EXHIBIT 10.2.5


(Multicurrency -- Cross Border)


                                   ISDA(R)
                International Swap Dealers Association, Inc.

                               MASTER AGREEMENT

                        dated as of 28 January, 2004

Swiss Re Financial Products           The Bank of New York (as "Note Trustee")
Corporation ("Party A")               and Granite Mortgages 04-1 plc ("Party B")
................................and..............................................

have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.

Accordingly, the parties agree as follows: --

1.   Interpretation

(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.

2.   Obligations

(a) General Conditions.

     (i) Each party will make each payment or delivery specified in each
     Confirmation to be made by it, subject to the other provisions of this
     Agreement.

     (ii) Payments under this Agreement will be made on the due date for value
     on that date in the place of the account specified in the relevant
     Confirmation or otherwise pursuant to this Agreement, in freely
     transferable funds and in the manner customary for payments in the
     required currency. Where settlement is by delivery (that is, other than
     by payment), such delivery will be made for receipt on the due date in
     the manner customary for the relevant obligation unless otherwise
     specified in the relevant Confirmation or elsewhere in this Agreement.

     (iii) Each obligation of each party under Section 2(a)(i) is subject to
     (1) the condition precedent that no Event of Default or Potential Event
     of Default with respect to the other party has occurred and is
     continuing, (2) the condition precedent that no Early Termination Date in
     respect of the relevant Transaction has occurred or been effectively
     designated and (3) each other applicable condition precedent specified in
     this Agreement.

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(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a
reasonable objection to such change.

(c) Netting. If on any date amounts would otherwise be payable:--

     (i)  in the same currency; and

     (ii) in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.

(d) Deduction or Withholding for Tax.

     (i) Gross-Up. All payments under this Agreement will be made without any
     deduction or withholding for or on account of any Tax unless such
     deduction or withholding is required by any applicable law, as modified
     by the practice of any relevant governmental revenue authority, then in
     effect. If a party is so required to deduct or withhold, then that party
     ("X") will:--

          (1) promptly notify the other party ("Y") of such requirement;

          (2) pay to the relevant authorities the full amount required to be
          deducted or withheld (including the full amount required to be
          deducted or withheld from any additional amount paid by X to Y under
          this Section 2(d)) promptly upon the earlier of determining that
          such deduction or withholding is required or receiving notice that
          such amount has been assessed against Y;

          (3) promptly forward to Y an official receipt (or a certified copy),
          or other documentation reasonably acceptable to Y, evidencing such
          payment to such authorities; and

          (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
          the payment to which Y is otherwise entitled under this Agreement,
          such additional amount as is necessary to ensure that the net amount
          actually received by Y (free and clear of Indemnifiable Taxes,
          whether assessed against X or Y) will equal the full amount Y would
          have received had no such deduction or withholding been required.
          However, X will not be required to pay any additional amount to Y to
          the extent that it would not be required to be paid but for:--

               (A) the failure by Y to comply with or perform any agreement
               contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

               (B) the failure of a representation made by Y pursuant to
               Section 3(f) to be accurate and true unless such failure would
               not have occurred but for (I) any action taken by a taxing
               authority, or brought in a court of competent jurisdiction, on
               or after the date on which a Transaction is entered into
               (regardless of whether such action is taken or brought with
               respect to a party to this Agreement) or (II) a Change in Tax
               Law.

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     (ii) Liability. If: --

          (1) X is required by any applicable law, as modified by the practice
          of any relevant governmental revenue authority, to make any
          deduction or withholding in respect of which X would not be required
          to pay an additional amount to Y under Section 2(d)(i)(4);

          (2) X does not so deduct or withhold; and

          (3) a liability resulting from such Tax is assessed directly against
          X,

      then, except to the extent Y has satisfied or then satisfies the
      liability resulting from such Tax, Y will promptly pay to X the amount
      of such liability (including any related liability for interest, but
      including any related liability for penalties only if Y has failed to
      comply with or perform any agreement contained in Section 4(a)(i),
      4(a)(iii) or 4(d)).

(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.

3.   Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:--

(a)  Basic Representations.

     (i) Status. It is duly organised and validly existing under the laws of
     the jurisdiction of its organisation or incorporation and, if relevant
     under such laws, in good standing;

     (ii) Powers. It has the power to execute this Agreement and any other
     documentation relating to this Agreement to which it is a party, to
     deliver this Agreement and any other documentation relating to this
     Agreement that it is required by this Agreement to deliver and to perform
     its obligations under this Agreement and any obligations it has under any
     Credit Support Document to which it is a party and has taken all
     necessary action to authorise such execution, delivery and performance;

     (iii) No Violation or Conflict. Such execution, delivery and performance
     do not violate or conflict with any law applicable to it, any provision
     of its constitutional documents, any order or judgment of any court or
     other agency of government applicable to it or any of its assets or any
     contractual restriction binding on or affecting it or any of its assets;

     (iv) Consents. All governmental and other consents that are required to
     have been obtained by it with respect to this Agreement or any Credit
     Support Document to which it is a party have been obtained and are in
     full force and effect and all conditions of any such consents have been
     complied with; and

     (v) Obligations Binding. Its obligations under this Agreement and any
     Credit Support Document to which it is a party constitute its legal,
     valid and binding obligations, enforceable in accordance with their
     respective terms (subject to applicable bankruptcy, reorganisation,
     insolvency, moratorium or similar laws affecting creditors' rights
     generally and subject, as to enforceability, to equitable principles of
     general application (regardless of whether enforcement is sought in a
     proceeding in equity or at law)).


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(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.

(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.

(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.

4.   Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--

(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--

     (i) any forms, documents or certificates relating to taxation specified
     in the Schedule or any Confirmation;

     (ii) any other documents specified in the Schedule or any Confirmation;
     and

     (iii) upon reasonable demand by such other party, any form or document
     that may be required or reasonably requested in writing in order to allow
     such other party or its Credit Support Provider to make a payment under
     this Agreement or any applicable Credit Support Document without any
     deduction or withholding for or on account of any Tax or with such
     deduction or withholding at a reduced rate (so long as the completion,
     execution or submission of such form or document would not materially
     prejudice the legal or commercial position of the party in receipt of
     such demand), with any such form or document to be accurate and completed
     in a manner reasonably satisfactory to such other party and to be
     executed and to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.

(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated,


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organised, managed and controlled, or considered to have its seat, or in which
a branch or office through which it is acting for the purpose of this
Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party's execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.

5.   Events of Default and Termination Events

(a) Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--

     (i) Failure to Pay or Deliver. Failure by the party to make, when due,
     any payment under this Agreement or delivery under Section 2(a)(i) or
     2(e) required to be made by it if such failure is not remedied on or
     before the third Local Business Day after notice of such failure is given
     to the party;

     (ii) Breach of Agreement. Failure by the party to comply with or perform
     any agreement or obligation (other than an obligation to make any payment
     under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
     notice of a Termination Event or any agreement or obligation under
     Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by
     the party in accordance with this Agreement if such failure is not
     remedied on or before the thirtieth day after notice of such failure is
     given to the party;

     (iii) Credit Support Default.

          (1) Failure by the party or any Credit Support Provider of such
          party to comply with or perform any agreement or obligation to be
          complied with or performed by it in accordance with any Credit
          Support Document if such failure is continuing after any applicable
          grace period has elapsed;

          (2) the expiration or termination of such Credit Support Document or
          the failing or ceasing of such Credit Support Document to be in full
          force and effect for the purpose of this Agreement (in either case
          other than in accordance with its terms) prior to the satisfaction
          of all obligations of such party under each Transaction to which
          such Credit Support Document relates without the written consent of
          the other party; or

          (3) the party or such Credit Support Provider disaffirms, disclaims,
          repudiates or rejects, in whole or in part, or challenges the
          validity of, such Credit Support Document;

     (iv) Misrepresentation. A representation (other than a representation
     under Section 3(e) or (f)) made or repeated or deemed to have been made
     or repeated by the party or any Credit Support Provider of such party in
     this Agreement or any Credit Support Document proves to have been
     incorrect or misleading in any material respect when made or repeated or
     deemed to have been made or repeated;

     (v) Default under Specified Transaction. The party, any Credit Support
     Provider of such party or any applicable Specified Entity of such party
     (1) defaults under a Specified Transaction and, after giving effect to
     any applicable notice requirement or grace period, there occurs a
     liquidation of, an acceleration of obligations under, or an early
     termination of, that Specified Transaction, (2) defaults, after giving
     effect to any applicable notice requirement or grace period, in making
     any payment or delivery due on the last payment, delivery or exchange
     date of, or any payment on early termination of, a Specified Transaction
     (or such default continues for at least three Local Business Days if
     there is no applicable notice requirement or grace period) or (3)
     disaffirms, disclaims, repudiates or rejects, in whole or in part, a
     Specified Transaction (or such action is taken by any person or entity
     appointed or empowered to operate it or act on its behalf);

     (vi) Cross Default. If "Cross Default" is specified in the Schedule as
     applying to the party, the occurrence or existence of(1) a default, event
     of default or other similar condition or event (however


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     described) in respect of such party, any Credit Support Provider of such
     party or any applicable Specified Entity of such party under one or more
     agreements or instruments relating to Specified Indebtedness of any of
     them (individually or collectively) in an aggregate amount of not less
     than the applicable Threshold Amount (as specified in the Schedule) which
     has resulted in such Specified Indebtedness becoming, or becoming capable
     at such time of being declared, due and payable under such agreements or
     instruments, before it would otherwise have been due and payable or (2) a
     default by such party, such Credit Support Provider or such Specified
     Entity (individually or collectively) in making one or more payments on
     the due date thereof in an aggregate amount of not less than the
     applicable Threshold Amount under such agreements or instruments (after
     giving effect to any applicable notice requirement or grace period);

     (vii) Bankruptcy. The party, any Credit Support Provider of such party or
     any applicable Specified Entity of such party: --

          (1) is dissolved (other than pursuant to a consolidation,
          amalgamation or merger); (2) becomes insolvent or is unable to pay
          its debts or fails or admits in writing its inability generally to
          pay its debts as they become due; (3) makes a general assignment,
          arrangement or composition with or for the benefit of its creditors;
          (4) institutes or has instituted against it a proceeding seeking a
          judgment of insolvency or bankruptcy or any other relief under any
          bankruptcy or insolvency law or other similar law affecting
          creditors' rights, or a petition is presented for its winding-up or
          liquidation, and, in the case of any such proceeding or petition
          instituted or presented against it, such proceeding or petition (A)
          results in a judgment of insolvency or bankruptcy or the entry of an
          order for relief or the making of an order for its winding-up or
          liquidation or (B) is not dismissed, discharged, stayed or
          restrained in each case within 30 days of the institution or
          presentation thereof; (5) has a resolution passed for its
          winding-up, official management or liquidation (other than pursuant
          to a consolidation, amalgamation or merger); (6) seeks or becomes
          subject to the appointment of an administrator, provisional
          liquidator, conservator, receiver, trustee, custodian or other
          similar official for it or for all or substantially all its assets;
          (7) has a secured party take possession of all or substantially all
          its assets or has a distress, execution, attachment, sequestration
          or other legal process levied, enforced or sued on or against all or
          substantially all its assets and such secured party maintains
          possession, or any such process is not dismissed, discharged, stayed
          or restrained, in each case within 30 days thereafter; (8) causes or
          is subject to any event with respect to it which, under the
          applicable laws of any jurisdiction, has an analogous effect to any
          of the events specified in clauses (1) to (7) (inclusive); or (9)
          takes any action in furtherance of, or indicating its consent to,
          approval of, or acquiescence in, any of the foregoing acts; or

     (viii) Merger Without Assumption. The party or any Credit Support Provider
     of such party consolidates or amalgamates with, or merges with or into,
     or transfers all or substantially all its assets to, another entity and,
     at the time of such consolidation, amalgamation, merger or transfer:--

          (1) the resulting, surviving or transferee entity fails to assume
          all the obligations of such party or such Credit Support Provider
          under this Agreement or any Credit Support Document to which it or
          its predecessor was a party by operation of law or pursuant to an
          agreement reasonably satisfactory to the other party to this
          Agreement; or

          (2) the benefits of any Credit Support Document fail to extend
          (without the consent of the other party) to the performance by such
          resulting, surviving or transferee entity of its obligations under
          this Agreement.

