Exhibit 10.4
Dated [o]
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GRANITE FINANCE FUNDING LIMITED
as Funding
NORTHERN ROCK PLC
as Current Issuer Start-Up Loan Provider
- and -
THE BANK OF NEW YORK
as Security Trustee
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ISSUER 04-1 START-UP LOAN AGREEMENT
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SIDLEY ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TELEPHONE ▇▇▇ ▇▇▇▇ ▇▇▇▇
FACSIMILE 020 7626 7937
CONTENTS
1. Definitions and Interpretation..........................................1
2. The Advance.............................................................1
3. Interest................................................................2
4. Repayment...............................................................2
5. Acceleration............................................................3
6. Payments and limited recourse...........................................3
7. Subordination and Security..............................................3
8. Notices.................................................................5
9. Taxes...................................................................5
10. Remedies and Waivers....................................................6
11. Assignments and Transfer................................................6
12. Alternative Payment Arrangements........................................6
13. Security Trustee as a Party.............................................6
14. No Partnership..........................................................7
15. Variation...............................................................7
16. Execution in Counterparts; Severability.................................7
17. Third Party Rights......................................................7
18. Governing Law and Jurisdiction; Process Agents; Appropriate Forum.......7
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES 8
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THIS ISSUER 04-1 START-UP LOAN AGREEMENT is made on [o]
BETWEEN:
(1) GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
limited company incorporated under the laws of Jersey but acting out of
its branch office established in England (registered overseas company
number FC022999 and branch number BR005916) at ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ as Funding;
(2) NORTHERN ROCK PLC (registered number 3273685), a public limited company
incorporated under the laws of England and Wales whose registered
office is at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇
in its capacity as Current Issuer Start-Up Loan Provider; and
(3) THE BANK OF NEW YORK, whose principal office is at ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ in its capacity as Security Trustee.
IT IS HEREBY AGREED as follows:
1. Definitions and Interpretation
1.1 The provisions of:
(a) the Master Definitions Schedule as amended and restated by (and
appearing in Appendix 1 to) the Master Definitions Schedule
Seventh Amendment and Restatement Deed made on [o] between, among
others, the Seller, Funding and the Mortgages Trustee, and
(b) the Issuer Master Definitions Schedule signed for the purposes of
identification by Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇ on
[o],
(as the same have been and may be amended, varied or supplemented
from time to time with the consent of the parties hereto) are
expressly and specifically incorporated into and shall apply to this
Agreement. The Issuer Master Definitions Schedule specified above
shall prevail to the extent that it conflicts with the Master
Definitions Schedule.
2. The Advance
The Current Issuer Start-Up Loan Provider grants to Funding
simultaneously with the issue by the Current Issuer of the Current
Issuer Notes (and upon the simultaneous issuance by the Current Issuer
to Funding of the Current Issuer Intercompany Loan) and upon the terms
and subject to the conditions hereof, a loan in an aggregate amount of
(pound)[o] ([o]) (the "Advance") on the Closing Date for the purposes
of providing for the partial funding of the Issuer Reserve Fund and
providing for Funding's costs and expenses in respect of the increase
of the Funding Share of the Trust Property and in respect of amounts
payable to the Current Issuer by Funding as fees under the Current
Issuer Intercompany Loan. The Advance shall be paid into the Funding
Transaction Account.
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3. Interest
3.1 The Advance and any interest capitalised pursuant to Clause 3.4 will
bear interest in accordance with Clause 3.3 at a rate of LIBOR for
three-month sterling deposits plus 0.90 % per annum from (and
including) the Closing Date until the Advance and all accrued interest
thereon is repaid in full. Prior to the service of an Intercompany Loan
Enforcement Notice, Funding shall pay interest on the Advance on each
Payment Date if, and only to the extent that, there are Funding
Available Revenue Receipts available therefor after making the payments
and provisions referred to in the Funding Pre-Enforcement Revenue
Priority of Payments.
3.2 Subject to Clauses 6.2 and 6.3, interest on the Advance and any
interest capitalised pursuant to Clause 3.4 will be payable by Funding
in arrear on each Payment Date in accordance with the Funding Priority
of Payments.
