Exhibit 4.8
Dated 26 March 2001
NORTHERN ROCK PLC
as Cash Manager, Seller and Beneficiary
GRANITE FINANCE TRUSTEES LIMITED
as Mortgages Trustee
GRANITE FINANCE FUNDING LIMITED
as Beneficiary
GRANITE FINANCE FUNDING 2 LIMITED
as Beneficiary
- and -
THE BANK OF NEW YORK
as Security Trustee and Funding 2 Security Trustee
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EIGHTH AMENDED CASH MANAGEMENT AGREEMENT
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SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
WOOLGATE EXCHANGE
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
REF:30507-30090/972619
CONTENTS
1. Definitions and Interpretation.........................................4
2. Appointment of Cash Manager............................................5
3. The Services...........................................................6
4. Payments, Accounts, Ledgers............................................7
5. Early Repayment Charges...............................................22
6. No Liability..........................................................23
7. Costs and Expenses....................................................23
8. Information...........................................................23
9. Remuneration..........................................................27
10. Covenants, Representations and Warranties of the Cash Manager.........27
11. Services Non-Exclusive................................................28
12. Termination...........................................................28
13. Further Assurances....................................................32
14. Miscellaneous.........................................................32
15. Confidentiality.......................................................33
16. No Partnership........................................................34
17. Assignment............................................................34
18. The Funding Security Trustees.........................................34
19. New Intercompany Loan Agreements......................................35
20. Non Petition Covenant; Limited Recourse...............................35
21. Amendments and Waiver.................................................37
22. Notices...............................................................38
23. Third Party Rights....................................................39
24. Execution in Counterparts; Severability...............................39
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25. Governing Law and Submission to Jurisdiction..........................39
SCHEDULE 1 The Cash Management Services....................................41
SCHEDULE 2 Cash Management and Maintenance of Ledgers......................46
SCHEDULE 3A Form of Mortgages Trustee Quarterly Report.....................67
SCHEDULE 3B Form of Funding Quarterly Report...............................68
SCHEDULE 3C Form of Funding 2 Quarterly Report.............................71
SCHEDULE 4 Cash Manager Representations and Warranties.....................74
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THIS AGREEMENT IS MADE ON 26 MARCH, 2001 AND AMENDED AND RESTATED PURSUANT TO
THE DEEDS OF AMENDMENT AND RESTATEMENT DATED 23 JULY 2001, 27 JANUARY 2003, 24
SEPTEMBER 2003, 28 JANUARY 2004, 26 MAY 2004, 19 JANUARY 2005, 24 AUGUST 2005,
19 JANUARY 2005 AND 23 DECEMBER 2005 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, Seller and as a Beneficiary;
(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) 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 Funding and a Beneficiary;
(4) GRANITE FINANCE FUNDING 2 LIMITED (registered number 5249387), a private
limited company incorporated under the laws of England and Wales whose
registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in
its capacity as Funding 2 and a Beneficiary; and
(5) THE BANK OF NEW YORK a New York banking corporation acting through its
office at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity
as Security Trustee and Funding 2 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) On the Funding 2 Programme Date, Funding 2 acquired a portion of the
Seller's beneficial interest in the Mortgages Trust Deed and became party
to the Mortgages Trust Deed.
(C) The Cash Manager is willing to provide Cash Management Services to the
Mortgages Trustee each Funding Beneficiary and each Funding Security
Trustee on the terms and subject to the conditions contained in this
Agreement.
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IT IS HEREBY AGREED as follows:
1. Definitions and Interpretation
1.1 The provisions of the Programme Master Definitions Schedule signed for
the purposes of identification by Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ and ▇▇▇▇▇ &
Overy on 19 January, 2005 (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 the Mortgages Trust Deed and the Controlling
Beneficiary Deed.
1.3 In addition to the provisions of the Programme Master Definitions
Schedule, the following words and expressions used in this Agreement
shall the meanings set out below.
"Funding Basis Rate Swap Agreement" means each of the ISDA Master
Agreements, Schedules and Confirmations thereto each entered into on or
about 23 December 2005 and any Credit Support Annexes or other credit
support documents entered into at any time among Funding and the Funding
Basis Rate Swap Provider and/or any credit support provider and shall
include any additional basis rate swap agreement entered into by Funding
from time to time in accordance with the Transaction Documents;
"Funding Basis Rate Swap Provider" means Northern Rock and/or, as
applicable, any other basis rate swap provider appointed from time to
time by Funding in accordance with the Transaction Documents;
"Funding Basis Rate Swaps" means the swap transactions as documented
under the Funding Basis Rate Swap Agreements;
"Funding Swap Collateral" means any asset (including, without limitation,
Cash and/or securities) delivered to Funding by the Funding Basis Rate
Swap Provider in accordance with the terms of any of, the Funding Basis
Rate Swap Agreements in respect of the Funding Basis Rate Swap Provider's
obligations under such Funding Basis Rate Swap Agreement;
"Funding Swap Collateral Accounts" means the Funding Swap Collateral Cash
Account and the Funding Swap Collateral Securities Account;
"Funding Swap Collateral Cash Account" means an account opened in the
name of Funding for the purpose of holding Funding Swap Collateral in
Cash and maintained in accordance with the terms of the Cash Management
Agreement;
"Funding Swap Collateral Ledger" means the ledger maintained by the Cash
Manager in the books of Funding in accordance with Clause 4.3 (Funding
Ledgers) of the Cash Management Agreement;
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"Funding Swap Collateral Securities Account" means a securities account
opened in the name of the Funding for the purpose of holding Funding Swap
Collateral in the form of securities and maintained in accordance with
the terms of the Cash Management Agreement; and
"Funding Swap Replacement Premium" means any payment received from a
replacement swap provider upon entry into an agreement with such
replacement swap provider replacing a Funding Basis Rate Swap Agreement.
2. Appointment of Cash Manager
2.1 Appointment: Until termination pursuant to Clause 12 (Termination)
herein, 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 and the Cash Manager in
each case hereby accepts such appointment on the terms and subject to the
conditions of this Agreement.
2.2 Appointment by Funding 2: Until termination pursuant to Clause 12
(Termination) herein, Funding 2 (according to its estates and interests)
hereby appoints the Cash Manager as its lawful agent to provide the Cash
Management Services set out in this Agreement and the Cash Manager hereby
accepts such appointment on the terms and subject to the conditions of
this Agreement. The Funding 2 Security Trustee consents to the
appointment of the Cash Manager on the terms of and subject to the
conditions of this Agreement.
2.3 Duties prescribed by Transaction Documents: For the avoidance of doubt
and in connection with the powers conferred under Clause 2.1
(Appointment) and Clause 2.2 (Appointment by Funding 2), save as
expressly provided elsewhere in this Agreement, nothing herein shall be
construed so as to give the Cash Manager any powers, rights, authorities,
directions or obligations other than as specified in this Agreement or
any of the other Transaction Documents.
2.4 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.
2.5 Appointment by Funding 2 Conditional: The appointment pursuant to Clause
2.2 (Appointment by Funding 2) herein is conditional upon the acquisition
by Funding 2 from the Seller of a portion of the Seller's beneficial
interest in the Mortgages Trust pursuant to the Seller (Mortgages Trust)
Assignment Agreement and shall take effect upon and from the Funding 2
Programme Date automatically without any further action on the part of
any person PROVIDED THAT if Funding 2 has not acquired from the Seller a
portion of the Seller's beneficial interest in the Mortgages Trust by 31
January, 2005, or such later date as Funding 2 and the Seller may agree,
the
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appointment of the Cash Manager as agent of Funding 2 under Clause 2.2
(Appointment by Funding 2) shall not take 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 each Funding Beneficiary and shall prepare and submit, or
procure the preparation and submission of, on behalf of the Mortgages
Trustee and each Funding Beneficiary, 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 each Funding Beneficiary 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
each Funding Beneficiary with all applicable legal requirements and with
the terms of the Transaction Documents to which each of the Mortgages
Trustee and/or and each Funding Beneficiary (respectively) is a party,
PROVIDED THAT the Cash Manager shall not lend or provide any sum to the
Mortgages Trustee or any Funding Beneficiary (other than as expressly
contemplated by the Transaction Documents) and the Cash Manager shall
have no liability whatsoever to the Mortgages Trustee, each Funding
Beneficiary and each Funding Security Trustee, to any other person for
any failure by the Mortgages Trustee or any Funding Beneficiary 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, each
Funding Beneficiary and each Funding Security Trustee on demand for
any loss, liability, claim, expense or damage suffered or incurred
by any of them in respect of the negligence, bad faith or wilful
default of the Cash Manager in carrying out its functions as Cash
Manager under this Agreement or under the other Transaction
Documents or as a result of a breach by the Cash Manager of the
terms and provisions of this Agreement or such other Transaction
Documents to which the Cash Manager is a party (in its capacity as
such) in relation to such functions.
(b) For the avoidance of doubt, the Cash Manager shall not be liable in
respect of any loss, liability, claim, expense or damage suffered or
incurred by the
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Mortgages Trustee, each Funding Beneficiary or each Funding 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 (General)) by the Cash Manager save to the extent that such
loss, liability, claim, expense or damage is suffered or incurred as
a result of any negligence, bad faith or wilful default of the Cash
Manager under, or as a result of, a breach by the Cash Manager of
the terms and provisions of this Agreement or any of the other
Transaction Documents to which the Cash Manager is a party (in its
capacity as such) in relation to such functions.
4. Payments, Accounts, Ledgers
4.1 Establishment of Bank Accounts:
(a) The Cash Manager hereby confirms that the Mortgages Trustee GIC
Account has been established on or before the date hereof pursuant
to the Bank Account Agreement and the Mortgages Trustee Guaranteed
Investment Contract and that the Mortgages Trustee GIC Account
Mandate in the agreed form will apply thereto at the Initial Closing
Date. The Cash Manager undertakes (to the extent to which the same
is within its control) that at the Initial Closing Date the
Mortgages Trustee GIC Account will be operative and that the Cash
Manager will not knowingly create or permit to subsist any Security
Interest in relation to the Mortgages Trustee GIC Account (but
without prejudice to the Mortgages Trust and the other Transaction
Documents).
(b) The Cash Manager hereby confirms that the Mortgages Trustee
Transaction Account has been established on or before the date
hereof pursuant to the Bank Account Agreement and that the Mortgages
Trustee Transaction Account Mandate in the agreed form will apply
thereto at the Initial Closing Date. The Cash Manager undertakes (to
the extent to which the same is within its control) that at the
Initial Closing Date the Mortgages Trustee Transaction Account will
be operative and that the Cash Manager will not knowingly create or
permit to subsist any Security Interest in relation to the Mortgages
Trustee Transaction Account (but without prejudice to the Mortgages
Trust and the other Transaction Documents).
