EXHIBIT 4.8
Dated 28 January 2004
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NORTHERN ROCK PLC
as Cash Manager
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
NORTHERN ROCK PLC
as Seller
GRANITE FINANCE FUNDING LIMITED
as Beneficiary
- and -
THE BANK OF NEW YORK
as Security Trustee
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FOURTH AMENDED CASH MANAGEMENT AGREEMENT
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SIDLEY AUSTIN BROWN & WOOD
1 THREADNEEDLE STREET
LONDON EC2R 8AW
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
CONTENTS
Clause
Page No.
1. Definitions and Interpretation.......................................5
2. Appointment of Cash Manager..........................................5
3. The Services.........................................................5
4. Payments, Accounts, Ledgers..........................................7
5. Early Repayment Charges.............................................14
6. No Liability........................................................14
7. Costs and Expenses..................................................14
8. Information.........................................................15
9. Remuneration........................................................18
10. Covenants, Representations and Warranties of the Cash Manager.......18
11. Services Non-Exclusive..............................................19
12. Termination.........................................................19
13. Further Assurances..................................................23
14. Miscellaneous.......................................................23
15. Confidentiality.....................................................24
16. No Partnership......................................................24
17. Assignment..........................................................24
18. The Security Trustee................................................25
19. New Intercompany Loan Agreements....................................25
20. Non Petition Covenant; Limited Recourse.............................25
21. Amendments and Waiver...............................................27
22. Notices.............................................................27
23. Third Party Rights..................................................28
24. Execution in Counterparts; Severability.............................28
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25. Governing Law and Submission to Jurisdiction........................28
SCHEDULE 1 The Cash Management Services...................................30
SCHEDULE 2 Cash Management and Maintenance of Ledgers.....................33
SCHEDULE 3A Form of Mortgages Trustee Quarterly Report....................48
SCHEDULE 3B Form of Funding Quarterly Report..............................49
SCHEDULE 4 Cash Manager Representations and Warranties....................52
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THIS FOURTH AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT DATED 28
JANUARY 2004 AMENDS AND RESTATES THE CASH MANAGEMENT AGREEMENT DATED 26
MARCH 2001
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), 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;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, Channel Islands
whose registered office is at 22 Grenville Street, St. Helier, Jersey
JE4 8PX, Channel Islands in its capacity as Mortgages Trustee;
(3) NORTHERN ROCK PLC (registered number 3273685), 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 Seller and in its capacity as a Beneficiary;
(4) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, Channel Islands
having its principal place of business in the United Kingdom at 4 Royal
Mint Court, London EC3N 4HJ in its capacity as a Beneficiary; and
(5) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at One Canada Square, 48th Floor, London E14 5AL in its
capacity as Security Trustee.
WHEREAS:
(A) On the Initial Closing Date the First Issuer will issue the First
Issuer Notes constituted by the First Issuer Trust Deed. From the
proceeds of the issue of those First Issuer Notes, the First Issuer
shall make a loan to Funding pursuant to the terms of the First Issuer
Intercompany Loan Agreement. From the proceeds of that loan, Funding
shall pay the Initial Contribution to the Mortgages Trustee as
consideration in part for the Initial Funding Share of the Trust
Property, which funds will be used by the Mortgages Trustee to pay to
the Seller the Initial Purchase Price for the sale and assignment by
the Seller to the Mortgages Trustee of the Initial Mortgage Portfolio
pursuant to the Mortgage Sale Agreement.
(B) The Cash Manager is willing to provide Cash Management Services to the
Mortgages Trustee, Funding and the Security Trustee on the terms and
subject to the conditions contained in this Agreement.
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IT IS HEREBY AGREED as follows:
1. Definitions and Interpretation
1.1 The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Seventh Amendment and Restatement Deed made on 26 January 2004
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.
1.2 Any reference in this Agreement to any discretion, power or right on
the part of the Mortgages Trustee shall be as exercised by the
Mortgages Trustee only as directed by the Beneficiaries but subject in
each case to the provisions of Clause 17 (Directions from
Beneficiaries) of the Mortgages Trust Deed.
2. Appointment of Cash Manager
2.1 Appointment: Until termination pursuant to Clause 12 herein
(Termination), the Mortgages Trustee, Funding and the Security Trustee
(according to their respective estates and interests) each hereby
appoints the Cash Manager as its lawful agent to provide the Cash
Management Services set out in this Agreement, including in relation
to:
(a) the Mortgages Trustee; and
(b) Funding,
and the Cash Manager in each case hereby accepts such appointment on
the terms and subject to the conditions of this Agreement.
2.2 Duties prescribed by Transaction Documents: For the avoidance of doubt
and in connection with the powers conferred under Clause 2.1
(Appointment), save as expressly provided elsewhere in this Agreement,
nothing herein shall be construed so as to give the Cash Manager any
powers, rights, authorities, directions or obligations other than as
specified in this Agreement or any of the other Transaction Documents.
2.3 Appointment conditional upon issuance of First Issuer Notes: The
appointment pursuant to Clause 2.1 (Appointment) is conditional upon
the issue of the First Issuer Notes and the making of the First Issuer
Intercompany Loan under the First Issuer Intercompany Loan Agreement
and shall take effect upon and from the Initial Closing Date
automatically without any further action on the part of any person,
PROVIDED THAT, if the issue of the First Issuer Notes by the First
Issuer has not occurred by 30 April 2001, or such later date as the
First Issuer and the Lead Manager may agree, this Agreement shall cease
to be of further effect.
3. The Services
3.1 General: The Cash Manager shall provide the services set out in this
Agreement (including, without limitation, Schedules 1 and 2 attached
hereto) (the "Cash Management Services").
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3.2 Approvals and authorisations: The Cash Manager shall maintain, or
procure the maintenance of, the approvals, authorisations, consents and
licences required in connection with the respective businesses of the
Mortgages Trustee and Funding and shall prepare and submit, or procure
the preparation and submission of, on behalf of the Mortgages Trustee
and Funding, all necessary applications and requests for any further
approvals, authorisations, consents or licences which may be required
in connection with the respective businesses of the Mortgages Trustee
and Funding and shall, so far as it reasonably can do so, perform the
Cash Management Services in such a way as not to prejudice the
continuation of any such approvals, authorisations, consents or
licences.
3.3 Compliance with Transaction Documents, etc.: The Cash Management
Services shall include procuring (so far as the Cash Manager, using its
reasonable endeavours, is able so to do) compliance by the Mortgages
Trustee and Funding with all applicable legal requirements and with the
terms of the Transaction Documents to which each of the Mortgages
Trustee and/or Funding is a party, PROVIDED THAT the Cash Manager shall
not lend or provide any sum to the Mortgages Trustee or Funding (other
than as expressly contemplated by the Transaction Documents) and the
Cash Manager shall have no liability whatsoever to the Mortgages
Trustee, Funding, the Security Trustee or any other person for any
failure by the Mortgages Trustee or Funding to make any payment due by
any of them under any of the Transaction Documents (other than to the
extent arising from (i) the Cash Manager failing to make a payment in
its capacity as Administrator, or in any other capacity under the
Transaction Documents, or (ii) the Cash Manager failing to perform any
of its obligations under any of the Transaction Documents).
3.4 Liability of Cash Manager:
(a) The Cash Manager shall indemnify each of the Mortgages Trustee,
Funding and the Security Trustee on demand for any loss,
liability, claim, expense or damage suffered or incurred by any
of them in respect of the negligence, bad faith or wilful
default of the Cash Manager in carrying out its functions as
Cash Manager under this Agreement or under the other Transaction
Documents or as a result of a breach by the Cash Manager of the
terms and provisions of this Agreement or such other Transaction
Documents to which the Cash Manager is a party (in its capacity
as such) in relation to such functions.
(b) For the avoidance of doubt, the Cash Manager shall not be liable
in respect of any loss, liability, claim, expense or damage
suffered or incurred by the Mortgages Trustee, Funding, or the
Security Trustee and/or any other person as a result of the
proper performance of the Cash Management Services (as defined
in Clause 3.1) by the Cash Manager save to the extent that such
loss, liability, claim, expense or damage is suffered or
incurred as a result of any negligence, bad faith or wilful
default of the Cash Manager under, or as a result of, a breach
by the Cash Manager of the terms and provisions of this
Agreement or any of the other Transaction Documents to which the
Cash Manager is a party (in its capacity as such) in relation to
such functions.
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4. Payments, Accounts, Ledgers
4.1 Establishment of Bank Accounts:
(a) The Cash Manager hereby confirms that the Mortgages Trustee GIC
Account has been established on or before the date hereof
pursuant to the Bank Account Agreement and the Mortgages Trustee
Guaranteed Investment Contract and that the Mortgages Trustee
GIC Account Mandate in the agreed form will apply thereto at the
Initial Closing Date. The Cash Manager undertakes (to the extent
to which the same is within its control) that at the Initial
Closing Date the Mortgages Trustee GIC Account will be operative
and that the Cash Manager will not knowingly create or permit to
subsist any Security Interest in relation to the Mortgages
Trustee GIC Account (but without prejudice to the Mortgages
Trust and the other Transaction Documents).
(b) The Cash Manager hereby confirms that the Mortgages Trustee
Transaction Account has been established on or before the date
hereof pursuant to the Bank Account Agreement and that the
Mortgages Trustee Transaction Account Mandate in the agreed form
will apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its
control) that at the Initial Closing Date the Mortgages Trustee
Transaction Account will be operative and that the Cash Manager
will not knowingly create or permit to subsist any Security
Interest in relation to the Mortgages Trustee Transaction
Account (but without prejudice to the Mortgages Trust and the
other Transaction Documents).
(c) The Cash Manager hereby confirms that the Funding GIC Account
has been established on or before the date hereof pursuant to
the Bank Account Agreement and the Funding Guaranteed Investment
Contract and that the Funding GIC Account Mandate in the agreed
form will apply thereto at the Initial Closing Date. The Cash
Manager undertakes (to the extent to which the same is within
its control) that at the Initial Closing Date the Funding GIC
Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in
relation to the Funding GIC Account other than as created under
or permitted pursuant to the Funding Deed of Charge.
(d) The Cash Manager hereby confirms that the Funding Transaction
Account has been established on or before the date hereof
pursuant to the Bank Account Agreement and that the Funding
Transaction Account Mandate in the agreed form will apply
thereto at the Initial Closing Date. The Cash Manager undertakes
(to the extent to which the same is within its control) that at
the Initial Closing Date the Funding Transaction Account will be
operative and that the Cash Manager will not knowingly create or
permit to subsist any Security Interest in relation to the
Funding Transaction Account other than as created under or
permitted pursuant to the Funding Deed of Charge.
(e) The Cash Manager hereby confirms that the Funding (First Issuer)
GIC Account has been established on or before the date hereof
pursuant to the Funding (First Issuer) Bank Account Agreement
and the Funding (First Issuer)
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Guaranteed Investment Contract and that the Funding (First
Issuer) GIC Account Mandate in the agreed form will apply
thereto at the Initial Closing Date. The Cash Manager undertakes
(to the extent to which the same is within its control) that at
the Initial Closing Date the Funding (First Issuer) GIC Account
will be operative and that the Cash Manager will not knowingly
create or permit to subsist any Security Interest in relation to
the Funding (First Issuer) GIC Account other than as created
under or permitted pursuant to the Funding Deed of Charge.
(f) Upon Funding entering into any New Intercompany Loan Agreement
with a New Issuer, the Cash Manager undertakes to establish a
separate Funding (Issuer) GIC Account in respect of each New
Issuer to which amounts in respect of any Issuer Reserve Fund
and Issuer Liquidity Reserve Fund (if any) of such New Issuer
will be credited.
(g) If Funding enters into a New Intercompany Loan Agreement, then
the Cash Manager, the Seller, Funding, the Security Trustee and
the Mortgages Trustee shall execute such amendments to this
Agreement as may be necessary to reflect the establishment of
any new Funding (Issuer) GIC Account.
