EXHIBIT 4.4
Dated 26 May 2004
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GRANITE FINANCE FUNDING LIMITED
as Funding
THE BANK OF NEW YORK
as Security Trustee
GRANITE MORTGAGES 04-2 PLC
as Current Issuer
NORTHERN ROCK PLC
as Current Issuer Start-up Loan Provider
- and -
OTHERS
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ISSUER DEED OF ACCESSION
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SIDLEY XXXXXX XXXXX & XXXX
WOOLGATE EXCHANGE
00 XXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
CONTENTS
1. Interpretation............................................................4
2. Representations and Warranties............................................4
3. Accession.................................................................5
4. Funding Security..........................................................6
5. Title Guarantee...........................................................8
6. Application...............................................................8
7. Scope of the Funding Deed of Charge.......................................8
8. Notices and Acknowledgements..............................................9
9. Amendment to the Funding Priority of Payments.............................9
10. Notices and Demands.......................................................9
11. Non Petition Covenant....................................................11
12. Third Party Rights.......................................................11
13. Execution in Counterparts................................................11
14. Governing Law and Jurisdiction; Appropriate Forum........................11
15. Process Agents...........................................................12
SCHEDULE I Utilisation of Issuer Reserves....................................18
APPENDIX 1 Amended and Restated Funding Priority of Payments..................19
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THIS DEED OF ACCESSION is made on 26 May 2004
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited liability company incorporated under the laws of Jersey whose
London branch (registered overseas company number FCO22999 and branch
number BR005916) is at 00 Xxxx Xxxx, Xxxxxxx XX0 0XX;
(2) THE BANK OF NEW YORK, a New York banking corporation whose London branch
address is at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX Xxxxxx Xxxxxxx,
in its capacity as Security Trustee;
(3) THE BANK OF NEW YORK, a New York banking corporation whose London branch
address is at 00xx Xxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX Xxxxxx Xxxxxxx,
(1) in its separate capacities as Note Trustee in respect of the Previous
Issuers and (2) in its capacity as note trustee under the Current Issuer
Trust Deed and the Current Issuer Deed of Charge (the "Current Issuer Note
Trustee", which expression shall include such person and all other persons
for the time being acting as the note trustee or note trustees pursuant to
those deeds);
(4) GRANITE MORTGAGES 01-1 PLC (registered number 4129652), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(5) GRANITE MORTGAGES 01-2 PLC (registered number 4270015), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(6) GRANITE MORTGAGES 02-1 PLC (registered number 4340767), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(7) GRANITE MORTGAGES 02-2 PLC (registered number 4482804), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(8) GRANITE MORTGAGES 03-1 PLC (registered number 4598035), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(9) GRANITE MORTGAGES 03-2 PLC (registered number 4684567), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
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(10) GRANITE MORTGAGES 03-3 PLC (registered number 4823268), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(11) GRANITE MORTGAGES 04-1 PLC (registered number 4959572), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX;
(12) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited liability company incorporated under the laws of Jersey whose
registered office is at 00 Xxxxxxxxx Xxxxxx, Xx. Xxxxxx, Xxxxxx XX0 0XX
Channel Islands in its capacity as Mortgages Trustee;
(13) NORTHERN ROCK PLC (registered number 03273685), 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 (1) Cash Manager (2) Account Bank and (3) Funding GIC Provider;
(14) LLOYDS TSB BANK PLC, acting through its office at City Office, Xxxxxx
Drive, Xxxxxxxxxx Xxxxxxxx Xxxx, Xxxx XX0 0XX, in its capacity as Account
Bank and acting through its office at 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
in its capacity as (1) Funding GIC Provider (2) Stand-by Funding GIC
Provider and (3) Stand-by Account Bank;
(15) MOURANT & CO. CAPITAL (SPV) LIMITED, a private limited company incorporated
under the laws of England and Wales whose registered office is 00 Xxxx
Xxxx, Xxxxxxx XX0 0XX, in its capacity as Corporate Services Provider;
(16) NORTHERN ROCK PLC (registered number 03273685), acting through its office
at Northern Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX, in its
capacity (1) as the Previous Start-up Loan Provider, and (2) as Current
Issuer Start-up Loan Provider; and
(17) GRANITE MORTGAGES 04-2 PLC (registered number 5057377), a public limited
company incorporated under the laws of England and Wales whose registered
office is at Xxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxx XX0X 0XX as Current
Issuer.
NOW THIS DEED OF ACCESSION WITNESSES AS FOLLOWS
WHEREAS:
(A) Pursuant to the terms of the Current Issuer Intercompany Loan Confirmation,
the Current Issuer has agreed to make available to Funding the Current
Issuer Intercompany Loan.
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(B) Pursuant to the terms of the Current Issuer Start-up Loan Agreement, the
Current Issuer Start-up Loan Provider has agreed to grant to Funding the
Current Issuer Start-up Loan.
(C) This Deed is supplemental to the Funding Deed of Charge, pursuant to which
Funding agreed to provide the Security Trustee with the benefit of the
security described in the Funding Deed of Charge to secure Funding's
obligations to the Funding Secured Creditors.
(D) The terms of the Funding Deed of Charge permit Funding to secure its
obligations to a New Funding Secured Creditor thereunder and (where such
New Funding Secured Creditor is a New Issuer) permit Funding to create
certain Security Interests in favour of the Security Trustee for the
benefit of such New Funding Secured Creditor.
(E) Northern Rock as an Account Bank and a Funding GIC Provider has agreed to
establish a new Funding GIC Account pursuant to the terms of the Funding
Guaranteed Investment Contract dated 26 May 2004 and the Bank Account
Agreement, as amended and restated by (and appearing as appendix 1 to) the
Bank Account Amendment Deed made on 26 May 2004 between, among others,
Funding and the Account Banks (as may be amended, varied or supplemented
from time to time).
(F) Pursuant to the terms of the Stand-by Funding Guaranteed Investment
Contract, the Stand-by GIC Provider has agreed to establish a Stand-by
Funding GIC Account, and the Stand-by Account Bank has agreed to operate
such account under the terms of the Stand-by Account Bank Agreement in the
event of the termination of the appointment of Northern Rock as an Account
Bank and the Funding GIC Provider under the agreements referred to in
paragraph (E) above.
(G) The Current Issuer Start-up Loan Provider, the Current Issuer, the Stand-by
Funding GIC Provider, the Stand-by Account Bank and Northern Rock as an
Account Bank and as a Funding GIC Provider, each of whom is a New Funding
Secured Creditor, have agreed to enter into this Deed of Accession (this
"Deed") to accede to the provisions of the Funding Deed of Charge.
(H) The Current Issuer Note Trustee has agreed to enter into this Deed to
accede to the provisions of the Funding Deed of Charge.
(I) The Funding Secured Creditors have agreed to enter into this Deed to, among
other things, acknowledge and agree to such accessions, permit any
consequential changes to the Funding Priority of Payments set out in Part
I, Part II and Part III of Schedule 3 of the Funding Deed of Charge as are
required and any other amendment as may be required to give effect to this
Deed and to acknowledge the Security Interests created hereunder.
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1. Interpretation
The provisions of:
(a) the Master Definitions Schedule as amended and restated by (and
appearing in Appendix 1 to) the Master Definitions Schedule Eighth
Amendment Deed made on 26 May 2004 between, among others, the Seller,
Funding and the Mortgages Trustee, and
(b) the Issuer Master Definitions Schedule signed for the purposes of
identification by Sidley Xxxxxx Xxxxx & Xxxx and Xxxxx & Xxxxx LLP on
26 May 2004,
(as the same have been and may be amended, varied or supplemented from time
to time with the consent of the parties hereto) are expressly and
specifically incorporated into and shall apply to this Agreement. The
Issuer Master Definitions Schedule specified above shall prevail to the
extent that it conflicts with the Master Definitions Schedule.
