EXECUTION
DATED 23 JULY 2001
NORTHERN ROCK PLC
as Cash Manager
- AND -
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
- AND -
NORTHERN ROCK PLC
as Seller
- AND -
GRANITE FINANCE FUNDING LIMITED
as Beneficiary
- AND -
THE BANK OF NEW YORK
as Security Trustee
--------------------------
FIRST AMENDED AND RESTATED
CASH MANAGEMENT AGREEMENT
Dated 23 July 2001
which amends and restates the
CASH MANAGEMENT AGREEMENT
Dated 26 March 2001
--------------------------
SIDLEY XXXXXX XXXXX & XXXX
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF:
CONTENTS
CLAUSE PAGE NO.
1. Definitions and Interpretation..........................................5
2. Appointment of Cash Manager.............................................5
3. The Services............................................................6
4. Payments, Accounts, Ledgers.............................................7
5. Early Repayment Charges................................................14
6. No Liability...........................................................14
7. Costs and Expenses.....................................................14
8. Information............................................................15
9. Remuneration...........................................................17
10. Covenants, Representations and Warranties of the Cash Manager..........18
11. Services Non-Exclusive.................................................19
12. Termination............................................................19
13. Further Assurances.....................................................22
14. Miscellaneous..........................................................22
15. Confidentiality........................................................23
16. No Partnership.........................................................24
17. Assignment.............................................................24
18. The Security Trustee...................................................24
19. New Intercompany Loan Agreements.......................................25
20. Non Petition Covenant; Limited Recourse................................25
21. Amendments and Waiver..................................................26
22. Notices................................................................27
23. Third Party Rights.....................................................28
24. Execution in Counterparts; Severability................................28
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25. Governing Law and Submission to Jurisdiction...........................28
SCHEDULE 1 The Cash Management Services......................................29
SCHEDULE 2 Cash Management and Maintenance of Ledgers........................32
SCHEDULE 3A Form of Mortgages Trustee Quarterly Report.......................42
SCHEDULE 3B Form of Funding Quarterly Report.................................43
SCHEDULE 4 Cash Manager Representations and Warranties.......................46
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THIS FIRST AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT DATED 23 JULY 2001
AMENDS AND RESTATES THE ORIGINAL CASH MANAGEMENT AGREEMENT DATED 26 MARCH 2001
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered office
is at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX in its
capacity as cash manager (the "CASH MANAGER", which expression shall
include such other person as may from time to time be appointed as cash
manager pursuant to this Agreement);
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, Channel Islands
whose registered office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0
0XX, Channel Islands (the "MORTGAGES TRUSTEE");
(3) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered office
is at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX in its
capacity as Seller of the Mortgage Loans (the "SELLER");
(4) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, Channel Islands
having its principal place of business in the United Kingdom at 00 Xxx
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX ("FUNDING" and,
together with the Seller, the "BENEFICIARIES"); and
(5) THE BANK OF NEW YORK whose principal office is at Xxx Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx X00 0XX in its capacity as trustee (the "SECURITY TRUSTEE"
which expression shall include such company and all other persons or
companies for the time being acting as the trustee or trustees under the
Funding Deed of Charge).
WHEREAS:
(A) On the Initial Closing Date the First Issuer will issue the First Issuer
Notes constituted by the First Issuer Trust Deed. From the proceeds of
the issue of those First Issuer Notes, the First Issuer shall make a loan
to Funding pursuant to the terms of the First Issuer Intercompany Loan
Agreement. From the proceeds of that loan, Funding shall pay the Initial
Contribution to the Mortgages Trustee as consideration in part for the
Initial Funding Share of the Trust Property, which funds will be used by
the Mortgages Trustee to pay to the Seller the Initial Purchase Price for
the assignment by the Seller to the Mortgages Trustee of the Initial
Mortgage Portfolio pursuant to the Mortgage Sale Agreement.
(B) The Cash Manager is willing to provide Cash Management Services to the
Mortgages Trustee, Funding and the Security Trustee on the terms and
subject to the conditions contained in this Agreement.
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IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 The Master Definitions Schedule signed for the purposes of identification
by Xxxxx & Wood and Xxxxxxxx Chance Limited Liability Partnership on 26
March 2001 (as the same may be amended, varied or supplemented from time
to time with the consent of the parties hereto) is expressly and
specifically incorporated into this Agreement and, accordingly, the
expressions defined in the Master Definitions Schedule (as so amended,
varied or supplemented) shall, except where the context otherwise
requires and save where otherwise defined herein, have the same meanings
in this Agreement, including the recitals hereto, and this Agreement
shall be construed in accordance with the interpretation provisions set
out in Clause 2 of such Master Definitions Schedule.
1.2 Any reference in this Agreement to any discretion, power or right on the
part of the Mortgages Trustee shall be as exercised by the Mortgages
Trustee only as directed by the Beneficiaries but subject in each case to
the provisions of Clause 17 (Directions from Beneficiaries) of the
Mortgages Trust Deed.
2. APPOINTMENT OF CASH MANAGER
2.1 APPOINTMENT: Until termination pursuant to Clause 12 herein
(Termination), the Mortgages Trustee, Funding and the Security Trustee
(according to their respective estates and interests) each hereby
appoints the Cash Manager as its lawful agent to provide the Cash
Management Services set out in this Agreement, including in relation to:
(a) the Mortgages Trustee; and
(b) Funding,
and the Cash Manager in each case hereby accepts such appointment on the
terms and subject to the conditions of this Agreement.
2.2 DUTIES PRESCRIBED BY TRANSACTION DOCUMENTS: For the avoidance of doubt
and in connection with the powers conferred under Clause 2.1
(Appointment), save as expressly provided elsewhere in this Agreement,
nothing herein shall be construed so as to give the Cash Manager any
powers, rights, authorities, directions or obligations other than as
specified in this Agreement or any of the other Transaction Documents.
2.3 APPOINTMENT CONDITIONAL UPON ISSUANCE OF FIRST ISSUER NOTES: The
appointment pursuant to Clause 2.1 (Appointment) is conditional upon the
issue of the First Issuer Notes and the making of the First Issuer
Intercompany Loan under the First Issuer Intercompany Loan Agreement and
shall take effect upon and from the Initial Closing Date automatically
without any further action on the part of any person, PROVIDED THAT, if
the issue of the First Issuer Notes by the First Issuer has not occurred
by 30 April 2001, or such later date as the First Issuer and the Lead
Manager may agree, this Agreement shall cease to be of further effect.
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3. THE SERVICES
3.1 GENERAL: The Cash Manager shall provide the services set out in this
Agreement (including, without limitation, Schedules 1 and 2 attached
hereto) (the "CASH MANAGEMENT SERVICES").
3.2 APPROVALS AND AUTHORISATIONS: The Cash Manager shall maintain, or
procure the maintenance of, the approvals, authorisations, consents and
licences required in connection with the respective businesses of the
Mortgages Trustee and Funding and shall prepare and submit, or procure
the preparation and submission of, on behalf of the Mortgages Trustee and
Funding, all necessary applications and requests for any further
approvals, authorisations, consents or licences which may be required in
connection with the respective businesses of the Mortgages Trustee and
Funding and shall, so far as it reasonably can do so, perform the Cash
Management Services in such a way as not to prejudice the continuation of
any such approvals, authorisations, consents or licences.
3.3 COMPLIANCE WITH TRANSACTION DOCUMENTS, ETC.: The Cash Management Services
shall include procuring (so far as the Cash Manager, using its reasonable
endeavours, is able so to do) compliance by the Mortgages Trustee and
Funding with all applicable legal requirements and with the terms of the
Transaction Documents to which each of the Mortgages Trustee and/or
Funding is a party, PROVIDED THAT the Cash Manager shall not lend or
provide any sum to the Mortgages Trustee or Funding (other than as
expressly contemplated by the Transaction Documents) and the Cash Manager
shall have no liability whatsoever to the Mortgages Trustee, Funding, the
Security Trustee or any other person for any failure by the Mortgages
Trustee or Funding to make any payment due by any of them under any of
the Transaction Documents (other than to the extent arising from (i) the
Cash Manager failing to make a payment in its capacity as Administrator,
or in any other capacity under the Transaction Documents, or (ii) the
Cash Manager failing to perform any of its obligations under any of the
Transaction Documents).
3.4 LIABILITY OF CASH MANAGER:
(a) The Cash Manager shall indemnify each of the Mortgages Trustee,
Funding and the Security Trustee on demand for any loss,
liability, claim, expense or damage suffered or incurred by any of
them in respect of the negligence, bad faith or wilful default of
the Cash Manager in carrying out its functions as Cash Manager
under this Agreement or under the other Transaction Documents or
as a result of a breach by the Cash Manager of the terms and
provisions of this Agreement or such other Transaction Documents
to which the Cash Manager is a party (in its capacity as such) in
relation to such functions.
(b) For the avoidance of doubt, the Cash Manager shall not be liable
in respect of any loss, liability, claim, expense or damage
suffered or incurred by the Mortgages Trustee, Funding, or the
Security Trustee and/or any other person as a result of the proper
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performance of the Cash Management Services (as defined in Clause
3.1) by the Cash Manager save to the extent that such loss,
liability, claim, expense or damage is suffered or incurred as a
result of any negligence, bad faith or wilful default of the Cash
Manager under, or as a result of, a breach by the Cash Manager of
the terms and provisions of this Agreement or any of the other
Transaction Documents to which the Cash Manager is a party (in its
capacity as such) in relation to such functions.
4. PAYMENTS, ACCOUNTS, LEDGERS
4.1 ESTABLISHMENT OF BANK ACCOUNTS:
(a) The Cash Manager hereby confirms that the Mortgages Trustee GIC
Account has been established on or before the date hereof pursuant
to the Bank Account Agreement and the Mortgages Trustee Guaranteed
Investment Contract and that the Mortgages Trustee GIC Account
Mandate in the agreed form will apply thereto at the Initial
Closing Date. The Cash Manager undertakes (to the extent to which
the same is within its control) that at the Initial Closing Date
the Mortgages Trustee GIC Account will be operative and that the
Cash Manager will not knowingly create or permit to subsist any
Security Interest in relation to the Mortgages Trustee GIC Account
(but without prejudice to the Mortgages Trust and the other
Transaction Documents).
(b) The Cash Manager hereby confirms that the Mortgages Trustee
Transaction Account has been established on or before the date
hereof pursuant to the Bank Account Agreement and that the
Mortgages Trustee Transaction Account Mandate in the agreed form
will apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control)
that at the Initial Closing Date the Mortgages Trustee Transaction
Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in
relation to the Mortgages Trustee Transaction Account (but without
prejudice to the Mortgages Trust and the other Transaction
Documents).
(c) The Cash Manager hereby confirms that the Funding GIC Account has
been established on or before the date hereof pursuant to the Bank
Account Agreement and the Funding Guaranteed Investment Contract
and that the Funding GIC Account Mandate in the agreed form will
apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control)
that at the Initial Closing Date the Funding GIC Account will be
operative and that the Cash Manager will not knowingly create or
permit to subsist any Security Interest in relation to the Funding
GIC Account other than as created under or permitted pursuant to
the Funding Deed of Charge.
(d) The Cash Manager hereby confirms that the Funding Transaction
Account has been established on or before the date hereof pursuant
to the Bank Account Agreement and that the Funding Transaction
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Account Mandate in the agreed form will apply thereto at the
Initial Closing Date. The Cash Manager undertakes (to the extent
to which the same is within its control) that at the Initial
Closing Date the Funding Transaction Account will be operative and
that the Cash Manager will not knowingly create or permit to
subsist any Security Interest in relation to the Funding
Transaction Account other than as created under or permitted
pursuant to the Funding Deed of Charge.