4.2 Mortgages Trustee Ledgers:
(a) The Cash Manager shall open and maintain in the books of the
Mortgages Trustee the following ledgers on behalf of the
Mortgages Trustee:
(i) the Principal Ledger, which shall separately reflect all
Principal Receipts standing to the credit of each of the
Mortgages Trustee GIC Account and the Mortgages Trustee
Transaction Account from time to time and distribution of
the same to Funding and the Seller;
(ii) the Revenue Ledger, which shall separately reflect all
Revenue Receipts standing to the credit of each of the
Mortgages Trustee GIC Account and the Mortgages Trustee
Transaction Account from time to time and distribution of
the same to Funding and the Seller;
(iii) the Losses Ledger, which shall record Losses on the
Mortgage Portfolio;
(iv) the Funding Share/Seller Share Ledger which shall record
the Funding Share, the Seller Share, the Funding Share
Percentage and the Seller Share Percentage of the Trust
Property;
(v) the Overpayments Ledger, which will reflect each Revenue
Receipt and/or Principal Receipt paid by a Borrower in
excess of the amount required under the terms of the
relevant Mortgage Loan (and in the case of any
non-Flexible Mortgage Loan any payment which is not a
Capital Payment), which shall be divided into (A) the
Non-Flexible Overpayments Sub Ledger to record
Overpayments on Non-Flexible Mortgage Loans and (B) the
Flexible Overpayments Sub Ledger to record Overpayments
on Flexible Mortgage Loans, in each case as
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received into and paid out of the Mortgages Trustee GIC
Account from time to time;
(vi) the Non-Flexible Underpayments Ledger, which shall record
Underpayments on Non-Flexible Mortgage Loans from time to
time;
(vii) the Re-Draws Ledger, which will record Re-Draws on the
Flexible Mortgage Loans and which shall be divided into
(A) the Cash Re-Draws Sub Ledger to record Cash Re-Draws
made in respect of Flexible Mortgage Loans and (B) the
Non-Cash Re-Draws Sub Ledger to record Non-Cash Re-Draws
made in respect of Flexible Mortgage Loans;
(viii) the Contributions Ledger, which will be divided into sub
ledgers to record (i) the making by Funding to the
Mortgages Trustee of Contributions to the Mortgages Trust
pursuant to the Mortgages Trust Deed (ii) the making by
the Seller to the Mortgages Trustee of Contributions to
the Mortgages Trust pursuant to the Mortgages Trust Deed
and the application of such Contributions in accordance
with the terms of the Mortgages Trust Deed by (iii) the
payment by the Mortgages Trustee to the Seller of either
(a) amounts of Initial Purchase Price for the sale of any
New Mortgage Portfolio which is acquired by the Mortgages
Trustee from the Seller under the provisions of Mortgage
Sale Agreement (b) amounts of Deferred Purchase Price in
accordance with the Mortgage Sale Agreement and (iv) the
payment by the Mortgages Trustee to the Seller of any
Initial Consideration in accordance with the Mortgages
Trust Deed; and
(ix) the Further Draws Ledger, which will record Further Draws
on Personal Secured Loans from time to time.
(b) The Cash Manager shall make credits and debits to the Mortgages
Trustee Ledgers in the manner described in paragraphs 10, 11,
12, 13, 20, 21 and 22 of Schedule 2 hereto.
4.3 Funding Ledgers:
(a) The Cash Manager shall open and maintain in the books of Funding
the following ledgers on behalf of Funding:
(i) the Issuer Reserve Fund Ledger of any Issuer, which shall
record the amount credited to the Issuer Reserve Fund of
such Issuer on the related Closing Date, and subsequent
withdrawals and deposits in respect of such Issuer
Reserve Fund;
(ii) the Issuer Liquidity Reserve Ledger of any Issuer, if
any, which shall record the amount credited to the Issuer
Liquidity Reserve Fund from time to time of such Issuer,
and subsequent withdrawals and deposits in respect of
such Issuer Liquidity Reserve Fund;
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(iii) the Funding Principal Ledger, which shall separately
reflect all Funding Principal Receipts received by
Funding on each Distribution Date and all Funding
Principal Receipts standing to the credit of each Funding
Bank Account, and the following sub-ledgers:
(A) the Group 1 Principal Sub-Ledger which shall
record receipts and payments of Funding Principal
Receipts allocable to Group 1; and
(B) the Group 2 Principal Sub-Ledger which shall
record receipts and payments of Funding Principal
Receipts allocable to Group 2;
(iv) the Funding Principal Deficiency Ledger, which shall
reflect the aggregate position of the Issuer Principal
Deficiency Ledgers of all Issuers as to Losses on the
Mortgage Loans and the application of Funding Available
Principal Receipts to fund Issuer Liquidity Reserve
Funds;
(v) the Funding Revenue Ledger, which shall separately
reflect all Funding Revenue Receipts received by Funding
on each Distribution Date and all Funding Revenue
Receipts standing to the credit of each Funding Bank
Account, and the following sub-ledgers:
(A) the Funding Expense Sub-Ledger which shall record
receipts and payments of Funding Revenue Receipts
allocable to the payment of expenses;
(B) the Group 1 Revenue Sub-Ledger which shall record
receipts and payments of Funding Revenue Receipts
allocable to Group 1; and
(C) the Group 2 Revenue Sub-Ledger which shall record
receipts and payments of Funding Revenue Receipts
allocable to Group 2;
(vi) the Funding Reserve Ledger, which shall record the amount
credited to the Funding Reserve Fund from time to time,
and subsequent withdrawals and deposits in respect of the
Funding Reserve Fund; and
(vii) the Intercompany Loan Ledger, which shall be divided into
segregated sub ledgers each of which shall record
payments of interest and fees and repayments of principal
made under such Intercompany Loan.
(b) The Cash Manager shall make credits and debits to the Funding
Ledgers in accordance with the provisions of paragraphs 14
through 19 of Schedule 2 hereto.
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4.4 Payments:
(a) The Cash Manager shall procure that so far as it may be able in
relation to all Mortgage Loans comprised in the Mortgage
Portfolio, the following amounts are paid into the Mortgages
Trustee Transaction Account:
(i) all Monthly Payments, other interest received under and
in respect of the Mortgage Loans and any costs or other
amounts received under the Mortgage Loans (including in
any such case amounts recovered on enforcement of rights
against any Borrower or guarantor of the Borrower, any
Mortgaged Property or any of the Borrower's or
guarantor's other property or assets);
(ii) all final releases and all repayments or prepayments of
principal under the Mortgage Loans;
(iii) any amount received by or on behalf of the Mortgages
Trustee pursuant to any Insurance Policy; and
(iv) any other amounts whatsoever received by or on behalf of
the Mortgages Trustee on or after the Initial Closing
Date,
(b) The Cash Manager shall procure that the following amounts are
credited to the Mortgages Trustee GIC Account:
(i) from time to time upon written or electronic receipt of
instructions from the Administrator, all amounts standing
to the credit of the Mortgages Trustee Transaction
Account; and
(ii) all interest earned on any of (A) the Mortgages Trustee
Transaction Account, (B) the Mortgages Trustee GIC
Account and (C) all investment proceeds from Authorised
Investments purchased from amounts standing to the credit
of either the Mortgages Trustee Transaction Account or
the Mortgages Trustee GIC Account.
(c) The Cash Manager shall procure that on each Distribution Date
the following amounts are paid into the Funding GIC Account:
(i) all Funding Principal Receipts, PROVIDED HOWEVER that any
amounts recorded as a credit on the Non-Flexible
Overpayments Sub Ledger shall remain in the Mortgages
Trustee GIC Account on such Distribution Date;
(ii) all Funding Revenue Receipts; and
(iii) any other amounts whatsoever received by or on behalf of
Funding after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on
the Funding GIC Account and the Funding Transaction Account and
all investment
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proceeds from Authorised Investments purchased from amounts
standing to the credit of such accounts are credited to the
Funding GIC Account.
(d) The Cash Manager shall procure that all interest earned on each
Funding (Issuer) GIC Account and all investment proceeds from
Authorised Investments purchased from amounts standing to the
credit of such Funding (Issuer) GIC Account are credited to such
account.
(e) The Cash Manager shall procure that on each Payment Date the
lesser of (1) the amount standing to the credit of the Funding
GIC Account and (2) the aggregate of all amounts required to be
paid by Funding to all Issuers in accordance with the relevant
Funding Priority of Payments, is credited to the Funding
Transaction Account in accordance with the provisions of the
Funding Deed of Charge.
(f) The Cash Manager shall procure that all transfers and
withdrawals of amounts standing to the credit of the Funding
Transaction Account and the Funding GIC Account shall be made in
accordance with the provisions of the Funding Deed of Charge.
(g) The Cash Manager shall procure that all transfers and
withdrawals of amounts standing to the credit of each Funding
(Issuer) GIC Account shall be made in accordance with the
provisions of the Funding Deed of Charge.
(h) Each of the payments into the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account, the Funding
Transaction Account, the Funding GIC Account and each Funding
(Issuer) GIC Account referred to in Clauses 4.4(a) through (g)
herein shall be made forthwith upon receipt by the Mortgages
Trustee, Funding or the Cash Manager, as the case may be, of the
amount in question.
(i) For the avoidance of doubt, as soon as reasonably practicable
after becoming aware of the same, the Cash Manager may, and
shall, withdraw Cash from, as the case may be, the Mortgages
Trustee Transaction Account, the Mortgages Trustee GIC Account,
the Funding Transaction Account, the Funding GIC Account or any
Funding (Issuer) GIC Account if, and to the extent that, such
Cash was credited thereto in error and shall use its reasonable
endeavours to ensure that such Cash is applied correctly
thereafter.
(j) The Cash Manager shall promptly notify each of the Mortgages
Trustee, Funding and the Security Trustee of any additional
account which supplements or replaces any account specifically
referred to in the definitions of the "Mortgages Trustee
Transaction Account", the "Mortgages Trustee GIC Account", the
"Funding Transaction Account", the "Funding GIC Account" or any
"Funding (Issuer) GIC Account" in the Master Definitions
Schedule.
(k) Each of the Cash Manager, the Mortgages Trustee and Funding
undertakes that, so far as it is able to procure the same, the
Mortgages Trustee Transaction Account, the Mortgages Trustee GIC
Account, the Funding Transaction Account and the Funding GIC
Account and all instructions and Mandates in
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relation thereto will continue to be operative and will not,
save as provided in Clause 4.6 herein (Cash Management) or as
permitted pursuant to the Bank Account Agreement, be changed
without the prior written consent of the Security Trustee (such
consent not to be unreasonably withheld or delayed). Each of the
Cash Manager and Funding undertakes that, so far as it is able
to procure the same, any Funding (Issuer) GIC Account and all
instructions and Mandates in relation thereto will continue to
be operative and will not, save as provided in Clause 4.6 herein
(Cash Management) or as permitted pursuant to the related
Funding (Issuer) Bank Account Agreement, be changed without the
prior written consent of the Security Trustee (such consent not
to be unreasonably withheld or delayed). For the avoidance of
doubt, the Cash Manager may change the Authorised Signatories in
respect of any instructions or Mandates relating to Funding
and/or the Mortgages Trustee, without the prior written consent
of the Security Trustee, in accordance with Clause 4.2
(Amendment or Revocation) of the Bank Account Agreement or any
Funding (Issuer) Bank Account Agreement, as the case may be.
4.5 Withdrawals: The Cash Manager may make withdrawals:
(a) on behalf of the Mortgages Trustee from the Mortgages Trustee
Transaction Account and the Mortgages Trustee GIC Account;
(b) on behalf of Funding from the Funding GIC Account, any Funding
(Issuer) GIC Account and the Funding Transaction Account, but
only:
(i) with the prior consent of the Security Trustee as
provided under the Funding Deed of Charge or following
receipt of a request for withdrawal in writing from the
Cash Manager on behalf of Funding; and
(ii) until receipt of an Intercompany Loan Enforcement Notice
served by the Security Trustee on Funding (with a copy to
the Funding Secured Creditors as soon as reasonable
thereafter in accordance with and subject to the Funding
Deed of Charge),
as permitted by this Agreement, the Mortgages Trust Deed, the Bank
Account Agreement, any Funding (Issuer) Bank Account Agreement, the
Mortgages Trustee Guaranteed Investment Contract, the Funding
Guaranteed Investment Contract, any Funding (Issuer) Guaranteed
Investment Contract and the Funding Deed of Charge, but shall not in
carrying out its functions as Cash Manager under this Agreement
otherwise make withdrawals from the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account or the Funding Bank
Accounts. Following enforcement of the Funding Security, the Cash
Manager will not be entitled to make withdrawals from any Funding
Account other than in accordance with the instructions of the Security
Trustee.
4.6 Cash Management: In administering the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account, the Funding Transaction
Account, the Funding GIC Account and any Funding (Issuer) GIC Account
on behalf of the Mortgages Trustee, Funding and the Security Trustee,
as applicable, the Cash Manager shall
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comply with the provisions of Schedule 2 hereto prior to receipt by the
Cash Manager of a copy of any Intercompany Loan Enforcement Notice
served by the Security Trustee on Funding.
4.7 Contributions: Following the drawing of any Intercompany Loan by
Funding from the First Issuer or any New Issuer on any date, the Cash
Manager shall procure (i) the payment on such date by Funding to the
Mortgages Trustee of Funding's Contribution to the Mortgages Trustee
pursuant to the Mortgages Trust Deed and (ii) the application of such
Contribution by the Mortgages Trustee for payment to the Seller of
either (a) the amount of Initial Purchase Price for the sale of any New
Mortgage Portfolio which is acquired by the Mortgages Trustee from the
Seller on such date under the provisions of Mortgage Sale Agreement or
(b) the amount of any Initial Consideration made to the Seller as
Beneficiary under the Mortgages Trust Deed, as applicable.
