EXHIBIT 4.9
Dated [22] September 2004
NORTHERN ROCK PLC
as Current Issuer Cash Manager
GRANITE MORTGAGES 04-3 PLC
as Current Issuer
- and -
THE BANK OF NEW YORK
as Note Trustee
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ISSUER CASH MANAGEMENT AGREEMENT
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SIDLEY AUSTIN BROWN & WOOD
WOOLGATE EXCHANGE
25 BASINGHALL STREET
LONDON EC2V 5HA
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
Table of Contents
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Page
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1. Definitions and Interpretation......................................................................1
2. Appointment of Current Issuer Cash Manager..........................................................2
3. The Current Issuer Cash Management Services.........................................................2
4. Payments, Accounts, Ledgers.........................................................................3
5. Payments Under Current Issuer Swap Agreements; Termination & Swap Collateral........................6
6. No Liability.......................................................................................10
7. Costs and Expenses.................................................................................10
8. Information........................................................................................10
9. Remuneration.......................................................................................13
10. Covenants, Representations and Warranties of Current Issuer Cash Manager...........................13
11. Current Issuer Cash Management Services Non-Exclusive..............................................14
12. Termination........................................................................................14
13. Further Assurances.................................................................................17
14. Miscellaneous......................................................................................17
15. Confidentiality....................................................................................18
16. No Partnership.....................................................................................19
17. Assignment.........................................................................................19
18. The Note Trustee...................................................................................19
19. Non Petition Covenant; Limited Recourse............................................................20
20. Amendments and Waiver..............................................................................21
21. Notices............................................................................................21
22. Third Party Rights.................................................................................22
23. Execution in Counterparts; Severability............................................................22
24. Governing Law and Jurisdiction; Appropriate Forum..................................................23
SCHEDULE 1 The Current Issuer Cash Management Services.....................................................24
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Table of Contents
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(continued)
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SCHEDULE 2 Cash Management and Maintenance of Ledgers......................................................27
SCHEDULE 3 Form of Issuer Quarterly Report.................................................................50
SCHEDULE 4 Controlled Amortisation Amount/Target Balance...................................................55
SCHEDULE 5 Current Issuer Cash Manager Representations and Warranties......................................61
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THIS ISSUER CASH MANAGEMENT AGREEMENT is made on [22] September 2004
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 the Current Issuer Cash Manager;
(2) GRANITE MORTGAGES 04-3 PLC (registered number 5168395), a public
limited company incorporated under the laws of England and Wales whose
registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX
as the Current Issuer; and
(3) THE BANK OF NEW YORK, whose principal office is at 48th Floor, One
Canada Square, London E14 5AL, in its capacity as Note Trustee.
WHEREAS:
(A) On the Closing Date the Current Issuer will issue the Current Issuer
Notes constituted by the Current Issuer Trust Deed. From the proceeds
of the issue of those Current Issuer Notes, the Current Issuer shall
make an Intercompany Loan to Granite Finance Funding Limited pursuant
to the terms of the Current Issuer Intercompany Loan Agreement.
(B) The Current Issuer Cash Manager is willing to provide cash management
services to the Current Issuer and the Note Trustee on the terms and
subject to the conditions contained in this Agreement.
IT IS HEREBY AGREED as follows:
1. Definitions and Interpretation
1.1 The provisions of:
(a) the Master Definitions Schedule as amended and restated by
(and appearing in Appendix 1 to) the Master Definitions
Schedule Ninth Amendment Deed made on [22] September 2004
between, among others, the Seller, Funding and the Mortgages
Trustee, and
(b) the Issuer Master Definitions Schedule signed for the purposes
of identification by Sidley Austin Brown & Wood and Allen &
Overy LLP on [22] September 2004,
(as the same have been and may be amended, varied or supplemented from
time to time with the consent of the parties hereto) are expressly and
specifically incorporated into and shall apply to this Agreement. The
Issuer Master Definitions Schedule specified above shall prevail to
the extent that it conflicts with the Master Definitions Schedule.
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2. Appointment of Current Issuer Cash Manager
2.1 Appointment: Until termination pursuant to Clause 12 (Termination),
the Current Issuer and the Note Trustee (according to their respective
estates and interests) each hereby appoints the Current Issuer Cash
Manager as its lawful agent on each of their behalves to provide the
Current Issuer Cash Management Services set out in this Agreement,
including in relation to the Current Issuer Notes to be issued by the
Current Issuer. The Current Issuer 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
Current Issuer 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 Current Issuer Notes: The
appointment pursuant to Clause 2.1 (Appointment) is conditional upon
the issue of the Current Issuer Notes and the making of the Current
Issuer Intercompany Loan under the Current Issuer Intercompany Loan
Agreement and shall take effect upon and from the Closing Date
automatically without any further action on the part of any person,
PROVIDED THAT if the issue of the Current Issuer Notes has not
occurred by 30 September 2004, or such later date as the Current
Issuer and the Lead Managers may agree, this Agreement shall cease to
be of further effect.
3. The Current Issuer Cash Management Services
3.1 General: The Current Issuer Cash Manager shall provide the services
set out in this Agreement (including, without limitation, Schedules 1
and 2 attached hereto) (the "Current Issuer Cash Management
Services").
3.2 Approvals and authorisations: The Current Issuer Cash Manager shall
maintain, or use reasonable endeavours to procure the maintenance of,
the approvals, authorisations, consents and licences required in
connection with the business of the Current Issuer and shall prepare
and submit, or procure the preparation and submission of, on behalf
of the Current Issuer, all necessary applications and requests for
any further approvals, authorisations, consents or licences which may
be required in connection with the business of the Current Issuer and
shall, so far as it reasonably can do so, perform the Current Issuer
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 Current Issuer Cash
Management Services shall include procuring (so far as the Current
Issuer Cash Manager, using its reasonable endeavours, is able so to
do) compliance by the Current Issuer with all applicable legal
requirements and with the terms of the Current Issuer Transaction
Documents, PROVIDED THAT the Current Issuer Cash Manager shall not
lend or provide any sum to the Current Issuer and the Current Issuer
Cash Manager shall have no liability whatsoever to the Current
Issuer, the Note Trustee or any other person for any failure by the
Current Issuer to make any payment due by
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any of them under any of the Current Issuer Transaction Documents
(other than to the extent arising from the Current Issuer Cash Manager
failing to perform any of its obligations under any of the Transaction
Documents).
3.4 Liability of Current Issuer Cash Manager:
(a) The Current Issuer Cash Manager shall indemnify each of the
Current Issuer and the Note Trustee on demand for any loss,
liability, claim, expense or damage suffered or incurred by it
in respect of the negligence, bad faith or wilful default of
the Current Issuer Cash Manager in carrying out its functions
as Current Issuer Cash Manager under, or as a result of a
breach by the Current Issuer Cash Manager of, the terms and
provisions of this Agreement or such other Transaction
Documents to which the Current Issuer Cash Manager is a party
(in its capacity as such) in relation to such functions.
(b) For the avoidance of doubt, the Current Issuer Cash Manager
shall not be liable in respect of any loss, liability, claim,
expense or damage suffered or incurred by the Current Issuer
or the Note Trustee and/or any other person as a result of the
proper performance of the Current Issuer Cash Management
Services (as defined in Clause 3.1 (General)) by the Current
Issuer 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
Current Issuer Cash Manager under, or as a result of a breach
by the Current Issuer Cash Manager of, the terms and
provisions of this Agreement or any of the other Transaction
Documents to which the Current Issuer Cash Manager is a party
(in its capacity as such) in relation to such functions.
4. Payments, Accounts, Ledgers
4.1 Current Issuer Bank Accounts: The Current Issuer Cash Manager hereby
confirms that each of the Current Issuer Transaction Accounts have
been established on or before the date hereof and that the mandates
in the agreed form will apply thereto at the Closing Date. The
Current Issuer Cash Manager undertakes (to the extent to which the
same is within its control in its capacity as Current Issuer Cash
Manager) that at the Closing Date the Current Issuer Transaction
Accounts will be operative and that the Current Issuer Cash Manager
will not knowingly create or permit to subsist any Security Interest
in relation to the Current Issuer Transaction Accounts other than as
created under or permitted pursuant to the Current Issuer Deed of
Charge.
4.2 Current Issuer Ledgers:
(a) The Current Issuer Cash Manager shall open and maintain in the
books of the Current Issuer the following ledgers:
(i) the Current Issuer Revenue Ledger, which shall record
all Current Issuer Revenue Receipts standing to the
credit of the Current Issuer Transaction Accounts from
time to time;
(ii) the Current Issuer Principal Ledger, which shall
record all Current Issuer Principal Receipts standing
to the credit of the Current Issuer Transaction
Accounts from time to time;
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(iii) the Current Issuer Principal Deficiency Ledger, which
shall comprise four sub-ledgers to be known as the
Class A Principal Deficiency Sub Ledger, the Class B
Principal Deficiency Sub Ledger, the Class M Principal
Deficiency Sub Ledger and the Class C Principal
Deficiency Sub Ledger, and which shall record (A) any
principal deficiencies arising from Losses on the
Mortgage Loans which have been allocated by Funding to
the Current Issuer Intercompany Loan, (B) the
application of Current Issuer Principal Receipts to
meet any deficiency in Current Issuer Revenue
Receipts, (C) the application of Funding Available
Principal Receipts to fund the Current Issuer
Liquidity Reserve Fund and (D) the application of
Current Issuer Available Revenue Receipts to be
applied to reduce the balances on the Current Issuer
Principal Deficiency Ledger; and
(iv) the Swap Collateral Ledger, (which shall comprise of
such sub-ledgers as the Current Issuer Cash Manager
considers appropriate) to record all payments,
transfers and receipts in connection with Swap
Collateral, including, without limitation:
(A) the receipt of any Swap Collateral by the
Current Issuer from the Swap Providers;
(B) the receipt of any income or distributions in
respect of such Swap Collateral;
(C) the payment or transfer of all, or any part
of, such Swap Collateral to the relevant
Current Issuer Swap Provider; and
(D) the realisation of such Swap Collateral,
provided that the Swap Collateral Ledger (and
sub-ledgers) shall only be established in the event
that any Current Issuer Swap Provider pays or
transfers Swap Collateral to the Issuer in
accordance with the relevant Current Issuer Swap
Agreement.
(b) The Current Issuer Cash Manager shall make credits and debits
to the Current Issuer Ledgers in accordance with the
provisions of paragraphs 5, 6, 7, 8, 9 and 10 of Schedule 2
hereto.
4.3 Payments:
(a) The Current Issuer Cash Manager shall procure that the
following amounts payable to the Current Issuer are paid into
the Current Issuer Transaction Accounts:
(i) all Current Issuer Revenue Receipts;
(ii) all Current Issuer Principal Receipts;
(iii) all amounts (excluding Swap Collateral Excluded
Amounts) received by the Current Issuer pursuant to
the Current Issuer Swap Agreements; and
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(iv) any other amounts whatsoever received by or on behalf
of the Current Issuer on or after the Closing Date,
and the Current Issuer Cash Manager shall procure that all
investment proceeds from Authorised Investments purchased
from amounts standing to the credit of any of the Current
Issuer Transaction Accounts are credited to each such
account. All amounts received by the Current Issuer
denominated (i) in Sterling shall be paid into the Current
Issuer Sterling Account, (ii) in U.S. Dollars shall be paid
into the Current Issuer Dollar Account and (iii) in Euro
shall be paid into the Current Issuer Euro Account.
(b) The Current Issuer Cash Manager shall procure that all
transfers and withdrawals of amounts standing to the credit of
the Current Issuer Transaction Accounts and Swap Collateral
Accounts shall be made in accordance with the provisions of
the Current Issuer Bank Account Agreement and the Current
Issuer Deed of Charge.
(c) Each of the payments into the Current Issuer Transaction
Accounts referred to in Clause 4.3(a) shall be made forthwith
upon receipt by the Current Issuer or the Current Issuer Cash
Manager of the amount in question.
(d) For the avoidance of doubt, as soon as reasonably practicable
after becoming aware of the same, the Current Issuer Cash
Manager may, and shall, withdraw Cash from the Current Issuer
Transaction Accounts and Swap Collateral Cash Accounts, 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.
(e) The Current Issuer Cash Manager shall promptly notify each of
the Current Issuer and the Note Trustee of any additional
account or sub-account which supplements or replaces any
account or sub-account specifically referred to in the
definition of the "Current Issuer Transaction Accounts" in the
Current Issuer Master Definitions Schedule.
(f) Each of the Current Issuer Cash Manager and the Current Issuer
undertakes that, so far as it is able to procure the same, the
Current Issuer Transaction Accounts and all instructions and
mandates in relation thereto will continue to be operative and
will not, save as permitted pursuant to the Current Issuer
Bank Account Agreement, be changed without the prior written
consent of the Note Trustee (such consent not to be
unreasonably withheld or delayed). For the avoidance of doubt,
the Current Issuer Cash Manager may change the authorised
signatories in respect of any instructions or mandates
relating to the Current Issuer, without the prior written
consent of the Note Trustee, in accordance with the terms of
the Current Issuer Bank Account Agreement.
4.4 Withdrawals:
(a) The Current Issuer Cash Manager may make withdrawals on behalf
of the Current Issuer from the Current Issuer Transaction
Accounts (but only until receipt of a copy of a Current Issuer
Note Enforcement Notice served by the Note Trustee on the
Current Issuer) and Swap Collateral Accounts as
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permitted by this Agreement, the Current Issuer Trust Deed,
the Current Issuer Bank Account Agreement and the Current
Issuer Deed of Charge, but shall not in carrying out its
functions as Current Issuer Cash Manager under this Agreement
otherwise make withdrawals from the Current Issuer Transaction
Accounts and Swap Collateral Accounts.