2. Representations and Warranties
2.1 The Current Issuer hereby represents and warrants to the Security Trustee
and each of the Funding Secured Creditors in respect of itself that as of
the date of this Deed:
(a) pursuant to the terms of the Current Issuer Intercompany Loan
Agreement, Funding has agreed to pay to the Current Issuer fees,
interest and principal in accordance with the terms of the Current
Issuer Intercompany Loan Agreement; and
(b) the Current Issuer Intercompany Loan Agreement expressly provides that
all amounts due from Funding thereunder are to be secured by or
pursuant to the Funding Deed of Charge.
2.2 The Current Issuer Start-up Loan Provider hereby represents and warrants to
the Security Trustee and each of the Funding Secured Creditors in respect
of itself that as of the date of this Deed:
(a) Funding has agreed to pay interest and repay principal to the Current
Issuer Start-up Loan Provider in accordance with the terms of the
Current Issuer Start-up Loan Agreement; and
(b) the Current Issuer Start-up Loan Agreement expressly provides that all
amounts due from Funding thereunder are to be secured by or pursuant
to the Funding Deed of Charge.
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2.3 Funding hereby represents and warrants to the Security Trustee and each of
the Funding Secured Creditors that as at the date of this Deed, the
conditions to incurring further secured financial indebtedness set out in
Clause 2.2 (New Intercompany Loan Agreements) of the Intercompany Loan
Terms and Conditions are satisfied.
3. Accession
3.1 In consideration of the Current Issuer New Funding Secured Creditors being
accepted as Funding Secured Creditors for the purposes of the Funding Deed
of Charge by the parties thereto as from the date of this Deed, each of the
Current Issuer New Funding Secured Creditors:
(a) confirms that as from the date of this Deed, it will become and
intends to be a party to the Funding Deed of Charge as a Funding
Secured Creditor;
(b) undertakes to comply with and be bound by all of the provisions of the
Master Definitions Schedule and the Current Issuer Master Definitions
Schedule (as the same may be amended, varied or restated from time to
time) and the Funding Deed of Charge in its capacity as a Funding
Secured Creditor, as if it had been an original party thereto;
(c) undertakes to perform, comply with and be bound by all of the
provisions of the Funding Deed of Charge in its capacity as a Funding
Secured Creditor, as if it had been an original party thereto
including, without limitation, Clause 20.3 (Funding Secured
Creditors), Clause 8.3 (Funding Post-Enforcement Priority of
Payments), Clause 8.6 (Security Trustee Rights upon Enforcement) and
Clause 6 (Restrictions on Exercise of Certain Rights); and
(d) agrees that the Security Trustee shall be the Security Trustee of the
Funding Deed of Charge for all Funding Secured Creditors upon and
subject to the terms set out in the Funding Deed of Charge.
3.2 The Current Issuer Note Trustee:
(a) confirms that as of the date of this Deed, it becomes and intends to
be party to the Funding Deed of Charge; and
(b) agrees to comply with and be bound by the provisions of the Funding
Deed of Charge relating to the Note Trustee and agrees that all
references to the Note Trustee in the Funding Deed of Charge and this
Deed shall be construed as including the note trustee under the
Current Issuer Deed of Charge and Current Issuer Trust Deed.
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4. Funding Security
4.1 Funding, by way of first fixed security for the payment or discharge of
that portion of the Funding Secured Obligations which represent the
obligations and liabilities of Funding to the Current Issuer under the
Current Issuer Intercompany Loan Agreement, subject to Clause 4 (Release of
Funding Charged Property) of the Funding Deed of Charge, hereby:
(a) assigns by way of first fixed security to the Security Trustee for the
benefit of the Current Issuer all of its right, title, benefit and
interest, present and future, in, to and under:
(i) the Funding (Current Issuer) Bank Account Agreement; and
(ii) the Funding (Current Issuer) Guaranteed Investment Contract,
including all rights to receive payment of any amounts which may
become payable to Funding thereunder and all payments received by
Funding thereunder including, without limitation, all rights to serve
notices and/or make demands thereunder and/or to take such steps as
are required to cause payments to become due and payable thereunder
and all rights of action in respect of any breach thereof and all
rights to receive damages or obtain relief in respect thereof and the
proceeds of any of the foregoing, TO HOLD the same unto the Security
Trustee absolutely;
(b) assigns by way of first fixed security in favour of the Security
Trustee for the benefit of the Current Issuer all of its rights,
title, benefit and interest, present and future, in and to all monies
now or at any time hereafter standing to the credit of the Funding
(Current Issuer) GIC Account and the debts represented by them
together with all rights and claims relating or attached thereto
including, without limitation, the right to interest and the proceeds
of any of the foregoing, TO HOLD the same unto the Security Trustee
absolutely; and
(c) charges by way of first fixed security to the Security Trustee for the
benefit of the Current Issuer all of its right, title, benefit and
interest, present and future in, to and under any Authorised
Investment purchased using monies standing to the credit of the
Funding (Current Issuer) GIC Account and all rights in respect of or
ancillary to such Authorised Investments, including the right to
income and the proceeds of any of the foregoing, TO HOLD the same unto
the Security Trustee absolutely.
4.2 (a) Funding, by way of first fixed security for the payment or discharge
of the Funding Secured Obligations, subject to Clause 4 (Release of
Funding Charged Property) of the Funding Deed of Charge, hereby
assigns to the
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Security Trustee, save to the extent that the same may be situate in
Jersey at any relevant time, all of its right, title, benefit and
interest, present and future, in, to and under the Current Issuer
Start-up Loan Agreement, including, without limitation, all rights to
receive payment of any amounts which may become payable to Funding
thereunder and all payments received by Funding thereunder, all rights
to serve notices and/or make demands thereunder and/or to take such
steps as are required to cause payments to become due and payable
thereunder, all rights of action in respect of any breach thereof and
all rights to receive damages or obtain relief in respect thereof and
the proceeds of any of the foregoing, TO HOLD the same unto the
Security Trustee absolutely.
(b) To the intent that the Security Trustee shall have a security interest
in accordance with the Jersey Security Law (and as secured party for
the purposes of such law) for the payment or discharge of the Funding
Secured Obligations, subject to Clause 4 (Release of Funding Charged
Property) of the Funding Deed of Charge, Funding (as debtor for the
purposes of the Jersey Security Law) hereby assigns, to the extent
that the same may be situate in Jersey at any relevant time to the
Security Trustee all of its right, title, benefit and interest,
present and future, in, to and under the Current Issuer Start-up Loan
Agreement, including, without limitation, all rights to receive
payment of any amounts which may become payable to Funding thereunder
and all payments received by Funding thereunder, all rights to serve
notices and/or make demands thereunder and/or to take such steps as
are required to cause payments to become due and payable thereunder,
all rights of action in respect of any breach thereof and all rights
to receive damages or obtain relief in respect thereof and the
proceeds of any of the foregoing, TO HOLD the same unto the Security
Trustee absolutely.
4.3 Funding, by way of fixed security for the payment or discharge of the
Funding Secured Obligations, subject to Clause 4 (Release of Funding
Charged Property) of the Funding Deed of Charge, hereby:
(a) assigns by way of fixed security to the Security Trustee all of its
right, title, benefit and interest, present and future, in, to and
under:
(i) the Stand-by Bank Account Agreement; and
(ii) the Stand-by Funding Guaranteed Investment Contract,
including all rights to receive payment of any amounts which may
become payable to Funding thereunder and all payments received by
Funding thereunder including, without limitation, all rights to serve
notices and/or
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make demands thereunder and/or to take such steps as are required to
cause payments to become due and payable thereunder and all rights of
action in respect of any breach thereof and all rights to receive
damages or obtain relief in respect thereof and the proceeds of any of
the foregoing, TO HOLD the same unto the Security Trustee absolutely.
5. Title Guarantee
Each of the dispositions of, assignments of and charges over, property
effected in or pursuant to Clause 4 (Accounts for Issuers) is made with
full title guarantee.
6. Application
Prior to and following enforcement of the Funding Security all amounts at
any time held by Funding, the Cash Manager or the Security Trustee in
respect of the security created under this Deed shall be held and/or
applied by such person subject to and in accordance with the relevant
provisions of the Funding Deed of Charge.