(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event


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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--

     (i) Illegality. Due to the adoption of, or any change in, any applicable
     law after the date on which a Transaction is entered into, or due to the
     promulgation of, or any change in, the interpretation by any court,
     tribunal or regulatory authority with competent jurisdiction of any
     applicable law after such date, it becomes unlawful (other than as a
     result of a breach by the party of Section 4(b)) for such party (which
     will be the Affected Party):--

          (1) to perform any absolute or contingent obligation to make a
          payment or delivery or to receive a payment or delivery in respect
          of such Transaction or to comply with any other material provision
          of this Agreement relating to such Transaction; or

          (2) to perform, or for any Credit Support Provider of such party to
          perform, any contingent or other obligation which the party (or such
          Credit Support Provider) has under any Credit Support Document
          relating to such Transaction;

     (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
     brought in a court of competent jurisdiction, on or after the date on
     which a Transaction is entered into (regardless of whether such action is
     taken or brought with respect to a party to this Agreement) or (y) a
     Change in Tax Law, the party (which will be the Affected Party) will, or
     there is a substantial likelihood that it will, on the next succeeding
     Scheduled Payment Date (1) be required to pay to the other party an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount is required to be
     deducted or withheld for or on account of a Tax (except in respect of
     interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
     is required to be paid in respect of such Tax under Section 2(d)(i)(4)
     (other than by reason of Section 2(d)(i)(4)(A) or (B));

     (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
     succeeding Scheduled Payment Date will either (1) be required to pay an
     additional amount in respect of an Indemnifiable Tax under Section
     2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
     6(e)) or (2) receive a payment from which an amount has been deducted or
     withheld for or on account of any Indemnifiable Tax in respect of which
     the other party is not required to pay an additional amount (other than
     by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of
     a party consolidating or amalgamating with, or merging with or into, or
     transferring all or substantially all its assets to, another entity
     (which will be the Affected Party) where such action does not constitute
     an event described in Section 5(a)(viii);

     (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
     in the Schedule as applying to the party, such party ("X"), any Credit
     Support Provider of X or any applicable Specified Entity of X
     consolidates or amalgamates with, or merges with or into, or transfers
     all or substantially all its assets to, another entity and such action
     does not constitute an event described in Section 5(a)(viii) but the
     creditworthiness of the resulting, surviving or transferee entity is
     materially weaker than that of X, such Credit Support Provider or such
     Specified Entity, as the case may be, immediately prior to such action
     (and, in such event, X or its successor or transferee, as appropriate,
     will be the Affected Party); or

     (v) Additional Termination Event. If any "Additional Termination Event"
     is specified in the Schedule or any Confirmation as applying, the
     occurrence of such event (and, in such event, the Affected Party or
     Affected Parties shall be as specified for such Additional Termination
     Event in the Schedule or such Confirmation).

(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.

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6.   Early Termination

(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as
applying to a party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).

(b) Right to Terminate Following Termination Event.

     (i) Notice. If a Termination Event occurs, an Affected Party will,
     promptly upon becoming aware of it, notify the other party, specifying
     the nature of that Termination Event and each Affected Transaction and
     will also give such other information about that Termination Event as the
     other party may reasonably require.

     (ii) Transfer to Avoid Termination Event. If either an Illegality under
     Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
     Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
     Affected Party, the Affected Party will, as a condition to its right to
     designate an Early Termination Date under Section 6(b)(iv), use all
     reasonable efforts (which will not require such party to incur a loss,
     excluding immaterial, incidental expenses) to transfer within 20 days
     after it gives notice under Section 6(b)(i) all its rights and
     obligations under this Agreement in respect of the Affected Transactions
     to another of its Offices or Affiliates so that such Termination Event
     ceases to exist.

     If the Affected Party is not able to make such a transfer it will give
     notice to the other party to that effect within such 20 day period,
     whereupon the other party may effect such a transfer within 30 days after
     the notice is given under Section 6(b)(i).

     Any such transfer by a party under this Section 6(b)(ii) will be subject
     to and conditional upon the prior written consent of the other party,
     which consent will not be withheld if such other party's policies in
     effect at such time would permit it to enter into transactions with the
     transferee on the terms proposed.

     (iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
     a Tax Event occurs and there are two Affected Parties, each party will
     use all reasonable efforts to reach agreement within 30 days after notice
     thereof is given under Section 6(b)(i) on action to avoid that
     Termination Event.

     (iv) Right to Terminate. If:--

          (1) a transfer under Section 6(b)(ii) or an agreement under Section
          6(b)(iii), as the case may be, has not been effected with respect to
          all Affected Transactions within 30 days after an Affected Party
          gives notice under Section 6(b)(i); or

          (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
          Merger or an Additional Termination Event occurs, or a Tax Event
          Upon Merger occurs and the Burdened Party is not the Affected Party,

     either party in the case of an Illegality, the Burdened Party in the case
     of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
     or an Additional Termination Event if there is more than one Affected
     Party, or the party which is not the Affected Party in the case of a
     Credit Event Upon Merger or an Additional Termination Event if there is
     only one Affected Party may, by not more than 20 days notice to the other
     party and provided that the relevant Termination Event is then


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     continuing, designate a day not earlier than the day such notice is
     effective as an Early Termination Date in respect of all Affected
     Transactions.

(c) Effect of Designation.

     (i) If notice designating an Early Termination Date is given under
     Section 6(a) or (b), the Early Termination Date will occur on the date so
     designated, whether or not the relevant Event of Default or Termination
     Event is then continuing.

     (ii) Upon the occurrence or effective designation of an Early Termination
     Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
     respect of the Terminated Transactions will be required to be made, but
     without prejudice to the other provisions of this Agreement. The amount,
     if any, payable in respect of an Early Termination Date shall be
     determined pursuant to Section 6(e).

(d) Calculations.

     (i) Statement. On or as soon as reasonably practicable following the
     occurrence of an Early Termination Date, each party will make the
     calculations on its part, if any, contemplated by Section 6(e) and will
     provide to the other party a statement (1) showing, in reasonable detail,
     such calculations (including all relevant quotations and specifying any
     amount payable under Section 6(e)) and (2) giving details of the relevant
     account to which any amount payable to it is to be paid. In the absence
     of written confirmation from the source of a quotation obtained in
     determining a Market Quotation, the records of the party obtaining such
     quotation will be conclusive evidence of the existence and accuracy of
     such quotation.

     (ii) Payment Date. An amount calculated as being due in respect of any
     Early Termination Date under Section 6(e) will be payable on the day that
     notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated or occurs as a result of an Event of
     Default) and on the day which is two Local Business Days after the day on
     which notice of the amount payable is effective (in the case of an Early
     Termination Date which is designated as a result of a Termination Event).
     Such amount will be paid together with (to the extent permitted under
     applicable law) interest thereon (before as well as after judgment) in
     the Termination Currency, from (and including) the relevant Early
     Termination Date to (but excluding) the date such amount is paid, at the
     Applicable Rate. Such interest will be calculated on the basis of daily
     compounding and the actual number of days elapsed.

(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to
any Set-off.

     (i) Events of Default. If the Early Termination Date results from an
     Event of Default: --

          (1) First Method and Market Quotation. If the First Method and
          Market Quotation apply, the Defaulting Party will pay to the
          Non-defaulting Party the excess, if a positive number, of(A) the sum
          of the Settlement Amount (determined by the Non-defaulting Party) in
          respect of the Terminated Transactions and the Termination Currency
          Equivalent of the Unpaid Amounts owing to the Non-defaulting Party
          over (B) the Termination Currency Equivalent of the Unpaid Amounts
          owing to the Defaulting Party.

          (2) First Method and Loss. If the First Method and Loss apply, the
          Defaulting Party will pay to the Non-defaulting Party, if a positive
          number, the Non-defaulting Party's Loss in respect of this
          Agreement.

          (3) Second Method and Market Quotation. If the Second Method and
          Market Quotation apply, an amount will be payable equal to (A) the
          sum of the Settlement Amount (determined by the

                                      9

<PAGE>

          Non-defaulting Party) in respect of the Terminated Transactions and
          the Termination Currency Equivalent of the Unpaid Amounts owing to
          the Non-defaulting Party less (B) the Termination Currency
          Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
          that amount is a positive number, the Defaulting Party will pay it
          to the Non-defaulting Party; if it is a negative number, the
          Non-defaulting Party will pay the absolute value of that amount to
          the Defaulting Party.

          (4) Second Method and Loss. If the Second Method and Loss apply, an
          amount will be payable equal to the Non-defaulting Party's Loss in
          respect of this Agreement. If that amount is a positive number, the
          Defaulting Party will pay it to the Non-defaulting Party; if it is a
          negative number, the Non-defaulting Party will pay the absolute
          value of that amount to the Defaulting Party.

     (ii) Termination Events. If the Early Termination Date results from a
     Termination Event:--

          (1) One Affected Party. If there is one Affected Party, the amount
          payable will be determined in accordance with Section 6(e)(i)(3), if
          Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
          except that, in either case, references to the Defaulting Party and
          to the Non-defaulting Party will be deemed to be references to the
          Affected Party and the party which is not the Affected Party,
          respectively, and, if Loss applies and fewer than all the
          Transactions are being terminated, Loss shall be calculated in
          respect of all Terminated Transactions.

          (2) Two Affected Parties. If there are two Affected Parties: --

               (A) if Market Quotation applies, each party will determine a
               Settlement Amount in respect of the Terminated Transactions,
               and an amount will be payable equal to (I) the sum of (a)
               one-half of the difference between the Settlement Amount of the
               party with the higher Settlement Amount ("X") and the
               Settlement Amount of the party with the lower Settlement Amount
               ("Y") and (b) the Termination Currency Equivalent of the Unpaid
               Amounts owing to X less (II) the Termination Currency
               Equivalent of the Unpaid Amounts owing to Y; and

               (B) if Loss applies, each party will determine its Loss in
               respect of this Agreement (or, if fewer than all the
               Transactions are being terminated, in respect of all Terminated
               Transactions) and an amount will be payable equal to one-half
               of the difference between the Loss of the party with the higher
               Loss ("X") and the Loss of the party with the lower Loss ("Y").