(e) The Cash Manager hereby confirms that the Funding (First Issuer)
GIC Account has been established on or before the date hereof
pursuant to the Funding (First Issuer) Bank Account Agreement and
the Funding (First Issuer) Guaranteed Investment Contract and that
the Funding (First Issuer) GIC Account Mandate in the agreed form
will apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control)
that at the Initial Closing Date the Funding (First Issuer) GIC
Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in
relation to the Funding (First Issuer) GIC Account other than as
created under or permitted pursuant to the Funding Deed of Charge.
(f) Upon Funding entering into any New Intercompany Loan Agreement
with a New Issuer, the Cash Manager undertakes to establish a
separate Funding (Issuer) GIC Account in respect of each New
Issuer to which amounts in respect of any Issuer Reserve Fund and
Issuer Liquidity Reserve Fund (if any) of such New Issuer will be
credited.
(g) If Funding enters into a New Intercompany Loan Agreement, then the
Cash Manager, the Seller, Funding, the Security Trustee and the
Mortgages Trustee shall execute such amendments to this Agreement
as may be necessary to reflect the establishment of any new
Funding (Issuer) GIC Account.
4.2 MORTGAGES TRUSTEE LEDGERS:
(a) The Cash Manager shall open and maintain in the books of the
Mortgages Trustee the following ledgers on behalf of the Mortgages
Trustee:
(i) the Mortgages Trustee Principal Ledger, which shall
separately reflect all Principal Receipts standing to the
credit of each of the Mortgages Trustee GIC Account and the
Mortgages Trustee Transaction Account from time to time and
distribution of the same to Funding and the Seller;
(ii) the Mortgages Trustee Revenue Ledger, which shall separately
reflect all Revenue Receipts standing to the credit of each
of the Mortgages Trustee GIC Account and the Mortgages
Trustee Transaction Account from time to time and
distribution of the same to Funding and the Seller;
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(iii) the Losses Ledger, which shall record Losses on the Mortgage
Portfolio;
(iv) the Funding Share/Seller Share Ledger which shall record the
Funding Share, the Seller Share, the Funding Share
Percentage and the Seller Share Percentage of the Trust
Property;
(v) the Overpayments Ledger, which will reflect each Revenue
Receipt and/or Principal Receipt paid by a Borrower in
excess of the amount required under the terms of the
relevant Mortgage Loan (and in the case of any non-Flexible
Mortgage Loan any payment which is not a Capital Payment),
which shall be divided into (A) the Non-Flexible
Overpayments Sub Ledger to record Overpayments on Non-
Flexible Mortgage Loans and (B) the Flexible Overpayments
Sub Ledger to record Overpayments on Flexible Mortgage
Loans, in each case as received into and paid out of the
Mortgages Trustee GIC Account from time to time;
(vi) the Non-Flexible Underpayments Ledger, which shall record
Underpayments on Non-Flexible Mortgage Loans from time to
time;
(vii) the Re-Draws Ledger, which will record Re-Draws on the
Flexible Mortgage Loans and which shall be divided into (A)
the Cash Re-Draws Sub Ledger to record Cash Re-Draws made in
respect of Flexible Mortgage Loans and (B) the Non-Cash Re-
Draws Sub Ledger to record Non-Cash Re-Draws made in respect
of Flexible Mortgage Loans; and
(viii) the Contributions Ledger, which will be divided into sub
ledgers to record (i) the making by Funding to the Mortgages
Trustee of Contributions to the Mortgages Trust pursuant to
the Mortgages Trust Deed (ii) the making by the Seller to
the Mortgages Trustee of Contributions to the Mortgages
Trust pursuant to the Mortgages Trust Deed and the
application of such Contributions in accordance with the
terms of the Mortgages Trust Deed by (iii) the payment by
the Mortgages Trustee to the Seller of either (a) amounts of
Initial Purchase Price for the sale of any New Mortgage
Portfolio which is acquired by the Mortgages Trustee from
the Seller under the provisions of Mortgage Sale Agreement
(b) amounts of Deferred Purchase Price in accordance with
the Mortgage Sale Agreement and (iv) the payment by the
Mortgages Trustee to the Seller of any Special Distribution
in accordance with the Mortgages Trust Deed.
(b) The Cash Manager shall make credits and debits to the Mortgages
Trustee Ledgers in the manner described in paragraphs 10, 11, 12,
13, 20, 21 and 22 of Schedule 2 hereto.
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4.3 FUNDING LEDGERS:
(a) The Cash Manager shall open and maintain in the books of Funding
the following ledgers on behalf of Funding:
(i) the Issuer Reserve Fund Ledger of any Issuer, which shall
record the amount credited to the Issuer Reserve Fund of
such Issuer on the related Closing Date, and subsequent
withdrawals and deposits in respect of such Issuer Reserve
Fund;
(ii) the Issuer Liquidity Reserve Ledger of any Issuer, if any,
which shall record the amount credited to the Issuer
Liquidity Reserve Fund from time to time of such Issuer, and
subsequent withdrawals and deposits in respect of such
Issuer Liquidity Reserve Fund;
(iii) the Funding Principal Ledger, which shall separately reflect
all Funding Principal Receipts received by Funding on each
Distribution Date and all Funding Principal Receipts
standing to the credit of each Funding Bank Account;
(iv) the Funding Principal Deficiency Ledger, which shall reflect
the aggregate position of the Issuer Principal Deficiency
Ledgers of all Issuers as to Losses on the Mortgage Loans
and the application of Funding Available Principal Receipts
to fund Issuer Liquidity Reserve Funds;
(v) the Funding Revenue Ledger, which shall separately reflect
all Funding Revenue Receipts received by Funding on each
Distribution Date and all Funding Revenue Receipts standing
to the credit of each Funding Bank Account;
(vi) the Funding Reserve Ledger, which shall record the amount
credited to the Funding Reserve Fund from time to time, and
subsequent withdrawals and deposits in respect of the
Funding Reserve Fund; and
(vii) the Intercompany Loan Ledger, which shall be divided into
segregated sub ledgers each of which shall record payments
of interest and fees and repayments of principal made under
such Intercompany Loan.
(b) The Cash Manager shall make credits and debits to the Funding
Ledgers in accordance with the provisions of paragraphs 14 through
19 of Schedule 2 hereto.
4.4 PAYMENTS:
(a) The Cash Manager shall procure that so far as it may be able in
relation to all Mortgage Loans comprised in the Mortgage
Portfolio, the following amounts are paid into the Mortgages
Trustee Transaction Account:
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(i) all Monthly Payments, other interest received under and in
respect of the Mortgage Loans and any costs or other amounts
received under the Mortgage Loans (including in any such
case amounts recovered on enforcement of rights against any
Borrower or guarantor of the Borrower, any Mortgaged
Property or any of the Borrower's or guarantor's other
property or assets);
(ii) all final releases and all repayments or prepayments of
principal under the Mortgage Loans;
(iii) any amount received by or on behalf of the Mortgages Trustee
pursuant to any Insurance Policy; and
(iv) any other amounts whatsoever received by or on behalf of the
Mortgages Trustee on or after the Initial Closing Date,
(b) The Cash Manager shall procure that the following amounts are
credited to the Mortgages Trustee GIC Account:
(i) from time to time upon written or electronic receipt of
instructions from the Administrator, all amounts standing to
the credit of the Mortgages Trustee Transaction Account; and
(ii) all interest earned on any of (A) the Mortgages Trustee
Transaction Account, (B) the Mortgages Trustee GIC Account
and (C) all investment proceeds from Authorised Investments
purchased from amounts standing to the credit of either the
Mortgages Trustee Transaction Account or the Mortgages
Trustee GIC Account.
(c) The Cash Manager shall procure that on each Distribution Date the
following amounts are paid into the Funding GIC Account:
(i) all Funding Principal Receipts, PROVIDED HOWEVER that any
amounts recorded as a credit on the Non-Flexible
Overpayments Sub Ledger shall remain in the Mortgages
Trustee GIC Account on such Distribution Date;
(ii) all Funding Revenue Receipts; and
(iii) any other amounts whatsoever received by or on behalf of
Funding after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on the
Funding GIC Account and the Funding Transaction Account and all
investment proceeds from Authorised Investments purchased from
amounts standing to the credit of such accounts are credited to
the Funding GIC Account.
(d) The Cash Manager shall procure that all interest earned on each
Funding (Issuer) GIC Account and all investment proceeds from
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Authorised Investments purchased from amounts standing to the
credit of such Funding (Issuer) GIC Account are credited to such
account.
(e) The Cash Manager shall procure that on each Payment Date the
lesser of (1) the amount standing to the credit of the Funding GIC
Account and (2) the aggregate of all amounts required to be paid
by Funding to all Issuers in accordance with the relevant Funding
Priority of Payments, is credited to the Funding Transaction
Account in accordance with the provisions of the Funding Deed of
Charge.
(f) The Cash Manager shall procure that all transfers and withdrawals
of amounts standing to the credit of the Funding Transaction
Account and the Funding GIC Account shall be made in accordance
with the provisions of the Funding Deed of Charge.
(g) The Cash Manager shall procure that all transfers and withdrawals
of amounts standing to the credit of each Funding (Issuer) GIC
Account shall be made in accordance with the provisions of the
Funding Deed of Charge.
(h) Each of the payments into the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account, the Funding
Transaction Account, the Funding GIC Account and each Funding
(Issuer) GIC Account referred to in Clauses 4.4(a) through (g)
herein shall be made forthwith upon receipt by the Mortgages
Trustee, Funding or the Cash Manager, as the case may be, of the
amount in question.
(i) For the avoidance of doubt, as soon as reasonably practicable
after becoming aware of the same, the Cash Manager may, and shall,
withdraw Cash from, as the case may be, the Mortgages Trustee
Transaction Account, the Mortgages Trustee GIC Account, the
Funding Transaction Account, the Funding GIC Account or any
Funding (Issuer) GIC Account if, and to the extent that, such Cash
was credited thereto in error and shall use its reasonable
endeavours to ensure that such Cash is applied correctly
thereafter.
(j) The Cash Manager shall promptly notify each of the Mortgages
Trustee, Funding and the Security Trustee of any additional
account which supplements or replaces any account specifically
referred to in the definitions of the "Mortgages Trustee
Transaction Account", the "Mortgages Trustee GIC Account", the
"Funding Transaction Account", the "Funding GIC Account" or any
"Funding (Issuer) GIC Account" in the Master Definitions Schedule.
(k) Each of the Cash Manager, the Mortgages Trustee and Funding
undertakes that, so far as it is able to procure the same, the
Mortgages Trustee Transaction Account, the Mortgages Trustee GIC
Account, the Funding Transaction Account and the Funding GIC
Account and all instructions and Mandates in relation thereto will
continue to be operative and will not, save as provided in Clause
4.6 herein (Cash Management) or as permitted pursuant to the Bank
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Account Agreement, be changed without the prior written consent of
the Security Trustee (such consent not to be unreasonably withheld
or delayed). Each of the Cash Manager and Funding undertakes that,
so far as it is able to procure the same, any Funding (Issuer) GIC
Account and all instructions and Mandates in relation thereto will
continue to be operative and will not, save as provided in Clause
4.6 herein (Cash Management) or as permitted pursuant to the
related Funding (Issuer) Bank Account Agreement, be changed
without the prior written consent of the Security Trustee (such
consent not to be unreasonably withheld or delayed). For the
avoidance of doubt, the Cash Manager may change the Authorised
Signatories in respect of any instructions or Mandates relating to
Funding and/or the Mortgages Trustee, without the prior written
consent of the Security Trustee, in accordance with Clause 4.2
(Amendment or Revocation) of the Bank Account Agreement or any
Funding (Issuer) Bank Account Agreement, as the case may be.