7. Scope of the Funding Deed of Charge
Funding, the Current Issuer New Funding Secured Creditors and the Funding
Secured Creditors (including the Security Trustee) hereby agree that for
the relevant purposes under the Funding Deed of Charge and the Master
Definitions Schedule:
(a) the Current Issuer Intercompany Loan Agreement shall be treated as a
Funding Transaction Document;
(b) the Current Issuer Start-up Loan Agreement shall be treated as a
Funding Transaction Document;
(c) the Funding (Current Issuer) Bank Account Agreement shall be treated
as a Funding Transaction Document;
(d) the Funding (Current Issuer) Guaranteed Investment Contract shall be
treated as a Funding Transaction Document;
(e) each of the Stand-by Funding Guaranteed Investment Contract and the
Stand-by Bank Account Agreement shall be treated as a Funding
Transaction Document;
(f) the property and assets of Funding expressed to be assigned or charged
pursuant to this Deed shall constitute Funding Charged Property; and
(g) each of the Current Issuer New Funding Secured Creditors shall be
treated as a Funding Secured Creditor.
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8. Notices and Acknowledgements
(a) The execution of this Deed by the Current Issuer New Funding Secured
Creditors shall constitute notice to such Current Issuer New Funding
Secured Creditors of the assignments made by Funding pursuant to
Clause 3 (Funding Security) of the Funding Deed of Charge. The
execution of this Deed by each other Funding Secured Creditor shall
constitute notice to such Funding Secured Creditor of the assignments
made by Funding pursuant to this Deed.
(b) By its execution of this Deed, each of the Current Issuer New Funding
Secured Creditors acknowledges that it has notice of and consents to
the assignments, charges and Security Interests (including the Jersey
Security Interests) made or granted by Funding pursuant to Clause 3
(Funding Security) of the Funding Deed of Charge and also acknowledges
that as at the date hereof it has not received from any other person
any notice of any assignment or charge of any of the property the
subject of such Security Interests. By its execution of this Deed,
each other Funding Secured Creditor acknowledges that it has notice of
and consents to the assignments, charges and Security Interests made
or granted by Funding pursuant to this Deed and also acknowledges that
as at the date hereof it has not received from any other person any
notice of any assignment or charge of any of the property the subject
of such Security Interests.
(c) Notwithstanding the assignments and charges granted pursuant to Clause
3 (Funding Security) of the Funding Deed of Charge or pursuant to this
Deed, the parties hereto acknowledge that, subject as provided
otherwise in the Funding Deed of Charge, each Funding Secured Creditor
and each other party to any Funding Transaction Document may continue
to make all payments becoming due to Funding under any Funding
Transaction Document in the manner envisaged by such Funding
Transaction Document until the receipt of written notice from the
Security Trustee or any Receiver requiring payments to be made
otherwise.
9. Amendment to the Funding Priority of Payments
The Funding Secured Creditors agree to amend and restate the Funding
Priority of Payments set out in Part I and Part II of Schedule 3 of the
Funding Deed of Charge in accordance with Appendix 1 hereto.
10. Notices and Demands
Any notice or communication under or in connection with this Deed shall be
given in the manner and at the times set out in Clause 24 (Notices) of the
Funding Deed of
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Charge. For the purposes of such Clause 24 (Notices), as at the date of
this Deed the relevant contact details for the Current Issuer are:
Granite Mortgages 04-2 plc
Xxxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxx XX0X 0XX
For the attention of: The Company Secretary
Telephone: x00 000 0000 0000
Facsimile: x00 000 0000 0000
and for the Current Issuer Start-up Loan Provider, Northern Rock as an
Account Bank and Funding GIC Provider are:
Northern Rock PLC
Xxxxxxxx Xxxx Xxxxx
Xxxxxxxx
Xxxxxxxxx xxxx Xxxx
XX0 0XX
For the attention of: The Group Secretary
Facsimile: x00 (0)000 000 0000
and for the Current Issuer Note Trustee are:
The Bank of New York
00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxxxx X00 0XX
For the attention of: Corporate Trust (Global Structured Finance)
Facsimile: x00 (000) 0000 0000
and for the Funding GIC Provider and the Stand-by Funding GIC Provider are:
Lloyds TSB Bank plc
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
For the attention of: Xxxxx Eperon (Manager, Financial Institutions
& International Trade Finance)
Facsimile: 020 7661 4790
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and for the Stand-by Account Bank are:
Lloyds TSB Bank plc
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
For the attention of: Xxxxx Eperon (Manager, Financial Institutions
& International Trade Finance)
Facsimile: 020 7661 4790
11. Non Petition Covenant
Each of the parties hereto hereby agrees that it shall not institute
against Funding, the Mortgages Trustee or any Issuer any winding-up,
administration, insolvency or similar proceedings in any jurisdiction for
so long as any sum is outstanding under any Intercompany Loan Agreement of
any Issuer or for two years plus one day since the last day on which any
such sum was outstanding provided that the Security Trustee may prove or
lodge a claim in the event of a liquidation initiated by any other person.
The provisions of Clause 6 (Restrictions on Exercise of Certain Rights) of
the Funding Deed of Charge shall prevail in the event that and to the
extent that they conflict with the provisions of this Clause.
12. Third Party Rights
A person who is not a party to this Deed may not enforce any of its terms
under the Contracts (Rights of Third Parties) Xxx 0000, but this shall not
affect any right or remedy of a third party which exists or is available
apart from that Act.
13. Execution in Counterparts
This Deed may be executed in any number of counterparts (manually or by
facsimile) and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same instrument.
14. Governing Law and Jurisdiction; Appropriate Forum
14.1 This Deed is governed by and shall be construed in accordance with English
law save that those parts of this Deed concerned with the creation,
subsistence or enforcement of Jersey Security Interests shall be governed
by and in accordance with Jersey law.
14.2 Each of the parties hereto irrevocably agrees that the courts of England
shall have jurisdiction to hear and determine any suit, action or
proceeding, and to settle any
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disputes, which may arise out of or in connection with this Deed and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
14.3 Each of the parties hereto irrevocably waives any objection which it might
now or hereafter have to the courts of England being nominated as the forum
to hear and determine any Proceedings and to settle any disputes, and
agrees not to claim that any such court is not a convenient or appropriate
forum.
15. Process Agents
Funding irrevocably and unconditionally appoints Mourant & Co. Capital
(SPV) Limited at 00 Xxxx Xxxx, Xxxxxxx XX0 0XX or otherwise at the
registered office of Mourant & Co. Capital (SPV) Limited for the time being
as its agent for service of process in England in respect of any
proceedings in respect of this Agreement and undertakes that in the event
of Mourant & Co. Capital (SPV) Limited ceasing so to act it will appoint
another person with a registered office in London as its agent for service
of process.
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DULY EXECUTED AND DELIVERED AS A DEED by each of the parties hereto or on its
behalf on the date appearing on page one.
