EXHIBIT 4.1
Dated 26 May 2004
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NORTHERN ROCK PLC
as Cash Manager
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
NORTHERN ROCK PLC
as Seller
GRANITE FINANCE FUNDING LIMITED
as Beneficiary
- and -
THE BANK OF NEW YORK
as Security Trustee
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CASH MANAGEMENT AGREEMENT
FIFTH DEED OF AMENDMENT
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SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
WOOLGATE EXCHANGE
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
THIS DEED is made on 26 May 2004
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Cash Manager;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, Channel Islands
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, Channel Islands in its capacity as Mortgages Trustee;
(3) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Seller and in its capacity as a Beneficiary;
(4) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, Channel Islands
but acting out of its office established in England (registered
overseas company number FC022999 and branch number BR005916) at ▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ in its capacity as a Beneficiary; and
(5) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its
capacity as Security Trustee.
WHEREAS:
(A) The Seller carries on the business (inter alia) of originating mortgage
loans secured on residential properties in England, Wales and Scotland.
(B) The Seller has sold and assigned to the Mortgage Trustee certain
mortgage loans, together with the benefit of related security for the
same, on the terms and subject to the conditions set out in the
Mortgage Sale Agreement among the parties hereto.
(C) The Cash Manager has agreed to provide Cash Management Services to the
Mortgages Trustee, Funding and the Security Trustee on the terms and
subject to the conditions contained in the Cash Management Agreement
dated 26 March 2001 (as amended, varied, novated or supplemented from
time to time, the "Cash Management Agreement").
(D) The parties have agreed to amend and restate the Cash Management
Agreement (the "First Amended and Restated Cash Management Agreement")
pursuant to the provisions set out in a deed of amendment and
restatement dated 23 July 2001 (the "First Deed of Amendment and
Restatement").
(E) The parties have agreed to amend and restate the First Amended and
Restated Cash Management Agreement (the "Second Amended and Restated
Cash Management
Agreement") pursuant to the provisions set out in a deed of amendment
and restatement dated 27 January 2003 (the "Second Deed of Amendment
and Restatement").
(F) The parties have agreed to amend and restate the Second Amended and
Restated Cash Management Agreement (the "Third Amended and Restated
Cash Management Agreement") pursuant to the provisions set out in a
deed of amendment and restatement dated 24 September 2003 (the "Third
Deed of Amendment and Restatement").
(G) The parties have agreed to amend and restate the Third Amended and
Restated Cash Management Agreement (the "Fourth Amended and Restated
Cash Management Agreement") pursuant to the provisions set out in a
deed of amendment and restatement dated 28 January 2004 (the "Fourth
Deed of Amendment and Restatement").
(H) The parties now wish to amend and restate the Fourth Amended and
Restated Cash Management Agreement.
(I) With effect from the date hereof, the provisions of the Cash Management
Agreement, the First Amended and Restated Cash Management Agreement,
the Second Amended and Restated Cash Management Agreement, the Third
Amended and Restated Cash Management Agreement, the Fourth Amended and
Restated Cash Management Agreement and this Deed shall be read and
construed as follows.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Eighth Deed of Amendment made on 26 May 2004 between, among
others, the parties hereto (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 Deed.
1.2 The Cash Management Agreement as amended and restated pursuant to the
First Deed of Amendment and Restatement, the Second Deed of Amendment
and Restatement, the Third Deed of Amendment and Restatement, the
Fourth Amended and Restated Cash Management Agreement and pursuant
hereto shall be referred to herein as the "Amended and Restated Cash
Management Agreement".
1.3 As used in the Amended and Restated Cash Management Agreement, the
terms "Cash Management Agreement", "this Cash Management Agreement",
"Agreement", "this Agreement", "herein", "hereinafter", "hereof",
"hereto" and other words of similar import shall mean or refer to the
Amended and Restated Cash Management Agreement, unless the context
otherwise specifically requires.
2
2. AMENDMENTS TO THE FOURTH AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT
Upon execution of this Deed by the parties hereto, the Fourth
Amended and Restated Cash Management Agreement shall be and hereby
is amended and restated in the form of Appendix I hereto.
3. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No person shall have any right to enforce any provision of this
Deed or any provision of the Amended and Restated Cash Management
Agreement under the Contract (Rights of Third Parties) ▇▇▇ ▇▇▇▇.
4. COUNTERPARTS
This Deed may be executed in any number of counterparts, and has
the same effect as if the signatures on the counterparts were on a
single copy of this Deed.
5. GOVERNING LAW
5.1 This Deed is governed by, and shall be construed in accordance with,
English law.
5.2 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.
3
EXECUTION PAGE
IN WITNESS WHEREOF this Deed has been executed as a deed by the parties hereto
and entered into the day and year first above written.
as Cash Manager, Seller and Beneficiary
EXECUTED AS A DEED by )
)
)
as attorney for )
NORTHERN ROCK PLC )
in the presence of:
Signature of Witness:
Name of Witness:
Occupation:
Address:
EXECUTED AS A DEED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
Director
Name:
Title:
Director/Company Secretary
Name:
Title:
4
EXECUTED AS A DEED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
Director
Name:
Title:
Director/Company Secretary
Name:
Title:
EXECUTED AS A DEED for and on behalf of )
THE BANK OF NEW YORK )
by: )
Authorised Signatory
Name:
Title:
5
Appendix I
Amended and Restated Cash Management Agreement
6
Dated 26 May 2004
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NORTHERN ROCK PLC
as Cash Manager
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
NORTHERN ROCK PLC
as Seller
GRANITE FINANCE FUNDING LIMITED
as Beneficiary
- and -
THE BANK OF NEW YORK
as Security Trustee
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FIFTH AMENDED CASH MANAGEMENT AGREEMENT
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SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
WOOLGATE EXCHANGE
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
CONTENTS
Clause Page No.
1. Definitions and Interpretation..........................................5
2. Appointment of Cash Manager.............................................5
3. The Services............................................................6
4. Payments, Accounts, Ledgers.............................................7
5. Early Repayment Charges................................................14
6. No Liability...........................................................15
7. Costs and Expenses.....................................................15
8. Information............................................................15
9. Remuneration...........................................................18
10. Covenants, Representations and Warranties of the Cash Manager..........19
11. Services Non-Exclusive.................................................20
12. Termination............................................................20
13. Further Assurances.....................................................23
14. Miscellaneous..........................................................23
15. Confidentiality........................................................24
16. No Partnership.........................................................25
17. Assignment.............................................................25
18. The Security Trustee...................................................25
19. New Intercompany Loan Agreements.......................................25
20. Non Petition Covenant; Limited Recourse................................26
21. Amendments and Waiver..................................................27
22. Notices................................................................27
23. Third Party Rights.....................................................28
24. Execution in Counterparts; Severability................................28
2
25. Governing Law and Submission to Jurisdiction...........................29
SCHEDULE 1 The Cash Management Services.....................................30
SCHEDULE 2 Cash Management and Maintenance of Ledgers.......................33
SCHEDULE 3A Form of Mortgages Trustee Quarterly Report......................48
SCHEDULE 3B Form of Funding Quarterly Report................................49
SCHEDULE 4 Cash Manager Representations and Warranties......................52
3
THIS FIFTH AMENDED AND RESTATED CASH MANAGEMENT AGREEMENT DATED 26 MAY 2004
AMENDS AND RESTATES THE CASH MANAGEMENT AGREEMENT DATED 26 MARCH 2001
BETWEEN:
(1) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Cash Manager;
(2) GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
limited company incorporated under the laws of Jersey, Channel Islands
whose registered office is at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, Channel Islands in its capacity as Mortgages Trustee;
(3) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Seller and in its capacity as a Beneficiary;
(4) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey, Channel Islands
having its principal place of business in the United Kingdom at ▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as a Beneficiary; and
(5) THE BANK OF NEW YORK a New York banking corporation whose London branch
address is at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its
capacity as Security Trustee.
WHEREAS:
(A) On the Initial Closing Date the First Issuer will issue the First
Issuer Notes constituted by the First Issuer Trust Deed. From the
proceeds of the issue of those First Issuer Notes, the First Issuer
shall make a loan to Funding pursuant to the terms of the First Issuer
Intercompany Loan Agreement. From the proceeds of that loan, Funding
shall pay the Initial Contribution to the Mortgages Trustee as
consideration in part for the Initial Funding Share of the Trust
Property, which funds will be used by the Mortgages Trustee to pay to
the Seller the Initial Purchase Price for the sale and assignment by
the Seller to the Mortgages Trustee of the Initial Mortgage Portfolio
pursuant to the Mortgage Sale Agreement.
(B) The Cash Manager is willing to provide Cash Management Services to the
Mortgages Trustee, Funding and the Security Trustee on the terms and
subject to the conditions contained in this Agreement.
4
IT IS HEREBY AGREED as follows:
1. Definitions and Interpretation
1.1 The provisions of the Master Definitions Schedule as amended and
restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Eighth Amendment and Restatement Deed made on 26 May 2004
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.
1.2 Any reference in this Agreement to any discretion, power or right on
the part of the Mortgages Trustee shall be as exercised by the
Mortgages Trustee only as directed by the Beneficiaries but subject in
each case to the provisions of Clause 17 (Directions from
Beneficiaries) of the Mortgages Trust Deed.
1.3 During the period 26 May 2004 to the Distribution Date falling in June
2004 (inclusive), any reference in this Agreement to the Mortgages
Trustee GIC Account shall be construed as meaning the account in the
name of the Mortgages Trustee (sort code 30-16-63, account number
▇▇▇▇▇▇▇▇) held at Lloyds TSB Bank plc, Jersey International Branch, ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel Islands, and after such
date, the account in the name of the Mortgages Trustee (sort code
30-00-59, account number ▇▇▇▇▇▇▇▇, reference 132200) held at Northern
Rock plc, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇.
1.4 During the period 26 May 2004 to the Payment Date falling in July 2004
(inclusive), any reference in this Agreement to the Funding GIC Account
shall be construed as meaning the account in the name of Funding (sort
code 30-15-57, account number ▇▇▇▇▇▇▇) held at Lloyds TSB Bank plc,
Treasury Division, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, and after such
date, the account in the name of Funding (sort code 30-00-59, account
number ▇▇▇▇▇▇▇▇, reference 132161) held at Northern Rock plc, Northern
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇.
2. Appointment of Cash Manager
2.1 Appointment: Until termination pursuant to Clause 12 herein
(Termination), the Mortgages Trustee, Funding and the Security Trustee
(according to their respective estates and interests) each hereby
appoints the Cash Manager as its lawful agent to provide the Cash
Management Services set out in this Agreement, including in relation
to:
(a) the Mortgages Trustee; and
(b) Funding,
and the Cash Manager in each case hereby accepts such appointment on
the terms and subject to the conditions of this Agreement.
2.2 Duties prescribed by Transaction Documents: For the avoidance of doubt
and in connection with the powers conferred under Clause 2.1
(Appointment), save as
5
expressly provided elsewhere in this Agreement, nothing herein shall be
construed so as to give the Cash Manager any powers, rights,
authorities, directions or obligations other than as specified in this
Agreement or any of the other Transaction Documents.
2.3 Appointment conditional upon issuance of First Issuer Notes: The
appointment pursuant to Clause 2.1 (Appointment) is conditional upon
the issue of the First Issuer Notes and the making of the First Issuer
Intercompany Loan under the First Issuer Intercompany Loan Agreement
and shall take effect upon and from the Initial Closing Date
automatically without any further action on the part of any person,
PROVIDED THAT, if the issue of the First Issuer Notes by the First
Issuer has not occurred by 30 April 2001, or such later date as the
First Issuer and the Lead Manager may agree, this Agreement shall cease
to be of further effect.
3. The Services
3.1 General: The Cash Manager shall provide the services set out in this
Agreement (including, without limitation, Schedules 1 and 2 attached
hereto) (the "Cash Management Services").
3.2 Approvals and authorisations: The Cash Manager shall maintain, or
procure the maintenance of, the approvals, authorisations, consents and
licences required in connection with the respective businesses of the
Mortgages Trustee and Funding and shall prepare and submit, or procure
the preparation and submission of, on behalf of the Mortgages Trustee
and Funding, all necessary applications and requests for any further
approvals, authorisations, consents or licences which may be required
in connection with the respective businesses of the Mortgages Trustee
and Funding and shall, so far as it reasonably can do so, perform the
Cash Management Services in such a way as not to prejudice the
continuation of any such approvals, authorisations, consents or
licences.
3.3 Compliance with Transaction Documents, etc.: The Cash Management
Services shall include procuring (so far as the Cash Manager, using its
reasonable endeavours, is able so to do) compliance by the Mortgages
Trustee and Funding with all applicable legal requirements and with the
terms of the Transaction Documents to which each of the Mortgages
Trustee and/or Funding is a party, PROVIDED THAT the Cash Manager shall
not lend or provide any sum to the Mortgages Trustee or Funding (other
than as expressly contemplated by the Transaction Documents) and the
Cash Manager shall have no liability whatsoever to the Mortgages
Trustee, Funding, the Security Trustee or any other person for any
failure by the Mortgages Trustee or Funding to make any payment due by
any of them under any of the Transaction Documents (other than to the
extent arising from (i) the Cash Manager failing to make a payment in
its capacity as Administrator, or in any other capacity under the
Transaction Documents, or (ii) the Cash Manager failing to perform any
of its obligations under any of the Transaction Documents).
