Exhibit 4.1
Dated [o] 2005
GRANITE FINANCE FUNDING 2 LIMITED
as Funding 2
GRANITE MASTER ISSUER PLC
as Master Issuer
THE BANK OF NEW YORK
as Funding 2 Security Trustee
-and -
CITIBANK, N.A.
as Agent Bank
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GLOBAL INTERCOMPANY LOAN AGREEMENT
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SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
WOOLGATE EXCHANGE
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
CONTENTS
Clause Page No.
1. Interpretation.....................................................1
2. The Facility.......................................................1
3. The Loan Tranches..................................................1
4. Purpose............................................................2
5. Limited Recourse...................................................3
6. Advance of Loan Tranches...........................................4
7. Interest...........................................................5
8. Repayment..........................................................9
9. Prepayment.........................................................9
10. Taxes.............................................................10
11. Illegality........................................................10
12. Mitigation........................................................10
13. Representations and Warranties of Funding 2.......................11
14. Covenants.........................................................13
15. Default...........................................................15
16. [Acceleration of Individual Loan Tranches.........................17
17. Default Interest and Indemnity....................................17
18. Payments..........................................................18
19. Entrenched Provisions.............................................19
20. Further Provisions................................................19
21. Redenomination....................................................21
22. Notices...........................................................21
23. Governing Law and Submission to Jurisdiction......................22
SCHEDULE 1 LOAN TRANCHE NOTICE............................................23
SCHEDULE 2 FORM OF LOAN TRANCHE SUPPLEMENT................................24
i
THIS AGREEMENT is dated [o], 2005
BETWEEN:
(1) 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 ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ as Master Issuer;
(2) GRANITE MASTER ISSUER PLC (registered number 5250668), a public
limited company incorporated under the laws of England and Wales
whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ as Funding 2;
(3) THE BANK OF NEW YORK a New York banking corporation whose London
branch address is at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in
its capacity as Funding 2 Security Trustee; and
(4) CITIBANK, N.A., acting through its office at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in its capacity as Agent Bank.
WHEREAS:
(A) From time to time, the Master Issuer will issue Notes pursuant to the
Programme.
(B) The Master Issuer has agreed that it will lend the proceeds (or, as
applicable, the sterling equivalent thereof) of any issue of Notes by
it to Funding 2.
(C) This Agreement sets out the terms and conditions with respect to
lending of the proceeds of the issue of Notes by the Master Issuer to
Funding 2.
1. Interpretation
1.1 The provisions of the Programme Master Definitions Schedule signed
for the purposes of identification by Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ and
▇▇▇▇▇ & Overy LLP on [o], 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.
2. The Facility
2.1 Subject to the terms of this Agreement, the Master Issuer agrees to
make available to Funding 2 a facility in an aggregate amount equal
to the Total Credit Commitment (the "Global Loan Facility"). On the
London Business Day prior to each Closing Date, the Master Issuer
shall offer Loan Tranches to Funding 2 under the Global Loan Facility
that correspond to each Series and Class of Notes to be issued by the
Master Issuer on the following Closing Date. Each Loan Tranche shall
be denominated in Sterling. Subject to the terms of this Agreement,
on each Closing Date Funding 2 shall accept the offer.
3. The Loan Tranches
3.1 Conditions precedent: Save as the Master Issuer and the Funding 2
Security Trustee
1
may otherwise agree, each Loan Tranche will not be available for
utilisation on a Closing Date unless:
(a) the related Series and Class of Notes has been issued by the
Master Issuer on the relevant Closing Date and the
subscription proceeds thereof have been received by or on
behalf of the Master Issuer;
(b) not later than [2.00 pm (London time)] on the relevant
Closing Date, Funding 2 and the Master Issuer have signed a
Loan Tranche Supplement (generally in the form set out in
Schedule 2 (Form of Loan Tranche Supplement)) which shall
oblige Funding 2 to borrow the whole amount stated in the
Loan Tranche Supplement on the Closing Date subject to the
terms of this Agreement;
(c) Funding 2 has confirmed in the applicable Loan Tranche
Supplement that:
(i) no Funding 2 Intercompany Loan Event of Default
has occurred and is continuing unremedied (if
capable of remedy) or unwaived or would result
from the making of such Loan Tranche;
(ii) the representations set out in Clause 13
(Representations and warranties of Funding 2) are
true on and as of the Closing Date by reference to
the facts and circumstances then existing;
(iii) there is no debit balance on the Funding 2
Principal Deficiency Ledger;
(d) Funding 2 has delivered to the Funding 2 Security Trustee a
solvency certificate in form and substance satisfactory to
the Funding 2 Security Trustee;
(e) The Master Issuer has confirmed in the applicable Loan
Tranche Supplement that:
(i) no Issuer Event of Default has occurred and is
continuing unremedied (if capable of remedy) or
unwaived or would result from the making of such
Loan Tranche; and
(ii) the aggregate amount of the Loan Tranches to be
made on such Closing Date and any Loan Tranches
outstanding on such Closing Date do not exceed the
Total Credit Commitment;
(f) each of the Rating Agencies has confirmed in writing to the
Funding 2 Security Trustee that there will not, as a result
of the Master Issuer issuing any Notes, be any reduction,
withdrawal or qualification of the then current ratings by
the Rating Agencies of any existing Notes; and
(g) all other conditions precedent specified in the applicable
Loan Tranche Supplement have been satisfied.
4. Purpose
4.1 Purpose and application of a Loan Tranche: The proceeds of each Loan
Tranche
2
may only be used by Funding 2 either:
(a) to make a Contribution (excluding a Deferred Contribution)
to the Mortgages Trustee (which shall increase the Funding 2
Share of the Trust Property); and/or
(b) to refinance the existing debt of Funding 2, including any
existing Loan Tranche; and/or
(c) to fund or partly fund or replenish the Funding 2 Reserve
Fund or make a deposit into the Funding 2 GIC Account.
4.2 Application of amounts: Without prejudice to the obligations of
Funding 2 under this Clause 4, neither the Funding 2 Security Trustee
nor any of the Funding 2 Secured Creditors shall be obliged to
concern themselves as to the application of amounts raised by Funding
2 under a Loan Tranche.
5. Limited Recourse
5.1 Recourse limited to available funds: Notwithstanding the terms of any
other provision in this Agreement or any other Transaction Document,
each of the Master Issuer and the Funding 2 Security Trustee agree
that the liability of Funding 2 in respect of its obligations to
repay principal and pay interest or any other amounts due under this
Agreement or for any breach of any other representation, warranty,
covenant or undertaking of Funding 2 under this Agreement shall be
limited to:
(a) in respect of amounts payable prior to the enforcement of
the Funding 2 Security:
(i) the amount of Funding 2 Available Revenue Receipts
in respect of interest, fees or other amounts (but
excluding principal) payable by Funding 2 to the
Master Issuer, but only to the extent of an amount
of Funding 2 Available Revenue Receipts remaining
after paying amounts of a higher order of priority
and providing for amounts payable pari passu
therewith in accordance with, and subject to, the
relevant Funding 2 Pre-Enforcement Revenue
Priority of Payments; and
(ii) the amount of Funding 2 Available Principal
Receipts in respect of principal payable by
Funding 2 to the Master Issuer, but only to the
extent of the amount of Funding 2 Available
Principal Receipts but only to the extent of an
amount of Funding 2 Available Principal Receipts
remaining after paying amounts of a higher
priority and providing for amounts pari passu
therewith, and subject to, the rules set forth in
the Funding 2 Pre-Enforcement Principal Priority
of Payments; and
(b) in respect of amounts payable following enforcement of the
Funding 2 Security, amounts received or recovered by Funding
2, the Funding 2 Security Trustee or a Receiver appointed on
behalf of the Funding 2 Security Trustee, but only to the
extent of such amount thereof as remains after paying
amounts
3
of a higher order of priority and providing for amounts
payable pari passu therewith in accordance with, and subject
to, the Funding Post-Enforcement Priority of Payments,
provided that the application of such amounts set forth in
sub-clauses (a) and (b) above to the discharge of Funding 2's
obligations under this Agreement shall be subject to the terms of the
Funding 2 Deed of Charge.
5.2 Shortfall on Final Repayment Date: On the Final Repayment Date of
this Agreement, the amount of interest and principal due and payable
under this Agreement shall be an amount equal to the sum available to
pay all outstanding interest and/or principal amounts due (including
interest and principal amounts deferred and unpaid) under this
Agreement after paying amounts of a higher order of priority in
accordance with the relevant Funding 2 Priority of Payments. To the
extent that on the Final Repayment Date of this Agreement there is a
shortfall between the amount available to Funding 2 to pay such
interest and principal under this Agreement and the amount of
interest and principal due and payable under this Agreement, the
Master Issuer agrees that Funding 2 shall not be obliged to pay that
shortfall to the Master Issuer and that any claim that the Master
Issuer may otherwise have against Funding 2 in respect of that
shortfall will be extinguished.
6. Advance of Loan Tranches
6.1 Notice to Funding 2: On the London Business Day prior to each Closing
Date, the Master Issuer shall give to Funding 2 (copied to the
Funding 2 Security Trustee) a Loan Tranche Notice (generally in the
form set out in Schedule 1 (Form of Loan Tranche Notice)) setting
out, inter alia:
(a) the amount and currency or currencies of the proposed issue
on the next London Business Day of each Series and Class of
Notes under the Programme;
(b) the Specified Currency Exchange Rate(s) at which the Master
Issuer will swap the proceeds of each Series and Class of
Notes that is not denominated in Sterling into Sterling; and
(c) the principal amount of each Loan Tranche available for
drawing under the Global Loan Facility on the next Closing
Date.
6.2 Loan Tranches correspond to Series and Classes of Notes: Each Loan
Tranche shall be identified by reference to the relevant Series and
Class of Notes that is used to fund it, as set out in each Loan
Tranche Supplement. [For instance, the Series 05-1 Class A1 Notes
shall fund the Series 05-1 AAA (Class A1) Loan Tranche.]
6.3 Loan Tranche Supplement: The Loan Tranche Supplement to be signed on
each Closing Date in accordance with Clause 3.1(b) shall record,
amongst other things, the amount of each Loan Tranche to be made on
such Closing Date, which shall correspond to the principal amount of
such Loan Tranche that is available for drawing which is notified to
Funding 2 in the applicable Loan Tranche Notice.
6.4 Single drawing of the Loan Tranche: On satisfaction of the conditions
set out in
4
Clause 3.1 (Conditions Precedent), the Master Issuer shall
make the applicable Loan Tranches available to Funding 2 on the
applicable Closing Date. The aggregate of the Loan Tranches to be
made on such Closing Date will only be available for drawing in one
amount by Funding 2 on the such Closing Date.