Funding
Executed by
GRANITE FINANCE FUNDING LIMITED
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary Director
Name
----------------------------------------------
By
----------------------------------------------
Director/Secretary
Name
----------------------------------------------
The Security Trustee, the Note Trustee in respect of the
Previous Issuers and the Current Issuer Note Trustee
Executed by
THE BANK OF NEW YORK
as its deed as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised signatories Name
----------------------------------------------
Executed by
GRANITE MORTGAGES 01-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
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Executed by
GRANITE MORTGAGES 01-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
Executed by
GRANITE MORTGAGES 02-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
Executed by
GRANITE MORTGAGES 02-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
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Executed by
GRANITE MORTGAGES 03-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
Executed by
GRANITE MORTGAGES 03-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
Executed by
GRANITE MORTGAGES 03-3 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
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Executed by
GRANITE MORTGAGES 04-1 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
Current Issuer
Executed by
GRANITE MORTGAGES 04-2 PLC
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary for and on behalf of LDC Securitisation
Director No.1 Ltd
Name Xxxxx Xxxxxxxxx
----------------------------------------------
By
----------------------------------------------
for and on behalf of LDC Securitisation
Director No.2 Ltd
Name Xxxxxx Xxxxx
----------------------------------------------
The Cash Manager, the Previous Start-up Loan Provider
the Current Issuer Loan Provider, an Account Bank and
the Funding GIC Provider
Executed by
NORTHERN ROCK PLC
as its deed as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised attorneys/signatories Duly Authorised Attorney/Signatory
Name
----------------------------------------------
Signature
----------------------------------------------
Witness
Full name
----------------------------------------------
Occupation Solicitor
----------------------------------------------
Address c/o Sidley Xxxxxx Xxxxx & Xxxx
----------------------------------------------
Woolgate Exchange
----------------------------------------------
00 Xxxxxxxxxx Xxxxxx
----------------------------------------------
Xxxxxx XX0X 0XX
----------------------------------------------
16
The Corporate Services Provider
Executed by
MOURANT & CO. CAPITAL (SPV)
LIMITED By
as its deed as follows: ----------------------------------------------
Signed for and on its behalf by one of its directors Director
and by another of its directors/its secretary Name
----------------------------------------------
By
----------------------------------------------
Director/Secretary
Name
----------------------------------------------
An Account Bank, Funding GIC Provider,
the Stand-by Account Bank and the Stand-by
Funding GIC Provider
Executed by
LLOYDS TSB BANK PLC
as its deed as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised attorneys/signatories Duly Authorised Attorney/Signatory
Name
----------------------------------------------
Signature
----------------------------------------------
Witness
Full name
----------------------------------------------
Occupation Solicitor
----------------------------------------------
Address c/o Sidley Xxxxxx Xxxxx & Xxxx
----------------------------------------------
Woolgate Exchange
----------------------------------------------
00 Xxxxxxxxxx Xxxxxx
----------------------------------------------
Xxxxxx XX0X 0XX
----------------------------------------------
The Mortgages Trustee
Executed by
GRANITE FINANCE TRUSTEES LIMITED
as its deed as follows: By
Signed for and on its behalf by one of its directors ----------------------------------------------
and by another of its directors/its secretary Director
Name
----------------------------------------------
By
----------------------------------------------
Director/Secretary
Name
----------------------------------------------
17
SCHEDULE I
Utilisation of Issuer Reserves
Reserves for Current Issuer
1. Current Issuer Reserve Fund:
1.1 Prior to enforcement of the Current Issuer Security, the Current Issuer
Reserve Fund shall only be applied on any Payment Date to increase that
portion of Funding Available Revenue Receipts which are allocated to the
Current Issuer to make payments of interest and fees due under the Current
Issuer Intercompany Loan.
1.2 Following enforcement of the Current Issuer Security, to the extent not
applied on a Payment Date in accordance with 1.1 above, amounts standing to
the credit of the Current Issuer Reserve Fund Ledger shall only be applied
in making payments of principal due under the Current Issuer Intercompany
Loan (but not in respect of any other Intercompany Loan of any other
Issuer) .
2. Current Issuer Liquidity Reserve Fund:
2.1 Prior to enforcement of the Current Issuer Security, the Current Issuer
Liquidity Reserve Fund (if any is required to be established) shall only be
applied on any Payment Date to:
(a) help meet any deficit in Funding Available Revenue Receipts which are
allocated to the Current Issuer to pay amounts due under the Current
Issuer Intercompany Loan, but only to the extent necessary to fund the
payment by the Current Issuer of interest and fees due on the relevant
Payment Date in respect of the Class A Notes and/or the Class B Notes
and to credit the Class A Principal Deficiency Sub Ledger; and
(b) (provided that there are no Class A Notes outstanding) help meet any
deficit in Funding Available Revenue Receipts which are allocated to
the Current Issuer to pay interest and fees due on the Current Issuer
Intercompany Loan.
2.2 Following enforcement of the Current Issuer Security, to the extent not
applied on a Payment Date in accordance with 2.1 above, amounts standing to
the credit of the Current Issuer Liquidity Reserve Ledger shall only be
applied in making payments of principal due under the Current Issuer
Intercompany Loan (but not in respect of any other Intercompany Loan of any
other Issuer).
18
APPENDIX 1
Amended and Restated Funding Priority of Payments
Part I
Funding Pre-Enforcement Revenue Priority of Payments
Distribution of Funding Available Revenue Receipts prior to Enforcement of the
Funding Security
On each Payment Date or, in respect of amounts due to third parties by Funding
under paragraph (B), when due, prior to enforcement of the Funding Security, the
Cash Manager will, subject to the rules for application of Funding Available
Revenue Receipts (set out below), apply Group 1 Available Revenue Receipts,
Group 2 Available Revenue Receipts and amounts standing to the credit of the
Funding Expense Sub-Ledger, as applicable, in the following order of priority
(the "Funding Pre-Enforcement Revenue Priority of Payments"):
(A) first, to pay amounts due to the Security Trustee (together with
interest and (to the extent not already inclusive) VAT on those
amounts) and to provide for any amounts due or to become due during
the following Interest Period to the Security Trustee, under the
Funding Deed of Charge or any other Transaction Document;
(B) second, to pay amounts due to any third party creditors of Funding
(other than those referred to later in this order of priority of
payments or in the Funding Pre-enforcement Principal Priority of
Payments) of which the Cash Manager has notice prior to the relevant
Payment Date, which amounts have been incurred without breach by
Funding of the Transaction Documents to which it is a party (and for
which payment has not been provided for elsewhere) and to provide for
any such amounts expected to become due and payable by Funding during
the following Interest Period and to pay or discharge any liability of
Funding for corporation tax on any chargeable income or gain of
Funding;
(C) third, towards payment of amounts due to the Cash Manager under the
Cash Management Agreement (together with (to the extent not already
inclusive) VAT on those amounts);
(D) fourth, in no order of priority among them, but in proportion to the
respective amounts due, towards payment of amounts, if any, due to (i)
the Account Bank under the terms of the Bank Account Agreement (ii) to
the Stand-by Account Bank under the terms of the Stand-by Bank Account
Agreement and (iii) to
19
the Corporate Services Provider under the terms of the Corporate
Services Agreement;
(E) fifth, to pay, in no order of priority among them, to each Issuer an
amount up to its Issuer Allocable Revenue Receipts in respect of
interest and fees due on that Issuer's Intercompany Loan but not
exceeding the aggregate amount of, and to be applied in the amounts
and priorities set forth in, the Issuer Pre-Liquidity Payments for
that Issuer;
(F) sixth, to pay, in no order of priority among them, such amount for
each Issuer up to its Issuer Allocable Revenue Receipts as is
necessary to replenish the Issuer Liquidity Reserve Fund, if any,
established in respect of that Issuer up to the Issuer Liquidity
Reserve Required Amount (but only to the extent that monies have been
drawn from the relevant Issuer Liquidity Reserve Fund to pay interest
and fees due under the relevant Intercompany Loan and only to
replenish the Issuer Liquidity Reserve Fund of an Issuer to the extent
that there are Class A Notes issued by the such Issuer outstanding on
such Payment Date);
(G) seventh, to pay, in no order of priority among them, to each Issuer an
amount up to its Issuer Allocable Revenue Receipts in respect of
interest and fees due on that Issuer's Intercompany Loan but not
exceeding the aggregate amount of, and to be applied in the amounts
and priorities set forth in, the Issuer Post-Liquidity Payments for
that Issuer;
(H) eighth, to pay, in no order of priority among them, such amount for
each Issuer up to its Issuer Allocable Revenue Receipts as is
necessary to fund the Issuer Reserve Fund established in respect of
that Issuer up to the Issuer Reserve Required Amount or to replenish
such Issuer Reserve Fund up to the related Issuer Reserve Required
Amount (to the extent that monies have been drawn from such Issuer
Reserve Fund to pay interest and fees under the relevant Intercompany
Loan) or if an Arrears or Step-Up Trigger Event has occurred, to
credit the Issuer Reserve Ledger with the applicable Issuer Reserve
Additional Amount;
(I) ninth, to pay in no order of priority among them, to each Issuer an
amount up to its Issuer Allocable Revenue Receipts in respect of
interest, principal (in the case of the Special Repayment Notes) and
fees due on that Issuer's Intercompany Loan but not exceeding the
aggregate amount of, and to be applied in the amounts and priorities
set forth in, the Issuer Pre-Reserve Payments for that Issuer;
20
(J) tenth, in no order of priority among them, from Issuer Allocable
Revenue Receipts, to credit the Funding Reserve Ledger in an amount up
to the Funding Reserve Required Amount or if a Funding Step-Up Trigger
Event has occurred to credit the Funding Reserve Ledger with the
Funding Reserve Additional Amount;
(K) eleventh, to pay to each Issuer, in no order of priority among them
but in proportion to the respective amounts due, an amount up to its
Issuer Allocable Revenue Receipts in respect of interest and fees due
on that Issuer's Intercompany Loan but not exceeding the aggregate
amount of, and to be applied in the amounts and priorities set forth
in, the Issuer Post-Reserve Payments for that Issuer;
(L) twelfth, in no order of priority among them, but in proportion to the
respective amounts due, from Issuer Allocable Revenue Receipts,
towards payment of interest and principal amounts due to each Issuer
Start-up Loan Provider under the relevant Issuer Start-up Loan
Agreement;
(M) thirteenth, in no order of priority among them, but in proportion to
the respective amounts due, to pay to each Issuer an amount up to its
Issuer Allocable Revenue Receipts in respect of interest and fees and
any other amount (if any) due on that Issuer's Intercompany Loan but
not exceeding the aggregate amount of, and to be applied in the
amounts and priorities set forth in, the Issuer Post Start-up Payments
for that Issuer;
(N) fourteenth, to the extent required, to apply on the Payment Date for
Group 1 Issuers, Group 1 Available Revenue Receipts remaining or, on
the Payment Date for Group 2 Issuers, Group 2 Available Revenue
Receipts remaining, as applicable, in the priorities set forth in
items (E) through (M) above;
(O) fifteenth, towards payment to Funding of an amount equal to 0.01% per
annum of the Funding Available Revenue Receipts (excluding, for this
purpose, amounts standing to the credit of the Funding Reserve
Ledger), which amount will be retained by Funding as profit less
corporation tax in respect of those profits provided for or paid at
item (B) above;
(P) sixteenth, towards payment of any Deferred Contribution due to the
Mortgages Trustee pursuant to the terms of the Mortgages Trust Deed;
and
(Q) last, towards payment to the shareholders of Funding of any dividend
declared by Funding.
