Exhibit 4.5.2
DATED [__] SEPTEMBER, 2002
GRANITE FINANCE FUNDING LIMITED
as Funding
THE BANK OF NEW YORK
as Security Trustee
GRANITE MORTGAGES 02-2 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
0 XXXXXXXXXXXX XXXXXX
XXXXXX XX0X 0XX
TELEPHONE 000 0000 0000
FACSIMILE 020 7626 7937
REF: 30507-13/547080
CONTENTS
CLAUSE PAGE NO.
1. Interpretation........................................................3
2. Representations and Warranties........................................3
3. Accession.............................................................4
4. Funding Security......................................................4
5. Title Guarantee.......................................................6
6. Application...........................................................6
7. Scope of the Funding Deed of Charge...................................6
8. Notices and Acknowledgements..........................................7
9. [Amendment to the Funding Priority of Payments........................8
10. Notices and Demands...................................................8
11. Non Petition Covenant.................................................9
12. Third Party Rights....................................................9
13. Execution in Counterparts.............................................9
14. Governing Law and Jurisdiction; Appropriate Forum.....................9
SCHEDULE I UTILISATION OF ISSUER RESERVES............................17
[APPENDIX AMENDED AND RESTATED FUNDING PRIORITY OF PAYMENTS].........18
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THIS DEED OF ACCESSION is made on [__] September, 2002
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited liability company incorporated under the laws of Jersey whose
London branch is at 0xx Xxxxx, 00 Xxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxx
XX0X 0XX;
(2) THE BANK OF NEW YORK, a New York banking corporation whose London branch
address is at One Canada Square, 00xx Xxxxx, 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 One Canada Square, 00xx Xxxxx, Xxxxxx X00 0XX Xxxxxx Xxxxxxx,
(1) in it 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 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;
(8) 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 Cash Manager;
(9) 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
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through its office at 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX in its capacity
as Funding GIC Provider;
(10) MOURANT & CO. CAPITAL (SPV) LIMITED, a private limited company incorporated
under the laws of England and Wales whose registered office is 0xx Xxxxx,
00 Xxx Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX, in its capacity as Corporate
Services Provider;
(11) 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;
(12) 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 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.
(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) The Current Issuer Start-up Loan Provider and the Current Issuer, 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.
(F) The Current Issuer Note Trustee has agreed to enter into this Deed to
accede to the provisions of the Funding Deed of Charge.
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(G) 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.
1. INTERPRETATION
The provisions of the Master Definitions Schedule as amended and restated
by (and appearing in Appendix 1 to) the Master Definitions Schedule [Third]
Amendment Deed made on [__] September, 2002 between, among others, the
Seller, Funding and the Mortgages Trustee (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.
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.
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
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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.
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
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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 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 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 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 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
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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.
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:
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(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) the property and assets of Funding expressed to be assigned or charged
pursuant to this Deed shall constitute Funding Charged Property; and
(f) each of the Current Issuer New Funding Secured Creditors shall be
treated as a Funding Secured Creditor.
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
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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 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 02-2 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 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:
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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.
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 disputes, which may arise out of or in
connection with this Deed and, for such purposes, irrevocably submits to
the jurisdiction of such courts.
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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.
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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 AS A DEED by )
GRANITE FINANCE FUNDING LIMITED )
acting by: )
Name:
Title:
Name:
Title:
THE SECURITY TRUSTEE
EXECUTED AS A DEED for and )
on behalf of )
THE BANK OF NEW YORK )
by: )
Name:
Title:
THE NOTE TRUSTEE IN RESPECT OF THE PREVIOUS ISSUERS
AND THE CURRENT ISSUER NOTE TRUSTEE
EXECUTED AS A DEED for and )
on behalf of )
THE BANK OF NEW YORK )
by: )
Name:
Title:
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GRANITE 01-1 PLC
EXECUTED AS A DEED by )
GRANITE MORTGAGES 01-1 PLC )
acting by: )
Name:
Title:
Name:
Representing LDC Securitisation
Director No. 1 Limited
Title:
GRANITE 01-2 PLC
EXECUTED AS A DEED by )
GRANITE MORTGAGES 01-2 PLC )
acting by: )
Name:
Title:
Name:
Representing LDC Securitisation
Director No. 1 Limited
Title:
12
GRANITE 02-1 PLC
EXECUTED AS A DEED by )
GRANITE MORTGAGES 02-1 PLC )
acting by: )
Name:
Title:
Name:
Representing LDC Securitisation
Director No. 1 Limited
Title:
THE MORTGAGES TRUSTEE
EXECUTED AS A DEED by )
GRANITE FINANCE TRUSTEES LIMITED )
acting by: )
Name:
Title:
Name:
Title:
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THE CASH MANAGER
EXECUTED AS A DEED by )
)
)
as attorney for
NORTHERN ROCK PLC in the presence of:
Witness Signature:
Name of Witness:
Occupation:
Address:
THE ACCOUNT BANK AND THE FUNDING GIC PROVIDER
EXECUTED AS A DEED by )
)
)
as attorney for
LLOYDS TSB BANK PLC
in the presence of:
Witness Signature:
Name of Witness:
Occupation:
Address:
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THE CORPORATE SERVICES PROVIDER
EXECUTED AS A DEED by )
MOURANT & CO. CAPITAL (SPV) )
LIMITED )
acting by:
Name:
Title:
Name:
Title:
THE PREVIOUS START-UP LOAN PROVIDER AND
THE CURRENT ISSUER START-UP LOAN PROVIDER
EXECUTED AS A DEED by )
)
)
as attorney for
NORTHERN ROCK PLC in the presence of:
Witness Signature:
Name of Witness:
Occupation:
Address:
15
THE CURRENT ISSUER
EXECUTED AS A DEED by )
GRANITE MORTGAGES 02-2 PLC )
acting by: )
Name:
Title:
Name:
Representing LDC Securitisation
Director No. 1 Limited
Title:
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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) increase that portion of 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) increase
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). Amounts standing to the credit of the Issuer Liquidity
Reserve Ledger may not be applied in making payments of principal due under
the Current Issuer Intercompany Loan in order to fund payments of principal
due on the Class D Notes.