(c) The Cash Manager hereby confirms that the Funding GIC Account has
been established on or before the date hereof pursuant to the Bank
Account Agreement and the Funding Guaranteed Investment Contract and
that the Funding GIC Account Mandate in the agreed form will apply
thereto at the Initial Closing Date. The Cash Manager undertakes (to
the extent to which the same is within its control) that at the
Initial Closing Date the Funding GIC Account will be operative and
that the Cash Manager will not knowingly create or permit to subsist
any Security Interest in relation to the Funding GIC Account other
than as created under or permitted pursuant to the Funding Deed of
Charge.
(d) The Cash Manager hereby confirms that the Funding Transaction
Account has been established on or before the date hereof pursuant
to the Bank Account
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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) The Cash Manager hereby confirms that the Funding 2 GIC Account has
been established on or before the Funding 2 Programme Date pursuant
to the Funding 2 Bank Account Agreement and the Funding 2 Guaranteed
Investment Contract and that the Funding 2 GIC Account Mandate in
the agreed form will apply thereto at the Funding 2 Programme Date.
The Cash Manager undertakes (to the extent to which the same is
within its control) that at the Funding 2 Programme Date the Funding
2 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 2 GIC Account other than as created under or
permitted pursuant to the Funding 2 Deed of Charge.
(g) The Cash Manager hereby confirms that the Funding 2 Transaction
Account has been established on or before the Funding 2 Programme
Date pursuant to the Funding 2 Bank Account Agreement and that the
Funding 2 Transaction Account Mandate in the agreed form will apply
thereto at the Funding 2 Programme Date. The Cash Manager undertakes
(to the extent to which the same is within its control) that at the
Funding 2 Programme Date the Funding 2 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 2
Transaction Account other than as created under or permitted
pursuant to the Funding 2 Deed of Charge.
(h) On each occasion that Funding enters into an Intercompany Loan
Agreement, the Cash Manager undertakes to establish a separate
Funding (Issuer) GIC Account in respect of the applicable Funding
Issuer to which amounts in respect of any Issuer Reserve Fund and
Issuer Liquidity Reserve Fund (if any) of such Issuer will be
credited.
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(i) On each occasion that a Funding Beneficiary enters into an
Intercompany Loan Agreement (or, in the case of Funding 2, is the
recipient of a Loan Tranche under an existing Funding 2 Intercompany
Loan Agreement), then the Cash Manager, the Seller, each Funding
Beneficiary, each Funding Security Trustee and the Mortgages Trustee
shall execute such amendments to this Agreement as may be necessary
to reflect the establishment of any bank account for such Funding
Beneficiary.
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 the Beneficiaries;
(ii) the Revenue Ledger, which shall separately reflect all Revenue
Receipts standing to the credit of each of the Mortgages
Trustee GIC Account and the Mortgages Trustee Transaction
Account from time to time and distribution of the same to the
Beneficiaries;
(iii) the Losses Ledger, which shall record Losses on the Mortgage
Portfolio;
(iv) the Funding Share/Funding 2 Share/Seller Share Ledger which
shall record the Funding Share, the Funding 2 Share, the Seller
Share, the Funding Share Percentage, the Funding 2 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 with respect to 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
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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 the making of Contributions to the Mortgages
Trustee pursuant to the Mortgages Trust Deed by each of the
Funding Beneficiaries and the Seller and the application of
such Contributions in accordance with the terms of the
Mortgages Trust Deed by:
(A) the payment by the Mortgages Trustee to the Seller of (1)
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 (2) amounts of Deferred Purchase Price in
accordance with the Mortgage Sale Agreement or (3) amounts
of any Special Distribution in accordance with the
Mortgages Trust Deed;
(B) the payment by the Mortgages Trustee to Funding of amounts
of any Special Distribution 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.
(b) The Cash Manager shall make credits and debits to the Mortgages
Trustee Ledgers in the manner described in paragraphs 10, 11, 12,
13, 14, 31, 32, 33 and 34 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 Funding 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 Funding 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:
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(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 Funding 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, (other than any
Funding Swap Collateral 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
(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 Funding 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
each Funding Intercompany Loan.
(viii) the Funding Swap Collateral Ledger to record all payments,
deliveries, transfers and receipts in connection with Funding
Swap Collateral, including, without limitation:
(A) the delivery of any Funding Swap Collateral to Funding by
the Funding Basis Rate Swap Provider;
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(B) the receipt of any income or distributions in respect of
such Funding Swap Collateral and the payment of such
income or distributions to the Funding Basis Rate Swap
Provider;
(C) the return of all, or any part of, such Funding Swap
Collateral to the Funding Basis Rate Swap Provider; and
(D) the payment or transfer of all, or any part of, such
Funding Swap Collateral to the Funding Transaction Account
or the Funding Swap Collateral Account,
provided that the Funding Swap Collateral Ledger shall only be
established in the event that the Funding Basis Rate Swap
Provider pays or transfers Funding Swap Collateral to Funding
in accordance with the Funding Basis Rate Swap Agreement.
(b) The Cash Manager shall make credits and debits to the Funding
Ledgers in accordance with the provisions of paragraphs 15 through
21 of Schedule 2 hereto.
4.4 Funding 2 Ledgers:
(a) The Cash Manager shall open and maintain in the books of Funding 2
the following ledgers on behalf of Funding 2:
(i) the Funding 2 Principal Ledger, which shall separately reflect
all Funding 2 Principal Receipts received by Funding 2 on each
Distribution Date (other than any Funding 2 Principal Receipts
constituting the Cash Accumulation Requirement) and all Funding
2 Principal Receipts standing to the credit of each Funding 2
Bank Account (other than any Funding 2 Principal Receipts
credited to the Funding 2 Cash Accumulation Ledger);
(ii) the Funding 2 Cash Accumulation Ledger which shall separately
reflect all Funding 2 Principal Receipts received by Funding 2
on each Distribution Date in respect of the Cash Accumulation
Requirement;
(iii) the Funding 2 Principal Deficiency Ledger, which shall
comprise five sub-ledgers to be known as the AAA Principal
Deficiency Sub-Ledger, the AA Principal Deficiency Sub-Ledger,
the A Principal Deficiency Sub-Ledger, the BBB Principal
Deficiency Sub-Ledger and the BB Principal Deficiency
Sub-Ledger, and which shall record (A) any principal
deficiencies arising from Losses on the Mortgage Loans which
have been allocated to Funding 2, (B) the application of
Funding 2 Available Principal Receipts to meet any deficiency
in Funding 2 Available Revenue Receipts, (C) the application of
Funding 2 Available Principal Receipts to fund the Funding 2
Liquidity Reserve Fund and (D) the application of Funding 2
Available Revenue Receipts to be applied to reduce the balances
on the Funding 2 Principal Deficiency Ledger;
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(iv) the Funding 2 Revenue Ledger, which shall separately reflect
all Funding 2 Revenue Receipts received by Funding 2 on each
Distribution Date, and all Funding 2 Revenue Receipts standing
to the credit of each Funding 2 Bank Account (other than any
Funding 2 Swap Collateral Account);
(v) the Funding 2 Reserve Ledger, which shall record the amount
credited to the Funding 2 Reserve Fund from time to time, and
subsequent withdrawals and deposits in respect of the Funding 2
Reserve Fund;
(vi) the Funding 2 Liquidity Reserve Ledger, which shall record the
amount credited to the Funding 2 Liquidity Reserve Fund from
time to time, and subsequent withdrawals and deposits in
respect of the Funding 2 Liquidity Reserve Fund provided that
the Funding 2 Liquidity Reserve Ledger shall only be
established in the event that Funding 2 is required to do so
pursuant to the terms of the Funding 2 Deed of Charge;
(vii) the Funding 2 Liquidity Facility Ledger which shall record all
drawings and repayments in respect of any Funding 2 Liquidity
Facility provided that the Funding 2 Liquidity Facility Ledger
shall only be established in the event that Funding 2 enters
into a Funding 2 Liquidity Agreement;
(viii) the Funding 2 Swap Collateral Ledger to record all payments,
deliveries, transfers and receipts in connection with Swap
Collateral, including, without limitation:
(A) the delivery of any Swap Collateral to Funding 2 by the
Funding 2 Basis Rate Swap Provider;
(B) the receipt of any income or distributions in respect of
such Swap Collateral and the payment of such income or
distributions to the Funding 2 Basis Rate Swap Provider;
(C) the return of all, or any part of, such Swap Collateral to
the Funding 2 Basis Rate Swap Provider; and
(D) the payment or transfer of all, or any part of, such Swap
Collateral to the Funding 2 Transaction Account or the
Funding 2 Swap Account,
provided that the Funding 2 Swap Collateral Ledger shall only
be established in the event that the Funding 2 Basis Rate Swap
Provider pays or transfers Swap Collateral to Funding 2 in
accordance with the Funding 2 Basis Rate Swap Agreement; and
(ix) the Funding 2 Intercompany Loan Ledger, which shall be divided
into segregated sub-ledgers each of which shall record payments
made under each Loan Tranche (each of which shall be divided
into sub-
13
ledgers to record payments of interest and fees and repayments
of principal made under the applicable Loan Tranche).
(b) The Cash Manager shall make credits and debits to the Funding 2
Ledgers in accordance with the provisions of paragraphs 22 through
30 of Schedule 2 hereto.
4.5 Payments:
Mortgages Trust
(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.
Funding
(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-
14
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 (excluding Funding Swap
Collateral),
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 Funding 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 Bank Accounts and the
Funding Swap Collateral Accounts shall be made in accordance with
the provisions of the Funding Deed of Charge.
Funding 2
(g) The Cash Manager shall procure that on each Distribution Date the
following amounts are paid into the Funding 2 GIC Account:
(i) all Funding 2 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; and
(ii) all Funding 2 Revenue Receipts; and
(iii) any other amounts whatsoever received by or on behalf of
Funding 2 after the Funding 2 Programme Date (excluding Swap
Collateral),
and the Cash Manager shall procure that all interest earned on the
Funding 2 GIC Account and the Funding 2 Transaction Account and all
investment proceeds from Authorised Investments purchased from
amounts standing to the credit of such accounts are credited to the
Funding 2 GIC Account.
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(h) The Cash Manager shall procure that on each Monthly Payment Date the
lesser of (1) the amount standing to the credit of the Funding 2 GIC
Account and (2) the aggregate of all amounts required to be paid by
Funding 2 to the Funding 2 Issuers in accordance with the relevant
Funding 2 Priority of Payments, is credited to the Funding 2
Transaction Account in accordance with the provisions of the Funding
2 Deed of Charge.
(i) The Cash Manager shall procure that all transfers and withdrawals of
amounts standing to the credit of the Funding 2 Transaction Account,
the Funding 2 GIC Account and the Funding 2 Swap Collateral Account
shall be made in accordance with the provisions of the Funding 2
Deed of Charge.
