EXHIBIT 10.4
Execution Copy
DATED 23 SEPTEMBER 2002
GRANITE FINANCE FUNDING LIMITED
as Funding
- AND -
NORTHERN ROCK PLC
as Current Issuer Start-Up Loan Provider
- AND -
THE BANK OF NEW YORK
as Security Trustee
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ISSUER 02-2 START-UP LOAN AGREEMENT
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SIDLEY XXXXXX XXXXX & XXXX
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF: UK:550776
TABLE OF CONTENTS
CLAUSE PAGE NO.
1. Definitions and Interpretation............................................1
2. The Advance...............................................................1
3. Interest..................................................................2
4. Repayment.................................................................2
5. Acceleration..............................................................3
6. Payments and limited recourse.............................................3
7. Subordination and Security................................................3
8. Notices...................................................................5
9. Taxes.....................................................................5
10. Remedies and Waivers......................................................6
11. Assignments and Transfer..................................................6
12. Alternative Payment Arrangements..........................................6
13. Security Trustee as a Party...............................................6
14. No Partnership............................................................7
15. Variation.................................................................7
16. Execution in Counterparts; Severability...................................7
17. Third Party Rights........................................................7
18. Governing Law and Jurisdiction; Appropriate Forum.........................7
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES.....................................8
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THIS ISSUER 02-2 START-UP LOAN AGREEMENT is made on 23 September 2002
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey but acting out of its
branch office established in England (registered overseas company number
FC022999 and branch number BR005916) at 0xx Xxxxx, 00 Xxx Xxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxx XX0X 0XX as Funding;
(2) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered office is
at Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX in its
capacity as Current Issuer Start-Up Loan Provider; and
(3) THE BANK OF NEW YORK, whose principal office is at Xxx Xxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxx X00 0XX in its capacity as Security Trustee.
IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 The provisions of:
(a) the Master Definitions Schedule as amended and restated by (and
appearing in Appendix 1 to) the Master Definitions Schedule Third
Amendment and Restatement Deed made on 23 September 2002 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 on 23
September 2002,
(as the same have been and may be amended, varied or supplemented from time
to time with the consent of the parties hereto) are expressly and
specifically incorporated into and shall apply to this Agreement. The
Issuer Master Definitions Schedule specified above shall prevail to the
extent that it conflicts with the Master Definitions Schedule.
2. THE ADVANCE
The Current Issuer Start-Up Loan Provider grants to Funding simultaneously
with the issue by the Current Issuer of the Current Issuer Notes (and upon
the simultaneous issuance by the Current Issuer to Funding of the Current
Issuer Intercompany Loan) and upon the terms and subject to the conditions
hereof, a loan in an aggregate amount of (pound)23,909,355 (twenty three
million nine hundred and nine thousand three hundred and fifty five pounds)
(the "ADVANCE") on the Closing Date for the purposes of providing for the
partial funding of the Issuer Reserve Fund and providing for Funding's
costs and expenses in respect of the acquisition of the Funding Share of
the Additional Trust Property and in respect of amounts payable to the
Current Issuer by Funding as fees under the Current Issuer Intercompany
Loan. The Advance shall be paid into the Funding Transaction Account.
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3. INTEREST
3.1 The Advance and any interest capitalised pursuant to Clause 3.4 will bear
interest in accordance with Clause 3.3 at a rate of LIBOR for three-month
sterling deposits plus 0.90% per annum from (and including) the Closing
Date until the Advance and all accrued interest thereon is repaid in full.
Prior to the service of an Intercompany Loan Enforcement Notice, Funding
shall pay interest on the Advance on each Payment Date if, and only to the
extent that, there are Funding Available Revenue Receipts available
therefor after making the payments and provisions referred to in the
Funding Pre-Enforcement Revenue Priority of Payments.