6.5 Issuance Fees: The Master Issuer shall, on behalf of Funding 2 and
itself, pay the fees and expenses incurred by Funding 2 and/or itself
in connection with the issuance of Notes, the making of Loan Tranches
by it to Funding 2 and the acquisition by Funding 2 of an additional
share in the Trust Property using the proceeds of such Loan Tranches.
7. Interest
7.1 Loan Tranche Interest Periods: The first Loan Tranche Interest Period
in respect of a Loan Tranche will commence on (and include) the Loan
Tranche Interest Commencement Date relating to that Loan Tranche and
end on (but exclude) the first Payment Date falling thereafter. Each
subsequent Loan Tranche Interest Period shall commence on (and
include) a Payment Date and end on (but exclude) the next following
Payment Date.
7.2 Day Count Fraction: Whenever it is necessary to compute an amount of
interest in respect of a Loan Tranche for any period (including any
Loan Tranche Interest Period), such interest shall be calculated on
the basis of [actual days elapsed in a 365 day year].
7.3 Determination of Intercompany Loan Tranche Interest Amount: In
relation to any Loan Tranche, the rate of interest payable (the "Loan
Tranche Rate of Interest") and the relevant sterling interest amount
(each an "Loan Tranche Interest Amount") in respect of such Loan
Tranche shall be determined on the basis or the provisions set out
below:
(a) On the Loan Tranche Interest Reset Date in relation to such
Loan Tranche, the Agent Bank will determine the Relevant
Screen Rate in respect of such Loan Tranche at or about
11.00 am London time.
If the Relevant Screen Rate is unavailable, the Agent Bank
will request the principal London Office of each of the
Reference Banks to provide the Agent Bank with its offered
quotation to leading Banks for Sterling Deposits of
(GBP)10,000,000 for [three months] in the London
inter-bank market as at or about 11.00 am London time on
such Loan Tranche Interest Reset Date.
The Loan Tranche Rate of Interest for such Loan Tranche for
the Loan Tranche Interest Period relating to such Loan
Tranche shall be the aggregate of:
(i) the Relevant Margin in respect of such Loan
Tranche; and
(ii) the Relevant Screen Rate in respect of such Loan
Tranche or, if the Relevant Screen Rate is
unavailable, the arithmetic mean (or, in the case
of the initial Loan Tranche Interest Determination
Date for such Loan Tranche, the linear
interpolation of the arithmetic mean) of such
5
offered quotations by the Reference Banks (rounded
upwards, if necessary, to five decimal places).
(b) If on any Loan Tranche Interest Reset Date in relation to
such Loan Tranche, the Relevant Screen Rate in respect of
such Loan Tranche is unavailable and only two or three of
the Reference Banks provide offered quotations, the Loan
Tranche Rate of Interest for such Loan Tranche for the
relevant Loan Tranche Interest Period shall be determined in
accordance with the provisions of sub-paragraph (a) above on
the basis of the offered quotations of those Reference Banks
providing such quotations.
(c) If, on any such Loan Tranche Interest Reset Date, only one
or none of the Reference Banks provides the Agent Bank with
such an offered quotation, the Agent Bank shall forthwith
consult with the Funding 2 Security Trustee for the purposes
of agreeing two banks (or, where one only of the Reference
Banks provided such a quotation, one additional bank) to
provide such a quotation or quotations to the Agent Bank
(which bank or banks are in the opinion of the Funding 2
Security Trustee suitable for such purpose) and the Loan
Tranche Rate of Interest for such Loan Tranche for the Loan
Tranche Interest Period in question shall be determined, as
aforesaid, on the basis of the offered quotations of such
banks as so agreed (or, as the case may be, the offered
quotations of such bank as so agreed and the relevant
Reference Bank).
(d) If no such bank or banks is or are so agreed or such bank or
banks as so agreed does or do not provide such a quotation
or quotations, then the Loan Tranche Rate of Interest for
such Loan Tranche for the relevant Loan Tranche Interest
Periods shall be the Loan Tranche Rate of Interest in
relation to such Loan Tranche in effect for the immediately
preceding Loan Tranche Interest Period to which
sub-paragraph (a) above shall have applied but taking
account of any change in the Relevant Margin in relation to
such Loan Tranche.
(e) There will be no minimum or maximum Loan Tranche Rate of
Interest for such Loan Tranche.
(f) The Agent Bank shall: (i) as soon as practicable on each
Loan Tranche Interest Reset Date, determine and notify the
Master Issuer, Funding 2, the Cash Manager and the Funding 2
Security Trustee of the Loan Tranche Rate of Interest
applicable to such Loan Tranche for the relevant Loan
Tranche Interest Periods and (ii) as soon as practicable on
each Loan Interest Determination Date determine and notify
the Master Issuer, Funding 2, the Cash Manager and the
Funding 2 Security Trustee of the Loan Tranche Interest
Amount payable in respect of such Loan Tranche for the
relevant Loan Tranche Interest Period.
(g) The Loan Tranche Interest Amount for such Loan Tranche shall
be determined by applying the relevant Loan Tranche Rate of
Interest to the Outstanding Principal Balance of such Loan
Tranche, multiplying the sum by the day count fraction
described in Clause 7.2 (Day Count Fraction) and rounding
the resultant figure to the nearest ▇▇▇▇▇ (half a ▇▇▇▇▇
being rounded upwards).
6
(h) If the Agent Bank does not at any time for any reason
determine the Loan Tranche Rate of Interest and the Loan
Tranche Interest Amount for any Loan Tranche in accordance
with Clause 7.2(a) to (g) above, the Funding 2 Security
Trustee shall (subject to it being indemnified to its
satisfaction) determine the Loan Tranche Rate of Interest
and Loan Tranche Interest Amount for each Loan Tranche and
any such determination shall be deemed to have been made by
the Agent Bank.
(i) All notifications, opinions, determinations, certificates,
calculations and decisions given, expressed, made or
obtained for the purposes of this Clause 7, whether by the
Agent Bank or the Funding 2 Security Trustee, shall (in the
absence of wilful default, bad faith or manifest error) be
binding on Funding 2, the Master Issuer, the Cash Manager,
the Agent Bank, the Funding 2 Security Trustee and (in such
absence as aforesaid) no liability to Funding 2 shall attach
to such Master Issuer, the Agent Bank, the Funding 2
Security Trustee or the Cash Manager in connection with the
exercise or non-exercise by them or any of them of their
powers, duties and discretions hereunder.
(j) In the event of the then Agent Bank being unwilling to act
as the Agent Bank, or resigning pursuant to the Issuer
Paying Agent and Agent Bank Agreement, the Master Issuer
shall, with the approval of the Issuer Security Trustee,
appoint a successor Agent Bank. If the Master Issuer shall
fail to appoint a successor Agent Bank, the Agent Bank shall
appoint such other bank as may be previously approved in
writing by the Issuer Security Trustee to act as the Agent
Bank. The resignation of the Agent Bank will not take effect
until a successor approved by the Issuer Security Trustee
has been appointed.
7.4 Payment on Payment Dates: Subject to Clause 5.1 (Recourse limited to
available funds), interest payable on any Loan Tranche shall be
payable on the Payment Dates specified for such Loan Tranche in the
applicable Loan Tranche Supplement.
7.5 Deferred Interest: To the extent that there are insufficient funds
available to pay interest on a Loan Tranche on any Payment Date, the
shortfall in the interest amount payable will not then fall due but
will instead be due on the following Payment Date on which sufficient
funds are available to pay such interest, and pending such payment,
will accrue interest at the rate specified for such Loan Tranche in
the applicable Loan Tranche Supplement.
7.6 Certain Fees: In addition to the interest and principal payments to
be made by Funding 2 in respect of each Loan Tranche under this
Clause 7 and Clause 8 (Repayment), respectively, on each Payment Date
(or, in respect of the payment to be made as set forth in (a) below,
on the Closing Date for each Loan Tranche) or on any other date on
which the Master Issuer notifies Funding 2, but subject to Clause 5.1
(Recourse limited to available funds), Funding 2 shall pay to the
Master Issuer for same day value to the Issuer Transaction Account a
fee for the provision of the Global Loan Facility (except that in the
case of payments due under paragraphs (c), (e), (f) and (k) below,
such payments shall be paid when due). Such fee shall be an amount or
amounts in the aggregate equal to the following:
(a) the amount equal to the Issuance Fees (other than to the
extent such Issuance Fees are specified in items (b) to (k)
below);
7
(b) the fees, costs, charges, liabilities and expenses and any
other amounts due and payable to the Note Trustee and the
Issuer Security Trustee pursuant to the Issuer Trust Deed,
the Issuer Deed of Charge or any other Transaction Document,
together with interest thereon as provided therein;
(c) the reasonable fees and expenses of any legal advisers,
accountants and auditors appointed by the Master Issuer and
properly incurred in their performance of their functions
under the Transaction Documents which have fallen due;
(d) the fees, costs and expenses due and payable to the Paying
Agents and the Agent Bank pursuant to the Issuer Paying
Agent and Agent Bank Agreement and the fees, costs and
expenses due and payable to the Transfer Agent, the
Registrar;
(e) any amounts due and payable by the Master Issuer to the
Inland Revenue in respect of the Master Issuer's liability
to United Kingdom corporation tax (insofar as payment is not
satisfied by the surrender of group relief or out of the
profits, income or gains of the Master Issuer and subject to
the terms of the Issuer Deed of Charge) or any other Taxes
payable by the Master Issuer;
(f) the fees, costs, charges, liabilities and expenses due and
payable to the Issuer Account Bank pursuant to the Issuer
Bank Account Agreement (if any);
(g) the fees, costs, charges, liabilities and expenses due and
payable to the Issuer Cash Manager pursuant to the Issuer
Cash Management Agreement;
(h) any termination payment due and payable by the Master Issuer
to an Issuer Swap Provider pursuant to an Issuer Swap
Agreement;
(i) the fees, costs, charges, liabilities and expenses due and
payable to the Issuer Corporate Services Provider pursuant
to the Issuer Corporate Services Agreement;
(j) any amounts due and payable (other than principal) by the
Master Issuer to the Start-Up Loan Provider(s) in respect of
the Master Issuer's obligations under the Start-Up Loan
Agreements; and
(k) any other amounts due or overdue by the Master Issuer to
third parties including the Rating Agencies and the amounts
paid by the Master Issuer under the Programme Agreement,
each Subscription Agreement and each Underwriting Agreement
(excluding, for these purposes, the Noteholders) other than
amounts specified in paragraphs (b) to (j) above,
together with, (i) in respect of taxable supplies made to the Master
Issuer, any amount in respect of any VAT or similar tax payable in
respect thereof against production of a valid tax invoice; and (ii)
in respect of taxable supplies made to a person other than the Master
Issuer, any amount in respect of any Irrecoverable VAT or similar tax
payable in respect thereof (against production of a copy of the
relevant tax invoice), and to be applied subject to and in accordance
with the provisions of the Issuer Pre-
8
Enforcement Revenue Priority of Payments in the Issuer Cash Management
Agreement.