4.5 WITHDRAWALS: The Cash Manager may make withdrawals:
(a) on behalf of the Mortgages Trustee from the Mortgages Trustee
Transaction Account and the Mortgages Trustee GIC Account;
(b) on behalf of Funding from the Funding GIC Account, any Funding
(Issuer) GIC Account and the Funding Transaction Account, but
only:
(i) with the prior consent of the Security Trustee as provided
under the Funding Deed of Charge or following receipt of a
request for withdrawal in writing from the Cash Manager on
behalf of Funding; and
(ii) until receipt of an Intercompany Loan Enforcement Notice
served by the Security Trustee on Funding (with a copy to
the Funding Secured Creditors as soon as reasonable
thereafter in accordance with and subject to the Funding
Deed of Charge),
as permitted by this Agreement, the Mortgages Trust Deed, the Bank
Account Agreement, any Funding (Issuer) Bank Account Agreement, the
Mortgages Trustee Guaranteed Investment Contract, the Funding Guaranteed
Investment Contract, any Funding (Issuer) Guaranteed Investment Contract
and the Funding Deed of Charge, but shall not in carrying out its
functions as Cash Manager under this Agreement otherwise make withdrawals
from the Mortgages Trustee Transaction Account, the Mortgages Trustee GIC
Account or the Funding Bank Accounts. Following enforcement of the
Funding Security, the Cash Manager will not be entitled to make
withdrawals from any Funding Account other than in accordance with the
instructions of the Security Trustee.
4.6 CASH MANAGEMENT: In administering the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account, the Funding Transaction
Account, the Funding GIC Account and any Funding (Issuer) GIC Account on
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behalf of the Mortgages Trustee, Funding and the Security Trustee, as
applicable, the Cash Manager shall comply with the provisions of Schedule
2 hereto prior to receipt by the Cash Manager of a copy of any
Intercompany Loan Enforcement Notice served by the Security Trustee on
Funding.
4.7 CONTRIBUTIONS: Following the drawing of any Intercompany Loan by Funding
from the First Issuer or any New Issuer on any date, the Cash Manager
shall procure (i) the payment on such date by Funding to the Mortgages
Trustee of Funding's Contribution to the Mortgages Trustee pursuant to
the Mortgages Trust Deed and (ii) the application of such Contribution by
the Mortgages Trustee for payment to the Seller of either (a) the amount
of Initial Purchase Price for the sale of any New Mortgage Portfolio
which is acquired by the Mortgages Trustee from the Seller on such date
under the provisions of Mortgage Sale Agreement or (b) the amount of any
Special Distribution made to the Seller as Beneficiary under the
Mortgages Trust Deed, as applicable.
5. EARLY REPAYMENT CHARGES
The Cash Manager shall withdraw any Early Repayment Charges paid into the
Mortgages Trustee Transaction Account or the Mortgages Trustee GIC
Account and pay the same to the Seller, by telegraphic transfer to such
account as may be specified by the Seller from time to time, promptly
following a request for such withdrawal being received from the Seller.
For the avoidance of doubt, the Cash Manager shall not record the receipt
or withdrawal of Early Repayment Charges in any of the ledgers maintained
under this Agreement.
6. NO LIABILITY
Save as otherwise provided in this Agreement, the Cash Manager shall have
no liability for the obligations of any of the Mortgages Trustee, Funding
or the Security Trustee under any of the Transaction Documents or
otherwise and nothing herein shall constitute a guarantee, or similar
obligation, by the Cash Manager of any of the Mortgages Trustee, Funding
or the Security Trustee in respect of any of them.
7. COSTS AND EXPENSES
7.1 Funding and the Mortgages Trustee, proportionately in accordance with and
subject to the applicable Funding Priority of Payments set out in the
Funding Deed of Charge or the applicable Priority of Payments for the
Mortgages Trustee under the Mortgages Trust Deed, as the case may be,
will on each Payment Date reimburse the Cash Manager for all out-of-
pocket costs, expenses and charges (together with any amounts in respect
of Irrecoverable VAT due thereon) properly incurred by the Cash Manager
in the performance of the Cash Management Services including any such
costs, expenses or charges not reimbursed to the Cash Manager on any
previous Payment Date and the Cash Manager shall supply Funding and/or
the Mortgages Trustee with an appropriate VAT invoice issued by the Cash
Manager or, if the Cash Manager has treated the relevant cost, expense or
charge as a disbursement for VAT purposes, by the person making the
supply.
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7.2 Unless and until otherwise agreed by Funding, the Mortgages Trustee and
the Security Trustee in writing (notified to the Cash Manager), Funding
and the Mortgages Trustee shall be jointly and severally responsible for
reimbursing the Cash Manager for the out-of-pocket costs, expenses and
charges (together with any amounts in respect of Irrecoverable VAT due
thereon) referred to in Clause 7.1 herein.
8. INFORMATION
8.1 USE OF INFORMATION TECHNOLOGY SYSTEMS:
(a) The Cash Manager represents and warrants that at the date hereof
in respect of the software which is to be used by the Cash Manager
in providing the Cash Management Services it has in place all
necessary licences and/or consents from the respective licensor or
licensors (if any) of such software.
(b) The Cash Manager undertakes that it shall for the duration of this
Agreement, use reasonable endeavours to:
(i) ensure that the licences and/or consents referred to in
paragraph (a) are maintained in full force and effect; and
(ii) except insofar as it would breach any other of its legal
obligations, grant to any person to whom it may sub-contract
or delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as
the Mortgages Trustee, Funding and the Security Trustee
elect as a substitute cash manager in accordance with the
terms of this Agreement a licence to use any proprietary
software together with any updates which may be made thereto
from time to time.
(c) The Cash Manager shall use reasonable endeavours to maintain in
working order the information technology systems used by the Cash
Manager in providing the Cash Management Services.
(d) The Cash Manager shall pass to any person to whom it may sub-
contract or delegate the performance of all or any of its powers
and obligations under this Agreement and/or to such person as the
Mortgages Trustee, Funding and the Security Trustee elect as a
substitute cash manager in accordance with the terms of this
Agreement the benefit of any warranties in relation to the
software insofar as the same are capable of assignment.
8.2 BANK ACCOUNT STATEMENTS: The Cash Manager shall take all reasonable
steps to ensure that it receives:
(a) a monthly bank statement in relation to each of the Mortgages
Trustee Transaction Account and the Mortgages Trustee GIC Account
(and any additional or supplemental bank account of the Mortgages
Trustee) and that it furnishes a copy of such statements to the
Mortgages Trustee, each of the Beneficiaries and the Security
Trustee (upon its request); and
(b) monthly bank statements in relation to each of the Funding
Transaction Account, the Funding GIC Account
15
and any Funding (Issuer) GIC Account (and any additional or
supplemental bank account of Funding) and that it furnishes a copy
of such statements to Funding and the Security Trustee (upon its
request).
8.3 ACCESS TO BOOKS AND RECORDS: Subject to all applicable laws, the Cash
Manager shall permit the Mortgages Trustee, Funding, the Auditors of the
Mortgages Trustee and Funding, the Security Trustee and/or any other
person nominated by the Security Trustee or the Beneficiaries (to whom
the Cash Manager has no reasonable objection) at any time during normal
office hours upon reasonable notice to have access, or procure that such
person or persons are granted access, to all books of record and account
relating to the Cash Management Services provided by the Cash Manager and
related matters in accordance with this Agreement.
8.4 STATUTORY OBLIGATIONS: The Cash Manager will use its reasonable
endeavours on behalf of the Mortgages Trustee and Funding, to prepare or
procure the preparation of and file all reports, annual returns,
financial statements, statutory forms and other returns which each of the
Mortgages Trustee and Funding is required by law to prepare and file.
Subject to approval thereof by the directors of the Mortgages Trustee or
Funding (as appropriate), the Cash Manager shall cause such accounts to
be audited by the Auditors and shall procure so far as it is able so to
do that the Auditors shall make a report thereon as required by law and
copies of all such documents shall be delivered to the Mortgages Trustee,
the Security Trustee and Funding (as appropriate) and the Rating Agencies
as soon as practicable after the end of each accounting reference period
of the Mortgages Trustee or Funding (as appropriate).
8.5 INFORMATION COVENANTS:
(a) The Cash Manager shall provide the Mortgages Trustee, Funding, the
Security Trustee, the Seller and the Rating Agencies:
(i) quarterly with a report in, or substantially in, the form
set out in Schedule 3A hereto in respect of the Mortgages
Trustee; and
(ii) quarterly with a report in, or substantially in, the form
set out in Schedule 3B hereto in respect of Funding.
Such quarterly reports shall be delivered to the Mortgages
Trustee, Funding, the Security Trustee (upon its request), the
Seller and the Rating Agencies by the last Business Day of the
month in which each Payment Date occurs.
(b) The Cash Manager shall provide, or procure the provision of, to
the Mortgages Trustee, Funding, the Security Trustee (upon its
request) and the Rating Agencies copies of any annual returns or
financial statements referred to in Clause 8.4 herein (Statutory
Obligations) as soon as reasonably practicable after the
preparation thereof.
(c) The Cash Manager shall notify the Rating Agencies and the Security
Trustee in writing of the details of (i) any material amendment to
the Transaction
16
Documents of which it is or becomes aware, (ii) the occurrence of
an Intercompany Loan Event of Default or Potential Intercompany
Loan Event of Default and (iii) any other information relating to
the Cash Manager as the Rating Agencies and the Security Trustee
may reasonably request in connection with its obligations under
this Agreement, PROVIDED THAT any such request by the Security
Trustee does not adversely interfere with the Cash Manager's
day-to-day provision of the Cash Management Services under the
other terms of this Agreement.
(d) After becoming aware of any event described in paragraph (c)(i)
and (ii) above, the Cash Manager shall give details to Funding,
the Mortgages Trustee and Security Trustee of any pending legal
action and any judgments given in respect of the Cash Manager if
it could have a potential material adverse effect on the ability
of the Cash Manager to perform its obligations hereunder.
(e) The Cash Manager shall, at the request of the Security Trustee,
furnish the Security Trustee and the Rating Agencies with such
other information relating to its business and financial condition
as the Security Trustee may request in connection with this
Agreement, PROVIDED THAT the Security Trustee shall not make such
a request more than once every three months unless, in the belief
of the Security Trustee, an Intercompany Loan Event of Default, a
Note Event of Default or Cash Manager Termination Event (as
defined in Clause 12.1 herein (Cash Manager Termination Events))
shall have occurred and is continuing or a Potential Intercompany
Loan Event of Default or a Potential Note Event of Default shall
have occurred and is continuing or may reasonably be expected to
occur, PROVIDED THAT any such request by the Security Trustee does
not adversely interfere with the Cash Manager's day to day
provision of the Cash Management Services under the other terms of
this Agreement.