(b) Upon receipt of such a Current Issuer Note Enforcement Notice,
no amount shall be withdrawn from any Current Issuer
Transaction Account by the Current Issuer Cash Manager without
the prior written consent of the Note Trustee.
4.5 Cash Management: In administering the Current Issuer Transaction
Accounts on behalf of the Current Issuer and the Note Trustee, the
Current Issuer Cash Manager shall comply with the provisions of
Schedule 2 prior to receipt by the Current Issuer Cash Manager of a
copy of any Current Issuer Note Enforcement Notice served on the
Current Issuer. Following service of a Current Issuer Note
Enforcement Notice, the Note Trustee or any Receiver appointed by the
Note Trustee will administer the Current Issuer Transaction Accounts
in accordance with the terms of the Current Issuer Deed of Charge.
5. Payments Under Current Issuer Swap Agreements; Termination & Swap
Collateral
5.1 Current Issuer Available Revenue Receipts: Subject to the order of
priorities of payment set out in Schedule 2 or, as the case may be,
the Current Issuer Deed of Charge, on each Payment Date prior to the
enforcement of the Current Issuer Security under the Current Issuer
Deed of Charge, the Current Issuer Cash Manager will pay Current
Issuer Available Revenue Receipts received in respect of the Current
Issuer Intercompany Loan (after making payments ranking higher in the
order or priority of payments) to the Current Issuer Basis Rate Swap
Provider. Amounts received by the Current Issuer Cash Manager from
the Current Issuer Basis Rate Swap Provider will be applied to pay
(1) in respect of the Dollar Notes, the Current Issuer Dollar
Currency Swap Provider, and amounts received by the Current Issuer
Cash Manager from the Current Issuer Dollar Currency Swap Provider
will be applied to pay amounts due to the holders of the relevant
classes of Dollar Notes in accordance with the Current Issuer
Pre-Enforcement Revenue Priority of Payments, (2) in respect of the
Sterling Notes (excluding the Series 3 Class A2 Notes), amounts due
to the holders of the relevant classes of Sterling Notes in
accordance with the Current Issuer Pre-Enforcement Revenue Priority
of Payments and in respect of the Series 3 Class A2 Notes, the
Current Issuer Interest Rate Swap Provider, amounts received by the
Current Issuer Cash Manager from the Current Issuer Interest Rate
Swap Provider will be applied to pay amounts due to the holders of
the Series 3 Class A2 Notes in accordance with the Current Issuer
Pre-Enforcement Revenue Priority of Payments; and, (3) in respect of
the Euro Notes, the Current Issuer Euro Currency Swap Provider, and
amounts received by the Current Issuer Cash Manager from the Current
Issuer Euro Currency Swap Provider will be applied to pay amounts due
to the holders of the relevant classes of Euro Notes in accordance
with the Current Issuer Pre-Enforcement Revenue Priority of Payments.
5.2 Current Issuer Available Principal Receipts: Subject to the order of
priorities of payment set out in Schedule 2 or, as the case may be,
the Current Issuer Deed of
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Charge, on each Payment Date prior to enforcement of the Current
Issuer Security under the Current Issuer Deed of Charge, the Current
Issuer Cash Manager will pay Current Issuer Available Principal
Receipts received in respect of the Current Issuer Intercompany Loan
(after making payments ranking higher in the order or priority of
payments) to (1) in respect of the Dollar Notes, the Current Issuer
Dollar Currency Swap Provider, and amounts received by the Current
Issuer Cash Manager from the Current Issuer Dollar Currency Swap
Provider will be applied to pay amounts due to the holders of the
relevant classes of Dollar Notes in accordance with the Current Issuer
Pre-Enforcement Principal Priority of Payments, (2) in respect of the
Sterling Notes, amounts due to the holders of the relevant classes of
Sterling Notes in accordance with the Current Issuer Pre-Enforcement
Principal Priority of Payments, and (3) in respect of the Euro Notes,
the Current Issuer Euro Currency Swap Provider, and amounts received
by the Current Issuer Cash Manager from the Current Issuer Euro
Currency Swap Provider will be applied to pay amounts due to the
holders of the relevant classes of Euro Notes in accordance with the
Current Issuer Pre-Enforcement Principal Priority of Payments.
5.3 Following a Non-Asset Trigger Event: On each Payment Date following
the occurrence of a Non-Asset Trigger Event under the Mortgages Trust
Deed but prior to enforcement of the Funding Security under the
Funding Deed of Charge or the Current Issuer Security under the
Current Issuer Deed of Charge, the Current Issuer Cash Manager will
pay Current Issuer Available Principal Receipts received in respect
of the Current Issuer Intercompany Loan (after making payments
ranking higher in the order or priority of payments) to (1) in
respect of the Dollar Notes, the Current Issuer Dollar Currency Swap
Provider, and amounts received by the Current Issuer Cash Manager
from the Current Issuer Dollar Currency Swap Provider will be applied
to pay amounts due to the holders of the relevant classes of Dollar
Notes, and (2) in respect of the Sterling Notes, amounts due to the
holders of the relevant classes of Sterling Notes, and (3) in respect
of the Euro Notes, the Current Issuer Euro Currency Swap Provider,
and amounts received by the Current Issuer Cash Manager from the
Current Issuer Euro Currency Swap Provider will be applied to pay
amounts due to the holders of the relevant classes of Euro Notes,
each in accordance with the priority of payments set forth in Clause
4.2 (Distribution of Current Issuer Available Principal Receipts
Following the Occurrence of a Non-Asset Trigger Event) of Schedule 2.
5.4 Following an Asset Trigger Event: On each Payment Date following the
occurrence of an Asset Trigger Event under the Mortgages Trust Deed
but prior to enforcement of the Funding Security under the Funding
Deed of Charge or the Current Issuer Security under the Current
Issuer Deed of Charge, the Current Issuer Cash Manager will pay
Current Issuer Available Principal Receipts received in respect of
the Current Issuer Intercompany Loan (after making payments ranking
higher in the order or priority of payments) to (1) in respect of the
Dollar Notes, the Current Issuer Dollar Currency Swap Provider, and
amounts received by the Current Issuer Cash Manager from the Current
Issuer Dollar Currency Swap Provider will be applied to pay amounts
due to the holders of the relevant classes of Dollar Notes, and (2)
in respect of the Sterling Notes, amounts due to the holders of the
relevant classes of Sterling Notes, and (3) in respect of the Euro
Notes, the Current Issuer Euro Currency Swap Provider, and amounts
received by the Current Issuer Cash Manager from the Current Issuer
Euro Currency Swap Provider will be applied to pay amounts due to the
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holders of the relevant classes of Euro Notes, each in accordance
with the priority of payments set forth in Clause 4.3 (Distribution
of Current Issuer Available Principal Receipts Following the
Occurrence of an Asset Trigger Event) of Schedule 2.
5.5 Termination: If on or prior to the date of the earlier of (i)
repayment in full of the Current Issuer Notes or (ii) the service of
a Current Issuer Note Enforcement Notice, any of the Current Issuer
Swap Agreements is terminated, the Current Issuer Cash Manager (on
behalf of the Current Issuer and the Note Trustee) shall purchase a
replacement hedge, as applicable, in respect of the relevant Series
of Current Issuer Notes in each case on terms acceptable to the
Rating Agencies, the Current Issuer and the Note Trustee and with a
swap provider that the Rating Agencies have previously confirmed in
writing to the Current Issuer and the Note Trustee will not cause the
then-current ratings of the Current Issuer Notes to be downgraded,
withdrawn or qualified. The Current Issuer may apply any early
termination payment received from, as appropriate, the relevant
Current Issuer Swap Provider for such purpose.
5.6 Swap Collateral:
(a) In the event that pursuant to the terms of a Current Issuer
Swap Agreement a Current Issuer Swap Provider pays or
transfers Swap Collateral to the Current Issuer, the Current
Issuer Cash Manager shall:
(i) create the Swap Collateral Ledger in the books of the
Current Issuer if not already created so as to record
the amount and type of such Swap Collateral and
identify the relevant Current Issuer Swap Agreement in
respect of which it has been posted;
(ii) upon receipt of such Swap Collateral, credit it to and
record the relevant details in the Swap Collateral
Ledger;
(iii) to the extent that such Swap Collateral is in the form
of Cash, pay it into the relevant Swap Collateral Cash
Account; and
(iv) to the extent that such Swap Collateral is in the form
of securities, arrange for it to be credited to the
relevant Swap Collateral Securities Account.
(b) Any such Swap Collateral shall not form part of the Current
Issuer Available Revenue Receipts and the Current Issuer
Available Principal Receipts. If the terms of the relevant
Current Issuer Swap Agreement permit such Swap Collateral to
be applied in or towards satisfaction of the Current Issuer's
Swap Provider's obligations under the relevant Current Issuer
Swap Agreement, and in the event that such Swap Collateral is
to be so applied, the Current Issuer Cash Manager shall:
(i) where the relevant Swap Collateral is in the form of
Cash, transfer the relevant amount of Cash from the
relevant Swap Collateral Cash Account to the relevant
Current Issuer Transaction Account; and/or
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(ii) where the relevant Swap Collateral is in the form of
securities, realise the Swap Collateral and pay the
amount of the net proceeds into the relevant Current
Issuer Transaction Account,
and, in each case, make the appropriate debits and credits
to the Swap Collateral Ledger, apply such amount as if it
had been paid to the Current Issuer by the Current Issuer
Swap Provider under the relevant Current Issuer Swap
Agreement and make appropriate ledger entries.
(c) To the extent that pursuant to the terms of the relevant
Current Issuer Swap Agreement Swap Collateral is to be
transferred or paid to the Current Issuer Swap Provider, the
Current Issuer Cash Manager shall:
(i) where the relevant Swap Collateral is in the form of
Cash, pay the relevant amount of Cash out of the
relevant Swap Collateral Cash Account to the Current
Issuer Swap Provider; and/or
(ii) where the relevant Swap Collateral is in the form of
securities, transfer and deliver the Swap Collateral
to the Current Issuer Swap Provider,
and, in each case, debit the Swap Collateral Ledger as
appropriate.
(d) Where:
(i) Swap Collateral is to be applied in satisfaction of
the Current Issuer Swap Provider's obligations under
the relevant Current Issuer Swap Agreement; and
(ii) such Swap Collateral or the proceeds of such Swap
Collateral are in a different currency to the currency
(the "Required Currency") in which such obligations of
the Current Issuer Swap Provider are payable,
then, the Current Issuer Cash Manager shall arrange for such
Swap Collateral to be converted (by such person as the Current
Issuer Cash Manager may reasonably select) at the prevailing
spot rate of exchange into the Required Currency.
(e) The terms of this Clause 5.6 shall prevail if and to the
extent that they are inconsistent with the other paragraphs of
this Clause 5.
5.7 Interest Payment Dates: [Not required]
5.8 Spot Rate Conversions: In the event that any payment is to be made
from the Current Issuer Available Revenue Receipts or the Current
Issuer Available Principal Receipts by the Current Issuer under the
Current Issuer Priority of Payments and the Current Issuer Available
Revenue Receipts or the Current Issuer Available Principal Receipts,
as applicable, do not comprise a sufficient amount in the relevant
currency in which such payment is to be made, the Current Issuer Cash
Manager shall arrange for any remaining amounts comprised in the
Current Issuer Available Revenue Receipts or the Current Issuer
Available Principal Receipts, as applicable, to be converted (by such
person as the Current Issuer Cash Manager may reasonably select) into
such
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currency at the then prevailing spot rate of exchange as may be
required in order to be applied in or towards such payment.
6. No Liability
Save as otherwise provided in this Agreement, the Current Issuer Cash
Manager shall have no liability for the obligations of either the
Note Trustee or the Current Issuer under any of the Transaction
Documents or otherwise and nothing herein shall constitute a
guarantee, or similar obligation, by the Current Issuer Cash Manager
of either the Note Trustee or the Current Issuer in respect of any of
them.
7. Costs and Expenses
7.1 Subject to and in accordance with the Current Issuer Pre-Enforcement
Priority of Payments or, as the case may be, the Current Issuer
Post-Enforcement Priority of Payments, the Current Issuer will on
each Payment Date reimburse the Current Issuer 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
Current Issuer Cash Manager in the performance of the Current Issuer
Cash Management Services, including any such costs, expenses or
charges not reimbursed to the Current Issuer Cash Manager on any
previous Payment Date and the Current Issuer Cash Manager shall
supply the Current Issuer with an appropriate VAT invoice issued by
the Current Issuer Cash Manager or, if the Current Issuer 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 the Current Issuer and the Note
Trustee in writing (notified to the Current Issuer Cash Manager), the
Current Issuer shall be solely responsible for reimbursing the
Current Issuer 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 (Costs and Expenses).
8. Information
8.1 Use of information technology systems:
(a) The Current Issuer Cash Manager represents and warrants that
at the date hereof (and in respect of the software which is to
be used by the Current Issuer Cash Manager in providing the
Current Issuer 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 Current Issuer 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
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Agreement (and/or to such person as the Current Issuer
and the Note Trustee elects 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 Current Issuer Cash Manager shall use reasonable
endeavours to maintain in working order the information
technology systems used by the Current Issuer Cash Manager in
providing the Current Issuer Cash Management Services.
(d) The Current Issuer 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 Current Issuer and the Note Trustee
elects as a substitute cash manager in accordance with the
terms of this Agreement) the benefit of any warranties in
relation to such software insofar as the same are capable of
assignment.
8.2 Bank Account Statements: The Current Issuer Cash Manager shall take
all reasonable steps to ensure that it receives a monthly bank
statement in relation to each Current Issuer Transaction Account and
Swap Collateral Cash Account and that it furnishes a copy of such
statements to the Current Issuer, with a copy to the Note Trustee
upon its request.
