of priority among them, but in
proportion to the respective amounts due, to each Issuer an
amount up to its Issuer Allocable Revenue Receipts in
respect of interest, principal (in the case of the Special
Repayment Notes) and fees due on that Issuer's Intercompany
Loan but not exceeding the aggregate amount of, and to be
applied in the amounts and priorities set forth in, the
Issuer Pre-Reserve Payments for that Issuer;
(J) tenth, in no order of priority among them, but in proportion
to the respective amounts due, from Issuer Allocable Revenue
Receipts, to credit the Funding Reserve Ledger in an amount
up to the Funding Reserve Required Amount;
(K) eleventh, to pay to each Issuer, in no order of priority
among them but in proportion to the respective amounts due,
an amount up to its Issuer Allocable
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Revenue Receipts in respect of interest and fees due on that
Issuer's Intercompany Loan but not exceeding the aggregate
amount of, and to be applied in the amounts and priorities
set forth in, the Issuer Post-Reserve Payments for that
Issuer;
(L) twelfth, in no order of priority among them, but in
proportion to the respective amounts due, from Issuer
Allocable Revenue Receipts, towards payment of interest and
principal amounts due to each Issuer Start-up Loan Provider
under the relevant Issuer Start-up Loan Agreement;
(M) thirteenth, in no order of priority among them, but
in proportion to the respective amounts due, to pay to each
Issuer an amount up to its Issuer Allocable Revenue Receipts
in respect of interest and fees and any other amount (if
any) due on that Issuer's Intercompany Loan but not
exceeding the aggregate amount of, and to be applied in the
amounts and priorities set forth in, the Issuer Post
Start-up Payments for that Issuer;
(N) fourteenth, to the extent required, to apply all
Shared Issuer Revenue Receipts in the priorities set forth
in items (E) through (M) above;
(O) fifteenth, towards payment to Funding of an amount
equal to 0.01% per annum of the Funding Available Revenue
Receipts, which amount will be retained by Funding as profit
less corporation tax in respect of those profits provided
for or paid at item (B) above;
(P) sixteenth, towards payment of any Deferred Contribution due
to the Mortgages Trustee pursuant to the terms of the
Mortgages Trust Deed; and
(Q) last, towards payment to the shareholders of Funding
of any dividend declared by Funding.
PROVIDED THAT no amount will be applied in replenishing any of the reserve
funds held by Funding in respect of an Issuer under paragraphs (F) and/or (H)
above following an enforcement of the Issuer Security relating to that Issuer.
Rules for application of Funding Available Revenue Receipts
(1) Subject as provided in paragraphs (2) through (4) below, the
portion of Issuer Allocable Revenue Receipts, remaining after item
(M) of the Funding Pre-Enforcement Revenue Priority of Payments,
together with any additional Funding Available Revenue Receipts under
paragraph (3) below, shall constitute "Shared Issuer Revenue
Receipts". Shared Issuer Revenue Receipts will be reallocated by the
Cash Manager and distributed on such Payment Date among the Issuers
until there are no remaining amounts of Shared Issuer Revenue
Receipts to be reallocated and
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distributed on such Payment Date. If there is more than one Issuer
that is entitled to Shared Issuer Revenue Receipts then each such
Issuer will be reallocated a portion of the Shared Issuer Revenue
Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of the Issuer
Amount of Shared Issuer Revenue Receipts x--------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Issuers
(2) No Issuer shall be entitled to or shall receive any amount of
Issuer Allocable Revenue Receipts from Funding on a Payment Date on
which such Issuer is not required by that Issuer to make a payment on
that date in accordance with the relevant Issuer Pre-Enforcement
Revenue Priority of Payments or other relevant Issuer Priority of
Payments which applies to that Issuer on that date, and the Cash
Manager will take account of all of the funds which are or will
become available to that Issuer on that Payment Date and which
constitute Issuer Available Revenue Receipts (including any payments
due under any Swap Agreement and any interest or other income
received or to be received) for that Issuer for the purpose of making
this determination.