9. REMUNERATION
9.1 FEE PAYABLE:
(a) Subject to paragraph (b) below, Funding and the Mortgages Trustee,
proportionately in accordance with and subject to the applicable
Funding Priority of Payments set out in the Funding Deed of Charge
and the applicable Priority of Payments for the Mortgages Trustee
under the Mortgages Trust Deed, as the case may be, shall pay to
the Cash Manager for its Cash Management Services hereunder an
annual cash management fee of {pound-sterling}100,000 for its
services which will be paid quarterly.
(b) Unless and until otherwise agreed by Funding, the Mortgages
Trustee and the Security Trustee in writing (notified to the Cash
Manager), Funding and the Mortgages Trustee shall be jointly and
severally responsible for paying the cash management fee to the
Cash Manager which is referred to in paragraph (a) above.
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9.2 PAYMENT OF FEE: The cash management fee referred to in Clause 9.1 herein
(Fee Payable) shall only be payable to the Cash Manager on each Payment
Date in the manner contemplated by, in accordance with and subject to the
provisions of the applicable Priority of Payments for the Mortgages
Trustee under the Mortgages Trust Deed and the applicable Funding
Priority of Payments under the Funding Deed of Charge.
10. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE CASH MANAGER
10.1 COVENANTS: The Cash Manager hereby covenants with and undertakes to each
of the Mortgages Trustee, Funding and the Security Trustee that without
prejudice to any of its specific obligations hereunder:
(a) it will exercise all due skill, care and diligence to the
performance of its obligations and the exercise of its discretions
hereunder;
(b) it will comply with any proper directions, orders and instructions
which the Mortgages Trustee, Funding or the Security Trustee may
from time to time give to it in accordance with the provisions of
this Agreement and, in the event of any conflict, those of the
Security Trustee shall prevail;
(c) it will obtain and keep in force all licences, approvals,
authorisations and consents which are necessary in connection with
the performance of the Cash Management Services and prepare and
submit all necessary applications and requests for any further
approval, authorisation, consent or licence required in connection
with the performance of the Cash Management Services;
(d) it will not knowingly fail to comply with any legal requirements
in the performance of the Cash Management Services;
(e) it will make all payments required to be made by it pursuant to
this Agreement on the due date for payment thereof for value in
the specified currency on such day without set-off (including,
without limitation, in respect of any fees owed to it) or
counterclaim; and
(f) it will not without the prior written consent of the Security
Trustee amend or terminate any of the Transaction Documents save
in accordance with their terms.
10.2 DURATION OF COVENANTS: The covenants of the Cash Manager in Clause 10.1
(Covenants) shall remain in force until this Agreement is terminated but
without prejudice to any right or remedy of the Mortgages Trustee and/or
Funding and/or the Security Trustee arising from breach of any such
covenant prior to the date of termination of this Agreement.
10.3 REPRESENTATIONS AND WARRANTIES: The Cash Manager hereby makes the
representations and warranties to each of the Mortgages Trustee, Funding
and the Security Trustee that are specified on Schedule 4 hereto.
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11. SERVICES NON-EXCLUSIVE
Nothing in this Agreement shall prevent the Cash Manager from rendering
or performing services similar to those provided for in this Agreement to
or for itself or other persons, firms or companies or from carrying on
business similar to or in competition with the business of the Mortgages
Trustee, Funding or the Security Trustee.
12. TERMINATION
12.1 CASH MANAGER TERMINATION EVENTS: If any of the following events ("Cash
Manager Termination Events") shall occur:
(a) default is made by the Cash Manager in the payment on the due date
of any payment due and payable by it under this Agreement or in
the performance of its obligations under Clauses 4.4 and 4.5
herein and such default continues unremedied for a period of five
(5) London Business Days after the earlier of the Cash Manager
becoming aware of such default and receiving written notice from
the Security Trustee requiring the same to be remedied;
(b) default is made by the Cash Manager in the performance or
observance of any of its other covenants and obligations under
this Agreement, which in the opinion of the Security Trustee
(acting at the direction of the Note Trustee) is materially
prejudicial to the Noteholders and such default continues
unremedied for a period of twenty (20) days after the earlier of
the Cash Manager becoming aware of such default and receipt by the
Cash Manager of written notice from the Security Trustee requiring
the same to be remedied; or
(c) the Cash Manager suffers an Insolvency Event,
then Funding, the Mortgages Trustee and/or the Security Trustee may at
once or at any time thereafter while such default continues by notice in
writing to the Cash Manager with a copy to the Account Bank terminate its
appointment as Cash Manager under this Agreement with effect from a date
(not earlier than the date of the notice) specified in the notice.
12.1.1Upon termination of the appointment of the Cash Manager, the Security
Trustee agrees to use its reasonable endeavours to appoint a substitute
cash manager. Any substitute cash manager:
(i) must agree to enter into an agreement substantially on the
same terms as the relevant provisions of this Agreement or
on such terms as are satisfactory to the Mortgages Trustee,
Funding and the Security Trustee, and
(ii) must be a party that the Rating Agencies have previously
confirmed in writing to the Mortgages Trustee, Funding and
the Security Trustee will not cause the then-current ratings
of the Notes to be downgraded, withdrawn or qualified.
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The Security Trustee shall have no liability to any person in the event
that, having used reasonable endeavours, it is unable to appoint a
substitute cash manager. In any event, the Security Trustee shall only
be required to use its reasonable endeavours to appoint such substitute
cash manager. Notwithstanding any other provision of the Transaction
Documents, the Security Trustee shall not itself be required to perform
any duties of the Cash Manager.
The Security Trustee shall not be obliged to monitor or supervise the
performance by any substitute Cash Manager of its duties hereunder or in
relation to the other Transaction Documents nor shall the Security
Trustee be responsible or liable for any act or omission of any
substitute Cash Manager or for any loss caused thereby.
12.2 RESIGNATION OF CASH MANAGER: The Cash Manager may resign from its
appointment under this Agreement only upon giving not less than twelve
(12) months' notice to each of the Mortgages Trustee, Funding and the
Security Trustee, PROVIDED THAT:
(a) the Mortgages Trustee, Funding and the Security Trustee each
consent in writing to such resignation;
(b) a substitute cash manager shall be appointed, such appointment to
be effective not later than the effective date of such
resignation;
(c) such substitute cash manager enters into an agreement
substantially on the same terms as the relevant provisions of this
Agreement and the Cash Manager shall not be released from its
obligations under the relevant provisions of this Agreement until
such substitute cash manager has entered into such new agreement
and the rights of the Mortgages Trustee and Funding under such
agreement are charged in favour of the Security Trustee on terms
satisfactory to the Security Trustee; and
(d) the then-current ratings of the Notes are not adversely affected
as a result thereof.
12.3 EFFECT OF TERMINATION OR RESIGNATION:
(a) On and after termination or resignation of the appointment of the
Cash Manager under this Agreement pursuant to this Clause 12, all
authority and power of the Cash Manager under this Agreement shall
be terminated and be of no further effect and the Cash Manager
shall not thereafter hold itself out in any way as the agent of
the Mortgages Trustee, Funding or the Security Trustee pursuant to
this Agreement.
(b) Upon termination or resignation of the appointment of the Cash
Manager under this Agreement pursuant to this Clause 12, the Cash
Manager shall:
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(i) forthwith deliver (and in the meantime hold on trust for,
and to the order of, the Mortgages Trustee, Funding or the
Security Trustee, as the case may be) to the Mortgages
Trustee, Funding or the Security Trustee, as the case may be
or as it shall direct, all books of account, papers,
records, registers, correspondence and documents in its
possession or under its control relating to the affairs of
or belongings of the Mortgages Trustee, Funding or the
Security Trustee, as the case may be (if practicable, on the
date of receipt), any monies then held by the Cash Manager
on behalf of the Mortgages Trustee, Funding or, the Security
Trustee and any other assets of the Mortgages Trustee,
Funding and the Security Trustee;
(ii) take such further action as the Mortgages Trustee, Funding
or the Security Trustee, as the case may be, may reasonably
direct at the expense of the Mortgages Trustee or Funding,
provided that the Cash Manager shall not be required to take
or direct to be taken such further action unless it has been
indemnified to its satisfaction (and in the event of a
conflict between the directions of Funding, the Mortgages
Trustee and the Security Trustee, the directions of the
Security Trustee shall prevail);
(iii) provide all relevant information contained on computer
records in the form of magnetic tape, together with details
of the layout of the files encoded on such magnetic tapes;
and
(iv) co-operate and consult with and assist the Mortgages
Trustee, Funding or the Security Trustee or its nominee, as
the case may be (which shall, for the avoidance of doubt,
include any Receiver appointed by it), for the purposes of
explaining the file layouts and the format of the magnetic
tapes generally containing such computer records on the
computer system of the Mortgages Trustee, Funding, or the
Security Trustee or such nominee, as the case may be.
12.4 NOTICE OF EVENT OF DEFAULT: The Cash Manager shall deliver to the
Mortgages Trustee, Funding and the Security Trustee as soon as reasonably
practicable but in any event within three London Business Days of
becoming aware thereof a notice of any Cash Manager Termination Event or
any event which with the giving of notice or expiry of any grace period
or certification, as specified in such Cash Manager Termination Event
would constitute the same or any Intercompany Loan Event of Default or
any Potential Intercompany Loan Event of Default.
12.5 GENERAL PROVISIONS RELATING TO TERMINATION:
(a) Termination of this Agreement or the appointment of the Cash
Manager under this Agreement shall be without prejudice to the
liabilities of the Mortgages Trustee and Funding to the Cash
Manager and vice versa incurred before the effective date of such
termination. The Cash Manager shall have no right of
21
set-off or any lien in respect of such amounts against amounts
held by it on behalf of the Mortgages Trustee, Funding or the
Security Trustee.
(b) This Agreement shall terminate automatically at such time as
Funding has no further interest in the Trust Property and all
Intercompany Loans have been fully repaid or Funding's obligations
under all Intercompany Loans have been otherwise discharged.
(c) On termination of the appointment of the Cash Manager under the
provisions of this Clause 12, the Cash Manager shall be entitled
to receive all fees and other monies accrued up to (but excluding)
the date of termination subject to the applicable Funding Priority
of Payments set out in the Funding Deed of Charge and/or the
applicable Priority of Payments for the Mortgages Trustee under
the Mortgages Trust Deed, as the case may be, but shall not be
entitled to any other or further compensation. Such monies so
receivable by the Cash Manager shall be paid by Funding and the
Mortgages Trustee, on the dates on which they would otherwise have
fallen due hereunder and under the terms of the Funding Deed of
Charge and the Mortgages Trust Deed. For the avoidance of doubt,
such termination shall not affect the Cash Manager's rights to
receive payment of all amounts (if any) due to it from Funding and
the Mortgages Trust Deed other than under this Agreement.
(d) Any provision of this Agreement which is stated to continue after
termination of the Agreement shall remain in full force and effect
notwithstanding termination.
13. FURTHER ASSURANCES
13.1 CO-OPERATION, ETC: The parties hereto agree that they will co-operate
fully to do all such further acts and things and execute any further
documents as may be necessary or desirable to give full effect to the
arrangements contemplated by this Agreement and the other Transaction
Documents.
13.2 POWERS OF ATTORNEY: Without prejudice to the generality of Clause 13.1
herein (Co-Operation, etc.), the Mortgages Trustee and Funding shall upon
request by the Cash Manager forthwith give to the Cash Manager such
further powers of attorney or other written authorisations, mandates or
instruments as are necessary to enable the Cash Manager to perform the
Cash Management Services.