3.2 Subject to Clauses 6.2 and 6.3, interest on the Advance and any interest
capitalised pursuant to Clause 3.4 will be payable by Funding in arrear on
each Payment Date in accordance with the Funding Priority of Payments.
3.3 Interest shall be calculated by reference to any Interest Period on the
basis of the actual number of days elapsed and a 365 day year (or, in the
case of a leap year, a 366 day year).
3.4 Any interest accrued in respect of an Interest Period but not paid on the
Payment Date relating thereto shall be capitalised forthwith.
4. REPAYMENT
4.1 Prior to the service of an Intercompany Loan Enforcement Notice, Funding
shall repay principal of the Advance (including any interest capitalised
pursuant to Clause 3.4) on each Payment Date if, and only to the extent
that, there are Funding Available Revenue Receipts available therefor after
making the payments and provisions referred to in the Funding
Pre-Enforcement Revenue Priority of Payments.
4.2 The Cash Manager is responsible, pursuant to the Cash Management Agreement,
for determining the amount of Funding Available Revenue Receipts as at any
Payment Date and each determination so made shall (in the absence of
negligence, wilful default, bad faith or manifest error) be final and
binding on the Current Issuer Start-Up Loan Provider.
4.3 Subject to Clauses 5, 6.2, 6.3 and 7, on any Payment Date on which all the
Intercompany Loans have been repaid in full, Funding shall immediately
repay the Advance (including any interest capitalised pursuant to Clause
3.4) and pay any accrued interest.
4.4 The Current Issuer Start-Up Loan Provider hereby acknowledges that Funding
has entered into Previous Start-Up Loan Agreements with Previous Start-Up
Loan Providers and that from time to time Funding may enter into New
Start-Up Loan Agreements with New Start-Up Loan Providers and that the
obligation of Funding to repay the Current Issuer Start-Up Loan, any other
existing Start-Up Loans and any New Start-Up Loan will rank pari passu and
will be paid pro rata between themselves. The Current Issuer Start-Up Loan
Provider further acknowledges that the Funding Pre-Enforcement Revenue
Priority of Payments and the Funding Post-Enforcement Priority of Payments
set out in the Funding Deed of Charge, respectively, will be amended to
reflect the entry by Funding into New Start-Up Loan
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Agreements and related agreements from time to time and agrees to execute
such documents as are necessary or required by the Rating Agencies for the
purpose of including the New Start-Up Loan Provider (and any other relevant
party) in the Transaction Documents to effect those amendments.
5. ACCELERATION
If an Intercompany Loan Enforcement Notice is served, the Advance
(including any interest capitalised pursuant to Clause 3.4) and accrued
interest shall, subject to the Funding Deed of Charge, become immediately
due and payable.
6. PAYMENTS AND LIMITED RECOURSE
6.1 All payments to be made hereunder by Funding shall be made in sterling in
immediately available cleared funds to the Current Issuer Start-Up Loan
Provider's account as specified in writing to Funding for this purpose. If
any sum falls due hereunder otherwise than on a London Business Day, it
shall be paid on the next succeeding London Business Day.
6.2 Prior to service of an Intercompany Loan Enforcement Notice or repayment in
full of all the Intercompany Loans, amounts of interest, principal and any
other amounts due hereunder shall be paid only in accordance with Clauses
3.1, 4.1 and 7.1, respectively, and the provisions of the Funding Deed of
Charge.
6.3 If, upon the Advance becoming due and payable pursuant to Clauses 4.3 or 5,
Funding has insufficient funds available to meet its obligations hereunder
in full on such date then:
(a) Funding shall utilise its funds on such date to the extent available
in making payments to the Current Issuer Start-Up Loan Provider to
repay the Advance (including any interest capitalised pursuant to
Clause 3.4) and accrued interest thereon; and
(b) the obligations of Funding to pay the shortfall together with any
amounts falling due and payable thereafter shall on any day be limited
to the available funds actually received by Funding from time to time
subsequent to such date, together with the proceeds of the enforcement
of the security, paid to the Current Issuer Start-Up Loan Provider
pursuant to Clause 8 (Upon Enforcement) of the Funding Deed of Charge,
provided that the Current Issuer Start-Up Loan Provider shall not release
Funding from Funding's obligation to pay the remaining amount that would
have been due under this Agreement had this Clause 6.3 not applied.