3.4 Liability of Cash Manager:
(a) The Cash Manager shall indemnify each of the Mortgages Trustee,
Funding and the Security Trustee on demand for any loss,
liability, claim, expense or damage suffered or incurred by any of
them in respect of the negligence, bad
6
faith or wilful default of the Cash Manager in carrying out its
functions as Cash Manager under this Agreement or under the other
Transaction Documents or as a result of a breach by the Cash
Manager of the terms and provisions of this Agreement or such
other Transaction Documents to which the Cash Manager is a party
(in its capacity as such) in relation to such functions.
(b) For the avoidance of doubt, the Cash Manager shall not be liable
in respect of any loss, liability, claim, expense or damage
suffered or incurred by the Mortgages Trustee, Funding, or the
Security Trustee and/or any other person as a result of the proper
performance of the Cash Management Services (as defined in Clause
3.1) by the Cash Manager save to the extent that such loss,
liability, claim, expense or damage is suffered or incurred as a
result of any negligence, bad faith or wilful default of the Cash
Manager under, or as a result of, a breach by the Cash Manager of
the terms and provisions of this Agreement or any of the other
Transaction Documents to which the Cash Manager is a party (in its
capacity as such) in relation to such functions.
4. Payments, Accounts, Ledgers
4.1 Establishment of Bank Accounts:
(a) The Cash Manager hereby confirms that the Mortgages Trustee GIC
Account has been established on or before the date hereof pursuant
to the Bank Account Agreement and the Mortgages Trustee Guaranteed
Investment Contract and that the Mortgages Trustee GIC Account
Mandate in the agreed form will apply thereto at the Initial
Closing Date. The Cash Manager undertakes (to the extent to which
the same is within its control) that at the Initial Closing Date
the Mortgages Trustee GIC Account will be operative and that the
Cash Manager will not knowingly create or permit to subsist any
Security Interest in relation to the Mortgages Trustee GIC Account
(but without prejudice to the Mortgages Trust and the other
Transaction Documents).
(b) The Cash Manager hereby confirms that the Mortgages Trustee
Transaction Account has been established on or before the date
hereof pursuant to the Bank Account Agreement and that the
Mortgages Trustee Transaction Account Mandate in the agreed form
will apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control)
that at the Initial Closing Date the Mortgages Trustee Transaction
Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in
relation to the Mortgages Trustee Transaction Account (but without
prejudice to the Mortgages Trust and the other Transaction
Documents).
(c) The Cash Manager hereby confirms that the Funding GIC Account has
been established on or before the date hereof pursuant to the Bank
Account Agreement and the Funding Guaranteed Investment Contract
and that the Funding GIC Account Mandate in the agreed form will
apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control)
that at the Initial Closing Date the Funding GIC
7
Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in
relation to the Funding GIC Account other than as created under or
permitted pursuant to the Funding Deed of Charge.
(d) The Cash Manager hereby confirms that the Funding Transaction
Account has been established on or before the date hereof pursuant
to the Bank Account Agreement and that the Funding Transaction
Account Mandate in the agreed form will apply thereto at the
Initial Closing Date. The Cash Manager undertakes (to the extent
to which the same is within its control) that at the Initial
Closing Date the Funding Transaction Account will be operative and
that the Cash Manager will not knowingly create or permit to
subsist any Security Interest in relation to the Funding
Transaction Account other than as created under or permitted
pursuant to the Funding Deed of Charge.
(e) The Cash Manager hereby confirms that the Funding (First Issuer)
GIC Account has been established on or before the date hereof
pursuant to the Funding (First Issuer) Bank Account Agreement and
the Funding (First Issuer) Guaranteed Investment Contract and that
the Funding (First Issuer) GIC Account Mandate in the agreed form
will apply thereto at the Initial Closing Date. The Cash Manager
undertakes (to the extent to which the same is within its control)
that at the Initial Closing Date the Funding (First Issuer) GIC
Account will be operative and that the Cash Manager will not
knowingly create or permit to subsist any Security Interest in
relation to the Funding (First Issuer) GIC Account other than as
created under or permitted pursuant to the Funding Deed of Charge.
(f) Upon Funding entering into any New Intercompany Loan Agreement
with a New Issuer, the Cash Manager undertakes to establish a
separate Funding (Issuer) GIC Account in respect of each New
Issuer to which amounts in respect of any Issuer Reserve Fund and
Issuer Liquidity Reserve Fund (if any) of such New Issuer will be
credited.
(g) If Funding enters into a New Intercompany Loan Agreement, then the
Cash Manager, the Seller, Funding, the Security Trustee and the
Mortgages Trustee shall execute such amendments to this Agreement
as may be necessary to reflect the establishment of any new
Funding (Issuer) GIC Account.
4.2 Mortgages Trustee Ledgers:
(a) The Cash Manager shall open and maintain in the books of the
Mortgages Trustee the following ledgers on behalf of the Mortgages
Trustee:
(i) the Principal Ledger, which shall separately reflect all
Principal Receipts standing to the credit of each of the
Mortgages Trustee GIC Account and the Mortgages Trustee
Transaction Account from time to time and distribution of
the same to Funding and the Seller;
(ii) the Revenue Ledger, which shall separately reflect all
Revenue Receipts standing to the credit of each of the
Mortgages Trustee GIC
8
Account and the Mortgages Trustee Transaction Account from
time to time and distribution of the same to Funding and the
Seller;
(iii) the Losses Ledger, which shall record Losses on the
Mortgage Portfolio;
(iv) the Funding Share/Seller Share Ledger which shall record
the Funding Share, the Seller Share, the Funding Share
Percentage and the Seller Share Percentage of the Trust
Property;
(v) the Overpayments Ledger, which will reflect each Revenue
Receipt and/or Principal Receipt paid by a Borrower in
excess of the amount required under the terms of the
relevant Mortgage Loan (and in the case of any non-Flexible
Mortgage Loan any payment which is not a Capital Payment),
which shall be divided into (A) the Non-Flexible
Overpayments Sub Ledger to record Overpayments on
Non-Flexible Mortgage Loans and (B) the Flexible
Overpayments Sub Ledger to record Overpayments on Flexible
Mortgage Loans, in each case as received into and paid out
of the Mortgages Trustee GIC Account from time to time;
(vi) the Non-Flexible Underpayments Ledger, which shall record
Underpayments on Non-Flexible Mortgage Loans from time to
time;
(vii) the Re-Draws Ledger, which will record Re-Draws on the
Flexible Mortgage Loans and which shall be divided into (A)
the Cash Re-Draws Sub Ledger to record Cash Re-Draws made
in respect of Flexible Mortgage Loans and (B) the Non-Cash
Re-Draws Sub Ledger to record Non-Cash Re-Draws made in
respect of Flexible Mortgage Loans;
(viii) the Contributions Ledger, which will be divided into sub
ledgers to record (i) the making by Funding to the
Mortgages Trustee of Contributions to the Mortgages Trust
pursuant to the Mortgages Trust Deed (ii) the making by the
Seller to the Mortgages Trustee of Contributions to the
Mortgages Trust pursuant to the Mortgages Trust Deed and
the application of such Contributions in accordance with
the terms of the Mortgages Trust Deed by (iii) the payment
by the Mortgages Trustee to the Seller of either (a)
amounts of Initial Purchase Price for the sale of any New
Mortgage Portfolio which is acquired by the Mortgages
Trustee from the Seller under the provisions of Mortgage
Sale Agreement (b) amounts of Deferred Purchase Price in
accordance with the Mortgage Sale Agreement and (iv) the
payment by the Mortgages Trustee to the Seller of any
Initial Consideration in accordance with the Mortgages
Trust Deed; and
(ix) the Further Draws Ledger, which will record Further Draws
on Personal Secured Loans from time to time.
9
(b) The Cash Manager shall make credits and debits to the Mortgages
Trustee Ledgers in the manner described in paragraphs 10, 11, 12,
13, 20, 21 and 22 of Schedule 2 hereto.
4.3 Funding Ledgers:
(a) The Cash Manager shall open and maintain in the books of Funding
the following ledgers on behalf of Funding:
(i) the Issuer Reserve Fund Ledger of any Issuer, which shall
record the amount credited to the Issuer Reserve Fund of
such Issuer on the related Closing Date, and subsequent
withdrawals and deposits in respect of such Issuer Reserve
Fund;
(ii) the Issuer Liquidity Reserve Ledger of any Issuer, if any,
which shall record the amount credited to the Issuer
Liquidity Reserve Fund from time to time of such Issuer,
and subsequent withdrawals and deposits in respect of such
Issuer Liquidity Reserve Fund;
(iii) the Funding Principal Ledger, which shall separately
reflect all Funding Principal Receipts received by Funding
on each Distribution Date and all Funding Principal
Receipts standing to the credit of each Funding Bank
Account, and the following sub-ledgers:
(A) the Group 1 Principal Sub-Ledger which shall record
receipts and payments of Funding Principal Receipts
allocable to Group 1; and
(B) the Group 2 Principal Sub-Ledger which shall record
receipts and payments of Funding Principal Receipts
allocable to Group 2;
(iv) the Funding Principal Deficiency Ledger, which shall
reflect the aggregate position of the Issuer Principal
Deficiency Ledgers of all Issuers as to Losses on the
Mortgage Loans and the application of Funding Available
Principal Receipts to fund Issuer Liquidity Reserve Funds;
(v) the Funding Revenue Ledger, which shall separately reflect
all Funding Revenue Receipts received by Funding on each
Distribution Date and all Funding Revenue Receipts standing
to the credit of each Funding Bank Account, and the
following sub-ledgers:
(A) the Funding Expense Sub-Ledger which shall record
receipts and payments of Funding Revenue Receipts
allocable to the payment of expenses;
(B) the Group 1 Revenue Sub-Ledger which shall record
receipts and payments of Funding Revenue Receipts
allocable to Group 1; and
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(C) the Group 2 Revenue Sub-Ledger which shall record
receipts and payments of Funding Revenue Receipts
allocable to Group 2;
(vi) the Funding Reserve Ledger, which shall record the amount
credited to the Funding Reserve Fund from time to time, and
subsequent withdrawals and deposits in respect of the
Funding Reserve Fund; and
(vii) the Intercompany Loan Ledger, which shall be divided into
segregated sub ledgers each of which shall record payments
of interest and fees and repayments of principal made under
such Intercompany Loan.
(b) The Cash Manager shall make credits and debits to the Funding
Ledgers in accordance with the provisions of paragraphs 14 through
19 of Schedule 2 hereto.
4.4 Payments:
(a) The Cash Manager shall procure that so far as it may be able in
relation to all Mortgage Loans comprised in the Mortgage Portfolio,
the following amounts are paid into the Mortgages Trustee Transaction
Account:
(i) all Monthly Payments, other interest received under and in
respect of the Mortgage Loans and any costs or other
amounts received under the Mortgage Loans (including in any
such case amounts recovered on enforcement of rights
against any Borrower or guarantor of the Borrower, any
Mortgaged Property or any of the Borrower's or guarantor's
other property or assets);
(ii) all final releases and all repayments or prepayments of
principal under the Mortgage Loans;
(iii) any amount received by or on behalf of the Mortgages
Trustee pursuant to any Insurance Policy; and
(iv) any other amounts whatsoever received by or on behalf of
the Mortgages Trustee on or after the Initial Closing Date,
(b) The Cash Manager shall procure that the following amounts are
credited to the Mortgages Trustee GIC Account:
(i) from time to time upon written or electronic receipt of
instructions from the Administrator, all amounts standing
to the credit of the Mortgages Trustee Transaction Account;
and
(ii) all interest earned on any of (A) the Mortgages Trustee
Transaction Account, (B) the Mortgages Trustee GIC Account
and (C) all investment proceeds from Authorised Investments
purchased from amounts standing to the credit of either the
Mortgages Trustee Transaction Account or the Mortgages
Trustee GIC Account.
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(c) The Cash Manager shall procure that on each Distribution Date the
following amounts are paid into the Funding GIC Account:
(i) all Funding Principal Receipts, PROVIDED HOWEVER that any
amounts recorded as a credit on the Non-Flexible
Overpayments Sub Ledger shall remain in the Mortgages
Trustee GIC Account on such Distribution Date;
(ii) all Funding Revenue Receipts; and
(iii) any other amounts whatsoever received by or on behalf of
Funding after the Initial Closing Date,
and the Cash Manager shall procure that all interest earned on the
Funding GIC Account and the Funding Transaction Account and all
investment proceeds from Authorised Investments purchased from
amounts standing to the credit of such accounts are credited to
the Funding GIC Account.
(d) The Cash Manager shall procure that all interest earned on each
Funding (Issuer) GIC Account and all investment proceeds from
Authorised Investments purchased from amounts standing to the
credit of such Funding (Issuer) GIC Account are credited to such
account.
(e) The Cash Manager shall procure that on each Payment Date the
lesser of (1) the amount standing to the credit of the Funding GIC
Account and (2) the aggregate of all amounts required to be paid
by Funding to all Issuers in accordance with the relevant Funding
Priority of Payments, is credited to the Funding Transaction
Account in accordance with the provisions of the Funding Deed of
Charge.
(f) The Cash Manager shall procure that all transfers and withdrawals
of amounts standing to the credit of the Funding Transaction
Account and the Funding GIC Account shall be made in accordance
with the provisions of the Funding Deed of Charge.
(g) The Cash Manager shall procure that all transfers and withdrawals
of amounts standing to the credit of each Funding (Issuer) GIC
Account shall be made in accordance with the provisions of the
Funding Deed of Charge.
(h) Each of the payments into the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account, the Funding
Transaction Account, the Funding GIC Account and each Funding
(Issuer) GIC Account referred to in Clauses 4.4(a) through (g)
herein shall be made forthwith upon receipt by the Mortgages
Trustee, Funding or the Cash Manager, as the case may be, of the
amount in question.