14. MISCELLANEOUS
14.1 NO SET-OFF: Each of the Seller and the Cash Manager agrees that it will
not make or exercise any claims or demands, any rights of counterclaim or
any other equities against or withhold payment of any and all sums of
money which may at any time and from time to time be standing to the
credit of the Mortgages Trustee Transaction Account, the Mortgages
Trustee GIC Account, the Funding Transaction Account, the Funding GIC
Account or any Funding (Issuer) GIC Account or any replacement of
additional bank account of either the Mortgages Trustee or Funding.
22
14.2 NO RECOURSE:
(a) In relation to all sums due and payable by the Mortgages Trustee
or Funding to the Cash Manager, the Cash Manager agrees that it
shall have recourse only to sums paid to or received by (or on
behalf of) the Mortgages Trustee or Funding pursuant to the
provisions of the Transaction Documents, in each case subject to
the Mortgages Trustee Revenue Priority of Payments and the Funding
Priority of Payments.
(b) For the avoidance of doubt, the Security Trustee shall not be
liable to pay any amounts due under Clause 7 (Costs and Expenses),
but without prejudice to the obligations of the Mortgages Trustee
or Funding, as the case may be, or any receiver appointed pursuant
to the Funding Deed of Charge in respect of such amounts.
(c) Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of, the Security Trustee under or in
connection with this Agreement (other than its obligations under
Clause 13 herein (Further Assurances)) shall automatically
terminate upon the discharge in full of the Funding Secured
Obligations, PROVIDED THAT this shall be without prejudice to any
claims in respect of such obligations and rights arising on or
prior to such date.
15. CONFIDENTIALITY
During the continuance of this Agreement or after its termination, each
of the Mortgages Trustee, the Cash Manager, the Seller, Funding and the
Security Trustee shall use its best endeavours not to disclose to any
person, firm or company whatsoever any information relating to the
business, finances or other matters of a confidential nature of any other
party hereto of which it may exclusively by virtue of being party to the
Transaction Documents have become possessed and shall use all reasonable
endeavours to prevent any such disclosure as aforesaid, PROVIDED HOWEVER
that the provisions of this Clause 15 shall not apply:
(a) to any information already known to the recipient otherwise than
as a result of entering into any of the Transaction Documents;
(b) to any information subsequently received by the recipient which it
would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge otherwise
than as a result of the conduct of the recipient;
(d) to any extent that the recipient is required to disclose the same
pursuant to any law or order of any court or pursuant to any
direction, request or requirement (whether or not having the force
of law) of any central bank or any governmental or other authority
(including, without limitation, any official bank examiners or
regulators);
23
(e) to the extent that the recipient needs to disclose the same for
determining the existence of, or declaring, an Event of Default,
an Intercompany Loan Event of Default or a Cash Manager
Termination Event, the protection or enforcement of any of its
rights under any of the Transaction Documents or in connection
herewith or therewith or for the purpose of discharging, in such
manner as it thinks fit, its duties under or in connection with
such agreements in each case to such persons as require to be
informed of such information for such purposes; or
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt to be issued by any Issuer) to any credit
rating agency or any prospective new cash manager or prospective
new security trustee.
16. NO PARTNERSHIP
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any partnership between
any of the parties.
17. ASSIGNMENT
17.1 ASSIGNMENT BY THE MORTGAGES TRUSTEE AND FUNDING: Neither of the
Mortgages Trustee nor Funding may assign or transfer any of its
respective rights and obligations under this Agreement without the prior
written consent of:
(a) in the case of the Mortgages Trustee, each of the Beneficiaries
and the Security Trustee; and
(b) in the case of Funding, each of the Security Trustee and the Cash
Manager,
except that Funding may assign its respective rights hereunder without
such consent pursuant to the Funding Deed of Charge.
17.2 NO ASSIGNMENT BY CASH MANAGER: The Cash Manager may not assign or
transfer any of its rights and obligations under this Agreement without
the prior written consent of the Mortgages Trustee, each of the
Beneficiaries and the Security Trustee.
18. THE SECURITY TRUSTEE
18.1 CHANGE IN SECURITY TRUSTEE: If there is any change in the identity of the
security trustee in accordance with the Funding Deed of Charge, the Cash
Manager, the Seller, Funding and the Mortgages Trustee shall execute such
documents and take such action as the successor security trustee and the
outgoing security trustee may require for the purpose of vesting in the
successor security trustee the rights and obligations of the outgoing
security trustee under this Agreement and releasing the outgoing security
trustee from its future obligations under this Agreement.
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18.2 NO OBLIGATIONS: It is hereby acknowledged and agreed that by its
execution of this Agreement the Security Trustee shall not assume or have
any of the obligations or liabilities of the Cash Manager, the Seller,
Funding or the Mortgages Trustee under this Agreement. Furthermore, any
liberty or power which may be exercised or any determination which may be
made hereunder by the Security Trustee may be exercised or made in the
Security Trustee's absolute and unfettered discretion without any
obligation to give reasons therefor, but in any event must be exercised
or made in accordance with the provisions of the Funding Deed of Charge.
19. NEW INTERCOMPANY LOAN AGREEMENTS
If Funding enters into a New Intercompany Loan Agreement, then the Cash
Manager, the Seller, Funding, the Security Trustee and the Mortgages
Trustee shall execute such documents and take such action as may be
necessary or required by the Rating Agencies for the purpose of including
the New Issuer, any Basis Rate Swap Provider, any Currency Swap Provider,
any New Start-up Loan Provider and any other person who has executed an
Accession Undertaking or any New Intercompany Loan Agreement in the
Transaction Documents.
20. NON PETITION COVENANT; LIMITED RECOURSE
20.1 ONLY TRUSTEE TO ENFORCE: The Cash Manager hereby undertakes to each of
the other parties hereto that only the Security Trustee may enforce the
security created in favour of the Security Trustee by the Funding Deed of
Charge in accordance with the provisions thereof.
20.2 LIMITED RECOURSE: The Cash Manager hereby undertakes to each of the other
parties hereto that, notwithstanding any other provision of this
Agreement or any other Transaction Document, no sum due or owing to the
Cash Manager from or by Funding or the Mortgages Trustee under this
Agreement shall be payable by Funding or the Mortgages Trustee except to
the extent that Funding or the Mortgages Trustee, as applicable, has
sufficient funds available subject to the applicable Funding Priority of
Payments set out in the Funding Deed of Charge or the applicable Priority
of Payments for the Mortgages Trustee under the Mortgages Trust Deed, as
the case may be, or, following enforcement of the Funding Security the
Security Trustee has realised sufficient funds from the Funding Security
to pay such sum subject to and in accordance with the relevant Funding
Priority of Payments, and provided that all liabilities of Funding or the
Mortgages Trustee required to be paid in priority thereto or pari passu
therewith pursuant to the applicable Funding Priority of Payments set out
in the Funding Deed of Charge or the applicable Priority of Payments for
the Mortgages Trustee under the Mortgages Trust Deed, as the case may be,
have been paid, discharged and/or otherwise provided for in full.
20.3 NON-PETITION: The Cash Manager hereby undertakes to each of the other
parties hereto that it shall not take any steps for the purpose of
recovering any amount payable under this Agreement (including, without
limitation, by exercising any rights of set-off) or enforcing any rights
arising out of this Agreement against Funding or the Mortgages Trustee
and it shall not take any steps or legal proceedings for the winding-up,
dissolution or reorganisation of, or the institution of insolvency
proceedings against, either Funding or the Mortgages Trustee or for the
appointment
25
of a receiver, administrator, liquidator or similar officer of Funding or
the Mortgages Trustee in respect of any or all of its revenues except to
the extent expressly permitted under the Funding Deed of Charge or the
Mortgages Trust Deed, as the case may be.
20.4 FOLLOWING ENFORCEMENT: The Cash Manager hereby undertakes to each of the
other parties hereto that, following any enforcement of the Funding
Security, it will hold on trust for, and will pay to, the Security
Trustee or the Receiver, as the case may be, all monies received or
recovered by it (whether by way of set-off or otherwise) from Funding or
in respect of any amount due hereunder by Funding, otherwise than in
accordance with the Funding Post-Enforcement Priority of Payments in
order that such monies may be applied by the Security Trustee or the
Receiver in accordance with the Funding Post-Enforcement Priority of
Payments.
20.5 CORPORATE OBLIGATIONS: To the extent permitted by law, no recourse under
any obligation, covenant, or agreement of any person contained in this
Agreement shall be had against any shareholder, officer or director of
such person as such, by the enforcement of any assessment or by any legal
proceeding, by virtue of any statute or otherwise; it being expressly
agreed and understood that this Agreement is a corporate obligation of
each person expressed to be a party hereto and no personal liability
shall attach to or be incurred by the shareholders, officers, agents or
directors of such person as such, or any of them, under or by reason of
any of the obligations, covenants or agreements of such person contained
in this Agreement, or implied therefrom, and that any and all personal
liability for breaches by such person of any of such obligations,
covenants or agreements, either under any applicable law or by statute or
constitution, of every such shareholder, officer, agent or director is
hereby expressly waived by each person expressed to be a party hereto as
a condition of and consideration for the execution of this Agreement.
21. AMENDMENTS AND WAIVER
21.1 ENTIRE AGREEMENT: This Agreement sets out the entire agreement and
understanding between the parties with respect to the subject matter of
this Agreement superseding all prior oral or written understandings other
than the other Transaction Documents.
21.2 AMENDMENTS AND WAIVER: No amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing and
signed by each of the parties hereto. In the case of a waiver or
consent, such waiver or consent shall be effective only in the specific
instance and as against the party or parties giving it for the specific
purpose for which it is given.
21.3 RIGHTS CUMULATIVE: The respective rights of each of the parties to this
Agreement are cumulative and may be exercised as often as they consider
appropriate. No failure on the part of any party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any
other right. The remedies in this Agreement are cumulative and not
exclusive of any remedies provided by law.
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21.4 RATINGS: No variation or waiver of this Agreement shall be made if the
same would adversely affect the then-current ratings of any of the Notes.
22. NOTICES
Any notices or other communication or document to be given or delivered
pursuant to this Agreement to any of the parties hereto shall be
sufficiently served if sent by prepaid first class post, by hand or by
facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched or (where delivered by hand) on
the day of delivery if delivered before 17.00 hours on a London Business
Day or on the next London Business Day if delivered thereafter or (in the
case of first class post) when it would be received in the ordinary
course of the post and shall be sent:
(a) in the case of the Cash Manager and the Seller, to Northern Rock
plc, Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX
(facsimile number: 0191 213 2203) for the attention of the Group
Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance Trustees
Limited, 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX, Channel
Islands (facsimile number 0153 469 9333) for the attention of
Securitisation Team, Treasury;
(c) in the case of Funding, to Granite Finance Funding Limited, 00 Xxx
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX (facsimile
number 0207 332 6199) for the attention of Securitisation Team,
Treasury;
(d) in the case of the Security Trustee, to The Bank of New York, at
Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX (facsimile number
020 7964 6399) for the attention of Corporate Trust (Global
Structured Finance);
(e) in the case of Fitch, to Fitch Ratings Ltd., at Xxxxx Xxxxx, 0
Xxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number 0207 417 6262) for
the attention of European Structured Finance Surveillance;
(f) in the case of Moody's, to Xxxxx'x Investors Services, Inc., at
1st Floor, 0 Xxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxx XX0X 0XX
(facsimile number 0207 772 5400) for the attention of Xxxxx
Xxxxxxxx;
(g) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc., at Xxxxxx Xxxxx, 00
Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX (facsimile number 0207 826 3598)
for the attention of Xxxxxxx Xxxx;
or to such other address or facsimile number or for the attention of such
other person or entity as may from time to time be notified by any party
or by any Rating Agency to the others by written notice in accordance
with the provisions of this Clause 22. All notices served under this
Agreement shall be simultaneously copied to the Security Trustee by the
person serving the same.