(3) Unless and until the Intercompany Loan of any Issuer has been
repaid in full and Funding has no further liability under the
relevant Intercompany Loan Agreement, amounts standing to the credit
of the Issuer Reserve Ledger and the Issuer Liquidity Reserve Ledger,
if any, established by Funding for that Issuer may only be utilized
by Funding in making payments due under that Issuer's Intercompany
Loan and may not be used in or towards the payment of any other
liability of Funding. On the Payment Date following the repayment in
full of the Intercompany Loan of that Issuer and provided that
Funding has no further liability in respect of the relevant
Intercompany Loan Agreement, any remaining amounts standing to the
credit of the Issuer Reserve Ledger and the Issuer Liquidity Reserve
Ledger, if any, of that Issuer will constitute additional Funding
Available Revenue Receipts for the purpose of paragraphs (N) through
(Q) of the Funding Pre-Enforcement Revenue Priority of Payments and
may be utilized by Funding in paying any other liability of Funding
subject to and in accordance with the relevant Funding Priority of
Payments.
(4) If on any Payment Date any Issuer Allocable Revenue Receipts
and/or any Shared Issuer Revenue Receipts are paid to an Issuer and
are applied by that Issuer, in reducing any deficiency recorded on
the Issuer Principal Deficiency Ledger of that Issuer (but only to
the extent that any deficiency which has arisen as a result of (i)
losses on the Mortgage Loans allocated by Funding to the Issuer
and/or (ii) the application of Funding Available Principal Receipts
to fund the Issuer Liquidity
20
Reserve Fund of the Issuer, but not as a result of any other principal
deficiency of the Issuer), then the Issuer Allocable Revenue Receipts
and/or Shared Issuer Revenue Receipts so applied shall constitute
repayments of principal under the relevant Intercompany Loan and shall
reduce the Outstanding Principal Balance of that Intercompany Loan
accordingly.
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Part II
Funding Pre-Enforcement Principal Priority of Payments
On each Payment Date prior to enforcement of the Funding Security, the Cash
Manager will, subject to the rules for application of Funding Available
Principal Receipts set forth below, apply Funding Available Principal Receipts
in the following order of priority (the "Funding Pre-Enforcement Principal
Priority of Payments"):
(A) first, to fund or replenish, as the case may be, the
Issuer Liquidity Reserve Fund, if any, of each Issuer up to
the Issuer Liquidity Reserve Required Amount but only from
and to the extent of the Issuer Allocable Principal Receipts
for that Issuer;
(B) second, to pay to (or, if required under that
Issuer's Intercompany Loan, set aside for) each Issuer an
amount up to its Issuer Allocable Principal Receipts in
respect of principal due (or, if required under that
Issuer's Intercompany Loan, to become due) on that Issuer's
Intercompany Loan, which shall be an amount up to the
aggregate amount of, and shall be applied in the amounts and
priorities set forth in, the Issuer Principal Payments for
that Issuer;
(C) last, to pay to (or, if required under that Issuer's
Intercompany Loan, set aside for) each Issuer an amount up
to its allocable portion of Shared Issuer Principal Receipts
in respect of principal due (or, if required under that
Issuer's Intercompany Loan, to become due) on that Issuer's
Intercompany Loan, which in the case of the Issuer shall be
an amount up to the aggregate amount of, and shall be
applied in the amounts and priorities set forth in, the
Issuer Principal Payments for that Issuer until there are no
remaining Funding Available Principal Receipts on such
Payment Date,
PROVIDED THAT no amount will be applied in replenishing the Issuer Liquidity
Reserve Fund held by Funding in respect of an Issuer under paragraph (A) above
following an enforcement of the Issuer Security relating to that Issuer.
Rules for application of Funding available principal receipts
(1) On the Distribution Date immediately preceding such
Payment Date, the Cash Manager will calculate the "Issuer Allocable
Principal Receipts" for each Issuer in respect of the relevant
Payment Date which, subject as provided in paragraphs (2) through (7)
below, is for any Issuer an amount which is equal to the sum of:
(A) For any Issuer which has a Money Market Note
still outstanding up to the amount equal to the Controlled
Amortization Amount due on such Money Market Note, if any,
on the Payment Date immediately succeeding such Distribution
Date; and
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(B) For any Issuer, an amount equal to the lesser of:
(a) (only if relevant) the principal amount due on
the Intercompany Loan of such Issuer which is an amount
equal to the Controlled Amortisation Amount due, if any, on
the Payment Date immediately succeeding such Distribution
Date (excluding any amount calculated in accordance with
paragraph 1(A)); and
(b) an amount equal to:
Funding Available Principal Receipts
minus the aggregate of any Controlled Outstanding Principal Balance on
Amortisation Amounts already allocated x such Issuer's Intercompany Loan
to an Issuer under (1)(A) above in after applying amounts allocated
relation to the Money Market Notes of under 1(A) above
such Issuer on such Payment Date ---------------------------
Aggregate Outstanding Principal
Balance of the Intercompany's
Loans of all Issuers
PROVIDED THAT,
(a) subject as provided in paragraphs (2) through (7) below,
for the purpose only of determining the amount of Issuer Allocable
Principal Receipts which may be allocated and paid to that Issuer
(but not to any other Issuer) in accordance with this paragraph (1),
following an enforcement of the Issuer Security relating to that
Issuer the amount so determined may be increased to the extent of the
aggregate of any amounts standing to the credit of the Issuer
Liquidity Reserve Ledger, if any, and the Issuer Reserve Ledger of
that Issuer remaining on that Payment Date after the application of
such reserve funds in accordance with the Funding Pre-Enforcement
Revenue Priority of Payments; and
(b) for the purposes only of determining the amount of Shared
Issuer Principal Receipts in accordance with paragraph (6) below,
Issuer Allocable Principal Receipts shall be an amount equal to the
amount calculated in accordance with paragraphs 1(A) and (1)(B)(b)
above and paragraph 1(B)(a) above shall not apply.