          If the amount payable is a positive number, Y will pay it to X; if
          it is a negative number, X will pay the absolute value of that
          amount to Y.

     (iii) Adjustment for Bankruptcy. In circumstances where an Early
     Termination Date occurs because "Automatic Early Termination" applies in
     respect of a party, the amount determined under this Section 6(e) will be
     subject to such adjustments as are appropriate and permitted by law to
     reflect any payments or deliveries made by one party to the other under
     this Agreement (and retained by such other party) during the period from
     the relevant Early Termination Date to the date for payment determined
     under Section 6(d)(ii).

     (iv) Pre-Estimate. The parties agree that if Market Quotation applies an
     amount recoverable under this Section 6(e) is a reasonable pre-estimate
     of loss and not a penalty. Such amount is payable for the loss of bargain
     and the loss of protection against future risks and except as otherwise
     provided in this Agreement neither party will be entitled to recover any
     additional damages as a consequence of such losses.


                                    10

<PAGE>


7.   Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that:

(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and

(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be
void.

8.   Contractual Currency

(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment
will refund promptly the amount of such excess.

(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party
is entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency and will refund promptly to the other party any excess of
the Contractual Currency received by such party as a consequence of sums paid
in such other currency if such shortfall or such excess arises or results from
any variation between the rate of exchange at which the Contractual Currency
is converted into the currency of the judgment or order for the purposes of
such judgment or order and the rate of exchange at which such party is able,
acting in a reasonable manner and in good faith in converting the currency
received into the Contractual Currency, to purchase the Contractual Currency
with the amount of the currency of the judgment or order actually received by
such party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of or
conversion into the Contractual Currency.

(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.

(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

                                      11

<PAGE>


9.   Miscellaneous

(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.

(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e) Counterparts and Confirmations.

     (i) This Agreement (and each amendment, modification and waiver in
     respect of it) may be executed and delivered in counterparts (including
     by facsimile transmission), each of which will be deemed an original.

     (ii) The parties intend that they are legally bound by the terms of each
     Transaction from the moment they agree to those terms (whether orally or
     otherwise). A Confirmation shall he entered into as soon as practicable
     and may he executed and delivered in counterparts (including by facsimile
     transmission) or be created by an exchange of telexes or by an exchange
     of electronic messages on an electronic messaging system, which in each
     case will be sufficient for all purposes to evidence a binding supplement
     to this Agreement. The parties will specify therein or through another
     effective means that any such counterpart, telex or electronic message
     constitutes a Confirmation.

(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.  Offices; Multibranch Parties

(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.

(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.

11.  Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document


                                      12
<PAGE>


to which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of
collection.

12.  Notices

(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--

     (i) if in writing and delivered in person or by courier, on the date it
     is delivered;

     (ii) if sent by telex, on the date the recipient's answerback is
     received;

     (iii) if sent by facsimile transmission, on the date that transmission is
     received by a responsible employee of the recipient in legible form (it
     being agreed that the burden of proving receipt will be on the sender and
     will not be met by a transmission report generated by the sender's
     facsimile machine);

     (iv) if sent by certified or registered mail (airmail, if overseas) or
     the equivalent (return receipt requested), on the date that mail is
     delivered or its delivery is attempted; or

     (v) if sent by electronic messaging system, on the date that electronic
     message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13.  Governing Law and Jurisdiction

(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--

     (i) submits to the jurisdiction of the English courts, if this Agreement
     is expressed to be governed by English law, or to the non-exclusive
     jurisdiction of the courts of the State of New York and the United States
     District Court located in the Borough of Manhattan in New York City, if
     this Agreement is expressed to be governed by the laws of the State of
     New York; and

     (ii) waives any objection which it may have at any time to the laying of
     venue of any Proceedings brought in any such court, waives any claim that
     such Proceedings have been brought in an inconvenient forum and further
     waives the right to object, with respect to such Proceedings, that such
     court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the
Civil Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any


                                      13
<PAGE>


reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute
process agent acceptable to the other party. The parties irrevocably consent
to service of process given in the manner provided for notices in Section 12.
Nothing in this Agreement will affect the right of either party to serve
process in any other manner permitted by law.

(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.

14.  Definitions

As used in this Agreement:--

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.

"Applicable Rate" means:--

(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and

(d) in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

                                      14

<PAGE>


"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or re-establishing any hedge or related trading
position (or any gain resulting from any of them). Loss includes losses and
costs (or gains) in respect of any payment or delivery required to have been
made (assuming satisfaction of each applicable condition precedent) on or
before the relevant Early Termination Date and not made, except, so as to
avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies.
Loss does not include a party's legal fees and out-of-pocket expenses referred
to under Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have

                                      15


<PAGE>


been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is
to be included. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith,
agree. The party making the determination (or its agent) will request each
Reference Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time
zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if
more than one quotation has the same highest value or lowest value, then one
of such quotations shall be disregarded. If fewer than three quotations are
provided, it will be deemed that the Market Quotation in respect of such
Terminated Transaction or group of Terminated Transactions cannot be
determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head
or home office.

"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --

(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meanings specified in the Schedule.


                                      16


<PAGE>


"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation
or similar tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market

                                      17


<PAGE>


value of that which was (or would have been) required to be delivered as of
the originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding)
such Early Termination Date, at the Applicable Rate. Such amounts of interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in clause
(b) above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be
the average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.

Swiss Re Financial Product,                  Granite Mortgages 04-1 plc,
Corporation being Party A                    being Party B

------------------------------      --------------------------------
       (Name of Party)                       (Name of Party)



By:                                 By:
   ---------------------------         -----------------------------
   Name:                               Name:
   Title:                              Title:
   Date:                               Date:


The Bank of New York,
being the Note Trustee

------------------------------
       (Name of Party)



By:
   ---------------------------
   Name:
   Title:
   Date:


                                      18


<PAGE>

                                                        Series 1 Class C Notes


                                   SCHEDULE
                                    to the
                               Master Agreement


                         dated as of 28 January, 2004


between

(1)   SWISS RE FINANCIAL PRODUCTS CORPORATION ("Party A");

(2)   GRANITE MORTGAGES 04-1 plc ("Party B"); and

(3)   THE BANK OF NEW YORK (as Note Trustee and which has agreed to become a
      party to this Agreement solely for the purpose of taking the benefit of
      Parts 5(c) and (h) and undertaking the obligations in Part 5(k)(vii) of
      the Schedule to this Agreement).

Part 1.     Termination Provisions.

(a)   "Specified Entity" means in relation to Party A for the purpose of:-

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

      and in relation to Party B for the purpose of:-

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

(b)   "Specified Transaction" will have the meaning specified in Section 14.

(c)   The "Cross Default" provisions of Section 5(a)(vi) will not apply to
      Party A and will not apply to Party B.


                                      1
<PAGE>


(d)   The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply
      to Party A and will not apply to Party B.

(e)   The "Automatic Early Termination" provision of Section 6(a) will not
      apply to Party A and will not apply to Party B.

(f)   Payments on Early Termination. For the purposes of Section 6(e) of this
      Agreement:-

      (i)   Market Quotation will apply.

      (ii)  The Second Method will apply.

(g)   "Termination Currency" means Sterling.

Part  2. Tax Representations

(a)   Payer Representations. For the purpose of Section 3(e) of this
      Agreement, Party A and Party B will each make the following
      representation:

      It is not required by any applicable law, as modified by the practice of
      any relevant governmental revenue authority, of any Relevant
      Jurisdiction to make any deduction or withholding for or on account of
      any Tax from any payment (other than interest under Section 2(e),
      6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
      under this Agreement. In making this representation, it may rely on (i)
      the accuracy of any representations made by the other party pursuant to
      Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
      of the other party contained in Section 4(a)(i) or 4(a)(iii) of this
      Agreement and the accuracy and effectiveness of any document provided by
      the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
      Agreement and (iii) the satisfaction of the agreement of the other party
      contained in Section 4(d) of this Agreement, provided that it shall not
      be a breach of this representation where reliance is placed on clause
      (ii) and the other party does not deliver a form or document under
      Section 4(a)(iii) by reason of material prejudice to its legal or
      commercial position.

(b)   Payee Representations. For the purposes of Section 3(f) of the
      Agreement, Party A makes the representation specified below (the
      "Additional Tax Representation"):-

      (i)   it is a party to each Transaction solely for the purposes of a
            trade (or part of a trade) carried on by it in the United Kingdom
            through a branch or agency; or

      (ii)  it is resident in the United Kingdom or in a jurisdiction with
            which the United Kingdom has a double tax treaty which makes
            provision, whether for relief or otherwise, in relation to
            interest.

(c)   Additional Termination Event. The Additional Tax Representation proves
      to have been incorrect or misleading in any material respect with
      respect to one or more Transactions (each an "Affected Transaction" for
      the purposes of this Additional Termination Event) when made or repeated
      or deemed to have been made or repeated. The Affected Party shall be
      Party A only.


                                      2
<PAGE>


Part  3. Agreement to Deliver Documents

      For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each
      party agrees to deliver the following documents, as applicable:-

(a)   Tax forms, documents or certificates to be delivered are:-

      Party required to    Form/Document/         Date by which to be deliver
      delivered document   Certificate

      Party B              Form W8-BEN            On signing of this Agreement

(b)   Other documents to be delivered are:-
<TABLE>
<CAPTION>

      <S>                  <C>                          <C>                     <C>
      Party required       Form/Document/               Date by which           Covered by
      to deliver           Certificate                  to be delivered         Section 3(d)
      document                                                                  Representation

      Party A and          Appropriate evidence of      On signing of this      Yes
      Party B              its signatory's authority    Agreement

      Party B              Certified copy of            On signing of this      Yes
                           board resolution             Agreement

      Party A              Legal opinion in form and    On signing of this      No
                           substance satisfactory to    Agreement
                           Party B
      Party B              Legal opinion of the         On signing of this      No
                           counsel to Party B in form   Agreement
                           and substance satisfactory
                           to Party A

</TABLE>


                                      3
<PAGE>





Part  4. Miscellaneous

(a)   Addresses for Notices. For the purpose of Section 12(a) of this
      Agreement:-

      Address for notices or communications to Party A:-

      Address:          Swiss Re Financial Products Corporation,
                        55 East 52nd  Street,
                        New York,
                        New York 10055,
                        U.S.A.

      Attention:        Head of Operations

      Facsimile No.:    + 1 (212) 317 5335

      With a copy to:

      Address:          Swiss Re Financial Products Corporation,
                        55 East 52nd Street,
                        New York,
                        New York 10055,
                        U.S.A.

      Attention:        Legal Department

      Facsimile No:     + 1(212) 317 5474

      Address for notices or communications to Party B:-

      Address:          Granite Mortgages 04-1 plc
                        Fifth Floor
                        100 Wood Street
                        London
                        EC2V 7EX

      With a copy to:   Northern Rock plc
                        Northern Rock House
                        Gosforth
                        Newcastle upon Tyne
                        NE3 4PL

      Attention:        Keith M. Currie

      Facsimile No.:    0191 279 4694


                                      4
<PAGE>


      With a copy to the Note Trustee:-

      Address:          The Bank of New York
                        One Canada Square
                        48th Floor
                        London
                        E14 5AL

      Attention:        Corporate Trust (Global Structured Finance)

      Facsimile No.:    020 7964 6061

(b)   Process Agent. For this purpose of Section 13(c) of this Agreement:-

      Party A appoints as its Process Agent:  Swiss Re Services Limited
                                              71/77 Leadenhall Street
                                              London EC3A 3DE
                                              England

      Party B appoints as its Process Agent:  None.