General
(j) Each of the payments into the Mortgages Trustee Bank Accounts, the
Funding Bank Accounts and the Funding 2 Bank Accounts referred to in
Clauses 4.4(a) through (i) herein shall be made forthwith upon
receipt by the Mortgages Trustee, Funding, Funding 2 or the Cash
Manager, as the case may be, of the amount in question.
(k) 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 Bank
Accounts, the Funding Bank Accounts or the Funding 2 Bank Accounts
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.
(l) The Cash Manager shall promptly notify each of the Mortgages
Trustee, each Funding Beneficiary and each Funding 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", any
"Funding (Issuer) GIC Account", the "Funding 2 Transaction Account"
or the "Funding 2 GIC Account" in the Programme Master Definitions
Schedule.
(m) Each of the Cash Manager and the Mortgages Trustee undertakes that,
so far as it is able to procure the same, the Mortgages Trustee Bank
Accounts and all instructions and Mandates in relation thereto will
continue to be operative and will not, save as provided in Clause
4.7 (Cash Management) herein or as permitted pursuant to the Bank
Account Agreement, be changed without the prior written consent of
the Funding Security Trustees (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 the Mortgages Trustee Bank Accounts, without
the prior written consent of the Funding Security Trustees, in
accordance with Clause 4.2 (Amendment or Revocation) of the Bank
Account Agreement.
(n) Each of the Cash Manager and Funding undertakes that, so far as it
is able to procure the same, the Funding Bank Accounts and all
instructions and
16
Mandates in relation thereto will continue to be operative and will
not, save as provided in Clause 4.7 (Cash Management) herein or as
permitted pursuant to the Bank Account Agreement or any 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 the Funding Bank Accounts
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.
(o) Each of the Cash Manager and Funding 2 undertakes that, so far as it
is able to procure the same, the Funding 2 Bank Accounts and all
instructions and Mandates in relation thereto will continue to be
operative and will not, save as provided in Clause 4.7 (Cash
Management) herein or as permitted pursuant to the Funding 2 Bank
Account Agreement, be changed without the prior written consent of
the Funding 2 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 the Funding 2 Bank Accounts without the
prior written consent of the Funding 2 Security Trustee, in
accordance with Clause 4.2 (Amendment or Revocation) of the Funding
2 Bank Account Agreement.
4.6 Withdrawals: The Cash Manager may make withdrawals:
(a) on behalf of the Mortgages Trustee from the Mortgages Trustee Bank
Accounts;
(b) on behalf of Funding from the Funding Bank Accounts, 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 a Funding 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);
(c) on behalf of Funding 2 from the Funding 2 Bank Accounts, but only:
(i) with the prior consent of the Funding 2 Security Trustee as
provided under the Funding 2 Deed of Charge or following
receipt of a request for withdrawal in writing from the Cash
Manager on behalf of Funding 2; and
(ii) until receipt of a Funding 2 Intercompany Loan Enforcement
Notice served by the Funding 2 Security Trustee on Funding 2
(with a copy to
17
the Funding 2 Secured Creditors as soon as reasonable
thereafter in accordance with and subject to the Funding 2 Deed
of Charge),
as permitted by this Agreement and the other Transaction Documents;
(d) on behalf of Funding 2 from the Funding 2 Swap Collateral Account as
permitted by this Agreement and the other Transaction Documents; and
(e) on behalf of Funding from the Funding Swap Collateral Account as
permitted by this Agreement and other Transaction Documents.
4.7 Cash Management: In administering the Funding Bank Accounts on behalf of
Funding and the Security Trustee, 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. In administering the Funding 2 Bank Accounts on
behalf of Funding 2 and the Funding 2 Security Trustee, 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 Funding 2 Security Trustee on Funding 2.
4.8 Contributions by Funding: Following the drawing of any Intercompany Loan
by Funding from any Funding Issuer on any date, the Cash Manager shall
procure (i) the payment on such date by Funding to the Mortgages Trustee
of Funding's Contribution to the Mortgages Trustee pursuant to the
Mortgages Trust Deed and (ii) the application of such Contribution by the
Mortgages Trustee for payment to the Seller of either (a) the amount of
Initial Purchase Price for the sale of any New Mortgage Portfolio which
is acquired by the Mortgages Trustee from the Seller on such date under
the provisions of Mortgage Sale Agreement or (b) the amount of any
Special Distribution made to the Seller as Beneficiary under the
Mortgages Trust Deed, as applicable.
4.9 Contributions by Funding 2: Following the drawing of any Intercompany
Loan or the drawing of any Loan Tranche pursuant to an Intercompany Loan
Agreement by Funding 2 from any Funding 2 Issuer on any date, the Cash
Manager shall procure:
(i) the payment on such date (or on such other date as may be agreed
between Funding 2, the Funding 2 Security Trustee, the applicable
Funding 2 Issuer and the applicable Issuer Security Trustee) by
Funding 2 to a Funding 2 Issuer of an amount by way of the
refinancing (in whole or in part) of an existing Intercompany Loan
or Loan Tranche; or
(ii) the payment on such date by Funding 2 to the Mortgages Trustee of
Funding 2's Contribution to the Mortgages Trustee pursuant to the
Mortgages Trust Deed and the application of such Contribution by the
Mortgages Trustee (as directed by Funding 2 or the Funding 2
Security Trustee) for payment to:
(a) the Seller of either (1) 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
18
Sale Agreement or (2) the amount of any Special Distribution
made to the Seller as Beneficiary under the Mortgages Trust
Deed, as applicable; and/or
(b) Funding of the amount of any Special Distribution made to
Funding as Beneficiary under the Mortgages Trust Deed.
4.10 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 Notes by any Funding 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 Funding Issuer.
4.11 Funding 2 Reserve Fund: The Cash Manager, on behalf of Funding 2, may
utilise the Funding 2 Reserve Fund to fund initial reserves and other
expenses in connection with the issuance of any Notes by any Funding 2
Issuer and the making of Loan Tranches to Funding 2, to the extent that
such reserves and expenses are to be funded or paid for by Funding 2.
4.12 Termination of Funding 2 Basis Rate Swaps: If on or prior to the date of
the earlier of (i) repayment in full of the Funding 2 Intercompany Loan
Agreements or (ii) the service of a Funding 2 Intercompany Loan
Enforcement Notice on Funding 2, any Funding 2 Basis Rate Swap under the
Funding 2 Basis Rate Swap Agreement is terminated, the Cash Manager (on
behalf of Funding 2 and the Funding 2 Security Trustee) shall purchase a
replacement hedge on terms acceptable to the Rating Agencies, Funding 2
and the Funding 2 Security Trustee and with a swap provider that the
Rating Agencies have previously confirmed in writing, to Funding 2 and
the Funding 2 Security Trustee, will not cause the then-current ratings
of the Notes issued by the Funding 2 Issuers to be downgraded, withdrawn
or qualified. Funding 2 may apply any early termination payment received
from, as appropriate, the Funding 2 Basis Rate Swap Provider for such
purpose. Any Swap Replacement Premium received by Funding 2 from a
replacement swap provider upon entry into a swap agreement replacing such
Funding 2 Basis Rate Swap shall firstly be applied in or towards payment
of any termination payment due and payable to the Funding 2 Basis Rate
Swap Provider following the termination of the applicable Funding 2 Basis
Rate Swap. Any amount of such Swap Replacement Premium not applied in or
towards payment of such termination payment will form part of Funding 2
Available Revenue Receipts.
4.13 Funding 2 Swap Collateral:
(a) In the event that pursuant to the terms of the Funding 2 Basis Rate
Swap Agreement, the Funding 2 Basis Rate Swap Provider pays or
transfers Swap Collateral to Funding 2, the Cash Manager shall:
(i) if not already created, create the Funding 2 Swap Collateral
Ledger in the books of Funding 2 so as to record the amount and
type of such Swap Collateral and, if there is more than one
Funding 2 Basis Rate
19
Swap Agreement; identify the agreement in respect of which it
has been posted;
(ii) upon receipt of such Swap Collateral, credit it to and record
the relevant details in the Funding 2 Swap Collateral Ledger;
(iii) to the extent that such Swap Collateral is in the form of
Cash, pay it into the relevant Funding 2 Swap Collateral Cash
Account; and
(iv) to the extent that such Swap Collateral is in the form of
securities, arrange for it to be credited to the relevant
Funding 2 Swap Collateral Securities Account.
(b) Any such Swap Collateral shall not form part of the Funding 2
Available Revenue Receipts and the Funding 2 Available Principal
Receipts; provided that if the terms of the Funding 2 Basis Rate
Swap Agreement permit such Swap Collateral (or any part thereof) to
be applied in or towards satisfaction of the Funding 2 Basis Rate
Swap Provider's obligations under the Funding 2 Basis Rate Swap
Agreement, and in the event that such Swap Collateral (or such part
thereof) is to be so applied, the Cash Manager shall:
(i) where such Swap Collateral is in the form of Cash, transfer the
amount of Cash to be so applied from the Funding 2 Swap
Collateral Cash Account to the Funding 2 Transaction Account;
and/or
(ii) where such Swap Collateral is in the form of securities,
realise the Swap Collateral and pay the amount of the net
proceeds to be so applied into the Funding 2 Transaction
Account,
and, in each case, make the appropriate debits and credits to the
Funding 2 Swap Collateral Ledger. Any amount transferred from the
Funding 2 Swap Collateral Accounts to the Funding 2 Transaction
Account in accordance with this Clause 4.13(b) will form part of the
Funding 2 Available Revenue Receipts.
(c) To the extent that pursuant to the terms of the Funding 2 Basis Rate
Swap Agreement, Swap Collateral (or any income or distributions in
respect thereof) is to be returned or paid (as applicable) to the
Funding 2 Basis Rate Swap Provider, the Cash Manager shall:
(i) where the relevant Swap Collateral (or such income or
distributions) is in the form of Cash, return or pay (as
applicable) the relevant amount of Cash out of the relevant
Funding 2 Swap Collateral Cash Account to the Funding 2 Basis
Rate Swap Provider; and/or
(ii) where the relevant Swap Collateral (or such income or
distributions) is in the form of securities, transfer and
deliver the Swap Collateral to the Funding 2 Basis Rate Swap
Provider,
and, in each case, debit the Funding 2 Swap Collateral Ledger as
appropriate.
20
(d) The terms of this Clause 4.13 shall prevail if and to the extent
that they are inconsistent with the other paragraphs of this Clause
4.
(e) If, in relation to Swap Collateral, there is any conflict between
the terms of the Funding 2 Basis Rate Swap Agreement, the Funding 2
Deed of Charge and/or this Agreement, the terms of the Funding 2
Basis Rate Swap Agreement shall apply.