(i) For the avoidance of doubt, as soon as reasonably practicable
after becoming aware of the same, the Cash Manager may, and shall,
withdraw Cash from, as the case may be, the Mortgages Trustee
Transaction Account, the Mortgages Trustee GIC Account, the
Funding Transaction Account, the Funding GIC
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Account or any Funding (Issuer) GIC Account if, and to the extent
that, such Cash was credited thereto in error and shall use its
reasonable endeavours to ensure that such Cash is applied
correctly thereafter.
(j) The Cash Manager shall promptly notify each of the Mortgages
Trustee, Funding and the Security Trustee of any additional
account which supplements or replaces any account specifically
referred to in the definitions of the "Mortgages Trustee
Transaction Account", the "Mortgages Trustee GIC Account", the
"Funding Transaction Account", the "Funding GIC Account" or any
"Funding (Issuer) GIC Account" in the Master Definitions Schedule.
(k) Each of the Cash Manager, the Mortgages Trustee and Funding
undertakes that, so far as it is able to procure the same, the
Mortgages Trustee Transaction Account, the Mortgages Trustee GIC
Account, the Funding Transaction Account and the Funding GIC
Account and all instructions and Mandates in relation thereto will
continue to be operative and will not, save as provided in Clause
4.6 herein (Cash Management) or as permitted pursuant to the Bank
Account Agreement, be changed without the prior written consent of
the Security Trustee (such consent not to be unreasonably withheld
or delayed). Each of the Cash Manager and Funding undertakes that,
so far as it is able to procure the same, any Funding (Issuer) GIC
Account and all instructions and Mandates in relation thereto will
continue to be operative and will not, save as provided in Clause
4.6 herein (Cash Management) or as permitted pursuant to the
related Funding (Issuer) Bank Account Agreement, be changed
without the prior written consent of the Security Trustee (such
consent not to be unreasonably withheld or delayed). For the
avoidance of doubt, the Cash Manager may change the Authorised
Signatories in respect of any instructions or Mandates relating to
Funding and/or the Mortgages Trustee, without the prior written
consent of the Security Trustee, in accordance with Clause 4.2
(Amendment or Revocation) of the Bank Account Agreement or any
Funding (Issuer) Bank Account Agreement, as the case may be.
4.5 Withdrawals: The Cash Manager may make withdrawals:
(a) on behalf of the Mortgages Trustee from the Mortgages Trustee
Transaction Account and the Mortgages Trustee GIC Account;
(b) on behalf of Funding from the Funding GIC Account, any Funding
(Issuer) GIC Account and the Funding Transaction Account, but
only:
(i) with the prior consent of the Security Trustee as provided
under the Funding Deed of Charge or following receipt of a
request for withdrawal in writing from the Cash Manager on
behalf of Funding; and
(ii) until receipt of an Intercompany Loan Enforcement Notice
served by the Security Trustee on Funding (with a copy to
the Funding Secured Creditors as soon as reasonable
thereafter in accordance with and subject to the Funding
Deed of Charge),
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as permitted by this Agreement, the Mortgages Trust Deed, the Bank
Account Agreement, any Funding (Issuer) Bank Account Agreement, the
Mortgages Trustee Guaranteed Investment Contract, the Funding
Guaranteed Investment Contract, any Funding (Issuer) Guaranteed
Investment Contract and the Funding Deed of Charge, but shall not in
carrying out its functions as Cash Manager under this Agreement
otherwise make withdrawals from the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account or the Funding Bank
Accounts. Following enforcement of the Funding Security, the Cash
Manager will not be entitled to make withdrawals from any Funding
Account other than in accordance with the instructions of the Security
Trustee.
4.6 Cash Management: In administering the Mortgages Trustee Transaction
Account, the Mortgages Trustee GIC Account, the Funding Transaction
Account, the Funding GIC Account and any Funding (Issuer) GIC Account
on behalf of the Mortgages Trustee, Funding and the Security Trustee,
as applicable, the Cash Manager shall comply with the provisions of
Schedule 2 hereto prior to receipt by the Cash Manager of a copy of any
Intercompany Loan Enforcement Notice served by the Security Trustee on
Funding.
4.7 Contributions: Following the drawing of any Intercompany Loan by
Funding from the First Issuer or any New Issuer on any date, the Cash
Manager shall procure (i) the payment on such date by Funding to the
Mortgages Trustee of Funding's Contribution to the Mortgages Trustee
pursuant to the Mortgages Trust Deed and (ii) the application of such
Contribution by the Mortgages Trustee for payment to the Seller of
either (a) the amount of Initial Purchase Price for the sale of any New
Mortgage Portfolio which is acquired by the Mortgages Trustee from the
Seller on such date under the provisions of Mortgage Sale Agreement or
(b) the amount of any Initial Consideration made to the Seller as
Beneficiary under the Mortgages Trust Deed, as applicable.
4.8 Funding Reserve Fund: The Cash Manager, on behalf of Funding, may
utilise the Funding Reserve Fund to fund initial reserves and other
expenses in connection with the issuance of any New Notes by any New
Issuer, to the extent that such initial reserves and expenses are to be
established, or paid for, by Funding and are not funded pursuant to the
terms of the Issuer Start Up Loan Agreement applicable to that New
Issuer.
5. Early Repayment Charges
The Cash Manager shall withdraw any Early Repayment Charges paid into
the Mortgages Trustee Transaction Account or the Mortgages Trustee GIC
Account and pay the same to the Seller, by telegraphic transfer to such
account as may be specified by the Seller from time to time, promptly
following a request for such withdrawal being received from the Seller.
For the avoidance of doubt, the Cash Manager shall not record the
receipt or withdrawal of Early Repayment Charges in any of the ledgers
maintained under this Agreement.
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6. No Liability
Save as otherwise provided in this Agreement, the Cash Manager shall
have no liability for the obligations of any of the Mortgages Trustee,
Funding or the Security Trustee under any of the Transaction Documents
or otherwise and nothing herein shall constitute a guarantee, or
similar obligation, by the Cash Manager of any of the Mortgages
Trustee, Funding or the Security Trustee in respect of any of them.
7. Costs and Expenses
7.1 Funding and the Mortgages Trustee, proportionately in accordance with
and subject to the applicable Funding Priority of Payments set out in
the Funding Deed of Charge or the applicable Priority of Payments for
the Mortgages Trustee under the Mortgages Trust Deed, as the case may
be, will on each Payment Date reimburse the Cash Manager for all
out-of-pocket costs, expenses and charges (together with any amounts in
respect of Irrecoverable VAT due thereon) properly incurred by the Cash
Manager in the performance of the Cash Management Services including
any such costs, expenses or charges not reimbursed to the Cash Manager
on any previous Payment Date and the Cash Manager shall supply Funding
and/or the Mortgages Trustee with an appropriate VAT invoice issued by
the Cash Manager or, if the Cash Manager has treated the relevant cost,
expense or charge as a disbursement for VAT purposes, by the person
making the supply.
7.2 Unless and until otherwise agreed by Funding, the Mortgages Trustee and
the Security Trustee in writing (notified to the Cash Manager), Funding
and the Mortgages Trustee shall be jointly and severally responsible
for reimbursing the Cash Manager for the out-of-pocket costs, expenses
and charges (together with any amounts in respect of Irrecoverable VAT
due thereon) referred to in Clause 7.1 herein.
8. Information
8.1 Use of information technology systems:
(a) The Cash Manager represents and warrants that at the date hereof
in respect of the software which is to be used by the Cash Manager
in providing the Cash Management Services it has in place all
necessary licences and/or consents from the respective licensor or
licensors (if any) of such software.
(b) The Cash Manager undertakes that it shall for the duration of this
Agreement, use reasonable endeavours to:
(i) ensure that the licences and/or consents referred to in
paragraph (a) are maintained in full force and effect; and
(ii) except insofar as it would breach any other of its legal
obligations, grant to any person to whom it may
sub-contract or delegate the performance of all or any of
its powers and obligations under this Agreement and/or to
such person as the Mortgages Trustee, Funding and the
Security Trustee elect as a substitute cash manager in
15
accordance with the terms of this Agreement a licence to
use any proprietary software together with any updates
which may be made thereto from time to time.
(c) The Cash Manager shall use reasonable endeavours to maintain in
working order the information technology systems used by the Cash
Manager in providing the Cash Management Services.
(d) The Cash Manager shall pass to any person to whom it may
sub-contract or delegate the performance of all or any of its
powers and obligations under this Agreement and/or to such person
as the Mortgages Trustee, Funding and the Security Trustee elect
as a substitute cash manager in accordance with the terms of this
Agreement the benefit of any warranties in relation to the
software insofar as the same are capable of assignment.
8.2 Bank Account Statements: The Cash Manager shall take all reasonable
steps to ensure that it receives:
(a) a monthly bank statement in relation to each of the Mortgages
Trustee Transaction Account and the Mortgages Trustee GIC Account
(and any additional or supplemental bank account of the Mortgages
Trustee) and that it furnishes a copy of such statements to the
Mortgages Trustee, each of the Beneficiaries and the Security
Trustee (upon its request); and
(b) monthly bank statements in relation to each of the Funding
Transaction Account, the Funding GIC Account and any Funding
(Issuer) GIC Account (and any additional or supplemental bank
account of Funding) and that it furnishes a copy of such
statements to Funding and the Security Trustee (upon its request).
8.3 Access to Books and Records: Subject to all applicable laws, the Cash
Manager shall permit the Mortgages Trustee, Funding, the Auditors of
the Mortgages Trustee and Funding, the Security Trustee and/or any
other person nominated by the Security Trustee or the Beneficiaries (to
whom the Cash Manager has no reasonable objection) at any time during
normal office hours upon reasonable notice to have access, or procure
that such person or persons are granted access, to all books of record
and account relating to the Cash Management Services provided by the
Cash Manager and related matters in accordance with this Agreement.
8.4 Statutory Obligations: The Cash Manager will use its reasonable
endeavours on behalf of the Mortgages Trustee and Funding, to prepare
or procure the preparation of and file all reports, annual returns,
financial statements, statutory forms and other returns which each of
the Mortgages Trustee and Funding is required by law to prepare and
file. Subject to approval thereof by the directors of the Mortgages
Trustee or Funding (as appropriate), the Cash Manager shall cause such
accounts to be audited by the Auditors and shall procure so far as it
is able so to do that the Auditors shall make a report thereon as
required by law and copies of all such documents shall be delivered to
the Mortgages Trustee, the Security Trustee and Funding (as
appropriate) and the Rating Agencies as soon as practicable after the
end of each accounting reference period of the Mortgages Trustee or
Funding (as
16
appropriate).
8.5 Information Covenants:
(a) The Cash Manager shall provide the Mortgages Trustee, Funding, the
Security Trustee, the Seller and the Rating Agencies:
(i) quarterly with a report in, or substantially in, the form
set out in Schedule 3A hereto in respect of the Mortgages
Trustee; and
(ii) quarterly with a report in, or substantially in, the form
set out in Schedule 3B hereto in respect of Funding.
Such quarterly reports shall be delivered to the Mortgages
Trustee, Funding, the Security Trustee (upon its request), the
Seller and the Rating Agencies by the last Business Day of the
month in which each Payment Date occurs.
(b) The Cash Manager shall provide, or procure the provision of, to
the Mortgages Trustee, Funding, the Security Trustee (upon its
request) and the Rating Agencies copies of any annual returns or
financial statements referred to in Clause 8.4 herein (Statutory
Obligations) as soon as reasonably practicable after the
preparation thereof.
(c) The Cash Manager shall notify the Rating Agencies and the Security
Trustee in writing of the details of (i) any material amendment to
the Transaction Documents of which it is or becomes aware, (ii)
the occurrence of an Intercompany Loan Event of Default or
Potential Intercompany Loan Event of Default and (iii) any other
information relating to the Cash Manager as the Rating Agencies
and the Security Trustee may reasonably request in connection with
its obligations under this Agreement, PROVIDED THAT any such
request by the Security Trustee does not adversely interfere with
the Cash Manager's day-to-day provision of the Cash Management
Services under the other terms of this Agreement.
(d) After becoming aware of any event described in paragraph (c)(i)
and (ii) above, the Cash Manager shall give details to Funding,
the Mortgages Trustee and the Security Trustee of any pending
legal action and any judgments given in respect of the Cash
Manager if it could have a potential material adverse effect on
the ability of the Cash Manager to perform its obligations
hereunder.
(e) The Cash Manager shall, at the request of the Security Trustee,
furnish the Security Trustee and the Rating Agencies with such
other information relating to its business and financial condition
as the Security Trustee may request in connection with this
Agreement, PROVIDED THAT the Security Trustee shall not make such
a request more than once every three months unless, in the belief
of the Security Trustee, an Intercompany Loan Event of Default, a
Note Event of Default or a Cash Manager Termination Event (as
defined in Clause 12.1 herein (Cash Manager Termination Events))
shall have occurred and is continuing or a Potential Intercompany
Loan Event of Default or a Potential Note Event of Default shall
have occurred and is continuing or may
17
reasonably be expected to occur, PROVIDED THAT any such request by
the Security Trustee does not adversely interfere with the Cash
Manager's day to day provision of the Cash Management Services
under the other terms of this Agreement.
8.6 Together Connections Mortgage Loans and Connections Mortgage Loans:
(a) The Seller shall, upon request, use its reasonable endeavours to:
(i) provide the Cash Manager with such information (including,
but not limited to documentary information) in its
possession; and
(ii) do such other acts and things,
that the Cash Manager may require in order for the Cash Manager to
exercise its rights and comply with its obligations with respect
to the Together Connections Mortgage Loans and the Connections
Mortgage Loans and under the Transaction Documents with respect to
the administration of such Mortgage Loans.