(c)   Offices. The provisions of Section 10(a) will apply to this Agreement.

(d)   Multibranch Party. For the purpose of Section 10(c) of this Agreement:-

      Party A is not a Multibranch Party and will act through its New York
      branch.

      Party B is not a Multibranch Party.

(e)   Calculation Agent. The Calculation Agent shall be as specified in each
      Confirmation.

(f)   Credit Support Document. Details of any Credit Support Document:-

      In respect of Party A: The guarantee of Swiss Reinsurance Company in the
      form attached hereto as Appendix B.

      In respect of Party B:  None.

(g)   Credit Support Provider.

      Credit Support Provider means, in relation to Party A, Swiss Reinsurance
      Company.

      Credit Support Provider means, in relation to Party B, none.

(h)   Governing Law. This Agreement will be governed by and construed in
      accordance with English law.


                                      5
<PAGE>


(i)   Netting of Payments. Sub-paragraph (ii) of Section 2(c) of this
      Agreement will apply to Transactions entered into under this Agreement
      unless otherwise specified in a Confirmation.

(i)   "Affiliate" will have the meaning specified in Section 14 of this
      Agreement.

Part  5. Other Provisions

(a)   Definitions and Interpretation

      Capitalised terms used in this Agreement shall, except where the context
      otherwise requires and save where otherwise defined in this Agreement,
      bear the meanings given to them in the Master Definitions Schedule as
      amended and restated by (and appearing in Appendix 1 to) the Master
      Definitions Schedule Seventh Amendment Deed executed by, among others,
      the Note Trustee on 26 January, 2004 and the Issuer Master Definitions
      Schedule signed for the purposes of identification by Sidley Austin
      Brown & Wood and Allen & Overy on 28 January, 2004 (as the same have
      been and may be amended, varied or supplemented from time to time with
      the consent of the parties hereto). The Issuer Master Definitions
      Schedule specified above shall prevail to the extent that it conflicts
      with the Master Definitions Schedule.

(b)   No Set-Off

      (i)   All payments under this Agreement shall be made without set-off or
            counterclaim, except as expressly provided for in Section 6.

      (ii)  Section 6(e) shall be amended by the deletion of the following
            sentence: "The amount, if any, payable in respect of an Early
            Termination Date and determined pursuant to this Section will be
            subject to any Set-off."

(c)   Security Interest

      Notwithstanding Section 7, Party A hereby agrees and consents to the
      assignment by way of security by Party B of its interests under this
      Agreement (without prejudice to, and after giving effect to, any
      contractual netting provision contained in this Agreement) to the Note
      Trustee (or any successor thereto) pursuant to and in accordance with
      the Current Issuer Deed of Charge and acknowledges notice of such
      assignment. Each of the parties hereby confirms and agrees that the Note
      Trustee shall not be liable for any of the obligations of Party B
      hereunder.

(d)   Disapplication of certain Events of Default

      Section 5(a)(ii), Section 5(a)(iii), Section 5(a)(iv), Section 5(a)(v),
      Section 5(a)(vii)(2), (5),(6),(7) and (9) and Section 5(a)(viii) will
      not apply in respect of Party B.

      Section 5(a)(vii)(8) will not apply to Party B to the extent that it
      applies to Section 5(a)(vii)(2) (5),(6),(7) and (9).


                                      6
<PAGE>


(e)   Disapplication of certain Termination Events

      The "Tax Event" and "Tax Event Upon Merger" provisions of Section
      5(b)(ii) and 5(b)(iii) will not apply to Party A or to Party B.

(f)   Additional Event of Default and Additional Termination Event

      The following shall constitute an additional Event of Default:

      "Note Enforcement Notice. The Note Trustee serves a Note Enforcement
      Notice on Party B (in which case Party B shall be the Defaulting
      Party)."

      The following shall constitute an Additional Termination Event:

      "Redemption and Prepayment of the Current Issuer Notes. The Current
      Issuer serves a notice of redemption pursuant to Condition 5(F) of the
      terms and conditions of the Current Issuer Notes (in which case Party B
      shall be the sole Affected Party and all Transactions shall be Affected
      Transactions)."

(g)   Northern Rock plc as Party B's Agent

      Party B hereby declares that pursuant to the Current Issuer Cash
      Management Agreement it has appointed Northern Rock plc to act as its
      agent for the purpose, inter alia, of the operation of this Agreement
      and dealing with payments hereunder. Accordingly, unless and until
      written notice is received by Party A from the Note Trustee that such
      appointment has been terminated, Party A shall be entitled to treat all
      communications and acts relating to this Agreement received from or
      carried out by Northern Rock plc as agent for Party B under the Current
      Issuer Cash Management Agreement as being those of Party B and Party B
      hereby agrees to ratify and confirm the same.

(h)   Security, Enforcement and Limited Recourse

      (i)   Party A agrees with Party B and the Note Trustee to be bound by
            the terms of the Current Issuer Deed of Charge and the Current
            Issuer Cash Management Agreement and, in particular, confirms
            that: (i) save as otherwise expressly set out in the Current
            Issuer Cash Management Agreement or, as applicable, the Current
            Issuer Deed of Charge, no sum shall be payable by or on behalf of
            Party B to it except in accordance with the Current Issuer
            Priority of Payments as set out in the Current Issuer Cash
            Management Agreement or, as applicable, the Current Issuer Deed of
            Charge (as the same may be amended from time to time); and (ii) it
            will not take any steps for the winding up, dissolution or
            reorganisation or for the appointment of a receiver,
            administrator, administrative receiver, trustee, liquidator,
            sequestrator or similar officer of Party B or of any or all of its
            revenues and assets nor participate in any ex parte proceedings
            nor seek to enforce any judgment against Party B except as
            provided in the Current Issuer Deed of Charge.


                                      7
<PAGE>


      (ii)  In relation to all sums due and payable by Party B to Party A,
            Party A agrees that it shall have recourse only to sums available
            to Party B for the purpose of making payments to Party A in
            accordance with the relevant Current Issuer Priority of Payments,
            the Current Issuer Cash Management Agreement and/or, as applicable
            the Current Issuer Deed of Charge.

      (iii) If, on any date, Party B does not pay the full amount it would
            otherwise owe under any Transaction (after the application of
            Section 2(c) to such Transaction) because of the limitation
            contained in clause (i) of this paragraph (h), then (A) payment by
            Party B of the shortfall (and the corresponding payment obligation
            of Party A with respect to such shortfall (being the full amount
            Party A would otherwise owe on such date less the actual amount
            payable by Party A determined in accordance with clause (iii) (C)
            of this paragraph (h))) will not then fall due but will instead be
            deferred until the first Payment Date thereafter on which
            sufficient funds are available (subject to the limitation in
            clause (i) of this paragraph (h)), (B) failure by Party B to make
            the full payment under such Transaction (after the application of
            Section 2(c) to such Transaction) shall not constitute an Event of
            Default for the purpose of Section 5(a)(i), and (C) the obligation
            of Party A to make payment to Party B, in respect of the same
            Transaction, on such date, will be reduced so that Party A will be
            obligated to pay the Equivalent Percentage of the amount it would
            otherwise owe under that Transaction. "Equivalent Percentage"
            means the percentage obtained by dividing the amount paid by Party
            B by the amount it would have paid absent such limitation.

      (iv)  For the avoidance of doubt, if an Early Termination Date results
            from an Event of Default, any amount payable (the payment of which
            was deferred or not paid in the circumstances described under
            clause (iii) of this Part 5(h) by Party A or by Party B, as the
            case may be, under this Agreement) will be deemed to be Unpaid
            Amounts owing to Party B or, as the case may be, owing to Party A.

      (v)   Following the calculation thereof, Party B agrees to notify Party
            A of the amount of any shortfall, the payment of which by Party B
            is deferred in accordance with clause (iii) of this paragraph (h).

(i)   Scope of Agreement

      It is hereby understood and agreed that the provisions of this Agreement
      shall only apply to the Transactions entered into between Party A and
      Party B on the date as of which this Agreement is made as evidenced by
      the Confirmation substantially in the form attached hereto as Appendix
      A, and that no other Transaction may be entered into pursuant hereto
      except in accordance with sub-paragraphs (i)(A),(ii)(D), (iii)(D),
      (iv)(A) or (v)(D) of Part 5(k) or where the Rating Agencies have
      confirmed in writing that the then current ratings of the Current Issuer
      Notes would not be adversely affected by such other Transaction.


                                      8
<PAGE>


(j)   [Reserved]

(k)   Ratings Downgrade of Party A

      (i)   In the event that the long-term, unsecured and unsubordinated debt
            obligations of Party A (or its successor), or any Credit Support
            Provider of Party A, cease to be rated at least as high as
            "AA-"(or its equivalent) by Standard & Poor's Rating Services, a
            division of The McGraw-Hill Companies Inc. ("S&P") and as a result
            of such downgrade the then current rating of the Series 1 Class C
            Notes may in the reasonable opinion of S&P be downgraded or placed
            under review for possible downgrade (an "S&P Note Downgrade
            Event"), then Party A shall, within 30 days of the occurrence of
            such S&P Note Downgrade Event, at its own cost either:-

            (A)   put in place an appropriate mark-to-market collateral
                  agreement (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates
                  to collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement provided
                  that (x) Party A shall be deemed to have satisfied the
                  requirements of S&P if the amount of collateral agreed to be
                  provided in the form of cash and/or securities (the
                  "Collateral Amount") is determined on a basis which is no
                  more onerous than the S&P Criteria (as defined below) and
                  (y) the Collateral Amount shall not be required to exceed
                  such amount as would be required (in accordance with the S&P
                  Criteria) to restore the rating of the Series 1 Class C
                  Notes to the level they would have been at immediately prior
                  to such downgrading; or

            (B)   transfer all of its rights and obligations with respect to
                  this Agreement to a replacement third party whose long-term,
                  unsecured and unsubordinated debt obligations are rated at
                  least as high as "AA-" (or its equivalent) by S&P or such
                  other rating as is commensurate with the rating assigned to
                  the Series 1 Class C Notes by S&P from time to time; or

            (C)   procure another person to become co-obligor in respect of
                  the obligations of Party A under this Agreement whose
                  long-term, unsecured and unsubordinated debt obligations are
                  rated at least as high as "AA-" (or its equivalent) by S&P
                  or such other rating as is commensurate with the rating
                  assigned to the Series 1 Class C Notes by S&P from time to
                  time; or

            (D)   take such other action as Party A may agree with S&P as will
                  result in the rating of the Series 1 Class C Notes then
                  outstanding following the taking of such action being rated
                  no lower than the rating of the Series 1 Class C Notes
                  immediately prior to such downgrade.