4.14 Termination of Funding Basis Rate Swaps: If on or prior to the date of
the earlier of (i) repayment in full of the Funding Intercompany Loan
Agreements or (ii) the service of a Funding Intercompany Loan Enforcement
Notice on Funding, any Funding Basis Rate Swap under the Funding Basis
Rate Swap Agreements is terminated, the Cash Manager (on behalf of
Funding and the Funding Security Trustee) shall purchase a replacement
hedge on terms acceptable to the Rating Agencies, Funding and the Funding
Security Trustee and with a swap provider that the Rating Agencies have
previously confirmed in writing, to Funding and the Funding Security
Trustee, will not cause the then-current ratings of the Notes issued by
the Funding Issuers to be downgraded, withdrawn or qualified. Funding may
apply any early termination payment received from, as appropriate, the
Funding Basis Rate Swap Provider for such purpose. Any Funding Swap
Replacement Premium received by Funding from a replacement swap provider
upon entry into a swap agreement replacing such Funding Basis Rate Swap
shall firstly be applied in or towards payment of any termination payment
due and payable to the Funding Basis Rate Swap Provider following the
termination of the applicable Funding Basis Rate Swap. Any amount of such
Swap Replacement Premium not applied in or towards payment of such
termination payment will form part of Funding Available Revenue Receipts.
4.15 Funding Swap Collateral:
(a) In the event that pursuant to the terms of any of the Funding Basis
Rate Swap Agreements, the Funding Basis Rate Swap Provider pays or
transfers Funding Swap Collateral to Funding, the Cash Manager
shall:
(i) if not already created, create the Funding Swap Collateral
Ledger in the books of Funding so as to record the amount and
type of such Funding Swap Collateral and identify the Funding
Basis Rate Swap Agreement in respect of which it has been
posted;
(ii) upon receipt of such Funding Swap Collateral, credit it to and
record the relevant details in the Funding Swap Collateral
Ledger;
(iii) to the extent that such Funding Swap Collateral is in the form
of Cash, pay it into the relevant Funding Swap Collateral Cash
Account; and
(iv) to the extent that such Funding Swap Collateral is in the form
of securities, arrange for it to be credited to the relevant
Funding Swap Collateral Securities Account.
(b) Any such Funding Swap Collateral shall not form part of the Funding
Available Revenue Receipts and the Funding Available Principal
Receipts;
21
provided that if the terms of the Funding Basis Rate Swap Agreement
permit such Funding Swap Collateral (or any part thereof) to be
applied in or towards satisfaction of the Funding Basis Rate Swap
Provider's obligations under the Funding Basis Rate Swap Agreement,
and in the event that such Funding Swap Collateral (or such part
thereof) is to be so applied, the Cash Manager shall:
(i) where such Funding Swap Collateral is in the form of Cash,
transfer the amount of Cash to be so applied from the Funding
Swap Collateral Cash Account to the Funding Transaction
Account; and/or
(ii) where such Funding Swap Collateral is in the form of
securities, realise the Funding Swap Collateral and pay the
amount of the net proceeds to be so applied into the Funding
Transaction Account,
and, in each case, make the appropriate debits and credits to the
Funding Swap Collateral Ledger. Any amount transferred from the
Funding Swap Collateral Accounts to the Funding Transaction Account
in accordance with this Clause 4.15(b) will form part of the Funding
Available Revenue Receipts.
(c) To the extent that pursuant to the terms of the Funding Basis Rate
Swap Agreement, Funding Swap Collateral (or any income or
distributions in respect thereof) is to be returned or paid (as
applicable) to the Funding Basis Rate Swap Provider, the Cash
Manager shall:
(i) where the relevant Funding Swap Collateral (or such income or
distributions) is in the form of Cash, return or pay (as
applicable) the relevant amount of Cash out of the relevant
Funding Swap Collateral Cash Account to the Funding Basis Rate
Swap Provider; and/or
(ii) where the relevant Funding Swap Collateral (or such income or
distributions) is in the form of securities, transfer and
deliver the Funding Swap Collateral to the Funding Basis Rate
Swap Provider,
and, in each case, debit the Funding Swap Collateral Ledger as
appropriate.
(d) The terms of this Clause 4.15 shall prevail if and to the extent
that they are inconsistent with the other paragraphs of this Clause
4.
(e) If, in relation to Funding Swap Collateral, there is any conflict
between the terms of the Funding Basis Rate Swap Agreement, the
Funding Deed of Charge and/or this Agreement, the terms of the
Funding Basis Rate Swap Agreement shall apply.
5. Early Repayment Charges
The Cash Manager shall withdraw any Early Repayment Charges paid into the
Mortgages Trustee Bank Accounts 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
22
avoidance of doubt, the Cash Manager shall not record the receipt or
withdrawal of Early Repayment Charges in any of the ledgers maintained
under this Agreement.
6. No Liability
Save as otherwise provided in this Agreement, the Cash Manager shall have
no liability for the obligations of any of the Mortgages Trustee, each
Funding Beneficiary or each Funding 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, each Funding Beneficiary or each Funding Security
Trustee in respect of any of them.
7. Costs and Expenses
7.1 Each Funding Beneficiary and the Mortgages Trustee, proportionately in
accordance with and subject to the applicable Funding Priority of
Payments, the applicable Funding 2 Priority of Payments or the applicable
Mortgages Trustee Priority of Payments, as the case may be, will on each
Distribution Date, Payment Date or Monthly Payment Date (as applicable)
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 Distribution Date,
Payment Date or Monthly Payment Date (as applicable) and the Cash Manager
shall supply each Funding Beneficiary 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 the Mortgages Trustee, the Funding
Beneficiaries and the Funding Security Trustees in writing (notified to
the Cash Manager), each Funding Beneficiary 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
23
(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, the Funding Beneficiaries and the Funding
Security Trustees elect as a substitute cash manager in
accordance with the terms of this Agreement a licence to use
any proprietary software together with any updates which may be
made thereto from time to time.
(c) The Cash Manager shall use reasonable endeavours to maintain in
working order the information technology systems used by the Cash
Manager in providing the Cash Management Services.
(d) The Cash Manager shall pass to any person to whom it may
sub-contract or delegate the performance of all or any of its powers
and obligations under this Agreement and/or to such person as the
Mortgages Trustee, the Funding Beneficiaries and the Funding
Security Trustees 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 Bank Accounts (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 each Funding Security Trustee (upon its request); and
(b) monthly bank statements in relation to each of the Funding Bank
Accounts (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).
(c) monthly bank statements in relation to each of the Funding 2 Bank
Accounts (and any additional or supplemental bank account of Funding
2) and that it furnishes a copy of such statements to Funding 2 and
the Funding 2 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 (and its auditors), each
Funding Beneficiary (and its auditors) and each Funding Security Trustee
and/or any other person nominated by the Funding Security Trustees 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.
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8.4 Statutory Obligations: The Cash Manager will use its reasonable
endeavours on behalf of the Mortgages Trustee and each Funding
Beneficiary, to prepare or procure the preparation of and file all
reports, annual returns, financial statements, statutory forms and other
returns which the Mortgages Trustee and each Funding Beneficiary is
required by law to prepare and file. Subject to approval thereof by the
directors of the Mortgages Trustee or the applicable Funding Beneficiary
(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. Copies
of all documents referred to in this Clause 8.4 which relate to the
Mortgages Trustee shall be delivered to the Mortgages Trustee, each
Funding Beneficiary, each Funding Security Trustee and the Rating
Agencies. Copies of all documents referred to in this Clause 8.4 which
relate to Funding shall be delivered to Funding, the Security Trustee and
the Rating Agencies. Copies of all documents referred to in this Clause
8.4 which relate to Funding 2 shall be delivered to Funding 2, the
Funding 2 Security Trustee and the Rating Agencies. In each case, such
documents shall be delivered soon as practicable after the end of each
accounting reference period of the Mortgages Trustee or the applicable
Funding Beneficiary (as appropriate).
8.5 Information Covenants:
(a) The Cash Manager shall:
(a) provide the Mortgages Trustee, each Funding Beneficiary, each
Funding Security Trustee (upon its request), the Seller and the
Rating Agencies quarterly with a report in, or substantially
in, the form set out in Schedule 3A hereto in respect of the
Mortgages Trustee;
(b) provide the Mortgages Trustee, Funding, the Security Trustee
(upon its request), the Seller and the Rating Agencies
quarterly with a report in, or substantially in, the form set
out in Schedule 3B hereto in respect of Funding; and
(c) provide the Mortgages Trustee, Funding 2, the Funding 2
Security Trustee (upon its request), the Seller and the Rating
Agencies quarterly with a report in, or substantially in, the
form set out in Schedule 3C hereto in respect of Funding 2; and
Such reports shall be delivered to the Mortgages Trustee, the
applicable Funding Beneficiary, the applicable Funding Security
Trustee, the Seller and the Rating Agencies (in the case of the
Mortgages Trustee and Funding) by the last Business Day of the month
in which each Payment Date occurs and (in the case of Funding 2) by
the last Business Day of each month.
(b) The Cash Manager shall notify the Rating Agencies and each Funding
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/or each Funding Security Trustee may reasonably
25
request in connection with its obligations under this Agreement,
PROVIDED THAT any such request by any Funding 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.
(c) After becoming aware of any event described in paragraph (b)(i) and
(ii) above, the Cash Manager shall give details to the Mortgages
Trustee, each Funding Beneficiary and each Funding 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.
(d) The Cash Manager shall, at the request of the Funding Security
Trustees, furnish each Funding Security Trustee and the Rating
Agencies with such other information relating to its business and
financial condition as the Funding Security Trustees may request in
connection with this Agreement, PROVIDED THAT the Funding Security
Trustees shall not make such a request more than once every three
months unless, in the belief of the Funding Security Trustees, 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 reasonably be expected to occur, PROVIDED THAT any
such request by the Funding Security Trustees 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,
26
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, any Funding Beneficiary, 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, the Mortgages Trustee and each
Funding Beneficiary, proportionately in accordance with and subject
to the applicable Funding Priority of Payments, the applicable
Funding 2 Priority of Payments and the applicable Mortgages Trustee
Priority of Payments, as the case may be, shall pay to the Cash
Manager for its Cash Management Services hereunder an annual cash
management fee of (GBP)200,000 for its services which will be paid
quarterly.
(b) Unless and until otherwise agreed by the Mortgages Trustee, the
Funding Beneficiaries and the Funding Security Trustees in writing
(notified to the Cash Manager), the Mortgages Trustee and each
Funding Beneficiary shall be jointly and severally responsible for
paying the cash management fee to the Cash Manager which is referred
to in paragraph (a) above.