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23. THIRD PARTY RIGHTS
A person who is not a party to this Agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) Xxx 0000, but this
shall not affect any right or remedy of a third party which exists or is
available apart from that Act.
24. EXECUTION IN COUNTERPARTS; SEVERABILITY
24.1 COUNTERPARTS: This Agreement may be executed in any number of
counterparts (manually or by facsimile) and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute
one and the same instrument.
24.2 SEVERABILITY: Where any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations under this Agreement, or of such provision or obligation in
any other jurisdiction, shall not be affected or impaired thereby.
25. GOVERNING LAW AND SUBMISSION TO JURISDICTION
25.1 GOVERNING LAW: This Agreement is governed by, and shall be construed in
accordance with, English law.
25.2 SUBMISSION TO JURISDICTION: Each of the parties hereto irrevocably agrees
that the courts of England shall have jurisdiction to hear and determine
any suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with this Agreement and, for such purposes,
irrevocably submits to the jurisdiction of such courts.
25.3 PROCESS AGENT: The Mortgages Trustee irrevocably and unconditionally
appoints Mourant & Co. Capital (SPV) Limited at Xxxxxx Xxxxx, 00 Xxx
Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX or otherwise at its
registered office for the time being as its agent for service of process
in England in respect of any proceedings in respect of this Agreement and
undertakes that in the event of Mourant & Co. Capital (SPV) Limited
ceasing so to act it will appoint another person with a registered office
in London as its agent for service of process.
25.4 FORUM: Each of the parties hereto irrevocably waives any objection which
it might now or hereafter have to the courts of England being nominated
as the forum to hear and determine any Proceedings and to settle any
disputes, and agrees not to claim that any such court is not a convenient
or appropriate forum.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed the
day and year first before written.
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SCHEDULE 1
THE CASH MANAGEMENT SERVICES
The Cash Manager shall:
(a) make the determinations set out in Schedule 2 hereto;
(b) invest sums, if any, standing to the credit of the Funding
Transaction Account in short-term Authorised Investments as
determined by Funding and, if applicable, the Security Trustee;
(c) invest sums, if any, standing to the credit of the Mortgages
Trustee Transaction Account in short-term Authorised Investments
as determined by the Mortgages Trustee and, if applicable, the
Security Trustee;
(d) maintain the Funding Principal Deficiency Ledger, and record (1)
any principal Losses on the Mortgage Loans allocated to Funding
pursuant to the terms of the Mortgages Trust and (2) to record the
application of Funding Available Principal Receipts to any Issuer
to fund the Issuer Liquidity Reserve Fund of any Issuer.
(e) provide the Mortgages Trustee, Funding, the Security Trustee (upon
its request) and the Rating Agencies with quarterly reports in
relation to the Mortgages Trustee and Funding as set forth on
Schedule 3;
(f) operate the Mortgages Trustee Transaction Account, the Mortgages
Trustee GIC Account, the Funding GIC Account, any Funding (Issuer)
GIC Account and the Funding Transaction Account and ensure that
payments are made into and from such accounts in accordance with
this Agreement, the Mortgages Trust Deed, the Funding Deed of
Charge, the Bank Account Agreement, any Funding (Issuer) Bank
Account Agreement, the Mortgages Trustee Guaranteed Investment
Contract, the Funding Guaranteed Investment Contract, any Funding
(Issuer) Guaranteed Investment Contract and any other applicable
Transaction Document, PROVIDED HOWEVER, that nothing herein shall
require the Cash Manager to make funds available to the Mortgages
Trustee or Funding to enable such payments to be made other than
as expressly required by the provisions of this Agreement;
(g) in relation to the payments to be made to each Issuer, make
withdrawals under the Issuer Reserve Fund, if required;
(h) in relation to the payments to be made to each Issuer, make any
required withdrawals under the Issuer Liquidity Reserve Fund;
(i) maintain any Issuer Reserve Fund Ledger, and record the amount
credited to any Issuer Reserve Fund on the Initial Closing Date,
and subsequent withdrawals and deposits in respect of any Issuer
Reserve Fund;
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(j) maintain any Issuer Liquidity Reserve Ledger, if any, and record
the amount credited to any Issuer Liquidity Reserve Fund from time
to time, and subsequent withdrawals and deposits in respect of any
Issuer Liquidity Reserve Fund;
(k) keep records for all taxation purposes (including, without
limitation VAT);
(l) subject to any applicable law, assist the auditors of the
Mortgages Trustee and Funding and provide such information to them
as they may reasonably request for the purpose of carrying out
their duties as auditors;
(m) make all filings, give all notices and make all registrations and
other notifications required in the day-to-day operation of the
respective businesses of the Mortgages Trustee and Funding or
required to be given by the Mortgages Trustee or Funding pursuant
to the Transaction Documents;
(n) arrange for all payments due to be made by the Mortgages Trustee
and/or Funding under any of the Transaction Documents, PROVIDED
THAT such monies are at the relevant time available to the
Mortgages Trustee and/or Funding and PROVIDED FURTHER that nothing
herein shall constitute a guarantee by the Cash Manager of all or
any of the obligations of the Mortgages Trustee or Funding under
any of the Transaction Documents;
(o) without prejudice to the role of and in conjunction with the
Corporate Services Provider to Funding and the Mortgages Trustee
under the relevant Corporate Services Agreement, keep general
books of account and records of the Mortgages Trustee and Funding;
provide accounting services, including reviewing receipts and
payments, supervising and assisting in the preparation of interim
statements and final accounts and supervising and assisting in the
preparation of Tax returns;
(p) without prejudice to the role of and in conjunction with the
Corporate Services Provider to Funding and the Mortgages Trustee
under the relevant Corporate Services Agreement, provide or
procure the provision of company secretarial and administration
services to the Mortgages Trustee and Funding including the
keeping of all registers and the making of all returns and filings
required by applicable law or by U.S., U.K. or Jersey regulatory
authorities (including the Securities and Exchange Commission),
co-operate in the convening of board and general meetings and
provide registered office facilities;
(q) itself on behalf of the Mortgages Trustee and Funding, PROVIDED
THAT such monies are at the relevant time available to the
Mortgages Trustee and Funding, pay all the out-of-pocket expenses
of the Mortgages Trustee and Funding, incurred by the Cash Manager
on behalf of the Mortgages Trustee and Funding in the performance
of the Cash Manager's duties hereunder including without
limitation:
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(i) all Taxes which may be due or payable by the Mortgages
Trustee and Funding;
(ii) all registration, transfer, filing and other fees and other
charges payable in respect of the sale by the Seller of the
Mortgage Portfolio to the Mortgages Trustee;
(iii) all necessary filing and other fees in compliance with
regulatory requirements;
(iv) all legal and audit fees and other professional advisory
fees;
(v) all communication expenses including postage, courier and
telephone charges; and
(vi) all premiums payable by the Mortgages Trustee in respect of
the Insurance Policies;
(r) at the request of Funding (and following the enforcement of the
Funding Security, with the prior written consent of the Security
Trustee), the Cash Manager may invest monies standing from time to
time to the credit of the Funding GIC Account or any Funding
(Issuer) GIC Account (including any amounts credited thereto and
representing amounts standing to the credit of such Issuer
Liquidity Reserve Fund, if any) in Authorised Investments, subject
to the following provisions:
(i) any such Authorised Investment shall be made in the joint
names of Funding and the Security Trustee;
(ii) any costs properly and reasonably incurred in making and
changing Authorised Investments will be reimbursed to the
Cash Manager and the Security Trustee by Funding;
(iii) all income or proceeds following the disposal or maturity of
Authorised Investments shall be credited to the Funding GIC
Account or any Funding (Issuer) GIC Account, as applicable;
and
(iv) following the enforcement of the Funding Security no such
investment may be made without the prior written consent of
the Security Trustee.
The Security Trustee and the Cash Manager shall not be responsible
(save where any loss results from the Security Trustee's or the
Cash Manager's own fraud, wilful default or gross negligence or
that of its officers or employees) for any loss occasioned by
reason of any such Authorised Investments whether by depreciation
in value or otherwise provided that such Authorised Investments
were made in accordance with the above provisions; and
(s) take such other action or provide any other Cash Management
Services as is required in the Transaction Documents.
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SCHEDULE 2
CASH MANAGEMENT AND MAINTENANCE OF LEDGERS
1. DETERMINATION
(a) On or before each Distribution Date based on the aggregate amount
of monies standing to the credit of the Mortgages Trustee
Transaction Account and the Mortgages Trustee GIC Account as at
close of business on the preceding day, the Cash Manager shall
determine each of the following:
(i) the amount of Principal Receipts and Revenue Receipts
received during the immediately preceding Trust Calculation
Period and during each Interim Calculation Period (as
defined in the Mortgages Trust Deed), if any, during such
immediately preceding Trust Calculation Period;
(ii) the amount of any Mortgages Trustee Available Revenue
Receipts received during the immediately preceding Trust
Calculation Period;
(iii) the amount of any net credit on the Non-Flexible
Overpayments Sub Ledger;
(iv) the amount of Mortgages Trustee Available Revenue Receipts
and Principal Receipts to be distributed to Funding and to
the Seller on such Distribution Date;
(v) whether each of the Issuer Arrears Test, the Issuer Reserve
Requirement and the Subordinated Principal Test is satisfied
on such date and shall promptly notify the Issuer Cash
Manager of such determinations; and
(vi) the various amounts, balances and rates to be calculated in
accordance with any Basis Rate Swap and/or any Currency Rate
Swap, and shall promptly notify the Issuer, the First Issuer
Cash Manager, the Note Trustee and each Calculation Agent
(as defined in each Basis Rate Swap Agreement and Currency
Swap Agreement) of such amounts, balances and rates.
(b) On or before each Distribution Date (and, in respect of Clause
1(b)(ii) below, on each Assignment Date), the Cash Manager shall
determine each of the following:
(i) the amount of any Losses incurred on the Mortgage Loans
during the immediately preceding Trust Calculation Period
and during each Interim Calculation Period (as defined in
the Mortgages Trust Deed), if any, during such immediately
preceding Trust Calculation Period;
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(ii) (the Funding Share, the Seller Share, the Funding Share
Percentage and the Seller Share Percentage in accordance
with Clause 8 (Adjustment of Funding Share Percentage and
Seller Share Percentage) of the Mortgages Trust Deed;
(iii) to the extent the Seller has assigned New Mortgage Loans to
the Mortgages Trustee during the immediately preceding Trust
Calculation Period, the Weighted Average Funding Share
Percentage and the Weighted Average Seller Share Percentage
(in respect of Revenue Receipts, Principal Receipts and
Losses) in accordance with Clause 8.3 (Weighted Average
Funding Share Percentage) and Clause 8.7 (Weighted Average
Seller Share Percentage), respectively, of the Mortgages
Trust Deed; and
(iv) the Minimum Seller Share in accordance with Clause 9.2
(Fluctuation of Minimum Seller Share on each Distribution
Date) of the Mortgages Trust Deed.