            "S&P Criteria" means the criteria published in January 1999 as
            amended in June 2000 which enable entities rated lower than a
            specified level to participate in structured finance transactions
            which, through collateralisation, are rated at a


                                      9
<PAGE>


            higher level (as referred to, in part, in the article entitled New
            Interest Rate Currency Swap Criteria Broadens Allowable
            Counterparties in the January 1999 issue of S&P's Structured
            Finance publication).

      (ii)  In the event that (aa) the long-term, unsecured and unsubordinated
            debt obligations of Party A (or its successor) and, if relevant,
            any Credit Support Provider of Party A, cease to be rated at least
            as high as "A1" (or its equivalent) by Moody's Investors Service
            Limited ("Moody's") or (bb) the short-term, unsecured and
            unsubordinated debt obligations of Party A (or its successor) and,
            if relevant, any Credit Support Provider of Party A, cease to be
            rated at least as high as "Prime-1" (or its equivalent) by Moody's
            (an "Initial Moody's Note Downgrade Event"), then Party A will, on
            a reasonable efforts basis and at its own cost attempt to:-

            (A)   transfer all of its rights and obligations with respect to
                  this Agreement to either (x) a replacement third party with
                  the Required Ratings (as defined below) domiciled in the
                  same legal jurisdiction as Party A or Party B or (y) a
                  replacement third party in relation to whom Moody's has
                  confirmed that there would be no Initial Moody's Note
                  Downgrade Event; or

            (B)   procure another person to become co-obligor in respect of
                  the obligations of Party A under this Agreement. Such
                  co-obligor may be either (x) a person with the Required
                  Ratings domiciled in the same legal jurisdiction as Party A
                  or Party B, or (y) a person in relation to whom Moody's has
                  confirmed that there would be no Initial Moody's Note
                  Downgrade Event; or

            (C)   take such other action as Moody's shall confirm to Party A
                  will remedy an Initial Moody's Note Downgrade Event.

            Pending compliance with any of (k)(ii)(A), (k)(ii)(B) or
            (k)(ii)(C) above, Party A will, at its own cost:

            (D)   within 30 days of the occurrence of an Initial Moody's Note
                  Downgrade Event, put in place a mark-to-market collateral
                  agreement in a form and substance acceptable to Moody's
                  (which may be based on the credit support documentation
                  published by ISDA, or otherwise, and relates to collateral
                  in the form of cash or securities or both) in support of its
                  obligations under this Agreement which complies with the
                  Moody's Criteria (or such other amount as may be agreed with
                  Moody's).

            If any of (k)(ii)(A), (k)(ii)(B) or (k)(ii)(C) are satisfied at
            any time, all collateral (or the equivalent thereof, as
            appropriate) transferred by Party A pursuant to (k)(ii)(D) will be
            retransferred to Party A and Party A will not be required to
            transfer any additional collateral.

      (iii) In the event that (aa) the long-term, unsecured and unsubordinated
            debt obligations of Party A (or its successor) and, if relevant,
            any Credit Support


                                      10
<PAGE>


            Provider of Party A, cease to be rated at least as high as "A3"
            (or its equivalent) by Moody's or (bb) the short-term, unsecured
            and unsubordinated debt obligations of Party A (or its successor)
            and, if relevant, any Credit Support Provider of Party A, cease to
            be rated at least as high as "Prime-2" (or its equivalent) by
            Moody's (a "Subsequent Moody's Note Downgrade Event"), then Party
            A will, on a reasonable efforts basis, within 30 days of the
            occurrence of such Subsequent Moody's Note Downgrade Event, and at
            its own cost:

            (A)   transfer all of its rights and obligations with respect to
                  this Agreement to either (x) a replacement third party with
                  the Required Ratings domiciled in the same legal
                  jurisdiction as Party A or Party B, or (y) a replacement
                  third party in relation to whom Moody's has confirmed that
                  there would be no Subsequent Moody's Note Downgrade Event;
                  or

            (B)   procure another person to become co-obligor in respect of
                  the obligations of Party A under this Agreement. Such
                  co-obligor may be either (x) a person with the Required
                  Ratings domiciled in the same legal jurisdiction as Party A
                  or Party B, or (y) a person in relation to whom Moody's has
                  confirmed that there would be no Subsequent Moody's Note
                  Downgrade Event; or

            (C)   take such other action as Moody's shall confirm to Party A
                  will remedy a Subsequent Moody's Note Downgrade Event.

            Pending compliance with (k)(iii)(A), (k)(iii)(B) or (k)(iii)(C),
            Party A will at its own cost:

            (D)   put in place a mark-to-market collateral agreement in a form
                  and substance acceptable to Moody's (which may be based on
                  the credit support documentation published by ISDA, or
                  otherwise, and relates to collateral in the form of cash or
                  securities or both) in support of its obligations under this
                  Agreement which complies with the Moody's Criteria (or such
                  other amount as may be agreed with Moody's).

            If any of (k)(iii)(A), (k)(iii)(B) or (k)(iii)(C) are satisfied at
            any time, all collateral (or the equivalent thereof, as
            appropriate) transferred by Party A pursuant to (k)(iii)(D) will
            be retransferred to Party A and Party A will not be required to
            transfer any additional collateral.

            For the purposes of (k)(ii) and (k)(iii), "Required Ratings"
            means, in respect of the relevant entity, its short-term,
            unsecured and unsubordinated debt obligations are rated at least
            as high as "Prime-1" and its long-term, unsecured and
            unsubordinated debt obligations are rated at least as high as
            "A1", or such other ratings as may be agreed with Moody's from
            time to time.

            "Moody's Criteria" means that the Collateral Amount shall equal
            the sum of (a) the product of A multiplied by the mark-to-market
            value of the outstanding Transactions as determined by Party A in
            good faith on each Local Business Day


                                      11
<PAGE>


            and (b) the product of B multiplied by the current aggregate
            notional amounts of the outstanding Transactions, where:

            (i)   "A" means 102% and "B" means 1.6% if the long-term,
                  unsecured and unsubordinated debt obligations or the
                  short-term, unsecured and unsubordinated debt obligations of
                  Party A (or its successor) and any Credit Support Provider
                  of Party A cease to be rated as high as "A1" or "Prime-1" by
                  Moody's;

            (ii)  "A" means 102% and "B" means 3.7% if the long-term,
                  unsecured and unsubordinated debt obligations or the
                  short-term, unsecured and unsubordinated debt obligations of
                  Party A (or its successor) and any Credit Support Provider
                  of Party A cease to be rated as high as "A3" or "Prime-2" by
                  Moody's;

            (iii) "A" means 0% and "B" means 0% in all other cases.

      (iv)  In the event that the insurer financial strength rating of any
            Credit Support Provider of Party A ceases to be rated at least as
            high as "AA-" (or its equivalent) by Fitch Ratings Ltd ("Fitch")
            and as a result the then current rating of the Series 1 Class C
            Notes may in the reasonable opinion of Fitch be downgraded or
            placed on credit watch for possible downgrade (an "Initial Fitch
            Note Downgrade Event"), then Party A will, on a reasonable efforts
            basis, within 30 days of the occurrence of such Initial Fitch Note
            Downgrade Event, at its own cost, either:-

            (A)   put in place an appropriate mark-to-market collateral
                  agreement (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates
                  to collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement which
                  complies with the Fitch Criteria (or such other amount as
                  may be agreed with Fitch); or

            (B)   attempt to transfer all of its rights and obligations with
                  respect to this Agreement to a replacement third party whose
                  short-term, unsecured and unsubordinated debt ratings are
                  rated at least as high as "F1" (or its equivalent) by Fitch
                  or such other rating as is commensurate with the rating
                  assigned to the Series 1 Class C Notes by Fitch from time to
                  time; or

            (C)   procure another person to become co-obligor or guarantor in
                  respect of the obligations of Party A under this Agreement
                  whose short-term, unsecured and unsubordinated debt ratings
                  are rated at least as high as "F1" (or its equivalent) by
                  Fitch or such other rating as is commensurate with the
                  rating assigned to the Series 1 Class C Notes by Fitch from
                  time to time; or

            (D)   take such other action as Party A may agree with Fitch as
                  will result in the rating of the Series 1 Class C Notes then
                  outstanding being maintained.


                                      12
<PAGE>


      (v)   In the event that the insurer financial strength rating of any
            Credit Support Provider of Party A ceases to be rated at least as
            high as "A-" (or its equivalent) by Fitch and as a result the then
            current rating of the Series 1 Class C Notes may in the reasonable
            opinion of Fitch be downgraded or placed on credit watch for
            possible downgrade (a "Subsequent Fitch Note Downgrade Event"),
            then Party A will, on a reasonable efforts basis, within 30 days
            of the occurrence of such Subsequent Fitch Note Downgrade Event,
            at its own cost, either:-

            (A)   attempt to transfer all of its rights and obligations with
                  respect to this Agreement to a replacement third party whose
                  short-term, unsecured and unsubordinated debt ratings are
                  rated at least as high as "F1" (or its equivalent) by Fitch
                  or such other rating as is commensurate with the rating
                  assigned to the Series 1 Class C Notes by Fitch from time to
                  time; or

            (B)   procure another person to become co-obligor or guarantor in
                  respect of the obligations of Party A under this Agreement
                  whose short-term, unsecured and unsubordinated debt ratings
                  are rated at least as high as "F1" (or its equivalent) by
                  Fitch or such other rating as is commensurate with the
                  rating assigned to the Series 1 Class C Notes by Fitch from
                  time to time; or

            (C)   take such other action as Party A may agree with Fitch as
                  will result in the rating of the Series 1 Class C Notes then
                  outstanding being maintained.

            Pending compliance with (k)(v)(A), (k)(v)(B) or (k)(v)(C), Party A
            will at its own cost:

            (D)   put in place an appropriate mark-to-market collateral
                  agreement (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates
                  to collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement which
                  complies with the Fitch Criteria (or such other amount as
                  may be agreed with Fitch).

            If any of (k)(v)(A), (k)(v)(B) or (k)(v)(C) are satisfied at any
            time, all collateral (or the equivalent thereof, as appropriate)
            transferred by Party A pursuant to (k)(v)(D) will be retransferred
            to Party A and Party A will not be required to transfer any
            additional collateral.

            "Fitch Criteria" means the Collateral Amount shall equal the sum
            of (i) the product of A multiplied by the mark-to-market value of
            the outstanding Transactions determined by Party A in good faith
            from time to time, and (ii) the product of B multiplied by the
            current aggregate notional amount of the outstanding Transactions,
            where:

            (a)   "A" means 100% and "B" means 1.25% if the mark-to-market
                  value of the outstanding Transactions is determined by Party
                  A on each Local Business Day; or


                                      13
<PAGE>


            (b)   "A" means 100% and "B" means 2.5% where the mark-to-market
                  value of the outstanding Transactions is determined by Party
                  A on a weekly basis.

      (vi)  If Party A does not take any of the measures described in (k)(i)
            above such failure shall not be or give rise to an Event of
            Default but shall constitute an Additional Termination Event with
            respect to Party A and shall be deemed to have occurred on the
            thirtieth day following such S&P Note Downgrade Event with Party A
            as the sole Affected Party and all Transactions shall be Affected
            Transactions.