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
Distribution Date, Payment Date or Monthly Payment Date (as applicable)
in the manner contemplated by, in accordance with and subject to the
provisions of the applicable Mortgages Trustee Priority of Payments, the
applicable Funding Priority of Payments and the applicable Funding 2
Priority of Payments.
10. Covenants, Representations and Warranties of the Cash Manager
10.1 Covenants: The Cash Manager hereby covenants with and undertakes to the
Mortgages Trustee, each Funding Beneficiary and each Funding 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, the Funding Beneficiaries or the
Funding Security Trustees 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 Funding Security Trustees 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
27
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 Funding
Security Trustees 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
any Funding Beneficiary and/or any Funding 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 the Mortgages Trustee, each Funding
Beneficiary and each Funding Security Trustee that are specified on
Schedule 4 hereto.
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, each Funding Beneficiary and each Funding 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 (Payments) and 4.5
(Withdrawals) 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 of such default from the Funding Security Trustees 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 material obligations under this
Agreement or any of the other Transaction Documents, which:
28
(i) in the opinion of the Security Trustee, is materially prejudicial to
the interests of the holders of the Notes issued by the Funding
Issuers from time to time; or
(ii) in the opinion of the Funding 2 Security Trustee, is materially
prejudicial to the interests of the holders of the Notes issued by
the Funding 2 Issuers from time to time;
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 of such default from the
Funding Security Trustees requiring the same to be remedied; or
(c) the Cash Manager suffers an Insolvency Event,
then the Mortgages Trustee, the Funding Beneficiaries and/or the Funding
Security Trustees 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 Following the delivery of a notice of termination to the Cash Manager
of the termination of its appointment under this Agreement, each of
the Funding Security Trustees shall, subject to the terms of the
Controlling Beneficiary Deed, use its reasonable endeavours to appoint
a substitute cash manager (with such appointment to become effective
no later than the effective date of the termination). 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, the Funding
Beneficiaries and the Funding Security Trustees, and
(ii) must be a party that the Rating Agencies have previously confirmed
in writing to the Mortgages Trustee, each Funding Beneficiary and
each Funding Security Trustee will not cause the then-current
ratings of the Notes issued by any Issuer to be reduced, withdrawn
or qualified.
The Funding Security Trustees shall have no liability to any person in
the event that, having used reasonable endeavours, subject to the terms
of the Controlling Beneficiary Deed, they are unable to appoint a
substitute cash manager. Notwithstanding any other provision of the
Transaction Documents, neither Funding Security Trustee shall itself be
required to perform any duties of the Cash Manager.
The Funding Security Trustees 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 Funding Security Trustees be responsible or liable for any act or
omission of any substitute Cash Manager or for any loss caused thereby.
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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' prior written notice to the Mortgages Trustee, each Funding
Beneficiary and each Funding Security Trustee, PROVIDED THAT:
(a) the Mortgages Trustee, the Funding Beneficiaries and the Funding
Security Trustees 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
Funding under such agreement are charged in favour of the Security
Trustee on terms satisfactory to the Security Trustee and the rights
of Funding 2 under such agreement are charged in favour of the
Funding 2 Security Trustee on terms satisfactory to the Funding 2
Security Trustee; and
(d) the then-current ratings of the Notes are not reduced, withdrawn or
qualified 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 and
each other Transaction Document to which it is a party 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, each Funding Beneficiary or each Funding Security
Trustee pursuant to this Agreement and each other Transaction
Document to which it is a party.
(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, the Funding
Beneficiaries or the Funding Security Trustees, as the case may
be) to the Mortgages Trustee, the Funding Beneficiaries or the
Funding Security Trustees, as the case may be or as they 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, any Funding Beneficiary or any Funding
Security Trustee, as the case may be (if practicable, on the
date of receipt), any monies and any other assets then held by
the Cash Manager on behalf of the Mortgages Trustee, any
Funding Beneficiary or any Funding Security Trustee;
30
(ii) take such further action as the Mortgages Trustee, the Funding
Beneficiaries or the Funding Security Trustees, as the case may
be, may reasonably direct at the expense of the Mortgages
Trustee or each Funding Beneficiary, 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 the Funding Beneficiaries, the Mortgages Trustee
and the Funding Security Trustees, the directions of the
Funding Security Trustees 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,
each Funding Beneficiary and each Funding 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, the applicable
Funding Beneficiary, the applicable Funding 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, each Funding Beneficiary and each Funding 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 each Funding Beneficiary 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, any Funding Beneficiary or any Funding
Security Trustee.
(b) This Agreement shall terminate automatically at such time as each
Funding Beneficiary has no further interest in the Trust Property
and all Intercompany Loans have been fully repaid or each Funding
Beneficiary's obligations under all Intercompany Loan Agreements
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, the applicable Funding 2 Priority
31
of Payments and/or the applicable Mortgages Trustee Priority of
Payments, 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, Funding 2 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, the
Funding 2 Deed of Charge and/or the Mortgages Trust Deed, as
applicable. 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 any Funding Beneficiary and/or the Mortgages
Trustee 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 each Funding
Beneficiary 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 Bank Accounts, the Funding Bank Accounts
or the Funding 2 Bank Accounts or any replacement or additional bank
account of the Mortgages Trustee or any Funding Beneficiary.
14.2 No recourse:
(a) In relation to all sums due and payable by the Mortgages Trustee
and/or each Funding Beneficiary 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 and/or each
Funding Beneficiary pursuant to the provisions of the Transaction
Documents, in each case subject to the Mortgages Trustee Priority of
Payments, the Funding Priority of Payments and the Funding 2
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
32
any receiver appointed pursuant to the Funding Deed of Charge in
respect of such amounts.
(c) For the avoidance of doubt, the Funding 2 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 2, as the case may be, or any receiver appointed
pursuant to the Funding 2 Deed of Charge in respect of such amounts.
(d) 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.
(e) Notwithstanding any other provisions of this Agreement, all
obligations to, and rights of, the Funding 2 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 2 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, each Funding
Beneficiary and each Funding 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);
33
(e) to the extent that the recipient needs to disclose the same for
determining the existence of, or declaring, an Event of Default, an
Intercompany Loan Event of Default or a Cash Manager Termination
Event, the protection or enforcement of any of its rights under any
of the Transaction Documents or in connection herewith or therewith
or for the purpose of discharging, in such manner as it thinks fit,
its duties under or in connection with such agreements in each case
to such persons as require to be informed of such information for
such purposes; or
(f) in relation to any information disclosed to the professional
advisers of the recipient or (in connection with a prospective
rating of any debt to be issued by any Issuer) to any credit rating
agency or any prospective new cash manager or prospective new
security trustee.
16. No Partnership
It is hereby acknowledged and agreed by the parties that nothing in this
Agreement shall be construed as giving rise to any partnership between
any of the parties.
17. Assignment
17.1 Assignment by the Mortgages Trustee, Funding and Funding 2: Neither the
Mortgages Trustee nor any Funding Beneficiary 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 Seller, the
Funding Beneficiaries and the Funding Security Trustees; and
(b) in the case of Funding, each of the Security Trustee and the Cash
Manager except that Funding may assign its rights hereunder without
such consent pursuant to the Funding Deed of Charge; and
(c) in the case of Funding 2, each of the Funding 2 Security Trustee and
the Cash Manager except that Funding 2 may assign its rights
hereunder without such consent pursuant to the Funding 2 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, the Seller, the
Funding Beneficiaries and the Funding Security Trustees.
18. The Funding Security Trustees
18.1 Vesting of Rights: 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, each Funding Beneficiary, the Funding 2 Security Trustee and
the Mortgages Trustee shall execute such documents and take such action
as the successor security trustee and the outgoing security trustee may
reasonably require for the purpose of vesting in the successor security
trustee the rights and obligations of the outgoing security trustee
34
under this Agreement and releasing the outgoing security trustee from its
future obligations under this Agreement. If there is any change in the
identity of the security trustee in accordance with the Funding 2 Deed of
Charge, the Cash Manager, the Seller, each Funding Beneficiary, the
Security Trustee and the Mortgages Trustee shall execute such documents
and take such action as the successor security trustee and the outgoing
security trustee may reasonably 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 Assumption: It is hereby acknowledged and agreed that by its execution
of this Agreement no Funding Security Trustee shall assume or have any of
the obligations or liabilities of the Seller, any Funding Beneficiary or
the Mortgages Trustee or any other Funding Security Trustee hereunder.
Furthermore, any liberty or power which may be exercised or any
determination which may be made hereunder by a Funding Security Trustee
may be exercised or made in its absolute discretion without any
obligation to give reasons therefor, but in any event must be exercised
or made in accordance with the provisions of the Funding Deed of Charge
or the Funding 2 Deed of Charge (as applicable) and the Controlling
Beneficiary Deed. Without prejudice to the generality of the foregoing,
all references to any Funding Security Trustee taking action in
connection with any duty of the Seller shall also be read subject to
Clause 25 and Schedule 4 of the Administration Agreement
19. New Intercompany Loan Agreements
On each occasion that a Funding Beneficiary enters into an Intercompany
Loan Agreement or is the recipient of a loan advance under an
Intercompany Loan Agreement, then the Administrator, the Seller, each
Funding Beneficiary, each Funding Security Trustee and the Mortgages
Trustee shall execute such documents and take such action as may be
necessary or required by the Rating Agencies for the purpose of including
the relevant Issuer, any Swap Provider, any Funding Basis Rate Swap
Provider, any Start-up Loan Provider and any other person who has
executed an Accession Undertaking or any such Intercompany Loan Agreement
in the Transaction Documents or to take account of the terms of that
Intercompany Loan Agreement or loan advance, as applicable.
20. Non Petition Covenant; Limited Recourse
20.1 Non Petition Covenant: Each of the parties hereto (other than, in the
case of Funding, the Security Trustee and, in the case of Funding 2, the
Funding 2 Security Trustee) hereby agrees that it shall not institute
against any Funding Beneficiary or the Mortgages Trustee any winding-up,
administration, insolvency or similar proceedings so long as any sum is
outstanding under any Intercompany Loan Agreement of any Issuer or for
two years plus one day since the last day on which any such sum was
outstanding.
20.2 Limited Recourse: Each of the parties hereto agrees that:
(a) in relation to the Mortgages Trustee, any amount payable by the
Mortgages Trustee to any other party to this Agreement under this
Agreement not being
35
an amount payable out of the Trust Property in accordance with the
terms of the Mortgages Trust Deed shall only be payable to the
extent that on that date the Mortgages Trustee has sufficient funds
to pay such amount out of fees paid to it under the Mortgages Trust
Deed; and
(b) in relation to Funding:
(i) only the Security Trustee may enforce the security created in
favour of the Security Trustee under the Funding Deed of Charge
in accordance with the provisions thereof;
(ii) notwithstanding any other provision of this Agreement or any
other Transaction Document, no sum due or owing to any party to
this Agreement from or by Funding under this Agreement shall be
payable by Funding except to the extent that Funding has
sufficient funds available 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 required to be
paid in priority thereto or pari passu therewith pursuant to
such Funding Priority of Payments have been paid, discharged
and/or otherwise provided for in full; and
(iii) it shall not take any steps for the purpose of recovering any
amount payable by Funding or enforcing any rights arising out
of this Agreement against Funding otherwise than in accordance
with the Funding Deed of Charge.