4.8 Funding Reserve Fund: The Cash Manager, on behalf of Funding, may
utilise the Funding Reserve Fund to fund initial reserves and other
expenses in connection with the issuance of any New Notes by any New
Issuer, to the extent that such initial reserves and expenses are to be
established, or paid for, by Funding and are not funded pursuant to the
terms of the Issuer Start Up Loan Agreement applicable to that New
Issuer.
5. Early Repayment Charges
The Cash Manager shall withdraw any Early Repayment Charges paid into
the Mortgages Trustee Transaction Account or the Mortgages Trustee GIC
Account and pay the same to the Seller, by telegraphic transfer to such
account as may be specified by the Seller from time to time, promptly
following a request for such withdrawal being received from the Seller.
For the avoidance of doubt, the Cash Manager shall not record the
receipt or withdrawal of Early Repayment Charges in any of the ledgers
maintained under this Agreement.
6. No Liability
Save as otherwise provided in this Agreement, the Cash Manager shall
have no liability for the obligations of any of the Mortgages Trustee,
Funding or the Security Trustee under any of the Transaction Documents
or otherwise and nothing herein shall constitute a guarantee, or
similar obligation, by the Cash Manager of any of the Mortgages
Trustee, Funding or the Security Trustee in respect of any of them.
7. Costs and Expenses
7.1 Funding and the Mortgages Trustee, proportionately in accordance with
and subject to the applicable Funding Priority of Payments set out in
the Funding Deed of Charge or the applicable Priority of Payments for
the Mortgages Trustee under the Mortgages Trust Deed, as the case may
be, will on each Payment Date reimburse the Cash Manager for all
out-of-pocket costs, expenses and charges (together with any amounts in
respect of Irrecoverable VAT due thereon) properly incurred by the Cash
Manager in the performance of the Cash Management Services including
any such costs, expenses or charges not reimbursed to the Cash Manager
on any previous Payment
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Date and the Cash Manager shall supply Funding and/or the Mortgages
Trustee with an appropriate VAT invoice issued by the Cash Manager or,
if the Cash Manager has treated the relevant cost, expense or charge as
a disbursement for VAT purposes, by the person making the supply.
7.2 Unless and until otherwise agreed by Funding, the Mortgages Trustee and
the Security Trustee in writing (notified to the Cash Manager), Funding
and the Mortgages Trustee shall be jointly and severally responsible
for reimbursing the Cash Manager for the out-of-pocket costs, expenses
and charges (together with any amounts in respect of Irrecoverable VAT
due thereon) referred to in Clause 7.1 herein.
8. Information
8.1 Use of information technology systems:
(a) The Cash Manager represents and warrants that at the date hereof
in respect of the software which is to be used by the Cash
Manager in providing the Cash Management Services it has in
place all necessary licences and/or consents from the respective
licensor or licensors (if any) of such software.
(b) The Cash Manager undertakes that it shall for the duration of
this Agreement, use reasonable endeavours to:
(i) ensure that the licences and/or consents referred to in
paragraph (a) are maintained in full force and effect;
and
(ii) except insofar as it would breach any other of its legal
obligations, grant to any person to whom it may
sub-contract or delegate the performance of all or any of
its powers and obligations under this Agreement and/or to
such person as the Mortgages Trustee, Funding and the
Security Trustee elect as a substitute cash manager in
accordance with the terms of this Agreement a licence to
use any proprietary software together with any updates
which may be made thereto from time to time.
(c) The Cash Manager shall use reasonable endeavours to maintain in
working order the information technology systems used by the
Cash Manager in providing the Cash Management Services.
(d) The Cash Manager shall pass to any person to whom it may
sub-contract or delegate the performance of all or any of its
powers and obligations under this Agreement and/or to such
person as the Mortgages Trustee, Funding and the Security
Trustee elect as a substitute cash manager in accordance with
the terms of this Agreement the benefit of any warranties in
relation to the software insofar as the same are capable of
assignment.
8.2 Bank Account Statements: The Cash Manager shall take all reasonable
steps to ensure that it receives:
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(a) a monthly bank statement in relation to each of the Mortgages
Trustee Transaction Account and the Mortgages Trustee GIC
Account (and any additional or supplemental bank account of the
Mortgages Trustee) and that it furnishes a copy of such
statements to the Mortgages Trustee, each of the Beneficiaries
and the Security Trustee (upon its request); and
(b) monthly bank statements in relation to each of the Funding
Transaction Account, the Funding GIC Account and any Funding
(Issuer) GIC Account (and any additional or supplemental bank
account of Funding) and that it furnishes a copy of such
statements to Funding and the Security Trustee (upon its
request).
8.3 Access to Books and Records: Subject to all applicable laws, the Cash
Manager shall permit the Mortgages Trustee, Funding, the Auditors of
the Mortgages Trustee and Funding, the Security Trustee and/or any
other person nominated by the Security Trustee or the Beneficiaries (to
whom the Cash Manager has no reasonable objection) at any time during
normal office hours upon reasonable notice to have access, or procure
that such person or persons are granted access, to all books of record
and account relating to the Cash Management Services provided by the
Cash Manager and related matters in accordance with this Agreement.
8.4 Statutory Obligations: The Cash Manager will use its reasonable
endeavours on behalf of the Mortgages Trustee and Funding, to prepare
or procure the preparation of and file all reports, annual returns,
financial statements, statutory forms and other returns which each of
the Mortgages Trustee and Funding is required by law to prepare and
file. Subject to approval thereof by the directors of the Mortgages
Trustee or Funding (as appropriate), the Cash Manager shall cause such
accounts to be audited by the Auditors and shall procure so far as it
is able so to do that the Auditors shall make a report thereon as
required by law and copies of all such documents shall be delivered to
the Mortgages Trustee, the Security Trustee and Funding (as
appropriate) and the Rating Agencies as soon as practicable after the
end of each accounting reference period of the Mortgages Trustee or
Funding (as appropriate).
8.5 Information Covenants:
(a) The Cash Manager shall provide the Mortgages Trustee, Funding,
the Security Trustee, the Seller and the Rating Agencies:
(i) quarterly with a report in, or substantially in, the form
set out in Schedule 3A hereto in respect of the Mortgages
Trustee; and
(ii) quarterly with a report in, or substantially in, the form
set out in Schedule 3B hereto in respect of Funding.
Such quarterly reports shall be delivered to the Mortgages
Trustee, Funding, the Security Trustee (upon its request), the
Seller and the Rating Agencies by the last Business Day of the
month in which each Payment Date occurs.
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(b) The Cash Manager shall provide, or procure the provision of, to
the Mortgages Trustee, Funding, the Security Trustee (upon its
request) and the Rating Agencies copies of any annual returns or
financial statements referred to in Clause 8.4 herein (Statutory
Obligations) as soon as reasonably practicable after the
preparation thereof.
(c) The Cash Manager shall notify the Rating Agencies and the
Security Trustee in writing of the details of (i) any material
amendment to the Transaction Documents of which it is or becomes
aware, (ii) the occurrence of an Intercompany Loan Event of
Default or Potential Intercompany Loan Event of Default and
(iii) any other information relating to the Cash Manager as the
Rating Agencies and the Security Trustee may reasonably request
in connection with its obligations under this Agreement,
PROVIDED THAT any such request by the Security Trustee does not
adversely interfere with the Cash Manager's day-to-day provision
of the Cash Management Services under the other terms of this
Agreement.
(d) After becoming aware of any event described in paragraph (c)(i)
and (ii) above, the Cash Manager shall give details to Funding,
the Mortgages Trustee and the Security Trustee of any pending
legal action and any judgments given in respect of the Cash
Manager if it could have a potential material adverse effect on
the ability of the Cash Manager to perform its obligations
hereunder.
(e) The Cash Manager shall, at the request of the Security Trustee,
furnish the Security Trustee and the Rating Agencies with such
other information relating to its business and financial
condition as the Security Trustee may request in connection with
this Agreement, PROVIDED THAT the Security Trustee shall not
make such a request more than once every three months unless, in
the belief of the Security Trustee, an Intercompany Loan Event
of Default, a Note Event of Default or a Cash Manager
Termination Event (as defined in Clause 12.1 herein (Cash
Manager Termination Events)) shall have occurred and is
continuing or a Potential Intercompany Loan Event of Default or
a Potential Note Event of Default shall have occurred and is
continuing or may reasonably be expected to occur, PROVIDED THAT
any such request by the Security Trustee does not adversely
interfere with the Cash Manager's day to day provision of the
Cash Management Services under the other terms of this
Agreement.
8.6 Together Connections Mortgage Loans and Connections Mortgage Loans:
(a) The Seller shall, upon request, use its reasonable endeavours
to:
(i) provide the Cash Manager with such information
(including, but not limited to documentary information)
in its possession; and
(ii) do such other acts and things,
that the Cash Manager may require in order for the Cash Manager
to exercise its rights and comply with its obligations with
respect to the Together Connections Mortgage Loans and the
Connections Mortgage Loans and under
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the Transaction Documents with respect to the administration of
such Mortgage Loans.
(b) The Cash Manager shall, upon request, use its reasonable
endeavours to:
(i) provide the Seller with such information (including, but
not limited to documentary information) in its
possession; and
(ii) do such other acts and things,
that the Seller may require in order for the Seller to, exercise
its rights and comply with its obligations under the Together
Connection Conditions and the Connection Conditions (where such
rights and obligations are not required to be administered by
the Mortgages Trustee, Funding, the Administrator or the Cash
Manager under the Transaction Documents) and in respect of the
products linked to the Together Connections Mortgage Loans and
the Connections Mortgage Loans.
9. Remuneration
9.1 Fee payable:
(a) Subject to paragraph (b) below, Funding and the Mortgages
Trustee, proportionately in accordance with and subject to the
applicable Funding Priority of Payments set out in the Funding
Deed of Charge and the applicable Priority of Payments for the
Mortgages Trustee under the Mortgages Trust Deed, as the case
may be, shall pay to the Cash Manager for its Cash Management
Services hereunder an annual cash management fee of (GBP)100,000
for its services which will be paid quarterly.
(b) Unless and until otherwise agreed by Funding, the Mortgages
Trustee and the Security Trustee in writing (notified to the
Cash Manager), Funding and the Mortgages Trustee shall be
jointly and severally responsible for paying the cash management
fee to the Cash Manager which is referred to in paragraph (a)
above.
9.2 Payment of fee: The cash management fee referred to in Clause 9.1
herein (Fee Payable) shall only be payable to the Cash Manager on each
Payment Date in the manner contemplated by, in accordance with and
subject to the provisions of the applicable Priority of Payments for
the Mortgages Trustee under the Mortgages Trust Deed and the applicable
Funding Priority of Payments under the Funding Deed of Charge.
10. Covenants, Representations and Warranties of the Cash Manager
10.1 Covenants: The Cash Manager hereby covenants with and undertakes to
each of the Mortgages Trustee, Funding and the Security Trustee that
without prejudice to any of its specific obligations hereunder:
(a) it will exercise all due skill, care and diligence to the
performance of its obligations and the exercise of its
discretions hereunder;
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(b) it will comply with any proper directions, orders and
instructions which the Mortgages Trustee, Funding or the
Security Trustee may from time to time give to it in accordance
with the provisions of this Agreement and, in the event of any
conflict, those of the Security Trustee shall prevail;
(c) it will obtain and keep in force all licences, approvals,
authorisations and consents which are necessary in connection
with the performance of the Cash Management Services and prepare
and submit all necessary applications and requests for any
further approval, authorisation, consent or licence required in
connection with the performance of the Cash Management Services;
(d) it will not knowingly fail to comply with any legal requirements
in the performance of the Cash Management Services;
(e) it will make all payments required to be made by it pursuant to
this Agreement on the due date for payment thereof for value in
the specified currency on such day without set-off (including,
without limitation, in respect of any fees owed to it) or
counterclaim; and
(f) it will not without the prior written consent of the Security
Trustee amend or terminate any of the Transaction Documents save
in accordance with their terms.
10.2 Duration of covenants: The covenants of the Cash Manager in Clause 10.1
(Covenants) shall remain in force until this Agreement is terminated
but without prejudice to any right or remedy of the Mortgages Trustee
and/or Funding and/or the Security Trustee arising from breach of any
such covenant prior to the date of termination of this Agreement.
10.3 Representations and Warranties: The Cash Manager hereby makes the
representations and warranties to each of the Mortgages Trustee,
Funding and the Security Trustee that are specified on Schedule 4
hereto.
