EXHIBIT 4.5.2
Dated [22] September 2004
-------------------------
GRANITE FINANCE FUNDING LIMITED
as Funding
THE BANK OF NEW YORK
as Security Trustee
GRANITE MORTGAGES 04-3 PLC
as Current Issuer
NORTHERN ROCK PLC
as Current Issuer Start-up Loan Provider
- and -
OTHERS
________________________________________________________________________________
ISSUER DEED OF ACCESSION
________________________________________________________________________________
SIDLEY AUSTIN BROWN & WOOD
WOOLGATE EXCHANGE
25 BASINGHALL STREET
LONDON EC2V 5HA
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
CONTENTS
1. Interpretation...........................................................3
2. Representations and Warranties...........................................4
3. Accession................................................................4
4. Funding Security.........................................................5
5. Title Guarantee..........................................................7
6. Application..............................................................7
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...................................................11
12. Third Party Rights......................................................11
13. Execution in Counterparts...............................................12
14. Governing Law and Jurisdiction; Appropriate Forum.......................12
15. Process Agents..........................................................12
SCHEDULE I Utilisation of Issuer Reserves...................................19
APPENDIX 1 Amended and Restated Funding Priority of Payments.................21
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THIS DEED OF ACCESSION is made on [22] September 2004
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited liability company incorporated under the laws of Jersey whose
London branch (registered overseas company number FCO22999 and branch
number BR005916) is at 69 Park Lane, Croydon CR9 1TQ;
(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;
(10) 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;
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(11) GRANITE MORTGAGES 04-1 PLC (registered number 4959572), 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;
(12) GRANITE MORTGAGES 04-2 PLC (registered number 5057377), 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;
(13) 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;
(14) NORTHERN ROCK PLC (registered number 03273685), a public limited company
incorporated under the laws of England and Wales whose registered office
is at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL in its
capacity as (1) Cash Manager (2) Account Bank and (3) Funding GIC
Provider;
(15) 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 (1) Funding GIC Provider (2) Stand-by Funding GIC
Provider (3) Stand-by Account Bank (4) Stand-by Funding (04-2) GIC
Provider and (5) Stand-by Funding (Current Issuer) GIC Provider;
(16) MOURANT & CO. CAPITAL (SPV) LIMITED, a private limited company
incorporated under the laws of England and Wales whose registered office
is at 69 Park Lane, Croydon CR9 1TQ, in its capacity as Corporate
Services Provider;
(17) 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; and
(18) GRANITE MORTGAGES 04-3 PLC (registered number 5168395), 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
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Funding Deed of Charge to secure Funding's obligations to the Funding
Secured Creditors.
(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) Pursuant to the terms of the Stand-by Funding (04-2) Guaranteed
Investment Contract and the Stand-by Funding (Current Issuer) Guaranteed
Investment Contract, the Stand-by GIC Provider has agreed to establish a
Stand-by Funding (Current Issuer) GIC Account and Stand-by Funding
(Current Issuer) GIC Account, respectively, and the Stand-by Account Bank
has agreed to operate each such account under the terms of the Stand-by
Account Bank Agreement in the event of the termination of the appointment
of Northern Rock as an Account Bank and the Funding GIC Provider under
the Stand-by Funding (04-2) Guaranteed Investment Contract and the
Stand-by Funding (Current Issuer) Guaranteed Investment Contract.
(F) 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.
(G) The Current Issuer Note Trustee has agreed to enter into this Deed to
accede to the provisions of the Funding Deed of Charge.
(H) 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:
(a) the Master Definitions Schedule as amended and restated by (and
appearing in Appendix 1 to) the Master Definitions Schedule Ninth
Amendment Deed made on [22] September 2004 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 LLP
on [22] September 2004,
(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.
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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:
(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-
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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
(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
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(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
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.
4.3 [Funding, by way of 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:
(a) assigns by way of fixed security to the Security Trustee all of its
right, title, benefit and interest, present and future, in, to and
under the Stand-by 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
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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.]
5. Title Guarantee
Each of the dispositions of, assignments of and charges over, property
effected in or pursuant to Clause 4 (Funding Security) is made with full
title guarantee.