(c) in relation to Funding 2:
(i) only the Funding 2 Security Trustee may enforce the security
created in favour of the Funding 2 Security Trustee under the
Funding 2 Deed of Charge in accordance with the provisions
thereof;
(ii) notwithstanding any other provision of this Agreement or any
other Transaction Document, no sum due or owing to any party to
this Agreement from or by Funding 2 under this Agreement shall
be payable by Funding 2 except to the extent that Funding 2 has
sufficient funds available or (following enforcement of the
Funding 2 Security) the Funding 2 Security Trustee has realised
sufficient funds from the Funding 2 Security to pay such sum
subject to and in accordance with the relevant Funding 2
Priority of Payments and provided that all liabilities of
Funding 2 required to be paid in priority thereto or pari passu
therewith pursuant to such Funding 2 Priority of Payments have
been paid, discharged and/or otherwise provided for in full;
and
(iii) it shall not take any steps for the purpose of recovering any
amount payable by Funding 2 or enforcing any rights arising out
of this Agreement against Funding 2 otherwise than in
accordance with the Funding 2 Deed of Charge.
36
20.3 Following Enforcement: The Cash Manager hereby undertakes to each of the
other parties hereto that:
(a) 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;
and
(b) following any enforcement of the Funding 2 Security, it will hold on
trust for, and will pay to, the Funding 2 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 2 or in
respect of any amount due hereunder by Funding 2, otherwise than in
accordance with the Funding 2 Post-Enforcement Priority of Payments
in order that such monies may be applied by the Funding 2 Security
Trustee or the Receiver in accordance with the Funding 2
Post-Enforcement Priority of Payments.
20.4 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.
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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:
(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 Funding 2, to Granite Finance Funding 2 Limited at
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ (facsimile number 020
7606 0643) for the attention of the Company Secretary (with a copy
to the Seller in accordance with (a) above);
(f) in the case of the Funding 2 Security Trustee, to The Bank of New
York, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (facsimile
number 020 7964 6399) for the attention of the Global Structured
Finance (Corporate Trust);
(g) in the case of Fitch, to Fitch Ratings Ltd., at ▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number 020 7417 6262) for the
attention of European Structured Finance Surveillance;
38
(h) in the case of Moody's, to ▇▇▇▇▇'▇ Investors Services, Inc., at 1st
Floor, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile
number 020 7772 5400) for the attention of RMBS Monitoring;
(i) in the case of S&P, to Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number 020 7176 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 and the
Funding 2 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 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
39
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.
40
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 Funding 2
Transaction Account in short-term Authorised Investments as
determined by Funding 2 and, if applicable, the Funding 2 Security
Trustee;
(d) 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 Funding
Security Trustees;
(e) 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 Funding
Issuer to fund the Issuer Liquidity Reserve Fund of such Issuer;
(f) maintain the Funding 2 Principal Deficiency Ledger, and record (1)
any principal Losses on the Mortgage Loans allocated to Funding 2
pursuant to the terms of the Mortgages Trust (2) the use of Funding
2 Principal Receipts to meet any deficiency in Funding 2 Available
Revenue Receipts (3) the application of Funding 2 Available Revenue
Receipts to reduce the balances on the Funding 2 Principal
Deficiency Ledger and (5) to record the application of Funding 2
Available Principal Receipts to fund the Funding 2 Liquidity Reserve
Fund;
(g) provide the Mortgages Trustee, each Funding Beneficiary (as
applicable), each Funding Security Trustee (as applicable and upon
its request) and the Rating Agencies with (as applicable) monthly or
quarterly reports in relation to the Mortgages Trustee and each
Funding Beneficiary as set forth on Schedule 3;
(h) operate the Mortgages Trustee Bank Accounts, the Funding Bank
Accounts and the Funding 2 Bank Accounts and ensure that payments
are made into and from such accounts in accordance with this
Agreement 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 any Funding Beneficiary
to enable such payments to be made other than as expressly required
by the provisions of this Agreement;
(i) in relation to the payments to be made to each Funding Issuer, make
withdrawals under the applicable Issuer Reserve Fund, if required;
41
(j) in relation to the payments to be made to each Funding Issuer, make
any required withdrawals under the applicable Issuer Liquidity
Reserve Fund;
(k) 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;
(l) maintain any Issuer Liquidity Reserve Ledger, if any, and record the
amount credited to any Issuer Liquidity Reserve Fund from time to
time and subsequent withdrawals and deposits in respect of any
Issuer Liquidity Reserve Fund;
(m) maintain the Funding 2 Reserve Ledger and record the amount credited
to the Funding 2 Reserve Fund from time to time and subsequent
withdrawals in respect of the Funding 2 Reserve Fund;
(n) maintain the Funding 2 Liquidity Reserve Ledger, if any, and record
the amount credited to the Funding 2 Liquidity Reserve Fund from
time to time and subsequent withdrawals in respect of the Funding 2
Liquidity Reserve Fund;
(o) maintain the Funding 2 Liquidity Facility Ledger, if any, and record
the amount available in respect of the Funding 2 Liquidity Facility
from time to time and subsequent drawings and repayments in respect
of the Funding 2 Liquidity Facility;
(p) keep records for all taxation purposes (including, without
limitation VAT);
(q) subject to any applicable law, assist the auditors of the Mortgages
Trustee, Funding and Funding 2 and provide such information to them
as they may reasonably request for the purpose of carrying out their
duties as auditors;
(r) 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 each Funding
Beneficiary or required to be given by the Mortgages Trustee and
each Funding Beneficiary pursuant to the Transaction Documents;
(s) arrange for all payments due to be made by the Mortgages Trustee
and/or each Funding Beneficiary under any of the Transaction
Documents, PROVIDED THAT such monies are at the relevant time
available to the Mortgages Trustee and/or the applicable Funding
Beneficiary 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 any Funding Beneficiary
under any of the Transaction Documents;
(t) without prejudice to the role of and in conjunction with the
Corporate Services Provider to the Mortgages Trustee and each
Funding Beneficiary under the relevant Corporate Services Agreement,
keep general books of account and records of the Mortgages Trustee
and each Funding Beneficiary; provide
42
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;
(u) without prejudice to the role of and in conjunction with the
Corporate Services Provider to the Mortgages Trustee and each
Funding Beneficiary under the relevant Corporate Services Agreement,
provide or procure the provision of company secretarial and
administration services to the Mortgages Trustee and each Funding
Beneficiary 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;
(v) on behalf of the Mortgages Trustee and each Funding Beneficiary,
PROVIDED THAT such monies are at the relevant time available to the
Mortgages Trustee or the applicable Funding Beneficiary, pay all the
out-of-pocket expenses of the Mortgages Trustee and each Funding
Beneficiary, incurred by the Cash Manager on behalf of the Mortgages
Trustee and each Funding Beneficiary 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 each Funding Beneficiary ;
(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;
(w) 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;
43
(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
(x) at the request of Funding 2 (and following the enforcement of the
Funding 2 Security, with the prior written consent of the Funding 2
Security Trustee), the Cash Manager may invest monies standing from
time to time to the credit of the Funding 2 GIC Account in
Authorised Investments, subject to the following provisions:
(i) any such Authorised Investment shall be made in the joint names
of Funding 2 and the Funding 2 Security Trustee;
(ii) any costs properly and reasonably incurred in making and
changing Authorised Investments will be reimbursed to the Cash
Manager and the Funding 2 Security Trustee by Funding 2;
(iii) all income or proceeds following the disposal or maturity of
Authorised Investments shall be credited to the Funding 2 GIC
Account; and
(iv) following the enforcement of the Funding 2 Security no such
investment may be made without the prior written consent of the
Funding 2 Security Trustee.
The Funding 2 Security Trustee and the Cash Manager shall not be
responsible (save where any loss results from the Funding 2 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
(y) provide services in relation to Swap Collateral or Funding Swap
Collateral (including, without limitation, in connection with the
transfer, receipt, administration and/or holding of Swap Collateral
or Funding Swap Collateral, the making of calculations,
determinations, communications or valuations, the
44
opening and maintenance of the Funding Swap Collateral Accounts, the
Funding 2 Swap Collateral Accounts, the Funding Swap Collateral
Ledger and the Funding 2 Swap Collateral Ledger; and the entering
into of Funding Swap Collateral Ancillary Documents and Funding 2
Swap Collateral Ancillary Documents); and
(z) take such other action or provide any other Cash Management Services
as is required in the Transaction Documents.
45
SCHEDULE 2
Cash Management and Maintenance of Ledgers
1. Determination
Mortgage Trustee
(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 each of Funding,
Funding 2 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 relevant Issuer Cash
Manager of such determinations; and
(vi) the various amounts, balances and rates to be calculated in
accordance with any Swap Agreement and the Funding Basis Rate
Swap Agreement and in respect of each Swap Agreement and the
Funding Basis Rate Swap Agreement, shall promptly notify (as
applicable) each Funding Beneficiary, each Issuer, each Issuer
Cash Manager, each Issuer Security Trustee and each Calculation
Agent (as defined in each Basis Rate Swap Agreement and the
Funding Basis Rate 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
46
Interim Calculation Period (as defined in the Mortgages Trust
Deed), if any, during such immediately preceding Trust
Calculation Period;
(ii) the Funding Share, the Funding 2 Share, the Seller Share, the
Funding Share Percentage, the Funding 2 Share Percentage and
the Seller Share Percentage in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 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 or Funding 2 has made a
Contribution (excluding a Deferred Contribution) to the
Mortgages Trustee during the immediately preceding Trust
Calculation Period, the Weighted Average Funding Share
Percentage, the Weighted Average Funding 2 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
Weighted Average Funding 2 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.