11. Services Non-Exclusive
Nothing in this Agreement shall prevent the Cash Manager from rendering
or performing services similar to those provided for in this Agreement
to or for itself or other persons, firms or companies or from carrying
on business similar to or in competition with the business of the
Mortgages Trustee, Funding or the Security Trustee.
12. Termination
12.1 Cash Manager Termination Events: If any of the following events ("Cash
Manager Termination Events") shall occur:
(a) default is made by the Cash Manager in the payment on the due
date of any payment due and payable by it under this Agreement
or in the performance of its obligations under Clauses 4.4 and
4.5 herein and such default continues unremedied for a period of
five (5) London Business Days after the earlier of
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the Cash Manager becoming aware of such default and receiving
written notice from the Security Trustee requiring the same to
be remedied;
(b) default is made by the Cash Manager in the performance or
observance of any of its other covenants and obligations under
this Agreement, which in the opinion of the Security Trustee
(acting at the direction of the Note Trustee) is materially
prejudicial to the Noteholders and such default continues
unremedied for a period of twenty (20) days after the earlier of
the Cash Manager becoming aware of such default and receipt by
the Cash Manager of written notice from the Security Trustee
requiring the same to be remedied; or
(c) the Cash Manager suffers an Insolvency Event,
then Funding, the Mortgages Trustee and/or the Security Trustee may at
once or at any time thereafter while such default continues by notice
in writing to the Cash Manager with a copy to the Account Bank
terminate its appointment as Cash Manager under this Agreement with
effect from a date (not earlier than the date of the notice) specified
in the notice.
12.1.1 Upon termination of the appointment of the Cash Manager, the
Security Trustee agrees to use its reasonable endeavours to
appoint a substitute cash manager. Any substitute cash manager:
(i) must agree to enter into an agreement substantially on
the same terms as the relevant provisions of this
Agreement or on such terms as are satisfactory to the
Mortgages Trustee, Funding and the Security Trustee, and
(ii) must be a party that the Rating Agencies have previously
confirmed in writing to the Mortgages Trustee, Funding
and the Security Trustee will not cause the then-current
ratings of the Notes to be downgraded, withdrawn or
qualified.
The Security Trustee shall have no liability to any person in
the event that, having used reasonable endeavours, it is unable
to appoint a substitute cash manager. In any event, the Security
Trustee shall only be required to use its reasonable endeavours
to appoint such substitute cash manager. Notwithstanding any
other provision of the Transaction Documents, the Security
Trustee shall not itself be required to perform any duties of
the Cash Manager.
The Security Trustee shall not be obliged to monitor or
supervise the performance by any substitute Cash Manager of its
duties hereunder or in relation to the other Transaction
Documents nor shall the Security Trustee be responsible or
liable for any act or omission of any substitute Cash Manager or
for any loss caused thereby.
12.2 Resignation of Cash Manager: The Cash Manager may resign from its
appointment under this Agreement only upon giving not less than twelve
(12) months' notice to each of the Mortgages Trustee, Funding and the
Security Trustee, PROVIDED
20
THAT:
(a) the Mortgages Trustee, Funding and the Security Trustee each
consent in writing to such resignation;
(b) a substitute cash manager shall be appointed, such appointment
to be effective not later than the effective date of such
resignation;
(c) such substitute cash manager enters into an agreement
substantially on the same terms as the relevant provisions of
this Agreement and the Cash Manager shall not be released from
its obligations under the relevant provisions of this Agreement
until such substitute cash manager has entered into such new
agreement and the rights of the Mortgages Trustee and Funding
under such agreement are charged in favour of the Security
Trustee on terms satisfactory to the Security Trustee; and
(d) the then-current ratings of the Notes are not adversely affected
as a result thereof.
12.3 Effect of Termination or Resignation:
(a) On and after termination or resignation of the appointment of
the Cash Manager under this Agreement pursuant to this Clause
12, all authority and power of the Cash Manager under this
Agreement shall be terminated and be of no further effect and
the Cash Manager shall not thereafter hold itself out in any way
as the agent of the Mortgages Trustee, Funding or the Security
Trustee pursuant to this Agreement.
(b) Upon termination or resignation of the appointment of the Cash
Manager under this Agreement pursuant to this Clause 12, the
Cash Manager shall:
(i) forthwith deliver (and in the meantime hold on trust for,
and to the order of, the Mortgages Trustee, Funding or
the Security Trustee, as the case may be) to the
Mortgages Trustee, Funding or the Security Trustee, as
the case may be or as it shall direct, all books of
account, papers, records, registers, correspondence and
documents in its possession or under its control relating
to the affairs of or belongings of the Mortgages Trustee,
Funding or the Security Trustee, as the case may be (if
practicable, on the date of receipt), any monies then
held by the Cash Manager on behalf of the Mortgages
Trustee, Funding or, the Security Trustee and any other
assets of the Mortgages Trustee, Funding and the Security
Trustee;
(ii) take such further action as the Mortgages Trustee,
Funding or the Security Trustee, as the case may be, may
reasonably direct at the expense of the Mortgages Trustee
or Funding, provided that the Cash Manager shall not be
required to take or direct to be taken such further
action unless it has been indemnified to its satisfaction
(and in the event of a conflict between the directions of
Funding, the Mortgages
21
Trustee and the Security Trustee, the directions of the
Security Trustee shall prevail);
(iii) provide all relevant information contained on computer
records in the form of magnetic tape, together with
details of the layout of the files encoded on such
magnetic tapes; and
(iv) co-operate and consult with and assist the Mortgages
Trustee, Funding or the Security Trustee or its nominee,
as the case may be (which shall, for the avoidance of
doubt, include any Receiver appointed by it), for the
purposes of explaining the file layouts and the format of
the magnetic tapes generally containing such computer
records on the computer system of the Mortgages Trustee,
Funding, or the Security Trustee or such nominee, as the
case may be.
12.4 Notice of event of default: The Cash Manager shall deliver to the
Mortgages Trustee, Funding and the Security Trustee as soon as
reasonably practicable but in any event within three London Business
Days of becoming aware thereof a notice of any Cash Manager Termination
Event or any event which with the giving of notice or expiry of any
grace period or certification, as specified in such Cash Manager
Termination Event would constitute the same or any Intercompany Loan
Event of Default or any Potential Intercompany Loan Event of Default.
12.5 General provisions relating to termination:
(a) Termination of this Agreement or the appointment of the Cash
Manager under this Agreement shall be without prejudice to the
liabilities of the Mortgages Trustee and Funding to the Cash
Manager and vice versa incurred before the effective date of
such termination. The Cash Manager shall have no right of
set-off or any lien in respect of such amounts against amounts
held by it on behalf of the Mortgages Trustee, Funding or the
Security Trustee.
(b) This Agreement shall terminate automatically at such time as
Funding has no further interest in the Trust Property and all
Intercompany Loans have been fully repaid or Funding's
obligations under all Intercompany Loans have been otherwise
discharged.
(c) On termination of the appointment of the Cash Manager under the
provisions of this Clause 12, the Cash Manager shall be entitled
to receive all fees and other monies accrued up to (but
excluding) the date of termination subject to the applicable
Funding Priority of Payments set out in the Funding Deed of
Charge and/or the applicable Priority of Payments for the
Mortgages Trustee under the Mortgages Trust Deed, as the case
may be, but shall not be entitled to any other or further
compensation. Such monies so receivable by the Cash Manager
shall be paid by Funding and the Mortgages Trustee, on the dates
on which they would otherwise have fallen due hereunder and
under the terms of the Funding Deed of Charge and the Mortgages
Trust Deed. For the avoidance of doubt, such termination shall
not affect the Cash Manager's rights to receive payment of all
amounts (if any) due to it from Funding and the Mortgages Trust
Deed other than under this Agreement.
22
(d) Any provision of this Agreement which is stated to continue
after termination of the Agreement shall remain in full force
and effect notwithstanding termination.
13. Further Assurances
13.1 Co-operation, etc: The parties hereto agree that they will co-operate
fully to do all such further acts and things and execute any further
documents as may be necessary or desirable to give full effect to the
arrangements contemplated by this Agreement and the other Transaction
Documents.
13.2 Powers of attorney: Without prejudice to the generality of Clause 13.1
herein (Co-Operation, etc.), the Mortgages Trustee and Funding shall
upon request by the Cash Manager forthwith give to the Cash Manager
such further powers of attorney or other written authorisations,
mandates or instruments as are necessary to enable the Cash Manager to
perform the Cash Management Services.
14. Miscellaneous
14.1 No set-off: Each of the Seller and the Cash Manager agrees that it will
not make or exercise any claims or demands, any rights of counterclaim
or any other equities against or withhold payment of any and all sums
of money which may at any time and from time to time be standing to the
credit of the Mortgages Trustee Transaction Account, the Mortgages
Trustee GIC Account, the Funding Transaction Account, the Funding GIC
Account or any Funding (Issuer) GIC Account or any replacement of
additional bank account of either the Mortgages Trustee or Funding.
14.2 No recourse:
(a) In relation to all sums due and payable by the Mortgages Trustee
or Funding to the Cash Manager, the Cash Manager agrees that it
shall have recourse only to sums paid to or received by (or on
behalf of) the Mortgages Trustee or Funding pursuant to the
provisions of the Transaction Documents, in each case subject to
the Mortgages Trustee Revenue Priority of Payments and the
Funding Priority of Payments.
(b) For the avoidance of doubt, the Security Trustee shall not be
liable to pay any amounts due under Clause 7 (Costs and
Expenses), but without prejudice to the obligations of the
Mortgages Trustee or Funding, as the case may be, or any
receiver appointed pursuant to the Funding Deed of Charge in
respect of such amounts.
(c) Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of, the Security Trustee under or in
connection with this Agreement (other than its obligations under
Clause 13 herein (Further Assurances)) shall automatically
terminate upon the discharge in full of the Funding Secured
Obligations, PROVIDED THAT this shall be without prejudice to
any claims in respect of such obligations and rights arising on
or prior to such date.
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15. Confidentiality
During the continuance of this Agreement or after its termination, each
of the Mortgages Trustee, the Cash Manager, the Seller, Funding and the
Security Trustee shall use its best endeavours not to disclose to any
person, firm or company whatsoever any information relating to the
business, finances or other matters of a confidential nature of any
other party hereto of which it may exclusively by virtue of being party
to the Transaction Documents have become possessed and shall use all
reasonable endeavours to prevent any such disclosure as aforesaid,
PROVIDED HOWEVER that the provisions of this Clause 15 shall not apply:
(a) to any information already known to the recipient otherwise than
as a result of entering into any of the Transaction Documents;
(b) to any information subsequently received by the recipient which
it would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge
otherwise than as a result of the conduct of the recipient;
(d) to any extent that the recipient is required to disclose the
same pursuant to any law or order of any court or pursuant to
any direction, request or requirement (whether or not having the
force of law) of any central bank or any governmental or other
authority (including, without limitation, any official bank
examiners or regulators);
(e) to the extent that the recipient needs to disclose the same for
determining the existence of, or declaring, an Event of Default,
an Intercompany Loan Event of Default or a Cash Manager
Termination Event, the protection or enforcement of any of its
rights under any of the Transaction Documents or in connection
herewith or therewith or for the purpose of discharging, in such
manner as it thinks fit, its duties under or in connection with
such agreements in each case to such persons as require to be
informed of such information for such purposes; or
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt to be issued by any Issuer) to any credit
rating agency or any prospective new cash manager or prospective
new security trustee.
16. No Partnership
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any partnership
between any of the parties.
17. Assignment
17.1 Assignment by the Mortgages Trustee and Funding: Neither of the
Mortgages Trustee nor Funding may assign or transfer any of its
respective rights and obligations under this Agreement without the
prior written consent of:
24
(a) in the case of the Mortgages Trustee, each of the Beneficiaries
and the Security Trustee; and
(b) in the case of Funding, each of the Security Trustee and the
Cash Manager,
except that Funding may assign its respective rights hereunder without
such consent pursuant to the Funding Deed of Charge.
17.2 No assignment by Cash Manager: The Cash Manager may not assign or
transfer any of its rights and obligations under this Agreement without
the prior written consent of the Mortgages Trustee, each of the
Beneficiaries and the Security Trustee.
18. The Security Trustee
18.1 Change in Security Trustee: If there is any change in the identity of
the security trustee in accordance with the Funding Deed of Charge, the
Cash Manager, the Seller, Funding and the Mortgages Trustee shall
execute such documents and take such action as the successor security
trustee and the outgoing security trustee may require for the purpose
of vesting in the successor security trustee the rights and obligations
of the outgoing security trustee under this Agreement and releasing the
outgoing security trustee from its future obligations under this
Agreement.
18.2 No Obligations: It is hereby acknowledged and agreed that by its
execution of this Agreement the Security Trustee shall not assume or
have any of the obligations or liabilities of the Cash Manager, the
Seller, Funding or the Mortgages Trustee under this Agreement.