(b) The Cash Manager shall, upon request, use its reasonable
endeavours to:
(i) provide the Seller with such information (including, but
not limited to documentary information) in its possession;
and
(ii) do such other acts and things,
that the Seller may require in order for the Seller to, exercise
its rights and comply with its obligations under the Together
Connection Conditions and the Connection Conditions (where such
rights and obligations are not required to be administered by the
Mortgages Trustee, Funding, the Administrator or the Cash Manager
under the Transaction Documents) and in respect of the products
linked to the Together Connections Mortgage Loans and the
Connections Mortgage Loans.
9. Remuneration
9.1 Fee payable:
(a) Subject to paragraph (b) below, Funding and the Mortgages Trustee,
proportionately in accordance with and subject to the applicable
Funding Priority of Payments set out in the Funding Deed of Charge
and the applicable Priority of Payments for the Mortgages Trustee
under the Mortgages Trust Deed, as the case may be, shall pay to
the Cash Manager for its Cash Management Services hereunder an
annual cash management fee of (GBP)100,000 for its services which
will be paid quarterly.
(b) Unless and until otherwise agreed by Funding, the Mortgages
Trustee and the Security Trustee in writing (notified to the Cash
Manager), Funding and the Mortgages Trustee shall be jointly and
severally responsible for paying the cash management fee to the
Cash Manager which is referred to in paragraph (a) above.
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9.2 Payment of fee: The cash management fee referred to in Clause 9.1
herein (Fee Payable) shall only be payable to the Cash Manager on each
Payment Date in the manner contemplated by, in accordance with and
subject to the provisions of the applicable Priority of Payments for
the Mortgages Trustee under the Mortgages Trust Deed and the applicable
Funding Priority of Payments under the Funding Deed of Charge.
10. Covenants, Representations and Warranties of the Cash Manager
10.1 Covenants: The Cash Manager hereby covenants with and undertakes to
each of the Mortgages Trustee, Funding and the Security Trustee that
without prejudice to any of its specific obligations hereunder:
(a) it will exercise all due skill, care and diligence to the
performance of its obligations and the exercise of its discretions
hereunder;
(b) it will comply with any proper directions, orders and instructions
which the Mortgages Trustee, Funding or the Security Trustee may
from time to time give to it in accordance with the provisions of
this Agreement and, in the event of any conflict, those of the
Security Trustee shall prevail;
(c) it will obtain and keep in force all licences, approvals,
authorisations and consents which are necessary in connection with
the performance of the Cash Management Services and prepare and
submit all necessary applications and requests for any further
approval, authorisation, consent or licence required in connection
with the performance of the Cash Management Services;
(d) it will not knowingly fail to comply with any legal requirements
in the performance of the Cash Management Services;
(e) it will make all payments required to be made by it pursuant to
this Agreement on the due date for payment thereof for value in
the specified currency on such day without set-off (including,
without limitation, in respect of any fees owed to it) or
counterclaim; and
(f) it will not without the prior written consent of the Security
Trustee amend or terminate any of the Transaction Documents save
in accordance with their terms.
10.2 Duration of covenants: The covenants of the Cash Manager in Clause 10.1
(Covenants) shall remain in force until this Agreement is terminated
but without prejudice to any right or remedy of the Mortgages Trustee
and/or Funding and/or the Security Trustee arising from breach of any
such covenant prior to the date of termination of this Agreement.
10.3 Representations and Warranties: The Cash Manager hereby makes the
representations and warranties to each of the Mortgages Trustee,
Funding and the Security Trustee that are specified on Schedule 4
hereto.
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11. Services Non-Exclusive
Nothing in this Agreement shall prevent the Cash Manager from rendering
or performing services similar to those provided for in this Agreement
to or for itself or other persons, firms or companies or from carrying
on business similar to or in competition with the business of the
Mortgages Trustee, Funding or the Security Trustee.
12. Termination
12.1 Cash Manager Termination Events: If any of the following events ("Cash
Manager Termination Events") shall occur:
(a) default is made by the Cash Manager in the payment on the due date
of any payment due and payable by it under this Agreement or in
the performance of its obligations under Clauses 4.4 and 4.5
herein and such default continues unremedied for a period of five
(5) London Business Days after the earlier of the Cash Manager
becoming aware of such default and receiving written notice from
the Security Trustee requiring the same to be remedied;
(b) default is made by the Cash Manager in the performance or
observance of any of its other covenants and obligations under
this Agreement, which in the opinion of the Security Trustee
(acting at the direction of the Note Trustee) is materially
prejudicial to the Noteholders and such default continues
unremedied for a period of twenty (20) days after the earlier of
the Cash Manager becoming aware of such default and receipt by the
Cash Manager of written notice from the Security Trustee requiring
the same to be remedied; or
(c) the Cash Manager suffers an Insolvency Event,
then Funding, the Mortgages Trustee and/or the Security Trustee may at
once or at any time thereafter while such default continues by notice
in writing to the Cash Manager with a copy to the Account Bank
terminate its appointment as Cash Manager under this Agreement with
effect from a date (not earlier than the date of the notice) specified
in the notice.
12.1.1 Upon termination of the appointment of the Cash Manager, the
Security Trustee agrees to use its reasonable endeavours to
appoint a substitute cash manager. Any substitute cash manager:
(i) must agree to enter into an agreement substantially on
the same terms as the relevant provisions of this
Agreement or on such terms as are satisfactory to the
Mortgages Trustee, Funding and the Security Trustee, and
(ii) must be a party that the Rating Agencies have previously
confirmed in writing to the Mortgages Trustee, Funding
and the Security Trustee will not cause the then-current
ratings of the Notes to be downgraded, withdrawn or
qualified.
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The Security Trustee shall have no liability to any person in the
event that, having used reasonable endeavours, it is unable to
appoint a substitute cash manager. In any event, the Security
Trustee shall only be required to use its reasonable endeavours to
appoint such substitute cash manager. Notwithstanding any other
provision of the Transaction Documents, the Security Trustee shall
not itself be required to perform any duties of the Cash Manager.
The Security Trustee shall not be obliged to monitor or supervise
the performance by any substitute Cash Manager of its duties
hereunder or in relation to the other Transaction Documents nor
shall the Security Trustee be responsible or liable for any act or
omission of any substitute Cash Manager or for any loss caused
thereby.
12.2 Resignation of Cash Manager: The Cash Manager may resign from its
appointment under this Agreement only upon giving not less than twelve
(12) months' notice to each of the Mortgages Trustee, Funding and the
Security Trustee, PROVIDED THAT:
(a) the Mortgages Trustee, Funding and the Security Trustee each
consent in writing to such resignation;
(b) a substitute cash manager shall be appointed, such appointment to
be effective not later than the effective date of such
resignation;
(c) such substitute cash manager enters into an agreement
substantially on the same terms as the relevant provisions of this
Agreement and the Cash Manager shall not be released from its
obligations under the relevant provisions of this Agreement until
such substitute cash manager has entered into such new agreement
and the rights of the Mortgages Trustee and Funding under such
agreement are charged in favour of the Security Trustee on terms
satisfactory to the Security Trustee; and
(d) the then-current ratings of the Notes are not adversely affected
as a result thereof.
12.3 Effect of Termination or Resignation:
(a) On and after termination or resignation of the appointment of the
Cash Manager under this Agreement pursuant to this Clause 12, all
authority and power of the Cash Manager under this Agreement shall
be terminated and be of no further effect and the Cash Manager
shall not thereafter hold itself out in any way as the agent of
the Mortgages Trustee, Funding or the Security Trustee pursuant to
this Agreement.
(b) Upon termination or resignation of the appointment of the Cash
Manager under this Agreement pursuant to this Clause 12, the Cash
Manager shall:
(i) forthwith deliver (and in the meantime hold on trust for,
and to the order of, the Mortgages Trustee, Funding or the
Security Trustee, as the case may be) to the Mortgages
Trustee, Funding or the Security Trustee, as
21
the case may be or as it shall direct, all books of
account, papers, records, registers, correspondence and
documents in its possession or under its control relating
to the affairs of or belongings of the Mortgages Trustee,
Funding or the Security Trustee, as the case may be (if
practicable, on the date of receipt), any monies then held
by the Cash Manager on behalf of the Mortgages Trustee,
Funding or, the Security Trustee and any other assets of
the Mortgages Trustee, Funding and the Security Trustee;
(ii) take such further action as the Mortgages Trustee, Funding
or the Security Trustee, as the case may be, may reasonably
direct at the expense of the Mortgages Trustee or Funding,
provided that the Cash Manager shall not be required to
take or direct to be taken such further action unless it
has been indemnified to its satisfaction (and in the event
of a conflict between the directions of Funding, the
Mortgages Trustee and the Security Trustee, the directions
of the Security Trustee shall prevail);
(iii) provide all relevant information contained on computer
records in the form of magnetic tape, together with details
of the layout of the files encoded on such magnetic tapes;
and
(iv) co-operate and consult with and assist the Mortgages
Trustee, Funding or the Security Trustee or its nominee, as
the case may be (which shall, for the avoidance of doubt,
include any Receiver appointed by it), for the purposes of
explaining the file layouts and the format of the magnetic
tapes generally containing such computer records on the
computer system of the Mortgages Trustee, Funding, or the
Security Trustee or such nominee, as the case may be.
12.4 Notice of event of default: The Cash Manager shall deliver to the
Mortgages Trustee, Funding and the Security Trustee as soon as
reasonably practicable but in any event within three London Business
Days of becoming aware thereof a notice of any Cash Manager Termination
Event or any event which with the giving of notice or expiry of any
grace period or certification, as specified in such Cash Manager
Termination Event would constitute the same or any Intercompany Loan
Event of Default or any Potential Intercompany Loan Event of Default.
12.5 General provisions relating to termination:
(a) Termination of this Agreement or the appointment of the Cash
Manager under this Agreement shall be without prejudice to the
liabilities of the Mortgages Trustee and Funding to the Cash
Manager and vice versa incurred before the effective date of such
termination. The Cash Manager shall have no right of set-off or
any lien in respect of such amounts against amounts held by it on
behalf of the Mortgages Trustee, Funding or the Security Trustee.
(b) This Agreement shall terminate automatically at such time as
Funding has no further interest in the Trust Property and all
Intercompany Loans have been
22
fully repaid or Funding's obligations under all Intercompany Loans
have been otherwise discharged.
(c) On termination of the appointment of the Cash Manager under the
provisions of this Clause 12, the Cash Manager shall be entitled
to receive all fees and other monies accrued up to (but excluding)
the date of termination subject to the applicable Funding Priority
of Payments set out in the Funding Deed of Charge and/or the
applicable Priority of Payments for the Mortgages Trustee under
the Mortgages Trust Deed, as the case may be, but shall not be
entitled to any other or further compensation. Such monies so
receivable by the Cash Manager shall be paid by Funding and the
Mortgages Trustee, on the dates on which they would otherwise have
fallen due hereunder and under the terms of the Funding Deed of
Charge and the Mortgages Trust Deed. For the avoidance of doubt,
such termination shall not affect the Cash Manager's rights to
receive payment of all amounts (if any) due to it from Funding and
the Mortgages Trust Deed other than under this Agreement.
(d) Any provision of this Agreement which is stated to continue after
termination of the Agreement shall remain in full force and effect
notwithstanding termination.
13. Further Assurances
13.1 Co-operation, etc: The parties hereto agree that they will co-operate
fully to do all such further acts and things and execute any further
documents as may be necessary or desirable to give full effect to the
arrangements contemplated by this Agreement and the other Transaction
Documents.
13.2 Powers of attorney: Without prejudice to the generality of Clause 13.1
herein (Co-Operation, etc.), the Mortgages Trustee and Funding shall
upon request by the Cash Manager forthwith give to the Cash Manager
such further powers of attorney or other written authorisations,
mandates or instruments as are necessary to enable the Cash Manager to
perform the Cash Management Services.
14. Miscellaneous
14.1 No set-off: Each of the Seller and the Cash Manager agrees that it will
not make or exercise any claims or demands, any rights of counterclaim
or any other equities against or withhold payment of any and all sums
of money which may at any time and from time to time be standing to the
credit of the Mortgages Trustee Transaction Account, the Mortgages
Trustee GIC Account, the Funding Transaction Account, the Funding GIC
Account or any Funding (Issuer) GIC Account or any replacement of
additional bank account of either the Mortgages Trustee or Funding.
14.2 No recourse:
(a) In relation to all sums due and payable by the Mortgages Trustee
or Funding to the Cash Manager, the Cash Manager agrees that it
shall have recourse only to sums paid to or received by (or on
behalf of) the Mortgages Trustee or Funding pursuant to the
provisions of the Transaction Documents, in each case
23
subject to the Mortgages Trustee Revenue Priority of Payments and
the Funding Priority of Payments.
(b) For the avoidance of doubt, the Security Trustee shall not be
liable to pay any amounts due under Clause 7 (Costs and Expenses),
but without prejudice to the obligations of the Mortgages Trustee
or Funding, as the case may be, or any receiver appointed pursuant
to the Funding Deed of Charge in respect of such amounts.
(c) Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of, the Security Trustee under or in
connection with this Agreement (other than its obligations under
Clause 13 herein (Further Assurances)) shall automatically
terminate upon the discharge in full of the Funding Secured
Obligations, PROVIDED THAT this shall be without prejudice to any
claims in respect of such obligations and rights arising on or
prior to such date.