            If Party A does not take the measures described in (k)(ii)(A),
            (B), (C) or (D) above such failure shall not be or give rise to an
            Event of Default but shall constitute an Additional Termination
            Event with respect to Party A and shall be deemed to have occurred
            on the thirtieth day following such Initial Moody's Note Downgrade
            Event with Party A as the sole Affected Party and all Transactions
            shall be Affected Transactions.

            If Party A does not take the measures described in (k)(iii)(D)
            above such failure shall give rise to an Event of Default with
            respect to Party A and shall be deemed to have occurred on the
            thirtieth day following such Subsequent Moody's Note Downgrade
            Event (or, if Party A has put in place a collateral agreement in
            accordance with the requirements of k(ii)(D) above, such Event of
            Default shall be deemed to have occurred on the tenth day
            following such Subsequent Moody's Note Downgrade Event) with Party
            A as the sole Defaulting Party. Further, it shall constitute an
            Additional Termination Event with respect to Party A if, even
            after satisfying the requirements of (k)(iii)(D), Party A has
            failed, having applied reasonable efforts, to either transfer as
            described in (k)(iii)(A), find a co-obligor as described in
            (k)(iii)(B) or take such other action as described in (k)(iii)(C),
            and such Additional Termination Event shall be deemed to have
            occurred on the thirtieth day following such Subsequent Moody's
            Note Downgrade Event with Party A as the sole Affected Party and
            all Transactions shall be Affected Transactions.

            If Party A does not take any of the measures described in (k)(iv)
            above such failure shall not be or give rise to an Event of
            Default but shall constitute an Additional Termination Event with
            respect to Party A and shall be deemed to have occurred on the
            thirtieth day following such Initial Fitch Note Downgrade Event
            with Party A as the sole Affected Party and all Transactions shall
            be Affected Transactions.

            If Party A does not take the measures described in (k)(v)(A), (B),
            (C) or (D) above such failure shall not be or give rise to an
            Event of Default but shall constitute an Additional Termination
            Event with respect to Party A and shall be deemed to have occurred
            on the thirtieth day following such Subsequent Fitch Note
            Downgrade Event with Party A as the sole Affected Party and all
            Transactions shall be Affected Transactions.


                                      14
<PAGE>


            However, in the event that Party B were to designate an Early
            Termination Date and there would be a payment due to Party A,
            Party B may only designate such an Early Termination Date in
            respect on an Additional Termination Event under this Part 5(k) if
            Party B has found a replacement counterparty willing to enter a
            new transaction on terms that reflect as closely as reasonably
            possible (as the Note Trustee may, in its absolute discretion,
            determine) the economic, legal and credit terms of the Terminated
            Transactions with Party A.

            Each Additional Termination Event described in this sub-part
            (k)(vi) shall, on its occurrence, constitute a "Downgrade
            Termination Event".

      (vii) Each of Party B and the Note Trustee shall use their reasonable
            endeavours to co-operate with Party A in putting in place such
            credit support documentation, including agreeing to such
            arrangements in such documentation as may satisfy S&P, Moody's and
            Fitch with respect to the operation and management of the
            collateral (subject always to proviso (x) and (y) in (k)(i)(A)
            above) and entering into such documents as may reasonably be
            requested by Party A in connection with the provision of such
            collateral.

(l)   Additional Representation

      Section 3  is  amended  by the  addition  at the  end  thereof  of the
      following additional representations:-

      (i)   "(g) No Agency. It is entering into this Agreement and each
            Transaction as principal and not as agent of any person."

      (ii)  The following additional representation shall be given by Party A
            only:

            "(h) Pari Passu. Its obligations under this Agreement rank pari
            passu with all of its other unsecured, unsubordinated obligations
            except those obligations preferred by operation of law."

(m)   Recording of Conversations

      Each party to this Agreement acknowledges and agrees to the tape
      recording of conversations between the parties to this Agreement whether
      by one or other or both of the parties.

(n)   Relationship between the parties

      The Agreement is amended by the insertion after Section 14 of an
      additional Section 15, reading in its entirety as follows:


                                      15
<PAGE>


      "15. Relationship between the parties

      Each party will be deemed to represent to the other party on the date on
      which it enters into a Transaction that (absent a written agreement
      between the parties that expressly imposes affirmative obligations to
      the contrary for that Transaction):-

      (i)   Non Reliance. It is acting for its own account, and it has made
            its own decisions to enter into that Transaction and as to whether
            that Transaction is appropriate or proper for it based upon its
            own judgment and advice from such advisers as it has deemed
            necessary. It is not relying on any communication (written or
            oral) of the other party as investment advice or as a
            recommendation to enter into that Transaction; it being understood
            that information and explanations related to the terms and
            conditions of a Transaction shall not be considered investment
            advice or a recommendation to enter into that Transaction. It has
            not received from the other party any assurance or guarantee as to
            the expected results of that Transaction.

      (ii)  Assessment and Understanding. It is capable of assessing the
            merits of and understanding (on its own behalf or through
            independent professional advice), and understands and accepts, the
            terms, conditions and risks of that Transaction. It is also
            capable of assuming, and assumes, the financial and other risks of
            that Transaction.

      (iii) Status of Parties. The other party is not acting as a fiduciary or
            an adviser for it in respect of that Transaction."

(o)   Tax

      The Agreement is amended by deleting Section 2(d) in its entirety and
      replacing it with the following:

      "(d)  Deduction or Withholding for Tax

      (i)   Requirement to Withhold

            All payments under this Agreement will be made without any
            deduction or withholding for or on account of any Tax unless such
            deduction or withholding is required (including, for the avoidance
            of doubt, if such deduction or withholding is required in order
            for the payer to obtain relief from Tax) by any applicable law, as
            modified by the practice of any relevant governmental revenue
            authority, then in effect. If a party ("X") is so required to
            deduct or withhold, then that party (the "Deducting Party"):-

            (A)   will promptly notify the other party ("Y") of such
                  requirement;

            (B)   will pay to the relevant authorities the full amount
                  required to be deducted or withheld (including the full
                  amount required to be deducted or withheld from any Gross Up
                  Amount (as defined below) paid by the Deducting


                                      16
<PAGE>


                  Party to Y under this Section 2(d)) promptly upon the
                  earlier of determining that such deduction or withholding is
                  required or receiving notice that such amount has been
                  assessed against Y;

            (C)   will promptly forward to Y an official receipt (or a
                  certified copy), or other documentation reasonably
                  acceptable to Y, evidencing such payment to such
                  authorities; and

            (D)   if X is Party A, X will promptly pay in addition to the
                  payment to which Party B is otherwise entitled under this
                  Agreement, such additional amount (the "Gross Up Amount") as
                  is necessary to ensure that the net amount actually received
                  by Party B will equal the full amount which Party B would
                  have received had no such deduction or withholding been
                  required.

      (ii)  Liability

            If:

            (A)   X is required by any applicable law, as modified by the
                  practice of any relevant governmental revenue authority, to
                  make any deduction or withholding for or on account of any
                  Tax in respect of payments under this Agreement; and

            (B)   X does not so deduct or withhold; and

            (C)   a liability resulting from such Tax is assessed directly
                  against X,

            then, except to the extent that Y has satisfied or then satisfies
            the liability resulting from such Tax, (A) where X is Party B,
            Party A will promptly pay to Party B the amount of such liability
            (the "Liability Amount") (including any related liability for
            interest and together with an amount equal to the Tax payable by
            Party B on receipt of such amount but including any related
            liability for penalties only if Party A has failed to comply with
            or perform any agreement contained in Section 4(a)(i), 4(a)(iii)
            or 4(d)) and Party B will promptly pay to the relevant government
            revenue authority the amount of such liability (including any
            related liability for interest and penalties) and (B) where X is
            Party A and Party A would have been required to pay a Gross Up
            Amount to Party B, Party A will promptly pay to the relevant
            government revenue authority the amount of such liability
            (including any related liability for interest and penalties).

      (iii) Tax Credit etc.

            (a)   Where Party A pays an amount in accordance with Section
                  2(d)(i)(D) or 2(d)(ii)(C) above, Party B undertakes as
                  follows:-

                  (1)   To the extent that Party B obtains any Tax credit,
                        allowance, set-off or repayment from the tax
                        authorities of any


                                      17
<PAGE>


                        jurisdiction relating to any deduction or withholding
                        giving rise to such payment or in the case of Section
                        2(d)(ii)(B) the amount to be assessed ("Tax Credit"),
                        it shall pay to Party A on the next Interest Payment
                        Date after receipt of the same so much of the cash
                        benefit (as calculated below) relating thereto which
                        it has received as will leave Party B in substantially
                        the same (but in any event no worse) position as Party
                        B would have been in if no such deduction or
                        withholding had been required or the amount had not
                        been so assessed;

                  (2)   The "cash benefit" shall, in the case of credit,
                        allowance or set-off, be the additional amount of Tax
                        which would have been payable by Party B in the
                        jurisdiction referred to in (1) above but for the
                        obtaining by it of the said Tax credit, allowance or
                        set-off and, in the case of a repayment, shall be the
                        amount of the repayment together, in either case, with
                        any related interest or similar payment obtained by
                        Party B; and

                  (3)   It will use all reasonable endeavours to obtain any
                        Tax Credit as soon as is reasonably practicable
                        provided that it shall be the sole judge of the amount
                        of any such Tax Credit and of the date on which the
                        same is received and shall not be obliged to disclose
                        to Party A any information regarding its tax affairs
                        or tax computations save that Party B shall, upon
                        request by Party A, supply Party A with a reasonably
                        detailed explanation of its calculation of the amount
                        of any such Tax Credit and of the date on which the
                        same is received.

                        The definition of "Indemnifiable Tax" in Section 14
                        shall be deleted and the following shall be
                        substituted therefor:

                        "Indemnifiable Tax" means any Tax."

(p)   Change of Account

      Section 2(b) of this Agreement is hereby amended by the addition of the
      following at the end thereof:

      "; provided that such new account shall be in the same legal and tax
      jurisdiction as the original account and such new account, in the case
      of Party B, is held with a financial institution with a short term
      unsecured, unsubordinated and unguaranteed debt obligation rating of at
      least P-1 (in the case of Moody's) and A-1 (in the case of S&P)."

(q)   Condition Precedent

      Section 2(a)(iii) shall be amended by the deletion of the words "a
      Potential Event of Default" in respect of conditions precedent to the
      obligations of Party A only.


                                      18
<PAGE>


(r)   Representations

      (i)   Section 3(a)(v) shall be amended by the addition of the words
            "(with the exception of Section 11 insofar as it relates to any
            Stamp Tax)" after the words "this Agreement".

      (ii)  Section 3(b) shall be amended by the deletion of the words "or
            Potential Event of Default" in respect of the representation given
            by Party B only.