Furthermore, any liberty or power which may be exercised or any
determination which may be made hereunder by the Security Trustee may
be exercised or made in the Security Trustee's absolute and unfettered
discretion without any obligation to give reasons therefor, but in any
event must be exercised or made in accordance with the provisions of
the Funding Deed of Charge.
19. New Intercompany Loan Agreements
If Funding enters into a New Intercompany Loan Agreement, then the Cash
Manager, the Seller, Funding, the Security Trustee and the Mortgages
Trustee shall execute such documents and take such action as may be
necessary or required by the Rating Agencies for the purpose of
including the New Issuer, any Basis Rate Swap Provider, any Currency
Swap Provider, any New Start-up Loan Provider and any other person who
has executed an Accession Undertaking or any New Intercompany Loan
Agreement in the Transaction Documents.
20. Non Petition Covenant; Limited Recourse
20.1 Only Trustee to Enforce: The Cash Manager hereby undertakes to each of
the other parties hereto that only the Security Trustee may enforce the
security created in favour of the Security Trustee by the Funding Deed
of Charge in accordance with the provisions thereof.
20.2 Limited Recourse: The Cash Manager hereby undertakes to each of the
other parties hereto that, notwithstanding any other provision of this
Agreement or any other
25
Transaction Document, no sum due or owing to the Cash Manager from or
by Funding or the Mortgages Trustee under this Agreement shall be
payable by Funding or the Mortgages Trustee except to the extent that
Funding or the Mortgages Trustee, as applicable, has sufficient funds
available subject to the applicable Funding Priority of Payments set
out in the Funding Deed of Charge or the applicable Priority of
Payments for the Mortgages Trustee under the Mortgages Trust Deed, as
the case may be, or, following enforcement of the Funding Security the
Security Trustee has realised sufficient funds from the Funding
Security to pay such sum subject to and in accordance with the relevant
Funding Priority of Payments, and provided that all liabilities of
Funding or the Mortgages Trustee required to be paid in priority
thereto or pari passu therewith pursuant to the applicable Funding
Priority of Payments set out in the Funding Deed of Charge or the
applicable Priority of Payments for the Mortgages Trustee under the
Mortgages Trust Deed, as the case may be, have been paid, discharged
and/or otherwise provided for in full.
20.3 Non-Petition: The Cash Manager hereby undertakes to each of the other
parties hereto that it shall not take any steps for the purpose of
recovering any amount payable under this Agreement (including, without
limitation, by exercising any rights of set-off) or enforcing any
rights arising out of this Agreement against Funding or the Mortgages
Trustee and it shall not take any steps or legal proceedings for the
winding-up, dissolution or reorganisation of, or the institution of
insolvency proceedings against, either Funding or the Mortgages Trustee
or for the appointment of a receiver, administrator, liquidator or
similar officer of Funding or the Mortgages Trustee in respect of any
or all of its revenues except to the extent expressly permitted under
the Funding Deed of Charge or the Mortgages Trust Deed, as the case may
be.
20.4 Following Enforcement: The Cash Manager hereby undertakes to each of
the other parties hereto that, following any enforcement of the Funding
Security, it will hold on trust for, and will pay to, the Security
Trustee or the Receiver, as the case may be, all monies received or
recovered by it (whether by way of set-off or otherwise) from Funding
or in respect of any amount due hereunder by Funding, otherwise than in
accordance with the Funding Post-Enforcement Priority of Payments in
order that such monies may be applied by the Security Trustee or the
Receiver in accordance with the Funding Post-Enforcement Priority of
Payments.
20.5 Corporate Obligations: To the extent permitted by law, no recourse
under any obligation, covenant, or agreement of any person contained in
this Agreement shall be had against any shareholder, officer or
director of such person as such, by the enforcement of any assessment
or by any legal proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this Agreement is a
corporate obligation of each person expressed to be a party hereto and
no personal liability shall attach to or be incurred by the
shareholders, officers, agents or directors of such person as such, or
any of them, under or by reason of any of the obligations, covenants or
agreements of such person contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by such
person of any of such obligations, covenants or agreements, either
under any applicable law or by statute or constitution, of every such
shareholder, officer, agent or director is hereby expressly waived by
each person expressed to be a party hereto as a condition of and
consideration for the execution of this Agreement.
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21. Amendments and Waiver
21.1 Entire Agreement: This Agreement sets out the entire agreement and
understanding between the parties with respect to the subject matter of
this Agreement superseding all prior oral or written understandings
other than the other Transaction Documents.
21.2 Amendments and Waiver: No amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing and
signed by each of the parties hereto. In the case of a waiver or
consent, such waiver or consent shall be effective only in the specific
instance and as against the party or parties giving it for the specific
purpose for which it is given.
21.3 Rights Cumulative: The respective rights of each of the parties to this
Agreement are cumulative and may be exercised as often as they consider
appropriate. No failure on the part of any party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any
other right. The remedies in this Agreement are cumulative and not
exclusive of any remedies provided by law.
21.4 Ratings: No variation or waiver of this Agreement shall be made if the
same would adversely affect the then-current ratings of any of the
Notes.
22. Notices
Any notices or other communication or document to be given or delivered
pursuant to this Agreement to any of the parties hereto shall be
sufficiently served if sent by prepaid first class post, by hand or by
facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched or (where delivered by hand) on
the day of delivery if delivered before 17.00 hours on a London
Business Day or on the next London Business Day if delivered thereafter
or (in the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
(a) in the case of the Cash Manager and the Seller, to Northern Rock
plc, Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
(facsimile number: 0191 213 2203) for the attention of the Group
Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance
Trustees Limited, 22 Grenville Street, St. Helier, Jersey JE4
8PX, Channel Islands (facsimile number 0153 469 9333) for the
attention of Securitisation Team, Treasury;
(c) in the case of Funding, to Granite Finance Funding Limited, 4
Royal Mint Court, London EC3N 4HJ (facsimile number 020 7073
7874) for the attention of Securitisation Team, Treasury;
(d) in the case of the Security Trustee, to The Bank of New York, at
One Canada Square, 48th Floor, London E14 5AL (facsimile number
020 7964 6399) for the attention of Corporate Trust (Global
Structured Finance);
27
(e) in the case of Fitch, to Fitch Ratings Ltd., at Eldon House, 2
Eldon Street, London EC2M 7UA (facsimile number 0207 417 6262)
for the attention of European Structured Finance Surveillance;
(f) in the case of Moody's, to Moody's Investors Services, Inc., at
1st Floor, 2 Minster Court, Mincing Lane, London EC3R 7XB
(facsimile number 0207 772 5400) for the attention of Jodi van
Breda;
(g) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., at Garden House, 18
Finsbury Circus, London EC2M 7NJ (facsimile number 0207 826
3598) for the attention of Heather Dyke;
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by any
party or by any Rating Agency to the others by written notice in
accordance with the provisions of this Clause 22. All notices served
under this Agreement shall be simultaneously copied to the Security
Trustee by the person serving the same.
23. Third Party Rights
A person who is not a party to this Agreement 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.
24. Execution in Counterparts; Severability
24.1 Counterparts: This Agreement may be executed in any number of
counterparts (manually or by facsimile) and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
24.2 Severability: Where any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations under this Agreement, or of such provision or obligation in
any other jurisdiction, shall not be affected or impaired thereby.
25. Governing Law and Submission to Jurisdiction
25.1 Governing Law: This Agreement is governed by, and shall be construed in
accordance with, English law.
25.2 Submission to Jurisdiction: Each of the parties hereto irrevocably
agrees that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Agreement and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
25.3 Process Agent: The Mortgages Trustee irrevocably and unconditionally
appoints Mourant & Co. Capital (SPV) Limited at 4 Royal Mint Court,
London EC3N 4HJ or
28
otherwise at its registered office 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.
25.4 Forum: Each of the parties hereto irrevocably waives any objection
which it might now or hereafter have to the courts of England being
nominated as the forum to hear and determine any Proceedings and to
settle any disputes, and agrees not to claim that any such court is not
a convenient or appropriate forum.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed the
day and year first before written.
29
SCHEDULE 1
The Cash Management Services
The Cash Manager shall:
(a) make the determinations set out in Schedule 2 hereto;
(b) invest sums, if any, standing to the credit of the Funding
Transaction Account in short-term Authorised Investments as
determined by Funding and, if applicable, the Security Trustee;
(c) invest sums, if any, standing to the credit of the Mortgages
Trustee Transaction Account in short-term Authorised Investments
as determined by the Mortgages Trustee and, if applicable, the
Security Trustee;
(d) maintain the Funding Principal Deficiency Ledger, and record (1)
any principal Losses on the Mortgage Loans allocated to Funding
pursuant to the terms of the Mortgages Trust and (2) to record
the application of Funding Available Principal Receipts to any
Issuer to fund the Issuer Liquidity Reserve Fund of any Issuer.
(e) provide the Mortgages Trustee, Funding, the Security Trustee
(upon its request) and the Rating Agencies with quarterly
reports in relation to the Mortgages Trustee and Funding as set
forth on Schedule 3;
(f) operate the Mortgages Trustee Transaction Account, the Mortgages
Trustee GIC Account, the Funding GIC Account, any Funding
(Issuer) GIC Account and the Funding Transaction Account and
ensure that payments are made into and from such accounts in
accordance with this Agreement, the Mortgages Trust Deed, the
Funding Deed of Charge, the Bank Account Agreement, any Funding
(Issuer) Bank Account Agreement, the Mortgages Trustee
Guaranteed Investment Contract, the Funding Guaranteed
Investment Contract, any Funding (Issuer) Guaranteed Investment
Contract and any other applicable Transaction Document, PROVIDED
HOWEVER, that nothing herein shall require the Cash Manager to
make funds available to the Mortgages Trustee or Funding to
enable such payments to be made other than as expressly required
by the provisions of this Agreement;
(g) in relation to the payments to be made to each Issuer, make
withdrawals under the Issuer Reserve Fund, if required;
(h) in relation to the payments to be made to each Issuer, make any
required withdrawals under the Issuer Liquidity Reserve Fund;
(i) maintain any Issuer Reserve Fund Ledger, and record the amount
credited to any Issuer Reserve Fund on the Initial Closing Date,
and subsequent withdrawals and deposits in respect of any Issuer
Reserve Fund;
(j) maintain any Issuer Liquidity Reserve Ledger, if any, and record
the amount credited to any Issuer Liquidity Reserve Fund from
time to time, and
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subsequent withdrawals and deposits in respect of any Issuer
Liquidity Reserve Fund;
(k) keep records for all taxation purposes (including, without
limitation VAT);
(l) subject to any applicable law, assist the auditors of the
Mortgages Trustee and Funding and provide such information to
them as they may reasonably request for the purpose of carrying
out their duties as auditors;
(m) make all filings, give all notices and make all registrations
and other notifications required in the day-to-day operation of
the respective businesses of the Mortgages Trustee and Funding
or required to be given by the Mortgages Trustee or Funding
pursuant to the Transaction Documents;
(n) arrange for all payments due to be made by the Mortgages Trustee
and/or Funding under any of the Transaction Documents, PROVIDED
THAT such monies are at the relevant time available to the
Mortgages Trustee and/or Funding and PROVIDED FURTHER that
nothing herein shall constitute a guarantee by the Cash Manager
of all or any of the obligations of the Mortgages Trustee or
Funding under any of the Transaction Documents;
(o) without prejudice to the role of and in conjunction with the
Corporate Services Provider to Funding and the Mortgages Trustee
under the relevant Corporate Services Agreement, keep general
books of account and records of the Mortgages Trustee and
Funding; provide accounting services, including reviewing
receipts and payments, supervising and assisting in the
preparation of interim statements and final accounts and
supervising and assisting in the preparation of Tax returns;
(p) without prejudice to the role of and in conjunction with the
Corporate Services Provider to Funding and the Mortgages Trustee
under the relevant Corporate Services Agreement, provide or
procure the provision of company secretarial and administration
services to the Mortgages Trustee and Funding including the
keeping of all registers and the making of all returns and
filings required by applicable law or by U.S., U.K. or Jersey
regulatory authorities (including the Securities and Exchange
Commission), co-operate in the convening of board and general
meetings and provide registered office facilities;
(q) itself on behalf of the Mortgages Trustee and Funding, PROVIDED
THAT such monies are at the relevant time available to the
Mortgages Trustee and Funding, pay all the out-of-pocket
expenses of the Mortgages Trustee and Funding, incurred by the
Cash Manager on behalf of the Mortgages Trustee and Funding in
the performance of the Cash Manager's duties hereunder including
without limitation:
(i) all Taxes which may be due or payable by the Mortgages
Trustee and Funding;
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(ii) all registration, transfer, filing and other fees and
other charges payable in respect of the sale by the
Seller of the Mortgage Portfolio to the Mortgages
Trustee;
(iii) all necessary filing and other fees in compliance with
regulatory requirements;
(iv) all legal and audit fees and other professional advisory
fees;
(v) all communication expenses including postage, courier and
telephone charges; and
(vi) all premiums payable by the Mortgages Trustee in respect
of the Insurance Policies;
(r) at the request of Funding (and following the enforcement of the
Funding Security, with the prior written consent of the Security
Trustee), the Cash Manager may invest monies standing from time
to time to the credit of the Funding GIC Account or any Funding
(Issuer) GIC Account (including any amounts credited thereto and
representing amounts standing to the credit of such Issuer
Liquidity Reserve Fund, if any) in Authorised Investments,
subject to the following provisions:
(i) any such Authorised Investment shall be made in the joint
names of Funding and the Security Trustee;
(ii) any costs properly and reasonably incurred in making and
changing Authorised Investments will be reimbursed to the
Cash Manager and the Security Trustee by Funding;
(iii) all income or proceeds following the disposal or maturity
of Authorised Investments shall be credited to the
Funding GIC Account or any Funding (Issuer) GIC Account,
as applicable; and
(iv) following the enforcement of the Funding Security no such
investment may be made without the prior written consent
of the Security Trustee.