6. Application
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 Stand-by Funding (04-2) Guaranteed Investment Contract and the
Stand-by Funding (Current Issuer) Guaranteed Investment Contract
shall each be treated as a Funding Transaction Document;
(f) the property and assets of Funding expressed to be assigned or
charged pursuant to this Deed shall constitute Funding Charged
Property; and
(g) 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
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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 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. Amendment to Clause 6.9 of the Funding Deed of Charge
The Funding Secured Creditors agree to amend and restate Clause 6.9
(Utilisation of Issuer Reserves) of the Funding Deed of Charge by the
insertion of:
(a) "and further subject to any provisos set forth in (in the case of
the First Issuer) Schedule 5 (Utilisation of Issuer Reserves) or in
the case of any New Issuer, Schedule I to the relevant Deed of
Accession,"
in the second line of the Clause after the words:
"Funding and the Cash Manager shall procure that, subject to and in
accordance with the Funding Priority of Payments...";
(b) ",if any,"
in the third line of the Clause after the words:
"...amounts standing to the credit of the Issuer Reserve Fund
Ledger..."; and
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(c) "provided, however, that, as set forth in Rule (3) of the Rules for
application of Funding Available Revenue Receipts, on the Payment
Date following the repayment in full of the Intercompany Loan of the
First Issuer or any New Issuer and provided that Funding has no
further liability under the relevant Intercompany Loan Agreement,
subject to any limits or conditions on the purposes for which the
related Issuer Reserve Fund or Issuer Liquidity Reserve Fund, if
any, may be utilised as set out in the Funding Deed of Charge, any
remaining amounts standing to the credit of the Issuer Reserve Fund
Ledger and the Issuer Liquidity Reserve Ledger, if any, of that
Issuer will constitute additional Funding Available Revenue Receipts
for the purpose of items (N) through (Q) of the Funding
Pre-Enforcement Priority of Payments and may be utilised by Funding
in paying any other liability of Funding (including, without
limitation, payment of interest and principal amounts due to each
Start-up Loan Provider under the relevant Start-up Loan Agreement
and payment of any Deferred Contribution due to the Mortgages
Trustee under the Mortgages Trust Deed), in each case, subject to
and in accordance with the relevant Funding Priority of Payments."
at the end of the Clause,
so that Clause 6.9 now reads as set out in Appendix 2 hereto.
11. Amendment to Schedule 5 to the Funding Deed of Charge
The Funding Secured Creditors agree to amend and restate Schedule 5 to
the Funding Deed of Charge (Utilisation of Issuer Reserves) by the
insertion of the following paragraphs:
(a) "PROVIDED THAT, as set forth in Rule (3) of the Rules for
application of Funding Available Revenue Receipts, on the Payment
Date following the repayment in full of the First Issuer
Intercompany Loan and provided that Funding has no further liability
under the Intercompany Loan Agreement for the First Issuer, subject
to any limits or conditions on the purposes for which the First
Issuer Reserve Fund may be utilized as set out in the Funding Deed
of Charge, any remaining amounts standing to the credit of the First
Issuer Reserve Fund Ledger will constitute additional Funding
Available Revenue Receipts for the purpose of items (N) through (Q)
of the Funding Pre-Enforcement Priority of Payments and may be
utilised by Funding in paying any other liability of Funding
(including, without limitation, payment of interest and principal
amounts due to the Start-up Loan Provider for the First Issuer under
the Start-up Loan Agreement for the First Issuer and payment of any
Deferred Contribution due to the Mortgages Trustee under the
Mortgages Trust Deed), in each case subject to and in accordance
with the relevant Funding Priority of Payments."
after Clause 1.1; and
(b) "PROVIDED THAT, as set forth in Rule (3) of the Rules for
application of Funding Available Revenue Receipts, on the Payment
Date following the repayment in full of the First Issuer
Intercompany Loan and provided that Funding has no further liability
under the Intercompany Loan Agreement for
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the First Issuer, subject to any limits or conditions on the
purposes for which the First Issuer Liquidity Reserve Fund may be
utilized as set out in the Funding Deed of Charge, any remaining
amounts standing to the credit of the First Issuer Liquidity Reserve
Ledger, if any, will constitute additional Funding Available Revenue
Receipts for the purpose of items (N) through (Q) of the Funding
Pre-Enforcement Priority of Payments and may be utilised by Funding
in paying any other liability of Funding (including, without
limitation, payment of interest and principal amounts due to the
Start-up Loan Provider for the First Issuer under the Start-up Loan
Agreement for the First Issuer and payment of any Deferred
Contribution due to the Mortgages Trustee under the Mortgages Trust
Deed), in each case subject to and in accordance with the relevant
Funding Priority of Payments."
after Clause 2.1 (b),
so that Schedule 5 now reads as set out in Appendix 3 hereto.
12. 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 04-3 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, Northern Rock as an
Account Bank and Funding GIC Provider are:
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:
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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
and for the Funding GIC Provider, the Stand-by Funding GIC Provider, the
Stand-by Funding (04-2) GIC Provider and the Stand-by (Current Issuer)
GIC Provider are:
Lloyds TSB Bank plc
25 Gresham Street
London EC2V 7HN
For the attention of: Jason Eperon (Manager, Financial Institutions
& International Trade Finance)
Facsimile: 020 7661 4790
and for the Stand-by Account Bank are:
Lloyds TSB Bank plc
25 Gresham Street
London EC2V 7HN
For the attention of: Jason Eperon (Manager, Financial Institutions
& International Trade Finance)
Facsimile: 020 7661 4790
13. 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.
14. 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.
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15. 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.
16. Governing Law and Jurisdiction; Appropriate Forum
16.1 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.
16.2 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.
16.3 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.
17. Process Agents
Funding irrevocably and unconditionally appoints Mourant & Co. Capital
(SPV) Limited at 69 Park Lane, Croydon CR9 1TQ or otherwise at the
registered office of Mourant & Co. Capital (SPV) Limited for the time
being as its agent for service of process in England in respect of any
proceedings in respect of this Agreement and undertakes that in the event
of Mourant & Co. Capital (SPV) Limited ceasing so to act it will appoint
another person with a registered office in London as its agent for
service of process.