7.7 Set-off: Funding 2 and each of the other parties to this Agreement
agree that the Master Issuer shall be entitled to set-off those
amounts due and payable by Funding 2 pursuant to Clause 7.6 (Certain
Fees) on the Closing Date for a Loan Tranche against the amount to be
advanced by the Master Issuer to Funding 2 under such Loan Tranche on
such Closing Date.
8. Repayment
8.1 Repayment of Loan Tranches: Subject to Clause 5.1 (Recourse limited
to available funds), each Loan Tranche shall be repaid in instalments
on the dates and in the amounts specified for such Loan Tranche in
the related Loan Tranche Supplement or as calculated pursuant to the
terms of the Funding 2 Deed of Charge and the Cash Management
Agreement (as applicable).
8.2 Loan Tranche Ratings: Unless otherwise specified for any Loan Tranche
in the applicable Loan Tranche Supplement, such Loan Tranche shall be
repaid (as to both interest and principal) in the priority according
with the Loan Tranche Rating of that Loan Tranche. The Loan Tranche
Rating for a Loan Tranche will be specified for such Loan Tranche in
the applicable Loan Tranche Supplement.
8.3 Payment subject to terms of the Issuer Deed of Charge: The terms and
conditions of Clause 7 (Interest) and this Clause 8 (Repayment) are
to be read in conjunction with the provisions of Schedule 2 to the
Issuer Deed of Charge, as the same may be amended or varied from time
to time in accordance with the provisions thereof.
9. Prepayment
9.1 Prepayment for taxation or other reasons: If:
(a) Funding 2 is required to withhold or deduct from any payment
of principal or interest in respect of any Loan Tranche any
amount for or on account of Tax; or
(b) the Master Issuer is required to withhold or deduct from any
payment of principal, interest or premium in respect of its
Notes any amount for or on account of Tax; or
(c) a Loan Tranche becomes illegal as described in Clause 11
(Illegality);
then, without prejudice to the obligations of Funding 2 under Clause
11 (Illegality) and subject to Clause 12 (Mitigation), the Master
Issuer may require Funding 2 to prepay, on any Payment Date, having
given not more than 60 days and not less than 30 days' (or such
shorter period as may be required by any relevant law in the case of
any Loan Tranche which becomes illegal pursuant to Clause 11
(Illegality)) prior written notice to Funding 2 and the Note Trustee
(or on or before the latest date permitted by the relevant law in the
case of Clause 11 (Illegality)) and while the relevant circumstances
continue, the applicable Loan Tranches without penalty or premium but
subject to Clause 17 (Default interest and indemnity), provided that
the
9
Master Issuer is able to repay the related Notes used to fund
such Loan Tranche on such Payment Date from funds received from
repayment of such Loan Tranche.
9.2 Prepayment at option of Master Issuer: The Master Issuer, at its
option, may require Funding 2 to prepay the outstanding principal
amount of a Loan Tranche (together with any accrued interest) on any
Payment Date on which the Master Issuer has decided to exercise its
option, if any, to redeem in full the Notes used to fund such Loan
Tranche. The Master Issuer shall give Funding 2 not more than 60
days' and not less than 30 days' prior written notice of the Master
Issuer's decision to exercise its option to require Funding 2 to
prepay the relevant Loan Tranche. Any prepayment by Funding 2 will be
made without penalty or premium but will be subject to Clause 17
(Default interest and indemnity).
9.3 Application of monies: The Master Issuer hereby agrees to apply any
amounts received by way of prepayment pursuant to Clause 9.1
(Prepayment for taxation or other reasons) or Clause 9.2 (Prepayment
at option of Master Issuer) in making prepayments under the relevant
Notes.
10. Taxes
10.1 No gross up: All payments by Funding 2 under this Agreement shall be
made without any deduction or withholding for or on account of, and
free and clear of, any Taxes, except to the extent that Funding 2 is
required by law to make payment subject to any Taxes.
10.2 Tax receipts: All Taxes required by law to be deducted or withheld by
Funding 2 from any amounts paid or payable under this Agreement shall
be paid by Funding when due and Funding 2 shall, within 30 days of
the payment being made, deliver to the Master Issuer evidence
satisfactory to the Master Issuer (including all relevant Tax
receipts) that the payment has been duly remitted to the appropriate
authority.
11. Illegality
If, at any time, it is unlawful for the Master Issuer to make, fund
or allow to remain outstanding a Loan Tranche made by it under this
Agreement, then the Master Issuer shall, promptly after becoming
aware of the same, deliver to Funding 2, the Funding 2 Security
Trustee and the Rating Agencies a certificate to that effect and if
the Master Issuer so requires, Funding 2 shall promptly to the extent
necessary to cure such illegality prepay such Loan Tranche subject to
and in accordance with the provisions of Clause 9.1 (Prepayment for
taxation or other reasons).
12. Mitigation
If circumstances arise in respect of the Master Issuer which would,
or would upon the giving of notice, result in:
(a) the prepayment of the Loan Tranches pursuant to Clause 11
(Illegality);
(b) a withholding or deduction from the amount to be paid by
Funding 2 on account of Taxes, pursuant to Clause 10
(Taxes),
10
then, without in any way limiting, reducing or otherwise qualifying
the obligations of Funding 2 under this Agreement, the Master Issuer
shall:
(i) promptly upon becoming aware of the circumstances, notify
the Funding 2 Security Trustee, Funding 2 and the Rating
Agencies; and
(ii) upon written request from Funding 2, take such reasonable
steps as may be practical to mitigate the effects of those
circumstances including (without limitation) the assignment
by novation of the Master Issuer's rights under this Loan
Agreement to, and assumption by novation of all the Master
Issuer's obligations under this Agreement by, another
company, which is willing to participate in the Loan
Tranches in its place and which is not subject to (a) and/or
(b) above,
provided that no such transfer or assignment and transfer by novation
of such rights and obligations may be permitted unless the Rating
Agencies confirm in writing to Funding 2 and the Funding 2 Security
Trustee that there will be no downgrading of the then current rating
of the Notes issued by the Master Issuer as a result and Funding 2
indemnifies the Master Issuer for any reasonable costs and expenses
properly incurred as a result of such transfer or assignment.
13. Representations and Warranties of Funding 2
13.1 Representations and warranties: Funding 2 makes the representations
and warranties set out in this Clause 13 to the Master Issuer and the
Funding 2 Security Trustee (as trustee for each of the Funding 2
Secured Creditors).
13.2 Status:
(a) It is a limited liability 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
(b) it has the power to own its property and assets and to carry
on its business as it is being conducted.
13.3 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 a party.
13.4 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 of Funding 2.
13.5 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 including, without limitation, borrowing pursuant to the
terms of this Agreement or granting any security contemplated by the
Transaction Documents will not:
11
(a) result in the existence or imposition of, nor oblige it to
create, any Security Interest in favour of any person (other
than the Funding 2 Security Trustee for itself and on behalf
of the other Funding 2 Secured Creditors or as otherwise
contemplated in the Transaction Documents) over all or any
of its present or future revenues or assets;
(b) conflict with any document which is binding upon it or any
of its assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial
order of any government, governmental body or court,
domestic or foreign, having jurisdiction over it.
13.6 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.
13.7 No default: No Funding 2 Intercompany Loan Event of Default is
continuing unremedied (if capable of remedy) or unwaived or would
result from the making of any Loan Tranche.
13.8 Authorisations: All governmental consents, licences and other
approvals and authorisations required or desirable 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.
13.9 Registration requirements: Except for due registration of the Funding
2 Deed of Charge under Section 395 of the Companies ▇▇▇ ▇▇▇▇, it is
not necessary that the Funding 2 Deed of Charge or this Agreement be
filed, recorded or enrolled with any authority or that, except for
registration fees payable at Companies Registry in respect of the
Funding 2 Deed of Charge, any stamp, registration or similar tax be
paid on or in respect thereof.
13.10 Ranking of security: The security conferred by the Funding 2 Deed of
Charge constitutes a first priority security interest of the type
described, and over the security assets referred to, in the Funding 2
Deed of Charge and the Funding 2 Charged Property is not subject to
any prior or pari passu Security Interests.
13.11 No other business:
(a) It has not traded or carried on any business since its date
of incorporation or engaged in any activity whatsoever that
is not incidental to or necessary in connection with any of
the activities in which the Transaction Documents provide or
envisage that it will engage; and
(b) it is not party to any material agreements other than the
Transaction Documents.
13.12 Ownership:
12
(a) Its entire issued share capital is legally and beneficially
owned and controlled by Holdings; and
(b) its shares are fully paid.
13.13 Good title as to assets: Subject to the Security Interests created
under the Funding 2 Deed of Charge, it is and will remain the
absolute beneficial owner of the Funding 2 Share and absolute legal
and beneficial owner of all other assets charged or assigned by the
Funding 2 Deed of Charge to which it is a party.
13.14 Repetition: The representations in this Clause 13 (Representations
and Warranties of Funding 2) shall survive the execution of this
Agreement and the making of each Loan Tranche under this Agreement,
and shall be repeated by Funding 2 on each Closing Date relating to
the making of each Loan Tranche by reference to the facts and
circumstances then existing.
14. Covenants
14.1 Duration: The undertakings in this Clause 14 (Covenants) shall remain
in force from the date of this Agreement for so long as any amount is
or may be outstanding under this Agreement.
14.2 Information: Funding 2 shall supply to the Funding 2 Security Trustee
and the Rating Agencies:
(a) as soon as the same are available its audited accounts for
that Financial Year; and
(b) promptly, such other information in connection with the
matters contemplated by the Transaction Documents as the
Funding 2 Security Trustee or the Rating Agencies may
reasonably request.
14.3 Notification of Default: Funding 2 shall notify the Master Issuer and
the Funding 2 Security Trustee of any Funding 2 Intercompany Loan
Event of Default (and the steps, if any, being taken to remedy it) or
any event which with the giving of notice or lapse of time or
certification would constitute the same promptly upon Funding 2
becoming aware of the occurrence of each Funding 2 Intercompany Loan
Event of Default or such other event.
