EXHIBIT 10.5
Dated [22] September 2004
-----------------
GRANITE FINANCE FUNDING LIMITED
as Funding
NORTHERN ROCK PLC
as Current Issuer Start-Up Loan Provider
- and -
THE BANK OF NEW YORK
as Security Trustee
_________________________________________
ISSUER 04-3 START-UP LOAN AGREEMENT
_________________________________________
SIDLEY AUSTIN BROWN & WOOD
WOOLGATE EXCHANGE
25 BASINGHALL STREET
LONDON EC2V 5HA
TELEPHONE 020 7360 3600
FACSIMILE 020 7626 7937
REF: UK: 30507-30030/664681
CONTENTS
1. Definitions and Interpretation...........................................1
2. The Advance..............................................................1
3. Interest.................................................................2
4. Repayment................................................................2
5. Acceleration.............................................................3
6. Payments and limited recourse............................................3
7. Subordination and Security...............................................3
8. Notices..................................................................5
9. Taxes....................................................................5
10. Remedies and Waivers.....................................................6
11. Assignments and Transfer.................................................6
12. Alternative Payment Arrangements.........................................6
13. Security Trustee as a Party..............................................6
14. No Partnership...........................................................7
15. Variation................................................................7
16. Execution in Counterparts; Severability..................................7
17. Third Party Rights.......................................................7
18. Governing Law and Jurisdiction; Process Agents; Appropriate Forum........7
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES 8
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THIS ISSUER 04-3 START-UP LOAN AGREEMENT is made on [22] September 2004
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey but acting out of
its branch office established in England (registered overseas company
number FC022999 and branch number BR005916) at 69 Park Lane, Croydon CR9
1TQ as Funding;
(2) 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 Current Issuer Start-Up Loan Provider; and
(3) THE BANK OF NEW YORK, whose principal office is at 48th Floor, One Canada
Square, London E14 5AL in its capacity as Security Trustee.
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 Eighth
Amendment and Restatement 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.
2. The Advance
The Current Issuer Start-Up Loan Provider grants to Funding
simultaneously with the issue by the Current Issuer of the Current Issuer
Notes (and upon the simultaneous issuance by the Current Issuer to
Funding of the Current Issuer Intercompany Loan) and upon the terms and
subject to the conditions hereof, a loan in an aggregate amount of
(GBP)[ ] ([ ]) (the "Advance") on the Closing Date for the purposes of
providingfor the partial funding of the Issuer Reserve Fund and providing
for Funding's costs and expenses in respect of the increase of the Funding
Share of the Trust Property and in respect of amounts payable to the
Current Issuer by Funding as fees under the Current Issuer Intercompany
Loan. The Advance shall be paid into the Funding Transaction Account.
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3. Interest
3.1 The Advance and any interest capitalised pursuant to Clause 3.4 will bear
interest in accordance with Clause 3.3 at a rate of LIBOR for three-month
sterling deposits plus [ ] % per annum from (and including) the Closing
Date until the Advance and all accrued interest thereon is repaid in
full. Prior to the service of an Intercompany Loan Enforcement Notice,
Funding shall pay interest on the Advance on each Payment Date if, and
only to the extent that, there are Funding Available Revenue Receipts
available therefor after making the payments and provisions referred to
in the Funding Pre-Enforcement Revenue Priority of Payments.
3.2 Subject to Clauses 6.2 and 6.3, interest on the Advance and any interest
capitalised pursuant to Clause 3.4 will be payable by Funding in arrear
on each Payment Date in accordance with the Funding Priority of Payments.
3.3 Interest shall be calculated by reference to any Interest Period on the
basis of the actual number of days elapsed and a 365 day year (or, in the
case of a leap year, a 366 day year).
3.4 Any interest accrued in respect of an Interest Period but not paid on the
Payment Date relating thereto shall be capitalised forthwith.
4. Repayment
4.1 Prior to the service of an Intercompany Loan Enforcement Notice, Funding
shall repay principal of the Advance (including any interest capitalised
pursuant to Clause 3.4) on each Payment Date if, and only to the extent
that, there are Funding Available Revenue Receipts available therefor
after making the payments and provisions referred to in the Funding
Pre-Enforcement Revenue Priority of Payments.
4.2 The Cash Manager is responsible, pursuant to the Cash Management
Agreement, for determining the amount of Funding Available Revenue
Receipts as at any Payment Date and each determination so made shall (in
the absence of negligence, wilful default, bad faith or manifest error)
be final and binding on the Current Issuer Start-Up Loan Provider.