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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 Director
and by another of its directors/its secretary
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 for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
13
Executed by
GRANITE MORTGAGES 01-2 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
Executed by
GRANITE MORTGAGES 02-1 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
Executed by
GRANITE MORTGAGES 02-2 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
14
Executed by
GRANITE MORTGAGES 03-1 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
Executed by
GRANITE MORTGAGES 03-2 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
Executed by
GRANITE MORTGAGES 03-3 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
15
Executed by
GRANITE MORTGAGES 04-1 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
Executed by
GRANITE MORTGAGES 04-2 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
Current Issuer
Executed by
GRANITE MORTGAGES 04-3 PLC
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors for and on behalf of LDC Securitisation
and by another of its directors/its secretary Director No.1 Ltd
Name Clive Rakestrow
----------------------------------------------
By______________________________________________
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Sharon Tyson
----------------------------------------------
16
The Cash Manager, the Previous Start-up Loan Provider
the Current Issuer Start-up Loan Provider, an Account Bank and
the Funding GIC Provider
Executed by
NORTHERN ROCK PLC
as its deed as follows: By______________________________________________
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
----------------------------------------------
Woolgate Exchange
----------------------------------------------
25 Basinghall Street
----------------------------------------------
London EC2V 5HA
----------------------------------------------
17
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 Director
and by another of its directors/its secretary
Name______________________________________________
By______________________________________________
Director/Secretary
Name______________________________________________
An Account Bank, Funding GIC Provider,
the Stand-by Account Bank, the Stand-by
Funding GIC Provider, the Stand-by
Funding (04-2) GIC Provider and the
Stand-by Funding (Current Issuer) GIC
Provider
Executed by
LLOYDS TSB BANK PLC
as its deed as follows: By______________________________________________
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
----------------------------------------------
Woolgate Exchange
----------------------------------------------
25 Basinghall Street
----------------------------------------------
London EC2V 5HA
----------------------------------------------
The Mortgages Trustee
Executed by
GRANITE FINANCE TRUSTEES LIMITED
as its deed as follows: By______________________________________________
Signed for and on its behalf by one of its directors Director
and by another of its directors/its secretary
Name______________________________________________
By______________________________________________
Director/Secretary
Name______________________________________________
18
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.
PROVIDED THAT, as set forth in Rule (3) of the Rules for application of
Funding Available Revenue Receipts, on the Payment Date following the
repayment in full of the Current Issuer Intercompany Loan and provided
that Funding has no further liability under the Intercompany Loan
Agreement for the Current Issuer, subject to any limits or conditions on
the purposes for which the Current Issuer Reserve Fund may be utilised as
set out in the Funding Deed of Charge, any remaining amounts standing to
the credit of the Current Issuer Reserve Fund Ledger will constitute
additional Funding Available Revenue Receipts for the purpose of items
(N) through (Q) of the Funding Pre-Enforcement Priority of Payments and
may be utilised by Funding in paying any other liability of Funding
(including, without limitation, payment of interest and principal amounts
due to the Current Issuer Start-up Loan Provider under the Current Issuer
Start-up Loan Agreement and payment of any Deferred Contribution due to
the Mortgages Trustee under the Mortgages Trust Deed), in each case
subject to and in accordance with the relevant Funding Priority of
Payments.
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) help meet any deficit in 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 to credit the Class A Principal Deficiency Sub
Ledger; and
(b) (provided that there are no Class A Notes outstanding) help meet any
deficit in Funding Available Revenue Receipts which are allocated to
the Current Issuer to pay interest and fees due on the Current
Issuer Intercompany Loan.
19
PROVIDED THAT, as set forth in Rule (3) of the Rules for application of
Funding Available Revenue Receipts, on the Payment Date following the
repayment in full of the Current Issuer Intercompany Loan and provided
that Funding has no further liability under the Intercompany Loan
Agreement for the Current Issuer, subject to any limits or conditions on
the purposes for which the Current Issuer Liquidity Reserve Fund may be
utilized as set out in the Funding Deed of Charge, any remaining amounts
standing to the credit of the Current Issuer Liquidity Reserve Ledger, if
any, will constitute additional Funding Available Revenue Receipts for
the purpose of items (N) through (Q) of the Funding Pre-Enforcement
Priority of Payments and may be utilised by Funding in paying any other
liability of Funding (including, without limitation, payment of interest
and principal amounts due to the Current Issuer Start-up Loan Provider
under the relevant Current Issuer Start-up Loan Agreement and payment of
any Deferred Contribution due to the Mortgages Trustee under the
Mortgages Trust Deed), in each case subject to and in accordance with the
relevant Funding Priority of Payments.
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).