3.3 Interest shall be calculated by reference to any Interest Period on the
basis of the actual number of days elapsed and a 365 day year (or, in
the case of a leap year, a 366 day year).
3.4 Any interest accrued in respect of an Interest Period but not paid on
the Payment Date relating thereto shall be capitalised forthwith.
4. Repayment
4.1 Prior to the service of an Intercompany Loan Enforcement Notice,
Funding shall repay principal of the Advance (including any interest
capitalised pursuant to Clause 3.4) on each Payment Date if, and only
to the extent that, there are Funding Available Revenue Receipts
available therefor after making the payments and provisions referred to
in the Funding Pre-Enforcement Revenue Priority of Payments.
4.2 The Cash Manager is responsible, pursuant to the Cash Management
Agreement, for determining the amount of Funding Available Revenue
Receipts as at any Payment Date and each determination so made shall
(in the absence of negligence, wilful default, bad faith or manifest
error) be final and binding on the Current Issuer Start-Up Loan
Provider.
4.3 Subject to Clauses 5, 6.2, 6.3 and 7, on any Payment Date on which all
the Intercompany Loans have been repaid in full, Funding shall
immediately repay the Advance (including any interest capitalised
pursuant to Clause 3.4) and pay any accrued interest.
4.4 The Current Issuer Start-Up Loan Provider hereby acknowledges that
Funding has entered into Previous Start-Up Loan Agreements with
Previous Start-Up Loan Providers and that from time to time Funding may
enter into New Start-Up Loan Agreements with New Start-Up Loan
Providers and that the obligation of Funding to repay the Current
Issuer Start-Up Loan, any other existing Start-Up Loans and any New
Start-Up Loan will rank pari passu and will be paid pro rata between
themselves. The Current Issuer Start-Up Loan Provider further
acknowledges that the Funding Pre-Enforcement Revenue Priority of
Payments and the Funding Post-Enforcement Priority of Payments set out
in the Funding Deed of Charge, respectively, will be amended to reflect
the entry by Funding into New Start-Up Loan
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Agreements and related agreements from time to time and agrees to
execute such documents as are necessary or required by the Rating
Agencies for the purpose of including the New Start-Up Loan Provider
(and any other relevant party) in the Transaction Documents to effect
those amendments.
5. Acceleration
If an Intercompany Loan Enforcement Notice is served, the Advance
(including any interest capitalised pursuant to Clause 3.4) and accrued
interest shall, subject to the Funding Deed of Charge, become
immediately due and payable.
6. Payments and limited recourse
6.1 All payments to be made hereunder by Funding shall be made in sterling
in immediately available cleared funds to the Current Issuer Start-Up
Loan Provider's account as specified in writing to Funding for this
purpose. If any sum falls due hereunder otherwise than on a London
Business Day, it shall be paid on the next succeeding London Business
Day.
6.2 Prior to service of an Intercompany Loan Enforcement Notice or
repayment in full of all the Intercompany Loans, amounts of interest,
principal and any other amounts due hereunder shall be paid only in
accordance with Clauses 3.1, 4.1 and 7.1, respectively, and the
provisions of the Funding Deed of Charge.
6.3 If, upon the Advance becoming due and payable pursuant to Clauses 4.3
or 5, Funding has insufficient funds available to meet its obligations
hereunder in full on such date then:
(a) Funding shall utilise its funds on such date to the extent
available in making payments to the Current Issuer Start-Up Loan
Provider to repay the Advance (including any interest capitalised
pursuant to Clause 3.4) and accrued interest thereon; and
(b) the obligations of Funding to pay the shortfall together with any
amounts falling due and payable thereafter shall on any day be
limited to the available funds actually received by Funding from
time to time subsequent to such date, together with the proceeds
of the enforcement of the security, paid to the Current Issuer
Start-Up Loan Provider pursuant to Clause 8 (Upon Enforcement) of
the Funding Deed of Charge,
provided that the Current Issuer Start-Up Loan Provider shall not
release Funding from Funding's obligation to pay the remaining amount
that would have been due under this Agreement had this Clause 6.3 not
applied.