4.3 Subject to Clauses 5, 6.2, 6.3 and 7, on any Payment Date on which all
the Intercompany Loans have been repaid in full, Funding shall
immediately repay the Advance (including any interest capitalised
pursuant to Clause 3.4) and pay any accrued interest.
4.4 The Current Issuer Start-Up Loan Provider hereby acknowledges that
Funding has entered into Previous Start-Up Loan Agreements with Previous
Start-Up Loan Providers and that from time to time Funding may enter into
New Start-Up Loan Agreements with New Start-Up Loan Providers and that
the obligation of Funding to repay the Current Issuer Start-Up Loan, any
other existing Start-Up Loans and any New Start-Up Loan will rank pari
passu and will be paid pro rata between themselves. The Current Issuer
Start-Up Loan Provider further acknowledges that the Funding
Pre-Enforcement Revenue Priority of Payments and the Funding
Post-Enforcement Priority of Payments set out in the Funding Deed of
Charge, respectively, will be amended to reflect the entry by Funding
into New Start-Up Loan
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Agreements and related agreements from time to time and agrees to execute
such documents as are necessary or required by the Rating Agencies for
the purpose of including the New Start-Up Loan Provider (and any other
relevant party) in the Transaction Documents to effect those amendments.
5. Acceleration
If an Intercompany Loan Enforcement Notice is served, the Advance
(including any interest capitalised pursuant to Clause 3.4) and accrued
interest shall, subject to the Funding Deed of Charge, become immediately
due and payable.
6. Payments and limited recourse
6.1 All payments to be made hereunder by Funding shall be made in sterling in
immediately available cleared funds to the Current Issuer Start-Up Loan
Provider's account as specified in writing to Funding for this purpose.
If any sum falls due hereunder otherwise than on a London Business Day,
it shall be paid on the next succeeding London Business Day.
6.2 Prior to service of an Intercompany Loan Enforcement Notice or repayment
in full of all the Intercompany Loans, amounts of interest, principal and
any other amounts due hereunder shall be paid only in accordance with
Clauses 3.1, 4.1 and 7.1, respectively, and the provisions of the Funding
Deed of Charge.
6.3 If, upon the Advance becoming due and payable pursuant to Clauses 4.3 or
5, Funding has insufficient funds available to meet its obligations
hereunder in full on such date then:
(a) Funding shall utilise its funds on such date to the extent available
in making payments to the Current Issuer Start-Up Loan Provider to
repay the Advance (including any interest capitalised pursuant to
Clause 3.4) and accrued interest thereon; and
(b) the obligations of Funding to pay the shortfall together with any
amounts falling due and payable thereafter shall on any day be
limited to the available funds actually received by Funding from
time to time subsequent to such date, together with the proceeds of
the enforcement of the security, paid to the Current Issuer Start-Up
Loan Provider pursuant to Clause 8 (Upon Enforcement) of the Funding
Deed of Charge,
provided that the Current Issuer Start-Up Loan Provider shall not release
Funding from Funding's obligation to pay the remaining amount that would
have been due under this Agreement had this Clause 6.3 not applied.
7. Subordination and Security
7.1 The parties hereby agree that repayments in respect of the Advance shall
be subordinated to, inter alia, payments of principal and interest on the
Current Issuer Intercompany Loan and all other payments or provisions
ranking in priority to payments to be made to the Current Issuer Start-Up
Loan Provider under this
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Agreement in accordance with the Funding Priority of Payments and the
Funding Deed of Charge.
7.2 The Current Issuer Start-Up Loan Provider further agrees that, without
prejudice to Clause 8 (Upon Enforcement) of the Funding Deed of Charge,
its rights against Funding under this Agreement are limited to the extent
that Funding has sufficient assets to meet the Current Issuer Start-Up
Loan Provider's claim or any part thereof having taken into account all
other liabilities, both actual and contingent, of Funding which pursuant
to the Funding Deed of Charge rank pari passu with or in priority to its
liabilities to the Current Issuer Start-Up Loan Provider under this
Agreement and so that Funding shall not be obliged to make any payment to
the Current Issuer Start-Up Loan Provider hereunder if and to the extent
that the making of such payment would cause Funding to be or become
unable to pay its debts within the meaning of Section 123 of the
Insolvency Act 1986. However, if there are Funding Available Revenue
Receipts available but Funding does not repay the Advance (including any
interest capitalised pursuant to Clause 3.4) and/or interest thereon when
due (to the extent of such available Funding Available Revenue Receipts),
such non-repayment will constitute an event of default under this Current
Issuer Start-Up Loan Agreement.
7.3 Funding undertakes that its obligations to the Current Issuer Start-Up
Loan Provider hereunder shall at all times be secured by the Funding Deed
of Charge.
