ALBA 2007 – 1 plc - Irish Stock Exchange

Under the terms of the Liquidity Facility, the Liquidity Facility Amount shall be reduced on each
Payment Date falling on or after the first Payment Date on which the initial Liquidity Facility Amount
is greater than or equal to 5.75 per cent. of the then aggregate Principal Amount Outstanding of the
Notes following application of the Actual Redemption Funds on such Payment Date, to an amount
which is the greater of:
(a)
(b)
10 per cent. of the aggregate Principal Amount Outstanding of the Notes on the relevant
Payment Date; and
1 per cent. of the aggregate Principal Amount Outstanding of the Notes on the Issue Date.
No such reduction shall be permitted on a Payment Date if:
(c)
(d)
(e)
(f)
(g)
(h)
(i)
such Payment Date falls on or before the date falling two years after the Issue Date;
there is a debit balance on any of the Principal Deficiency Sub-Ledgers;
any party is in breach of any of its obligations under any Transaction Document;
any amount is then outstanding under the Liquidity Facility;
the Reserve Fund is less than the Reserve Fund Required Amount;
the aggregate value of the principal losses experienced on the Mortgage Pool (whether or not
such losses form part of the Principal Deficiency Sub-Ledgers at such time) at the immediately
preceding Calculation Date is greater than 1.25 per cent. of the aggregate Principal Amount
Outstanding of the Notes on the Issue Date; or
as at the immediately preceding Payment Date the aggregate balance of Mortgage Loans in
respect of which payment is 90 days or more in arrears is higher than 17 per cent. of the
aggregate balance of all Mortgage Loans in the Mortgage Pool.
Reserve Fund
To provide limited coverage for shortfalls in amounts under items (i) to (xvii) (inclusive) of the Pre-
Enforcement Interest Priority of Payments (the "Senior Payments"), the Issuer will establish a reserve
fund (the "Reserve Fund") in the initial amount of £9,904,000 (being approximately equal to 1.02 per
cent. of the aggregate Principal Amount Outstanding of the Notes on the Issue Date). The Reserve
Fund shall be funded on the Issue Date from the net proceeds of the Subordinated Notes.
"Reserve Fund Required Amount" means £9,904,000 (being approximately equal to 1.02 per cent. of
the aggregate Principal Amount Outstanding of the Notes on the Issue Date) provided that on each
Payment Date falling on or after the first Payment Date on which the Reserve Fund is equal to or
greater than 2.04 per cent. of the then aggregate Principal Amount Outstanding of the Notes (the
"Reserve Fund Determination Date") and provided further that:
(a)
(b)
(c)
all balances on each of the Principal Deficiency Sub-Ledgers are zero;
there is no Liquidity Drawn Amount before the Reserve Fund Determination Date;
the amount standing to the credit of the Reserve Ledger is equal to or greater than the Reserve
Fund Required Amount as of the relevant Reserve Fund Determination Date;