Funding
(c) On each Distribution Date, in relation to the Mortgages Trustee
Revenue Receipts received from the Mortgages Trustee on such
Distribution Date which are to be distributed to Funding, 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 Funding 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
47
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
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 Funding 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:
48
(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
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 such Mortgages Trustee Available
Revenue Receipts allocated to Funding to the expenses of Funding,
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 Funding 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 Funding 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 Instalments due on such Payment
Dates;
(ii) (A) an amount which is equal to the lesser of:-
(I) the principal amount due on the Intercompany Loans of
all Group 1 Issuers equal to the Controlled
Amortisation Instalments 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
49
Subordinated Principal Test are satisfied on that
Payment Date); and
(II) an amount equal to:
Mortgages Trustee
Principal Receipts
plus any amounts
standing to the x Group 1 Share Percentage
credit of the Funding
Principal Ledger (less
any amounts applied in
paragraph (i) 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
(III) an amount equal to:
Mortgages Trustee
Principal Receipts
plus any amounts
standing to the x Group 2 Share Percentage
credit of the Funding
Principal Ledger (less
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
50
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
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 with 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
Funding 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
Funding Issuer to be applied on the following Payment Date in
accordance with 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
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the following Payment Date in accordance with the Funding
Priority of Payments.
Funding 2
(g) Prior to each Distribution Date, the Cash Manager shall determine
each of the following:
(i) whether the relevant Distribution Date is within a Cash
Accumulation Period relating to a Bullet Repayment Loan Amount
(the Cash Accumulation Period being calculated separately for
each Bullet Repayment Loan Amount); and
(ii) the Repayment Requirement of Funding 2 for the relevant
Distribution Date.
(h) No later than the Distribution Date immediately prior to each
Monthly Payment Date, the Cash Manager shall determine each of the
following:
(i) the amount of any Funding 2 Available Revenue Receipts to be
applied on the relevant Monthly Payment Date in accordance with
the Funding 2 Pre-Enforcement Revenue Priority of Payments; and
(ii) the amount of any Funding 2 Available Principal Receipts to be
applied on the following Monthly Payment Date in accordance the
Funding 2 Pre-Enforcement Principal Priority of Payments.
(i) The Cash Manager shall make all the determinations referred to in
paragraphs 1(a) to (h) 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 or the Funding 2 Principal Deficiency Ledger will not
increase; and
(iii) such other assumptions (including without limitation as to the
amount of any payments or provisions to be made in accordance
with the applicable Funding Priority of Payments and/or the
applicable Funding 2 Priority of Payments during the period
from and including the Distribution Date immediately prior to
each Monthly Payment Date to and excluding such Monthly Payment
Date) as the Cash Manager considers appropriate.
The Cash Manager shall notify the Mortgages Trustee, each Funding
Beneficiary and each Funding Security Trustee on request of any such
other assumptions and shall take account of any representations made
by the Mortgages Trustee, and (in the case of Funding) by Funding
and the Security Trustee and (in the case of Funding 2) by Funding 2
and the Funding 2 Security Trustee (as the case may be) in relation
thereto.
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(j) The Cash Manager shall:
(i) make or procure to be made all returns and filings required to
be made by each Funding Beneficiary and the Mortgages Trustee;
(ii) itself on behalf of each Funding Beneficiary and the Mortgages
Trustee, provided that such moneys are at the relevant time
available to each Funding Beneficiary and the Mortgages
Trustee, pay all out-of-pocket expenses of each Funding
Beneficiary 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.
(k) 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).
(l) 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:
(a) each determination of Principal Receipts, Revenue Receipts, Losses,
Mortgages Trustee Available Revenue Receipts, the Funding Share, the
Funding 2 Share, the Seller Share, the Funding Share Percentage, the
Funding 2 Share Percentage, the Seller Share Percentage, the
Weighted Average Funding Share Percentage, the Weighted Average
Funding 2 Share Percentage, the Weighted Average Seller Share
Percentage and the Minimum Seller Share to be notified forthwith to
the Mortgages Trustee, the Beneficiaries and each Funding Security
Trustee;
(b) 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 relevant Issuer Cash Manager; and
(c) each determination of Funding 2 Available Principal Receipts,
Funding 2 Available Revenue Receipts and the determinations made
under paragraph 1(g) to be notified forthwith to Funding 2, the
Funding 2 Security Trustee and the relevant Issuer Cash Manager.
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3. Priority of Payments for Mortgages Trustee Available Revenue Receipts
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date withdraw Cash from
the Mortgages Trustee GIC Account and/or, in the case of sums to be
provided for, retain Cash in the amounts required (to the extent that
such withdrawal does not cause the Mortgages Trustee GIC Account to
become overdrawn or, if any amounts are retained by way of provision for
the relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn). The aggregate amount
of the withdrawal shall equal the Mortgages Trustee Available Revenue
Receipts on each Distribution Date. The withdrawal shall be used to make
the payments and provisions in the order of priority set out in Clause
10.2 (Distribution of Mortgages Trustee Available Revenue Receipts) of
the Mortgages Trust Deed (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full).
4. Priority of Payments for Mortgages Trustee Principal Receipts
The Cash Manager shall (unless the intended recipient of the relevant
payment agrees otherwise) on each Distribution Date, (i) withdraw Cash
from the Mortgages Trustee GIC Account in an amount equal to the
Mortgages Trustee Principal Receipts (to the extent only that such
withdrawal does not cause the Mortgages Trustee GIC Account to become
overdrawn or, if any amounts are retained by way of provision for the
relevant liability and are thus not withdrawn, to the extent that
withdrawal of those amounts that are withdrawn would not, if such
retained amounts were also to be withdrawn, cause the balance on the
Mortgages Trustee GIC Account to become overdrawn) to make the payments
in the order of priority set out in Clause 11 of the Mortgages Trust Deed
(Distribution of Principal Receipts) and/or, (ii) until such time as the
same may be distributed in accordance with the Mortgages Trust Deed,
retain Cash in the Mortgages Trustee GIC Account in the amount of any net
credit on the Non-Flexible Overpayments Sub Ledger.
5. Priority of Payments for Funding Available Revenue Receipts
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
54
Funding Deed of Charge or until such time as there are no outstanding
Funding Secured Obligations, in making such payments and provisions in
the order of priority (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full) set
out in Part II of Schedule 3 to the Funding Deed of Charge.
7. Priority of Payments for Funding 2 Available Revenue Receipts
Funding 2 Available Revenue Receipts will be applied by the Cash Manager
on the relevant Monthly Payment Dates until enforcement of the Funding 2
Security pursuant to the Funding 2 Deed of Charge or until such time as
there are no outstanding Funding 2 Secured Obligations, in making such
payments and provisions in the order of priority set out in the Funding 2
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 1 of Schedule 3 to the Funding 2 Deed of
Charge (as the same may be amended, varied or restated from time to
time).
8. Priority of Payments for Funding 2 Available Principal Receipts
Funding 2 Available Principal will be applied by the Cash Manager on each
Monthly Payment Date until enforcement of the Funding 2 Security pursuant
to the Funding 2 Deed of Charge or until such time as there are no
outstanding Funding 2 Secured Obligations, in making such payments and
provisions in the order of priority set out in the Funding 2
Pre-Enforcement Principal 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 2 of Schedule 3 to the Funding 2 Deed of
Charge (as the same may be amended, varied or restated from time to
time).
9. 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;
55
(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 (Purchase Price), 4.5 (Purchase Price) and 5.2 (Trust
in favour of Seller) 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 9;
(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.
10. Use of Ledgers
The Cash Manager shall forthwith record monies received or payments made
by it on behalf of the Mortgages Trustee, Funding or Funding 2 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 Funding Security
Trustees (in relation to the Mortgages Trustee Ledgers) or with the
Security Trustee (in relation to the Funding Ledgers) or with the Funding
2 Security Trustee (in relation to the Funding 2 Ledgers).
Except in the case of the Funding Principal Deficiency Ledger and the
Funding 2 Principal Deficiency Ledger, a debit item shall only be made in
respect of any of the Mortgages Trustee Ledgers, Funding Ledgers and the
Funding 2 Ledgers and the
56
corresponding payment or transfer (if any) may only be made from the
applicable Mortgages Trustee Bank Account, the applicable Funding Bank
Account or the applicable Funding 2 Bank 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 and
the Funding 2 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.
11. 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.
12. Principal Ledger
The Cash Manager shall ensure that:
(a) all Principal Receipts shall be credited to the Principal Ledger;
and
(b) any payment or provision made under paragraph 4 herein shall be
debited to the Principal Ledger.
13. Losses Ledger
The Cash Manager shall ensure that all Losses shall be recorded in the
Losses Ledger.
14. Funding Share/Funding 2 Share/Seller Share Ledger
The Cash Manager shall ensure that the Current Funding Share and the
Current Funding Share Percentage of the Trust Property, the Current
Funding 2 Share and the Current Funding 2 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/Funding 2 Share/Seller Share Ledger on the Initial Closing Date and
thereafter on each Distribution Date. In addition to the foregoing, if:
(a) the Seller has assigned New Mortgage Loans to the Mortgages Trustee;
or
(b) Funding has paid a Further Contribution to the Mortgages Trustee to
increase the Funding Share of the Trust Property; or
57
(c) Funding 2 has paid an Initial Contribution or a Further Contribution
to the Mortgages Trustee to increase the Funding 2 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, the Current
Funding 2 Share and the Current Funding 2 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, the Weighted Average Funding 2 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/Funding 2 Share/Seller Share Ledger on each such Distribution Date
or Funding Contribution Date.
15. Funding Revenue Ledger
The Cash Manager shall ensure that:
(a) 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 Funding 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;
(b) any payment or provision made under paragraph 5 above shall be
debited to the Funding Revenue Ledger;
(c) the amount determined under paragraph 1(c)(i) shall be recorded on
the Revenue Expense Sub-Ledger on each Distribution Date;
(d) the amounts determined under paragraphs (1)(c)(ii) and 1(c)(iii)(A)
above shall be recorded on the Group 1 Revenue Receipts Sub-Ledger
on each Distribution Date; and
(e) the amounts determined under paragraphs 1(c)(iii) and 1(c)(iii)(B)
above shall be recorded on the Group 2 Revenue Receipts Sub-Ledger
on each Distribution Date.
16. 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:
58
(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 Reserve Fund Ledger in
accordance with the Funding Priority of Payments above; and
(c) amounts debited to an Issuer Reserve Fund Ledger in order to be
applied in accordance with the Funding Priority of Payments.
17. 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 Funding 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.
18. 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
(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 Funding
Intercompany Loan Agreements 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
59
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 Funding 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 Funding
Issuers, beginning with the earliest such Final Maturity Date
19. 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 Funding Issuer; and
(b) on each occasion on which the principal deficiency of a Funding
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.
20. 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.
(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 Notes by a Funding Issuer and on each Payment Date in order
to be applied in accordance with the Funding Priority of Payments.
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21. Funding Intercompany Loan Ledger
The Cash Manager shall ensure that all payments of interest and
repayments of principal on each of the Funding Intercompany Loans are
recorded in the Funding Intercompany Loan Ledger.