8.3 Access to Books and Records: Subject to all applicable laws, the
Current Issuer Cash Manager shall permit the Current Issuer, the
Auditors of the Current Issuer, the Note Trustee and/or any other
person nominated by the Note Trustee (to whom the Current Issuer 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 Current Issuer Cash Management Services
provided by the Current Issuer Cash Manager and related matters in
accordance with this Agreement.
8.4 Statutory Obligations: The Current Issuer Cash Manager will use its
reasonable endeavours, on behalf of the Current Issuer, to prepare or
procure the preparation of and file all reports, annual returns,
financial statements, statutory forms and other returns which the
Current Issuer is required by law to prepare and file. Subject to
approval thereof by the directors of the Current Issuer, the Current
Issuer 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 Note Trustee, the
Current Issuer and the Rating Agencies as soon as practicable after
the end of each accounting reference period of the Current Issuer.
8.5 Information Covenants:
(a) The Current Issuer Cash Manager shall provide the Current
Issuer, the Note Trustee, the Seller and the Rating Agencies
quarterly with a report in, or substantially in, the form set
out in Schedule 3 in respect of the Current Issuer. Such
quarterly report shall be delivered to the Current Issuer, the
Note Trustee
11
(upon its request), the Seller and the Rating Agencies by the
last Business Day of the month in which each Payment Date
occurs.
(b) The Current Issuer Cash Manager shall provide, or procure the
provision of, to the Current Issuer, the Note Trustee and the
Rating Agencies copies of any annual returns or financial
statements referred to in Clause 8.4 (Statutory Obligations)
as soon as reasonably practicable after the preparation
thereof.
(c) The Current Issuer Cash Manager shall notify the Rating
Agencies and the Note Trustee in writing of the details of (i)
any material amendment to the Transaction Documents to which
the Current Issuer is a party and of which it is or becomes
aware, (ii) the occurrence of a Current Issuer Note Event of
Default, or a Current Issuer Intercompany Loan Event of
Default or a Current Issuer Cash Manager Termination Event (as
defined in Clause 12.1 (Current Issuer Cash Manager
Termination Events)) and (iii) any other information relating
to the Current Issuer Cash Manager as the Rating Agencies and
the Note Trustee may reasonably request in connection with its
obligations under this Agreement, PROVIDED THAT the Note
Trustee shall not make such a request more than once every
three months unless, in the belief of the Note Trustee, a
Current Issuer Intercompany Loan Event of Default, a Current
Issuer Note Event of Default or a Current Issuer Cash Manager
Termination Event shall have occurred and is continuing or may
reasonably be expected to occur, and PROVIDED FURTHER THAT any
such request by the Note Trustee does not adversely interfere
with the Current Issuer Cash Manager's day-to-day provision of
the Current Issuer Cash Management Services under the other
terms of this Agreement.
(d) After becoming aware of any event described in paragraph
(c)(i) or (ii) above, the Current Issuer Cash Manager shall
give details to the Current Issuer and the Note Trustee of any
pending legal action and any judgments given in respect of the
Current Issuer Cash Manager if it could have a potential
material adverse effect on the ability of the Current Issuer
Cash Manager to perform its obligations hereunder.
(e) The Current Issuer Cash Manager shall, at the request of the
Note Trustee, furnish the Note Trustee and the Rating Agencies
with such other information relating to its business and
financial condition as the Note Trustee may request in
connection with this Agreement, PROVIDED THAT the Note Trustee
shall not make such a request more than once every three
months unless, in the belief of the Note Trustee, a Current
Issuer Intercompany Loan Event of Default, a Current Issuer
Note Event of Default or a Current Issuer Cash Manager
Termination Event (as defined in Clause 12.1 (Current Issuer
Cash Manager Termination Events)) shall have occurred and is
continuing or may reasonably be expected to occur, and
PROVIDED FURTHER THAT any such request of the Note Trustee
does not adversely interfere with the Current Issuer Cash
Manager's day-to-day provision of the Current Issuer Cash
Management Services under the other terms of this Agreement.
12
9. Remuneration
9.1 Fee payable:
(a) Subject to paragraph (b) below, the Current Issuer shall pay
to the Current Issuer Cash Manager for the provision of the
Current Issuer Cash Management Services hereunder a cash
management fee which shall be agreed in writing between the
Current Issuer, the Note Trustee and the Current Issuer Cash
Manager from time to time.
(b) Unless and until otherwise agreed by the Current Issuer and
the Note Trustee in writing (notified to the Current Issuer
Cash Manager), the Current Issuer shall be solely responsible
for paying the cash management fee to the Current Issuer 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
(Fee Payable) shall only be payable to the Current Issuer Cash
Manager on each Payment Date in the manner contemplated by, in
accordance with and subject to the provisions of the Current Issuer
Pre-Enforcement Revenue Priority of Payments or, as the case may be,
the Current Issuer Post-Enforcement Priority of Payments.
10. Covenants, Representations and Warranties of Current Issuer Cash Manager
10.1 Covenants: The Current Issuer Cash Manager hereby covenants with and
undertakes to each of the Current Issuer and the Note 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;
(b) it will comply with any proper directions, orders and
instructions which the Current Issuer or the Note 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 Note 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 Current Issuer 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
Current Issuer Cash Management Services;
(d) it will not knowingly fail to comply with any legal
requirements in the performance of the Current Issuer 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
13
(f) it will not without the prior written consent of the Note
Trustee amend or terminate any of the Current Issuer
Transaction Documents save in accordance with their terms.
10.2 Duration of covenants: The covenants of the Current Issuer 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 Current Issuer and/or the Note Trustee arising from breach of
any such covenant prior to the date of termination of this Agreement.
10.3 Representations and Warranties: The Current Issuer Cash Manager
hereby makes the representations and warranties to each of the
Current Issuer and the Note Trustee that are specified on Schedule 5
hereto.
11. Current Issuer Cash Management Services Non-Exclusive
Nothing in this Agreement shall prevent the Current Issuer 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 Current Issuer or the Note
Trustee.
12. Termination
12.1 Current Issuer Cash Manager Termination Events: If any of the
following events ("Current Issuer Cash Manager Termination Events")
shall occur:
(a) default is made by the Current Issuer Cash Manager in the
payment on the due date of any payment due and payable by it
under this Agreement and such default continues unremedied for
a period of five (5) London Business Days after the earlier of
the Current Issuer Cash Manager becoming aware of such default
and receipt by the Current Issuer Cash Manager of written
notice from the Current Issuer or the Note Trustee, as the
case may be, requiring the same to be remedied; or
(b) default is made by the Current Issuer Cash Manager in the
performance or observance of any of its other covenants and
obligations under this Agreement, which in the opinion of the
Note Trustee is materially prejudicial to the interests of the
holders of the Current Issuer Notes and such default continues
unremedied for a period of twenty (20) days after the earlier
of the Current Issuer Cash Manager becoming aware of such
default and receipt by the Current Issuer Cash Manager of
written notice from the Note Trustee requiring the same to be
remedied; or
(c) the Current Issuer Cash Manager suffers an Insolvency Event,
then the Current Issuer and/or Note Trustee may at once or at any time
thereafter while such default continues by notice in writing to the
Current Issuer Cash Manager with a copy to the Current Issuer Account
Bank terminate its appointment as Current Issuer Cash Manager under
this Agreement with effect from a date (not earlier than the date of
the notice) specified in the notice.
14
Upon termination of the appointment of the Current Issuer Cash
Manager, the Note Trustee agrees to use its reasonable endeavours to
appoint a substitute Current Issuer Cash Manager. Any substitute
Current Issuer Cash Manager 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 Current Issuer
and the Note Trustee.
Any termination of the appointment of the Current Issuer Cash Manager
and the appointment of a substitute Current Issuer Cash Manager under
this Clause 12.1 is conditional upon the Rating Agencies having
previously confirmed in writing to the Current Issuer and the Note
Trustee that the then-current ratings of the Current Issuer Notes will
not be downgraded, withdrawn or qualified.
The Note Trustee shall have no liability to any person in the event
that, having used reasonable endeavours, it is unable to appoint a
substitute Current Issuer Cash Manager. In any event, the Note Trustee
shall only be required to use its reasonable endeavours to appoint
such substitute Current Issuer Cash Manager. Notwithstanding any other
provision of the Transaction Documents, the Note Trustee shall not
itself be required to perform any duties of the Current Issuer Cash
Manager.
The Note Trustee shall not be obliged to monitor or supervise the
performance by any substitute Current Issuer Cash Manager of its
duties hereunder or in relation to the other Transaction Documents nor
shall the Note Trustee be responsible or liable for any act or
omission of any substitute Current Issuer Cash Manager or for any loss
caused thereby.
12.2 Resignation of Current Issuer Cash Manager: The Current Issuer Cash
Manager may resign from its appointment under this Agreement only
upon giving not less than twelve (12) months' notice to each of the
Current Issuer and the Note Trustee, PROVIDED THAT:
(a) the Current Issuer and the Note 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 or on such terms as are satisfactory to the
Current Issuer and the Note Trustee, and the Current Issuer
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 Current Issuer under such agreement are
charged in favour of the Note Trustee on terms satisfactory to
the Note Trustee; and
(d) the Rating Agencies have confirmed to the Current Issuer and
the Note Trustee that the then-current ratings of the Current
Issuer Notes are not adversely affected as a result thereof.
15
12.3 Effect of Termination or Resignation:
(a) On and after termination or resignation of the appointment of the
Current Issuer Cash Manager under this Agreement pursuant to this
Clause 12, all authority and power of the Current Issuer Cash Manager
under this Agreement shall be terminated and be of no further effect
and the Current Issuer Cash Manager shall not thereafter hold itself
out in any way as the agent of the Current Issuer or the Note Trustee
pursuant to this Agreement.
(b) Upon termination or resignation of the appointment of the
Current Issuer Cash Manager under this Agreement pursuant to
this Clause 12, the Current Issuer Cash Manager shall:
(i) forthwith deliver (and in the meantime hold on trust
for, and to the order of, the Current Issuer or the
Note Trustee, as the case may be) to the Current
Issuer or the Note 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 Current Issuer or the
Note Trustee, as the case may be, (if practicable, on
the date of receipt) any monies then held by the
Current Issuer Cash Manager on behalf of the Current
Issuer, the Note Trustee and any other assets of the
Current Issuer and the Note Trustee;
(ii) take such further action as the Current Issuer or the
Note Trustee, as the case may be, may reasonably
direct PROVIDED THAT the Note Trustee 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 Current Issuer and the Note Trustee,
the directions of the Note 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 Current
Issuer or the Note 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 Current Issuer
or the Note Trustee or such nominee, as the case may
be.
12.4 Notice of event of default: The Current Issuer Cash Manager shall
deliver to the Current Issuer and the Note Trustee as soon as
reasonably practicable (but in any event within three London Business
Days of becoming aware thereof) a notice of any Current Issuer Cash
Manager Termination Event, any Current Issuer Note Event of Default
or any Current Issuer Intercompany Loan Event of Default, or any
event which with the giving of notice or expiry of any grace period
or certification, as specified in such Current Issuer Cash Manager
Termination Event or Current Issuer Note Event of Default or Current
Issuer Intercompany Loan Event of Default, would
16
constitute the same.
12.5 General provisions relating to termination:
(a) Termination of this Agreement or the appointment of the
Current Issuer Cash Manager under this Agreement shall be
without prejudice to the liabilities of the Current Issuer to
the Current Issuer Cash Manager and vice versa incurred before
the date of such termination. The Current Issuer 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 Current
Issuer or the Note Trustee.
(b) This Agreement shall terminate at such time as the Current
Issuer Secured Obligations have been fully discharged.
(c) On termination of the appointment of the Current Issuer Cash
Manager under the provisions of this Clause 12, the Current
Issuer Cash Manager shall be entitled to receive all fees and
other monies accrued up to (but excluding) the date of
termination but shall not be entitled to any other or further
compensation. The Current Issuer shall pay such moneys so
receivable by the Current Issuer Cash Manager in accordance
with the Current Issuer Pre-Enforcement Revenue Priority of
Payments or, as the case may be, the Current Issuer
Post-Enforcement Priority of Payments, on the dates on which
they would otherwise have fallen due hereunder. For the
avoidance of doubt, such termination shall not affect the
Current Issuer Cash Manager's rights to receive payment of all
amounts (if any) due to it from the Current Issuer other than
under this Agreement.
(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 (Co-operation, etc), the Current Issuer shall upon request by
the Current Issuer Cash Manager forthwith give to the Current Issuer
Cash Manager such further powers of attorney or other written
authorisations, mandates or instruments as are necessary to enable
the Current Issuer Cash Manager to perform the Current Issuer Cash
Management Services.
14. Miscellaneous
14.1 No set-off: The Current Issuer Cash Manager agrees that it will not:
(a) set off or purport to set off any amount which either the
Current Issuer is or will become obliged to pay to it under
this Agreement against any amount
17
from time to time standing to the credit of or to be credited
to the Current Issuer Transaction Accounts or the Swap
Collateral Accounts or any replacement or additional bank
account of the Current Issuer and established from time to
time; or
(b) 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 standing to the credit of the Current Issuer
Transaction Accounts or the Swap Collateral Accounts or any
replacement or additional bank account of the Current Issuer
and established from time to time.
14.2 No recourse:
(a) In relation to all sums due and payable by the Current Issuer
to the Current Issuer Cash Manager, the Current Issuer Cash
Manager agrees that it shall have recourse only to sums paid
to or received by (or on behalf of) the Current Issuer
pursuant to the provisions of the Current Issuer Transaction
Documents.