15. Confidentiality
During the continuance of this Agreement or after its termination, each
of the Mortgages Trustee, the Cash Manager, the Seller, Funding and the
Security Trustee shall use its best endeavours not to disclose to any
person, firm or company whatsoever any information relating to the
business, finances or other matters of a confidential nature of any
other party hereto of which it may exclusively by virtue of being party
to the Transaction Documents have become possessed and shall use all
reasonable endeavours to prevent any such disclosure as aforesaid,
PROVIDED HOWEVER that the provisions of this Clause 15 shall not apply:
(a) to any information already known to the recipient otherwise than
as a result of entering into any of the Transaction Documents;
(b) to any information subsequently received by the recipient which it
would otherwise be free to disclose;
(c) to any information which is or becomes public knowledge otherwise
than as a result of the conduct of the recipient;
(d) to any extent that the recipient is required to disclose the same
pursuant to any law or order of any court or pursuant to any
direction, request or requirement (whether or not having the force
of law) of any central bank or any governmental or other authority
(including, without limitation, any official bank examiners or
regulators);
(e) to the extent that the recipient needs to disclose the same for
determining the existence of, or declaring, an Event of Default,
an Intercompany Loan Event of Default or a Cash Manager
Termination Event, the protection or enforcement of any of its
rights under any of the Transaction Documents or in connection
herewith or therewith or for the purpose of discharging, in such
manner as it thinks fit, its duties under or in connection with
such agreements in each case to such persons as require to be
informed of such information for such purposes; or
24
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt to be issued by any Issuer) to any credit
rating agency or any prospective new cash manager or prospective
new security trustee.
16. No Partnership
It is hereby acknowledged and agreed by the parties that nothing in
this Agreement shall be construed as giving rise to any partnership
between any of the parties.
17. Assignment
17.1 Assignment by the Mortgages Trustee and Funding: Neither of the
Mortgages Trustee nor Funding may assign or transfer any of its
respective rights and obligations under this Agreement without the
prior written consent of:
(a) in the case of the Mortgages Trustee, each of the Beneficiaries
and the Security Trustee; and
(b) in the case of Funding, each of the Security Trustee and the Cash
Manager,
except that Funding may assign its respective rights hereunder without
such consent pursuant to the Funding Deed of Charge.
17.2 No assignment by Cash Manager: The Cash Manager may not assign or
transfer any of its rights and obligations under this Agreement without
the prior written consent of the Mortgages Trustee, each of the
Beneficiaries and the Security Trustee.
18. The Security Trustee
18.1 Change in Security Trustee: If there is any change in the identity of
the security trustee in accordance with the Funding Deed of Charge, the
Cash Manager, the Seller, Funding and the Mortgages Trustee shall
execute such documents and take such action as the successor security
trustee and the outgoing security trustee may require for the purpose
of vesting in the successor security trustee the rights and obligations
of the outgoing security trustee under this Agreement and releasing the
outgoing security trustee from its future obligations under this
Agreement.
18.2 No Obligations: It is hereby acknowledged and agreed that by its
execution of this Agreement the Security Trustee shall not assume or
have any of the obligations or liabilities of the Cash Manager, the
Seller, Funding or the Mortgages Trustee under this Agreement.
Furthermore, any liberty or power which may be exercised or any
determination which may be made hereunder by the Security Trustee may
be exercised or made in the Security Trustee's absolute and unfettered
discretion without any obligation to give reasons therefor, but in any
event must be exercised or made in accordance with the provisions of
the Funding Deed of Charge.
19. New Intercompany Loan Agreements
If Funding enters into a New Intercompany Loan Agreement, then the Cash
Manager, the Seller, Funding, the Security Trustee and the Mortgages
Trustee shall execute
25
such documents and take such action as may be necessary or required by
the Rating Agencies for the purpose of including the New Issuer, any
Basis Rate Swap Provider, any Currency Swap Provider, any New Start-up
Loan Provider and any other person who has executed an Accession
Undertaking or any New Intercompany Loan Agreement in the Transaction
Documents.
20. Non Petition Covenant; Limited Recourse
20.1 Only Trustee to Enforce: The Cash Manager hereby undertakes to each of
the other parties hereto that only the Security Trustee may enforce the
security created in favour of the Security Trustee by the Funding Deed
of Charge in accordance with the provisions thereof.
20.2 Limited Recourse: The Cash Manager hereby undertakes to each of the
other parties hereto that, notwithstanding any other provision of this
Agreement or any other Transaction Document, no sum due or owing to the
Cash Manager from or by Funding or the Mortgages Trustee under this
Agreement shall be payable by Funding or the Mortgages Trustee except
to the extent that Funding or the Mortgages Trustee, as applicable, has
sufficient funds available subject to the applicable Funding Priority
of Payments set out in the Funding Deed of Charge or the applicable
Priority of Payments for the Mortgages Trustee under the Mortgages
Trust Deed, as the case may be, or, following enforcement of the
Funding Security the Security Trustee has realised sufficient funds
from the Funding Security to pay such sum subject to and in accordance
with the relevant Funding Priority of Payments, and provided that all
liabilities of Funding or the Mortgages Trustee required to be paid in
priority thereto or pari passu therewith pursuant to the applicable
Funding Priority of Payments set out in the Funding Deed of Charge or
the applicable Priority of Payments for the Mortgages Trustee under the
Mortgages Trust Deed, as the case may be, have been paid, discharged
and/or otherwise provided for in full.
20.3 Non-Petition: The Cash Manager hereby undertakes to each of the other
parties hereto that it shall not take any steps for the purpose of
recovering any amount payable under this Agreement (including, without
limitation, by exercising any rights of set-off) or enforcing any
rights arising out of this Agreement against Funding or the Mortgages
Trustee and it shall not take any steps or legal proceedings for the
winding-up, dissolution or reorganisation of, or the institution of
insolvency proceedings against, either Funding or the Mortgages Trustee
or for the appointment of a receiver, administrator, liquidator or
similar officer of Funding or the Mortgages Trustee in respect of any
or all of its revenues except to the extent expressly permitted under
the Funding Deed of Charge or the Mortgages Trust Deed, as the case may
be.
20.4 Following Enforcement: The Cash Manager hereby undertakes to each of
the other parties hereto that, following any enforcement of the Funding
Security, it will hold on trust for, and will pay to, the Security
Trustee or the Receiver, as the case may be, all monies received or
recovered by it (whether by way of set-off or otherwise) from Funding
or in respect of any amount due hereunder by Funding, otherwise than in
accordance with the Funding Post-Enforcement Priority of Payments in
order that such monies may be applied by the Security Trustee or the
Receiver in accordance with the Funding Post-Enforcement Priority of
Payments.
26
20.5 Corporate Obligations: To the extent permitted by law, no recourse
under any obligation, covenant, or agreement of any person contained in
this Agreement shall be had against any shareholder, officer or
director of such person as such, by the enforcement of any assessment
or by any legal proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that this Agreement is a
corporate obligation of each person expressed to be a party hereto and
no personal liability shall attach to or be incurred by the
shareholders, officers, agents or directors of such person as such, or
any of them, under or by reason of any of the obligations, covenants or
agreements of such person contained in this Agreement, or implied
therefrom, and that any and all personal liability for breaches by such
person of any of such obligations, covenants or agreements, either
under any applicable law or by statute or constitution, of every such
shareholder, officer, agent or director is hereby expressly waived by
each person expressed to be a party hereto as a condition of and
consideration for the execution of this Agreement.
21. Amendments and Waiver
21.1 Entire Agreement: This Agreement sets out the entire agreement and
understanding between the parties with respect to the subject matter of
this Agreement superseding all prior oral or written understandings
other than the other Transaction Documents.
21.2 Amendments and Waiver: No amendment or waiver of any provision of this
Agreement nor consent to any departure by any of the parties therefrom
shall in any event be effective unless the same shall be in writing and
signed by each of the parties hereto. In the case of a waiver or
consent, such waiver or consent shall be effective only in the specific
instance and as against the party or parties giving it for the specific
purpose for which it is given.
21.3 Rights Cumulative: The respective rights of each of the parties to this
Agreement are cumulative and may be exercised as often as they consider
appropriate. No failure on the part of any party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any
other right. The remedies in this Agreement are cumulative and not
exclusive of any remedies provided by law.
21.4 Ratings: No variation or waiver of this Agreement shall be made if the
same would adversely affect the then-current ratings of any of the
Notes.
22. Notices
Any notices or other communication or document to be given or delivered
pursuant to this Agreement to any of the parties hereto shall be
sufficiently served if sent by prepaid first class post, by hand or by
facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched or (where delivered by hand) on
the day of delivery if delivered before 17.00 hours on a London
Business Day or on the next London Business Day if delivered thereafter
or (in the case of first class post) when it would be received in the
ordinary course of the post and shall be sent:
27
(a) in the case of the Cash Manager and the Seller, to Northern Rock
plc, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
(facsimile number: 0191 213 2203) for the attention of the Group
Secretary;
(b) in the case of the Mortgages Trustee, to Granite Finance Trustees
Limited, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, Channel
Islands (facsimile number 01534 609333) for the attention of the
Company Secretary;
(c) in the case of Funding, to Granite Finance Funding Limited, ▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number 020 8409 8911) for
the attention of the Company Secretary;
(d) in the case of the Security Trustee, to The Bank of New York, at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number
020 7964 6399) for the attention of Corporate Trust (Global
Structured Finance);
(e) in the case of Fitch, to Fitch Ratings Ltd., at ▇▇▇▇▇ ▇▇▇▇▇, ▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number 0207 417 6262) for
the attention of European Structured Finance Surveillance;
(f) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Services, Inc., at
1st Floor, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
(facsimile number 0207 772 5400) for the attention of ▇▇▇▇ ▇▇▇
▇▇▇▇▇;
(g) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number 0207 176 3598) for
the attention of ▇▇▇▇▇▇▇ ▇▇▇▇;
or to such other address or facsimile number or for the attention of
such other person or entity as may from time to time be notified by any
party or by any Rating Agency to the others by written notice in
accordance with the provisions of this Clause 22. All notices served
under this Agreement shall be simultaneously copied to the Security
Trustee by the person serving the same.
23. Third Party Rights
A person who is not a party to this Agreement may not enforce any of
its terms under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇, but
this shall not affect any right or remedy of a third party which exists
or is available apart from that Act.
24. Execution in Counterparts; Severability
24.1 Counterparts: This Agreement may be executed in any number of
counterparts (manually or by facsimile) and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
24.2 Severability: Where any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations under this Agreement, or of
28
such provision or obligation in any other jurisdiction, shall not be
affected or impaired thereby.
25. Governing Law and Submission to Jurisdiction
25.1 Governing Law: This Agreement is governed by, and shall be construed in
accordance with, English law.
25.2 Submission to Jurisdiction: Each of the parties hereto irrevocably
agrees that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceeding, and to settle any disputes,
which may arise out of or in connection with this Agreement and, for
such purposes, irrevocably submits to the jurisdiction of such courts.
25.3 Process Agent: The Mortgages Trustee irrevocably and unconditionally
appoints Mourant & Co. Capital (SPV) Limited at ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or otherwise at its registered office for the time
being as its agent for service of process in England in respect of any
proceedings in respect of this Agreement and undertakes that in the
event of Mourant & Co. Capital (SPV) Limited ceasing so to act it will
appoint another person with a registered office in London as its agent
for service of process.
25.4 Forum: Each of the parties hereto irrevocably waives any objection
which it might now or hereafter have to the courts of England being
nominated as the forum to hear and determine any Proceedings and to
settle any disputes, and agrees not to claim that any such court is not
a convenient or appropriate forum.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed the
day and year first before written.
29
SCHEDULE 1
The Cash Management Services
The Cash Manager shall:
(a) make the determinations set out in Schedule 2 hereto;
(b) invest sums, if any, standing to the credit of the Funding
Transaction Account in short-term Authorised Investments as
determined by Funding and, if applicable, the Security Trustee;
(c) invest sums, if any, standing to the credit of the Mortgages
Trustee Transaction Account in short-term Authorised Investments
as determined by the Mortgages Trustee and, if applicable, the
Security Trustee;
(d) maintain the Funding Principal Deficiency Ledger, and record (1)
any principal Losses on the Mortgage Loans allocated to Funding
pursuant to the terms of the Mortgages Trust and (2) to record the
application of Funding Available Principal Receipts to any Issuer
to fund the Issuer Liquidity Reserve Fund of any Issuer.