14.4 Authorisations: Funding 2 shall promptly:
(a) obtain, maintain and comply with the terms of; and
(b) upon request, supply certified copies to the Master Issuer
and the Funding 2 Security Trustee of,
any authorisation required under any law or regulation to enable it
to perform its obligations under, or for the validity or
enforceability of, any Transaction Document to which it is a party.
14.5 Pari passu ranking: Funding 2 shall procure that its obligations
under the Transaction Documents do and will rank at least pari passu
with all its other present and future
13
unsecured obligations, except for obligations mandatorily preferred
by law.
14.6 Negative pledge: Funding 2 shall not create or permit to subsist any
security interest (including but not limited to any mortgage,
standard security, charge (whether legal or equitable), assignment by
way of security, pledge, lien, hypothecation or other security
interest securing any obligation of any person (including, without
limitation, any trust or arrangement having the effect of providing
security)) over or in respect of any of its assets (unless arising by
operation of law) other than as provided pursuant to the Transaction
Documents.
14.7 Disposals; Mergers and Acquisitions: Funding 2 shall not, either in a
single transaction or in a series of transactions, whether related or
not and whether voluntarily or involuntarily, sell, assign, transfer,
lease or otherwise dispose of or grant any option over all or any
part of its assets, properties or undertakings or any interest,
estate, right, title or benefit therein, other than as provided for
pursuant to the Transaction Documents. In addition to the foregoing:
(a) Funding 2 shall not enter into any amalgamation, demerger,
merger or reconstruction; and
(b) Funding 2 shall not acquire any assets or business or make
any investments other than as contemplated in the
Transaction Documents.
14.8 Lending and borrowing:
(a) Except as provided or contemplated under the Transaction
Documents, Funding 2 shall not make any loans or provide any
other form of credit to any person.
(b) Funding 2 shall not give any guarantee or indemnity to or
for the benefit of any person in respect of any obligation
of any other person or enter into any document under which
Funding assumes any liability of any other person.
(c) Funding 2 shall not incur any indebtedness in respect of any
borrowed money other than under the Transaction Documents.
14.9 Shares and dividends: Funding 2 shall not:
(a) declare or pay any dividend or make any other distribution
in respect of any of its shares other than in accordance
with the Funding 2 Deed of Charge;
(b) issue any further shares or alter any rights attaching to
its issued shares as at the date hereof; or
(c) repay or redeem any of its share capital.
14.10 Change of business:
(a) Funding 2 shall not carry on any business or engage in any
activity other than as contemplated by the Transaction
Documents or which is not incidental to or necessary in
connection with any of the activities in which the
Transaction Documents provide or envisage that Funding 2
will engage.
14
(b) Other than in respect of the Master Issuer, Funding 2 shall
not have any subsidiaries or subsidiary undertakings as
defined in the Companies ▇▇▇ ▇▇▇▇, as amended.
(c) Funding 2 shall not own any premises.
14.11 Tax: Funding 2 shall not apply to become part of any group for the
purposes of section 43 of the Value Added Tax Act 1994 (as amended)
with the Master Issuer unless required to do so by law.
14.12 United States Activities: Funding 2 will not engage in any activities
in the United States (directly or through agents), will not derive
any income from United States sources as determined under United
States income tax principles and will not hold any property if doing
so would cause it to be engaged or deemed to be engaged in a trade or
business within the United States as determined under United States
tax principles.
14.13 Funding Ledgers: Funding 2 shall maintain, or cause to be maintained,
the Funding 2 Ledgers in accordance with the Cash Management
Agreement.
14.14 Funding 2 Liquidity Reserve Fund: Funding 2 will establish the
Funding 2 Liquidity Reserve Fund and the Funding 2 Liquidity Reserve
Ledger, should the long-term, unsecured, unsubordinated and
unguaranteed debt obligations of the Seller cease to be rated at
least A3 by Moody's or A- by Fitch (unless Moody's or Fitch, as
applicable, confirms the then current ratings of the Notes of the
Master Issuer will not be adversely affected by such ratings
downgrade). Any such Funding 2 Liquidity Reserve Fund and Funding 2
Liquidity Reserve Ledger shall be established and maintained in
accordance with the provisions of the Cash Management Agreement.
15. Default
15.1 Funding 2 Intercompany Loan Events of Default: Each of the events set
out in Clause 14.2 (Non-payment) to Clause 15.8 (Ownership)
(inclusive) is a Funding 2 Intercompany Loan Event of Default
(whether or not caused by any reason whatsoever outside the control
of Funding 2 or any other person).
15.2 Non-payment: Subject to Clause 5.1 (Recourse limited to available
funds), Funding 2 does not pay on the due date or for a period of
five London Business Days after such due date any amount payable by
it under any Funding 2 Intercompany Loan Agreement at the place at
and in the currency in which it is expressed to be payable.
15.3 Breach of other obligations: Funding 2 does not comply in any
material respect with any of its obligations under the Transaction
Documents (other than those referred to in Clause 15.2 (Non-payment))
and such non-compliance, if capable of remedy, is not remedied
promptly and in any event within twenty London Business Days of
Funding 2 becoming aware of the non-compliance or receipt of a notice
from the Funding 2 Security Trustee requiring Funding 2's
non-compliance to be remedied.
15.4 Misrepresentation: A representation, warranty or statement made or
repeated in or in connection with any Transaction Document or in any
document delivered by or on behalf of Funding 2 under or in
connection with any Transaction Document is incorrect in any material
respect when made or deemed to be made or repeated.
15
15.5 Insolvency:
(a) An order is made or an effective resolution is passed for
the winding up of Funding 2 (except, in any such case, a
winding-up or dissolution for the purpose of a
reconstruction, amalgamation or merger the terms of which
have been previously approved by the Funding 2 Security
Trustee or as approved by an Extraordinary Resolution of the
holders of the Class A Notes of all Series issued by the
Master Issuer); or
(b) Except for the purposes of an amalgamation, merger or
restructuring as described in (a) above, Funding 2 ceases or
threatens to cease to carry on all or a substantial part of
its business or stops payment or threatens to stop payment
of its debts or is deemed unable to pay its debts within the
meaning of Section 123(a), (b), (c) or (d) of the Insolvency
▇▇▇ ▇▇▇▇ (as amended, modified or re-enacted) or becomes
unable to pay its debts within the meaning of Section 132(2)
of the Insolvency Act 1986 (as amended, modified or
re-enacted); or
(c) Proceedings are otherwise initiated against Funding 2 under
any applicable liquidation, insolvency, composition,
reorganisation or other similar laws (including, but not
limited to, presentation of a petition for an administration
order or the making of an application for an administration
order or the filing of documents for an administration
order) and (except in the case of presentation of a petition
for an administration order) such Proceedings are not, in
the opinion of the Funding 2 Security Trustee being disputed
in good faith with a reasonable prospect of success; or a
formal notice is given of intention to appoint an
administrator; or an administration order being granted or
an administrative receiver or other receiver, liquidator or
other similar official being appointed in relation to
Funding 2 or in relation to the whole or any substantial
part of the undertaking or assets of Funding 2; or an
encumbrancer taking possession of the whole or any
substantial part of the undertaking or assets of Funding 2;
or a distress, execution, diligence or other process being
levied or enforced upon or sued out against the whole or any
substantial part of the undertaking or assets of Funding 2
and such possession or process (as the case may be) not
being discharged or not otherwise ceasing to apply within 30
days; or Funding 2 initiating or consenting to judicial
proceedings relating to itself under applicable liquidation,
insolvency, composition, reorganisation or other similar
laws or making a conveyance or assignment for the benefit of
its creditors generally.
15.6 Unlawfulness: It is or becomes unlawful for Funding 2 to perform any
of its obligations under any Transaction Document.
15.7 The Funding 2 Deed of Charge: The Funding 2 Deed of Charge is no
longer binding on or enforceable against Funding 2 or effective to
create the security intended to be created by it.
15.8 Ownership: The entire issued share capital of Funding 2 ceases to be
legally and beneficially owned and controlled by Holdings.
15.9 Acceleration of Global Intercompany Loan: Upon the Funding 2 Security
Trustee's receipt from the Master Issuer or other party to a
Transaction Document of notice of
16
the occurrence of a Funding 2 Intercompany Loan Event of Default which
is continuing unremedied and/or has not been waived, the Funding 2
Security Trustee may by written notice to Funding 2 (a "Funding 2
Intercompany Loan Enforcement Notice") which is copied to each of the
Funding 2 Secured Creditors and the Mortgages Trustee:
(a) declare all Loan Tranches made under this Agreement to be
immediately due and payable, whereupon the same shall,
subject to Clause 15.10 (Repayment of Global Intercompany
Loan on acceleration), become so payable together with
accrued interest thereon and any other sums then owed by
Funding 2 under this Agreement; and/or
(b) declare the Loan Tranches to be due and payable on demand of
the Funding 2 Security Trustee.
15.10 Repayment of Intercompany Loans on acceleration: Upon the Funding 2
Security Trustee declaring the Loan Tranches to be immediately due
and payable pursuant to Clause 15.9 (Acceleration), the amount due
and payable in respect of shall be paid by Funding 2 without penalty
or premium but subject to Clause 17 (Default interest and indemnity).
16. Acceleration of Individual Loan Tranches
16.1 Acceleration Notice: In relation to a Loan Tranche, upon:
(a) the occurrence of any applicable date set out in the
applicable Loan Tranche Supplement;
(b) the date upon which a Trigger Event occurs;
(c) the date upon which an Issuer Enforcement Notice is served
on the Funding 2 Issuer who funded such Loan Tranche under
the Issuer Deed of Charge occurs;
(d) the date upon which a Note Acceleration Notice in relation
to the Series and Class of Notes that funded such Loan
Tranche is served on the applicable Funding 2 Issuer under
the Issuer Deed of Charge; or
(e) the occurrence of the Step-Up Date (if any) in relation to
such Loan Tranche,
then the Outstanding Principal Balance of such Loan Tranche will
become immediately due.