(b) For the avoidance of doubt, the Note Trustee shall not be
liable to pay any amounts due under Clauses 7 (Costs and
Expenses) and 9 (Remuneration), but without prejudice to the
obligations of the Current Issuer, or any receiver appointed
pursuant to the Current Issuer Deed of Charge in respect of
such amounts.
(c) Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of, the Note Trustee under or in
connection with this Agreement (other than its obligations
under Clause 13 (Further Assurances)) shall automatically
terminate upon the discharge in full of all Current Issuer
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.
15. Confidentiality
During the continuance of this Agreement or after its termination,
each of the Current Issuer, the Current Issuer Cash Manager and the
Note 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;
18
(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, a Current
Issuer Note Event of Default, or a Current Issuer Cash Manager
Termination Event, the protection or enforcement of any of its
rights under any of the Current Issuer 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 the Current Issuer or any
New Issuer) to any credit rating agency or any prospective new
cash manager or prospective new Note 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 Current Issuer: The Current Issuer may not assign
or transfer any of its rights and obligations under this Agreement
without the prior written consent of each of the Note Trustee and the
Current Issuer Cash Manager, except that the Current Issuer may
assign its respective rights hereunder without such consent pursuant
to the Current Issuer Deed of Charge.
17.2 No assignment by Current Issuer Cash Manager: The Current Issuer Cash
Manager may not assign or transfer any of its rights and obligations
under this Agreement without the prior written consent of the Current
Issuer and the Note Trustee.
18. The Note Trustee
18.1 Change in Note Trustee: If there is any change in the identity of the
note trustee in accordance with the Issuer Deed of Charge, the
Current Issuer and the Current Issuer Cash Manager shall execute such
documents and take such action as the successor note trustee and the
outgoing Note Trustee may require for the purpose of vesting in the
successor note trustee the rights and obligations of the outgoing
Note Trustee under this Agreement and releasing the outgoing Note
Trustee from its future obligations under this Agreement.
18.2 No Obligations: It is hereby acknowledged and agreed that by its
execution of this
19
Agreement the Note Trustee shall not assume or have any of the
obligations or liabilities of the Current Issuer or the Current Issuer
Cash Manager under this Agreement. Furthermore, any liberty or power
which may be exercised or any determination which may be made
hereunder by the Note Trustee may be exercised or made in the Note
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 Current Issuer Deed of Charge.
19. Non Petition Covenant; Limited Recourse
19.1 Note Trustee to Enforce: The Current Issuer Cash Manager hereby
undertakes to each of the other parties hereto that only the Security
Trustee, at the direction of the Note Trustee, may enforce the
security created in favour of the Note Trustee by the Current Issuer
Deed of Charge in accordance with the provisions thereof.
19.2 Limited Recourse: The Current Issuer Cash Manager hereby undertakes
to each of the other parties hereto that, notwithstanding any other
provision of this Agreement or any other Transaction Document, no sum
due or owing to the Current Issuer Cash Manager from or by the
Current Issuer under this Agreement shall be payable by the Current
Issuer except to the extent that the Current Issuer has sufficient
funds available or (following enforcement of the Current Issuer
Security) the Security Trustee has realised sufficient funds from the
Current Issuer Security to pay such sum subject to and in accordance
with the relevant Current Issuer Priority of Payments, and provided
that all liabilities of the Current Issuer required to be paid in
priority thereto or pari passu therewith pursuant to such Current
Issuer Priority of Payments have been paid, discharged and/or
otherwise provided for in full.
19.3 Non Petition: The Current Issuer 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 the
Current Issuer and it shall not take any steps or legal proceedings
for the winding-up, dissolution or reorganisation of, or the
institution of insolvency proceedings against, the Current Issuer or
for the appointment of a receiver, administrator, liquidator or
similar officer of the Current Issuer in respect of any or all of its
revenues except to the extent expressly permitted under the Current
Issuer Deed of Charge.
19.4 Following Enforcement: The Current Issuer Cash Manager hereby
undertakes to each of the other parties hereto that, following any
enforcement of the Current Issuer Security, it will hold on trust
for, and will pay to, the Note Trustee or the Receiver, as the case
may be, all monies received or recovered by it (whether by way of
set-off or otherwise) otherwise than in accordance with the Current
Issuer Post-Enforcement Priority of Payments in order that such
monies may be applied by the Note Trustee or the Receiver in
accordance with the Current Issuer Post-Enforcement Priority of
Payments.
19.5 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
20
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.
19.6 Current Issuer Deed of Charge: The provisions of Clause 6 of the
Current Issuer Deed of Charge shall prevail in the event that and to
the extent that they conflict with the provisions of this Clause 19.
20. Amendments and Waiver
20.1 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 Current Issuer Transaction
Documents.
20.2 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.
20.3 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.
20.4 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.
21. 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 (London time) 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:
21
(a) in the case of the Current Issuer Cash Manager, to Northern
Rock PLC, Northern Rock House, Gosforth, Newcastle upon Tyne
NE3 4PL (facsimile number: 0191 213 2203) for the attention of
the Group Secretary;
(b) in the case of the Current Issuer, to Granite Mortgages 04-3
plc c/o Fifth Floor, 100 Wood Street, London EC2V 7EX
(facsimile number 020 7606 0643) for the attention of The
Company Secretary with a copy to Northern Rock plc, Northern
Rock House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile
number 0191 213 2203) for the attention of the Group
Secretary;
(c) in the case of the Note Trustee, to The Bank of New York
(London Branch), at 48th Floor, One Canada Square, London E14
5AL (facsimile number 020 7964 6399) for the attention of
Corporate Trust (Global Structured Finance);
(d) 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;
(e) 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 the Head
of Monitoring Group, Structured Finance;
(f) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., at 20 Canada
Square, Canary Wharf, London E14 5LH (facsimile number 0207
176 3598) for the attention of Andre Vollmann;
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 21. All notices served
under this Agreement shall be simultaneously copied to the Note
Trustee by the person serving the same.
22. 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.
23. Execution in Counterparts; Severability
23.1 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.
23.2 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
22
thereby.
24. Governing Law and Jurisdiction; Appropriate Forum
24.1 Governing Law: This Agreement is governed by, and shall be construed
in accordance with, English law.
24.2 Jurisdiction: Each of the parties hereto irrevocably agrees that the
courts of England shall have jurisdiction to hear and determine any
suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with this Agreement and, for such
purposes, irrevocably submits to the jurisdiction of such courts.
24.3 Appropriate Forum: Each of the parties hereto irrevocably waives any
objection which it might now or hereafter have to the courts of
England being nominated as the forum to hear and determine any
Proceedings and to settle any disputes, and agrees not to claim that
any such court is not a convenient or appropriate forum.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed the
day and year first before written.
23
SCHEDULE 1
The Current Issuer Cash Management Services
The Current Issuer Cash Manager shall:
(a) make the determinations as set forth in Schedule 2;
(b) invest sums, if any, standing to the credit of the Current Issuer
Transaction Accounts in short-term Authorised Investments as
determined by the Current Issuer and, if applicable, the Note
Trustee;
(c) apply the Current Issuer Available Revenue Receipts and Current
Issuer Available Principal Receipts in accordance with the relevant
order of priority of payments for the Current Issuer set out in
Schedule 2;
(d) maintain the Current Issuer Principal Deficiency Ledger, and record
(1) principal deficiencies arising from Losses on the Mortgage Loans
which have been allocated by Funding to the Current Issuer
Intercompany Loan, (2) the use of Current Issuer Principal Receipts
to meet any deficiency in Current Issuer Revenue Receipts and (3) the
use of Funding Available Principal Receipts to fund or replenish, as
the case may be, the Current Issuer Liquidity Reserve Fund, if any,
and (4) the application of Current Issuer Available Revenue Receipts
to reduce the balances on the Current Issuer Principal Deficiency
Ledger;
(e) each time it records a debit on a Current Issuer Principal Deficiency
Sub Ledger, also record on such Current Issuer Principal Deficiency
Sub Ledger whether such debit was caused by (1) Losses on the
Mortgage Loans which have been allocated by Funding to the Current
Issuer Intercompany Loan, (2) the application of Current Issuer
Principal Receipts to meet any deficiency in Current Issuer Revenue
Receipts, and (3) the application of Funding Available Principal
Receipts to fund or replenish, as the case may be, the Current Issuer
Liquidity Reserve Fund, if any;
(f) provide the Current Issuer, Funding, the Note Trustee (upon its
request) and the Rating Agencies with quarterly reports in relation
to the Current Issuer as set out in Schedule 3;
(g) operate the Current Issuer Bank Accounts and ensure that payments are
made into and from such account in accordance with this Agreement,
the Current Issuer Deed of Charge, the Current Issuer Bank Account
Agreement and any other relevant Current Issuer Transaction Document,
PROVIDED HOWEVER THAT nothing herein shall require the Current Issuer
Cash Manager to make funds available to the Current Issuer to enable
such payments to be made other than as expressly required by the
provisions of this Agreement;
(h) keep records for all taxation purposes (including, without limitation
VAT);
(i) subject to any applicable law, assist the auditors of the Current
Issuer and provide such information to them as they may reasonably
request for the purpose of carrying out their duties as auditors;
24
(j) make all returns and filings, give all notices and make all
registrations and other notifications required in the day-to-day
operation of the business of the Current Issuer or required to be
given by the Current Issuer pursuant to the Current Issuer
Transaction Documents;
(k) arrange for all payments due to be made by the Current Issuer under
any of the Current Issuer Transaction Documents, PROVIDED THAT such
moneys are at the relevant time available to the Current Issuer and
PROVIDED FURTHER that nothing herein shall constitute a guarantee by
the Current Issuer Cash Manager of all or any of the obligations of
the Current Issuer under any of the Current Issuer Transaction
Documents;
(l) without prejudice to the role of and in conjunction with the Current
Issuer Corporate Services Provider under the Current Issuer Corporate
Services Agreement, keep general books of account and records of the
Current Issuer; 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;
(m) without prejudice to the role of and in conjunction with the Current
Issuer Corporate Services Provider under the Current Issuer Corporate
Services Agreement, provide or procure the provision of company
secretarial and administration services to the Current Issuer
including the keeping of all registers and the making of all returns
and filings required by applicable law or by UK regulatory
authorities, co-operate in the convening of board and general
meetings and provide registered office facilities;
(n) itself on behalf of the Current Issuer, PROVIDED THAT such monies are
at the relevant time available to the Current Issuer, pay all the
out-of-pocket expenses of the Current Issuer, incurred by the Current
Issuer Cash Manager on behalf of the Current Issuer in the
performance of the Current Issuer Cash Manager's duties hereunder
including without limitation:
(i) all Taxes which may be due or payable by the Current Issuer;
(ii) all necessary filing and other fees in compliance with
regulatory requirements;
(iii) all legal and audit fees and other professional advisory
fees; and
(iv) all communication expenses including postage, courier and
telephone charges;
(o) the Current Issuer Cash Manager may invest monies standing from time
to time to the credit of the Current Issuer Transaction Accounts
subject to the following provisions:
(i) any such Authorised Investment shall be made in the joint
names of the Current Issuer and the Note Trustee;
(ii) any costs properly and reasonably incurred in making and
changing Authorised Investments will be reimbursed to the
Current Issuer Cash Manager and the Note Trustee by the
Current Issuer;
(iii) all income or proceeds following the disposal or maturity of
Authorised Investments shall be credited to the Current
Issuer Transaction Accounts from
25
which moneys were withdrawn to make the relevant
Authorised Investment; and
(iv) following the enforcement of the Current Issuer Security no
such investment may be made without the prior written
consent of the Note Trustee.
The Note Trustee and the Current Issuer Cash Manager shall not be
responsible (save where any loss results from the Note Trustee's or
the Current Issuer 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;
(p) (i) if necessary, perform all currency conversions free of
charge, cost or expense at the relevant exchange rate; and
(ii) if necessary, perform all interest rate conversions free of
charge, cost or expense at the relevant interest swap rate.
for the purposes of any calculations referred to in sub-paragraphs
(i) and (ii) above, 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% (or 0.09876541) being rounded
down to 9.87654% (or 0.0987654)) and (ii) any currency amounts used
in or resulting from such calculations will be rounded in accordance
with the relevant market practice;
(q) arrange payment of all fees to the London Stock Exchange plc or, as
applicable, the UK Listing Authority; and
(r) provide services in relation to Swap Collateral (including, without
limitation, in connection with the transfer, receipt, administration
and/or holding of Swap Collateral, the making of calculations,
determinations, communications or valuations, the opening and
maintenance of the Swap Collateral Accounts and the Swap Collateral
Ledger; and the entering into of Swap Collateral Ancillary
Documents).
26
SCHEDULE 2
Cash Management and Maintenance of Ledgers
1. Determination
(a) On or before each Current Issuer Note Determination Date
immediately preceding a Payment Date, the Current Issuer
Cash Manager shall determine each of the following in
accordance with this paragraph 1:
(i) the amount of any Current Issuer Available Revenue
Receipts to be applied on the following Payment
Date in accordance with the Current Issuer
Pre-Enforcement Revenue Priority of Payments set
forth in paragraph 3 of this Schedule 2;
(ii) the amount of any Current Issuer Available
Principal Receipts to be applied on the following
Payment Date in accordance with the Current Issuer
Pre-Enforcement Principal Priority of Payments set
forth in paragraph 4 of this Schedule 2;
(iii) whether there will be an excess or a deficit of the
Current Issuer Available Revenue Receipts to pay
items (A) through (P) of the Current Issuer
Pre-Enforcement Revenue Priority of Payments (after
taking account of any Group 1 Shared Issuer Revenue
Receipts or Group 2 Shared Issuer Revenue Receipts
available therefor) as set forth in paragraph 3 of
this Schedule 2;
(iv) the various amounts, balances and rates to be
calculated in accordance with the Current Issuer
Swap Agreements, and shall promptly notify the
Current Issuer, the Note Trustee and each
Calculation Agent (as defined in each Current
Issuer Swap Agreement) of such amounts, balances
and rates; and
(v) the Principal Amount Outstanding of the Current
Issuer Notes, the Pool Factor, and the Note
Principal Payment of the Current Issuer Notes in
accordance with the Conditions.