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[APPENDIX
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 Funding Available Revenue Receipts 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 between them, but in proportion to the
respective amounts due, towards payment of amounts, if any, due to the
Account Bank under the terms of the Bank Account Agreement and to the
Corporate Services Provider under the Corporate Services Agreement;
(E) fifth, to pay, in no order of priority between them, but in proportion
to the respective amounts due, to each Issuer an amount up to its
Issuer Allocable
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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 between them, but in proportion
to the respective amounts due, 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 (to the
extent that monies have been drawn from such Issuer Liquidity Reserve
Fund to pay interest and fees due under the relevant Intercompany
Loan);
(G) seventh, to pay, in no order of priority between them, but in
proportion to the respective amounts due, 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 between them, but in
proportion to the respective amounts due, 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);
(I) ninth, to pay in no order of priority between them, but in proportion
to the respective amounts due, 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;
(J) tenth, in no order of priority between them, but in proportion to the
respective amounts due, from Issuer Allocable Revenue Receipts, to
credit the Funding Reserve Ledger in an amount up to the Funding
Reserve Required Amount;
(K) eleventh, to pay to each Issuer, in no order of priority between 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
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applied in the amounts and priorities set forth in, the Issuer
Post-Reserve Payments for that Issuer;
(L) twelfth, in no order of priority between 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 between 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 all Shared Issuer Revenue
Receipts 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, 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.
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.
RULES FOR APPLICATION OF FUNDING AVAILABLE REVENUE RECEIPTS
(1) Subject as provided in paragraphs (2) through (4) below, the portion of
Issuer Allocable Revenue Receipts, if any, not required to be applied by an
Issuer on a Payment Date to pay interest on the Notes or to credit the
related Issuer Principal Deficiency Ledger or to pay any other costs and
expenses due by that Issuer on that date pursuant to the relevant Issuer
Priority of Payments, together with the portion of Issuer Allocable Revenue
Receipts relating to all other Issuers not required to be so applied by
those other Issuers on that Payment Date (excluding any Issuer Reserve Fund
or Issuer Liquidity Reserve Fund (if any) of any Issuer), shall constitute
"SHARED ISSUER REVENUE RECEIPTS". Shared Issuer Revenue Receipts will be
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reallocated by the Cash Manager and distributed on such Payment Date among
the Issuers as payments of interest and fees under the applicable
Intercompany Loans to the extent required to make payments of interest due
on the Notes, to credit the related Issuer Principal Deficiency Ledgers and
to pay other costs, expenses and third party amounts payable by the Issuers
under the relevant Issuer Priority of Payments (but excluding principal
payable under any Intercompany Loan). Such reallocation and distribution
will continue to be made on such Payment Date until there are no remaining
amounts of Shared Issuer Revenue Receipts to be reallocated and distributed
on such Payment Date. Each Issuer will be entitled to receive a portion of
the Shared Issuer Revenue Receipts equal to:
Outstanding Principal Balance of
Intercompany Loan of the Issuer
Amount of Shared Issuer Revenue Receipts x---------------------------------
Aggregate Outstanding Principal
Balance of the Intercompany Loans
of all Issuers
(2) No Issuer shall be entitled to or shall receive any amount of Issuer
Allocable Revenue Receipts from Funding on a Payment Date which 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 Shared Issuer Revenue Receipts for the
purpose of paragraph (1) above 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.
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(4) If on any Payment Date any Issuer Allocable Revenue Receipts and/or any
Shared Issuer Revenue Receipts 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 then the Issuer Allocable Revenue Receipts
and/or Shared Issuer Revenue Receipts so applied shall constitute
repayments of principal under the relevant Intercompany Loan and shall
reduce the Outstanding Principal Balance of that Intercompany Loan
accordingly.