17. Default Interest and Indemnity
17.1 Default Loan Interest Periods: If any sum due and payable by Funding
2 under a Loan Tranche is not paid on the due date for payment in
accordance with this Agreement or if any sum due and payable by
Funding 2 under any judgment or decree of any court in connection
with this Agreement is not paid on the date of such judgment or
decree, the period beginning on such due date or, as the case may be,
the date of such judgment or decree and ending on the date upon which
the obligation of Funding 2 to pay such sum (the balance thereof for
the time being unpaid being herein
17
referred to as an "unpaid sum") is discharged shall be divided into
successive periods, each of which (other than the first) shall start
on the last day of the preceding such period and the duration of each
of which shall (except as otherwise provided in this Clause 17) be
selected by the Funding 2 Security Trustee having regard to when such
unpaid sum is likely to be paid.
17.2 Default interest: During each such period relating to an unpaid sum
as is mentioned in this Clause 17 an unpaid sum shall bear interest
at the rate per annum which the Master Issuer, acting reasonably,
determines and certifies to Funding 2 and the Funding 2 Security
Trustee, will be sufficient to enable it to pay interest and other
costs and indemnities on or in respect of any amount which the Master
Issuer does not pay as a result of Funding 2's non-payment under this
Agreement, as a result of such unpaid sum not being paid to it.
17.3 Payment of default interest: Any interest which shall have accrued
under Clause 17.2 (Default interest) in respect of an unpaid sum
shall be due and payable and shall be paid by Funding 2 at the end of
the period by reference to which it is calculated or on such other
date or dates as the Funding 2 Security Trustee may specify by
written notice to Funding 2.
17.4 Broken periods: Funding 2 shall forthwith on demand indemnify the
Master Issuer against any loss or liability that the Master Issuer
incurs as a consequence of any payment of principal being received
from any source otherwise than on a Payment Date or an overdue amount
being received otherwise than on its due date.
17.5 Funding 2's payment indemnity: Funding 2 undertakes to indemnify the
Master Issuer:
(a) against any cost, claim, loss, expense (including legal
fees) or liability together with any amount in respect of
Irrecoverable VAT thereon (other than by reason of the
negligence or wilful default by the Master Issuer) which it
may sustain or incur as a consequence of the occurrence of
any Funding 2 Intercompany Loan Event of Default or any
default by Funding 2 in the performance of any of the
obligations expressed to be assumed by it in any of the
Transaction Documents (other than by reason of negligence or
wilful default on the part of the Master Issuer or prior
breach by the Master Issuer of the terms of any of the
Transaction Documents to which it is a party); and
(b) against any other loss or liability (other than by reason of
the negligence or default of the Master Issuer or breach by
the Master Issuer of the terms of any of the Transaction
Documents to which it is a party (except where such breach
is caused by the prior breach of Funding 2) or loss of
profit) it may suffer by reason of having made a Loan
Tranche available or entering into this Agreement or
enforcing any security granted pursuant to the Funding 2
Deed of Charge.
18. Payments
18.1 Payment:
18
(a) Subject to Clause 5 (Limited Recourse), all amounts of
interest and principal to be paid to the Master Issuer under
this Agreement shall be paid in Sterling for value by
Funding 2 to the Issuer Transaction Account and the relevant
irrevocable payment instruction for such payment shall be
given by Funding 2 by no later than noon to the Issuer Cash
Manager under the Issuer Cash Management Agreement (with a
copy to the Master Issuer and the Funding 2 Security
Trustee) on the Distribution Date immediately preceding the
relevant Payment Date.
(b) On each date on which this Agreement requires any amount
other than the amounts specified in Clause 18.1(a) to be
paid by Funding 2, Funding 2 shall save as provided
otherwise herein, make the same available to the Master
Issuer by payment in Sterling in immediately available,
freely transferable, cleared funds to the Issuer Transaction
Account.
18.2 Alternative payment arrangements: If, at any time, it shall become
impracticable (by reason of any action of any governmental authority
or any change in law, exchange control regulations or any similar
event) for Funding 2 to make any payments under this Agreement in the
manner specified in Clause 18.1 (Payment), then Funding 2 shall make
such alternative arrangements for the payment direct to the Master
Issuer of amounts due under this Agreement as are acceptable to the
Funding 2 Security Trustee.
18.3 No set-off: All payments required to be made by Funding 2 under an
this Agreement shall be calculated without reference to any set-off
or counterclaim and shall be made free and clear of, and without any
deduction for or on account of, any set-off or counterclaim.
19. Entrenched Provisions
Each of Funding 2, the Master Issuer and the Funding 2 Security
Trustee acknowledge and agree that Funding 2 may from time to time
enter into new Funding 2 Intercompany Loan Agreements and that the
obligation of Funding 2 to repay the Loan Tranches made under this
Agreement will rank pari passu with the obligations of Funding 2 to
repay any such other Funding 2 Intercompany Loans. If Funding 2
intends to enter into a new Funding 2 Intercompany Loan Agreement
then the provisions of this Agreement may be varied (with the consent
of the parties to this Agreement to the extent necessary to reflect
the terms of that Funding 2 Intercompany Loan Agreement PROVIDED THAT
no variation shall be made to any of the following terms without the
prior written consent of the Funding 2 Secured Creditors and the
Rating Agencies:
(a) the Payment Dates;
(b) Clause 5 (Limited Recourse);
(c) Clause 10 (Taxes); and
(d) Clause 20.5 (Funding 2 Security Trustee).
20. Further Provisions
19
20.1 Evidence of indebtedness: In any proceeding, action or claim relating
to an a Loan Tranche a statement as to any amount due to the Master
Issuer under such Loan Tranche which is certified as being correct by
an officer of the Funding 2 Security Trustee shall, unless otherwise
provided in this Agreement, be prima facie evidence that such amount
is in fact due and payable.
20.2 Amendments and Waiver:
(a) 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.
(b) Amendments and Waiver: Subject to Clause 19 (Entrenched
Provisions), 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.
(c) 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.
20.3 Assignment: Neither the Master Issuer nor Funding 2 may assign or
transfer any of its respective rights and obligations under this
Agreement PROVIDED THAT:
(a) the Master Issuer may assign its rights, title, interest or
benefit thereunder to the Issuer Security Trustee pursuant
to the Issuer Deed of Charge;
(b) Funding 2 may assign its rights hereunder to the Funding 2
Security Trustee pursuant to the Funding 2 Deed of Charge.
20.4 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.
20.5 Funding 2 Security Trustee:
(a) The Funding 2 Security Trustee shall have no responsibility
for any of the obligations of any other party to this
Agreement (other than itself). For the avoidance of doubt,
the parties to this Agreement acknowledge that the rights
and obligations of the Funding 2 Security Trustee under this
Agreement are governed by the Funding 2 Deed of Charge.
20
(b) As between the Funding 2 Security Trustee and the parties
hereto any liberty or power which may be exercised or any
determination which may be made hereunder by the Funding 2
Security Trustee may be exercised or made in the Funding 2
Security Trustee's absolute discretion without any
obligation to give reasons therefor, but in any event must
be exercised or made in accordance with the provisions of
the Funding 2 Deed of Charge.
20.6 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.
20.7 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.
20.8 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. Redenomination
Each obligation under this Agreement which has been denominated in
sterling shall be redenominated in Euro in accordance with applicable
legislation passed by the European Monetary Union upon such
redenomination of the Sterling 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 Master Issuer, to Granite Issuer Master plc
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile
number 020 7606 0643) for the
21
attention of the Company Secretary with a copy to Northern
Rock plc, Northern ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇ (facsimile number 0191 213 2203) for the attention of
the Group Secretary;
(b) in the case of Funding 2, to Granite Finance Funding 2
Limited ▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (facsimile number 020
8409 8911) for the attention of the Company Secretary (with
a copy to Northern Rock plc, Northern ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ (facsimile number 0191 213 2203)
for the attention of the Group Secretary);
(c) in the case of 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); and
(d) in the case of Agent Bank, to Citibank, N.A., ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, (facsimile number 020 7508 3881)
for the attention of Rate Fixing,
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 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 Funding 2 Security Trustee by
the person serving the same.
23. Governing Law and Submission to Jurisdiction
23.1 Governing Law: This Agreement is governed by, and shall be construed
in accordance with, English law.
23.2 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.
23.3 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 suit, action or
proceeding 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 duly executed
on the day and year first before written.
22
SCHEDULE 1
FORM OF LOAN TRANCHE NOTICE
From: Granite Master Issuer plc (the "Master Issuer")
To: Granite Finance Funding 2 Limited ("Funding 2")
Copy: The Bank of New York (the "Funding 2 Security Trustee")
Dear Sirs,
1. We refer to the agreement between, inter alios, ourselves, the Master
Issuer and the Funding 2 Security Trustee (as from time to time
amended, varied, novated or supplemented (the "Global Intercompany
Loan Agreement")) dated [o], 2005 whereby a Global Loan Facility was
made available to Funding 2. Terms defined in the Global Intercompany
Loan Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Global Intercompany
Loan Agreement and upon the terms and subject to the conditions
contained therein, we wish to make the following Loan Tranches
available to Funding 2 on [specify Closing Date]:
o Series [o] [o] (Class [o]) Loan Tranche to be funded by the
Series [o] Class [o] Notes on the Closing Date:
(a) principal amount and currency of [o];
(b) specified Currency Exchange Rate of GBP 1.00/[o];
(c) Principal amount (in Sterling) available to be
drawn in respect of such Loan Tranche of
(GBP)[o];
[repeat for all applicable Loan Tranches]
3. The interest rate(s) applicable to each Loan Tranche will be as
follows:
o Series [o] [o] (Class [o]) Loan Tranche: [o] [Set out
relevant interest rate(s)]
[repeat for all applicable Loan Tranches]
Yours faithfully,
For and on behalf of
Granite Finance Funding Limited
23
SCHEDULE 2
FORM OF LOAN TRANCHE SUPPLEMENT
24
Dated [o]
GRANITE FINANCE FUNDING 2 LIMITED
as Funding 2
GRANITE MASTER ISSUER PLC
as Master Issuer
THE BANK OF NEW YORK
as Funding 2 Security Trustee
CITIBANK, NA
as Agent Bank
-------------------------------------------------------------------
LOAN TRANCHE SUPPLEMENT
--------------------------------------------------------------------
25
THIS LOAN TRANCHE SUPPLEMENT is dated [o] between:
(1) GRANITE FINANCE FUNDING 2 LIMITED (registered number 5249387) a
private limited liability company incorporated under the laws of
England and Wales whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ as Master Issuer;
(2) GRANITE MASTER ISSUER PLC (registered number 5250668) a public
limited company incorporated under the laws of England and Wales
whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ as Funding 2;
(3) THE BANK OF NEW YORK, whose offices are at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as the Funding 2 Security
Trustee; and
(4) CITIBANK, N.A., acting through its offices at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in its capacity as the Agent Bank.