(e) provide the Mortgages Trustee, Funding, the Security Trustee (upon
its request) and the Rating Agencies with quarterly reports in
relation to the Mortgages Trustee and Funding as set forth on
Schedule 3;
(f) operate the Mortgages Trustee Transaction Account, the Mortgages
Trustee GIC Account, the Funding GIC Account, any Funding (Issuer)
GIC Account and the Funding Transaction Account and ensure that
payments are made into and from such accounts in accordance with
this Agreement, the Mortgages Trust Deed, the Funding Deed of
Charge, the Bank Account Agreement, any Funding (Issuer) Bank
Account Agreement, the Mortgages Trustee Guaranteed Investment
Contract, the Funding Guaranteed Investment Contract, any Funding
(Issuer) Guaranteed Investment Contract and any other applicable
Transaction Document, PROVIDED HOWEVER, that nothing herein shall
require the Cash Manager to make funds available to the Mortgages
Trustee or Funding to enable such payments to be made other than
as expressly required by the provisions of this Agreement;
(g) in relation to the payments to be made to each Issuer, make
withdrawals under the Issuer Reserve Fund, if required;
(h) in relation to the payments to be made to each Issuer, make any
required withdrawals under the Issuer Liquidity Reserve Fund;
(i) maintain any Issuer Reserve Fund Ledger, and record the amount
credited to any Issuer Reserve Fund on the Initial Closing Date,
and subsequent withdrawals and deposits in respect of any Issuer
Reserve Fund;
(j) maintain any Issuer Liquidity Reserve Ledger, if any, and record
the amount credited to any Issuer Liquidity Reserve Fund from time
to time, and
30
subsequent withdrawals and deposits in respect of any Issuer
Liquidity Reserve Fund;
(k) keep records for all taxation purposes (including, without
limitation VAT);
(l) subject to any applicable law, assist the auditors of the
Mortgages Trustee and Funding and provide such information to them
as they may reasonably request for the purpose of carrying out
their duties as auditors;
(m) make all filings, give all notices and make all registrations and
other notifications required in the day-to-day operation of the
respective businesses of the Mortgages Trustee and Funding or
required to be given by the Mortgages Trustee or Funding pursuant
to the Transaction Documents;
(n) arrange for all payments due to be made by the Mortgages Trustee
and/or Funding under any of the Transaction Documents, PROVIDED
THAT such monies are at the relevant time available to the
Mortgages Trustee and/or Funding and PROVIDED FURTHER that nothing
herein shall constitute a guarantee by the Cash Manager of all or
any of the obligations of the Mortgages Trustee or Funding under
any of the Transaction Documents;
(o) without prejudice to the role of and in conjunction with the
Corporate Services Provider to Funding and the Mortgages Trustee
under the relevant Corporate Services Agreement, keep general
books of account and records of the Mortgages Trustee and Funding;
provide accounting services, including reviewing receipts and
payments, supervising and assisting in the preparation of interim
statements and final accounts and supervising and assisting in the
preparation of Tax returns;
(p) without prejudice to the role of and in conjunction with the
Corporate Services Provider to Funding and the Mortgages Trustee
under the relevant Corporate Services Agreement, provide or
procure the provision of company secretarial and administration
services to the Mortgages Trustee and Funding including the
keeping of all registers and the making of all returns and filings
required by applicable law or by U.S., U.K. or Jersey regulatory
authorities (including the Securities and Exchange Commission),
co-operate in the convening of board and general meetings and
provide registered office facilities;
(q) itself on behalf of the Mortgages Trustee and Funding, PROVIDED
THAT such monies are at the relevant time available to the
Mortgages Trustee and Funding, pay all the out-of-pocket expenses
of the Mortgages Trustee and Funding, incurred by the Cash Manager
on behalf of the Mortgages Trustee and Funding in the performance
of the Cash Manager's duties hereunder including without
limitation:
(i) all Taxes which may be due or payable by the Mortgages
Trustee and Funding;
31
(ii) all registration, transfer, filing and other fees and other
charges payable in respect of the sale by the Seller of the
Mortgage Portfolio to the Mortgages Trustee;
(iii) all necessary filing and other fees in compliance with
regulatory requirements;
(iv) all legal and audit fees and other professional advisory
fees;
(v) all communication expenses including postage, courier and
telephone charges; and
(vi) all premiums payable by the Mortgages Trustee in respect of
the Insurance Policies;
(r) at the request of Funding (and following the enforcement of the
Funding Security, with the prior written consent of the Security
Trustee), the Cash Manager may invest monies standing from time to
time to the credit of the Funding GIC Account or any Funding
(Issuer) GIC Account (including any amounts credited thereto and
representing amounts standing to the credit of such Issuer
Liquidity Reserve Fund, if any) in Authorised Investments, subject
to the following provisions:
(i) any such Authorised Investment shall be made in the joint
names of Funding and the Security Trustee;
(ii) any costs properly and reasonably incurred in making and
changing Authorised Investments will be reimbursed to the
Cash Manager and the Security Trustee by Funding;
(iii) all income or proceeds following the disposal or maturity
of Authorised Investments shall be credited to the Funding
GIC Account or any Funding (Issuer) GIC Account, as
applicable; and
(iv) following the enforcement of the Funding Security no such
investment may be made without the prior written consent of
the Security Trustee.
The Security Trustee and the Cash Manager shall not be responsible
(save where any loss results from the Security Trustee's or the
Cash Manager's own fraud, wilful default or gross negligence or
that of its officers or employees) for any loss occasioned by
reason of any such Authorised Investments whether by depreciation
in value or otherwise provided that such Authorised Investments
were made in accordance with the above provisions; and
(s) take such other action or provide any other Cash Management
Services as is required in the Transaction Documents.
32
SCHEDULE 2
Cash Management and Maintenance of Ledgers
1. Determination
(a) On or before each Distribution Date based on the aggregate amount
of monies standing to the credit of the Mortgages Trustee
Transaction Account and the Mortgages Trustee GIC Account as at
close of business on the preceding day, the Cash Manager shall
determine each of the following:
(i) the amount of Principal Receipts and Revenue Receipts
received during the immediately preceding Trust Calculation
Period and during each Interim Calculation Period (as
defined in the Mortgages Trust Deed), if any, during such
immediately preceding Trust Calculation Period;
(ii) the amount of any Mortgages Trustee Available Revenue
Receipts received during the immediately preceding Trust
Calculation Period;
(iii) the amount of any net credit on the Non-Flexible
Overpayments Sub Ledger;
(iv) the amount of Mortgages Trustee Available Revenue Receipts
and Principal Receipts to be distributed to Funding and to
the Seller on such Distribution Date;
(v) whether each of the Issuer Arrears Test, the Issuer Reserve
Requirement and the Subordinated Principal Test is
satisfied on such date and shall promptly notify the Issuer
Cash Manager of such determinations; and
(vi) the various amounts, balances and rates to be calculated in
accordance with any Basis Rate Swap and/or any Currency
Rate Swap, and shall promptly notify each Issuer, each
Issuer Cash Manager, the Note Trustee and each Calculation
Agent (as defined in each Basis Rate Swap Agreement and
Currency Swap Agreement) of such amounts, balances and
rates.
(b) On or before each Distribution Date (and, in respect of Clause
1(b)(ii) below, on each Assignment Date and Funding Contribution
Date), the Cash Manager shall determine each of the following:
(i) the amount of any Losses incurred on the Mortgage Loans
during the immediately preceding Trust Calculation Period
and during each Interim Calculation Period (as defined in
the Mortgages Trust Deed), if any, during such immediately
preceding Trust Calculation Period;
(ii) (the Funding Share, the Seller Share, the Funding Share
Percentage and the Seller Share Percentage in accordance
with Clause 8
33
(Adjustment of Funding Share Percentage and Seller Share
Percentage) of the Mortgages Trust Deed;
(iii) to the extent (i) the Seller has sold and assigned New
Mortgage Loans, or (ii) Funding has made a Further
Contribution, to the Mortgages Trustee during the
immediately preceding Trust Calculation Period, the
Weighted Average Funding Share Percentage and the Weighted
Average Seller Share Percentage (in respect of Revenue
Receipts, Principal Receipts and Losses) in accordance with
Clause 8.3 (Weighted Average Funding Share Percentage) and
Clause 8.7 (Weighted Average Seller Share Percentage),
respectively, of the Mortgages Trust Deed; and
(iv) the Minimum Seller Share in accordance with Clause 9.2
(Fluctuation of Minimum Seller Share on each Distribution
Date) of the Mortgages Trust Deed.
(c) On each Distribution Date, in relation to the Mortgages Trustee
Revenue Receipts received from the Mortgages Trustee on such
Distribution Date, the Cash Manager shall determine each of the
following amounts:
(i) an amount equal to all amounts to be applied on the
immediately succeeding Payment Dates for Group 1 Issuers
and Group 2 Issuers set forth under items (A)-(D) of the
Funding Pre-Enforcement Revenue Priority of Payments or, as
the case may be, items (A)-(C) of the Funding
Post-Enforcement Priority of Payments, and
(ii) (A) an amount which is equal to the lesser of:
(1) an amount equal to the aggregate of the amounts
to be applied on the immediately succeeding
Payment Date for all Group 1 Issuers as set forth
under items (E)-(Q) of the Funding
Pre-Enforcement Revenue Priority of Payments or,
as the case may be, items (D)-(G) of the Funding
Post-Enforcement Priority of Payments (but
excluding any principal amount due under any
Intercompany Loan (save that, for the avoidance
of doubt, such exclusion shall not apply in
respect of any Group 1 Available Revenue Receipts
which are applied by any Group 1 Issuer to credit
that Issuer's Principal Deficiency Ledgers and
thereby reduce the principal payable under that
Issuer's Intercompany Loan) and any amount of
Deferred Contribution under item (P) of the
Funding Pre-Enforcement Revenue Priority of
Payments and/or item (F) of the Funding
Post-Enforcement Priority of Payments), less all
other amounts (not derived from the distribution
of Mortgages Trustee Available Revenue Receipts
under the Mortgages Trust) which will constitute
Group 1
34
Available Revenue Receipts on the immediately
succeeding Payment Date; and
(2) an amount (not less than zero) equal to:
remaining Mortgages Trustee
Available Revenue Receipts x Group 1 Share Percentage
allocated to Funding
(B) an amount which is equal to the lesser of:
(1) an amount equal to the aggregate of the amounts
to be applied on the immediately succeeding
Payment Date for all Group 2 Issuers as set forth
under items (E)-(Q) of the Funding
Pre-Enforcement Revenue Priority of Payments or,
as the case may be, items (D)-(G) of the Funding
Post-Enforcement Priority of Payments (but
excluding any principal amount due under any
Intercompany Loan (save that, for the avoidance
of doubt, such exclusion shall not apply in
respect of any Group 2 Available Revenue Receipts
which are applied by any Group 2 Issuer to credit
that Issuer's Principal Deficiency Ledger and
thereby reduce the principal payable under that
Issuer's Intercompany Loan) and any amount of
Deferred Contribution under item (P) of the
Funding Pre-Enforcement Revenue Priority of
Payments and/or item (F) of the Funding
Post-Enforcement Priority of Payments), less all
other amounts (not derived from the distribution
of Mortgages Trustee Available Revenue Receipts
under the Mortgages Trust) which will constitute
Group 2 Available Revenue Receipts on the
immediately succeeding Payment Date; and
(2) an amount (not less than zero) equal to:
remaining Mortgages Trustee
Available Revenue Receipts x Group 2 Share Percentage
allocated to Funding
(iii) either:
(A) an amount in respect of all Group 1 Issuers towards
any remaining revenue amounts which will be due and
payable (taking into account the amount determined
under paragraph 1(c)(ii) above) on the immediately
succeeding Payment Date for Group 1 Issuers under such
Issuers' Intercompany Loans; or
(B) an amount in respect of all Group 2 Issuers towards
any remaining revenue amounts which will be due and
payable (taking into account the amount determined
under paragraph
35
1(c)(B) above) on the immediately succeeding Payment
Date for Group 2 Issuers under such Issuers'
Intercompany Loans;
Following determination of the amounts under this paragraph 1(c),
the Cash Manager shall allocate the Mortgages Trustee Available
Principal Receipts to expenses, the Group 1 Issuers and the Group
2 Issuers by recording such amounts on the Funding Expenses
Sub-Ledger, the Group 1 Revenue Sub- Ledger or the Group 2 Revenue
Sub-Ledger, as the case may be, as set forth in paragraph 13
below.
(d) On each Distribution Date in relation to Mortgages Trustee
Available Principal Receipts received from the Mortgages Trustee
on such Distribution Date and amounts standing to the credit of
the Funding Principal Ledger (taking into account amounts already
standing to the credit of the Group 1 Principal Sub-Ledger and the
Group 2 Principal Sub-Ledger), the Cash Manager shall determine
each of the following amounts as follows:-
(i) (A) for each Issuer, an amount 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 or Group 2
Available Principal Receipts, as applicable, on the
Payment Date for such Issuer immediately succeeding
such Distribution Date; and
(B) for each Issuer, an amount distributable on the
immediately succeeding Payment Dates for Group 1
Issuers and Group 2 Issuers to any Group 1 and Group 2
Issuers in respect of Money Market Notes of such
Issuers having Controlled Amortisation Amounts due on
such Payment Dates;
(ii) (A) an amount which isequal to the lesser of:-
(1) the principal amount due on the Intercompany
Loans of all Group 1 Issuers equal to the
Controlled Amortisation Amounts due for non-Money
Market Notes, if any, on the Payment Date for
Group 1 Issuers immediately succeeding such
Distribution Date (in each case determined on the
assumption that the Issuer Reserve Requirement,
the Issuer Arrears Test and the Subordinated
Principal Test are satisfied on that Payment
Date); and
(2) an amount equal to:
Mortgages Trustee Principal
Receipts plus any amounts
standing to the credit of the
Funding Principal Ledger (less any x Group 1 Share Percentage
amounts applied in paragraph (i)
36
above)
(B) an amount which is equal to the lesser of:
(1) the principal amount due on the Intercompany
Loans of all Group 2 Issuers equal to the
Controlled Amortisation Amounts due for non-Money
Market Notes, if any, on the Payment Date for
Group 2 Issuers immediately succeeding such
Distribution Date (in each case determined on the
assumption that the Issuer Reserve Requirement,
the Issuer Arrears Test and the Subordinated
Principal Test are satisfied on that Payment
Date); and
(2) an amount equal to:
Mortgages Trustee Principal
Receipts plus any amounts
standing to the credit of the
Funding Principal Ledger (less x Group 2 Share Percentage
any amounts applied in
paragraph (i) above)
(iii) either:
(A) an amount in respect of all Group 1 Issuers towards
any principal amounts remaining which will be due and
payable (taking into account the amount determined
under paragraphs 1(d)(i)(B) and 1(d)(ii)(A) above) on
the immediately succeeding Payment Date under such
Issuers' Intercompany Loans (in each case determined
on the assumption that the Issuer Reserve Requirement,
the Issuer Arrears Test and the Subordinated Principal
Test are satisfied on that Payment Date); or
(B) an amount in respect of all Group 2 Issuers towards
any principal amounts remaining which will be due and
payable (taking into account the amount determined
under paragraphs 1(d)(i)(B) and 1(d)(ii)(B) above) on
the immediately succeeding Payment Date under such
Issuers' Intercompany loans (in each case determined
on the assumption that the Issuer Reserve Requirement,
the Issuer Arrears Test and the Subordinated Principal
Test are satisfied on that Payment Date).