20
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 Group 1 Available Revenue
Receipts, Group 2 Available Revenue Receipts and amounts standing to the
credit of the Funding Expense Sub-Ledger, as applicable, 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
(i) the Account Bank under the terms of the Bank Account Agreement
(ii) to the Stand-by Account Bank under the terms of the Stand-by
Bank Account Agreement and (iii) to the Corporate Services Provider
under the terms of the Corporate Services Agreement;
(E) fifth, to pay, in no order of priority among them, 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,
21
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, 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, 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, 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) or if an Arrears or Step-Up Trigger Event has
occurred, to credit the Issuer Reserve Fund Ledger with the
applicable Issuer Reserve Additional Amount;
(I) ninth, to pay in no order of priority among them, 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, from Issuer Allocable
Revenue Receipts, to credit the Funding Reserve Ledger in an amount
up to the Funding Reserve Required Amount or if a Funding Step-Up
Trigger Event has occurred to credit the Funding Reserve Ledger with
the Funding Reserve Additional 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 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
22
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 on the Payment Date for
Group 1 Issuers, Group 1 Available Revenue Receipts remaining or, on
the Payment Date for Group 2 Issuers, Group 2 Available Revenue
Receipts remaining, as applicable, 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 (excluding, for
this purpose, amounts standing to the credit of the Funding Reserve
Ledger), 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.
For the avoidance of doubt, references to the Issuer Allocable Revenue Receipts
for a particular Issuer in items (E) through (M) (inclusive) above shall be
reduced by any amounts already allocated to that Issuer in the above Priority of
Payments on that Payment Date.
Rules for application of Funding Available Revenue Receipts
(1) (A) Subject as provided in paragraphs (2) through (9) below, the portion of
Issuer Allocable Revenue Receipts for all Group 1 Issuers 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 "Group 1 Shared Issuer Revenue Receipts". Group 1 Shared Issuer
Revenue Receipts will be reallocated by the Cash Manager on a Payment Date for
Group 1 Issuers in accordance with item (N) of the Funding Pre-Enforcement
Revenue Priority of Payments and will continue to be distributed on such Payment
Date in accordance with items (E) through (M) of the Funding Pre-Enforcement
Revenue Priority of Payments until there are no remaining amounts of Group 1
Shared Issuer Revenue Receipts to be reallocated and distributed on such Payment
Date. Any limitation restricting a payment to an Issuer to the amount up to that
Issuer's Issuer Allocable Revenue Receipts shall not apply for the purpose of
the reallocation of Group 1 Shared Issuer Revenue Receipts by the Cash Manager
on a Payment Date in accordance with this rule. If there is more than one Group
1 Issuer that is entitled to Group 1 Shared Issuer
23
Revenue Receipts then each such Group 1 Issuer will be reallocated a portion
of the Group 1 Shared Issuer Revenue Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 1 Issuer
Amount of Shared Group 1 Issuer Revenue Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 1 Issuers
(B) Subject as provided in paragraphs (2) through (4) below, the portion of
Issuer Allocable Revenue Receipts for all Group 2 Issuers 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 "Group 2 Shared Issuer Revenue Receipts". Group 2 Shared Issuer
Revenue Receipts will be reallocated by the Cash Manager on a Payment Date for
Group 2 Issuers distributed on such Payment Date in accordance with item (N) of
the Funding Pre-Enforcement Revenue Priority of Payments and will continue to be
distributed on such Payment Date in accordance with items (E) through (M) of the
Funding Pre-Enforcement Revenue Priority of Payments until there are no
remaining amounts of Group 2 Shared Issuer Revenue Receipts to be reallocated
and distributed on such Payment Date. Any limitation restricting a payment to an
Issuer to the amount up to that Issuer's Issuer Allocable Revenue Receipts shall
not apply for the purpose of the reallocation of Group 2 Shared Issuer Revenue
Receipts by the Cash Manager on a Payment Date in accordance with this rule. If
there is more than one Group 2 Issuer that is entitled to Group 2 Shared Issuer
Revenue Receipts, then each such Group 2 Issuer will be reallocated a portion of
Shared Issuer Revenue Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 2 Issuer
Amount of Group 2 Shared Issuer Revenue Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 2 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 Fund
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
24
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 Fund
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
Group 1 Shared Issuer Revenue Receipts or Group 2 Shared Issuer Revenue
Receipts, as applicable, 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 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 Group 1
Shared Issuer Revenue Receipts or Group 2 Shared Issuer Revenue Receipts,
as applicable, so applied shall constitute repayments of principal under
the relevant Intercompany Loan and shall reduce the Outstanding Principal
Balance of that Intercompany Loan accordingly.
To the extent that (a) an amount payable to an Issuer pursuant to the
Funding Pre-Enforcement Revenue Priority of Payments on any Payment Date
would, in accordance with the Issuer Pre-Enforcement Revenue Priority of
Payments relating to the Issuer, be credited by the Issuer to its Issuer
Principal Deficiency Ledger, and (b) the amount to be treated as
principal as a result of making such credit would result in the Issuer
Available Principal Receipts of that Issuer on that Payment Date being in
excess of the Principal Amount to be repaid by that Issuer in respect of
its Notes on that Payment Date, then an amount equal to that excess shall
be reapplied by Funding as Group 1 Available Principal Receipts or Group
2 Available Principal Receipts, as applicable.
(5) The Cash Manager will distribute Group 1 Available Revenue Receipts only
on each Payment Date for Group 1 Issuers and Group 2 Available Revenue
Receipts only on each Payment Date for Group 2 Issuers. Group 1 Available
Revenue Receipts and Group 2 Available Revenue Receipts will be applied
(subject to paragraph (7) below) to pay amounts set forth in paragraphs
(E)-(R) of the Funding Pre-Enforcement Revenue Priority of Payments and
(D)-(G) of the Funding Post-Enforcement Priority of Payments.