21
PROVIDED THAT no amount will be applied in replenishing any of the reserve funds
held by Funding in respect of an Issuer under paragraphs (F) and/or (H) above
following an enforcement of the Issuer Security relating to that Issuer.
For the avoidance of doubt, references to the Issuer Allocable Revenue Receipts
for a particular Issuer in items (E) through (M) (inclusive) above shall be
reduced by any amounts already allocated to that Issuer in the above Priority of
Payments on that Payment Date.
Rules for application of Funding Available Revenue Receipts
(1) (A) Subject as provided in paragraphs (2) through (9) below, the portion
of Issuer Allocable Revenue Receipts for all Group 1 Issuers remaining
after item (M) of the Funding Pre-Enforcement Revenue Priority of
Payments, together with any additional Funding Available Revenue
Receipts under paragraph (3) below, shall constitute "Group 1 Shared
Issuer Revenue Receipts". Group 1 Shared Issuer Revenue Receipts will
be reallocated by the Cash Manager on a Payment Date for Group 1
Issuers in accordance with item (N) of the Funding Pre-Enforcement
Revenue Priority of Payments and will continue to be distributed on
such Payment Date in accordance with items (E) through (M) of the
Funding Pre-Enforcement Revenue Priority of Payments until there are
no remaining amounts of Group 1 Shared Issuer Revenue Receipts to be
reallocated and distributed on such Payment Date. If there is more
than one Group 1 Issuer that is entitled to Group 1 Shared Issuer
Revenue Receipts then each such Group 1 Issuer will be reallocated a
portion of the Group 1 Shared Issuer Revenue Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 1 Issuer
Amount of Shared Group 1 Issuer Revenue Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 1 Issuers
(B) Subject as provided in paragraphs (2) through (4) below, the portion
of Issuer Allocable Revenue Receipts for all Group 2 Issuers remaining
after item (M) of the Funding Pre-Enforcement Revenue Priority of
Payments, together with any additional Funding Available Revenue
Receipts under paragraph (3) below, shall constitute "Group 2 Shared
Issuer Revenue Receipts". Group 2 Shared Issuer Revenue Receipts will
be reallocated by the Cash Manager on a Payment Date for Group 2
Issuers distributed on such Payment Date in accordance with item (N)
of the Funding Pre-Enforcement Revenue Priority of Payments and will
continue to be distributed on such Payment Date in accordance with
items (E) through (M) of the Funding Pre-Enforcement
22
Revenue Priority of Payments until there are no remaining amounts of
Group 2 Shared Issuer Revenue Receipts to be reallocated and
distributed on such Payment Date. If there is more than one Group 2
Issuer that is entitled to Group 2 Shared Issuer Revenue Receipts,
then each such Group 2 Issuer will be reallocated a portion of Shared
Issuer Revenue Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 2 Issuer
Amount of Shared Group 2 Issuer Revenue Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 2 Issuers
(2) No Issuer shall be entitled to or shall receive any amount of Issuer
Allocable Revenue Receipts from Funding on a Payment Date on which such
Issuer is not required by that Issuer to make a payment on that date in
accordance with the relevant Issuer Pre-Enforcement Revenue Priority of
Payments or other relevant Issuer Priority of Payments which applies to
that Issuer on that date, and the Cash Manager will take account of all of
the funds which are or will become available to that Issuer on that Payment
Date and which constitute Issuer Available Revenue Receipts (including any
payments due under any Swap Agreement and any interest or other income
received or to be received) for that Issuer for the purpose of making this
determination.
(3) Unless and until the Intercompany Loan of any Issuer has been repaid in
full and Funding has no further liability under the relevant Intercompany
Loan Agreement, amounts standing to the credit of the Issuer Reserve Ledger
and the Issuer Liquidity Reserve Ledger, if any, established by Funding for
that Issuer may only be utilized by Funding in making payments due under
that Issuer's Intercompany Loan and may not be used in or towards the
payment of any other liability of Funding. On the Payment Date following
the repayment in full of the Intercompany Loan of that Issuer and provided
that Funding has no further liability in respect of the relevant
Intercompany Loan Agreement, any remaining amounts standing to the credit
of the Issuer Reserve Ledger and the Issuer Liquidity Reserve Ledger, if
any, of that Issuer will constitute additional Funding Available Revenue
Receipts for the purpose of paragraphs (N) through (Q) of the Funding
Pre-Enforcement Revenue Priority of Payments and may be utilized by Funding
in paying any other liability of Funding subject to and in accordance with
the relevant Funding Priority of Payments.
(4) If on any Payment Date any Issuer Allocable Revenue Receipts and/or any
Group 1 Shared Issuer Revenue Receipts or Group 2 Shared Issuer Revenue
Receipts, as applicable, are paid to an Issuer and are applied by that
Issuer, in reducing any deficiency recorded on the Issuer Principal
Deficiency Ledger of that Issuer (but only
23
to the extent that any deficiency which has arisen as a result of (i)
losses on the Mortgage Loans allocated by Funding to the Issuer and/or (ii)
the application of Funding Available Principal Receipts to fund the Issuer
Liquidity Reserve Fund of the Issuer, but not as a result of any other
principal deficiency of the Issuer), then the Issuer Allocable Revenue
Receipts and/or Group 1 Shared Issuer Revenue Receipts or Group 2 Shared
Issuer Revenue Receipts, as applicable, so applied shall constitute
repayments of principal under the relevant Intercompany Loan and shall
reduce the Outstanding Principal Balance of that Intercompany Loan
accordingly.