For purposes of calculating the Group 1 Share Percentage and the
Group 2 Share Percentage in paragraphs 1(d)(ii)(A)(2) and
1(d)(ii)(B)(2) above, respectively, 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 that Issuer as at the
relevant Payment Date, but only to the extent that such deficiency
has arisen
37
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 of such Payment Date of any Special Repayment Notes
issued by that Issuer.
Following determination of the amounts under this paragraph 1(d),
the Cash Manager shall allocate the Mortgages Trustee Available
Principal Receipts to the Group 1 Issuers and Group 2 Issuers by
recording such the amounts on the Group 1 Principal Sub- Ledger or
Group 2 Principal Sub-Ledger, as the case may be, as set forth in
paragraph 16 below.
(e) No later than each Distribution Date immediately prior to each
Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Group 1 Available Revenue Receipts or
Group 2 Available Revenue Receipts, as applicable, to be
applied on the relevant Payment Date in accordance with the
Funding Pre-Enforcement Revenue Priority of Payments; and
(ii) the amount of any Group 1 Available Principal Receipts or
Group 2 Available Principal Receipts, as applicable, to be
applied on the following Payment Date in accordance the
Funding Pre-Enforcement Principal Priority of Payments.
(f) No later than each Distribution Date immediately prior to each
Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Issuer Allocable Revenue Receipts for
each Issuer to be applied on the relevant Payment Date in
accordance with the Funding Pre-Enforcement Revenue
Priority of Payments;
(ii) the amount of any Issuer Allocable Principal Receipts for
each Issuer to be applied on the following Payment Date in
accordance the Funding Pre-Enforcement Principal Priority
of Payments; and
(iii) the amount of any Group 1 Shared Issuer Revenue Receipts or
Group 2 Shared Issuer Revenue Receipts and Group 1 Shared
Issuer Principal and Group 2 Receipts Shared Issuer
Principal Receipts to be applied on the following Payment
Date in accordance with the Funding Priority of Payments.
(g) The Cash Manager shall make all the determinations referred to in
paragraphs 1(a) to (f) herein on the basis of the following
assumptions:
(i) that the amount of any Losses will not increase;
(ii) that any debit balance on any Issuer Principal Deficiency
Ledger will not increase; and
38
(iii) such other assumptions (including without limitation as to
the amount of any payments or provisions to be made in
accordance with the applicable Funding Priority of Payments
during the period from and including the Distribution Date
immediately prior to each Payment Date to and excluding
such Payment Date) as the Cash Manager considers
appropriate.
The Cash Manager shall notify the Mortgages Trustee, Funding and
the Security Trustee on request of any such other assumptions and
shall take account of any representations made by the Mortgages
Trustee, Funding and the Security Trustee (as the case may be) in
relation thereto.
(h) The Cash Manager shall:
(i) make or procure to be made all returns and filings required
to be made by Funding and the Mortgages Trustee;
(ii) itself on behalf of Funding and the Mortgages Trustee,
provided that such moneys are at the relevant time
available to Funding and the Mortgages Trustee, pay all
out-of-pocket expenses of Funding and the Mortgages Trustee
incurred in the performance of the Cash Manager's duties
hereunder including, without limitation, all fees payable
to the London Stock Exchange Limited.
(i) The Cash Manager shall, if necessary, perform all currency
conversions free of charge, cost or expense at the relevant
exchange rate (for the purposes of any calculations referred to
above, (i) all percentages resulting from such calculations will
be rounded, if necessary, to the nearest one hundred-thousandth of
a percentage point (e.g. 9.876541% being rounded down to 9.87654%
and (ii) any currency amounts used in or resulting from such
calculations will be rounded in accordance with the relevant
market practice).
(j) Each determination made in accordance with this paragraph 1 shall
(in the absence of bad faith, wilful default, negligence and
manifest error) be final and binding on all persons.
2. Notification of Determinations
The Cash Manager shall cause each determination of Principal Receipts,
Revenue Receipts, Losses, Mortgages Trustee Available Revenue Receipts,
the Funding Share, the Seller Share, the Funding Share Percentage, the
Seller Share Percentage, the Weighted Average Funding Share Percentage,
the Weighted Average Seller Share Percentage and the Minimum Seller
Share to be notified forthwith to the Mortgages Trustee, the
Beneficiaries and the Security Trustee and will cause each
determination of Group 1 Available Principal Receipts, Group 2
Available Principal Receipts, Group 1 Available Revenue Receipts, Group
2 Available Revenue Receipts and the determinations made under
paragraphs 1(c) and 1(d) above to be notified forthwith to Funding, the
Security Trustee and the Issuer Cash Manager.
3. Priority of Payments for Mortgages Trustee Available Revenue Receipts
39
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date withdraw Cash from
the Mortgages Trustee GIC Account and/or, in the case of sums to be
provided for, retain Cash in the amounts required (to the extent that
such withdrawal does not cause the Mortgages Trustee GIC Account to
become overdrawn or, if any amounts are retained by way of provision
for the relevant liability and are thus not withdrawn, to the extent
that withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn). The aggregate
amount of the withdrawal shall equal the Mortgages Trustee Available
Revenue Receipts on each Distribution Date. The withdrawal shall be
used to make the payments and provisions in the order of priority set
out in Clause 10.2 (Distribution of Mortgages Trustee Available Revenue
Receipts) of the Mortgages Trust Deed (in each case only if and to the
extent that payments or provisions of a higher priority have been made
in full).
4. Priority of Payments for Mortgages Trustee Principal Receipts
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date, (i) withdraw Cash
from the Mortgages Trustee GIC Account in an amount equal to the
Mortgages Trustee Principal Receipts (to the extent only that such
withdrawal does not cause the Mortgages Trustee GIC Account to become
overdrawn or, if any amounts are retained by way of provision for the
relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn) to make the payments
in the order of priority set out in Clause 11 of the Mortgages Trust
Deed (Distribution of Principal Receipts) and/or, (ii) until such time
as the same may be distributed in accordance with the Mortgages Trust
Deed, retain Cash in the Mortgages Trustee GIC Account in the amount of
any net credit on the Non-Flexible Overpayments Sub Ledger.
5. Priority of Payments for Funding Available Revenue Receipts
Group 1 Available Revenue Receipts and Group 2 Available Revenue
Receipts (including Issuer Allocable Revenue Receipts) will be applied
by the Cash Manager on the relevant Payment Dates until enforcement of
the Funding Security pursuant to the Funding Deed of Charge or until
such time as there are no outstanding Funding Secured Obligations, in
making such payments and provisions in the order of priority set out in
the Funding Pre-Enforcement Revenue Priority of Payments (in each case
only if and to the extent that payments or provisions of a higher
priority have been made in full) as set out in Part I of Schedule 3 to
the Funding Deed of Charge (as the same may be amended, varied or
restated from time to time).
6. Priority of Payments for Funding Available Principal Receipts
Group 1 Available Principal Receipts and Group 2 Available Principal
Receipts (including Issuer Allocable Principal Receipts) will be
applied by the Cash Manager on each Payment Date until enforcement of
the Funding Security pursuant to the Funding Deed of Charge or until
such time as there are no outstanding Funding Secured Obligations, in
making such payments and provisions in the order of priority
40
(in each case only if and to the extent that payments or provisions of
a higher priority have been made in full) set out in Part II of
Schedule 3 to the Funding Deed of Charge.
7. Other Payments
Each of the Beneficiaries and the Cash Manager agrees, and the
Mortgages Trustee concurs, that (save as otherwise specified below) the
following payments may be made from the Mortgages Trustee GIC Account
(to the extent that withdrawal of those amounts would not cause the
balance of the Mortgages Trustee GIC Account to become overdrawn) on
any date:
(a) if any amount has been received from a Borrower for the express
purpose of payment being made to a third party for the provision
of a service (including giving insurance cover) to any of that
Borrower or the Seller or the Mortgages Trustee, to pay such
amount when due to such third party or, in the case of the payment
of an insurance premium, where such third party and the Cash
Manager have agreed that payment of commission should be made by
deduction from such insurance premium, to pay such amount less
such commissions when due to such third party and to pay such
commission to the Cash Manager and to pay any premiums in respect
of any Insurance Policy or other insurance policy relating to any
Mortgage Loan comprised in the Mortgage Portfolio;
(b) to pay to any person (including the Cash Manager) any amounts due
arising from any unintentional overpayment (and not an
Overpayment) by any person or arising from any reimbursement by
any person of any such overpayment (including, for the avoidance
of doubt, where arising from the failure of a direct debit);
(c) to pay when due (but subject to any right to refuse or withhold
payment or of set-off that has arisen by reason of the Borrower's
breach of the terms of the relevant Mortgage or Mortgage Loan) any
amount payable to a Borrower under the terms of the Mortgage or
the Mortgage Loan to which that Borrower is a party, and to pay
when due any amount payable by the Mortgages Trustee to the Seller
pursuant to Clauses 3.2, 4.5 and 5.2 of the Mortgage Sale
Agreement;
(d) to pay to the Seller any amounts (including, for the avoidance of
doubt, any Early Repayment Charges) received and held by the
Mortgages Trustee on trust for the Seller pursuant to Clause 5
(Trust of Monies) of the Mortgage Sale Agreement;
(e) to pay when due and payable any amounts due and payable by the
Mortgages Trustee to third parties and incurred without breach by
the Mortgages Trustee of the Mortgages Trust Deed and not provided
for payment elsewhere in this paragraph 7;
41
(f) to refund any amounts due arising from the rejection of any
payments in respect of a Mortgage Loan and any other amounts which
have not been received by the Mortgages Trustee as cleared funds;
and
(g) to refund to the Seller any amounts which represent amounts
received from Borrowers but which do not form part of the Mortgage
Account or comprise unpaid interest as at the relevant Closing
Date and which are amounts owed by such Borrowers in respect of
any period prior to the relevant Closing Date as and when
identified by the Cash Manager and if a Borrower fails to pay the
full amount that it owes, the Cash Manager shall be obliged to
refund to the Seller only such portion of the amount which relates
to any period prior to the relevant Closing Date.
8. Use of Ledgers
The Cash Manager shall forthwith record monies received or payments
made by it on behalf of the Mortgages Trustee or Funding in the ledgers
in the manner set out in this Agreement. If, at any time, the Cash
Manager is in any doubt as to which ledger a particular amount should
be credited or debited, it shall consult with the Security Trustee
thereon.
Except in the case of the Funding Principal Deficiency Ledger, a debit
item shall only be made in respect of any of the Mortgages Trustee
Ledgers and the Funding Ledgers and the corresponding payment or
transfer (if any) may only be made from the Mortgages Trustee
Transaction Account, the Mortgages Trustee GIC Account, the Funding GIC
Account, the Funding Transaction Account or any Funding (Issuer) GIC
Account, as the case may be, to the extent that such entry does not
cause the relevant ledger to have a debit balance. In the case of the
Funding Principal Deficiency Ledger, a credit item shall only be made
to the extent that such entry does not cause such ledger to have a
credit balance.
9. Revenue Ledger
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Revenue Ledger:
(i) all Revenue Receipts; and
(ii) all interest received by the Mortgages Trustee on the
Mortgages Trustee Transaction Account and the Mortgages
Trustee GIC Account; and
(b) any payment or provision made under paragraph 3 herein shall be
debited to the Revenue Ledger.
10. Principal Ledger
The Cash Manager shall ensure that:
(a) all Principal Receipts shall be credited to the Principal Ledger;
and
42
(b) any payment or provision made under paragraph 4 herein shall be
debited to the Principal Ledger.
11. Losses Ledger
The Cash Manager shall ensure that all Losses shall be recorded in
the Losses Ledger.
12. Funding Share/Seller Share Ledger
The Cash Manager shall ensure that the Current Funding Share and the
Current Funding Share Percentage of the Trust Property and the Current
Seller Share and the Current Seller Share Percentage of the Trust
Property are recorded in the Funding Share/Seller Share Ledger on the
Initial Closing Date and thereafter on each Distribution Date. In
addition to the foregoing, if (i) the Seller has assigned New Mortgage
Loans to the Mortgages Trustee, or (ii) Funding has paid a Further
Contribution to the Mortgages Trustee to increase the Funding Share of
the Trust Property, during the Trust Calculation Period immediately
preceding a Distribution Date, the Cash Manager shall ensure that the
Current Funding Share and the Current Funding Share Percentage of the
Trust Property and the Current Seller Share and the Current Seller
Share Percentage of the Trust Property, as recalculated on each
Assignment Date and Funding Contribution Date and the Weighted Average
Funding Share Percentage and the Weighted Average Seller Share
Percentage, as calculated on such Distribution Date or Funding
Contribution Date in respect of Revenue Receipts, Principal Receipts
and Losses, are recorded on the Funding Share/Seller Share Ledger on
each such Distribution Date or Funding Contribution Date.