(6) All references to an "Issuer" or "Issuers" in the Funding Pre-Enforcement
Revenue Priority of Payments shall be construed to refer to an Issuer or
Issuers in Group 1 on a Payment Date for Group 1 Issuers and in Group 2
on a Payment Date for Group 2 Issuers.
(7) On Payment Dates for both Group 1 Issuers and Group 2 Issuers, the Cash
Manager will apply amounts standing to the credit of the Funding Expense
Sub-Ledger on the immediately preceding Distribution Date to pay the
amounts set forth in paragraphs
25
(A)-(D) of the Funding Pre-Enforcement Revenue Priority of Payments and
paragraph (A)-(C) of the Funding Post-Enforcement Priority of Payments.
(8) To the extent that on any Payment Date for Group 1 Issuers or Payment
Date for Group 2 Issuers amounts standing to the credit of the Funding
Expense Sub-Ledger distributed pursuant to paragraph (7) above are
insufficient to pay all amounts described in such paragraph (7), then the
Cash Manager will apply amounts standing to the credit of the Funding
Reserve Ledger to meet such a shortfall. To the extent that on any
Payment Date amounts standing to the credit of the Funding Reserve Ledger
and applied pursuant to the preceding sentence are insufficient to pay
all amounts described in paragraph (7) above, then the Cash Manager will
apply on the Payment Date for Group 1 Issuers, Group 1 Available Revenue
Receipts or on the Payment Date for Group 2 Issuers, Group 2 Available
Revenue Receipts, as applicable, to pay such amounts. To the extent that
amounts standing to the credit of the Funding Reserve Ledger are applied
to pay any amounts described in paragraph (7) above then the amounts
standing to the credit of the Funding Reserve Ledger as at the
Distribution Date immediately preceding the relevant Payment Date (unless
such Payment Date is also a Funding Reserve Adjustment Date, in which
case the relevant date will be the Distribution Date immediately
preceding the immediately preceding Payment Date) above shall be deemed
to have been reduced by the amount applied to pay amounts described in
paragraph 7 above.
(9) Group 1 Available Revenue Receipts may not be used to make payments to
Group 2 Issuers and Group 2 Available Revenue Receipts may not be used to
make payments to Group 1 Issuers.
26
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 Group 1 Available Principal Receipts
or Group 2 Available Principal Receipts, as applicable, as follows (the "Funding
Pre-Enforcement Principal Priority of Payments"):
(1) On each Payment Date for Group 1 Issuers, Group 1 Available Principal
Receipts to each Group 1 Issuer in the following order of priority:
(A) first, to fund or replenish, as the case may be, the Issuer
Liquidity Reserve Fund, if any, of each Group 1 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 Group 1 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) third, to pay to (or, if required under that Issuer's Intercompany
Loan, set aside for) each Group 1 Issuer an amount up to its
allocable portion of Group 1 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 that Group 1 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 Group 1 Available Principal
Receipts on such Payment Date; and
(D) last, to credit any remaining amounts to the Funding Principal
Ledger.
(2) On each Payment Date for Group 2 Issuers, Group 2 Available Principal
Receipts to each Group 2 Issuer in the following order of priority:
(A) first, to fund (either initially or to replenish, as the case may
be) the Issuer Liquidity Reserve Fund, if any, of each Group 2
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 Group 2 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
27
in the amounts and priorities set forth in, the Issuer Principal
Payments for that Issuer;
(C) third, to pay to (or, if required under the Issuer's Intercompany
Loan, set aside for) each Group 2 Issuer an amount up to its
allocable portion of Group 2 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 that Group 2 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 Group 2 Available Principal
Receipts on such Payment Date; and
(D) last, to credit any remaining amounts to the Funding Principal
Ledger;
PROVIDED THAT no amount will be applied in replenishing the Issuer Liquidity
Reserve Fund held by Funding in respect of an Issuer under paragraphs (1)(A) or
(2)(A) above following an enforcement of the Issuer Security relating to that
Issuer,
Rules for application of Funding available principal receipts
(1) (A) On the Distribution Date immediately preceding a Payment Date
for Group 1 Issuers, the Cash Manager will calculate the "Issuer
Allocable Principal Receipts" for each such Issuer in respect of the
relevant Payment Date which, subject as provided in paragraphs (2)
through (8) below, is for any Issuer an amount which is equal to the