7. SUBORDINATION AND SECURITY
7.1 The parties hereby agree that repayments in respect of the Advance shall be
subordinated to, inter alia, payments of principal and interest on the
Current Issuer Intercompany Loan and all other payments or provisions
ranking in priority to payments to be made to the Current Issuer Start-Up
Loan Provider under this
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Agreement in accordance with the Funding Priority of Payments and the
Funding Deed of Charge.
7.2 The Current Issuer Start-Up Loan Provider further agrees that, without
prejudice to Clause 8 (Upon Enforcement) of the Funding Deed of Charge, its
rights against Funding under this Agreement are limited to the extent that
Funding has sufficient assets to meet the Current Issuer Start-Up Loan
Provider's claim or any part thereof having taken into account all other
liabilities, both actual and contingent, of Funding which pursuant to the
Funding Deed of Charge rank pari passu with or in priority to its
liabilities to the Current Issuer Start-Up Loan Provider under this
Agreement and so that Funding shall not be obliged to make any payment to
the Current Issuer Start-Up Loan Provider hereunder if and to the extent
that the making of such payment would cause Funding to be or become unable
to pay its debts within the meaning of Section 123 of the Insolvency Xxx
0000. However, if there are Funding Available Revenue Receipts available
but Funding does not repay the Advance (including any interest capitalised
pursuant to Clause 3.4) and/or interest thereon when due (to the extent of
such available Funding Available Revenue Receipts), such non-repayment will
constitute an event of default under this Current Issuer Start-Up Loan
Agreement.
7.3 Funding undertakes that its obligations to the Current Issuer Start-Up Loan
Provider hereunder shall at all times be secured by the Funding Deed of
Charge.
7.4 The Current Issuer Start-Up Loan Provider hereby undertakes to be bound by
the terms of the Funding Deed of Charge and the Cash Management Agreement
and in particular agrees that on enforcement of the security created by the
Funding Deed of Charge, all amounts of principal, interest and any other
amounts due hereunder shall rank in the order of priority set out in the
Funding Post-Enforcement Priority of Payments.
7.5 The Current Issuer Start-Up Loan Provider further covenants that, except as
permitted under the Funding Deed of Charge, it will not set off or claim to
set off the Advance or any interest thereon or any part thereof against any
liability owed by it to Funding.
7.6 The Current Issuer Start-Up Loan Provider undertakes that it will not, for
so long as any sum is outstanding under any Intercompany Loan Agreement of
any Issuer or for two years plus one day since the last day on which any
such sum was outstanding take any corporate action or other steps or legal
proceedings for the winding up, dissolution or reorganisation or for the
appointment of a receiver, administrator, administrative receiver, trustee,
liquidator, sequestrator or similar officer of Funding or of any or all of
the revenues and assets of Funding nor participate in any ex parte
proceedings nor seek to enforce any judgment against Funding, except as
permitted under the provisions of the Funding Deed of Charge.
7.7 The Current Issuer Start-Up Loan Provider acknowledges hereby that it is
not entitled, other than by virtue of Section 208 of the Income and
Corporation Taxes Act 1988 ("ICTA"), to any exemption from Tax in respect
of any interest payable to it under this Agreement.
7.8 The Current Issuer Start-Up Loan Provider further represents that, pursuant
to Section 212 of ICTA, any interest payable to it under this Agreement is
paid to it within the charge to UK corporation tax.
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7.9 The Current Issuer Start-Up Loan Provider further represents that it is an
institution which is a bank for the purposes of Section 840A of ICTA
7.10 Each party to this Agreement other than the Security Trustee hereby makes
the representations and warranties to each of the other parties to this
Agreement that are specified in Schedule 1 hereto.