The Security Trustee and the Cash Manager shall not be responsible
(save where any loss results from the Security Trustee's or the
Cash Manager's own fraud, wilful default or gross negligence or
that of its officers or employees) for any loss occasioned by
reason of any such Authorised Investments whether by depreciation
in value or otherwise provided that such Authorised Investments
were made in accordance with the above provisions; and
(s) take such other action or provide any other Cash Management
Services as is required in the Transaction Documents.
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SCHEDULE 2
Cash Management and Maintenance of Ledgers
1. Determination
(a) On or before each Distribution Date based on the aggregate
amount of monies standing to the credit of the Mortgages Trustee
Transaction Account and the Mortgages Trustee GIC Account as at
close of business on the preceding day, the Cash Manager shall
determine each of the following:
(i) the amount of Principal Receipts and Revenue Receipts
received during the immediately preceding Trust
Calculation Period and during each Interim Calculation
Period (as defined in the Mortgages Trust Deed), if any,
during such immediately preceding Trust Calculation
Period;
(ii) the amount of any Mortgages Trustee Available Revenue
Receipts received during the immediately preceding Trust
Calculation Period;
(iii) the amount of any net credit on the Non-Flexible
Overpayments Sub Ledger;
(iv) the amount of Mortgages Trustee Available Revenue
Receipts and Principal Receipts to be distributed to
Funding and to the Seller on such Distribution Date;
(v) whether each of the Issuer Arrears Test, the Issuer
Reserve Requirement and the Subordinated Principal Test
is satisfied on such date and shall promptly notify the
Issuer Cash Manager of such determinations; and
(vi) the various amounts, balances and rates to be calculated
in accordance with any Basis Rate Swap and/or any
Currency Rate Swap, and shall promptly notify each
Issuer, each Issuer Cash Manager, the Note Trustee and
each Calculation Agent (as defined in each Basis Rate
Swap Agreement and Currency Swap Agreement) of such
amounts, balances and rates.
(b) On or before each Distribution Date (and, in respect of Clause
1(b)(ii) below, on each Assignment Date and Funding Contribution
Date), the Cash Manager shall determine each of the following:
(i) the amount of any Losses incurred on the Mortgage Loans
during the immediately preceding Trust Calculation Period
and during each Interim Calculation Period (as defined in
the Mortgages Trust Deed), if any, during such
immediately preceding Trust Calculation Period;
(ii) (the Funding Share, the Seller Share, the Funding Share
Percentage and the Seller Share Percentage in accordance
with Clause 8
33
(Adjustment of Funding Share Percentage and Seller Share
Percentage) of the Mortgages Trust Deed;
(iii) to the extent (i) the Seller has sold and assigned New
Mortgage Loans, or (ii) Funding has made a Further
Contribution, to the Mortgages Trustee during the
immediately preceding Trust Calculation Period, the
Weighted Average Funding Share Percentage and the
Weighted Average Seller Share Percentage (in respect of
Revenue Receipts, Principal Receipts and Losses) in
accordance with Clause 8.3 (Weighted Average Funding
Share Percentage) and Clause 8.7 (Weighted Average Seller
Share Percentage), respectively, of the Mortgages Trust
Deed; and
(iv) the Minimum Seller Share in accordance with Clause 9.2
(Fluctuation of Minimum Seller Share on each Distribution
Date) of the Mortgages Trust Deed.
(c) On each Distribution Date, in relation to the Mortgages Trustee
Revenue Receipts received from the Mortgages Trustee on such
Distribution Date, the Cash Manager shall determine each of the
following amounts:
(i) an amount equal to all amounts to be applied on the
immediately succeeding Payment Dates for Group 1 Issuers
and Group 2 Issuers set forth under items (A)-(D) of the
Funding Pre-Enforcement Revenue Priority of Payments or,
as the case may be, items (A)-(C) of the Funding
Post-Enforcement Priority of Payments, and
(ii) an amount which is equal to the lesser of:
(A) an amount equal to the aggregate of the amounts to
be applied on the immediately succeeding Payment
Date for all Group 1 Issuers as set forth under
items (E)-(Q) of the Funding Pre-Enforcement
Revenue Priority of Payments or, as the case may
be, items (D)-(G) of the Funding Post-Enforcement
Priority of Payments (but excluding any principal
amount due under any Intercompany Loan (save that,
for the avoidance of doubt, such exclusion shall
not apply in respect of any Group 1 Available
Revenue Receipts which are applied by any Group 1
Issuer to credit that Issuer's Principal
Deficiency Ledgers and thereby reduce the
principal payable under that Issuer's Intercompany
Loan) and any amount of Deferred Contribution
under item (P) of the Funding Pre-Enforcement
Revenue Priority of Payments and/or item (F) of
the Funding Post-Enforcement Priority of
Payments), less all other amounts (not derived
from the distribution of Mortgages Trustee
Available Revenue Receipts under the Mortgages
Trust) which will constitute Group 1 Available
Revenue Receipts on the immediately succeeding
Payment Date; and
(B) an amount (not less than zero) equal to:
34
remaining Mortgages
Trustee Available
Revenue Receipts x Group 1 Share Percentage
allocated to Funding
(iii) an amount which is equal to the lesser of:
(A) an amount equal to the aggregate of the amounts to
be applied on the immediately succeeding Payment
Date for all Group 2 Issuers as set forth under
items (E)-(Q) of the Funding Pre-Enforcement
Revenue Priority of Payments or, as the case may
be, items (D)-(G) of the Funding Post-Enforcement
Priority of Payments (but excluding any principal
amount due under any Intercompany Loan (save that,
for the avoidance of doubt, such exclusion shall
not apply in respect of any Group 2 Available
Revenue Receipts which are applied by any Group 2
Issuer to credit that Issuer's Principal
Deficiency Ledger and thereby reduce the principal
payable under that Issuer's Intercompany Loan) and
any amount of Deferred Contribution under item (P)
of the Funding Pre-Enforcement Revenue Priority of
Payments and/or item (F) of the Funding
Post-Enforcement Priority of Payments), less all
other amounts (not derived from the distribution
of Mortgages Trustee Available Revenue Receipts
under the Mortgages Trust) which will constitute
Group 2 Available Revenue Receipts on the
immediately succeeding Payment Date; and
(B) an amount (not less than zero) equal to:
remaining Mortgages
Trustee Available
Revenue Receipts x Group 2 Share Percentage
allocated to Funding
(iv) either:
(A) an amount in respect of all Group 1 Issuers
towards any remaining revenue amounts which will
be due and payable (taking into account the amount
determined under paragraph 1(c)(ii) above) on the
immediately succeeding Payment Date for Group 1
Issuers under such Issuers' Intercompany Loans; or
(B) an amount in respect of all Group 2 Issuers
towards any remaining revenue amounts which will
be due and payable (taking into account the amount
determined under paragraph 1(c)(iii) above) on the
immediately succeeding Payment Date for Group 2
Issuers under such Issuers' Intercompany Loans;
Following determination of the amounts under this paragraph
1(c), the Cash Manager shall allocate the Mortgages Trustee
Available Principal Receipts to expenses, the Group 1 Issuers
and the Group 2 Issuers by recording such amounts on the Funding
Expenses Sub-Ledger, the Group 1 Revenue Sub-
35
Ledger or the Group 2 Revenue Sub-Ledger, as the case may be, as
set forth in paragraph 13 below.
(d) On each Distribution Date in relation to Mortgages Trustee
Available Principal Receipts received from the Mortgages Trustee
on such Distribution Date and amounts standing to the credit of
the Funding Principal Ledger (taking into account amounts
already standing to the credit of the Group 1 Principal
Sub-Ledger and the Group 2 Principal Sub-Ledger), the Cash
Manager shall determine each of the following amounts as
follows:-
(i) (A) for each Issuer, an amount 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 or Group 2 Available Principal Receipts,
as applicable, on the Payment Date for such Issuer
immediately succeeding such Distribution Date; and
(B) for each Issuer, an amount distributable on the
immediately succeeding Payment Dates for Group 1
Issuers and Group 2 Issuers to any Group 1 and
Group 2 Issuers in respect of Money Market Notes
of such Issuers having Controlled Amortisation
Amounts due on such Payment Dates;
(ii) (A) an amount which is equal to the lesser of:-
(1) the principal amount due on the
Intercompany Loans of all Group 1 Issuers
equal to the Controlled Amortisation
Amounts due for non-Money Market Notes, if
any, on the Payment Date for Group 1
Issuers immediately succeeding such
Distribution Date (in each case determined
on the assumption that the Issuer Reserve
Requirement, the Issuer Arrears Test and
the Subordinated Principal Test are
satisfied on that Payment Date); and
(2) an amount equal to:
Mortgages Trustee
Principal Receipts plus
any amounts standing to
the credit of the Funding x Group 1 Share
Principal Ledger (less Percentage
any amounts applied in
paragraph (i) above)
(B) an amount which is equal to the lesser of:
(1) the principal amount due on the
Intercompany Loans of all Group 2 Issuers
equal to the Controlled Amortisation
Amounts due for non-Money Market Notes, if
any, on the Payment Date for Group 2
Issuers immediately
36
succeeding such Distribution Date (in each
case determined on the assumption that the
Issuer Reserve Requirement, the Issuer
Arrears Test and the Subordinated Principal
Test are satisfied on that Payment Date);
and
(2) an amount equal to:
Mortgages Trustee
Principal Receipts plus
any amounts standing to
the credit of the Funding x Group 2 Share
Principal Ledger (less Percentage
any amounts applied in
paragraph (i) above)
(iii) either:
(A) an amount in respect of all Group 1 Issuers
towards any principal amounts remaining which will
be due and payable (taking into account the amount
determined under paragraphs 1(d)(i)(B) and
1(d)(ii)(A) above) on the immediately succeeding
Payment Date under such Issuers' Intercompany
Loans (in each case determined on the assumption
that the Issuer Reserve Requirement, the Issuer
Arrears Test and the Subordinated Principal Test
are satisfied on that Payment Date); or
(B) an amount in respect of all Group 2 Issuers
towards any principal amounts remaining which will
be due and payable (taking into account the amount
determined under paragraphs 1(d)(i)(B) and
1(d)(ii)(B) above) on the immediately succeeding
Payment Date under such Issuers' Intercompany
loans (in each case determined on the assumption
that the Issuer Reserve Requirement, the Issuer
Arrears Test and the Subordinated Principal Test
are satisfied on that Payment Date).
For purposes of calculating the Group 1 Share Percentage and the
Group 2 Share Percentage in paragraphs 1(d)(ii)(A)(2) and
1(d)(ii)(B)(2) above, respectively, 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 that 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 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 of such Payment Date of any
Special Repayment Notes issued by that Issuer.
37
Following determination of the amounts under this paragraph
1(d), the Cash Manager shall allocate the Mortgages Trustee
Available Principal Receipts to the Group 1 Issuers and Group 2
Issuers by recording such the amounts on the Group 1 Principal
Sub-Ledger or Group 2 Principal Sub-Ledger, as the case may be,
as set forth in paragraph 16 below.
(e) No later than each Distribution Date immediately prior to each
Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Group 1 Available Revenue Receipts or
Group 2 Available Revenue Receipts, as applicable, to be
applied on the relevant Payment Date in accordance with
the Funding Pre-Enforcement Revenue Priority of Payments;
and
(ii) the amount of any Group 1 Available Principal Receipts or
Group 2 Available Principal Receipts, as applicable, to
be applied on the following Payment Date in accordance
the Funding Pre-Enforcement Principal Priority of
Payments.