7. Subordination and Security
7.1 The parties hereby agree that repayments in respect of the Advance
shall be subordinated to, inter alia, payments of principal and
interest on the Current Issuer Intercompany Loan and all other payments
or provisions ranking in priority to payments to be made to the Current
Issuer Start-Up Loan Provider under this
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Agreement in accordance with the Funding Priority of Payments and the
Funding Deed of Charge.
7.2 The Current Issuer Start-Up Loan Provider further agrees that, without
prejudice to Clause 8 (Upon Enforcement) of the Funding Deed of Charge,
its rights against Funding under this Agreement are limited to the
extent that Funding has sufficient assets to meet the Current Issuer
Start-Up Loan Provider's claim or any part thereof having taken into
account all other liabilities, both actual and contingent, of Funding
which pursuant to the Funding Deed of Charge rank pari passu with or in
priority to its liabilities to the Current Issuer Start-Up Loan
Provider under this Agreement and so that Funding shall not be obliged
to make any payment to the Current Issuer Start-Up Loan Provider
hereunder if and to the extent that the making of such payment would
cause Funding to be or become unable to pay its debts within the
meaning of Section 123 of the Insolvency ▇▇▇ ▇▇▇▇. However, if there
are Funding Available Revenue Receipts available but Funding does not
repay the Advance (including any interest capitalised pursuant to
Clause 3.4) and/or interest thereon when due (to the extent of such
available Funding Available Revenue Receipts), such non-repayment will
constitute an event of default under this Current Issuer Start-Up Loan
Agreement.
7.3 Funding undertakes that its obligations to the Current Issuer Start-Up
Loan Provider hereunder shall at all times be secured by the Funding
Deed of Charge.
7.4 The Current Issuer Start-Up Loan Provider hereby undertakes to be bound
by the terms of the Funding Deed of Charge and the Cash Management
Agreement and in particular agrees that on enforcement of the security
created by the Funding Deed of Charge, all amounts of principal,
interest and any other amounts due hereunder shall rank in the order of
priority set out in the Funding Post-Enforcement Priority of Payments.
7.5 The Current Issuer Start-Up Loan Provider further covenants that,
except as permitted under the Funding Deed of Charge, it will not set
off or claim to set off the Advance or any interest thereon or any part
thereof against any liability owed by it to Funding.
7.6 The Current Issuer Start-Up Loan Provider undertakes that it will not,
for so long as any sum is outstanding under any Intercompany Loan
Agreement of any Issuer or for two years plus one day since the last
day on which any such sum was outstanding take any corporate action or
other steps or legal proceedings for the winding up, dissolution or
reorganisation or for the appointment of a receiver, administrator,
administrative receiver, trustee, liquidator, sequestrator or similar
officer of Funding or of any or all of the revenues and assets of
Funding nor participate in any ex parte proceedings nor seek to enforce
any judgment against Funding, except as permitted under the provisions
of the Funding Deed of Charge.
7.7 The Current Issuer Start-Up Loan Provider acknowledges hereby that it
is not entitled, other than by virtue of Section 208 of the Income and
Corporation Taxes Act 1988 ("ICTA"), to any exemption from Tax in
respect of any interest payable to it under this Agreement.
7.8 The Current Issuer Start-Up Loan Provider further represents that,
pursuant to Section 212 of ICTA, any interest payable to it under this
Agreement is paid to it within the charge to UK corporation tax.
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7.9 The Current Issuer Start-Up Loan Provider further represents that it is
an institution which is a bank for the purposes of Section 840A of
ICTA.
7.10 Each party to this Agreement other than the Security Trustee hereby
makes the representations and warranties to each of the other parties
to this Agreement that are specified in Schedule 1 hereto.