(2) If the Notes of any Issuer have become immediately due and
payable as a result of the service of a Note Enforcement Notice or if
the Intercompany Loan of any Issuer and the other Intercompany Loans
of any other Issuers have become immediately due and payable as a
result of the service of an Intercompany Loan Enforcement Notice or
otherwise on any Payment Date following the occurrence of any Asset
Trigger Event, principal payments in respect of any Intercompany Loan
may be made in excess of any Controlled Amortisation Amount and
paragraphs (1)(A) and 1(B)(a) above shall no longer apply in relation
to that Issuer and the amount of Issuer Allocable Principal Receipts
payable to that Issuer on the relevant Payment Date may not exceed
the amount determined under paragraph (1)(B)(b) above (save that no
deduction shall be made from Funding Available Principal Receipts)
but subject always to any increase in that amount as a result of the
23
utilisation of the Issuer Reserve Fund and the Issuer Liquidity
Reserve Fund (if any) following enforcement of the Issuer Security
relating to that Issuer as provided in that paragraph.
(3) For the purpose of determining the amount of Issuer
Allocable Principal Receipts and/or any Shared Issuer Principal
Receipts which may be paid to any Issuer on a Payment Date pursuant
to paragraph (1) above or paragraph (6) below, the Outstanding
Principal Balance of that Intercompany Loan shall be deemed to be
reduced by the amount of:
(a) any deficiency recorded on the Issuer Principal
Deficiency Ledger of that Issuer as at such Payment
Date, but only to the extent that such deficiency has
arisen as a result of (i) losses on the Mortgage Loans
allocated by Funding to that Issuer and/or (ii) the
application of Funding Available Principal Receipts to
fund the Issuer Liquidity Reserve Fund of that Issuer
but not as a result of any other principal deficiency of
that Issuer; and
(b) the Outstanding Principal Balance as at such Payment
Date of any Special Repayment Notes issued by that
Issuer.
(4) The amount of Funding Available Principal Receipts payable
to each Issuer on a Payment Date will be reduced by an amount equal
to the aggregate of the Issuer Available Revenue Receipts of that
Issuer which are to be applied on that Payment Date in reducing
deficiencies recorded on the Issuer Principal Deficiency Ledgers, but
only to the extent that the Issuer Available Revenue Receipts which
are to be so applied on that Payment Date would not otherwise be
payable as principal on the relevant Notes on such Payment Date.
(5) No Issuer shall be entitled to, or shall receive on a
Payment Date, any amount of Issuer Allocable Principal Receipts from
Funding which is not required by that Issuer to make a payment on
that date in accordance with the relevant Issuer Pre-Enforcement
Principal Priority of Payments or otherwise to make a payment of
principal on the Notes.