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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 Funding Available Principal Receipts
in the following order of priority (the "FUNDING PRE-ENFORCEMENT PRINCIPAL
PRIORITY OF PAYMENTS"):
(A) first, to fund or replenish, as the case may be, the Issuer Liquidity
Reserve Fund, if any, of each 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 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) last, to pay to (or, if required under that Issuer's Intercompany
Loan, set aside for) each Issuer an amount up to its allocable portion
of 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 the 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 Funding Available
Principal Receipts on such Payment Date,
PROVIDED THAT no amount will be applied in replenishing the Issuer Liquidity
Reserve Fund held by Funding in respect of an Issuer under paragraph (A) above
following an enforcement of the Issuer Security relating to that Issuer.
RULES FOR APPLICATION OF FUNDING AVAILABLE PRINCIPAL RECEIPTS
(1) On the Distribution Date immediately preceding such Payment Date, the
Cash Manager will calculate the "ISSUER ALLOCABLE PRINCIPAL RECEIPTS" for
each Issuer in respect of the relevant Payment Date which, subject as
provided in paragraphs (2) through (7) below, is for any Issuer an amount
which is equal to the lesser of:
(a) (only if relevant) the principal amount due on the Intercompany
Loan of such Issuer which is an amount equal to the Controlled
Amortisation
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Amount due, if any, on the Payment Date immediately succeeding such
Distribution Date; and
(b) an amount equal to:
Outstanding Principal Balance on
such Issuer's Intercompany Loan
Funding Available Principal Receipts x--------------------------------
Aggregate Outstanding Principal
Balance of the Intercompany
Loans of all Issuers
PROVIDED THAT,
(a) subject as provided in paragraphs (2) through (7) below, for the
purpose only of determining the amount of Issuer Allocable Principal
Receipts which may be allocated and paid to that 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 that 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 Shared Issuer
Principal Receipts in accordance with paragraph (6) below, Issuer Allocable
Principal Receipts shall be an amount equal to the amount calculated in
accordance with paragraph 1(b) above only and paragraph 1(a) 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 Trigger Event, principal payments in
respect of any Intercompany Loan may be made in excess of any Controlled
Amortisation Amount and paragraph (1)(a) above 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 paragraph (1)(b) above 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.
(3) For the purpose of determining the amount of Issuer Allocable Principal
Receipts and/or any 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
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Outstanding Principal Balance of that Intercompany Loan shall be deemed to
be reduced by the amount of:
(a) any deficiency recorded on the Issuer Principal Deficiency Ledger
of that Issuer as at such 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.
(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) The portion of Issuer Allocable Principal Receipts, if any, not
required to be applied by the Issuer to pay principal on the Notes on a
Payment Date together with the portion of Issuer Allocable Principal
Receipts relating to all other Issuers not required to be so applied by
such other Issuers (or otherwise required to be set aside by Funding for
any Issuer) on that Payment Date (excluding the amount of any Issuer
Reserve Fund or Issuer Liquidity Reserve Fund (if any) of any Issuer),
shall constitute "SHARED ISSUER PRINCIPAL RECEIPTS". Shared Issuer
Principal Receipts will be reallocated by the Cash Manager and distributed
on such Payment Date among the Issuers as payments of principal under the
applicable Intercompany Loans to the extent required to make payments of
principal due on the relevant Notes. Such reallocation and distribution
will continue to be made on such Payment Date until there are no remaining
amounts of Shared Issuer Principal Receipts to be reallocated and
distributed on such Payment Date. Save as provided in paragraph (2) above,
each Issuer will be entitled to receive a portion of the Shared Issuer
Principal Receipts equal to:
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Outstanding Principal Balance of the
Intercompany Loan of the Issuer
Shared Issuer Principal Receipts x-----------------------------------------
Aggregate Outstanding Principal Balance
of the Intercompany Loans of all 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 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.
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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, 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, 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, (in no order of priority between them but in proportion to the
respective amounts due) towards payment of amounts (if any) due to the
Account Bank under the terms of the Bank Account Agreement and to the
Corporate Services Provider under the Corporate Services Agreement;
(D) fourth, (in no order of priority between them but in proportion to the
respective amounts due) to each 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 Issuer
under such Issuer's
27
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;
(E) fifth, towards payment of amounts due to each Issuer Start-up Loan
Provider under the relevant Issuer Start-up Loan Agreement;
(F) sixth, towards payment of any Deferred Contribution due to the
Mortgages Trustee under the Mortgages Trust Deed; and
(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 for the avoidance of doubt funds standing to the credit of any
Issuer Reserve Fund or Issuer Liquidity Reserve Fund of any Issuer shall only be
applied in reduction of the liabilities owing under the Intercompany Loan of
such Issuer.
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