8. NOTICES
Any notices to be given pursuant to this Agreement or to any of the parties
hereto shall be sufficiently served if sent by prepaid first class post or
by facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched, (where delivered by hand) on the
day of delivery if delivered before 17.00 hours on a Business Day or on the
next Business Day if delivered thereafter or (in the case of first class
post) when it would be received in the ordinary course of the post and
shall be sent:
(a) in the case of Funding, to Granite Finance Funding Limited, 00 Xxx
Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxxxx, Xxxxxx XX0X 0XX (facsimile
number 020 7332-6199) for the attention of the Company Secretary with
a copy to Northern Rock plc, Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx
xxxx Xxxx XX0 0XX Facsimile: 0191 213 2203 for the attention of the
Group Secretary;
(b) in the case of the Current Issuer Start-Up Loan Provider, to Northern
Rock plc, Xxxxxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx xxxx Xxxx XX0 0XX
Facsimile: 0191 213 2203 for the attention of the Group Secretary; and
(c) in the case of the Security Trustee, to The Bank of New York (London
Branch), Xxx Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx X00 0XX (facsimile 020
7964 6399) for the attention of Corporate Trust Administration,
or to such other address or facsimile number as may from time to time be
notified by any party to the other by written notice in accordance with the
provisions of this Clause 8.
9. TAXES
9.1 All payments to be made by Funding to the Current Issuer Start-Up Loan
Provider hereunder shall be made free and clear of and without deduction
for or on account of Tax unless Funding is required by law to make such a
payment subject to the deduction or withholding of Tax, in which case
Funding shall promptly upon becoming aware thereof notify the Current
Issuer Start-Up Loan Provider of such obligation, and shall make such
payments subject to such deduction or withholding of Tax which it is
required to make.
9.2 If Funding makes any payment hereunder in respect of which it is required
to make any deduction or withholding, it shall pay the full amount required
to be deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and shall
deliver to the Current Issuer Start-Up Loan Provider, within thirty days
after such payment falls due to the applicable authority,
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any original receipt (or a certified copy thereof) issued by such authority
evidencing such payment.
10. REMEDIES AND WAIVERS
No failure by the Current Issuer Start-Up Loan Provider to exercise, nor
any delay by the Current Issuer Start-Up Loan Provider in exercising, any
right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy prevent any further or
other exercise thereof or the exercise of any other right or remedy. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
11. ASSIGNMENTS AND TRANSFER
11.1 Funding (other than in respect of any assignment by way of security
pursuant to the Funding Deed of Charge) may not assign and/or transfer any
of its rights and/or obligations under this Agreement. The Current Issuer
Start-Up Loan Provider may not assign and/or transfer its rights under this
Agreement without obtaining the prior written consent of Funding, provided
that such consent may only be given if such assignment and/or transfer is
by way of security, or, if such assignment and/or transfer is to a person
within the charge to United Kingdom corporation tax as regards any interest
received by it under this Agreement. Any such assignee or transferee must
agree to be bound by the provisions contained in the Funding Deed of Charge
as if it were named as an original party thereto in place of the Current
Issuer Start-Up Loan Provider.
11.2 If there is any change in the identity of the Security Trustee pursuant to
the terms of the Funding Deed of Charge, the Current Issuer Start-Up Loan
Provider and Funding shall execute such documents and take such actions as
the new security trustee and the outgoing security trustee (as the case may
be) may reasonably require for the purpose of vesting in the new security
trustee the rights and obligations of the outgoing security trustee and
releasing the outgoing security trustee (as the case may be) from its
future obligations under this Agreement.
12. ALTERNATIVE PAYMENT ARRANGEMENTS
If at any time it shall become impracticable for Funding to make any
payments hereunder in the manner specified in Clause 6.1, then Funding may
agree with the Current Issuer Start-Up Loan Provider and the Security
Trustee alternative arrangements for such payments to be made.
