EXHIBIT 4.5.2










                             Dated 28 January 2004
                             ---------------------






                        GRANITE FINANCE FUNDING LIMITED
                                  as Funding



                             THE BANK OF NEW YORK
                              as Security Trustee



                          GRANITE MORTGAGES 04-1 PLC
                               as Current Issuer



                               NORTHERN ROCK PLC
                   as Current Issuer Start-up Loan Provider



                                    - and -


                                    OTHERS







------------------------------------------------------------------------------

                           ISSUER DEED OF ACCESSION

------------------------------------------------------------------------------







                          SIDLEY AUSTIN BROWN & WOOD
                             1 THREADNEEDLE STREET
                                LONDON EC2R 8AQ
                            TELEPHONE 020 7360 3600
                            FACSIMILE 020 7626 7937

<PAGE>

                                   CONTENTS

1.    Interpretation.........................................................3

2.    Representations and Warranties.........................................3

3.    Accession..............................................................4

4.    Funding Security.......................................................5

5.    Title Guarantee........................................................7

6.    Application............................................................7

7.    Scope of the Funding Deed of Charge....................................7

8.    Notices and Acknowledgements...........................................7

9.    Amendment to the Funding Priority of Payments..........................8

10.   Notices and Demands....................................................8

11.   Non Petition Covenant..................................................9

12.   Third Party Rights....................................................10

13.   Execution in Counterparts.............................................10

14.   Governing Law and Jurisdiction; Appropriate Forum.....................10

15.   Process Agents........................................................10

SCHEDULE I  Utilisation of Issuer Reserves..................................16
APPENDIX 1 Amended and Restated Funding Priority of Payments................17

<PAGE>

THIS DEED OF ACCESSION is made on 28 January 2004

BETWEEN:

(1)   GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
      limited liability company incorporated under the laws of Jersey whose
      London branch is at 4 Royal Mint Court, London EC3N 4HJ;

(2)   THE BANK OF NEW YORK, a New York banking corporation whose London branch
      address is at 48th Floor, One Canada Square, London E14 5AL United
      Kingdom, in its capacity as Security Trustee;

(3)   THE BANK OF NEW YORK, a New York banking corporation whose London branch
      address is at 48th Floor, One Canada Square, London E14 5AL United
      Kingdom, (1) in its separate capacities as Note Trustee in respect of
      the Previous Issuers and (2) in its capacity as note trustee under the
      Current Issuer Trust Deed and the Current Issuer Deed of Charge (the
      "Current Issuer Note Trustee", which expression shall include such
      person and all other persons for the time being acting as the note
      trustee or note trustees pursuant to those deeds);

(4)   GRANITE MORTGAGES 01-1 PLC (registered number 4129652), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;

(5)   GRANITE MORTGAGES 01-2 PLC (registered number 4270015), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;

(6)   GRANITE MORTGAGES 02-1 PLC (registered number 4340767), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;

(7)   GRANITE MORTGAGES 02-2 PLC (registered number 4482804), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;

(8)   GRANITE MORTGAGES 03-1 PLC (registered number 4598035), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;

(9)   GRANITE MORTGAGES 03-2 PLC (registered number 4684567), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;



                                      1
<PAGE>

(10)  GRANITE MORTGAGES 03-3 PLC (registered number 4823268), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX;

(11)  GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
      limited liability company incorporated under the laws of Jersey whose
      registered office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX
      Channel Islands in its capacity as Mortgages Trustee;

(12)  NORTHERN ROCK PLC (registered number 03273685), a public limited company
      incorporated under the laws of England and Wales whose registered office
      is at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL in its
      capacity as Cash Manager;

(13)  LLOYDS TSB BANK PLC, acting through its office at City Office, Bailey
      Drive, Gillingham Business Park, Kent ME8 0LS, in its capacity as
      Account Bank and acting through its office at 25 Monument Street, London
      EC3R 8BQ in its capacity as Funding GIC Provider;

(14)  MOURANT & CO. CAPITAL (SPV) LIMITED, a private limited company
      incorporated under the laws of England and Wales whose registered office
      is 4 Royal Mint Court, London EC3N 4HJ, in its capacity as Corporate
      Services Provider;

(15)  NORTHERN ROCK PLC (registered number 03273685), acting through its
      office at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL, in
      its capacity (1) as the Previous Start-up Loan Provider, and (2) as
      Current Issuer Start-up Loan Provider;

(16)  GRANITE MORTGAGES 04-1 PLC (registered number 4959572), a public limited
      company incorporated under the laws of England and Wales whose
      registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX as
      Current Issuer.

NOW THIS DEED OF ACCESSION WITNESSES AS FOLLOWS

WHEREAS:

(A)   Pursuant to the terms of the Current Issuer Intercompany Loan
      Confirmation, the Current Issuer has agreed to make available to Funding
      the Current Issuer Intercompany Loan.

(B)   Pursuant to the terms of the Current Issuer Start-up Loan Agreement, the
      Current Issuer Start-up Loan Provider has agreed to grant to Funding the
      Current Issuer Start-up Loan.



                                      2
<PAGE>

(C)   This Deed is supplemental to the Funding Deed of Charge, pursuant to
      which Funding agreed to provide the Security Trustee with the benefit of
      the security described in the Funding Deed of Charge to secure Funding's
      obligations to the Funding Secured Creditors.

(D)   The terms of the Funding Deed of Charge permit Funding to secure its
      obligations to a New Funding Secured Creditor thereunder and (where such
      New Funding Secured Creditor is a New Issuer) permit Funding to create
      certain Security Interests in favour of the Security Trustee for the
      benefit of such New Funding Secured Creditor.