22. Funding Swap Collateral Ledger
In connection with the Funding Swap Collateral the Cash Manager shall
ensure that appropriate debits and credits are made to the Funding Swap
Collateral Ledger in accordance with Clause 4.15 (Funding Swap
Collateral)
23. Funding 2 Revenue Ledger
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Funding 2 Revenue
Ledger:
(i) all Funding 2 Revenue Receipts;
(ii) all interest received by Funding 2 in respect of the Funding
Bank Accounts;
(iii) all amounts received by Funding 2 representing income on any
of Funding 2's Authorised Investments;
(iv) any amount debited to the Funding 2 Principal Ledger under
paragraph 24(b)(ii) herein and any amount debited to the
Funding 2 Cash Accumulation Ledger under paragraph 25(b)(ii)
herein; and
(b) any payment or provision made under paragraph 7 (Priority of
Payments for Funding 2 Available Revenue Receipts) above shall be
debited to the Funding 2 Revenue Ledger.
24. Funding 2 Principal Ledger
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Funding 2 Principal
Ledger:
(i) all Funding 2 Principal Receipts (after application of Funding
2 Principal Receipts towards the Cash Accumulation
Requirement);
(ii) amounts credited to the Funding 2 Principal Deficiency Ledger
under paragraph 26(b) herein; and
(b) the following amounts shall be debited to the Funding 2 Principal
Ledger:
(i) the aggregate amount of principal repaid on the Funding 2
Intercompany Loan Agreements (excluding principal repaid from
Funding 2 Principal Receipts, credited to the Funding 2 Cash
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Accumulation Ledger) pursuant to paragraph 8 (Priority of
Payments for Funding 2 Available Principal Receipts) herein,
excluding the amount of any principal repaid which is debited
to the Funding 2 Cash Accumulation Ledger;
(ii) the aggregate amount of Funding 2 Principal Receipts (other
than Funding 2 Principal Receipts credited to the Funding 2
Cash Accumulation Ledger) used to meet any deficiency in
Funding 2 Available Revenue Receipts.
25. Funding 2 Cash Accumulation Ledger
The Cash Manager shall ensure that:
(a) the following amounts shall be credited to the Funding 2 Cash
Accumulation Ledger:
(i) all Mortgages Trustee Principal Receipts distributed to Funding
2 which constitute the Cash Accumulation Requirement;
(ii) amounts credited to the Funding 2 Principal Deficiency Ledger
under paragraph 26(b) herein; and
(b) Funding 2 Principal Receipts received by Funding 2 on any
Distribution Date are firstly, applied towards the Cash Accumulation
Requirement calculated in respect of such date;
(c) the following amounts shall be debited to the Funding 2 Cash
Accumulation Ledger:
(i) the aggregate amount of principal applied towards repayment of
each Bullet Repayment Loan Amount pursuant to paragraph 8
(Priority of Payments for Funding 2 Available Principal
Receipts) herein;
(ii) the aggregate amount of Funding 2 Principal Receipts credited
to the Funding 2 Cash Accumulation Ledger used to meet any
deficiency in Funding 2 Available Revenue Receipts.
26. Funding 2 Principal Deficiency Ledger
Without prejudice to paragraph 7 (Priority of Payments for Funding 2
Available Revenue Receipts), the Cash Manager will ensure that:
(a) the following amounts are debited to the Funding 2 Principal
Deficiency Ledger:
(i) deficiencies arising from Losses which have been allocated to
Funding 2;
(ii) any amount required to be debited to the Funding 2 Principal
Ledger (under paragraph 24(b)(ii) above) and/or any amount
required to be
62
debited to the Funding 2 Cash Accumulation Ledger (under
paragraph 25(b)(ii) above);
(iii) any amount required to be applied under paragraph 8 (Priority
of Payments for Funding 2 Available Principal Receipts) to fund
the Funding 2 Liquidity Reserve Fund (if any);
(b) there shall be credited to the Funding 2 Principal Deficiency Ledger
any amount to be credited in accordance with paragraph 7 (Priority
of Payments for Funding 2 Available Revenue Receipts);
(c) amounts to be debited to the Funding 2 Principal Deficiency Ledger
are debited in the following order:
(i) first, on the BB Principal Deficiency Sub-ledger until the
balance of that sub-ledger is equal to the aggregate
outstanding balance of all BB Loan Tranches;
(ii) second, on the BBB Principal Deficiency Sub-ledger, until the
balance of that sub-ledger is equal to the aggregate
outstanding balance of all BBB Loan Tranches;
(iii) third, on the A Principal Deficiency Sub-ledger, until the
balance of that sub-ledger is equal to the aggregate
outstanding balance of all A Loan Tranches;
(iv) fourth, on the AA Principal Deficiency Sub-ledger, until the
balance of that sub-ledger is equal to the aggregate
outstanding balance of all AA Loan Tranches; and
(v) last, on the AAA Principal Deficiency Sub-ledger, at which
point there will be an asset trigger event.
(d) amounts to be credited to the Funding 2 Principal Deficiency Ledger
are credited in the following order:
(i) first, on the AAA Principal Deficiency Sub-ledger, until the
debit balance thereon has been reduced to zero;
(ii) second, on the AA Principal Deficiency Sub-ledger, until the
debit balance thereon has been reduced to zero;
(iii) third, on the A Principal Deficiency Sub-ledger, until the
debit balance thereon has been reduced to zero;
(iv) fourth, on the BBB Principal Deficiency Sub-ledger, until the
debit balance thereon has been reduced to zero; and
(v) last, on the BB Principal Deficiency Sub-ledger, until the
debit balance thereon has been reduced to zero.
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27. Funding 2 Reserve Ledger
(a) Amounts shall be credited to the Funding 2 Reserve Ledger on any
Monthly Payment Date in accordance with the Funding 2 Priority of
Payments.
(b) Amounts shall be debited to the Funding 2 Reserve Ledger in order to
be applied to fund any applicable reserves and the payment of
expenses in connection with the issuance of notes and the making of
Loan Tranches to Funding 2 and on each Monthly Payment Date in order
to be applied in accordance with the Funding 2 Priority of Payments.
28. Funding 2 Liquidity Reserve Ledger
If a Funding 2 Liquidity Reserve Fund is required to be established, the
Cash Manager will record on such Funding 2 Liquidity Reserve Ledger:
(a) an amount funded initially from Funding 2 Available Principal
Receipts which are allocated in accordance with the Funding 2
Pre-Enforcement Principal Priority of Payments up to the amount of
the Funding 2 Liquidity Reserve Required Amount and such amount will
be deposited in the Funding 2 GIC Account;
(b) amounts credited to the relevant Funding 2 Liquidity Reserve Ledger
in accordance with the Funding 2 Priority of Payments above; and
(c) amounts debited to the Funding 2 Liquidity Reserve Ledger in order
to be applied in accordance with Funding 2 Priority of Payments.
29. Funding 2 Liquidity Facility Ledger
If a Funding 2 Liquidity Facility is required to be established, the Cash
Manager shall ensure that:
(a) all Funding 2 Liquidity Facility Drawings shall be credited to the
Funding 2 Liquidity Facility Ledger; and
(b) all Funding 2 Liquidity Facility Repayments shall be debited to the
Funding 2 Liquidity Facility Ledger.
30. Funding 2 Swap Collateral Ledger
In connection with Swap Collateral the Cash Manager shall ensure that the
appropriate debits and credits are made to the Funding 2 Swap Collateral
Ledger in accordance with Clause 4.13 (Funding 2 Swap Collateral).
31. Funding 2 Intercompany Loan Ledger
The Cash Manager shall ensure that:
(a) the followings amounts shall be credited to the Funding 2
Intercompany Loan Ledger:
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(i) the principal amount of each Loan Tranche, as and when made;
(ii) all other amounts that become due on each Loan Tranche;
in each case, such amounts being credited to a sub-ledger in respect
of the applicable Loan Tranche;
(b) all payments of interest and repayments of principal on each Loan
Tranche are debited to the Funding 2 Intercompany Loan Ledger (in
each case, such amounts being recorded to the sub-ledger of the
applicable Loan Tranche).
32. 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.
33. 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.
34. Re-Draws Ledger
The Cash Manager shall ensure that, with respect to the Flexible Mortgage
Loans:
(a) all Non-Cash Re-Draws are recorded in the Non-Cash Re-Draws Sub
Ledger; and
(b) all Cash Re-Draws are recorded in the Cash Re-Draws Sub Ledger.
65
35. 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.
36. Records
The Cash Manager shall ensure that a separate record is kept of any
amount drawn under any Issuer Reserve Fund or Issuer Liquidity Reserve
Fund.
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SCHEDULE 3A
Form of Mortgages Trustee Quarterly Report
Granite Finance Trustees Limited
Memorandum of Account
Period Ended This Quarter Prior Quarter
(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
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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 0 0
ordinary activities
before tax
Taxation
Profit/loss on 0 0
ordinary activities
after tax
Dividend 0 0
Retained profit 0 0
brought forward
Retained profit for 0 0
the 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
69
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 3C
Form of Funding 2 Quarterly Report
Granite Finance Funding 2 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 0 0
ordinary activities
before tax
Taxation
Profit/loss on 0 0
ordinary activities
after tax
Dividend 0 0
Retained profit 0 0
brought forward
Retained profit for 0 0
the year
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Granite Finance Funding 2 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
72
Granite Finance Funding 2 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
Funding 2 Principal Deficiency Ledger AAA AA A BBB BB
0
Opening PDL Balance 0 0 0 0 0
Losses this Quarter 0 0 0 0 0
PDL top up from Revenue Income 0 0 0 0 0
Closing PDL Balance 0 0 0 0 0
Subordinated Loan Outstanding
Initial Balance
Last Quarter Closing Outstanding
Accrued Interest
Repayments Made
Closing Balance
73
SCHEDULE 4
Cash Manager Representations and Warranties
The Cash Manager makes the following representations and warranties to each of
the Mortgages Trustee, Funding, Funding 2, the Security Trustee and the
Funding 2 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 by it (in its capacity as Cash
Manager) 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.
74
8. Financial Statements: The most recent financial statements of the Cash
Manager:
(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 Reg S Prospectus:
All information in the Prospectus and the Reg S Prospectus 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.
75
EXECUTION PAGE
as Cash Manager, Seller and a Beneficiary
EXECUTED for and on behalf of )
NORTHERN ROCK PLC )
by )
-------------------------
Name:
as Mortgages Trustee
EXECUTED for and on behalf of )
GRANITE FINANCE TRUSTEES LIMITED )
by )
-------------------------
Name:
as a Beneficiary
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING LIMITED )
by )
-------------------------
Name:
as a Beneficiary
EXECUTED for and on behalf of )
GRANITE FINANCE FUNDING 2 LIMITED )
by )
-------------------------
Name:
76
as Security Trustee and Funding 2 Security Trustee
EXECUTED for and on behalf of )
THE BANK OF NEW YORK )
by )
-------------------------
Name:
77