(c) No later than each Distribution Date immediately prior to each
Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Funding Available Revenue Receipts to be
applied on the relevant Payment Date in accordance with the
Funding Pre-Enforcement Revenue Priority of Payments; and
(ii) the amount of any Funding Available Principal Receipts to be
applied on the following Payment Date in accordance the
Funding Pre-Enforcement Principal Priority of Payments.
(d) No later than each Distribution Date immediately prior to each
Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Issuer Allocable Revenue Receipts for each
Issuer to be applied on the relevant Payment Date in
accordance with the Funding Pre-Enforcement Revenue Priority
of Payments;
(ii) the amount of any Issuer Allocable Principal Receipts for
each Issuer to be applied on the following Payment Date in
accordance the Funding Pre-Enforcement Principal Priority of
Payments; and
(iii) the amount of any Shared Issuer Revenue Receipts and Shared
Issuer Principal Receipts to be applied on the following
Payment Date in accordance with the Funding Priority of
Payments.
(e) The Cash Manager shall make all the determinations referred to in
paragraphs 1(a) to (d) herein on the basis of the following
assumptions:
(i) that the amount of any Losses will not increase;
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(ii) that any debit balance on any Issuer Principal Deficiency
Ledger will not increase; and
(iii) such other assumptions (including without limitation as to
the amount of any payments or provisions to be made in
accordance with the applicable Funding Priority of Payments
during the period from and including the Distribution Date
immediately prior to each Payment Date to and excluding such
Payment Date) as the Cash Manager considers appropriate.
The Cash Manager shall notify the Mortgages Trustee, Funding and
the Security Trustee on request of any such other assumptions and
shall take account of any representations made by the Mortgages
Trustee, Funding and the Security Trustee (as the case may be) in
relation thereto.
(f) The Cash Manager shall:
(i) make or procure to be made all returns and filings required
to be made by Funding and the Mortgages Trustee;
(ii) itself on behalf of Funding and the Mortgages Trustee,
provided that such moneys are at the relevant time available
to Funding and the Mortgages Trustee, pay all out-of-pocket
expenses of Funding and the Mortgages Trustee incurred in
the performance of the Cash Manager's duties hereunder
including, without limitation, all fees payable to the
London Stock Exchange Limited.
(g) The Cash Manager shall, if necessary, perform all currency
conversions free of charge, cost or expense at the relevant
exchange rate (for the purposes of any calculations referred to
above, (i) all percentages resulting from such calculations will
be rounded, if necessary, to the nearest one hundred-thousandth of
a percentage point (e.g. 9.876541% being rounded down to 9.87654%
and (ii) any currency amounts used in or resulting from such
calculations will be rounded in accordance with the relevant
market practice).
(h) Each determination made in accordance with this paragraph 1 shall
(in the absence of bad faith, wilful default, negligence and
manifest error) be final and binding on all persons.
2. NOTIFICATION OF DETERMINATIONS
The Cash Manager shall cause each determination of Principal Receipts,
Revenue Receipts, Losses, Mortgages Trustee Available Revenue Receipts,
the Funding Share, the Seller Share, the Funding Share Percentage, the
Seller Share Percentage, the Weighted Average Funding Share Percentage,
the Weighted Average Seller Share Percentage and the Minimum Seller Share
to be notified forthwith to the Mortgages Trustee, the Beneficiaries and
the Security Trustee and will cause each determination of Funding
Available Principal Receipts and Funding Available Revenue Receipts to be
notified forthwith to Funding, the Security Trustee and the Issuer Cash
Manager.
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3. PRIORITY OF PAYMENTS FOR MORTGAGES TRUSTEE AVAILABLE REVENUE RECEIPTS
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date withdraw Cash from
the Mortgages Trustee GIC Account and/or, in the case of sums to be
provided for, retain Cash in the amounts required (to the extent that
such withdrawal does not cause the Mortgages Trustee GIC Account to
become overdrawn or, if any amounts are retained by way of provision for
the relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn). The aggregate amount
of the withdrawal shall equal the Mortgages Trustee Available Revenue
Receipts on each Distribution Date. The withdrawal shall be used to make
the payments and provisions in the order of priority set out in Clause
10.2 (Distribution of Mortgages Trustee Available Revenue Receipts) of
the Mortgages Trust Deed (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full).
4. PRIORITY OF PAYMENTS FOR MORTGAGES TRUSTEE PRINCIPAL RECEIPTS
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date, (i) withdraw Cash
from the Mortgages Trustee GIC Account in an amount equal to the
Mortgages Trustee Principal Receipts (to the extent only that such
withdrawal does not cause the Mortgages Trustee GIC Account to become
overdrawn or, if any amounts are retained by way of provision for the
relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn) to make the payments
in the order of priority set out in Clause 11 of the Mortgages Trust Deed
(Distribution of Principal Receipts) and/or, (ii) until such time as the
same may be distributed in accordance with the Mortgages Trust Deed,
retain Cash in the Mortgages Trustee GIC Account in the amount of any net
credit on the Non-Flexible Overpayments Sub Ledger.
5. PRIORITY OF PAYMENTS FOR FUNDING AVAILABLE REVENUE RECEIPTS
Funding Available Revenue Receipts (including Issuer Allocable Revenue
Receipts) will be applied by the Cash Manager on each Payment Date until
enforcement of the Funding Security pursuant to the Funding Deed of
Charge or until such time as there are no outstanding Funding Secured
Obligations, in making such payments and provisions in the order of
priority set out in the Funding Pre-Enforcement Revenue Priority of
Payments (in each case only if and to the extent that payments or
provisions of a higher priority have been made in full) as set out in
Part I of Schedule 3 to the Funding Deed of Charge (as the same may be
amended, varied or restated from time to time).
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6. PRIORITY OF PAYMENTS FOR FUNDING AVAILABLE PRINCIPAL RECEIPTS
Funding Available Principal Receipts (including Issuer Allocable
Principal Receipts) will be applied by the Cash Manager on each Payment
Date until enforcement of the Funding Security pursuant to the Funding
Deed of Charge or until such time as there are no outstanding Funding
Secured Obligations, in making such payments and provisions in the order
of priority (in each case only if and to the extent that payments or
provisions of a higher priority have been made in full) set out in Part
II of Schedule 3 to the Funding Deed of Charge.
7. OTHER PAYMENTS
Each of the Beneficiaries and the Cash Manager agrees, and the Mortgages
Trustee concurs, that (save as otherwise specified below) the following
payments may be made from the Mortgages Trustee GIC Account (to the
extent that withdrawal of those amounts would not cause the balance of
the Mortgages Trustee GIC Account to become overdrawn) on any date:
(a) if any amount has been received from a Borrower for the express
purpose of payment being made to a third party for the provision
of a service (including giving insurance cover) to any of that
Borrower or the Seller or the Mortgages Trustee, to pay such
amount when due to such third party or, in the case of the payment
of an insurance premium, where such third party and the Cash
Manager have agreed that payment of commission should be made by
deduction from such insurance premium, to pay such amount less
such commissions when due to such third party and to pay such
commission to the Cash Manager and to pay any premiums in respect
of any Insurance Policy or other insurance policy relating to any
Mortgage Loan comprised in the Mortgage Portfolio;
(a) to pay to any person (including the Cash Manager) any amounts due
arising from any unintentional overpayment (and not an
Overpayment) by any person or arising from any reimbursement by
any person of any such overpayment (including, for the avoidance
of doubt, where arising from the failure of a direct debit);
(a) to pay when due (but subject to any right to refuse or withhold
payment or of set-off that has arisen by reason of the Borrower's
breach of the terms of the relevant Mortgage or Mortgage Loan) any
amount payable to a Borrower under the terms of the Mortgage or
the Mortgage Loan to which that Borrower is a party, and to pay
when due any amount payable by the Mortgages Trustee to the Seller
pursuant to Clauses 3.2, 4.5 and 5.2 of the Mortgage Sale
Agreement;
(d) to pay to the Seller any amounts (including, for the avoidance of
doubt, any Early Repayment Charges) received and held by the
Mortgages Trustee on trust for the Seller pursuant to Clause 5
(Trust of Monies) of the Mortgage Sale Agreement;
36
(e) to pay when due and payable any amounts due and payable by the
Mortgages Trustee to third parties and incurred without breach by
the Mortgages Trustee of the Mortgages Trust Deed and not provided
for payment elsewhere in this paragraph 7;
(f) to refund any amounts due arising from the rejection of any
payments in respect of a Mortgage Loan and any other amounts which
have not been received by the Mortgages Trustee as cleared funds;
and
(g) to refund to the Seller any amounts which represent amounts
received from Borrowers but which do not form part of the Mortgage
Account or comprise unpaid interest as at the relevant Closing
Date and which are amounts owed by such Borrowers in respect of
any period prior to the relevant Closing Date as and when
identified by the Cash Manager and if a Borrower fails to pay the
full amount that it owes, the Cash Manager shall be obliged to
refund to the Seller only such portion of the amount which relates
to any period prior to the relevant Closing Date.
8. USE OF LEDGERS
The Cash Manager shall forthwith record monies received or payments made
by it on behalf of the Mortgages Trustee or Funding in the ledgers in the
manner set out in this Agreement. If, at any time, the Cash Manager is
in any doubt as to which ledger a particular amount should be credited or
debited, it shall consult with the Security Trustee thereon.
Except in the case of the Funding Principal Deficiency Ledger, a debit
item shall only be made in respect of any of the Mortgages Trustee
Ledgers and the Funding Ledgers and the corresponding payment or transfer
(if any) may only be made from the Mortgages Trustee Transaction Account,
the Mortgages Trustee GIC Account, the Funding GIC Account, the Funding
Transaction Account or any Funding (Issuer) GIC Account, as the case may
be, to the extent that such entry does not cause the relevant ledger to
have a debit balance. In the case of the Funding Principal Deficiency
Ledger, a credit item shall only be made to the extent that such entry
does not cause such ledger to have a credit balance.
9. REVENUE LEDGER
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Revenue Ledger:
(i) all Revenue Receipts; and
(ii) all interest received by the Mortgages Trustee on the
Mortgages Trustee Transaction Account and the Mortgages
Trustee GIC Account; and
37
(b) any payment or provision made under paragraph 3 herein shall be
debited to the Revenue Ledger.
10. PRINCIPAL LEDGER
The Cash Manager shall ensure that:
(a) all Principal Receipts shall be credited to the Principal Ledger;
and
(b) any payment or provision made under paragraph 4 herein shall be
debited to the Principal Ledger.
11. LOSSES LEDGER
The Cash Manager shall ensure that all Losses shall be recorded in the
Losses Ledger.
12. FUNDING SHARE/SELLER SHARE LEDGER
The Cash Manager shall ensure that the Current Funding Share and the
Current Funding Share Percentage of the Trust Property and the Current
Seller Share and the Current Seller Share Percentage of the Trust
Property are recorded in the Funding Share/Seller Share Ledger on the
Initial Closing Date and thereafter on each Distribution Date. In
addition to the foregoing, if the Seller has assigned New Mortgage Loans
to the Mortgages Trustee during the Trust Calculation Period immediately
preceding a Distribution Date, the Cash Manager shall ensure that the
Current Funding Share and the Current Funding Share Percentage of the
Trust Property and the Current Seller Share and the Current Seller Share
Percentage of the Trust Property, as recalculated on each Assignment
Date, and the Weighted Average Funding Share Percentage and the Weighted
Average Seller Share Percentage, as calculated on such Distribution Date
in respect of Revenue Receipts, Principal Receipts and Losses, are
recorded on the Funding Share/Seller Share Ledger on each such
Distribution Date.