13. Funding Revenue Ledger
The Cash Manager shall ensure that:
(c) the following amounts shall be credited to the Funding Revenue
Ledger:
(i) all Funding Revenue Receipts;
(ii) all interest received by Funding in respect of the Funding
Bank Accounts, including in respect of any Funding (Issuer)
GIC Account, provided that the Cash Manager shall keep a
separate record in respect of each Issuer of the amount of
interest received by Funding in respect of the Funding
(Issuer) GIC Account of such Issuer;
(iii) all amounts received by Funding representing income on any
of Funding's Authorised Investments;
(iv) any amount debited to the Funding Principal Ledger under
paragraph 16(b)(ii) herein; and
(d) any payment or provision made under paragraph 5 above shall be
debited to the Funding Revenue Ledger;
(e) the amount determined under paragraph 1(c)(i) shall be recorded on
the Revenue Expense Sub-Ledger on each Distribution Date;
43
(f) the amounts determined under paragraphs (1)(c)(ii) and 1(c)(iv)(A)
above shall be recorded on the Group 1 Revenue Receipts Sub-Ledger
on each Distribution Date; and
(g) the amounts determined under paragraphs 1(c)(iii) and 1(c)(iv)(B)
above shall be recorded on the Group 2 Revenue Receipts Sub-Ledger
on each Distribution Date.
14. Issuer Reserve Fund Ledger
If an Issuer Reserve Fund is required to be established, the Cash
Manager will record on such Issuer Reserve Fund Ledger:
(a) an amount initially from that portion of Funding's Contribution to
the Mortgages Trust which will be retained by Funding and not paid
to the Mortgages Trustee and deposited into the related Funding
(Issuer) GIC Account;
(b) amounts credited to the relevant Issuer Liquidity Reserve Ledger
in accordance with the Funding Priority of Payments above; and
(c) amounts debited to an Issuer Liquidity Reserve Ledger in order to
be applied in accordance with the Funding Priority of Payments.
15. Issuer Liquidity Reserve Ledger
If an Issuer Liquidity Reserve Fund is required to be established, the
Cash Manager will record on such Issuer Liquidity Reserve Ledger:
(a) an amount funded initially from Funding Available Principal
Receipts which are allocated to the relevant Issuer in accordance
with the Funding Pre-Enforcement Principal Priority of Payments up
to the amount of the Issuer Liquidity Reserve Required Amount and
such amount will be deposited in the relevant Funding (Issuer) GIC
Account;
(b) amounts credited to the relevant Issuer Liquidity Reserve Ledger
in accordance with the Funding Priority of Payments above; and
(c) amounts debited to the Issuer Liquidity Reserve Ledger in order to
be applied in accordance with Funding Priority of Payments.
16. Funding Principal Ledger
Without prejudice to paragraph 18 below, the Cash Manager shall ensure
that:
(a) the following amounts shall be credited to the Funding Principal
Ledger:
(i) all Funding Principal Receipts;
(ii) amounts credited to the Funding Principal Deficiency Ledger
under paragraphs 8 and 17 herein; and
44
(iii) any Mortgages Trustee Available Principal Receipts
remaining after determining the amounts under paragraphs
1(d)(i) through 1(d)(iii) herein;
(b) the following amounts shall be debited to the Funding Principal
Ledger:
(i) the aggregate amount of principal repaid on the
Intercompany Loan Agreement pursuant to paragraph 6 herein;
(c) the amounts determined under paragraphs 1(d)(i)(A) and 1(d)(i)(B)
(to the extent such amounts relate to Group 1 Issuers) and under
paragraphs, 1(d)(ii)(A) and 1(d)(iii)(A) above shall be recorded
on the Group 1 Principal Receipts Sub-Ledger on each Distribution
Date. PROVIDED that if on any Distribution Date Mortgages Trustee
Principal Receipts are allocable to both Group 1 and Group 2
pursuant to paragraph 1(d)(i)(B) above, then the Cash Manager
shall record such amounts on the Group 1 and Group 2 Principal
Sub-Ledgers, respectively, in priority corresponding to the Final
Maturity Dates of the Money Market Notes of the related Issuers,
beginning with the earliest such Final Maturity Date; and
(d) the amounts determined under paragraphs 1d(i)(A) and 1d(i)(B) (to
the extent such amounts relate to Group 2 Issuers) and under
paragraphs 1d(ii)(B) and 1d(iii)(B) above shall be recorded on the
Group 2 Principal Receipts Sub-Ledger on each Distribution Date.
PROVIDED that if on any Distribution Date Mortgages Trustee
Principal Receipts are allocable to both Group 1 and Group 2
pursuant to paragraph 1(d)(i)(B) above, then the Cash Manager
shall record such amounts on the Group 1 and Group 2 Principal
Sub-Ledgers, respectively, in priority corresponding to the Final
Maturity Dates of the Money Market Notes of the related Issuers,
beginning with the earliest such Final Maturity Date
17. Funding Principal Deficiency Ledger
The Cash Manager will establish a Principal Deficiency Ledger for
Funding and ensure that:
(a) on each occasion on which an Issuer Principal Deficiency Ledger is
credited with respect to (1) Losses and (2) Issuer Liquidity
Reserve Funds, the Funding Principal Deficiency Ledger is credited
with respect to such Issuer; and
(b) on each occasion on which the principal deficiency of an Issuer is
reduced with respect to a credit described in (a) above, the
Funding Principal Deficiency Ledger will record a parallel
reduction in aggregate principal deficiencies.
18. Funding Reserve Ledger
(a) An amount initially drawn from excess Revenue Receipts distributed
to Funding from the Mortgages Trust and deposited in the Funding
GIC Account will be credited to the Funding Reserve Ledger.
45
(b) Amounts shall be credited to the Funding Reserve Ledger in
accordance with the Funding Priority of Payments above.
(c) Amounts shall be debited to the Funding Reserve Ledger on any
Closing Date in order to be applied in the establishment of
initial reserves or in payment of expenses in connection with the
issuance of any New Notes by a New Issuer and on each Payment Date
in order to be applied in accordance with the Funding Priority of
Payments.
19. Intercompany Loan Ledger
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Intercompany Loans are recorded
in the Intercompany Loan Ledger.
20. Overpayments Ledger
The Cash Manager shall ensure that:
(a) with respect to the Non-Flexible Mortgage Loans:
(i) there shall be credited to the Non-Flexible Overpayments
Sub Ledger all Overpayments (not being Capital Payments)
made on Non-Flexible Mortgage Loans; and
(ii) there shall be debited from the Non-Flexible Overpayments
Sub Ledger:
(A) all underpayments made by any Borrower on Non-Flexible
Mortgage Loans which do not exceed the amount of the
Overpayment previously made by such Borrower in the
same calendar year; and
(B) on the first Trust Determination Date of each calendar
year, all outstanding credits made to the Non-Flexible
Overpayments Sub Ledger during the previous calendar
year; and
(b) all Overpayments on the Flexible Mortgage Loans are recorded in
the Flexible Overpayments Sub Ledger.
21. Non-Flexible Underpayments Ledger
The Cash Manager shall ensure that all amounts debited from the
Overpayments Ledger under paragraph 20(a)(ii) above shall be recorded
on the Non-Flexible Underpayments Ledger.
22. Re-Draws Ledger
The Cash Manager shall ensure that, with respect to the Flexible
Mortgage Loans:
46
(a) all Non-Cash Re-Draws are recorded in the Non-Cash Re-Draws Sub
Ledger; and
(b) all Cash Re-Draws are recorded in the Cash Re-Draws Sub Ledger.
23. Further Draws Ledger
The Cash Manager shall ensure that, with respect to Personal Secured
Loans, all Further Draws are recorded in the Further Draws Ledger.
24. Records
The Cash Manager shall ensure that a separate record is kept of any
amount drawn under any Issuer Reserve Fund or Issuer Liquidity Reserve
Fund.
47
SCHEDULE 3A
Form of Mortgages Trustee Quarterly Report
Granite Finance Trustees Limited
Memorandum of Account
Period Ended This Quarter Prior Quarter
(GBP) 000's (GBP) 000's
Fees Receivable
Fees Payable
Operating Expenses
Taxation
Dividend 0 0
Retained profit brought forward 0 0
------------------------- -------------------------
Retained profit for the year 0 0
========================= =========================
Granite Finance Trustees Limited
Balance Sheet
Period Ended
(GBP) (GBP)
Fixed Asset Investments
Current Assets
New Mortgage Loans 0
Interest Receivable 0
Other debtors 0
Cash at Bank 0
--------------------
0
--------------------
Creditors: Amounts falling due within one year
Accruals 0
Interest Payable Accrual 0
Taxation 0
====================
0
====================
Net current assets 0
=========================
Total Assets less current liabilities 0
=========================
Share Capital 0
Reserves 0
=========================
0
=========================
Diff 0
48
SCHEDULE 3B
Form of Funding Quarterly Report
Granite Finance Funding Limited
Profit & Loss Account
Period Ended This Quarter Prior Quarter
(GBP) 000's (GBP) 000's
Interest Receivable -
Mortgages
Interest Receivable -
Cash/ Authorised
Investments
0 0
Interest Payable -
Intercompany Loan
Interest Payable
0 0
Net Operating Income 0 0
Other Income
Operating Expenses
Deferred Consideration
Profit/loss on ordinary 0 0
activities before tax
Taxation
Profit/loss on ordinary 0 0
activities after tax
Dividend 0 0
Retained profit brought 0 0
forward
Retained profit for the 0 0
year
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Granite Finance Funding Limited
Balance Sheet
Period Ended
(GBP) 000's (GBP) 000's
Fixed Asset Investments
Beneficial Interest in Mortgage Portfolio 0
Current Assets
Interest Receivable 0
Deferred Expenditure (costs of Securing) 0
Other debtors 0
Cash at Bank 0
Creditors: Amounts falling due within one year
Accruals 0
Deferred Consideration Creditor 0
Interest Payable Accrual 0
Taxation 0
---------------------
0
---------------------
Net current assets 0
Creditors: Amounts falling due after one year
Intercompany Loan 0
Start-up Loan(s) (specify) 0
----------------------
Total Assets less current liabilities 0
======================
Share Capital 0
Reserves 0
----------------------
0
======================
Diff 0
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Granite Finance Funding Limited
Notes to Balance Sheet
Period Ended
Balance on Cash Accumulation Ledger 0
Available Credit Enhancement
Reserve Fund at closing
Last Quarter Closing Reserve Fund
Drawings to make a bullet repayment
Other drawings
Closing Reserve Balance
Target Reserve Fund
Issuer Principal Deficiency Ledger AAA AA BBB
Opening PDL Balance 0 0 0
Losses this Quarter 0 0 0
PDL top up from Revenue Income 0 0 0
Closing PDL Balance 0 0 0
Subordinated Loan Outstanding
Initial Balance
Last Quarter Closing Outstanding
Accrued Interest
Repayments Made
Closing Balance
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SCHEDULE 4
Cash Manager Representations and Warranties
The Cash Manager makes the following representations and warranties to each of
the Mortgages Trustee, Funding and the Security Trustee:
1. Status: It is a public limited company duly incorporated, validly
existing and registered under the laws of the jurisdiction in which it
is incorporated, capable of being sued in its own right and not subject
to any immunity from any proceedings, and it has the power to own its
property and assets and to carry on its business as it is being
conducted.
2. Powers and authority: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of each of the
Transaction Documents to which it is or will be a party, and each such
Transaction Document has been duly executed and delivered by it.
3. Legal validity: Each Transaction Document to which it is or will be a
party constitutes or when executed in accordance with its terms will
constitute, a legal, valid and binding obligation.
4. Non-conflict: The execution by it of each of the Transaction Documents
to which it is a party and the exercise by it of its rights and the
performance of its obligations under such Transaction Documents will
not:
(a) conflict with any document which is binding upon it or any of its
assets;
(b) conflict with its constitutional documents; or
(c) conflict with any law, regulation or official or judicial order of
any government, governmental body or court, domestic or foreign,
having jurisdiction over it.
5. No litigation: It is not a party to any material litigation,
arbitration or administrative proceedings and, to its knowledge, no
material litigation, arbitration or administrative proceedings are
pending or threatened against it.
6. Consents and Licenses: All governmental consents, licences and other
approvals and authorisations required in connection with the entry
into, performance, validity and enforceability of, and the transactions
contemplated by, the Transaction Documents have been obtained or
effected (as appropriate) and are in full force and effect.
7. Solvency: No Insolvency Event has occurred in respect of the Cash
Manager, and the Cash Manager is not insolvent.
8. Financial Statements: The most recent financial statements of the Cash
Manager:
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(a) were prepared in accordance with accounting principles generally
accepted in England and Wales consistently applied;
(b) disclose all liabilities (contingent or otherwise) and all
unrealised and or anticipated losses of the Cash Manager; and
(c) save as disclosed therein, give a true and fair view of the
financial condition and operations of the Cash Manager during the
relevant financial year.
9. No Adverse Change: Since the date as of which the most recent financial
statements of the Cash Manager were stated to be prepared, there has
been:
(a) no significant change in the financial position of the Cash
Manager; and
(b) no material adverse change in the financial position or prospects
of the Cash Manager.
10. Ranking of Claims:
Under the laws of England and Wales in force as at the date of making
this representation, claims against the Cash Manager under the
Transaction Documents will rank at least pari passu with the claims of
all its other unsecured and unsubordinated creditors, save those whose
claims are preferred solely by any bankruptcy, liquidation or other
similar laws of general application.
11. Information in Prospectus and Offering Circular:
All information in the Prospectus and the Offering Circular with regard
to the Cash Manager are true and accurate in all material respects and
not misleading in any material respect.
The Cash Manager has made all proper inquiries to ascertain and to verify the
foregoing.
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EXECUTION PAGE
as Cash Manager
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
--------------------------
Authorised Signatory
Name:
Title:
as Seller
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by: )
--------------------------
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by: )
--------------------------
Authorised Signatory
Name:
Title:
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by: )
--------------------------
Authorised Signatory
Name:
Title:
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EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by: )
--------------------------
Authorised Signatory
Name:
Title:
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