To the extent that (a) an amount payable to an Issuer pursuant to the
Funding Pre-Enforcement Revenue Priority of Payments on any Payment Date
would, in accordance with the Issuer Pre-Enforcement Revenue Priority of
Payments relating to the Issuer, be credited by the Issuer to its Issuer
Principal Deficiency Ledger, and (b) the amount to be treated as principal
as a result of making such credit would result in the Issuer Available
Principal Receipts of that Issuer on that Payment Date being in excess of
the Principal Amount to be repaid by that Issuer in respect of its Notes on
that Payment Date, then an amount equal to that excess shall be reapplied
by Funding as Group 1 Available Principal Receipts or Group 2 Available
Principal Receipts, as applicable.
(5) The Cash Manager will distribute Group 1 Available Revenue Receipts only on
each Payment Date for Group 1 Issuers and Group 2 Available Revenue
Receipts only on each Payment Date for Group 2 Issuers. Group 1 Available
Revenue Receipts and Group 2 Available Revenue Receipts will be applied
(subject to paragraph (7) below) to pay amounts set forth in paragraphs
(E)-(R) of the Funding Pre-Enforcement Revenue Priority of Payments and
(D)-(G) of the Funding Post-Enforcement Priority of Payments.
(6) All references to an "Issuer" or "Issuers" in the Funding Pre-Enforcement
Revenue Priority of Payments shall be construed to refer to an Issuer or
Issuers in Group 1 on a Payment Date for Group 1 Issuers and in Group 2 on
a Payment Date for Group 2 Issuers.
(7) On Payment Dates for both Group 1 Issuers and Group 2 Issuers, the Cash
Manager will apply amounts standing to the credit of the Funding Expense
Sub-Ledger on the immediately preceding Distribution Date to pay the
amounts set forth in paragraphs (A)-(D) of the Funding Pre-Enforcement
Revenue Priority of Payments and paragraph (A)-(C) of the Funding
Post-Enforcement Priority of Payments.
(8) To the extent that on any Payment Date for Group 1 Issuers or Payment Date
for Group 2 Issuers amounts standing to the credit of the Funding Expense
Sub-Ledger distributed pursuant to paragraph (7) above are insufficient to
pay all amounts described in such paragraph (7), then the Cash Manager will
apply amounts standing
24
to the credit of the Funding Reserve Ledger to meet such a shortfall. To
the extent that on any Payment Date amounts standing to the credit of the
Funding Reserve Ledger and applied pursuant to the preceding sentence are
insufficient to pay all amounts described in paragraph (7) above, then the
Cash Manager will apply on the Payment Date for Group 1 Issuers, Group 1
Available Revenue Receipts or on the Payment Date for Group 2 Issuers,
Group 2 Available Revenue Receipts, as applicable, to pay such amounts. To
the extent that amounts standing to the credit of the Funding Reserve
Ledger are applied to pay any amounts described in paragraph (7) above then
the amounts standing to the credit of the Funding Reserve Ledger as at the
Distribution Date immediately preceding the relevant Payment Date (unless
such Payment Date is also a Funding Reserve Adjustment Date, in which case
the relevant date will be the Distribution Date immediately preceding the
immediately preceding Payment Date) above shall be deemed to have been
reduced by the amount applied to pay amounts described in paragraph 7
above.
(9) Group 1 Available Revenue Receipts may not be used to make payments to
Group 2 Issuers and Group 2 Available Revenue Receipts may not be used to
make payments to Group 1 Issuers.
25
Part II
Funding Pre-Enforcement Principal Priority of Payments
On each Payment Date prior to enforcement of the Funding Security, the Cash
Manager will, subject to the rules for application of Funding Available
Principal Receipts set forth below, apply Group 1 Available Principal Receipts
or Group 2 Available Principal Receipts, as applicable, as follows (the "Funding
Pre-Enforcement Principal Priority of Payments"):
(1) On each Payment Date for Group 1 Issuers, Group 1 Available Principal
Receipts to each Group 1 Issuer in the following order of priority:
(A) first, to fund or replenish, as the case may be, the Issuer Liquidity
Reserve Fund, if any, of each Group 1 Issuer up to the Issuer
Liquidity Reserve Required Amount but only from and to the extent of
the Issuer Allocable Principal Receipts for that Issuer;
(B) second, to pay to (or, if required under that Issuer's Intercompany
Loan, set aside for) each Group 1 Issuer an amount up to its Issuer
Allocable Principal Receipts in respect of principal due (or, if
required under that Issuer's Intercompany Loan, to become due) on that
Issuer's Intercompany Loan, which shall be an amount up to the
aggregate amount of, and shall be applied in the amounts and
priorities set forth in, the Issuer Principal Payments for that
Issuer;
(C) third, to pay to (or, if required under that Issuer's Intercompany
Loan, set aside for) each Group 1 Issuer an amount up to its allocable
portion of Group 1 Shared Issuer Principal Receipts in respect of
principal due (or, if required under that Issuer's Intercompany Loan,
to become due) on that Issuer's Intercompany Loan, which in the case
of that Group 1 Issuer shall be an amount up to the aggregate amount
of, and shall be applied in the amounts and priorities set forth in,
the Issuer Principal Payments for that Issuer until there are no
remaining Group 1 Available Principal Receipts on such Payment Date;
and
(D) last, to credit any remaining amounts to the Funding Principal Ledger.
(2) On each Payment Date for Group 2 Issuers, Group 2 Available Principal
Receipts to each Group 2 Issuer in the following order of priority:
(A) first, to fund (either initially or to replenish, as the case may be)
the Issuer Liquidity Reserve Fund, if any, of each Group 2 Issuer up
to the Issuer Liquidity Reserve Required Amount but only from and to
the extent of the Issuer Allocable Principal Receipts for that Issuer;
26
(B) second, to pay to (or, if required under that Issuer's Intercompany
Loan, set aside for) each Group 2 Issuer an amount up to its Issuer
Allocable Principal Receipts in respect of principal due (or, if
required under that Issuer's Intercompany Loan, to become due) on that
Issuer's Intercompany Loan, which shall be an amount up to the
aggregate amount of, and shall be applied in the amounts and
priorities set forth in, the Issuer Principal Payments for that
Issuer;
(C) third, to pay to (or, if required under the Issuer's Intercompany
Loan, set aside for) each Group 2 Issuer an amount up to its allocable
portion of Group 2 Shared Issuer Principal Receipts in respect of
principal due (or, if required under that Issuer's Intercompany Loan,
to become due) on that Issuer's Intercompany Loan, which in the case
of that Group 2 Issuer shall be an amount up to the aggregate amount
of, and shall be applied in the amounts and priorities set forth in,
the Issuer Principal Payments for that Issuer until there are no
remaining Group 2 Available Principal Receipts on such Payment Date;
and
(D) last, to credit any remaining amounts to the Funding Principal Ledger.
PROVIDED THAT no amount will be applied in replenishing the Issuer Liquidity
Reserve Fund held by Funding in respect of an Issuer under paragraphs (1)(A) or
(2)(A) above following an enforcement of the Issuer Security relating to that
Issuer.