(b) If the Current Issuer Cash Manager determines (as set forth
in paragraph 1(a)(iii)) that there is a Current Issuer
Income Deficit and the Current Issuer has provided for that
deficit by the application of funds standing to the credit
of the Current Issuer Principal Ledger, if any, then the
Current Issuer Cash Manager shall make a corresponding debit
entry in the relevant Current Issuer Principal Deficiency
Sub Ledger, PROVIDED THAT the Current Issuer Cash Manager
shall ensure that Current Issuer Principal Receipts are not
used to pay interest on any class of Current Issuer Notes
if and to the extent that would result in a deficiency being
recorded, or an existing deficiency being increased, on a
Current Issuer Principal Deficiency Sub Ledger relating to
a higher ranking Class of Current Issuer Notes, and
furthermore that Current Issuer Principal Receipts are not
used to make up any deficit other than in respect of items
(A) through (E), (G), (I) and (K) of the Current Issuer Pre-
27
Enforcement Revenue Priority of Payments. The Current
Issuer Cash Manager shall thereafter record as a debit on
the Current Issuer Revenue Ledger the application by the
Current Issuer of any excess Current Issuer Available
Revenue Receipts to extinguish any balance on a Current
Issuer Principal Deficiency Sub Ledger.
(c) The Current Issuer Cash Manager may make all the
determinations referred to in paragraph 1(a) on the basis of
any reasonable and proper assumptions as the Current Issuer
Cash Manager considers appropriate (including without
limitation as to the amount of any payments to be made under
paragraph 3 below during the period from and including the
Current Issuer Note Determination Date immediately preceding
a Payment Date to but excluding such Payment Date).
The Current Issuer Cash Manager shall notify the Current
Issuer and the Note Trustee on request of any such other
assumptions and shall take account of any representations
made by the Current Issuer and the Note Trustee (as the case
may be) in relation thereto.
(d) 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
(a) The Current Issuer Cash Manager will cause each
determination of Current Issuer Available Principal Receipts
and Current Issuer Available Revenue Receipts (in accordance
with paragraph 1(a)(i) and (ii)) and any Current Issuer
Income Deficit (in accordance with paragraph 1(a)(iii)) to
be notified forthwith, following the calculation thereof, to
the Current Issuer.
(b) The Current Issuer Cash Manager shall procure that the
determinations and notifications required to be made
pursuant to Condition 5(C) of the Conditions are made.
3. Priority of Payments for Current Issuer Available Revenue Receipts
Current Issuer Available Revenue Receipts will be applied, as
applicable:
(a) on each Payment Date; or
(b) on each day when due in respect of amounts due to third
parties pursuant to paragraph (C) below,
in each case prior to the enforcement of the Current Issuer Security
pursuant to the Current Issuer Deed of Charge or until such time as
there are no Current Issuer Secured Obligations outstanding, in
making such payments and provisions in the following 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) (the "Current
Issuer Pre-Enforcement Revenue Priority of Payments"):
28
(A) first, to pay amounts due to the Note Trustee, together with
interest and (to the extent not already inclusive) VAT on
those amounts, and to provide for any amounts due or to become
due during the following Interest Period to the Note Trustee
under the Current Issuer Trust Deed, the Current Issuer Deed
of Charge or any other Transaction Document;
(B) second, in no order of priority among them but in proportion
to the respective amounts due, to pay amounts due to the Agent
Bank, the Paying Agents, the Transfer Agent and the Registrar,
together with interest and (to the extent not already
inclusive) VAT on those amounts, and to provide for any costs,
charges, liabilities and expenses due or to become due during
the following Interest Period to the Agent Bank, the Paying
Agents, the Transfer Agent and the Registrar under the Current
Issuer Paying Agent and Agent Bank Agreement;
(C) third, to pay amounts due to any third party creditors of the
Current Issuer (other than those referred to later in this
order of priority of payments or in the Current Issuer
Pre-Enforcement Principal Priority of Payments), of which the
Current Issuer Cash Manager has notice prior to the relevant
Payment Date, which amounts have been incurred without breach
by the Current Issuer of the Transaction Documents to which it
is a party and for which payment has not been provided for
elsewhere and to provide for any such amounts expected to
become due and payable during the following Interest Period by
the Current Issuer and to pay or discharge any liability of
the Current Issuer for corporation tax on any chargeable
income or gain of the Current Issuer;
(D) fourth, in no order of priority among them but in proportion
to the respective amounts due, to pay amounts due to the
Current Issuer Cash Manager under the Current Issuer Cash
Management Agreement, the Current Issuer Corporate Services
Provider under the Current Issuer Corporate Services Agreement
and the Current Issuer Account Bank under the Current Issuer
Bank Account Agreement together with (to the extent not
already inclusive) VAT on those amounts, and to provide for
any amounts due, or to become due in the immediately
succeeding Interest Period, to the Current Issuer Cash Manager
under the Current Issuer Cash Management Agreement, to the
Current Issuer Corporate Services Provider under the Current
Issuer Corporate Services Agreement and to the Current Issuer
Account Bank under the Current Issuer Bank Account Agreement;
(E) fifth, in no order of priority among them but in proportion to
the respective amounts due, to pay:
(1) amounts (including such part of any termination
payment) due to the Current Issuer Basis Rate Swap
Provider (except for any termination payment or any
part thereof due and payable to the Current Issuer
Basis Rate Swap Provider as a result of a Basis Rate
Swap Provider Default, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments);
29
(2) amounts due in respect of interest and such part of
any termination payment due to the Series 1 Class A1
Dollar Currency Swap Provider under the Series 1 Class
A1 Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received on each Payment
Date in respect of interest from the Series 1 Class A1
Dollar Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 1 Class A1
Notes to holders of the Series 1 Class A1 Notes; and
(3) amounts due in respect of interest and such part of
any termination payment due to the Series 1 Class A2
Euro Currency Swap Provider under the Series 1 Class
A2 Euro Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Euro Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received on each Payment
Date in respect of interest from the Series 1 Class A2
Euro Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 1 Class A2
Notes to holders of the Series 1 Class A2 Notes;
(4) amounts due in respect of interest and such part of
any termination payment due to the Series 1 Class A3
Dollar Currency Swap Provider under the Series 1 Class
A3 Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 1 Class A3 Dollar Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received on each Payment
Date in respect of interest from the Series 1 Class A3
Dollar Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 1 Class A3
Notes to the holders of the Series 1 Class A3 Notes;
(5) amounts due in respect of interest and such part of
any termination payment due to the Series 2 Class A1
Dollar Currency Swap Provider under the Series 2 Class
A1 Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the
30
Current Issuer following a Downgrade Termination Event
and applied in accordance with this order of priority
of payments) and from amounts received on each Payment
Date in respect of interest from the Series 2 Class A1
Dollar Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 2 Class A1
Notes to the holders of the Series 2 Class A1 Notes;
(6) amounts due in respect of interest and such part of
any termination payment due to the Series 2 Class A2
Euro Currency Swap Provider under the Series 2 Class
A2 Euro Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Euro Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 2 Class A2 Euro Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received on each Payment
Date in respect of interest from the Series 2 Class A2
Euro Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 2 Class A2
Notes to the holders of the Series 2 Class A2 Notes;
(7) amounts due to pay on each Payment Date interest due
or overdue on the Series 3 Class A1 Notes to the
holders of the Series 3 Class A1 Notes; and
(8) (i) on any Payment Date up to and including the
earlier of (a) the Payment Date in September 2001, (b)
the occurrence of a Trigger Event or (c) the
enforcement of the Funding Security and/or the Current
Issuer Security, amounts due in respect of interest
and such part of any termination payment due to the
Series 3 Class A2 Interest Rate Swap Provider under
the Series 3 Class A2 Interest Rate Swap (except for
any termination payment or any part thereof due and
payable to that Swap Provider as a result of an
Interest Rate Swap Provider Default by that Swap
Provider, save to the extent such termination payment
may be satisfied by any Swap Replacement Payment
received by the Current Issuer following a Downgrade
Termination Event in respect of the Series 3 Class A2
Interest Rate Swap and applied in accordance with this
order of priority of payments) and from amounts
received on each Payment Date in respect of interest
from the Series 3 Class A2 Interest Rate Swap Provider
to pay on such Payment Date interest due or overdue on
the Series 3 Class A2 Notes to the holders of the
Series 3 Class A2 Notes, and (ii) thereafter, amounts
due to pay on such Payment Date interest due or
overdue on the Series 3 Class A2 Notes to the holders
of the Series 3 Class A2 Notes;
(F) sixth, towards a credit to the Class A Principal Deficiency
Sub Ledger in an amount up to the amount necessary to
eliminate any debit on the Class A Principal Deficiency Sub
Ledger;
31
(G) seventh, in no order of priority among them but in proportion
to the respective amounts due, to pay:
(1) amounts due in respect of interest and such part of
any termination payment due to the Series 1 Class B
Dollar Currency Swap Provider under the Series 1 Class
B Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received on each Payment
Date in respect of interest from the Series 1 Class B
Dollar Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 1 Class B
Notes to the holders of the Series 1 Class B Notes;
(2) amounts due in respect of interest and such part of
any termination payment due to the Series 2 Class B
Euro Currency Swap Provider under the Series 2 Class B
Euro Currency Swap (except for any termination payment
or any part thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments)
and from amounts received on each Payment Date in
respect of interest from the Series 2 Class B Euro
Currency Swap Provider to pay on such Payment Date
interest due or overdue on the Series 2 Class B Notes
to the holders of the Series 2 Class B Notes; and
(3) amounts due to pay on each Payment Date interest due
or overdue on the Series 3 Class B Notes to the
holders of the Series 3 Class B Notes.
(H) eighth, towards a credit to the Class B Principal Deficiency
Sub Ledger in an amount up to the amount necessary to
eliminate any debit on the Class B Principal Deficiency Sub
Ledger;
(I) ninth, in no order or priority among them but in proportion to
the respective amounts due, to pay:
(1) amounts due in respect of interest and such part of
any termination payment due to the Series 1 Class M
Dollar Currency Swap Provider under the Series 1 Class
M Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any swap replacement payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 1 Class M Dollar Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received on
32
each Payment Date in respect of interest from the
Series 1 Class M Dollar Currency Swap Provider to pay
on such Payment Date interest due or overdue on the
Series 1 Class M Notes to the holders of the Series 1
Class M Notes;
(2) amounts due in respect of interest and such part of
any termination payment due to the Series 2 Class M
Euro Currency Swap Provider under the Series 2 Class M
Euro Currency Swap (except for any termination payment
or any part thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 2 Class C Euro Currency Swap and applied in
accordance with this order of priority of payments)
and from amounts received on each Payment Date in
respect of interest from the Series 2 Class M Euro
Currency Swap Provider to pay on such Payment Date
interest due or overdue on the Series 2 Class M Notes
to the holders of the Series 2 Class M Notes; and
(3) amounts due to pay on each Payment Date interest due
or overdue on the Series 3 Class M Notes to the
holders of the Series 3 Class M Notes;
(J) tenth, to credit to the Class M Principal Deficiency Sub
Ledger in an amount up to the amount necessary to eliminate
any debit on that ledger;
(K) eleventh, in no order of priority among them but in proportion
to the respective amounts due, to pay:
(1) amounts due in respect of interest and such part of
any termination payment due to the Series 1 Class C
Dollar Currency Swap Provider under the Series 1 Class
C Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received on each Payment
Date in respect of interest from the Series 1 Class C
Dollar Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 1 Class C
Notes to the holders of the Series 1 Class C Notes;
(2) amounts due in respect of interest and such part of
any termination payment due to the Series 2 Class C
Euro Currency Swap Provider under the Series 2 Class C
Euro Currency Swap (except for any termination payment
or any part thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current
33
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received on each Payment
Date in respect of interest from the Series 2 Class C
Euro Currency Swap Provider to pay on such Payment
Date interest due or overdue on the Series 2 Class C
Notes to the holders of the Series 2 Class C Notes;
and
(3) amounts due to pay on each Payment Date interest due
or overdue on the Series 3 Class C Notes to the
holders of the Series 3 Class C Notes;
(L) twelfth, to credit the Class C Principal Deficiency Sub Ledger
in an amount up to the amount necessary to eliminate any debit
on the Class C Principal Deficiency Sub Ledger;
(M) thirteenth, on the Payment Date falling in December of each
year, to pay to the Current Issuer Cash Manager an amount
equal to the amount of any debit balance on any Current Issuer
Transaction Account as permitted by the Current Issuer Cash
Manager, incurred in accordance with the provisions of the
Current Issuer Transaction Documents and outstanding as at
such Payment Date;
(N) fourteenth, in no order of priority among them but in
proportion to the respective amounts due, to pay any
termination payment to:
(1) the Current Issuer Basis Rate Swap Provider following
a Basis Rate Swap Provider Default;
(2) the Current Issuer Interest Rate Swap Provider
following a Interest Rate Swap Provider Default;
(3) any Dollar Currency Swap Provider following a Dollar
Currency Swap Provider Default; and
(4) any Euro Currency Swap Provider following a Euro
Currency Swap Provider Default;
(O) fifteenth, to pay to the Current Issuer an amount equal to
0.01% per annum of the interest received under the Current
Issuer Intercompany Loan, to be retained by the Current Issuer
as profit, less corporation tax in respect of those profits
provided for or paid at item (C) above; and
(P) last, to pay to shareholders of the Current Issuer any
dividend declared by the Current Issuer.