(f) No later than each Distribution Date immediately prior to each
Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Issuer Allocable Revenue Receipts for
each Issuer to be applied on the relevant Payment Date in
accordance with the Funding Pre-Enforcement Revenue
Priority of Payments;
(ii) the amount of any Issuer Allocable Principal Receipts for
each Issuer to be applied on the following Payment Date
in accordance the Funding Pre-Enforcement Principal
Priority of Payments; and
(iii) the amount of any Group 1 Shared Issuer Revenue Receipts
or Group 2 Shared Issuer Revenue Receipts and Group 1
Shared Issuer Principal and Group 2 Receipts Shared
Issuer Principal Receipts to be applied on the following
Payment Date in accordance with the Funding Priority of
Payments.
(g) The Cash Manager shall make all the determinations referred to
in paragraphs 1(a) to (f) herein on the basis of the following
assumptions:
(i) that the amount of any Losses will not increase;
(ii) that any debit balance on any Issuer Principal Deficiency
Ledger will not increase; and
(iii) such other assumptions (including without limitation as
to the amount of any payments or provisions to be made in
accordance with the applicable Funding Priority of
Payments during the period from and including the
Distribution Date immediately prior to each Payment Date
to and excluding such Payment Date) as the Cash Manager
considers appropriate.
38
The Cash Manager shall notify the Mortgages Trustee, Funding and
the Security Trustee on request of any such other assumptions
and shall take account of any representations made by the
Mortgages Trustee, Funding and the Security Trustee (as the case
may be) in relation thereto.
(h) The Cash Manager shall:
(i) make or procure to be made all returns and filings
required to be made by Funding and the Mortgages Trustee;
(ii) itself on behalf of Funding and the Mortgages Trustee,
provided that such moneys are at the relevant time
available to Funding and the Mortgages Trustee, pay all
out-of-pocket expenses of Funding and the Mortgages
Trustee incurred in the performance of the Cash Manager's
duties hereunder including, without limitation, all fees
payable to the London Stock Exchange Limited.
(i) The Cash Manager shall, if necessary, perform all currency
conversions free of charge, cost or expense at the relevant
exchange rate (for the purposes of any calculations referred to
above, (i) all percentages resulting from such calculations will
be rounded, if necessary, to the nearest one hundred-thousandth
of a percentage point (e.g. 9.876541% being rounded down to
9.87654% and (ii) any currency amounts used in or resulting from
such calculations will be rounded in accordance with the
relevant market practice).
(j) Each determination made in accordance with this paragraph 1
shall (in the absence of bad faith, wilful default, negligence
and manifest error) be final and binding on all persons.
2. Notification of Determinations
The Cash Manager shall cause each determination of Principal Receipts,
Revenue Receipts, Losses, Mortgages Trustee Available Revenue Receipts,
the Funding Share, the Seller Share, the Funding Share Percentage, the
Seller Share Percentage, the Weighted Average Funding Share Percentage,
the Weighted Average Seller Share Percentage and the Minimum Seller
Share to be notified forthwith to the Mortgages Trustee, the
Beneficiaries and the Security Trustee and will cause each
determination of Group 1 Available Principal Receipts, Group 2
Available Principal Receipts, Group 1 Available Revenue Receipts, Group
2 Available Revenue Receipts and the determinations made under
paragraphs 1(c) and 1(d) above to be notified forthwith to Funding, the
Security Trustee and the Issuer Cash Manager.
3. Priority of Payments for Mortgages Trustee Available Revenue Receipts
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date withdraw Cash from
the Mortgages Trustee GIC Account and/or, in the case of sums to be
provided for, retain Cash in the amounts required (to the extent that
such withdrawal does not cause the Mortgages Trustee GIC Account to
become overdrawn or, if any amounts are retained by way of provision
for the relevant liability and are thus not withdrawn, to the extent
that
39
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn). The aggregate
amount of the withdrawal shall equal the Mortgages Trustee Available
Revenue Receipts on each Distribution Date. The withdrawal shall be
used to make the payments and provisions in the order of priority set
out in Clause 10.2 (Distribution of Mortgages Trustee Available Revenue
Receipts) of the Mortgages Trust Deed (in each case only if and to the
extent that payments or provisions of a higher priority have been made
in full).
4. Priority of Payments for Mortgages Trustee Principal Receipts
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date, (i) withdraw Cash
from the Mortgages Trustee GIC Account in an amount equal to the
Mortgages Trustee Principal Receipts (to the extent only that such
withdrawal does not cause the Mortgages Trustee GIC Account to become
overdrawn or, if any amounts are retained by way of provision for the
relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn) to make the payments
in the order of priority set out in Clause 11 of the Mortgages Trust
Deed (Distribution of Principal Receipts) and/or, (ii) until such time
as the same may be distributed in accordance with the Mortgages Trust
Deed, retain Cash in the Mortgages Trustee GIC Account in the amount of
any net credit on the Non-Flexible Overpayments Sub Ledger.
5. Priority of Payments for Funding Available Revenue Receipts
Group 1 Available Revenue Receipts and Group 2 Available Revenue
Receipts (including Issuer Allocable Revenue Receipts) will be applied
by the Cash Manager on the relevant Payment Dates until enforcement of
the Funding Security pursuant to the Funding Deed of Charge or until
such time as there are no outstanding Funding Secured Obligations, in
making such payments and provisions in the order of priority set out in
the Funding Pre-Enforcement Revenue Priority of Payments (in each case
only if and to the extent that payments or provisions of a higher
priority have been made in full) as set out in Part I of Schedule 3 to
the Funding Deed of Charge (as the same may be amended, varied or
restated from time to time).
6. Priority of Payments for Funding Available Principal Receipts
Group 1 Available Principal Receipts and Group 2 Available Principal
Receipts (including Issuer Allocable Principal Receipts) will be
applied by the Cash Manager on each Payment Date until enforcement of
the Funding Security pursuant to the Funding Deed of Charge or until
such time as there are no outstanding Funding Secured Obligations, in
making such payments and provisions in the order of priority (in each
case only if and to the extent that payments or provisions of a higher
priority have been made in full) set out in Part II of Schedule 3 to
the Funding Deed of Charge.
40
7. Other Payments
Each of the Beneficiaries and the Cash Manager agrees, and the
Mortgages Trustee concurs, that (save as otherwise specified below) the
following payments may be made from the Mortgages Trustee GIC Account
(to the extent that withdrawal of those amounts would not cause the
balance of the Mortgages Trustee GIC Account to become overdrawn) on
any date:
(a) if any amount has been received from a Borrower for the express
purpose of payment being made to a third party for the provision
of a service (including giving insurance cover) to any of that
Borrower or the Seller or the Mortgages Trustee, to pay such
amount when due to such third party or, in the case of the
payment of an insurance premium, where such third party and the
Cash Manager have agreed that payment of commission should be
made by deduction from such insurance premium, to pay such
amount less such commissions when due to such third party and to
pay such commission to the Cash Manager and to pay any premiums
in respect of any Insurance Policy or other insurance policy
relating to any Mortgage Loan comprised in the Mortgage
Portfolio;
(b) to pay to any person (including the Cash Manager) any amounts
due arising from any unintentional overpayment (and not an
Overpayment) by any person or arising from any reimbursement by
any person of any such overpayment (including, for the avoidance
of doubt, where arising from the failure of a direct debit);
(c) to pay when due (but subject to any right to refuse or withhold
payment or of set-off that has arisen by reason of the
Borrower's breach of the terms of the relevant Mortgage or
Mortgage Loan) any amount payable to a Borrower under the terms
of the Mortgage or the Mortgage Loan to which that Borrower is a
party, and to pay when due any amount payable by the Mortgages
Trustee to the Seller pursuant to Clauses 3.2, 4.5 and 5.2 of
the Mortgage Sale Agreement;
(d) to pay to the Seller any amounts (including, for the avoidance
of doubt, any Early Repayment Charges) received and held by the
Mortgages Trustee on trust for the Seller pursuant to Clause 5
(Trust of Monies) of the Mortgage Sale Agreement;
(e) to pay when due and payable any amounts due and payable by the
Mortgages Trustee to third parties and incurred without breach
by the Mortgages Trustee of the Mortgages Trust Deed and not
provided for payment elsewhere in this paragraph 7;
(f) to refund any amounts due arising from the rejection of any
payments in respect of a Mortgage Loan and any other amounts
which have not been received by the Mortgages Trustee as cleared
funds; and
(g) to refund to the Seller any amounts which represent amounts
received from Borrowers but which do not form part of the
Mortgage Account or comprise
41
unpaid interest as at the relevant Closing Date and which are
amounts owed by such Borrowers in respect of any period prior to
the relevant Closing Date as and when identified by the Cash
Manager and if a Borrower fails to pay the full amount that it
owes, the Cash Manager shall be obliged to refund to the Seller
only such portion of the amount which relates to any period
prior to the relevant Closing Date.
8. Use of Ledgers
The Cash Manager shall forthwith record monies received or payments
made by it on behalf of the Mortgages Trustee or Funding in the ledgers
in the manner set out in this Agreement. If, at any time, the Cash
Manager is in any doubt as to which ledger a particular amount should
be credited or debited, it shall consult with the Security Trustee
thereon.
Except in the case of the Funding Principal Deficiency Ledger, a debit
item shall only be made in respect of any of the Mortgages Trustee
Ledgers and the Funding Ledgers and the corresponding payment or
transfer (if any) may only be made from the Mortgages Trustee
Transaction Account, the Mortgages Trustee GIC Account, the Funding GIC
Account, the Funding Transaction Account or any Funding (Issuer) GIC
Account, as the case may be, to the extent that such entry does not
cause the relevant ledger to have a debit balance. In the case of the
Funding Principal Deficiency Ledger, a credit item shall only be made
to the extent that such entry does not cause such ledger to have a
credit balance.
9. Revenue Ledger
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Revenue Ledger:
(i) all Revenue Receipts; and
(ii) all interest received by the Mortgages Trustee on the
Mortgages Trustee Transaction Account and the Mortgages
Trustee GIC Account; and
(b) any payment or provision made under paragraph 3 herein shall be
debited to the Revenue Ledger.
10. Principal Ledger
The Cash Manager shall ensure that:
(a) all Principal Receipts shall be credited to the Principal
Ledger; and
(b) any payment or provision made under paragraph 4 herein shall be
debited to the Principal Ledger.
42
11. Losses Ledger
The Cash Manager shall ensure that all Losses shall be recorded in the
Losses Ledger.
12. Funding Share/Seller Share Ledger
The Cash Manager shall ensure that the Current Funding Share and the
Current Funding Share Percentage of the Trust Property and the Current
Seller Share and the Current Seller Share Percentage of the Trust
Property are recorded in the Funding Share/Seller Share Ledger on the
Initial Closing Date and thereafter on each Distribution Date. In
addition to the foregoing, if (i) the Seller has assigned New Mortgage
Loans to the Mortgages Trustee, or (ii) Funding has paid a Further
Contribution to the Mortgages Trustee to increase the Funding Share of
the Trust Property, during the Trust Calculation Period immediately
preceding a Distribution Date, the Cash Manager shall ensure that the
Current Funding Share and the Current Funding Share Percentage of the
Trust Property and the Current Seller Share and the Current Seller
Share Percentage of the Trust Property, as recalculated on each
Assignment Date and Funding Contribution Date and the Weighted Average
Funding Share Percentage and the Weighted Average Seller Share
Percentage, as calculated on such Distribution Date or Funding
Contribution Date in respect of Revenue Receipts, Principal Receipts
and Losses, are recorded on the Funding Share/Seller Share Ledger on
each such Distribution Date or Funding Contribution Date.
13. Funding Revenue Ledger
The Cash Manager shall ensure that:
(c) the following amounts shall be credited to the Funding Revenue
Ledger:
(i) all Funding Revenue Receipts;
(ii) all interest received by Funding in respect of the
Funding Bank Accounts, including in respect of any
Funding (Issuer) GIC Account, provided that the Cash
Manager shall keep a separate record in respect of each
Issuer of the amount of interest received by Funding in
respect of the Funding (Issuer) GIC Account of such
Issuer;
(iii) all amounts received by Funding representing income on
any of Funding's Authorised Investments;
(iv) any amount debited to the Funding Principal Ledger under
paragraph 16(b)(ii) herein; and
(d) any payment or provision made under paragraph 5 above shall be
debited to the Funding Revenue Ledger;
(e) the amount determined under paragraph 1(c)(i) shall be recorded
on the Revenue Expense Sub-Ledger on each Distribution Date;
43
(f) the amounts determined under paragraphs (1)(c)(ii) and
1(c)(iv)(A) above shall be recorded on the Group 1 Revenue
Receipts Sub-Ledger on each Distribution Date; and
(g) the amounts determined under paragraphs 1(c)(iii) and
1(c)(iv)(B) above shall be recorded on the Group 2 Revenue
Receipts Sub-Ledger on each Distribution Date.