(s)   Transfers

      (i)   Section 7 of this Agreement shall not apply to Party A, who shall
            be required to comply with, and shall be bound by, the following:

            Without prejudice to Section 6(b)(ii) as amended in the Schedule,
            Party A may transfer all its interest and obligations in and under
            this Agreement upon providing five Business Days prior written
            notice to the Note Trustee, to any other entity (a "Transferee")
            provided that:

            (a)   the Transferee's  long-term,  unsecured and unsubordinated
                  debt  obligations  are then  rated not less than  "AA-" by
                  S&P and  "A1" by  Moody's  and its  short-term,  unsecured
                  and  unsubordinated  debt  obligations  are then rated not
                  less  than  "F1"  by  Fitch  (or  its  equivalent  by  any
                  substitute    rating   agency)   or   such    Transferee's
                  obligations  under this  Agreement  are  guaranteed  by an
                  entity  whose  long-term,   unsecured  and  unsubordinated
                  debt  obligations  are then  rated not less than  "AA-" by
                  S&P and "A1" by Moody's  and whose  short-term,  unsecured
                  and  unsubordinated  debt  obligations  are then rated not
                  less  than  "F1"by  Fitch  (or  its   equivalent   by  any
                  substitute rating agency);

            (b)   as of the date of such transfer the Transferee will not, as
                  a result of such transfer, be required to withhold or deduct
                  on account of tax under this Agreement;

            (c)   a Termination Event or an Event of Default does not occur
                  under this Agreement as a result of such transfer;

            (d)   no additional amount will be payable by Party B to Party A
                  or the Transferee on the next succeeding Scheduled Payment
                  Date as a result of such transfer; and

            (e)   (if the Transferee is domiciled in a different country from
                  both Party A and Party B) S&P, Moody's and Fitch have
                  provided prior written notification that the then current
                  ratings of the Series 1 Class C Notes will not be adversely
                  affected.

                  Following such transfer all references to Party A shall be
                  deemed to be references to the Transferee.


                                      19
<PAGE>


      (ii)  Save as otherwise provided for in this Agreement and
            notwithstanding Section 7, Party A shall not be permitted to
            transfer (by way of security or otherwise) this Agreement nor any
            interest or obligation in or under this Agreement without the
            prior written consent of the Note Trustee.

(t)   Contracts (Rights of Third Parties) Act 1999

      A person who is not a party to this Agreement shall have no right under
      the Contracts (Rights of Third Parties) Act 1999 to enforce any of its
      terms but this shall not affect any right or remedy of a third party
      which exists or is available apart from that Act.

(u)   Calculations if an Early Termination Date occurs as a result of an Event
      of Default or Additional Termination Event where Party A is the
      Defaulting Party or the sole Affected Party.

      Subject to compliance with Clause 15.3(l)(i) (Dollar Currency Swap
      Agreements) of the Current Issuer Deed of Charge, upon the occurrence of
      an Event of Default or an Additional Termination Event with respect to
      Party A, Party B will be entitled (but not obliged in the event that it
      does not designate an Early Termination Date) to proceed in accordance
      with Section 6 of the Agreement subject to the following:

      (i)   For the purposes of Clause 6(d)(i), Party B's obligation with
            respect to the extent of information to be provided with its
            calculations is limited to information Party B has already
            received in writing and provided Party B is able to release this
            information without breaching the provisions of any law applicable
            to, or any contractual restriction binding upon, Party B.

      (ii)  The following amendments shall be deemed to be made to the
            definitions of "Market Quotation":

            (a)   the word "firm" shall be added before the word "quotations"
                  in the second line; and

            (b)   the  words  "provided  that  the  documentation   relating
                  thereto  is  either  the  same as this  Agreement  and the
                  existing   confirmations   hereto   (and   the   long-term
                  unsecured  and  unsubordinated  debt  obligations  of  the
                  Reference  Market-maker  are rated not less than  "AA-" by
                  S&P and  "A1" by  Moody's  and its  short-term,  unsecured
                  and  unsubordinated  debt  obligations  are rated not less
                  than "F1" by Fitch  (or,  if such  Reference  Market-maker
                  is not  rated  by a  Rating  Agency,  at  such  equivalent
                  rating (by another  Rating  Agency) that is  acceptable to
                  such   Rating   Agency)  or  the  Rating   Agencies   have
                  confirmed  in writing  such  proposed  documentation  will
                  not  adversely  impact the ratings of the Series 1 Class C
                  Notes"  shall  be added  after  "agree"  in the  sixteenth
                  line; and

            (c)   the last sentence shall be deleted and replaced with the
                  following:


                                      20
<PAGE>


                  "If, on the last date set for delivery of quotations,
                  exactly two quotations are provided, the Market Quotation
                  will be either (a) the lower of the two quotations where
                  there would be a sum payable by Party A to Party B, or (b)
                  the higher of the two quotations where there would be a sum
                  payable by Party B to Party A. If only one quotation is
                  provided on such date, Party B may, in its discretion,
                  accept such quotation as the Market Quotation and if Party B
                  does not accept such quotation (or if no quotation has been
                  provided), it will be deemed that the Market Quotation in
                  respect of the Terminated Transaction cannot be determined."

      (iii) For the purpose of the definition of "Market Quotation", and
            without limitation of the general rights of Party B under the
            Agreement:

            (A)   Party B will undertake to use its reasonable efforts to
                  obtain at least three firm quotations as soon as reasonably
                  practicable after the Early Termination Date and in any
                  event within the time period specified pursuant to (iii)(C)
                  below;

            (B)   Party A shall, for the purposes of Section 6(e), be
                  permitted to obtain quotations from Reference Market-makers;
                  and

            (C)   If no quotations have been obtained within 6 Local Business
                  Days after the occurrence of the Early Termination Date or
                  such longer period as Party B may specify in writing to
                  Party A, then it will be deemed that the Market Quotation in
                  respect of the Terminated Transaction cannot be determined.

      (iv)  Party B will be deemed to have discharged its obligations under
            (iii)(A) above if it promptly requests, in writing, Party A (such
            request to be made within two Local Business Days after the
            occurrence of the Early Termination Date) to obtain quotations
            from Reference Market-makers and Party A agrees to act in
            accordance with such request.

      (v)   Party B will not be obliged to consult with Party A as to the day
            and time of obtaining any quotations.

(v)   Swiss Re Capital Markets Limited as Party A's Agent

      In the case of Party A, Swiss Re Capital Markets Limited ("SRCML")
      possesses the full power and authority to enter into any transaction on
      behalf of Party A under this Agreement, and any action taken or
      purported to be taken by SRCML, as the case may be, under this Agreement
      on behalf of Party A shall be binding on Party A. Notwithstanding the
      foregoing, SRCML shall not have any obligations or liabilities in
      connection with this Agreement or the Transactions hereunder, and the
      Transactions and the related collateral under the Credit Support Annex,
      if any, shall have no relation to the assets and liabilities of SRCML,
      or of any entity that is affiliated with SRCML, other than Party A and
      any Credit Support Provider of Party A. Accordingly, unless and until
      written notice is received by Party B and the Note Trustee from Party A
      that such power


                                      21
<PAGE>


      and authority has been terminated, Party B and the Note Trustee shall be
      entitled to treat all communications and acts relating to this Agreement
      received from or carried out by SRCML as being those of Party A and
      Party A hereby agrees to ratify and confirm the same.



                                      22
<PAGE>





                                  APPENDIX A

<PAGE>

                                                        Series 1 Class C Notes


From:       Swiss Re Financial Products Corporation
            55 East 52nd Street
            New York
            New York 10055
            U.S.A.

To:         Granite Mortgages 04-1 plc
            Fifth Floor
            100 Wood Street
            London
            EC2V 7EX

Attention:  Securitisation Team, Risk Operations

To:         The Bank of New York
            48th Floor
            One Canada Square
            London
            E14 5AL

Attention:  Corporate Trust (Global Structured Finance)

                                                              28 January, 2004


Dear Sirs,

Re:   Cross Currency Swap Transactions Relating to Granite Mortgages 04-1 plc
      USD 108,000,000 Series 1 Class C Notes due March 2044

The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Date specified below (the
"Swap Transactions"). This letter constitutes a "Confirmation" as referred to
in the 1992 ISDA Master Agreement (Multicurrency-Cross Border) entered into
between us and both of you on the date hereof as amended and supplemented from
time to time (the "Agreement").

The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps & Derivatives Association, Inc. (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
shall prevail. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master
Definitions Schedule Seventh Amendment Deed executed by, among others, the
Note Trustee on 26 January, 2004 and the Issuer Master Definitions Schedule
signed for the purposes of identification by Sidley Austin Brown & Wood and
Allen & Overy on 28 January, 2004 (as the same have been and may be amended,
varied or supplemented from time to time with the consent of the parties
hereto). The Issuer Master Definitions Schedule specified above shall prevail
to the extent that it conflicts with the Master Definitions Schedule.



                                      1
<PAGE>



1     This Confirmation supplements, forms part of, and is subject to, the
      Agreement. All provisions contained in, incorporated in, or incorporated
      by reference to, the Agreement shall govern this Confirmation except as
      expressly modified below.

2     The terms of the particular Swap Transactions to which this Confirmation
      relates are as follows:

Party A:                                    Swiss Re Financial Products
                                            Corporation

Party B:                                    Granite Mortgages 04-1 plc

Trade Date:                                 21 January, 2004

Effective Date:                             28 January, 2004

Termination Date:                           The earlier of (i) the Payment
                                            Date falling in March
                                            2044 and (ii) the date
                                            on which the Series 1
                                            Class C Notes are
                                            redeemed or repaid in
                                            full.

Payment Date:                               Each Quarterly Payment Date.

USD Amortisation Amount:                    In respect of a Payment Date,
                                            the amount (in USD) to
                                            be applied in
                                            repayment of the
                                            principal amount of
                                            the Series 1 Class C
                                            Notes on such Payment
                                            Date as notified to
                                            the Calculation Agent
                                            by the Cash Manager.

Exchange Rate:                              GBP 1.00: USD 1.8367

A.    Floating Payments

Floating Amounts for Party A:
Floating Rate Payer:                        Party A

Party A Currency Amount:                    As at any Party A Payment
                                            Date, USD108,000,000
                                            minus the aggregate of
                                            each Party A Interim
                                            Exchange Amount made
                                            prior to such date.

Party A Payment Dates:                      Each Payment Date in respect
                                            of the Series 1 Class C Notes.

Floating Rate Option:                       USD-LIBOR-BBA


                                      2
<PAGE>


Designated Maturity:                        3 months; except for the
                                            initial Calculation
                                            Period which shall be
                                            the linear
                                            interpolation of 1 and
                                            2 months.

Spread A for the Calculation Periods        0.9% per annum
up to and including the Calculation
Period ending on but excluding the
Payment Date in March 2009:



Spread A for the Calculation Periods        1.9% per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in March 2009 up to
and including the Calculation Period
ending on but excluding the
Termination Date:



Party A Floating Rate Day Count Fraction:   Actual/360

Reset Dates:                                The first day of each
                                            Calculation Period.

Floating Amounts for Party B:

Floating Rate Payer:                        Party B

Party B Currency Amount:                    As at any Party B Payment
                                            Date, GBP 58,801,111
                                            minus the aggregate of
                                            each Party B Interim
                                            Exchange Amount made
                                            prior to such date.

Party B Payment Dates:                      Each Payment Date in respect
                                            of the Series 1 Class C Notes.

Floating Rate Option:                       GBP-LIBOR-BBA

Designated Maturity:                        3 months except for the
                                            initial Calculation
                                            Period which shall be
                                            the linear
                                            interpolation of 1 and
                                            2 months.