This document constitutes the Loan Tranche Supplement relating to the Loan
Tranches described herein. Terms used herein shall be deemed to be defined as
such for the purposes of the Global Intercompany Loan Agreement entered into
between the parties hereto on [o], 2005. This Loan Tranche Supplement contains
the final terms of the Loan Tranches identified and described herein, is
supplemental to and must be read in conjunction with the Global Intercompany
Loan Agreement.
[To be repeated for each Loan Tranche funded by Notes of each class of the
same Series]
Loan Tranche: The Series [o] Class [o] Notes will fund the [identifier] Loan
Tranche which shall have thefollowing terms:
1. Borrower: Granite Finance Funding 2 Limited
2. Lender: Granite Master Issuer plc
3. (i) Loan Tranche Rating: [o]
(ii) Series Number: [o]
4. Initial Outstanding Principal [o]
Balance:
5. (i) Closing Date: [o]
(ii) Loan Tranche Interest [o]
Commencement Date:
(iii) Loan Tranche Interest Reset [o]
Dates:
6. Final Repayment Date [o]
7. Payment Dates: [o]
26
8. Initial Relevant Screen Rate: [o]
9. Relevant Margin: [o]
10. Step-Up Date [Not Applicable/The Payment Date
occurring in [specify date]]
(If not applicable, delete the
remaining parts of this sub-
paragraph)
11. Relevant Margin following Step-Up [Not Applicable/[o]]
Date:
12. Redemption/Payment Basis [Redemption at par]
[Index Linked Redemption]
[Dual Currency Redemption]
[Bullet Redemption]
[Scheduled Redemption]
[Controlled Amortisation]
[Pass-through]
13. Change of Redemption/Payment [Specify details of any provision
Basis for change of Loan Tranches into
another Redemption/Payment Basis
14. Details relating to Bullet Loan [Applicable/Not Applicable]
Tranche:
[if not applicable, delete the
remaining sub-paragraphs of this
paragraph]
(i) Bullet Repayment Loan [o]
Amount:
(ii) Bullet Redemption Date: [o]
15. Details relating to Scheduled [Applicable/Not Applicable]
Repayment Loan Tranche:
[If the Scheduled Repayment Loan
Tranche is applicable, specify the
Scheduled Repayment Dates and
Scheduled Repayment Loan
Instalments below]
[if not applicable, delete the
remaining sub-paragraphs of this
paragraph]
Scheduled Repayment Dates Scheduled Repayment Loan Instalment
[o] [o]
27
16. Details relating to Controlled [Applicable/Not Applicable]
Amortisation Loan Tranche:
[If the Controlled Amortisation
Loan Tranche is applicable,
specify the Target Balance for
each Payment Date below]
[if not applicable, delete the
remaining sub-paragraphs of this
paragraph]
Payment Date occurring in Target Balance
[o] [o]
17. Details relating to Pass-through [Applicable/Not Applicable]
Loan Tranches:
[If the Pass-through Loan Tranche
is applicable, specify the
[permitted redemption date]
following which the Pass-through
Loan Tranches will be due and
payable]
18. Other terms and special conditions: [Not Applicable/give details]
Confirmations:
Funding 2 confirms that:
(a) no Funding 2 Intercompany Loan Event of Default has occurred and is
continuing which has not been waived, or would result from the making
of such Loan Tranche;
(b) the representations and warranties set out in Clause 12
(Representations and warranties of Funding 2 are true on and as of
the Closing Date specified in this Loan Tranche Supplement by
reference to the facts and circumstances then existing; and
(c) as of the Closing Date specified in this Loan Tranche Supplement,
there is no debit balance on the Funding 2 Principal Deficiency
Ledger.
The Master Issuer confirms that:
(a) no Issuer Event of Default has occurred and is continuing which has
not been waived, or would result from the making of such Loan
Tranche;
(b) the aggregate amount of the Loan Tranches to be made on the Closing
Date specified in this Loan Tranche Supplement and any Loan Tranches
outstanding on such Closing Date do not exceed the Total Credit
Commitment.
28
EXECUTION PAGE
for Loan Tranche Supplement
Funding 2
Executed by
GRANITE FINANCE FUNDING 2
LIMITED By
as follows: ----------------------------------------------
Signed for and on its behalf by one of its duly Duly Authorised Attorney/Signatory
authorised attorneys/signatories
Name
----------------------------------------------
The Master Issuer
Executed by By
GRANITE MASTER ISSUER PLC -----------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
The Funding 2 Security Trustee
Executed by By
THE BANK OF NEW YORK ----------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
The Agent Bank
Executed by By
CITIBANK, NA ----------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
29
EXECUTION PAGE
Funding 2
Executed by By
GRANITE FINANCE FUNDING 2 LIMITED ---------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
The Master Issuer
Executed by By
GRANITE MASTER ISSUER PLC ----------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
The Funding 2 Security Trustee
Executed by By
THE BANK OF NEW YORK ---------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
The Agent Bank
Executed by By
CITIBANK, NA ----------------------------------------------
as follows: Duly Authorised Attorney/Signatory
Signed for and on its behalf by one of its duly
authorised attorneys/signatories
Name
----------------------------------------------
30
Definitions (to be incorporated into revised Master Definitions and Issuer
Definitions Schedules)
"AAA Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated AAA by S&P, Aaa by Moody's and
AAA by Fitch at their date of issue;
"AAA Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the AAA Loan Tranches;
"AA Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated AA by S&P, Aa2 by Moody's and AA
by Fitch at their date of issue;
"AA Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the AA Loan Tranches;
"A Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated A by S&P, A2 by Moody's and A by
Fitch at their date of issue;
"A Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the A Loan Tranches;
"Acceleration Notice" means, in relation to a Funding 2 Issuer, a notice
issued by the relevant Note Trustee to such Funding 2 Issuer, the relevant
Issuer Security Trustee and the Funding 2 Security Trustee which has the
effect of deeming the Series and Class of Notes specified in such notice to be
Pass-Through Notes which have passed their Step-Up Date;
"BBB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated BBB by S&P, Baa2 by Moody's and
BBB by Fitch at their date of issue;
"BBB Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the BBB Loan Tranches;
"BB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated BB by S&P, Ba2 by Moody's and BB
by Fitch at their date of issue;
"BB Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the BB Loan Tranches;
"Class" means in relation to the Notes or the Noteholders, the Class A Notes,
the Class B Notes, the Class M Notes, the Class C Notes or the Class D Notes,
as the context requires;
"Closing Date" means, in relation to a Funding 2 Issuer and a Series and Class
of Notes issued by such Funding 2 Issuer, the date on which such Series and
Class of Notes is issued to the Noteholders;
31
"Contributions" means the consideration in the form of cash provided to the
Mortgages Trustee by any Beneficiary in respect of the share of such
Beneficiary in the Trust Property under the Mortgages Trust Deed, being any of
an Initial Contribution, a Further Contribution or a Deferred Contribution;
"Current Funding 2 Share" means the amount of Trust Property beneficially
owned by Funding 2 from time to time, as determined in accordance with Clause
8 (Adjustment of Funding Share Percentage, Funding 2 Share Percentage and
Seller Share Percentage) of the Mortgages Trust Deed;
"Final Repayment Date" means, in respect of any Loan Tranche made under the
Global Intercompany Loan Agreement, the date specified as such for that Loan
Tranche in the related Loan Tranche Supplement and, in respect of the Global
Intercompany Loan Agreement, means, at any time, the latest Final Repayment
Date specified in respect of the Loan Tranches outstanding at that time;
"Funding 2 Available Principal Receipts" in respect of a Payment Date will be
calculated by the Cash Manager or otherwise on behalf of Funding 2 (or,
following enforcement of the Funding 2 Security, the Funding 2 Security
Trustee) on the Distribution Date immediately preceding that Payment Date and
will be an amount equal to the sum of:
(a) all Funding 2 Principal Receipts standing to the credit of the
Funding 2 Cash Accumulation Ledger which are to be applied on the
next Payment Date to repay a Bullet Repayment Loan Amount or to make
a payment under items (A), (B) or (C) of the Funding 2
Pre-Enforcement Principal Priority of Payments and, if such Payment
Date occurs on or after a Trigger Event, the remainder of such
receipts standing to the credit of the Funding 2 Cash Accumulation
Ledger;
(b) all other Mortgages Trustee Principal Receipts received by Funding 2
from the Mortgages Trustee during the Interest Period ending on the
relevant Payment Date standing to the credit of the Funding 2
Principal Ledger;
(c) the amounts, if any, credited to the Funding 2 Principal Deficiency
Ledger pursuant to items [(I), (L), (N),(P) (R)] of the Funding 2
Pre-Enforcement Revenue Priority of Payments;
(d) in so far as needed to make a Funding 2 Reserve Principal Payment,
any amount available to be drawn under the Funding 2 Reserve Fund
less any amounts applied or to be applied on the relevant Payment
Date in payment of interest and expenses under the Funding 2
Pre-Enforcement Revenue Priority of Payments, plus any amounts to be
credited to the Funding 2 Reserve Ledger on the relevant Payment
Date;
(e) in so far as needed to make a Funding 2 Liquidity Reserve Principal
Payment, any amount available to be drawn under the Funding 2
Liquidity Reserve Fund less any amounts applied or to be applied on
the relevant Payment Date in payment of interest and expenses under
the Funding 2 Pre-Enforcement Revenue Priority of Payments, plus any
amounts to be credited to the Funding 2 Liquidity Reserve Ledger on
that relevant Payment Date;
32
(f) in so far as needed to make a Funding 2 Liquidity Facility Principal
Payment, any amount available to be drawn under the Funding 2
Liquidity Facility less any amounts applied or to be applied on the
relevant Payment Date in payment of interest and expenses under the
Funding 2 Pre-Enforcement Revenue Priority of Payments, plus any
amounts to be repaid to the Funding 2 Liquidity Facility Provider
under item (A) of the relevant Funding 2 Pre-Enforcement Principal
Priority of Payments on that relevant Payment Date, to the extent
that such amounts are available to be drawn;
less
(g) amounts to be applied on the relevant payment date to any items [(H),
(J), (M), (O) and (Q)] of the Funding 2 Pre-Enforcement Revenue
Priority of Payments.