(6) The portion of Issuer Allocable Principal Receipts
(calculated in accordance with paragraph 1(b) above), if any, not
required to be applied by the Issuer to pay principal on the Notes on
a Payment Date together with the portion of Issuer Allocable
Principal Receipts relating to all other Issuers not required to be
so applied by such other Issuers (or otherwise required to be set
aside by Funding for any Issuer) on that Payment Date (excluding the
amount of any Issuer Reserve Fund or Issuer Liquidity Reserve Fund
(if any) of any Issuer), shall constitute "Shared Issuer Principal
Receipts". Shared Issuer Principal Receipts will be reallocated by
the Cash
24
Manager and distributed on such Payment Date among the Issuers
as payments of principal under the applicable Intercompany
Loans to the extent required to make payments of principal due on the
relevant Notes. Such reallocation and distribution will continue to
be made on such Payment Date until there are no remaining amounts of
Shared Issuer Principal Receipts to be reallocated and distributed on
such Payment Date. Save as provided in paragraph (2) above, if there
is more than one Issuer that is entitled to Shared Issuer Principal
Receipts, then each such Issuer will be reallocated a portion of the
Shared Issuer Principal Receipts equal to:
Outstanding Principal Balance of
Shared Issuer Principal Receipts x the Intercompany Loan of the Issuer
--------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Issuers
(7) The repayment of any Intercompany Loan prior to the
occurrence of a Trigger Event, enforcement of the Issuer Security by
the Note Trustee under the Issuer Deed of Charge or enforcement of
the Funding Security by the Security Trustee under the Funding Deed
of Charge will be made in accordance with the terms of the relevant
Intercompany Loan Agreement.
25
Part III
Funding Post-Enforcement Priority of Payments
At any time after the security created under the Funding Deed of Charge has
become enforceable in accordance with Clause 7.2 (Enforceable) thereof and
provided that the Intercompany Loan Enforcement Notice has not been withdrawn,
all Funding Available Revenue Receipts, Funding Available Principal Receipts
and all other monies paid to or received or recovered by or on behalf of
Funding or the Security Trustee or any Receiver appointed on its behalf,
including all proceeds following any sale, realisation or enforcement of the
security created under the Funding Deed of Charge and all amounts not
previously distributed and/or standing to the credit of any Funding Bank
Account and all monies standing to the credit of the Funding Reserve Ledger
(if any) shall (if not already received by the Security Trustee) be paid to
and held by the Security Trustee on trust to apply the same (save to the
extent required otherwise by applicable law) in accordance with the rules and
the order of priority of the Funding Post-Enforcement Priority of Payments.
The Security Trustee (or the Cash Manager on its behalf) will, subject to the
rules for application of Funding Available Principal Receipts and Funding
Available Revenue Receipts set out in Part I and Part II of this Schedule,
apply all such amounts received or recovered following enforcement of the
Funding Security on each Payment Date in accordance with the following order
of priority (the "Funding Post-Enforcement Priority of Payments"):
(A) first, to pay amounts due to the Security Trustee and
any Receiver appointed by the Security Trustee, together
with interest and (to the extent not already inclusive) VAT
on those amounts, and to provide for any amounts due or to
become due to the Security Trustee and the Receiver in the
following Interest Period under the Funding Deed of Charge
or any other Transaction Document;
(B) second, towards payment of amounts due and payable to
the Cash Manager and any costs, charges, liabilities and
expenses then due or to become due and payable to the Cash
Manager under the Cash Management Agreement, together with
(to the extent not already inclusive) VAT on those amounts;
(C) third, (in no order of priority between them but in
proportion to the respective amounts due) towards payment of
amounts (if any) due to the Account Bank under the terms of
the Bank Account Agreement and to the Corporate Services
Provider under the Corporate Services Agreement;
(D) fourth, (in no order of priority among them but in
proportion to the respective amounts due) to each Issuer its
share of Issuer Allocable Revenue Receipts and Issuer
Allocable Principal Receipts towards payment of amounts of
interest, principal and fees due to such Issuer under such
Issuer's
26
Intercompany Loan Agreement, which in the case of
that Issuer shall be up to the aggregate amount of the
amounts, and shall be applied in the amounts and priorities,
as set forth in the Issuer Post-Enforcement Priority of
Payments for that Issuer;
(E) fifth, towards payment of amounts due to each Issuer
Start-up Loan Provider under the relevant Issuer Start-up
Loan Agreement;
(F) sixth, towards payment of any Deferred Contribution
due to the Mortgages Trustee under the Mortgages Trust Deed;
and
(G) last, to pay any amount remaining following the
application of principal and revenue set forth in paragraphs
(A) through (F) above, to Funding,
Provided that for the avoidance of doubt, subject to and in accordance with
the Funding Priority of Payments, funds standing to the credit of any Issuer
Reserve Fund or Issuer Liquidity Reserve Fund of an Issuer shall only be
applied in reduction of the liabilities owing under the Intercompany Loan of
such Issuer.
27