sum of:
(a) the aggregate of:
(i) for any Group 1 Issuer, the amount, if any, by which the Issuer
Liquidity Reserve Fund relating to that Issuer will be less
than the Issuer Liquidity Reserve Required Amount in each case
prior to the distribution of Group 1 Available Principal
Receipts on the Payment Date for Group 1 Issuers immediately
succeeding such Distribution Date; and
(ii) for any Group 1 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 for Group 1 Issuers immediately succeeding
such Distribution Date;
(b) for any Group 1 Issuer, an amount equal to the lesser of:
(i) (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 for Group
1 Issuers immediately succeeding such Distribution Date
(excluding any amount calculated in accordance with paragraph
1(A)(a)); and
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(ii) an amount equal to:
Group 1 Available Principal Receipts minus the Outstanding Principal Balance on such
aggregate amount under (1)(A)(a) above in respect Group 1 Issuer's Intercompany Loan
of the relevant Issuer on such Payment x --------------------------------------
Date Aggregate Outstanding Principal
Balance of all Intercompany Loans of
Group 1 Issuers
(B) On the Distribution Date immediately preceding a Payment Date for
Group 2 Issuers, the Cash Manager will calculate the "Issuer
Allocable Principal Receipts" for each such Issuer in respect of the
relevant Payment Date which, subject as provided in paragraphs (2)
through (8) below, is an amount which is equal to the sum of:
(a) the aggregate of:
(i) for any Group 2 Issuer, the amount, if any, by which the Issuer
Liquidity Reserve Fund relating to that Issuer will be less
than the Issuer Liquidity Reserve Required Amount in each case
prior to the distribution of Group 2 Available Principal
Receipts on the Payment Date for Group 2 Issuers immediately
succeeding such Distribution Date; and
(ii) for any Group 2 Issuer which has a Money Market Note still
outstanding, up to the amount equal to the Controlled
Amortization Amount due on each Money Market Note, if any, on
the Payment Date for Group 2 Issuers immediately succeeding
such Distribution Date; and
(b) for any Group 2 Issuer, an amount equal to the lesser of:
(i) (only if relevant) the principal amount due on the Intercompany
Loan of such Issuer which is an amount equal to the Controlled
Amortization Amount due, if any, on the Payment Date for Group
2 Issuers immediately succeeding such Distribution Date
(excluding any amount calculated in accordance with paragraph
1(B)(a)); and
PROVIDED THAT,
(a) subject as provided in paragraphs (2) through (8) below, for
the purpose only of determining the amount of Issuer Allocable
Principal Receipts which may be allocated and paid to the
relevant Group 1 Issuer or Group 2 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 Fund
Ledger of that Issuer remaining on the relevant Payment Date
after the application of such reserve funds in accordance with
the Funding Pre-Enforcement Revenue Priority of Payments; and
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(b) for the purposes only of determining the amount of Group 1
Shared Issuer Principal Receipts and Group 2 Shared Issuer
Principal Receipts in accordance with paragraph (6) below,
Issuer Allocable Principal Receipts (in respect of a Group 1
Issuer) shall be an amount equal to the amount calculated in
accordance with paragraphs 1(A)(a) and (1)(A)(b)(ii) and
paragraph (1)(A)(b)(i) shall not apply and (in respect of a
Group 2 Issuer) shall be an amount equal to the amount
calculated in accordance with paragraphs (1)(B)(a) and
(1)(B)(b)(ii) above paragraph (1)(B)(b)(i) 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)(a) and 1(A)(b)(i) (in respect of a Group 1
Issuer), or paragraphs (1)(B)(a) and 1(B)(b)(i) above (in respect of
a Group 2 Issuer) 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 paragraphs (1)(A)(b)(ii) and (1)(B)(b)(ii) 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 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. Following the occurrence of any Non-Asset Trigger Event
(but prior to the occurrence of an Asset Trigger Event), (1) the
reference in paragraph (1)(A)(a)(ii) and (1)(B)(a)(ii) above to the
"Controlled Amortization Amount due on such Money Market Note" shall
be deemed to refer to the "Outstanding Principal Balance of such
Money Market Note", and (2) paragraph (1)(A)(b)(i) above (in respect
of a Group 1 Issuer), or paragraph (1)(B)(b)(i) above (in respect of
a Group 2 Issuer) shall no longer apply in relation to the relevant
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)(A)(b)(ii) above (in respect of
a Group 1 Issuer) and (1)(B)(b)(ii) above (in respect of a Group 2
Issuer, subject to the same qualifications set forth in the
immediately preceding paragraph.