13. SECURITY TRUSTEE AS A PARTY
The Security Trustee has agreed to become a party to this Agreement for the
better preservation and enforcement of its rights under this Agreement and
the Security Trustee shall assume no obligations or liabilities whatsoever
to the Current Issuer Start-Up Loan Provider or to Funding. Furthermore,
any liberty or power which may be exercised or any determination which may
be made hereunder by the Security Trustee may be exercised or made in the
Security Trustee's absolute discretion without any obligation to give
reasons therefor, but in any event must be exercised or made in accordance
with the provisions of the Funding Deed of Charge.
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14. NO PARTNERSHIP
Nothing in this Agreement (or in any of the arrangements contemplated
hereby) shall, or shall be deemed to, constitute a partnership amongst the
parties hereto.
15. VARIATION
No variation of this Agreement shall be effective unless it is in writing
and signed by or on behalf of each of the parties hereto.
16. EXECUTION IN COUNTERPARTS; SEVERABILITY
16.1 This Agreement may be executed in any number of counterparts (manually or
by facsimile) and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which when taken together shall constitute one and the same instrument.
16.2 Where any provision in or obligation under this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations under this
Agreement, or of such provision or obligation in any other jurisdiction,
shall not be affected or impaired thereby.
17. THIRD PARTY RIGHTS
A person who is not a party to this Agreement may not enforce any of its
terms under the Contracts (Rights of Third Parties) Xxx 0000, but this
shall not affect any right or remedy of a third party which exists or is
available apart from that Act.
18. GOVERNING LAW AND JURISDICTION; APPROPRIATE FORUM
18.1 This Agreement is governed by, and shall be construed in accordance with,
English law.
18.2 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 disputes, which may arise out of or in
connection with this Agreement and, for such purposes, irrevocably submits
to the jurisdiction of such courts.
18.3 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.
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
Each party to the Current Issuer Start-Up Loan Agreement (the "AGREEMENT")
hereby makes the following representations and warranties to each of the other
parties to such Agreement:
1. STATUS: It is duly incorporated, validly existing and registered under the
laws of the jurisdiction in which it is incorporated, capable of being sued
in its own right and not subject to any immunity from any proceedings, and
it has the power to own its property and assets and to carry on its
business as it is being conducted.
2. POWERS AND AUTHORITY: It has the power to enter into, perform and deliver,
and has taken all necessary corporate and other action to authorise the
execution, delivery and performance by it of the Agreement, which has been
duly executed and delivered by it.
3. LEGAL VALIDITY: The Agreement constitutes, or when executed in accordance
with its terms will constitute, its legal, valid and binding obligation.
4. NON-CONFLICT: The execution by it of the Agreement and the exercise by it
of its rights and the performance of its obligations under the Agreement
will not:
(a) result in the existence or imposition of, nor oblige it to create, any
Security Interest in favour of any person over all or any of its
present or future revenues or assets save for any which are created
under or pursuant to the Funding Deed of Charge;
(b) conflict with any document which is binding upon it or any of its
assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial order of any
government, governmental body or court, domestic or foreign, having
jurisdiction over it.
5. NO LITIGATION: It is not a party to any material litigation, arbitration or
administrative proceedings and, to its knowledge, no material litigation,
arbitration or administrative proceedings are pending or threatened against
it.
6. CONSENTS AND LICENCES: All governmental consents, licences and other
approvals and authorisations required in connection with the entry into,
performance, validity and enforceability of, the transaction contemplated
by the Agreement have been obtained or effected (as appropriate) and are in
full force and effect.
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EXECUTION PAGE
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
Name: XXXXX XXXXXXX
Title: DIRECTOR
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
Name:
Title:
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
Name: XXXX XXXXXXX
Title: ASSISTANT VICE PRESIDENT
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