Spread B for the Calculation Periods        1.0337% per annum
up to and including the Calculation
Period ending on but excluding the
Payment Date in March 2009:

Spread B for the Calculation Periods        1.9% per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in March 2009 up to
and including the Calculation Period
ending on but excluding the
Termination Date:

Party B Floating Rate Day Count Fraction:   Actual/365 (Fixed)


                                       3
<PAGE>


Reset Dates:                                The first day of each
                                            Calculation Period.

Calculation Agent:                          Party A

B.    Initial Exchange:

Initial Exchange Date:                      Effective Date

Party A Initial Exchange Amount:            GBP 58,801,111

Party B Initial Exchange Amount:            USD108,000,000

C.    Interim Exchange:

Interim Exchange Date:                      Each Payment Date on which the
                                            USD Amortisation Amount is to
                                            be applied in repayment of the
                                            principal amount of the Series
                                            1 Class C Notes.

Party A Interim Exchange Amount:            The USD Amortisation Amount.

Party B Interim Exchange Amount:            In respect of any Interim
                                            Exchange Date, an
                                            amount in GBP equal to
                                            the Party A Interim
                                            Exchange Amount
                                            converted into GBP at
                                            the Exchange Rate.
D. Final Exchange:

Final Exchange Date:                        Termination Date

Party A Final Exchange Amount:              A USD amount equal to the
                                            Party B Final Exchange
                                            Amount converted into
                                            USD at the Exchange
                                            Rate.

Party B Final Exchange Amount:              The Party B Currency Amount.

E. Account Details:

Payments to Party A:

Account for Payments in USD:                JP Morgan Chase Bank
                                            SWIFT: CHASUS33
                                            For the Account of Swiss Re
                                            Financial Products Corporation
                                            Account No.: 066-911184


                                      4
<PAGE>


Account for Payments in GBP:                JP Morgan Chase Bank
                                            (CHAPS Sort Code 60-92-42)
                                            SWIFT: CHASGB2L
                                            For the Account of Swiss Re
                                            Financial Products Corporation
                                            Account No.: 24492904

Payments to Party B:

Account for Payments in USD:                Citibank, N.A., London
                                            Agency and Trust
                                            S.W.I.F.T. CITIGB2L
                                            for further credit to
                                            A/C Granite Mortgages 04-1 plc
                                            A/C 10141615

Account for Payments in GBP:                Citibank N.A., London
                                            8378088
                                            Agency and Trust
                                            Sort Code 18-50-08
                                            for further credit to
                                            A/C Granite Mortgages 04-1 plc
                                            A/C 10141631

F.    Notice Details:

Party A:                                    Swiss Re Financial Products
                                            Corporation

Address:                                    55 East 52nd Street
                                            New York
                                            New York 10055 U.S.A.

Facsimile Number:                           +1 212 317 5335

Attention:                                  Head of Operations

With a copy to:                             Swiss Re Financial Products
                                            Corporation

                                            55 East 52nd Street
                                            New York
                                            New York 10055 U.S.A.

Facsimile Number:                           +1 212 317 5474

Attention:                                  Legal Department


                                      5
<PAGE>


Party B:                                    Granite Mortgages 04-1 plc

Address:                                    Fifth Floor
                                            100 Wood Street
                                            London
                                            EC2V 7EX

With a copy to:                             Northern Rock plc
                                            Northern Rock House
                                            Gosforth
                                            Newcastle upon Tyne
                                            NE3 4PL

Facsimile Number:                           44-191-279-4694

Attention:                                  Keith M. Currie

With a copy to the                          The Bank of New York
Note Trustee:

Address:                                    One Canada Square
                                            48th Floor
                                            London
                                            E14 5AL

Facsimile Number:                           020 7964 6061

G.    Offices:                              The Office of Party A for each
                                            of the Transactions evidenced
                                            by this Confirmation is London.
H.    Miscellaneous:

(a)   Section 2(c)(ii) of the Agreement will not apply to the Transactions
      evidenced by this Confirmation.

(b)   If any payment of any amounts by Party A and Party B is deferred in
      accordance with Part 5(h)(iii) of the Schedule to this Agreement then
      the amount so deferred on the Party A Floating Amount shall, subject
      to the terms of this Agreement, be payable on the next Party A
      Payment Date (together with an additional floating amount accrued
      thereon at the applicable Party A Floating Rate) and the Party A
      Floating Amount due on such date shall be deemed to include such
      amounts.

      The amount so deferred on the Party B Floating Amount shall, subject to
      the terms of this Agreement, be payable on the next Party B Payment Date
      (together with an additional floating amount accrued thereon accrued at
      the applicable Party B Floating Rate) and the Party B Floating Amount
      due on such date shall be deemed to include such amounts.


                                      6
<PAGE>


(c)   In relation to Part 5(f) of the Schedule to this Agreement, in the case
      of a redemption in full of the Series 1 Class C Notes pursuant to
      Condition 5(F) of the terms and conditions of the Current Issuer Notes,
      "Market Quotation" in respect of the Terminated Transactions shall be
      determined based on the anticipated rate of reduction in the Party A
      Currency Amount and the Party B Currency Amount had such redemption not
      occurred.

(d)   "Quarterly Payment Date" means the 20th day of March, June, September
      and December in each year (or if such day is not a Business Day, the
      next succeeding Business Day), beginning in March 2004.



                                      7
<PAGE>



Yours faithfully,


SWISS RE FINANCIAL PRODUCTS CORPORATION

By:



Name:
Title:


Confirmed as of the date first written:

GRANITE MORTGAGES 04-1 PLC

By:


Name:
Title:




THE BANK OF NEW YORK
     as Note Trustee

By:


Name:
Title:



                                      8
<PAGE>



                                  APPENDIX B


<PAGE>




                                   Guarantee

To: Granite  Mortgages 04-1 plc ("the  Beneficiary"),  issuer of the Granite
Mortgages 04-1 plc Series 1 Class C Notes (the "Rated Security")

1. The undersigned, SWISS REINSURANCE COMPANY, a Swiss company (the
"Guarantor"), hereby absolutely and unconditionally guarantees the prompt
payment as and when due of all obligations of its indirect, wholly-owned
subsidiary SWISS RE FINANCIAL PRODUCTS CORPORATION, a Delaware corporation
("THE GUARANTEED SUBSIDIARY") under, in connection with or ancillary to an
ISDA Master Agreement, dated as of January 28, 2004 between the Beneficiary
and the Guaranteed Subsidiary as amended or restated from time to time ("the
Agreements") which support the issuance of the Rated Security. In this
Guarantee these obligations are referred to as the "Guaranteed Obligations".
This Guarantee is given solely for the benefit of, and is enforceable only by,
the Beneficiary or any trustee as assignee of the Beneficiary to which this
Guarantee has been validly assigned in accordance with applicable law and who
is acting as trustee for the investors in the Rated Securities.

2. This Guarantee constitutes a Guarantee of payment and not of collection and
is not conditional or contingent upon any attempts to collect from, or pursue
or exhaust any rights or remedies against, THE GUARANTEED SUBSIDIARY. A demand
for payment hereunder may at the Beneficiary's option be made in writing
addressed to the Chief Financial Officer of the Guarantor. This Guarantee is
not however dependent in any way on the manner of the demand for payment.
Delay in making a claim will not affect the Guarantor's obligations under this
Guarantee unless the relevant legal limitation period has expired.

3. This Guarantee constitutes, and is intended by the Guarantor to constitute,
an unlimited non-accessory undertaking (,,unbeschrankte, nicht akzessorische
Verpflichtung") within the meaning of Article 111 of the Swiss Code of
Obligations (,CO`) and is not a mere surety (,,Burgschaft") within the meaning
of Article 492 et seq of the CO.

4. Notwithstanding any reference to the obligations of THE GUARANTEED
SUBSIDIARY, the Guarantor's obligations under this Guarantee are its absolute
and independent obligations as a primary obligor. Payment of a claim hereunder
is required as soon as the Guaranteed Obligations are due and payable.

5. To the extent that any event or circumstance would give rise to any legal
or equitable discharge, defence or other rights of the Guarantor under this
Guarantee, but which event or circumstance would not give rise to any
discharge, defence or other rights of THE GUARANTEED SUBSIDIARY under the
Agreements, the Guarantor hereby fully waives, subject to paragraph 7 below,
such discharge, defence, or other rights and the Guarantor's liability
hereunder shall continue as if such event or circumstance had not arisen.

6. The Guarantor further agrees, subject to paragraph 7 below, that to the
extent that any event or circumstance gives rise to any legal or equitable
discharge, defence or other rights available to both the Guarantor under the
Guarantee and THE GUARANTEED SUBSIDIARY under the Agreements, the Guarantor
hereby agrees to waive such discharge, defense or other rights against the
Beneficiary, until such time as all the Guaranteed Obligations in relation to
the same event or circumstance have been fully met as required to protect
investors in the Rated Securities.

7. Notwithstanding any other provision of this Guarantee, the Guarantor will
have the right, prior to making any payment under this Guarantee, to (a)
assert such rights of offset as are set forth in the Agreements to the extent
that such rights relate to amounts due and




<PAGE>


payable by the Beneficiary to THE GUARANTEED SUBSIDIARY and not to amounts
which are subject to dispute; and (b) defend manifestly fraudulent claims
under this Guarantee made by the Beneficiary.

8. This Guarantee will continue in full force and effect in relation to all
Guaranteed Obligations until all the Guaranteed Obligations have been
satisfied in full.
For the avoidance of doubt, all Guaranteed Obligations entered into by THE
GUARANTEED SUBSIDIARY during the term of this Guarantee shall be honoured in
accordance with this Guarantee and shall be binding on the Guarantor and its
successors and assigns.
This Guarantee may be amended only as necessary to reflect changes to the
Guaranteed Obligations which are validly agreed to by the Beneficiary (or the
trustee as assignee of the Beneficiary) in accordance with the terms of the
Rated Securities, including any requirement to obtain the consent of some or
all of the investors in the Rated Securities.

9. If any payment by THE GUARANTEED SUBSIDIARY is avoided, recaptured or
reduced as a result of insolvency or any similar event affecting creditors
rights generally having occurred in respect of THE GUARANTEED SUBSIDIARY, the
Guarantor`s liability under this Guarantee shall continue as if the avoided,
recaptured or reduced payment had not occurred.

10. Upon payment by the Guarantor to the Beneficiary of any amount due under
this Guarantee, the Guarantor shall be entitled to require the assignment to
it of the rights of the Beneficiary against THE GUARANTEED SUBSIDIARY to the
extent satisfied by such payment, and the Beneficiary will take at the
Guarantor's expense such steps as the Guarantor may reasonably require to
implement such assignment. The Guarantor shall not exercise any rights against
THE GUARANTEED SUBSIDIARY which it may acquire in consequence of such payment
and assignment unless and until all the Guaranteed Obligations to the
Beneficiary shall have been paid in full.

11. This Guarantee is governed and will be construed in accordance with Swiss
law. The exclusive place of jurisdiction for any legal proceeding hereunder
shall be Zurich, Switzerland.


IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be executed in
its name as of the 28th day of January, 2004.



                                        SWISS REINSURANCE COMPANY