(3) For the purpose of determining the amount of Issuer Allocable
Principal Receipts and/or any Group 1 Shared Issuer Principal
Receipts or Group 2 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 the
relevant Intercompany Loan shall be deemed to be reduced by the
amount of:
(A) any deficiency recorded on the Issuer Principal Deficiency
Ledger of the relevant Issuer as at the relevant Payment Date,
but only to the extent that such deficiency has arisen as a
result of (i) losses on the
30
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) (A) The portion of Issuer Allocable Principal Receipts
(calculated in accordance with paragraph 1(A)(b)(ii) above), if
any, not required to be applied by a Group 1 Issuer to pay
principal on the Notes on a Payment Date for Group 1 Issuers
together with the portion of Issuer Allocable Principal
Receipts relating to all other Group 1 Issuers not required to
be so applied by such other Group 1 Issuers (or otherwise
required to be set aside by Funding for any Group 1 Issuer) on
that Payment Date (excluding the amount of any Group 1 Issuer
Reserve Fund or Issuer Liquidity Reserve Fund (if any) of any
Group 1 Issuer), shall constitute "Group 1 Shared Issuer
Principal Receipts". Group 1 Shared Issuer Principal Receipts
will be reallocated by the Cash Manager and distributed on such
Payment Date among the Group 1 Issuers until there are no
remaining amounts of Group 1 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
Group 1 Issuer that is entitled to Group 1 Shared Issuer
Principal Receipts, then each such Issuer will be reallocated a
portion of the Group 1 Shared Issuer Principal Receipts equal
to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 1 Issuer
amount of Shared Group 1 Issuer Principal Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 1 Issuers
(B) The portion of Issuer Allocable Principal Receipts (calculated
in accordance with paragraph (1)(B)(b)(ii) above), if any, not
required to be applied by a Group 2 Issuer to pay principal of
the Notes on a Payment Date for Group 2 Issuers together with
the portion of Issuer Allocable Principal Receipts relating to
all other Group 2 Issuers not
31
required to be so applied by such other Group 2 Issuers (or
otherwise required to be set aside by Funding for any Group 2
Issuer) on that Payment Date (excluding the amount of any
Issuer Reserve Fund or Issuer Liquidity Reserve Fund (if any)
of any Group 2 Issuer) shall constitute "Group 2 Shared Issuer
Principal Receipts". Group 2 Shared Issuer Principal Receipts
will be reallocated by the Cash Manager and distributed on such
Payment Date among the Group 2 Issuers until there are no
remaining amounts of Group 2 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
Group 2 Issuer that is entitled to Group 2 Shared Issuer
Principal Receipts, then each such Group 2 Issuer will be
reallocated a portion of the Group 2 Shared Issuer Principal
Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 2 Issuer
Amount of Shared Group 2 Issuer Principal Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 2 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 relevant 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.
(8) The Cash Manager will distribute only Group 1 Available
Principal Receipts on each Payment Date for Group 1 Issuers and
only Group 2 Available Principal Receipts on each Payment Date
for Group 2 Issuers. No payment may be made to Group 1 Issuers
from Group 2 Available Principal Receipts and no payment may be
made to Group 2 Issuers from Group 2 Available Principal
Receipts.
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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, from amounts standing to the credit of the Funding Expense
Sub-Ledger in respect of such Payment Date, 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, from amounts standing to the credit of the Funding Expense
Sub-Ledger in respect of such Payment Date, 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, from amounts standing to the credit of the Funding Expense
Sub-Ledger in respect of such Payment Date, (in no order of priority
among them but in proportion to the respective amounts due) towards
payment of amounts (if any) due to (i) the Account Bank under the
terms of the Bank Account Agreement, (ii) to the Stand-by Account
Bank under the Stand-by Bank Account Agreement and (iii) to the
Corporate Services Provider under the Corporate Services Agreement;
(D) fourth,
(1) from Group 1 Available Revenue Receipts and Group 1 Available
Principal Receipts in respect of each Payment Date for Group 1
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Issuers, (in no order of priority among them but in proportion
to the respective amounts due) to each Group 1 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 Group 1 Issuer under such
Issuer's 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;
(2) from Group 2 Available Revenue Receipts and Group 2 Available
Principal Receipts in respect of each Payment Date for Group 2
Issuers (in no order of priority among them but in proportion
to the respective amounts due) to each Group 2 Issuer its
Issuer Allocable Revenue Receipts and Issuer Allocable
Principal Receipts, respectively, towards payment of amounts of
interest, principal and fees due to such Group 2 Issuer under
such Issuer's Intercompany Loan Agreement, which in the case of
that Group 2 Issuer shall be up to the aggregate 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,
(1) from Group 1 Available Revenue Receipts and Group 1 Available
Principal Receipts in respect of each Payment Date for Group 1
Issuers, towards payment of amounts due to each Issuer Start-Up
Loan Provider under the relevant Issuer Start-up Loan Agreement
for each Group 1 Issuer;
(2) from Group 2 Available Revenue Receipts and Group 2 Available
Principal Receipts in respect of each Payment Date for Group 2
Issuers, towards the payment of amounts due to each Issuer
Start-up Loan Provider under the relevant Issuer Start-up Loan
Agreement for each Group 2 Issuer;
(F) sixth, from any remaining Funding Available Revenue Receipts (being
the remaining Group 1 Available Revenue Receipts, the Group 1
Available Principal Receipts, the Group 2 Available Revenue Receipts
and the Group 2 Available Principal Receipts) in respect of such
Payment Date, 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, to the extent that there is a shortfall in the amounts standing
to the credit of the Funding Expense Sub-Ledger, amounts payable under (A)
through (C) above may also be paid from Group 1 Available Revenue Receipts or
Group 2 Available Revenue Receipts as applicable to the relevant Payment Date.