If any Swap Collateral Available Revenue Amounts are received by the
Current Issuer on a Payment Date, such Swap Collateral Available
Revenue Amounts shall be applied by the Current Issuer Cash Manager on
that Payment Date in the same manner as it would have applied the
receipts which such Swap Collateral Available Revenue Amounts replace.
If, on any Payment Date, an amount equal to the cash benefit relating
to any Tax Credit obtained by the Current Issuer is required to be
paid by the Current Issuer to
34
any Current Issuer Swap Provider (in accordance with Part 5(o) of the
Schedule to the relevant Current Issuer Swap Agreement), then the
Current Issuer shall make such payment on such Payment Date out of the
Current Issuer Available Revenue Receipts in priority to the payments
and provisions to be made on such Payment Date in accordance with the
Current Issuer Pre-Enforcement Revenue Priority of Payments. The
amount of any such cash benefit paid to the relevant Current Issuer
Swap Provider in accordance with this paragraph shall, to avoid double
counting, be deducted from the amount to be paid to that Current
Issuer Swap Provider under the relevant Current Issuer Swap Agreement
in accordance with the Current Issuer Pre-Enforcement Revenue Priority
of Payments on the relevant Payment Date.
4. Priority of Payments for Current Issuer Available Principal Receipts
4.1 Distribution of Current Issuer Available Principal Receipts Prior to
Enforcement of the Current Issuer Security
Prior to enforcement of the Current Issuer Security pursuant to the
Current Issuer Deed of Charge and/or the occurrence of a Trigger
Event, or until such time as there are no Current Issuer Notes
outstanding, Current Issuer Available Principal Receipts will be
applied in the following order of priority (the "Current Issuer
Pre-Enforcement Principal Priority of Payments"):
(A) first, amounts due in respect of principal and such part of
any termination payment due to the Series 1 Class A1 Dollar
Currency Swap Provider under the Series 1 Class A1 Dollar
Currency Swap (except for any termination payment or any part
thereof due and payable to that Swap Provider as a result of a
Dollar Currency Swap Provider Default by that Swap Provider,
save to the extent such termination payment may be satisfied
by any Swap Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments) and from
amounts received in respect of principal from the Series 1
Class A1 Dollar Currency Swap Provider to pay up to the Series
1 Class A1 Controlled Amortisation Amount to the holders of
the Series 1 Class A1 Notes;
(B) second, amounts due in respect of principal and such part of
any termination payment due to the Series 1 Class A2 Euro
Currency Swap Provider under the Series 1 Class A2 Euro
Currency Swap (except for any termination payment or any part
thereof due and payable to that Swap Provider as a result of a
Euro Currency Swap Provider Default by that Swap Provider,
save to the extent such termination payment may be satisfied
by any Swap Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments) and from
amounts received in respect of principal from the Series 1
Class A2 Euro Currency Swap Provider to pay up to the Series 1
Class A2 Controlled Amortisation Amount to the holders of the
Series 1 Class A2 Notes;
(C) third, in no order of priority between them but in proportion
to the amounts due, to pay:
35
(1) amounts due in respect of principal and such part of
any termination payment due to the Series 1 Class A3
Dollar Currency Swap Provider under the Series 1 Class
A3 Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 1 Class A3 Dollar Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received in respect of
principal from the Series 1 Class A3 Dollar Currency
Swap Provider to pay up to the Series 1 Class A3
Controlled Amortisation Amount to the holders of the
Series 1 Class A3 Notes;
(2) amounts due in respect of principal and such part of
any termination payment due to the Series 2 Class A1
Dollar Currency Swap Provider under the Series 2 Class
A1 Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received in respect of
principal from the Series 2 Class A1 Dollar Currency
Swap Provider to pay up to the Series 2 Class A1
Controlled Amortisation Amount to the holders of the
Series 2 Class A1 Notes;
(3) amounts due in respect of principal and such part of
any termination payment due to the Series 2 Class A2
Euro Currency Swap Provider under the Series 2 Class
A2 Euro Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Euro Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 2 Class A2 Euro Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received in respect of
principal from the Series 2 Class A2 Euro Currency
Swap Provider to pay up to the Series 2 Class A2
Controlled Amortisation Amount to the holders of the
Series 2 Class A2 Notes;
(4) to pay up to the Series 3 Class A1 Controlled
Amortisation Amount to the holders of the Series 3
Class A1 Notes; and
(5) to pay up to the Series 3 Class A2 Controlled
Amortisation Amount to the holders of the Series 3
Class A2 Notes;
(D) fourth, provided that the Issuer Reserve Requirement and the
Issuer Arrears Test are satisfied on such Payment Date (or, if
either the Issuer Reserve Requirement or the Issuer Arrears
Test is not satisfied on such Payment Date,
36
but the Class A Notes have been repaid in full) no order of
priority among them but in proportion to the respective
amounts due, to pay:
(1) amounts due in respect of principal and such part of
any termination payment due to the Series 1 Class B
Dollar Currency Swap Provider under the Series 1 Class
B Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 1 Class B Dollar Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received in respect of
principal from the Series 1 Class B Dollar Currency
Swap Provider to pay up to the Series 1 Class B
Controlled Amortization Amount to the holders of the
Series 1 Class B Notes;
(2) amounts due in respect of principal and such part of
any termination payment due to the Series 2 Class B
Euro Currency Swap Provider under the Series 2 Class B
Euro Currency Swap (except for any termination payment
or any part thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 2 Class B Euro Currency Swap and applied in
accordance with this order of priority of payments)
and from amounts received in respect of principal from
the Series 2 Class B Euro Currency Swap Provider to
pay up to the Series 2 Class B Controlled Amortization
Amount to the holders of the Series 2 Class B Notes;
and
(3) up to the Series 3 Class B Controlled Amortization
Amount to the holders of the Series 3 Class B Notes;
(E) fifth, provided that the Issuer Reserve Requirement and the
Issuer Arrears Test are satisfied on such Payment Date (or, if
either the Issuer Reserve Requirement or the Issuer Arrears
Test is not satisfied on such Payment Date, but the Class A
Notes have been repaid in full), in no order of priority among
them but in proportion to the respective amounts due, to pay:
(1) amounts due in respect of principal and such part of
any termination payment due to the Series 1 Class M
Dollar Currency Swap Provider under the Series 1 Class
M Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 1 Class M Dollar Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received in respect of
principal from the Series 1 Class M Dollar Currency
Swap
37
Provider to pay up to the Series 1 Class M Controlled
Amortization Amount to the holders of the Series 1
Class M Notes;
(2) amounts due in respect of principal and such part of
any termination payment due to the Series 2 Class M
Euro Currency Swap Provider under the Series 2 Class M
Euro Currency Swap (except for any termination payment
or any part thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 2 Class M Euro Currency Swap and applied in
accordance with this order of priority of payments)
and from amounts received in respect of principal from
the Series 2 Class M Euro Currency Swap Provider to
pay up to the Series 2 Class M Controlled Amortization
Amount to the holders of the Series 2 Class M Notes;
and
(3) up to the Series 3 Class M Controlled Amortization
Amount to the holders of the Series 3 Class M Notes;
and
(F) last, provided that the Issuer Reserve Requirement and the
Issuer Arrears Test are satisfied on such Payment Date (or, if
either the Issuer Reserve Requirement or the Issuer Arrears
Test is not satisfied on such Payment Date, but the Class A
Notes have been repaid in full) in no order of priority among
them but in proportion to the respective amounts due, to pay:
(1) amounts due in respect of principal and such part of
any termination payment due to the Series 1 Class C
Dollar Currency Swap Provider under the Series 1 Class
C Dollar Currency Swap (except for any termination
payment or any part thereof due and payable to that
Swap Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received in respect of
principal from the Series 1 Class C Dollar Currency
Swap Provider to pay up to the Series 1 Class C
Controlled Amortisation Amount to the holders of the
Series 1 Class C Notes;
(2) amounts due in respect of principal and such part of
any termination payment due to the Series 2 Class C
Euro Currency Swap Provider under the Series 2 Class C
Euro Currency Swap (except for any termination payment
or any part thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments)
and from amounts received in respect of principal from
the Series 2 Class C Euro
38
Currency Swap Provider to pay up to the Series 2
Class C Controlled Amortisation Amount to the
holders of the Series 2 Class C Notes; and
(3) up to the Series 3 Class C Controlled Amortisation
Amount to the holders of the Series 3 Class C Notes.
The Controlled Amortisation Amount of each class of Current Issuer
Notes for each Payment Date is as set forth on Schedule 4.
If any Swap Collateral Available Principal Amounts are received by
the Current Issuer on a Payment Date, such Swap Collateral Available
Principal Amounts shall be applied by the Current Issuer Cash Manager
on that Payment Date in the same manner as it would have applied the
receipts which such Swap Collateral Available Principal Amounts
replace.
4.2 Distribution of Current Issuer Available Principal Receipts Following
the Occurrence of a Non-Asset Trigger Event and prior to the
occurrence of an Asset Trigger Event
Following the occurrence of a Non-Asset Trigger Event and prior to
the occurrence of an Asset Trigger Event but prior to enforcement of
the Funding Security under the Funding Deed of Charge and/or the
Current Issuer Security under the Current Issuer Deed of Charge, the
Current Issuer Cash Manager will apply Current Issuer Available
Principal Receipts in the following order of priority:
(A) first, to pay amounts (including such part of any termination
payment) due to the Series 1 Class A1 Dollar Currency Swap
Provider under the Series 1 Class A1 Dollar Currency Swap
(except for any termination payment or any part thereof due
and payable to that Swap Provider as a result of a Dollar
Currency Swap Provider Default by that Swap Provider, save to
the extent such termination payment may be satisfied by any
Swap Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments) and from
amounts received from the Series 1 Class A1 Dollar Currency
Swap Provider to repay the Series 1 Class A1 Notes until the
Series 1 Class A1 Notes have been repaid in full;
(B) second, to pay amounts (including such part of any termination
payment) due to the Series 1 Class A2 Euro Currency Swap
Provider under the Series 1 Class A2 Euro Currency Swap
(except for any termination payment or any part thereof due
and payable to that Swap Provider as a result of a Euro
Currency Swap Provider Default by that Swap Provider, save to
the extent such termination payment may be satisfied by any
Swap Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments) and from
amounts received from the Series 1 Class A2 Euro Currency Swap
Provider to repay the Series 1 Class A2 Notes until the Series
1 Class A2 Notes have been repaid in full;
(C) third, in no order of priority between them but in proportion
to the amounts due:
39
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class A3 Dollar Currency
Swap Provider under the Series 1 Class A3 Dollar
Currency Swap (except for any termination payment or
any part thereof due and payable to that Swap Provider
as a result of a Dollar Currency Swap Provider Default
by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 1 Class A3 Dollar Currency Swap and applied
in accordance with this order of priority of payments)
and from amounts received from the Series 1 Class A3
Dollar Currency Swap Provider to repay the Series 1
Class A3 Notes until the Series 1 Class A3 Notes have
been repaid in full;
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class A1 Dollar Currency
Swap Provider under the Series 2 Class A1 Dollar
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received from the Series 2
Class A1 Dollar Currency Swap Provider to repay the
Series 2 Class A1 Notes until the Series 2 Class A1
Notes have been repaid in full;
(3) to pay amounts (including such part of any termination
payment) due to the Series 2 Class A2 Euro Currency
Swap Provider under the Series 2 Class A2 Euro
Currency Swap (except for any termination payment or
any part thereof due and payable to that Swap Provider
as a result of a Euro Currency Swap Provider Default
by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 2 Class A2 Euro Currency Swap and applied
in accordance with this order of priority of payments)
and from amounts received from the Series 2 Class A2
Euro Currency Swap Provider to repay the Series 2
Class A2 Notes until the Series 2 Class A2 Notes have
been repaid in full;
(4) to repay the Series 3 Class A1 Notes until the Series
3 Class A1 Notes have been repaid in full; and
(5) to repay the Series 3 Class A2 Notes until the Series
3 Class A2 Notes have been repaid in full;
(D) fourth, in no order of priority among them, but in proportion
to the amounts due:
40
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class B Dollar Currency
Swap Provider under the Series 1 Class B Dollar
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received from the Series 1
Class B Dollar Currency Swap Provider to repay the
Series 1 Class B Notes until the Series 1 Class B
Notes have been repaid in full;
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class B Euro Currency
Swap Provider under the Series 2 Class B Euro Currency
Swap (except for any termination payment or any amount
thereof due and payable to that Swap Provider as a
result of a Euro Currency Swap Provider Default by
that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments)
and from amounts received from the Series 2 Class B
Euro Currency Swap Provider to repay the Series 2
Class B Notes until the Series 2 Class B Notes have
been repaid in full; and
(3) to repay the Series 3 Class B Notes until the Series 3
Class B Notes have been repaid in full;
(E) fifth, in no order of priority among them, but in proportion
to the amounts due:
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class M Dollar Currency
Swap Provider under the Series 1 Class M Dollar
Currency Swap (except for any termination payment or
any part thereof due and payable to that Swap
Provider, as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment, received by the Current
Issuer following a Downgrade Termination Event in
respect of the Series 1 Class M Dollar Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received from the Series
1 Class M Dollar Currency Swap Provider to repay the
Series 1 Class M Notes until the Series 1 Class M
Notes have been repaid in full;
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class M Euro Currency
Swap Provider under the Series 2 Class M Euro Currency
Swap (except for any termination payment or any part
thereof due and payable to that Swap Provider as a
result of a Euro Currency Swap Provider Default by
that Swap Provider, save to
41
the extent such termination payment may be satisfied
by any Swap Replacement Payment received by the
Current Issuer following a Downgrade Termination Event
in respect of the Series 2 Class M Euro Currency Swap
and applied in accordance with this order of priority
of payments) and from amounts received from the Series
2 Class M Euro Currency Swap Provider to repay the
Series 2 Class M Notes until the Series 2 Class M
Notes have been repaid in full; and
(3) to repay the Series 3 Class M Notes until the Series 3
Class M Notes have been repaid in full; and
(F) last, in no order of priority among them, but in proportion to
the amounts due:
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class C Dollar Currency
Swap Provider under the Series 1 Class C Dollar
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received from the Series 1
Class C Dollar Currency Swap Provider to repay the
Series 1 Class C Notes until the Series 1 Class C
Notes have been repaid in full;
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class C Euro Currency
Swap Provider under the Series 2 Class C Euro Currency
Swap (except for any termination payment or any amount
thereof due and payable to that Swap Provider as a
result of a Euro Currency Swap Provider Default by
that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments)
and from amounts received from the Series 2 Class C
Euro Currency Swap Provider to repay the Series 2
Class C Notes until the Series 2 Class C Notes have
been repaid in full; and
(3) to repay the Series 3 Class C Notes until the Series 3
Class C Notes have been repaid in full.