8. Notices
Any notices to be given pursuant to this Agreement or to any of the
parties hereto shall be sufficiently served if sent by prepaid first
class post or by facsimile transmission and shall be deemed to be
given (in the case of facsimile transmission) when despatched, (where
delivered by hand) on the day of delivery if delivered before 17.00
hours on a Business Day or on the next Business Day if delivered
thereafter or (in the case of first class post) when it would be
received in the ordinary course of the post and shall be sent:
(a) in the case of Funding, to Granite Finance Funding Limited, ▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (facsimile number 020 7073 7874)
for the attention of the Company Secretary with a copy to Northern
Rock plc, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ Facsimile: 0191 213 2203 for the attention of the Group
Secretary;
(b) in the case of the Current Issuer Start-Up Loan Provider, to
Northern Rock plc, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇ Facsimile: 0191 213 2203 for the attention of the
Group Secretary; and
(c) in the case of the Security Trustee, to The Bank of New York
(London Branch), ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(facsimile 020 7964 6399) for the attention of Corporate Trust
Administration,
or to such other address or facsimile number as may from time to time
be notified by any party to the other by written notice in accordance
with the provisions of this Clause 8.
9. Taxes
9.1 All payments to be made by Funding to the Current Issuer Start-Up Loan
Provider hereunder shall be made free and clear of and without
deduction for or on account of Tax unless Funding is required by law to
make such a payment subject to the deduction or withholding of Tax, in
which case Funding shall promptly upon becoming aware thereof notify
the Current Issuer Start-Up Loan Provider of such obligation, and shall
make such payments subject to such deduction or withholding of Tax
which it is required to make.
9.2 If Funding makes any payment hereunder in respect of which it is
required to make any deduction or withholding, it shall pay the full
amount required to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under
applicable law and shall deliver to the Current Issuer Start-Up Loan
Provider, within thirty days after such payment falls due to the
applicable authority,
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any original receipt (or a certified copy thereof) issued by such
authority evidencing such payment.
10. Remedies and Waivers
No failure by the Current Issuer Start-Up Loan Provider to exercise,
nor any delay by the Current Issuer Start-Up Loan Provider in
exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies provided by law.
11. Assignments and Transfer
11.1 Funding (other than in respect of any assignment by way of security
pursuant to the Funding Deed of Charge) may not assign and/or transfer
any of its rights and/or obligations under this Agreement. The Current
Issuer Start-Up Loan Provider may not assign and/or transfer its rights
under this Agreement without obtaining the prior written consent of
Funding, provided that such consent may only be given if such
assignment and/or transfer is by way of security, or, if such
assignment and/or transfer is to a person within the charge to United
Kingdom corporation tax as regards any interest received by it under
this Agreement. Any such assignee or transferee must agree to be bound
by the provisions contained in the Funding Deed of Charge as if it were
named as an original party thereto in place of the Current Issuer
Start-Up Loan Provider.
11.2 If there is any change in the identity of the Security Trustee pursuant
to the terms of the Funding Deed of Charge, the Current Issuer Start-Up
Loan Provider and Funding shall execute such documents and take such
actions as the new security trustee and the outgoing security trustee
(as the case may be) may reasonably require for the purpose of vesting
in the new security trustee the rights and obligations of the outgoing
security trustee and releasing the outgoing security trustee (as the
case may be) from its future obligations under this Agreement.
12. Alternative Payment Arrangements
If at any time it shall become impracticable for Funding to make any
payments hereunder in the manner specified in Clause 6.1, then Funding
may agree with the Current Issuer Start-Up Loan Provider and the
Security Trustee alternative arrangements for such payments to be made.
13. Security Trustee as a Party
The Security Trustee has agreed to become a party to this Agreement for
the better preservation and enforcement of its rights under this
Agreement and the Security Trustee shall assume no obligations or
liabilities whatsoever to the Current Issuer Start-Up Loan Provider or
to Funding. Furthermore, any liberty or power which may be exercised or
any determination which may be made hereunder by the Security Trustee
may be exercised or made in the Security Trustee's absolute discretion
without any obligation to give reasons therefor, but in any event must
be exercised or made in accordance with the provisions of the Funding
Deed of Charge.
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14. No Partnership
Nothing in this Agreement (or in any of the arrangements contemplated
hereby) shall, or shall be deemed to, constitute a partnership amongst
the parties hereto.