7.4 The Current Issuer Start-Up Loan Provider hereby undertakes to be bound
by the terms of the Funding Deed of Charge and the Cash Management
Agreement and in particular agrees that on enforcement of the security
created by the Funding Deed of Charge, all amounts of principal, interest
and any other amounts due hereunder shall rank in the order of priority
set out in the Funding Post-Enforcement Priority of Payments.
7.5 The Current Issuer Start-Up Loan Provider further covenants that, except
as permitted under the Funding Deed of Charge, it will not set off or
claim to set off the Advance or any interest thereon or any part thereof
against any liability owed by it to Funding.
7.6 The Current Issuer Start-Up Loan Provider undertakes that it will not,
for so long as any sum is outstanding under any Intercompany Loan
Agreement of any Issuer or for two years plus one day since the last day
on which any such sum was outstanding take any corporate action or other
steps or legal proceedings for the winding up, dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee, liquidator, sequestrator or similar
officer of Funding or of any or all of the revenues and assets of Funding
nor participate in any ex parte proceedings nor seek to enforce any
judgment against Funding, except as permitted under the provisions of the
Funding Deed of Charge.
7.7 The Current Issuer Start-Up Loan Provider acknowledges hereby that it is
not entitled, other than by virtue of Section 208 of the Income and
Corporation Taxes Act 1988 ("ICTA"), to any exemption from Tax in respect
of any interest payable to it under this Agreement.
7.8 The Current Issuer Start-Up Loan Provider further represents that,
pursuant to Section 212 of ICTA, any interest payable to it under this
Agreement is paid to it within the charge to UK corporation tax.
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7.9 The Current Issuer Start-Up Loan Provider further represents that it is
an institution which is a bank for the purposes of Section 840A of ICTA.
7.10 Each party to this Agreement other than the Security Trustee hereby makes
the representations and warranties to each of the other parties to this
Agreement that are specified in Schedule 1 hereto.
8. Notices
Any notices to be given pursuant to this Agreement or to any of the
parties hereto shall be sufficiently served if sent by prepaid first
class post or by facsimile transmission and shall be deemed to be given
(in the case of facsimile transmission) when despatched, (where delivered
by hand) on the day of delivery if delivered before 17.00 hours on a
Business Day or on the next Business Day if delivered thereafter or (in
the case of first class post) when it would be received in the ordinary
course of the post and shall be sent:
(a) in the case of Funding, to Granite Finance Funding Limited, 69 Park
Lane, Croydon CR9 1TQ (facsimile number 020 8409 8911 for the
attention of the Company Secretary with a copy to Northern Rock plc,
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
Facsimile: 0191 213 2203 for the attention of the Group Secretary;
(b) in the case of the Current Issuer Start-Up Loan Provider, to
Northern Rock plc, Northern Rock House, Gosforth, Newcastle upon
Tyne NE3 4PL Facsimile: 0191 213 2203 for the attention of the Group
Secretary; and
(c) in the case of the Security Trustee, to The Bank of New York (London
Branch), 48th Floor, One Canada Square, London E14 5AL (facsimile
020 7964 6399) for the attention of Corporate Trust Administration,
or to such other address or facsimile number as may from time to time be
notified by any party to the other by written notice in accordance with
the provisions of this Clause 8.
9. Taxes
9.1 All payments to be made by Funding to the Current Issuer Start-Up Loan
Provider hereunder shall be made free and clear of and without deduction
for or on account of Tax unless Funding is required by law to make such a
payment subject to the deduction or withholding of Tax, in which case
Funding shall promptly upon becoming aware thereof notify the Current
Issuer Start-Up Loan Provider of such obligation, and shall make such
payments subject to such deduction or withholding of Tax which it is
required to make.
9.2 If Funding makes any payment hereunder in respect of which it is required
to make any deduction or withholding, it shall pay the full amount
required to be deducted or withheld to the relevant taxation or other
authority within the time allowed for such payment under applicable law
and shall deliver to the Current Issuer Start-Up Loan Provider, within
thirty days after such payment falls due to the applicable authority,
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any original receipt (or a certified copy thereof) issued by such
authority evidencing such payment.
10. Remedies and Waivers
No failure by the Current Issuer Start-Up Loan Provider to exercise, nor
any delay by the Current Issuer Start-Up Loan Provider in exercising, any
right or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right or remedy prevent any further
or other exercise thereof or the exercise of any other right or remedy.
The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law.