If any Swap Collateral Available Principal Amounts are received by
the Current Issuer on a Payment Date, such Swap Collateral Available
Principal Amounts shall be applied by the Current Issuer Cash Manager
on that Payment Date in the same manner as it would have applied the
receipts which such Swap Collateral Available Principal Amounts
replace.
42
4.3 Distribution of Current Issuer Available Principal Receipts Following
the Occurrence of an Asset Trigger Event
Following the occurrence of an Asset Trigger Event but prior to
enforcement of the Funding Security under the Funding Deed of Charge
and/or the Current Issuer Security under the Current Issuer Deed of
Charge, the Current Issuer Cash Manager will apply Current Issuer
Available Principal Receipts in the following order of priority:
(A) first, in no order of priority among them, but in proportion
to the amounts due:
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class A1 Dollar Currency
Swap Provider under the Series 1 Class A1 Dollar
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received from the Series 1
Class A1 Dollar Currency Swap Provider to repay the
Series 1 Class A1 Notes until the Series 1 Class A1
Notes have been repaid in full;
(2) to pay amounts (including such part of any termination
payment) due to the Series 1 Class A2 Euro Currency
Swap Provider under the Series 1 Class A2 Euro
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Euro Currency Swap Provider
Default by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments)
and from amounts received from the Series 1 Class A2
Euro Currency Swap Provider to repay the Series 1
Class A2 Notes until the Series 1 Class A2 Notes have
been repaid in full;
(3) to pay amounts (including such part of any termination
payment) due to the Series 1 Class A3 Dollar Currency
Swap Provider under the Series 1 Class A3 Dollar
Currency Swap (except for any termination payment or
any part thereof due and payable to that Swap Provider
as a result of a Dollar Currency Swap Provider Default
by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 1 Class A3 Dollar Currency Swap and applied
in accordance with this order of priority of payments)
and from amounts received from the Series 1 Class A3
Dollar Currency Swap Provider to repay the Series 1
Class A3 Notes until the Series 1 Class A3 Notes have
been repaid in full;
43
(4) to pay amounts (including such part of any termination
payment) due to the Series 2 Class A1 Dollar Currency
Swap Provider under the Series 2 Class A1 Dollar
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received from the Series 2
Class A1 Dollar Currency Swap Provider to repay the
Series 2 Class A1 Notes until the Series 2 Class A1
Notes have been repaid in full;
(5) to pay amounts (including such part of any termination
payment) due to the Series 2 Class A2 Euro Currency
Swap Provider under the Series 2 Class A2 Euro
Currency Swap (except for any termination payment or
any part thereof due and payable to that Swap Provider
as a result of a Euro Currency Swap Provider Default
by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 2 Class A2 Euro Currency Swap and applied
in accordance with this order of priority of payments)
and from amounts received from the Series 2 Class A2
Euro Currency Swap Provider to repay the Series 2
Class A2 Notes until the Series 2 Class A2 Notes have
been repaid in full;
(6) to repay the Series 3 Class A1 Notes until the Series
3 Class A1 Notes have been repaid in full; and
(5) to repay the Series 3 Class A2 Notes until the Series
3 Class A2 Notes have been repaid in full;
(B) second, in no order of priority among them, but in proportion
to the amounts due:
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class B Dollar Currency
Swap Provider under the Series 1 Class B Dollar
Currency Swap (except for any termination payment or
any amount thereof due and payable to that Swap
Provider as a result of a Dollar Currency Swap
Provider Default by that Swap Provider, save to the
extent such termination payment may be satisfied by
any Swap Replacement Payment received by the Current
Issuer following a Downgrade Termination Event and
applied in accordance with this order of priority of
payments) and from amounts received from the Series 1
Class B Dollar Currency Swap Provider to repay the
Series 1 Class B Notes until the Series 1 Class B
Notes have been repaid in full; and
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class B Euro Currency
Swap Provider under the Series
44
2 Class B Euro Currency Swap (except for any
termination payment or any amount thereof due and
payable to that Swap Provider as a result of a Euro
Currency Swap Provider Default by that Swap Provider,
save to the extent such termination payment may be
satisfied by any Swap Replacement Payment received by
the Current Issuer following a Downgrade Termination
Event and applied in accordance with this order of
priority of payments) and from amounts received from
the Series 2 Class B Euro Currency Swap Provider to
repay the Series 2 Class B Notes until the Series 2
Class B Notes have been repaid in full; and
(3) to repay the Series 3 Class B Notes until the Series 3
Class B Notes have been repaid in full;
(C) third, in no order of priority among them, but in proportion
to the amounts due:
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class M Dollar Currency
Swap Provider under the Series 1 Class M Dollar
Currency Swap (except for any termination payment or
any part thereof due and payable to that Swap Provider
as a result of a Dollar Currency Swap Provider Default
by that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event in respect of
the Series 1 Class M Dollar Currency Swap and applied
in accordance with this order of priority of payments)
and from amounts received from the Series 1 Class M
Dollar Currency Swap Provider to repay the Series 1
Class M Notes until the Series 1 Class M Notes have
been repaid in full; and
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class M Euro Currency
Swap Provider under the Series 2 Class M Euro Currency
Swap (except for any termination payment or any part
thereof due and payable to that Swap Provider as a
result of a Euro Currency Swap Provider Default by
that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Issuer following a
Downgrade Termination Event in respect of the Series 2
Class M Euro Currency Swap and applied in accordance
with this order of priority of payments) and from
amounts received from the Series 2 Class M Euro
Currency Swap Provider to repay the Series 2 Class M
Notes until the Series 2 Class M Notes have been
repaid in full; and
(3) to repay the Series 3 Class M Notes until the Series 3
Class M Notes have been repaid in full; and
(D) last, in no order of priority among them, but in proportion to
the amounts due:
(1) to pay amounts (including such part of any termination
payment) due to the Series 1 Class C Dollar Currency
Swap Provider under the
45
Series 1 Class C Dollar Currency Swap (except for any
termination payment or any amount thereof due and
payable to that Swap Provider as a result of a Dollar
Currency Swap Provider Default by that Swap Provider,
save to the extent such termination payment may be
satisfied by any Swap Replacement Payment received by
the Current Issuer following a Downgrade Termination
Event and applied in accordance with this order of
priority of payments) and from amounts received from
the Series 1 Class C Dollar Currency Swap Provider to
repay the Series 1 Class C Notes until the Series 1
Class C Notes have been repaid in full;
(2) to pay amounts (including such part of any termination
payment) due to the Series 2 Class C Euro Currency
Swap Provider under the Series 2 Class C Euro Currency
Swap (except for any termination payment or any amount
thereof due and payable to that Swap Provider as a
result of a Euro Currency Swap Provider Default by
that Swap Provider, save to the extent such
termination payment may be satisfied by any Swap
Replacement Payment received by the Current Issuer
following a Downgrade Termination Event and applied in
accordance with this order of priority of payments)
and from amounts received from the Series 2 Class C
Euro Currency Swap Provider to repay the Series 2
Class C Notes until the Series 2 Class C Notes have
been repaid in full; and
(3) to repay the Series 3 Class C Notes until the Series 3
Class C Notes have been repaid in full.
If any Swap Collateral Available Principal Amounts are received by the
Current Issuer on a Payment Date, such Swap Collateral Available
Principal Amounts shall be applied by the Current Issuer Cash Manager
on that Payment Date in the same manner as it would have applied the
receipts which such Swap Collateral Available Principal Amounts
replace.
5. Use of Ledgers
The Current Issuer Cash Manager shall forthwith record monies
received or payments made by it on behalf of the Current Issuer in
the ledgers in the manner set out in this Agreement. If, at any time,
the Current Issuer Cash Manager is in any doubt as to which ledger a
particular amount should be credited or debited, it shall consult
with the Note Trustee thereon.
Except in the case of the Current Issuer Principal Deficiency Ledger
and except as provided in Clause 2.4.(b) of the Current Issuer Bank
Account Agreement, a debit item shall only be made in respect of any
of the Current Issuer Ledgers, and the corresponding payment or
transfer (if any) may only be made from the Current Issuer
Transaction Accounts, to the extent that such entry does not cause
the relevant ledger to have a debit balance. In the case of the
Current Issuer Principal Deficiency Ledger and each Current Issuer
Principal Deficiency Sub Ledger, a credit item shall only be made to
the extent that such entry does not cause such ledger to have a
credit balance.
46
6. Current Issuer Revenue Ledger
The Current Issuer Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Current Issuer
Revenue Ledger:
(i) all interest fees and any other amount (not including
principal), if any, paid by Funding to the Current
Issuer under the terms of the Current Issuer
Intercompany Loan;
(ii) all interest received by the Current Issuer in respect
of the Current Issuer Bank Accounts;
(iii) all amounts received by the Current Issuer
representing income on any Current Issuer Authorised
Investments;
(iv) all amounts (including any early termination payment
which is to be used to acquire, if necessary, a new
basis rate swap) received by the Current Issuer under
the Basis Rate Swap Agreement;
(v) all revenue amounts (including any early termination
payment which is to be used to acquire, if necessary,
a new currency swap) received by the Current Issuer
under the Currency Swap Agreements;
(vi) all revenue amounts (including any early termination
payment which is to be used to acquire, if necessary,
a new interest rate swap) received by the Current
Issuer under the Interest Rate Swap Agreement; and
(vii) any amount debited to the Current Issuer Principal
Ledger under paragraph 8; and
(b) any payment or provision made under paragraphs 1 and 3 of this
Schedule 2 shall be debited to the Current Issuer Revenue
Ledger.
7. Current Issuer Principal Ledger
Without prejudice to paragraph 8 below, the Current Issuer Cash
Manager shall ensure that:
(a) the following amounts shall be credited to the Current Issuer
Principal Ledger:
(i) all principal paid by Funding to the Current Issuer
under the terms of the Current Issuer Intercompany
Loan;
(ii) amounts credited to the Current Issuer Principal
Deficiency Ledger under paragraphs 3 and 8 (excluding
amounts credited to the Current Issuer Principal
Deficiency Ledger under paragraph 8(d)); and
(b) any payment or provision made under paragraph 4 of this
Schedule 2 shall be debited to the Current Issuer Principal
Ledger.
47
8. Current Issuer Principal Deficiency Ledger
(a) Without prejudice to paragraph 7, the Current Issuer Cash
Manager shall ensure that there shall be debited to the
Current Issuer Principal Deficiency Ledger:
(i) principal deficiencies arising from Losses on the
Mortgage Loans which have been allocated by Funding to
the Current Issuer Intercompany Loan;
(ii) the use of Current Issuer Available Principal Receipts
to meet any deficiency in Current Issuer Available
Revenue Receipts; and
(iii) the use of Funding Available Principal Receipts to
fund the Current Issuer Liquidity Reserve Fund, if
any.
(b) The Current Issuer Cash Manager shall ensure that there shall
be credited to the Current Issuer Principal Deficiency Ledger
any amount to be credited in accordance with paragraph 3
above.
(c) Amounts to be debited to the Current Issuer Principal
Deficiency Ledger shall be debited in the following order:
(i) first, on the Class C Principal Deficiency Sub Ledger,
until the balance of the Class C Principal Deficiency
Sub Ledger is equal to the aggregate Outstanding
Principal Balance of the Class C Notes;
(ii) second, on the Class M Principal Deficiency Sub
Ledger, until the balance of the Class M Principal
Deficiency Sub Ledger is equal to the aggregate
Outstanding Principal Balance of the Class M Notes;
(iii) third, on the Class B Principal Deficiency Sub Ledger,
until the balance of the Class B Principal Deficiency
Sub Ledger is equal to the aggregate Outstanding
Principal Balance of the Class B Notes; and
(iv) last, on the Class A Principal Deficiency Sub Ledger,
at which point an Asset Trigger Event will have
occurred.
(d) The Current Issuer Cash Manager shall ensure that there shall
be credited to the Current Issuer Principal Deficiency Ledger
amounts to be credited to cure the deficiencies set out below
and each time such a credit is made, the Current Issuer shall
deemed to have cured the relevant deficiency in the following
order:
(i) first, deficiencies which have resulted from the
application of Current Issuer Available Principal
Receipts to meet any deficiency in Current Issuer
Available Revenue Receipts;
(ii) second, deficiencies which have arisen from Principal
Losses on the Mortgage Loans being allocated by
Funding to the Current Issuer Intercompany Loan; and
48
(iii) last, deficiencies which have arisen from the
application by Funding of Funding Allocable Principal
Receipts to fund the Current Issuer Liquidity Reserve
Fund.