15. Variation
No variation of this Agreement shall be effective unless it is in
writing and signed by or on behalf of each of the parties hereto.
16. Execution in Counterparts; Severability
16.1 This Agreement may be executed in any number of counterparts (manually
or by facsimile) and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and
the same instrument.
16.2 Where any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations
under this Agreement, or of such provision or obligation in any other
jurisdiction, shall not be affected or impaired thereby.
17. Third Party Rights
A person who is not a party to this Agreement may not enforce any of
its terms under the Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇, but
this shall not affect any right or remedy of a third party which exists
or is available apart from that Act.
18. Governing Law and Jurisdiction; Process Agents; Appropriate Forum
18.1 Governing Law: This Agreement is governed by, and shall be construed in
accordance with, English law.
18.2 Jurisdiction: Each of the parties hereto irrevocably agrees that the
courts of England are to have jurisdiction to settle 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
submit to the jurisdiction of such courts.
18.3 Process Agents: Funding irrevocably and unconditionally appoints
Mourant & Co. Capital (SPV) Limited at ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ or otherwise at the registered office of Mourant & Co. Capital
(SPV) Limited for the time being as its agent for service of process in
England in respect of any proceedings in respect of this Agreement and
undertakes that in the event of Mourant & Co. Capital (SPV) Limited
ceasing so to act it will appoint another person with a registered
office in London as its agent for service of process.
18.4 Appropriate Forum: Each of the parties hereto irrevocably waives any
objection which it might now or hereafter have to the courts of England
being nominated as the forum to hear and determine any Proceedings and
to settle any disputes, and agrees not to claim that any such court is
not a convenient or appropriate forum.
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SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
Each party to the Current Issuer Start-Up Loan Agreement (the "Agreement")
hereby makes the following representations and warranties to each of the other
parties to such Agreement:
1. Status: It is duly incorporated, validly existing and registered under
the laws of the jurisdiction in which it is incorporated, capable of
being sued in its own right and not subject to any immunity from any
proceedings, and it has the power to own its property and assets and to
carry on its business as it is being conducted.
2. Powers and authority: It has the power to enter into, perform and
deliver, and has taken all necessary corporate and other action to
authorise the execution, delivery and performance by it of the Agreement,
which has been duly executed and delivered by it.
3. Legal validity: The Agreement constitutes, or when executed in accordance
with its terms will constitute, its legal, valid and binding obligation.
4. Non-conflict: The execution by it of the Agreement and the exercise by it
of its rights and the performance of its obligations under the Agreement
will not:
(a) result in the existence or imposition of, nor oblige it to create,
any Security Interest in favour of any person over all or any of its
present or future revenues or assets save for any which are created
under or pursuant to the Funding Deed of Charge;
(b) conflict with any document which is binding upon it or any of its
assets;
(c) conflict with its constitutional documents; or
(d) conflict with any law, regulation or official or judicial order of
any government, governmental body or court, domestic or foreign,
having jurisdiction over it.
5. No litigation: It is not a party to any material litigation, arbitration
or administrative proceedings and, to its knowledge, no material
litigation, arbitration or administrative proceedings are pending or
threatened against it.
6. Consents and Licences: All governmental consents, licences and other
approvals and authorisations required in connection with the entry into,
performance, validity and enforceability of, the transaction contemplated
by the Agreement have been obtained or effected (as appropriate) and are
in full force and effect.
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EXECUTION PAGE
Funding
Executed by
GRANITE FINANCE FUNDING LIMITED
as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised attorneys/signatories Duly Authorised Attorney/Signatory
Name
----------------------------------------------
The Current Issuer Start-Up Loan Provider
Executed by
NORTHERN ROCK PLC
as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised attorneys/signatories Duly Authorised Attorney/Signatory
Name
----------------------------------------------
The Security Trustee
Executed by
BANK OF NEW YORK
as follows: By
Signed for and on its behalf by one of its duly ----------------------------------------------
authorised attorneys/signatories Duly Authorised Attorney/Signatory
Name
----------------------------------------------
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