"Funding 2 Available Revenue Receipts" in respect of any Payment Date will be
calculated by the Cash Manager on the Distribution Date immediately preceding
such Payment Date and will be an amount equal to the sum of:
(a) all Mortgages Trustee Available Revenue Receipts distributed to
Funding 2 during the Interest Period ending on the relevant Payment
Date;
(b) other net income of Funding 2 including all amounts of interest
received on the Funding 2 GIC Account and the Funding 2 Transaction
Account, and/or all income from Funding 2's Authorized Investments,
on each Distribution Date during the Interest Period ending on such
Payment Date, in each case to be received on or prior to such Payment
Date; and
(c) amounts received from the Funding 2 Basis Rate Swap Provider under
the Funding 2 Basis Rate Swap Agreement (excluding Swap Collateral
standing to the credit of the Funding 2 Swap Collateral Accounts)
including any early termination amounts (other than such early
termination amounts applied or to be applied by Funding 2 in the
purchase of one or more replacement hedge transactions) recovered by
Funding 2 under the Funding 2 Basis Rate Swap Agreement);
(d) [(only to the extent required after making the calculation set out in
paragraph [__] to Schedule [__] of the Funding 2 Deed of Charge the
aggregate of amounts standing to the credit of the Funding 2
Principal Ledger or the Funding 2 Cash Accumulation Ledger (as
applicable) which are to be applied on the relevant payment date to
pay items (H), (J), (M), (O), and (Q) of the Funding 2
Pre-Enforcement Revenue Priority of Payments;]
(e) the amount standing to the credit of the Funding 2 Reserve Ledger,
subject to any limits or conditions on the purposes for which the
Funding 2 Reserve Fund may be utilized; and
(f) the amount standing to the credit of the Funding 2 Liquidity Reserve
Ledger, if any, subject to any limits or conditions on the purposes
for which the Funding 2 Liquidity Reserve Fund may be utilized.
(g) in so far as is needed, any amount available to be drawn under the
Funding 2 Liquidity Facility, if any, for the payment of interest and
expenses.
33
"Funding 2 Charged Property" means the property, assets and undertakings of
Funding 2 which from time to time are or are expressed to be mortgaged,
charged, assigned, pledged or otherwise encumbered to, or in favour of the
Funding 2 Security Trustee for itself and for the Funding 2 Secured Creditors
under the Funding 2 Deed of Charge or any other Funding 2 Transaction
Document;
"Funding 2 Deed of Charge" means the deed of charge entered into on or about
the Funding 2 Program Date between Funding 2, the Funding 2 Security Trustee,
the Issuer Security Trustee, Granite Master Issuer plc, the Funding 2 Basis
Rate Swap Provider, the Corporate Services Provider, the Account Bank, the
Funding 2 GIC Provider, the Mortgages Trustee and the Cash Manager and the
Schedules thereto and including each Deed of Accession or Accession
Undertaking entered into in connection therewith;
"Funding 2 GIC Account" means the account in the name of Funding 2 (sort code
30-00-59, account number [o]) held at Northern Rock, and maintained subject to
the Funding 2 Guaranteed Investment Contract and the Bank Account Agreement
and such additional or replacement accounts as may for the time being be in
place with the prior consent of the Funding 2 Security Trustee;
"Funding 2 GIC Provider" means, Northern Rock or such other person or persons
as are for the time being the GIC Provider to Funding 2 under the Funding 2
Guaranteed Investment Contract;
"Funding 2 Guaranteed Investment Contract" means the guaranteed investment
contract entered into on or about the Funding 2 Program Date between Funding
2, the Funding 2 GIC Provider, the Cash Manager and the Funding 2 Security
Trustee under which the Funding 2 GIC Provider agrees to pay Funding 2 a
guaranteed rate of interest on the balance from time to time of the Funding 2
GIC Account and shall include any additional guaranteed investment contract
entered into by Funding 2 in accordance with the Transaction Documents;
"Funding 2 Intercompany Loan" means a loan (or the aggregate of a number of
separate loans) of the net proceeds of any issue (or all issues) of Notes by a
Funding 2 Issuer, such loan(s) being advanced to Funding 2 by such Funding 2
Issuer pursuant to the terms of a Funding 2 Intercompany Loan Agreement;
"Funding 2 Intercompany Loan Agreement" means an intercompany loan agreement
entered into between Funding 2 and a Funding 2 Issuer in relation to a Funding
2 Intercompany Loan;
"Funding 2 Intercompany Loan Enforcement Notice" means an enforcement notice
served by the Funding 2 Security Trustee on Funding 2 in relation to the
enforcement of the Funding 2 Security following the occurrence of a Funding 2
Intercompany Loan Event of Default;
"Funding 2 Intercompany Loan Event of Default" means, in relation to the
Global Intercompany Loan Agreement, the occurrence of an event of default
specified as such in Clause 15 (Default) of the Global Intercompany Loan
Agreement, and in relation to any other Funding 2 Intercompany Loan Agreement,
the occurrence of an event of default specified as such in such Funding 2
Intercompany Loan Agreement;
"Funding 2 Ledgers" means the Funding 2 Principal Ledger, the Funding 2
Revenue Ledger, the Funding 2 Reserve Ledger, the Funding 2 Liquidity Reserve
Ledger (if any), the Funding
34
2 Liquidity Facility Ledger (if any), the Funding 2 Principal Deficiency
Ledger, the Funding 2 Cash Accumulation Ledger, the Funding 2 Intercompany
Loan Ledger and the Funding 2 Swap Collateral Ledger;
"Funding 2 Liquidity Facility" means a liquidity facility entered into by
Funding 2 at any time after the Funding 2 Program Date;
"Funding 2 Liquidity Facility Agreement" means any agreement entered into by
Funding 2 relating to the provision of a Funding 2 Liquidity Facility;
"Funding 2 Liquidity Facility Principal Payment" means the payments specified
as such in the Funding 2 Liquidity Facility Agreement (if any);
"Funding 2 Liquidity Facility Provider" means such person or persons for the
time being the provider of liquidity under any Funding 2 Liquidity Facility
Agreement;
"Funding 2 Liquidity Reserve Fund" means the liquidity reserve fund which
Funding 2 will be required to establish if the long term, unsecured,
unsubordinated and unguaranteed debt obligations of the Seller cease to be
rated at least A3 by Moody's or A- by Fitch (unless Moody's or Fitch, as
applicable, confirms that the then-current ratings of the Notes of any Funding
2 Issuer will not be adversely affected). The Funding 2 Liquidity Reserve
Fund, if any, will be funded to the relevant Funding 2 Liquidity Reserve
Required Amount;
"Funding 2 Liquidity Reserve Ledger" means the ledger maintained by the Cash
Manager in the name of Funding 2 pursuant to the Cash Management Agreement to
record the amount standing to the credit of the Funding 2 Liquidity Reserve
Fund from time to time;
"Funding 2 Liquidity Reserve Principal Payment" means any drawing from the
Funding 2 Liquidity Reserve Fund to help meet any deficit in Funding 2
Available Principal Receipts available for:
(a) prior to the occurrence of a Trigger Event, repayment of principal
due and payable in respect of Original Bullet Loan Tranches (which
are AAA Loan Tranches); and
(b) on or after the occurrence of a Trigger Event, repayment of principal
due and payable in respect of Original Bullet Loan Tranches (which
are AAA Loan Tranches) on their respective Final Maturity Dates,
in each case, prior to the service of a Funding 2 Intercompany Loan
Enforcement Notice;
"Funding 2 Liquidity Reserve Required Amount" means [o];
"Funding 2 Post-Enforcement Priority of Payments" means the rules and the
order of priority in which Funding 2 Available Revenue Receipts, Funding 2
Available Principal Receipts and all other monies, income, receipts and
recoveries of Funding 2 or the Funding 2 Security Trustee or any Receiver of
Funding 2 and the proceeds of enforcement of the Funding 2 Security are to be
applied following service of an Intercompany Loan Enforcement Notice or
otherwise following an enforcement of the Funding 2 Security as set out in
Part [o] of Schedule [o] (Funding 2 Priority of Payments) to the Funding 2
Deed of Charge, as the same may be amended, varied or superseded from time to
time in accordance with the terms of the Funding 2 Deed of Charge;
35
"Funding 2 Pre-Enforcement Principal Priority of Payments" means the rules and
the order of priority in which Funding 2 Available Principal Receipts will be
applied prior to the enforcement of the Funding 2 Security as set out in Part
[o] of Schedule [o] (Funding 2 Priority of Payments) to the Funding 2 Deed of
Charge, as the same may be amended, varied or superseded from time to time in
accordance with the terms of the Funding 2 Deed of Charge;
"Funding 2 Pre-Enforcement Revenue Priority of Payments" means the rules and
the order of priority in which Funding 2 Available Revenue Receipts will be
applied prior to the enforcement of the Funding 2 Security as set out in Part
[o] of Schedule [o] (Funding 2 Priority of Payments) to the Funding 2 Deed of
Charge, as the same may be amended, varied or superseded from time to time in
accordance with the terms of the Funding 2 Deed of Charge;
"Funding 2 Principal Deficiency Ledger" means the ledger maintained by the
Cash Manager in the name of Funding 2 which will be established on the Funding
2 Program Date and will be sub-divided into sub ledgers corresponding to the
AAA Loan Tranches, the AA Loan Tranches, the A Loan Tranches, the BBB Loan
Tranches and the BB Loan Tranches in order to record Losses on Mortgage Loans
allocated to Funding 2, the application of Funding 2 Available Principal
Receipts in paying interest on the Funding 2 Intercompany Loans and certain
amounts ranking in priority thereto in accordance with the Funding 2
Pre-Enforcement Revenue Priority of Payments and the application of Funding 2
Principal Receipts to fund or replenish the Funding 2 Liquidity Reserve Fund
(if any);
"Funding 2 Principal Receipts" means the Principal Receipts received by
Funding 2 from the Mortgages Trustee on each Distribution Date;
"Funding 2 Priority of Payments" means, as applicable, any of the Funding 2
Pre-Enforcement Revenue Priority of Payments, the Funding 2 Pre-Enforcement
Principal Priority of Payments or the Funding 2 Post-Enforcement Priority of
Payments;
"Funding 2 Reserve Fund" means the reserve fund established in the name of
Funding 2 on the Funding 2 Program Date in an amount up to the Funding 2
Reserve Maximum Amount, which prior to enforcement may be allocated to help
meet any deficit in Funding Available Revenue Receipts and thereby any deficit
recorded on the Funding 2 Principal Deficiency Ledgers and/or utilised to fund
expenses in connection with the issuance of Notes by Funding 2 Issuers;
"Funding 2 Reserve Principal Payment" means any drawing from the Funding 2
Reserve Fund to help meet any deficit in Funding 2 Available Principal
Receipts available for:
(a) prior to the occurrence of a Trigger Event, repayment of principal
due and payable in respect of a Bullet Loan Tranche; and