Rules for application of Funding available principal receipts
(1) (A) On the Distribution Date immediately preceding a Payment Date for
Group 1 Issuers, the Cash Manager will calculate the "Issuer Allocable
Principal Receipts" for each such Issuer in respect of the relevant
Payment Date which, subject as provided in paragraphs (2) through (8)
below, is for any Issuer an amount which is equal to the sum of:
(a) the aggregate of:
(i) for any Group 1 Issuer, the amount, if any, by which the Issuer
Liquidity Reserve Fund relating to that Issuer will be less than
the Issuer Liquidity Reserve Required Amount in each case prior
to the distribution of Group 1 Available Principal Receipts on
the Payment Date for Group 1 Issuers immediately succeeding such
Distribution Date; and
(ii) for any Group 1 Issuer which has a Money Market Note still
outstanding up to the amount equal to the Controlled Amortization
27
Amount due on such Money Market Note, if any, on the Payment Date
for Group 1 Issuers immediately succeeding such Distribution
Date;
(b) for any Group 1 Issuer, an amount equal to the lesser of:
(i) (only if relevant) the principal amount due on the Intercompany
Loan of such Issuer which is an amount equal to the Controlled
Amortisation Amount due, if any, on the Payment Date for Group 1
Issuers immediately succeeding such Distribution Date (excluding
any amount calculated in accordance with paragraph 1(A)(a)); and
(ii) an amount equal to:
Group 1 Available Principal Receipts minus the aggregate Outstanding Principal Balance on such
amount under (1)(A)(a) above in respect of the relevant Group 1 Issuer's Intercompany Loan
Issuer on such Payment Date x -------------------------------------
Aggregate Outstanding Principal
Balance of all Intercompany Loans of
Group 1 Issuers
(B) On the Distribution Date immediately preceding a Payment Date for
Group 2 Issuers, the Cash Manager will calculate the "Issuer Allocable
Principal Receipts" for each such Issuer in respect of the relevant
Payment Date which, subject as provided in paragraphs (2) through (8)
below, is an amount which is equal to the sum of:
(a) the aggregate of:
(i) for any Group 2 Issuer, the amount, if any, by which the Issuer
Liquidity Reserve Fund relating to that Issuer will be less than
the Issuer Liquidity Reserve Required Amount in each case prior
to the distribution of Group 2 Available Principal Receipts on
the Payment Date for Group 2 Issuers immediately succeeding such
Distribution Date; and
(ii) for any Group 2 Issuer which has a Money Market Note still
outstanding, up to the amount equal to the Controlled
Amortization Amount due on each Money Market Note, if any, on the
Payment Date for Group 2 Issuers immediately succeeding such
Distribution Date; and
(b) for any Group 2 Issuer, an amount equal to the lesser of:
(i) (only if relevant) the principal amount due on the Intercompany
Loan of such Issuer which is an amount equal to the Controlled
Amortization Amount due, if any, on the Payment Date for Group 2
Issuers immediately succeeding such Distribution Date (excluding
any amount calculated in accordance with paragraph 1(B)(a)); and
28
(ii) an amount equal to:
Group 2 Available Principal Receipts minus the aggregate Outstanding Principal Balance on such
amount under (1)(A)(a) above in respect of the relevant Group 2 Issuer's Intercompany Loan
Issuer on such Payment Date x -------------------------------------
Aggregate Outstanding Principal
Balance of all Intercompany Loans of
Group 2 Issuers
PROVIDED THAT,
(a) subject as provided in paragraphs (2) through (8) below, for the
purpose only of determining the amount of Issuer Allocable
Principal Receipts which may be allocated and paid to the
relevant Group 1 Issuer or Group 2 Issuer (but not to any other
Issuer) in accordance with this paragraph (1), following an
enforcement of the Issuer Security relating to that Issuer the
amount so determined may be increased to the extent of the
aggregate of any amounts standing to the credit of the Issuer
Liquidity Reserve Ledger, if any, and the Issuer Reserve Ledger
of that Issuer remaining on the relevant Payment Date after the
application of such reserve funds in accordance with the Funding
Pre-Enforcement Revenue Priority of Payments; and
(b) for the purposes only of determining the amount of Group 1 Shared
Issuer Principal Receipts and Group 2 Shared Issuer Principal
Receipts in accordance with paragraph (6) below, Issuer Allocable
Principal Receipts (in respect of a Group 1 Issuer) shall be an
amount equal to the amount calculated in accordance with
paragraphs 1(A)(a) and (1)(A)(b)(ii) and paragraph (1)(A)(b)(i)
shall not apply and (in respect of a Group 2 Issuer) shall be an
amount equal to the amount calculated in accordance with
paragraphs (1)(B)(a) and (1)(B)(b)(ii) above paragraph
(1)(B)(b)(i) above shall not apply.
(2) If the Notes of any Issuer have become immediately due and payable as
a result of the service of a Note Enforcement Notice or if the
Intercompany Loan of any Issuer and the other Intercompany Loans of
any other Issuers have become immediately due and payable as a result
of the service of an Intercompany Loan Enforcement Notice or otherwise
on any Payment Date following the occurrence of any Asset Trigger
Event, principal payments in respect of any Intercompany Loan may be
made in excess of any Controlled Amortisation Amount and paragraphs
(1)(A)(a) and 1(A)(b)(i) (in respect of a Group 1 Issuer), or
paragraphs (1)(B)(a) and 1(B)(b)(i) above (in respect of a Group 2
Issuer) shall no longer apply in relation to that Issuer and the
amount of Issuer Allocable Principal Receipts payable to that Issuer
on the relevant Payment Date may not exceed the amount determined
under paragraphs (1)(A)(b)(ii) and (1)(B)(b)(ii) above (save that no
deduction shall be made
29
from Funding Available Principal Receipts) but subject always to any
increase in that amount as a result of the utilisation of the Issuer
Reserve Fund and the Issuer Liquidity Reserve Fund (if any) following
enforcement of the Issuer Security relating to that Issuer as provided
in that paragraph. Following the occurrence of any Non-Asset Trigger
Event (but prior to the occurrence of an Asset Trigger Event), (1) the
reference in paragraph (1)(A)(a)(ii) and (1)(B)(a)(ii) above to the
"Controlled Amortization Amount due on such Money Market Note" shall
be deemed to refer to the "Outstanding Principal Balance of such Money
Market Note", and (2) paragraph (1)(A)(b)(i) above (in respect of a
Group 1 Issuer), or paragraph (1)(B)(b)(i) above (in respect of a
Group 2 Issuer) shall no longer apply in relation to the relevant
Issuer and the amount of Issuer Allocable Principal Receipts payable
to that Issuer on the relevant Payment Date may not exceed the amount
determined under paragraph (1)(A)(b)(ii) above (in respect of a Group
1 Issuer) and (1)(B)(b)(ii) above (in respect of a Group 2 Issuer,
subject to the same qualifications set forth in the immediately
preceding paragraph.
(3) For the purpose of determining the amount of Issuer Allocable
Principal Receipts and/or any Group 1 Shared Issuer Principal Receipts
or Group 2 Shared Issuer Principal Receipts which may be paid to any
Issuer on a Payment Date pursuant to paragraph (1) above or paragraph
(6) below, the Outstanding Principal Balance of the relevant
Intercompany Loan shall be deemed to be reduced by the amount of:
(A) any deficiency recorded on the Issuer Principal Deficiency Ledger
of the relevant Issuer as at the relevant Payment Date, but only
to the extent that such deficiency has arisen as a result of (i)
losses on the Mortgage Loans allocated by Funding to that Issuer
and/or (ii) the application of Funding Available Principal
Receipts to fund the Issuer Liquidity Reserve Fund of that Issuer
but not as a result of any other principal deficiency of that
Issuer; and
(B) the Outstanding Principal Balance as at such Payment Date of any
Special Repayment Notes issued by that Issuer.
(4) The amount of Funding Available Principal Receipts payable to each
Issuer on a Payment Date will be reduced by an amount equal to the
aggregate of the Issuer Available Revenue Receipts of that Issuer
which are to be applied on that Payment Date in reducing deficiencies
recorded on the Issuer Principal Deficiency Ledgers, but only to the
extent that the Issuer Available Revenue Receipts which are to be so
applied on that Payment Date would not otherwise be payable as
principal on the relevant Notes on such Payment Date.
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(5) No Issuer shall be entitled to, or shall receive on a Payment Date,
any amount of Issuer Allocable Principal Receipts from Funding which
is not required by that Issuer to make a payment on that date in
accordance with the relevant Issuer Pre-Enforcement Principal Priority
of Payments or otherwise to make a payment of principal on the Notes.
(6) (A) The portion of Issuer Allocable Principal Receipts (calculated in
accordance with paragraph 1(A)(b)(ii) above), if any, not
required to be applied by a Group 1 Issuer to pay principal on
the Notes on a Payment Date for Group 1 Issuers together with the
portion of Issuer Allocable Principal Receipts relating to all
other Group 1 Issuers not required to be so applied by such other
Group 1 Issuers (or otherwise required to be set aside by Funding
for any Group 1 Issuer) on that Payment Date (excluding the
amount of any Group 1 Issuer Reserve Fund or Issuer Liquidity
Reserve Fund (if any) of any Group 1 Issuer), shall constitute
"Group 1 Shared Issuer Principal Receipts". Group 1 Shared Issuer
Principal Receipts will be reallocated by the Cash Manager and
distributed on such Payment Date among the Group 1 Issuers until
there are no remaining amounts of Group 1 Shared Issuer Principal
Receipts to be reallocated and distributed on such Payment Date.