14. Issuer Reserve Fund Ledger
If an Issuer Reserve Fund is required to be established, the Cash
Manager will record on such Issuer Reserve Fund Ledger:
(a) an amount initially from that portion of Funding's Contribution
to the Mortgages Trust which will be retained by Funding and not
paid to the Mortgages Trustee and deposited into the related
Funding (Issuer) GIC Account;
(b) amounts credited to the relevant Issuer Liquidity Reserve Ledger
in accordance with the Funding Priority of Payments above; and
(c) amounts debited to an Issuer Liquidity Reserve Ledger in order
to be applied in accordance with the Funding Priority of
Payments.
15. Issuer Liquidity Reserve Ledger
If an Issuer Liquidity Reserve Fund is required to be established, the
Cash Manager will record on such Issuer Liquidity Reserve Ledger:
(a) an amount funded initially from Funding Available Principal
Receipts which are allocated to the relevant Issuer in
accordance with the Funding Pre-Enforcement Principal Priority
of Payments up to the amount of the Issuer Liquidity Reserve
Required Amount and such amount will be deposited in the
relevant Funding (Issuer) GIC Account;
(b) amounts credited to the relevant Issuer Liquidity Reserve Ledger
in accordance with the Funding Priority of Payments above; and
(c) amounts debited to the Issuer Liquidity Reserve Ledger in order
to be applied in accordance with Funding Priority of Payments.
16. Funding Principal Ledger
Without prejudice to paragraph 18 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding Principal
Ledger:
(i) all Funding Principal Receipts;
(ii) amounts credited to the Funding Principal Deficiency
Ledger under paragraphs 8 and 17 herein; and
44
(iii) any Mortgages Trustee Available Principal Receipts
remaining after determining the amounts under paragraphs
1(d)(i) through 1(d)(iii) herein;
(b) the following amounts shall be debited to the Funding Principal
Ledger:
(i) the aggregate amount of principal repaid on the
Intercompany Loan Agreement pursuant to paragraph 6
herein;
(c) the amounts determined under paragraphs 1(d)(i)(A) and
1(d)(i)(B) (to the extent such amounts relate to Group 1
Issuers) and under paragraphs, 1(d)(ii)(A) and 1(d)(iii)(A)
above shall be recorded on the Group 1 Principal Receipts
Sub-Ledger on each Distribution Date. PROVIDED that if on any
Distribution Date Mortgages Trustee Principal Receipts are
allocable to both Group 1 and Group 2 pursuant to paragraph
1(d)(i)(B) above, then the Cash Manager shall record such
amounts on the Group 1 and Group 2 Principal Sub-Ledgers,
respectively, in priority corresponding to the Final Maturity
Dates of the Money Market Notes of the related Issuers,
beginning with the earliest such Final Maturity Date; and
(d) the amounts determined under paragraphs 1d(i)(A) and 1d(i)(B)
(to the extent such amounts relate to Group 2 Issuers) and under
paragraphs 1d(ii)(B) and 1d(iii)(B) above shall be recorded on
the Group 2 Principal Receipts Sub-Ledger on each Distribution
Date. PROVIDED that if on any Distribution Date Mortgages
Trustee Principal Receipts are allocable to both Group 1 and
Group 2 pursuant to paragraph 1(d)(i)(B) above, then the Cash
Manager shall record such amounts on the Group 1 and Group 2
Principal Sub-Ledgers, respectively, in priority corresponding
to the Final Maturity Dates of the Money Market Notes of the
related Issuers, beginning with the earliest such Final Maturity
Date
17. Funding Principal Deficiency Ledger
The Cash Manager will establish a Principal Deficiency Ledger for
Funding and ensure that:
(a) on each occasion on which an Issuer Principal Deficiency Ledger
is credited with respect to (1) Losses and (2) Issuer Liquidity
Reserve Funds, the Funding Principal Deficiency Ledger is
credited with respect to such Issuer; and
(b) on each occasion on which the principal deficiency of an Issuer
is reduced with respect to a credit described in (a) above, the
Funding Principal Deficiency Ledger will record a parallel
reduction in aggregate principal deficiencies.
18. Funding Reserve Ledger
(a) An amount initially drawn from excess Revenue Receipts
distributed to Funding from the Mortgages Trust and deposited in
the Funding GIC Account will be credited to the Funding Reserve
Ledger.
45
(b) Amounts shall be credited to the Funding Reserve Ledger in
accordance with the Funding Priority of Payments above.
(c) Amounts shall be debited to the Funding Reserve Ledger on any
Closing Date in order to be applied in the establishment of
initial reserves or in payment of expenses in connection with
the issuance of any New Notes by a New Issuer and on each
Payment Date in order to be applied in accordance with the
Funding Priority of Payments.
19. Intercompany Loan Ledger
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Intercompany Loans are recorded
in the Intercompany Loan Ledger.
20. Overpayments Ledger
The Cash Manager shall ensure that:
(a) with respect to the Non-Flexible Mortgage Loans:
(i) there shall be credited to the Non-Flexible Overpayments
Sub Ledger all Overpayments (not being Capital Payments)
made on Non-Flexible Mortgage Loans; and
(ii) there shall be debited from the Non-Flexible Overpayments
Sub Ledger:
(A) all underpayments made by any Borrower on
Non-Flexible Mortgage Loans which do not exceed
the amount of the Overpayment previously made by
such Borrower in the same calendar year; and
(B) on the first Trust Determination Date of each
calendar year, all outstanding credits made to the
Non-Flexible Overpayments Sub Ledger during the
previous calendar year; and
(b) all Overpayments on the Flexible Mortgage Loans are recorded in
the Flexible Overpayments Sub Ledger.
21. Non-Flexible Underpayments Ledger
The Cash Manager shall ensure that all amounts debited from the
Overpayments Ledger under paragraph 20(a)(ii) above shall be recorded
on the Non-Flexible Underpayments Ledger.
22. Re-Draws Ledger
The Cash Manager shall ensure that, with respect to the Flexible
Mortgage Loans:
46
(a) all Non-Cash Re-Draws are recorded in the Non-Cash Re-Draws Sub
Ledger; and
(b) all Cash Re-Draws are recorded in the Cash Re-Draws Sub Ledger.
23. Further Draws Ledger
The Cash Manager shall ensure that, with respect to Personal Secured
Loans, all Further Draws are recorded in the Further Draws Ledger.
24. Records
The Cash Manager shall ensure that a separate record is kept of any
amount drawn under any Issuer Reserve Fund or Issuer Liquidity Reserve
Fund.
47
SCHEDULE 3A
Form of Mortgages Trustee Quarterly Report
Granite Finance Trustees Limited
Memorandum of Account
Period Ended This Quarter Prior Quarter
(GBP) 000's (GBP) 000's
Fees Receivable
Fees Payable
Operating Expenses
Taxation
Dividend 0 0
Retained profit brought forward 0 0
----------------------------------------
Retained profit for the year 0 0
========================================
Granite Finance Trustees Limited
Balance Sheet
Period Ended
(GBP) (GBP)
Fixed Asset Investments
Current Assets
New Mortgage Loans 0
Interest Receivable 0
Other debtors 0
Cash at Bank 0
-------------------
0
-------------------
Creditors: Amounts falling due within one year
Accruals 0
Interest Payable Accrual 0
Taxation 0
===================
0
===================
Net current assets 0
===================
Total Assets less current liabilities 0
===================
Share Capital 0
Reserves 0
===================
0
===================
Diff 0
48
SCHEDULE 3B
Form of Funding Quarterly Report
Granite Finance Funding Limited
Profit & Loss Account
Period Ended This Quarter Prior Quarter
(GBP) 000's (GBP) 000's
Interest Receivable - Mortgages
Interest Receivable - Cash/
Authorised Investments
0 0
Interest Payable -
Intercompany Loan
Interest Payable
0 0
Net Operating Income 0 0
Other Income
Operating Expenses
Deferred Consideration
Profit/loss on ordinary 0 0
activities before tax
Taxation
Profit/loss on ordinary 0 0
activities after tax
Dividend 0 0
Retained profit brought forward 0 0
Retained profit for the year 0 0
49
Granite Finance Funding Limited
Balance Sheet
Period Ended
(GBP) 000's (GBP) 000's
Fixed Asset Investments
Beneficial Interest in Mortgage Portfolio 0
Current Assets
Interest Receivable 0
Deferred Expenditure (costs of Securing) 0
Other debtors 0
Cash at Bank 0
Creditors: Amounts falling due within one year
Accruals 0
Deferred Consideration Creditor 0
Interest Payable Accrual 0
Taxation 0
-------------------
0
-------------------
Net current assets 0
Creditors: Amounts falling due after one year
Intercompany Loan 0
Start-up Loan(s) (specify) 0
--------------
Total Assets less current liabilities 0
==============
Share Capital 0
Reserves 0
--------------
0
==============
Diff 0
50
Granite Finance Funding Limited
Notes to Balance Sheet
Period Ended
Balance on Cash Accumulation Ledger 0
Available Credit Enhancement
Reserve Fund at closing
Last Quarter Closing Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing Reserve Balance
Target Reserve Fund
Issuer Principal Deficiency Ledger AAA AA BBB
Opening PDL Balance 0 0 0
Losses this Quarter 0 0 0
PDL top up from Revenue Income 0 0 0
Closing PDL Balance 0 0 0
Subordinated Loan Outstanding
Initial Balance
Last Quarter Closing Outstanding
Accrued Interest
Repayments Made
Closing Balance
51
SCHEDULE 4
Cash Manager Representations and Warranties
The Cash Manager makes the following representations and warranties to each of
the Mortgages Trustee, Funding and the Security Trustee:
1. Status: It is a public limited company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which it
is incorporated, capable of being sued in its own right and not subject
to any immunity from any proceedings, and it has the power to own its
property and assets and to carry on its business as it is being
conducted.
2. Powers and authority: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of each of the
Transaction Documents to which it is or will be a party, and each such
Transaction Document has been duly executed and delivered by it.
3. Legal validity: Each Transaction Document to which it is or will be a
party constitutes or when executed in accordance with its terms will
constitute, a legal, valid and binding obligation.
4. Non-conflict: The execution by it of each of the Transaction Documents
to which it is a party and the exercise by it of its rights and the
performance of its obligations under such Transaction Documents will
not:
(a) conflict with any document which is binding upon it or any of
its assets;
(b) conflict with its constitutional documents; or
(c) conflict with any law, regulation or official or judicial order
of any government, governmental body or court, domestic or
foreign, having jurisdiction over it.
5. No litigation: It is not a party to any material litigation,
arbitration or administrative proceedings and, to its knowledge, no
material litigation, arbitration or administrative proceedings are
pending or threatened against it.
6. Consents and Licenses: All governmental consents, licences and other
approvals and authorisations required in connection with the entry
into, performance, validity and enforceability of, and the transactions
contemplated by, the Transaction Documents have been obtained or
effected (as appropriate) and are in full force and effect.
7. Solvency: No Insolvency Event has occurred in respect of the Cash
Manager, and the Cash Manager is not insolvent.
8. Financial Statements: The most recent financial statements of the Cash
Manager:
52
(a) were prepared in accordance with accounting principles generally
accepted in England and Wales consistently applied;
(b) disclose all liabilities (contingent or otherwise) and all
unrealised and or anticipated losses of the Cash Manager; and
(c) save as disclosed therein, give a true and fair view of the
financial condition and operations of the Cash Manager during
the relevant financial year.
9. No Adverse Change: Since the date as of which the most recent financial
statements of the Cash Manager were stated to be prepared, there has
been:
(a) no significant change in the financial position of the Cash
Manager; and
(b) no material adverse change in the financial position or
prospects of the Cash Manager.
10. Ranking of Claims:
Under the laws of England and Wales in force as at the date of making
this representation, claims against the Cash Manager under the
Transaction Documents will rank at least pari passu with the claims of
all its other unsecured and unsubordinated creditors, save those whose
claims are preferred solely by any bankruptcy, liquidation or other
similar laws of general application.
11. Information in Prospectus and Offering Circular:
All information in the Prospectus and the Offering Circular with regard
to the Cash Manager are true and accurate in all material respects and
not misleading in any material respect.
The Cash Manager has made all proper inquiries to ascertain and to verify the
foregoing.
53
EXECUTION PAGE
as Cash Manager
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
- --------------------------
Authorised Signatory
Name:
Title:
as Seller
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
- --------------------------
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
- --------------------------
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
- --------------------------
Authorised Signatory
Name:
Title:
54
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
- --------------------------
Authorised Signatory
Name:
Title:
55