11. Assignments and Transfer
11.1 Funding (other than in respect of any assignment by way of security
pursuant to the Funding Deed of Charge or under any Deed of Accession)
may not assign and/or transfer any of its rights and/or obligations under
this Agreement. The Current Issuer Start-Up Loan Provider may not assign
and/or transfer its rights under this Agreement without obtaining the
prior written consent of Funding, provided that such consent may only be
given if such assignment and/or transfer is by way of security, or, if
such assignment and/or transfer is to a person within the charge to
United Kingdom corporation tax as regards any interest received by it
under this Agreement. Any such assignee or transferee must agree to be
bound by the provisions contained in the Funding Deed of Charge as if it
were named as an original party thereto in place of the Current Issuer
Start-Up Loan Provider.
11.2 If there is any change in the identity of the Security Trustee pursuant
to the terms of the Funding Deed of Charge, the Current Issuer Start-Up
Loan Provider and Funding shall execute such documents and take such
actions as the new security trustee and the outgoing security trustee (as
the case may be) may reasonably require for the purpose of vesting in the
new security trustee the rights and obligations of the outgoing security
trustee and releasing the outgoing security trustee (as the case may be)
from its future obligations under this Agreement.
12. Alternative Payment Arrangements
If at any time it shall become impracticable for Funding to make any
payments hereunder in the manner specified in Clause 6.1, then Funding
may agree with the Current Issuer Start-Up Loan Provider and the Security
Trustee alternative arrangements for such payments to be made.
13. Security Trustee as a Party
The Security Trustee has agreed to become a party to this Agreement for
the better preservation and enforcement of its rights under this
Agreement and the Security Trustee shall assume no obligations or
liabilities whatsoever to the Current Issuer Start-Up Loan Provider or to
Funding. Furthermore, any liberty or power which may be exercised or any
determination which may be made hereunder by the Security Trustee may be
exercised or made in the Security Trustee's absolute discretion without
any obligation to give reasons therefor, but in any event must be
exercised or made in accordance with the provisions of the Funding Deed
of Charge.
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14. No Partnership
Nothing in this Agreement (or in any of the arrangements contemplated
hereby) shall, or shall be deemed to, constitute a partnership amongst
the parties hereto.
15. Variation
No variation of this Agreement shall be effective unless it is in writing
and signed by or on behalf of each of the parties hereto.
16. Execution in Counterparts; Severability
16.1 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.
16.2 Where any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations
under this Agreement, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
17. 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.
18. Governing Law and Jurisdiction; Process Agents; Appropriate Forum
18.1 Governing Law: This Agreement is governed by, and shall be construed in
accordance with, English law.
18.2 Jurisdiction: Each of the parties hereto irrevocably agrees that the
courts of England are to have jurisdiction to settle 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 submit
to the jurisdiction of such courts.
18.3 Process Agents: Funding irrevocably and unconditionally appoints Mourant
& Co. Capital (SPV) Limited at 69 Park Lane, Croydon CR9 1TQ or otherwise
at the registered office of Mourant & Co. Capital (SPV) Limited for the
time being as its agent for service of process in England in respect of
any proceedings in respect of this Agreement and undertakes that in the
event of Mourant & Co. Capital (SPV) Limited ceasing so to act it will
appoint another person with a registered office in London as its agent
for service of process.
18.4 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.
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
Each party to the Current Issuer Start-Up Loan Agreement (the "Agreement")
hereby makes the following representations and warranties to each of the other
parties to such Agreement:
1. Status: It is 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 the Agreement,
which has been duly executed and delivered by it.
3. Legal validity: The Agreement constitutes, or when executed in accordance
with its terms will constitute, its legal, valid and binding obligation.
4. Non-conflict: The execution by it of the Agreement and the exercise by it
of its rights and the performance of its obligations under the Agreement
will not:
(a) result in the existence or imposition of, nor oblige it to create,
any Security Interest in favour of any person over all or any of its
present or future revenues or assets save for any which are created
under or pursuant to the Funding Deed of Charge;
(b) conflict with any document which is binding upon it or any of its
assets;
(c) conflict with its constitutional documents; or
(d) 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 Licences: All governmental consents, licences and other
approvals and authorisations required in connection with the entry into,
performance, validity and enforceability of, the transaction contemplated
by the Agreement have been obtained or effected (as appropriate) and are
in full force and effect.
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EXECUTION PAGE
Funding
Executed by
GRANITE FINANCE FUNDING LIMITED
as follows: By_________________________________________________
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories
Name_________________________________________________
The Current Issuer Start-Up Loan Provider
Executed by
NORTHERN ROCK PLC
as follows: By_________________________________________________
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories
Name_________________________________________________
The Security Trustee
Executed by
BANK OF NEW YORK
as follows: By_________________________________________________
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories
Name_________________________________________________
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