Save as provided in paragraph (2) above, if there is more than
one Group 1 Issuer that is entitled to Group 1 Shared Issuer
Principal Receipts, then each such Issuer will be reallocated a
portion of the Group 1 Shared Issuer Principal Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 1 Issuer
amount of Shared Group 1 Issuer Principal Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 1 Issuers
(B) The portion of Issuer Allocable Principal Receipts (calculated in
accordance with paragraph (1)(B)(b)(ii) above), if any, not
required to be applied by a Group 2 Issuer to pay principal of
the Notes on a Payment Date for Group 2 Issuers together with the
portion of Issuer Allocable Principal Receipts relating to all
other Group 2 Issuers not required to be so applied by such other
Group 2 Issuers (or otherwise required to be set aside by Funding
for any Group 2 Issuer) on that Payment Date (excluding the
amount of any Issuer Reserve Fund or Issuer Liquidity Reserve
Fund (if any) of any Group 2 Issuer) shall constitute "Group 2
Shared Issuer Principal Receipts". Group 2 Shared Issuer
Principal Receipts will be reallocated by the Cash Manager and
distributed on such Payment Date among the Group 2 Issuers until
there are no remaining amounts of Group 2 Shared Issuer
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Principal Receipts to be reallocated and distributed on such
Payment Date. Save as provided in paragraph (2) above, if there
is more than one Group 2 Issuer that is entitled to Group 2
Shared Issuer Principal Receipts, then each such Group 2 Issuer
will be reallocated a portion of the Group 2 Shared Issuer
Principal Receipts equal to:
Outstanding Principal Balance of
the Intercompany Loan of such Group 2 Issuer
Amount of Shared Group 2 Issuer Principal Receipts x --------------------------------------------
Aggregate Outstanding Principal Balance of
the Intercompany Loans of all Group 2 Issuers
(7) The repayment of any Intercompany Loan prior to the occurrence of a
Trigger Event, enforcement of the Issuer Security by the Note Trustee
under the relevant Issuer Deed of Charge or enforcement of the Funding
Security by the Security Trustee under the Funding Deed of Charge will
be made in accordance with the terms of the relevant Intercompany Loan
Agreement.
(8) The Cash Manager will distribute only Group 1 Available Principal
Receipts on each Payment Date for Group 1 Issuers and only Group 2
Available Principal Receipts on each Payment Date for Group 2 Issuers.
No payment may be made to Group 1 Issuers from Group 2 Available
Principal Receipts and no payment may be made to Group 2 Issuers from
Group 2 Available Principal Receipts.
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Part III
Funding Post-Enforcement Priority of Payments
At any time after the security created under the Funding Deed of Charge has
become enforceable in accordance with Clause 7.2 (Enforceable) thereof and
provided that the Intercompany Loan Enforcement Notice has not been withdrawn,
all Funding Available Revenue Receipts, Funding Available Principal Receipts and
all other monies paid to or received or recovered by or on behalf of Funding or
the Security Trustee or any Receiver appointed on its behalf, including all
proceeds following any sale, realisation or enforcement of the security created
under the Funding Deed of Charge and all amounts not previously distributed
and/or standing to the credit of any Funding Bank Account and all monies
standing to the credit of the Funding Reserve Ledger (if any) shall (if not
already received by the Security Trustee) be paid to and held by the Security
Trustee on trust to apply the same (save to the extent required otherwise by
applicable law) in accordance with the rules and the order of priority of the
Funding Post-Enforcement Priority of Payments.
The Security Trustee (or the Cash Manager on its behalf) will, subject to the
rules for application of Funding Available Principal Receipts and Funding
Available Revenue Receipts set out in Part I and Part II of this Schedule, apply
all such amounts received or recovered following enforcement of the Funding
Security on each Payment Date in accordance with the following order of priority
(the "Funding Post-Enforcement Priority of Payments"):
(A) first, from amounts standing to the credit of the Funding Expense
Sub-Ledger in respect of such Payment Date, to pay amounts due to the
Security Trustee and any Receiver appointed by the Security Trustee,
together with interest and (to the extent not already inclusive) VAT
on those amounts, and to provide for any amounts due or to become due
to the Security Trustee and the Receiver in the following Interest
Period under the Funding Deed of Charge or any other Transaction
Document;
(B) second, from amounts standing to the credit of the Funding Expense
Sub-Ledger in respect of such Payment Date, towards payment of amounts
due and payable to the Cash Manager and any costs, charges,
liabilities and expenses then due or to become due and payable to the
Cash Manager under the Cash Management Agreement, together with (to
the extent not already inclusive) VAT on those amounts;
(C) third, from amounts standing to the credit of the Funding Expense
Sub-Ledger in respect of such Payment Date, (in no order of priority
among them but in proportion to the respective amounts due) towards
payment of amounts (if any) due to (i) the Account Bank under the
terms of the Bank Account
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Agreement, (ii) to the Stand-by Account Bank under the Stand-by Bank
Account Agreement and (iii) to the Corporate Services Provider under
the Corporate Services Agreement;
(D) fourth, (1) from Group 1 Available Revenue Receipts and Group 1
Available Principal Receipts in respect of each Payment Date for Group
1 Issuers, (in no order of priority among them but in proportion to
the respective amounts due) to each Group 1 Issuer its share of Issuer
Allocable Revenue Receipts and Issuer Allocable Principal Receipts
towards payment of amounts of interest, principal and fees due to such
Group 1 Issuer under such Issuer's Intercompany Loan Agreement, which
in the case of that Issuer shall be up to the aggregate amount of the
amounts, and shall be applied in the amounts and priorities, as set
forth in the Issuer Post-Enforcement Priority of Payments for that
Issuer;
(2) from Group 2 Available Revenue Receipts and Group 2
Available Principal Receipts in respect of each Payment Date
for Group 2 Issuers (in no order of priority among them but
in proportion to the respective amounts due) to each Group 2
Issuer its Issuer Allocable Revenue Receipts and Issuer
Allocable Principal Receipts, respectively, towards payment
of amounts of interest, principal and fees due to such Group
2 Issuer under such Issuer's Intercompany Loan Agreement,
which in the case of that Group 2 Issuer shall be up to the
aggregate of the amounts, and shall be applied in the
amounts and priorities, as set forth in the Issuer
Post-Enforcement Priority of Payments for that Issuer;
(E) fifth, (1) from Group 1 Available Revenue Receipts and Group 1
Available Principal Receipts in respect of each Payment Date for Group
1 Issuers, towards payment of amounts due to each Issuer Start-Up Loan
Provider under the relevant Issuer Start-up Loan Agreement for each
Group 1 Issuer;
(2) from Group 2 Available Revenue Receipts and Group 2
Available Principal Receipts in respect of each Payment Date
for Group 2 Issuers, towards the payment of amounts due to
each Issuer Start-up Loan Provider under the relevant Issuer
Start-up Loan Agreement for each Group 2 Issuer;
(F) sixth, from any remaining Funding Available Revenue Receipts (being
the remaining Group 1 Available Revenue Receipts, the Group 1
Available Principal Receipts, the Group 2 Available Revenue Receipts
and the Group 2 Available Principal Receipts) in respect of such
Payment Date, towards payment of any Deferred Contribution due to the
Mortgages Trustee under the Mortgages Trust Deed; and
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(G) last, to pay any amount remaining following the application of
principal and revenue set forth in paragraphs (A) through (F) above,
to Funding,
PROVIDED THAT, to the extent that there is a shortfall in the amounts standing
to the credit of the Funding Expense Sub-Ledger, amounts payable under (A)
through (C) above may also be paid from Group 1 Available Revenue Receipts or
Group 2 Available Revenue Receipts as applicable to the relevant Payment Date.
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