(b) on or after the occurrence of a Trigger Event, repayment of principal
due and payable in respect of Bullet Loan Tranches on their
respective Final Maturity Dates,
in each case, prior to the service of a Funding 2 Intercompany Loan
Enforcement Notice;
"Funding 2 Secured Creditors" means the Funding 2 Security Trustee (and any
Receiver of Funding 2 appointed pursuant to the Funding 2 Deed of Charge), the
Issuer Security Trustee,
36
Granite Master Issuer plc, the Corporate Services Provider in relation to
Funding 2, the Account Bank, the Funding 2 GIC Provider, the Mortgages
Trustee, the [NR] Start-up Loan Provider, the Cash Manager, the Funding 2
Basis Rate Swap Provider and each New Funding 2 Secured Creditor who accedes
to the Funding 2 Deed of Charge from time to time pursuant to a Deed of
Accession (including, for the avoidance of doubt, any new Funding 2 Issuer);
"Funding 2 Security" means the security granted by Funding 2 under or pursuant
to the Funding 2 Deed of Charge in favour of the Funding 2 Security Trustee
for the benefit of the Funding 2 Secured Creditors or any of them including
the security granted by Funding 2 under or pursuant to any Deed of Accession;
"Funding 2 Security Trustee" means, The Bank of New York, whose principal
office is at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, or such other
persons and all other persons for the time being acting as the security
trustee or security trustees pursuant to the Funding 2 Deed of Charge;
"Funding 2 Share" means the Current Funding 2 Share;
"Further Contribution" means the consideration in the form of cash payable to
the Mortgages Trustee by any Beneficiary to increase the Funding Share, the
Funding 2 Share or, as the case may be, the Seller Share of the Trust Property
pursuant to and in accordance with the Mortgages Trust Deed but excluding any
Initial Contribution or Deferred Contribution paid by Funding or by Funding 2
to the Mortgages Trustee;
"Global Intercompany Loan Agreement" means the Funding 2 Intercompany Loan
Agreement entered into on or around the Funding 2 Programme Date between the
Issuer, Funding 2, the Funding 2 Security Trustee and the Agent Bank;
"Global Loan Facility" means the facility in an aggregate amount equal to the
Total Credit Commitment made available to Funding 2 by the Issuer pursuant to
the Global Intercompany Loan Agreement;
"Initial Contribution" the consideration in the form of cash payable by
Funding to the Mortgages Trustee in respect of the Funding Share of the Trust
Property or by Funding 2 to the Mortgages Trustee in respect of the Funding 2
Share of the Trust Property pursuant to and in accordance with the Mortgages
Trust Deed, which Contribution is to fund the payment to the Seller by the
Mortgages Trustee of (and is equal to) the Initial Purchase Price in respect
of the Initial Mortgage Portfolio or (if any is payable) any New Mortgage
Portfolio sold and assigned to the Mortgages Trustee and is to be funded from
the proceeds of an Intercompany Loan;
"Initial Relevant Screen Rate" means, in respect of a Loan Tranche, the
Initial Relevant Screen Rate for such Loan Tranche specified as such in the
applicable Loan Tranche Supplement;
"Issuance Fees" means the fees and expenses incurred by the Master Issuer and
Funding 2 (and paid by the Master Issuer under the terms of the Global
Intercompany Loan Agreement) in connection with the issuance of Notes, the
making of Loan Tranches by the Master Issuer to Funding 2 and the acquisition
by Funding 2 of an additional share of the Trust Property from the proceeds of
such Loan Tranches;
37
"Issuer Event of Default" means, in relation to a Funding 2 Issuer, the
occurrence of an event of default by such Issuer as specified in the terms and
conditions of the Notes;
"Issuer Pre-Enforcement Revenue Priority of Payments" means the rules and the
order of priority in which Issuer Available Revenue Receipts will be applied
prior to the enforcement of the Issuer Security as set out in Part [o] of
Schedule [o] (Issuer Priority of Payments) to the Issuer Deed of Charge, as
the same may be amended, varied or superseded from time to time in accordance
with the terms of the Issuer Transaction Documents;
"Issuer Swap Agreements", in respect of any Funding 2 Issuer, means the ISDA
master agreements, schedules thereto and confirmations thereunder relating to
the Issuer Swaps to be entered into on or about each Closing Date, and any
credit support annexes or other credit support documents entered into at any
time, as amended from time to time, among the Issuer, the applicable Issuer
Swap Provider and the applicable Issuer Security Trustee and/or any credit
support provider and includes any additional and/or replacement Issuer Swap
Agreement entered into by the Issuer from time to time in connection with the
Notes;
"Issuer Swap Provider" means the institutions identified in respect of each
issuer swap in the note supplement and the issuer swap agreement related to
the relevant Series and Class of Notes;
"Issuer Swaps" means the sterling-specified issuer swaps which enable a
Funding 2 Issuer to receive and pay amounts under the relevant Funding 2
Intercompany Loan Agreement in sterling and to receive and pay amounts under
the Notes issued by such Issuer not denominated in sterling in the applicable
Specified Currency;
"Issuer Transaction Account" means the account in the name of the Master
Issuer (account no. [o], sort code [o]) held with the Issuer Account Bank and
maintained subject to the terms of the Issuer Bank Account Agreement and the
Issuer Deed of Charge or any additional or replacement account as may for the
time being be in place with the prior consent of the Issuer Security Trustee;
"Loan Tranche Interest Amount" in respect of a Loan Tranche, has the meaning
given to it in Clause 7.3 (Determination of Loan Tranche Interest Amount) of
the Global Intercompany Loan Agreement;
"Loan Tranche Interest Commencement Date" means, in respect of a Loan Tranche,
the Closing Date for such Loan Tranche or such other date specified as such in
the applicable Loan Tranche Supplement;
"Loan Tranche Interest Determination Date" means, in respect of a Loan
Tranche, for any Loan Tranche Interest Period for which the applicable Loan
Tranche Rate of Interest will apply, the first day of such Loan Tranche
Interest Period;
"Loan Tranche Interest Period" means, in relation to a Loan Tranche and any
Payment Date, the period from (and including) the immediately preceding
Payment Date for such Loan Tranche (or, in respect of the first Loan Tranche
Interest Period, the Loan Tranche Interest Commencement Date) to (but
excluding) the next following (or first) Payment Date for such Loan Tranche;
38
"Loan Tranche Interest Reset Date" means, in respect of a Loan Tranche, the
dates specified as such for such Loan Tranche in the applicable Loan Tranche
Supplement;
"Loan Tranche Notice" means a document substantially in the form set out in
Schedule 1 (Form of Loan Tranche Notice) to the Global Intercompany Loan
Agreement setting out, amongst other things, the principal amount of each Loan
Tranche available for drawing on the next Closing Date;
"Loan Tranche Rate of Interest" in respect of a Loan Tranche, has the meaning
given to it in Clause 7.3 (Determination of Loan Tranche Interest Amount) of
the Global Intercompany Loan Agreement;
"Loan Tranche Rating" means the designated rating assigned to a Loan Tranche
which corresponds to the rating of the series and class of notes when first
issued to provide funds for that loan tranche so that, for example, any AAA
loan tranche has a loan tranche rating of "AAA" to reflect the ratings of
AAA/Aaa/AAA then assigned to the corresponding series and class of notes;
"Loan Tranches" means the AAA loan tranches, the AA loan tranches, the A loan
tranches, the BBB loan tranches and the BB loan tranches, being the advances
made by a Funding 2 Issuer to Funding 2, pursuant to the Funding 2
Intercompany Loan Agreement between such Issuer and Funding 2, each being
funded from proceeds received by such Issuer from the issue of a Series and
Class of Notes;
"Loan Tranche Supplement" means, in relation to any Loan Tranche, means the
document between, amongst others, Funding 2 and applicable Funding 2 Issuer
substantially in the form set out in Schedule [__] (Form of Loan Tranche
Supplement) to the Funding 2 Intercompany Loan Agreement entered into between
Funding 2 and such Funding 2 Issuer recording the principal terms of such Loan
Tranche;
"London Business Day" means a day (other than a Saturday or Sunday or public
holiday) on which banks are generally open for business in London;
"Outstanding Principal Balance" means, in relation to any Loan Tranche and as
of any date, means the unpaid principal balance of that Loan Tranche at such
date;
"Pass-Through Notes" means, in relation to a Funding 2 Issuer, any Series and
Class of Notes issued by such Issuer which has no specified redemption date
other than the Final Maturity Date. If a date specified in relation to a
Series and Class of Bullet Redemption Notes, Scheduled Redemption Notes or
Controlled Amortisation Notes in the applicable Note Supplement occurs or a
Trigger Event occurs or the [Issuer] Security in respect of such Funding 2
Issuer is enforced or a Note Acceleration Notice is served in respect of such
Series and Class of Notes or a Step-Up Date (if any) in relation to such
Series and Class of Notes occurs, then that Series and Class of Notes issued
by such Funding 2 Issuer will be deemed to be Pass-Through Notes;
"Programme" means the Mortgage Backed Note programme established by, or
otherwise contemplated in the Programme Agreement and the Issuer Trust Deed;
"Programme Limit" has the meaning given to it in the Issuer Trust Deed;
"Reference Banks" means [__];
39
"Relevant Margin" means, in respect of a Loan Tranche, the Relevant Margin for
such Loan Tranche specified as such in the applicable Loan Tranche Supplement;
"Relevant Screen Rate" means, in respect of a Loan Tranche:
(a) for the first Loan Tranche Interest Period, the Initial Relevant
Screen Rate; and
(b) in respect of subsequent Loan Tranche Interest Periods, the
arithmetic mean of offered quotations for three month Sterling
deposits in the London inter-bank market displayed on the Dow
▇▇▇▇▇/Telerate Monitor at Telerate Page No. 3750.
"Specified Currency Exchange Rate" means, in relation to a Series and Class of
Notes, the exchange rate specified in the Issuer Swap Agreement relating to
such Series and Class of Notes or, if the Issuer Swap Agreement has been
terminated, the applicable spot rate;
"Subscription Agreement" means an agreement supplemental to the Programme
Agreement (by whatever name called) in or substantially in the form set out in
Schedule [__] of the Programme Agreement or in such other form as may be
agreed between the [Issuer] and the Lead Arrangers or one or more Dealers (as
the case may be);
"Total Credit Commitment" means an amount equal to the Programme Limit from
time to time;
"Underwriting Agreement" means an underwriting agreement relating to the sale
of a Series or Class of US Notes among the Master Issuer and the underwriters
designated therein;
40