13. FUNDING REVENUE LEDGER
The Cash Manager shall ensure that:
(c) the following amounts shall be credited to the Funding Revenue
Ledger:
(i) all Funding Revenue Receipts;
(ii) all interest received by Funding in respect of the Funding
Bank Accounts, including in respect of any Funding (Issuer)
GIC Account, provided that the Cash Manager shall keep a
separate record in respect of each Issuer of the amount of
interest received by Funding in respect of the Funding
(Issuer) GIC Account of such Issuer;
(iii) all amounts received by Funding representing income on any
of Funding's Authorised Investments; and
38
(iv) any amount debited to the Funding Principal Ledger under
paragraph 16(b)(ii) herein; and
(d) any payment or provision made under paragraph 5 above shall be
debited to the Funding Revenue Ledger.
14. ISSUER RESERVE FUND LEDGER
If an Issuer Reserve Fund is required to be established, the Cash Manager
will record on such Issuer Reserve Fund Ledger:
(a) an amount initially from that portion of Funding's Contribution to
the Mortgages Trust which will be retained by Funding and not paid
to the Mortgages Trustee and deposited into the related Funding
(Issuer) GIC Account;
(b) amounts credited to the relevant Issuer Liquidity Reserve Ledger
in accordance with the Funding Priority of Payments above; and
(c) amounts debited to an Issuer Liquidity Reserve Ledger in order to
be applied in accordance with the Funding Priority of Payments.
15. ISSUER LIQUIDITY RESERVE LEDGER
If an Issuer Liquidity Reserve Fund is required to be established, the
Cash Manager will record on such Issuer Liquidity Reserve Ledger:
(a) an amount funded initially from Funding Available Principal
Receipts which are allocated to the relevant Issuer in accordance
with the Funding Pre-Enforcement Principal Priority of Payments up
to the amount of the Issuer Liquidity Reserve Required Amount and
such amount will be deposited in the relevant Funding (Issuer) GIC
Account;
(b) amounts credited to the relevant Issuer Liquidity Reserve Ledger
in accordance with the Funding Priority of Payments above; and
(c) amounts debited to an Issuer Liquidity Reserve Ledger in order to
be applied in accordance with Funding Priority of Payments.
16. FUNDING PRINCIPAL LEDGER
Without prejudice to paragraph 18 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding Principal
Ledger:
(i) all Funding Principal Receipts; and
(ii) amounts credited to the Funding Principal Deficiency Ledger
under paragraphs 8 and 17 herein; and
39
(b) the following amounts shall be debited to the Funding Principal
Ledger:
(i) the aggregate amount of principal repaid on the Intercompany
Loan Agreement pursuant to paragraph 6 herein.
17. FUNDING PRINCIPAL DEFICIENCY LEDGER
The Cash Manager will establish a Principal Deficiency Ledger for Funding
and ensure that:
(a) on each occasion on which an Issuer Principal Deficiency Ledger is
credited with respect to (1) Losses and (2) Issuer Liquidity
Reserve Funds, the Funding Principal Deficiency Ledger is credited
with respect to such Issuer; and
(b) on each occasion on which the principal deficiency of an Issuer is
reduced with respect to a credit described in (a) above, the
Funding Principal Deficiency Ledger will record a parallel
reduction in aggregate principal deficiencies.
18. FUNDING RESERVE LEDGER
(a) to Funding from the Mortgages Trust and deposited in the Funding
GIC Account will be credited to the Funding Reserve Ledger.
(b) Amounts shall be credited to the Funding Reserve Ledger in
accordance with the Funding Priority of Payments above.
(c) Amounts shall be debited to the Funding Reserve Ledger on each
Payment Date in order to be applied in accordance with the Funding
Priority of Payments.
19. INTERCOMPANY LOAN LEDGER
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Intercompany Loans are recorded in
the Intercompany Loan Ledger.
20. OVERPAYMENTS LEDGER
The Cash Manager shall ensure that:
(a) with respect to the Non-Flexible Mortgage Loans:
(i) there shall be credited to the Non-Flexible Overpayments Sub
Ledger all Overpayments (not being Capital Payments) made on
Non-Flexible Mortgage Loans; and
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(ii) there shall be debited from the Non-Flexible Overpayments
Sub Ledger:
(A) all underpayments made by any Borrower on Non-Flexible
Mortgage Loans which do not exceed the amount of the
Overpayment previously made by such Borrower in the
same calendar year; and
(B) on the first Trust Determination Date of each calendar
year, all outstanding credits made to the Non-Flexible
Overpayments Sub Ledger during the previous calendar
year; and
(b) all Overpayments on the Flexible Mortgage Loans are recorded in
the Flexible Overpayments Sub Ledger.
21. NON-FLEXIBLE UNDERPAYMENTS LEDGER
The Cash Manager shall ensure that all amounts debited from the
Overpayments Ledger under paragraph 20(a)(ii) above shall be recorded on
the Non-Flexible Underpayments Ledger.
22. RE-DRAWS LEDGER
The Cash Manager shall ensure that, with respect to the Flexible Mortgage
Loans:
(a) all Non-Cash Re-Draws are recorded in the Non-Cash Re-Draws Sub
Ledger; and
(b) all Cash Re-Draws are recorded in the Cash Re-Draws Sub Ledger.
23. RECORDS
The Cash Manager shall ensure that a separate record is kept of any
amount drawn under any Issuer Reserve Fund or Issuer Liquidity Reserve
Fund.
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SCHEDULE 3A
FORM OF MORTGAGES TRUSTEE QUARTERLY REPORT
GRANITE FINANCE TRUSTEES LIMITED
MEMORANDUM OF ACCOUNT
Period Ended This Quarter Prior Quarter
{pound-sterling} 000's{pound-sterling} 000's
Fees Receivable
Fees Payable
Operating Expenses
Taxation
Dividend 0 0
Retained profit brought forward 0 0
Retained profit for the year 0 0
GRANITE FINANCE TRUSTEES LIMITED
BALANCE SHEET
Period Ended
{pound-sterling}{pound-sterling}
Fixed Asset Investments
Current Assets
New Mortgage Loans 0
Interest Receivable 0
Other debtors 0
Cash at Bank 0
0
Creditors: Amounts falling due within one year
Accruals 0
Interest Payable Accrual 0
Taxation 0
0
Net current assets 0
Total Assets less current liabilities 0
Share Capital 0
Reserves 0
0
Diff 0
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SCHEDULE 3B
FORM OF FUNDING QUARTERLY REPORT
GRANITE FINANCE FUNDING LIMITED
PROFIT & LOSS ACCOUNT
Period Ended This Quarter Prior Quarter
{pound-sterling} 000's{pound-sterling} 000's
Interest Receivable - Mortgages
Interest Receivable - Cash/ Authorised Investments
0 0
Interest Payable - Intercompany Loan
Interest Payable
0 0
Net Operating Income 0 0
Other Income
Operating Expenses
Deferred Consideration
Profit/loss on ordinary 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
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GRANITE FINANCE FUNDING LIMITED
BALANCE SHEET
Period Ended
{pound-sterling} 000's {pound-sterling} 000's
Fixed Asset Investments
Beneficial Interest in Mortgage Portfolio 0
Current Assets
Interest Receivable 0
Deferred Expenditure (costs of Securing)0
Other debtors 0
Cash at Bank 0
Creditors: Amounts falling due within one year
Accruals 0
Deferred Consideration Creditor 0
Interest Payable Accrual 0
Taxation 0
0
Net current assets 0
Creditors: Amounts falling due after one year
Intercompany Loan 0
Start-up Loan(s) (specify) 0
Total Assets less current liabilities 0
Share Capital 0
Reserves 0
0
Diff 0
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GRANITE FINANCE FUNDING LIMITED
NOTES TO BALANCE SHEET
Period Ended
Balance on Cash Accumulation Ledger0
Available Credit Enhancement
Reserve Fund at closing
Last Quarter Closing Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing Reserve Balance
Target Reserve Fund
Issuer Principal Deficiency Ledger AAAAA BBB
Opening PDL Balance 0 0 0
Losses this Quarter 0 0 0
PDL top up from Revenue Income 0 0 0
Closing PDL Balance 0 0 0
Subordinated Loan Outstanding
Initial Balance
Last Quarter Closing Outstanding
Accrued Interest
Repayments Made
Closing Balance
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SCHEDULE 4
CASH MANAGER REPRESENTATIONS AND WARRANTIES
The Cash Manager makes the following representations and warranties to each of
the Mortgages Trustee, Funding and the Security Trustee:
1. STATUS: It is a public limited company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which it is
incorporated, capable of being sued in its own right and not subject to
any immunity from any proceedings, and it has the power to own its
property and assets and to carry on its business as it is being
conducted.
2. POWERS AND AUTHORITY: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of each of the
Transaction Documents to which it is or will be a party, and each such
Transaction Document has been duly executed and delivered by it.
3. LEGAL VALIDITY: Each Transaction Document to which it is or will be a
party constitutes or when executed in accordance with its terms will
constitute, a legal, valid and binding obligation.
4. NON-CONFLICT: The execution by it of each of the Transaction Documents
to which it is a party and the exercise by it of its rights and the
performance of its obligations under such Transaction Documents will not:
(a) conflict with any document which is binding upon it or any of its
assets;
(b) conflict with its constitutional documents; or
(c) conflict with any law, regulation or official or judicial order of
any government, governmental body or court, domestic or foreign,
having jurisdiction over it.
5. NO LITIGATION: It is not a party to any material litigation, arbitration
or administrative proceedings and, to its knowledge, no material
litigation, arbitration or administrative proceedings are pending or
threatened against it.
6. CONSENTS AND LICENSES: All governmental consents, licences and other
approvals and authorisations required in connection with the entry into,
performance, validity and enforceability of, and the transactions
contemplated by, the Transaction Documents have been obtained or effected
(as appropriate) and are in full force and effect.
7. SOLVENCY: No Insolvency Event has occurred in respect of the Cash
Manager, and the Cash Manager is not insolvent.
8. FINANCIAL STATEMENTS: The most recent financial statements of the Cash
Manager:
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(a) were prepared in accordance with accounting principles generally
accepted in England and Wales consistently applied;
(b) disclose all liabilities (contingent or otherwise) and all
unrealised and or anticipated losses of the Cash Manager; and
(c) save as disclosed therein, give a true and fair view of the
financial condition and operations of the Cash Manager during the
relevant financial year.
9. NO ADVERSE CHANGE: Since the date as of which the most recent financial
statements of the Cash Manager were stated to be prepared, there has
been:
(a) no significant change in the financial position of the Cash
Manager; and
(b) no material adverse change in the financial position or prospects
of the Cash Manager.
10. RANKING OF CLAIMS:
Under the laws of England and Wales in force as at the date of making this
representation, claims against the Cash Manager under the Transaction
Documents will rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, save those whose claims are
preferred solely by any bankruptcy, liquidation or other similar laws of
general application.
11. INFORMATION IN PROSPECTUS AND OFFERING CIRCULAR:
All information in the Prospectus and the Offering Circular with regard to
the Cash Manager are true and accurate in all material respects and not
misleading in any material respect.
The Cash Manager has made all proper inquiries to ascertain and to verify
the foregoing.
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EXECUTION PAGE
AS CASH MANAGER
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
__________________________
Authorised Signatory
Name:
Title:
AS SELLER
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
__________________________
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
__________________________
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
__________________________
Authorised Signatory
Name:
Title:
48
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
__________________________
Authorised Signatory
Name:
Title:
49