(e) If, on any Payment Date, any Funding Available Revenue
Receipts are applied by Funding as Funding Available Principal
Receipts pursuant to rule 4 of the rules of application of
Funding Available Revenue Receipts as set forth in Part 1 of
Schedule 3 to the Funding Deed of Charge, then on such Payment
Date the Current Issuer Cash Manger shall ensure that there
shall be credited to the Current Issuer Principal Deficiency
Ledger an amount equal to the amount so applied as Funding
Available Principal Receipts.
9. Records
(a) The Current Issuer Cash Manager shall ensure that a separate
record is kept of any amount received from each of the Current
Issuer Swap Providers pursuant to each of the Current Issuer
Swap Agreements.
(b) The Current Issuer Cash Manager hereby agrees that, each time
the Current Issuer Cash Manager records a debit on a Current
Issuer Principal Deficiency Sub Ledger, the Current Issuer
Cash Manager shall also record on such Current Issuer
Principal Deficiency Sub Ledger whether such debit was caused
by (A) Losses on the Mortgage Loans which have been allocated
by Funding to the Current Issuer Intercompany Loan, (B) the
application of Current Issuer Available Principal Receipts to
meet any deficiency in Current Issuer Available Revenue
Receipts, or (C) the application of Funding Available
Principal Receipts to fund the Current Issuer Liquidity
Reserve Fund, if any.
(c) The Current Issuer Cash Manager hereby agrees that, each time
the Current Issuer Cash Manager records a credit on the
Current Issuer Principal Deficiency Ledger to cure a
deficiency, the Current Issuer Cash Manager shall also record
on such Current Issuer Principal Deficiency Ledger the source
of such deficiency as being one of the categories set forth in
8(d) above (as appropriate).
10. Swap Collateral Ledger
In connection with Swap Collateral the Current Issuer Cash Manager
shall ensure that the appropriate debits and credits are made to the
Swap Collateral Ledger in accordance with Clause 5.6 (Swap
Collateral).
49
SCHEDULE 3
Form of Issuer Quarterly Report
Granite Mortgages 04-3 plc
Profit & Loss Account
Period Ended
This Prior
Quarter Quarter
(GBP) 000's (GBP) 000's
Interest Receivable - Intercompany Loan
Interest Receivable - Cash Deposits/Authorised
Investments
-----------------------
0 0
Interest Payable - Notes
Interest Payable
-----------------------
0 0
-----------------------
Net Operating Income 0 0
Other Income
Operating Expenses
-----------------------
Profit/loss on ordinary activities before tax 0 0
Taxation
-----------------------
Profit/loss on ordinary activities after tax 0 0
Dividend 0 0
Retained profit brought forward 0 0
-----------------------
Retained profit for the year 0 0
=======================
50
Granite Mortgages 04-3 plc
Balance Sheet
Period Ended
(GBP) 000's (GBP) 000's
Fixed Asset Investments
Intercompany Lending 0
Current Assets
Interest Receivable 0
Other debtors 0
Cash at Bank 0
Current Issuer Transaction Account:
------------
0
------------
Creditors: Amounts falling due within one year
Accruals 0
Interest Payable Accrual 0
Taxation 0
------------
0
------------
Net current assets 0
Creditors: Amounts falling due after one year
Amount due to Noteholders 0
------------
Total Assets less current liabilities 0
============
Share Capital 0
Reserves 0
------------
0
============
51
Granite Mortgages 04-3 plc
Balance Sheet
Period Ended
Current Issuer Notes to Balance Sheet:
Principal Deficiency Ledger
Class A Principal Deficiency Sub Ledger
Opening PDL Balance
Losses this Quarter
Amount of PDL top-up
Closing PDL Balance
Class B Principal Deficiency Sub Ledger
Opening PDL Balance
Losses this Quarter
Amount of PDL top-up
Closing PDL Balance
Class M Principal Deficiency Sub Ledger
Opening PDL Balance
Losses this Quarter
Amount of PDL top-up
Closing PDL Balance
Class C Principal Deficiency Sub Ledger
Opening PDL Balance
Losses this Quarter
Amount of PDL top-up
Closing PDL Balance
52
Granite Mortgages 04-3 plc
Balance Sheet
Period Ended
Granite Mortgages 04-3 plc
Notes Outstanding
Period Ended
Series 1 Series 1 Series 1 Series 2 Series 2 Series 3 Series 3
Class A1 Class A2 Class A3 Class A1 Class A2 Class A1 Class A2
Moody's Current Rating
Fitch Ratings Current Rating
S&P Current Rating
Series 1 Series 2 Series 3
Class B Class B Class B
Moody's Current Rating
Fitch Ratings Current Rating
S&P Current Rating
Series 1 Series 2 Series 3
Class M Class M Class M
Moody's Current Rating
Fitch Ratings Current Rating
S&P Current Rating
Series 1 Series 2 Series 3
Class C Class C Class C
Moody's Current Rating
Fitch Ratings Current Rating
S&P Current Rating
Series 1 Series 1 Series 1 Series 2 Series 2 Series 3 Series 3
Class A1 Class A2 Class A3 Class A1 Class A2 Class A1 Class A2
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
Series 1 Series 2 Series 3
Class B Class B Class B
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
Series 1 Series 2 Series 3
Class M Class M Class M
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
Series 1 Series 2 Series 3
Class C Class C Class C
Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note Principal
53
Granite Mortgages 04-3 plc
Balance Sheet
Period Ended
Series 1 Series 1 Series 1 Series 2 Series 2 Series 3 Series 3
Class A1 Class A2 Class A3 Class A1 Class A2 Class A1 Class A2
Note Interest Margins
Step Up Dates
Step Up Margins
Series 1 Series 2 Series 3
Class B Class B Class B
Note Interest Margins
Step Up Dates
Step Up Margins
Series 1 Series 2 Series 3
Class M Class M Class M
Note Interest Margins
Step Up Dates
Step Up Margins
Series 1 Series 2 Series 3
Class C Class C Class C
Note Interest Margins
Step Up Dates
Step Up Margins
Payment Cycle
Payment Date
Next Payment Date
Amount Credited to Principal
Deficiency Sub Ledger:
Current Quarter:
Aggregate:
54
SCHEDULE 4
Controlled Amortisation Amount/Target Balance
The "Controlled Amortisation Amount" for each Class of Current Issuer Notes
for any Payment Date set forth below is an amount equal to the amount which
the Current Issuer would be required to repay in respect of such Class of
Current Issuer Notes so that on the relevant Payment Date the aggregate
Principal Amount Outstanding of such Class of Current Issuer Notes has been
reduced to (but is not less than) the "Target Balance" set out in the
following table:
55
[FIGURES TO BE INSERTED IN NEXT DRAFT]
- --------------------------------------------------------------------------------------------------------------
Payment date target balance for series 1 target balance for series 1 target balance for series 1
occurring in: class A1 notes class A2 notes class A3 notes
- ------------- --------------------------- --------------------------- ---------------------------
(GBP) US$ (GBP) $ (GBP) $
----------- ------------ ---------- ----------- ----------- -----------
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Payment date target balance for series 1 target balance for series 1 target balance for series 1
occurring in: class B notes class M notes class C notes
- ------------- --------------------------- --------------------------- ---------------------------
(GBP) US$ (GBP) $ (GBP) $
----------- ------------ ---------- ----------- ----------- -----------
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- - -
- --------------------------------------------------------------------------------------------------------------
56
- --------------------------------------------------------------------------------------------------------------
Payment date target balance for series 2 target balance for series 2 target balance for series 2
occurring in: class A1 notes class A2 notes class B notes
- ------------- --------------------------- --------------------------- ---------------------------
(GBP) US$ (GBP) (Euro) (GBP) (Euro)
----------- ------------ ---------- ----------- ----------- -----------
- --------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Payment date target balance for series 2 target balance for series 2
occurring in: class M notes class C notes
- ------------- --------------------------- ---------------------------
(GBP) (Euro) (GBP) (Euro)
----------- ------------ ---------- -----------
- -
- -
- ------------------------------------------------------------------------------
57
- --------------------------------------------------------------------------------------------------------------
Payment date target balance for series 3 target balance for series 3 target balance for series 3
occurring in: class A1 notes class A2 notes class B notes
- ------------- --------------------------- --------------------------- ---------------------------
(GBP) GBP (GBP) GBP (GBP) GBP
----------- ------------ ---------- ----------- ----------- -----------
- --------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Payment date target balance for series 3 target balance for series 3
occurring in: class M notes class C notes
- ------------- --------------------------- ---------------------------
(GBP) GBP (GBP) GBP
----------- ------------ ---------- -----------
- ------------------------------------------------------------------------------
58
PROVIDED THAT on the Payment Date immediately following the Step-up Date in
September 2011 in respect of the Current Issuer and on each Payment Date
thereafter:
(1) the Target Balance for the Series 1 Class A1 Notes and the Series 1
Class A2 Notes will be zero; and
(2) the Target Balances for each other Class of Notes will be an amount
equal to the greater of:
(a) zero, and
(b) the aggregate Principal Amount Outstanding on such Class of
Notes as at the immediately preceding Payment Date for Group 2
Issuers (after taking into account principal payments on such
Payment Date) less an amount equal the product of:
(i) the sum of (1) the aggregate of the product of (A) the
Mortgages Trustee Principal Receipts for each
Distribution Date since the immediately preceding
Payment Date for Group 2 Issuers, and (B) the Funding
Share Percentage or, as applicable, the Weighted
Average Funding Share Percentage applicable as at the
later to occur of the Assignment Date, the Funding
Contribution Date and the Distribution Date, in each
case immediately preceding each Distribution Date
referred to in (A) above and (2) the amount standing
to the credit of the Funding Principal Ledger as at
the end of the preceding Payment Date for Group 2
Issuers (after application of Funding Available
Principal Receipts on that Preceding Payment Date);
and
(ii) the quotient of (A) the Outstanding Principal Balance
on such Current Issuer's Intercompany Loan as at the
immediately preceding Payment Date for Group 2 Issuers
(after taking into account principal payments on such
Payment Date) less the aggregate of amounts recorded
on the Principal Deficiency Ledger of the Current
Issuer and less the aggregate Outstanding Principal
Balances of all Special Repayment Notes divided by (B)
the aggregate Outstanding Principal Balance on all
Intercompany Loans as at the immediately preceding
Payment Date for Group 2 Issuers (after taking into
account principal payments on such Payment Date) less
the sum of (1) the aggregate Outstanding Principal
Balance of all Special Repayment Notes and (2) the
aggregate of amounts recorded on the Principal
Deficiency Ledgers of all Issuers; and
(iii) either:
(A) if the Class A Notes have not been repaid in
full on that Payment Date and either the
Issuer Arrears Test or the Issuer Reserve
Requirement has not been satisfied on such
Payment Date:
(I) in relation to Class A Notes, the
quotient of (A) the aggregate
Principal Amount Outstanding on the
59
relevant Class of Notes as at the
immediately preceding Payment Date for
Group 2 Issuers (after taking into
account principal payments on Payment
Date), divided by (B) the Aggregate
Principal Amount Outstanding on all
Class A Notes of the Issuer as at the
immediately preceding Payment Date for
Group 2 Issuers (after taking into
account principal payments on such
Payment Date); and
(II) in relation to any other Class of
Notes, zero; or
(B) In any other case, the quotient of (A) the
aggregate Principal Amount Outstanding on the
relevant Class of Notes as at the immediately
preceding Payment Date for Group 2 Issuers
(after taking into account principal payments
on such Payment Date) divided by (B) the
aggregate Principal Amount Outstanding on all
Notes of the Current Issuer as at the
immediately preceding Payment Date for Group 2
Issuers (after taking into account principal
payments on such Payment Date).
Notwithstanding the foregoing, upon and after the occurrence of an
ACA Trigger Event in respect of an ACA Issuer the Target Balance for
each Class of Notes of such ACA Issuer will be zero.
To the extent not repaid earlier, the full Principal Amount
Outstanding on a Class of Current Issuer Notes will become due and
payable on the final maturity date of that Class of Notes.
60
SCHEDULE 5
Current Issuer Cash Manager Representations and Warranties
The Current Issuer Cash Manager makes the following representations and
warranties to each of the Mortgages Trustee, Funding and the Note 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 Current
Issuer Cash Manager, and the Current Issuer Cash Manager is not
insolvent.
8. Financial Statements: The most recent financial statements of the
Current Issuer Cash Manager:
61
(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 Current Issuer
Cash Manager; and
(c) save as disclosed therein, give a true and fair view of the
financial condition and operations of the Current Issuer Cash
Manager during the relevant financial year.
9. No Adverse Change: Since the date as of which the most recent
financial statements of the Current Issuer Cash Manager were stated to
be prepared, there has been:
(a) no significant change in the financial position of the Current
Issuer Cash Manager; and
(b) no material adverse change in the financial position or
prospects of the Current Issuer 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 Current Issuer 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 Current Issuer Cash Manager is true and accurate in all
material respects and not misleading in any material respect.
The Current Issuer Cash Manager has made all proper inquiries to ascertain and
to verify the foregoing.
62
EXECUTION PAGE
The Current Issuer Cash Manager
Executed by
NORTHERN ROCK PLC
as follows:
Signed for and on its By
behalf by one of its duly ------------------------------------
authorised attorneys/ Duly Authorised Attorney/Signatory
signatories
Name
----------------------------------
The Current Issuer
Executed by
GRANITE MORTGAGES 04-3 PLC
as follows:
Signed for and on its By
behalf by one of its duly ------------------------------------
authorised attorneys/ Duly Authorised Attorney/Signatory
signatories
Name
----------------------------------
The Note Trustee
Executed by
THE BANK OF NEW YORK
as follows:
Signed for and on its By
behalf by one of its duly ------------------------------------
authorised attorneys/ Duly Authorised Attorney/Signatory
signatories
Name
----------------------------------
63