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APPENDIX 2
6.9 Utilisation of Issuer Reserves: Funding and the Cash Manager shall
procure that, subject to and in accordance with the Funding Priority of
Payments and further subject to any provisos set forth in (in the case of
the First Issuer) Schedule 5 (Utilisation of Issuer Reserves) or, in the
case of any New Issuer, Schedule I to the relevant Deed of Accession,
amounts standing to the credit of the Issuer Reserve Fund Ledger or the
Issuer Liquidity Reserve Ledger, if any, of any Issuer shall, for so long
as such Issuer's Intercompany Loan remains outstanding, only be debited
for the purpose of making payments falling due under the Intercompany
Loan Agreement of such Issuer and then only for the purposes specified in
(in the case of the First Issuer) Schedule 5 (Utilisation of Issuer
Reserves) or, in the case on any New Issuer, Schedule I to the Deed of
Accession; provided, however, that, as set forth in Rule (3) of the Rules
for application of Funding Available Revenue Receipts, on the Payment
Date following the repayment in full of the Intercompany Loan of the
First Issuer or any New Issuer and provided that Funding has no further
liability under the relevant Intercompany Loan Agreement, subject to any
limits or conditions on the purposes for which the related Issuer Reserve
Fund or Issuer Liquidity Reserve Fund, if any, may be utilized as set out
in the Funding Deed of Charge, any remaining amounts standing to the
credit of the Issuer Reserve Fund Ledger and the Issuer Liquidity Reserve
Ledger, if any, of that Issuer will constitute additional Funding
Available Revenue Receipts for the purpose of items (N) through (Q) of
the Funding Pre-Enforcement Priority of Payments and may be utilized by
Funding in paying any other liability of Funding (including, without
limitation, payment of interest and principal amounts due to each
Start-up Loan Provider under the relevant Start-up Loan Agreement and
payment of any Deferred Contribution due to the Mortgages Trustee under
the Mortgages Trust Deed), in each case, subject to and in accordance
with the relevant Funding Priority of Payments.
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APPENDIX 3
1. First Issuer Reserve Fund:
1.1 Prior to enforcement of the First Issuer Security, the First 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
First Issuer to make payments of interest and fees due under the Current
Issuer Intercompany Loan;
PROVIDED THAT, as set forth in Rule (3) of the Rules for application of
Funding Available Revenue Receipts, on the Payment Date following the
repayment in full of the First Issuer Intercompany Loan and provided that
Funding has no further liability under the Intercompany Loan Agreement
for the First Issuer, subject to any limits or conditions on the purposes
for which the First Issuer Reserve Fund may be utilized as set out in the
Funding Deed of Charge, any remaining amounts standing to the credit of
the First Issuer Reserve Fund Ledger will constitute additional Funding
Available Revenue Receipts for the purpose of items (N) through (Q) of
the Funding Pre-Enforcement Priority of Payments and may be utilised by
Funding in paying any other liability of Funding (including, without
limitation, payment of interest and principal amounts due to the Start-up
Loan Provider for the First Issuer under the Start-up Loan Agreement for
the First Issuer and payment of any Deferred Contribution due to the
Mortgages Trustee under the Mortgages Trust Deed), in each case subject
to and in accordance with the relevant Funding Priority of Payments.
1.2 Following enforcement of the First Issuer Security, to the extent not
applied on a Payment Date in accordance with 1.1 above, amounts standing
to the credit of the First Issuer Reserve Fund Ledger shall only be
applied in making payments of principal due under the First Issuer
Intercompany Loan (but not in respect of any other Intercompany Loan of
any New Issuer) to fund payments of principal due on the First Issuer
Notes on any Payment Date.
2. First Issuer Liquidity Reserve Fund:
2.1 Prior to enforcement of the First Issuer Security, the First 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 First Issuer to pay amounts due under the First
Issuer Intercompany Loan, but only to the extent necessary to fund
the payment by the First 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 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 First
Issuer to pay interest and fees due on the First Issuer Intercompany
Loan;
PROVIDED THAT, as set forth in Rule (3) of the Rules for application of
Funding Available Revenue Receipts, on the Payment Date following the
repayment in full of the First Issuer Intercompany Loan and provided that
Funding has no further liability
36
under the Intercompany Loan Agreement for the First Issuer, subject to
any limits or conditions on the purposes for which the First Issuer
Liquidity Reserve Fund may be utilized as set out in the Funding Deed of
Charge, any remaining amounts standing to the credit of the First Issuer
Liquidity Reserve Ledger, if any, will constitute additional Funding
Available Revenue Receipts for the purpose of items (N) through (Q) of
the Funding Pre-Enforcement Priority of Payments and may be utilised by
Funding in paying any other liability of Funding (including, without
limitation, payment of interest and principal amounts due to the Start-up
Loan Provider for the First Issuer under the Start-up Loan Agreement for
the First Issuer and payment of any Deferred Contribution due to the
Mortgages Trustee under the Mortgages Trust Deed), in each case subject
to and in accordance with the relevant Funding Priority of Payments.
2.2 Following enforcement of the First Issuer Security, to the extent not
applied on a Payment Date in accordance with 2.1 above, amounts standing
to the credit of the First Issuer Liquidity Reserve Ledger shall only be
applied in making payments of principal due under the First Issuer
Intercompany Loan (but not in respect of any other Intercompany Loan of
any New Issuer) in order to fund payments of principal due on the First
Issuer Notes on any Payment Date.
37