(E)   The Current Issuer Start-up Loan Provider and the Current Issuer, each
      of whom is a New Funding Secured Creditor, have agreed to enter into
      this Deed of Accession (this "Deed") to accede to the provisions of the
      Funding Deed of Charge.

(F)   The Current Issuer Note Trustee has agreed to enter into this Deed to
      accede to the provisions of the Funding Deed of Charge.

(G)   The Funding Secured Creditors have agreed to enter into this Deed to,
      among other things, acknowledge and agree to such accessions, permit any
      consequential changes to the Funding Priority of Payments set out in
      Part I, Part II and Part III of Schedule 3 of the Funding Deed of Charge
      as are required and any other amendment as may be required to give
      effect to this Deed and to acknowledge the Security Interests created
      hereunder.

1.    Interpretation

      The provisions of the Master Definitions Schedule as amended and
      restated by (and appearing in Appendix 1 to) the Master Definitions
      Schedule Seventh Amendment Deed made on 26 January 2004 between, among
      others, the Seller, Funding and the Mortgages Trustee (as the same have
      been and may be amended, varied or supplemented from time to time with
      the consent of the parties hereto) are expressly and specifically
      incorporated into and shall apply to this Agreement.

2.    Representations and Warranties

2.1   The Current Issuer hereby represents and warrants to the Security
      Trustee and each of the Funding Secured Creditors in respect of itself
      that as of the date of this Deed:

      (a)  pursuant to the terms of the Current Issuer Intercompany Loan
           Agreement, Funding has agreed to pay to the Current Issuer fees,
           interest and principal in accordance with the terms of the Current
           Issuer Intercompany Loan Agreement; and



                                      3
<PAGE>

      (b)  the Current Issuer Intercompany Loan Agreement expressly provides
           that all amounts due from Funding thereunder are to be secured by
           or pursuant to the Funding Deed of Charge.

2.2   The Current Issuer Start-up Loan Provider hereby represents and warrants
      to the Security Trustee and each of the Funding Secured Creditors in
      respect of itself that as of the date of this Deed:

      (a)  Funding has agreed to pay interest and repay principal to the
           Current Issuer Start-up Loan Provider in accordance with the terms
           of the Current Issuer Start-up Loan Agreement; and

      (b)  the Current Issuer Start-up Loan Agreement expressly provides that
           all amounts due from Funding thereunder are to be secured by or
           pursuant to the Funding Deed of Charge.

2.3   Funding hereby represents and warrants to the Security Trustee and each
      of the Funding Secured Creditors that as at the date of this Deed, the
      conditions to incurring further secured financial indebtedness set out
      in Clause 2.2 (New Intercompany Loan Agreements) of the Intercompany
      Loan Terms and Conditions are satisfied.

3.    Accession

3.1   In consideration of the Current Issuer New Funding Secured Creditors
      being accepted as Funding Secured Creditors for the purposes of the
      Funding Deed of Charge by the parties thereto as from the date of this
      Deed, each of the Current Issuer New Funding Secured Creditors:

      (a)  confirms that as from the date of this Deed, it will become and
           intends to be a party to the Funding Deed of Charge as a Funding
           Secured Creditor;

      (b)  undertakes to comply with and be bound by all of the provisions of
           the Master Definitions Schedule and the Current Issuer Master
           Definitions Schedule (as the same may be amended, varied or
           restated from time to time) and the Funding Deed of Charge in its
           capacity as a Funding Secured Creditor, as if it had been an
           original party thereto;

      (c)  undertakes to perform, comply with and be bound by all of the
           provisions of the Funding Deed of Charge in its capacity as a
           Funding Secured Creditor, as if it had been an original party
           thereto including, without limitation, Clause 20.3 (Funding Secured
           Creditors), Clause 8.3 (Funding Post-Enforcement Priority of
           Payments), Clause 8.6 (Security Trustee Rights upon Enforcement)
           and Clause 6 (Restrictions on Exercise of Certain Rights); and



                                      4
<PAGE>

      (d)  agrees that the Security Trustee shall be the Security Trustee of
           the Funding Deed of Charge for all Funding Secured Creditors upon
           and subject to the terms set out in the Funding Deed of Charge.

3.2   The Current Issuer Note Trustee:

      (a)  confirms that as of the date of this Deed, it becomes and intends
           to be party to the Funding Deed of Charge; and

      (b)  agrees to comply with and be bound by the provisions of the Funding
           Deed of Charge relating to the Note Trustee and agrees that all
           references to the Note Trustee in the Funding Deed of Charge and
           this Deed shall be construed as including the note trustee under
           the Current Issuer Deed of Charge and Current Issuer Trust Deed.

4.    Funding Security

4.1   Funding, by way of first fixed security for the payment or discharge of
      that portion of the Funding Secured Obligations which represent the
      obligations and liabilities of Funding to the Current Issuer under the
      Current Issuer Intercompany Loan Agreement, subject to Clause 4 (Release
      of Funding Charged Property) of the Funding Deed of Charge, hereby:

      (a)  assigns by way of first fixed security to the Security Trustee for
           the benefit of the Current Issuer all of its right, title, benefit
           and interest, present and future, in, to and under:

           (i)    the Funding (Current Issuer) Bank Account Agreement; and

           (ii)   the Funding (Current Issuer) Guaranteed Investment Contract,

                  including all rights to receive payment of any amounts which
                  may become payable to Funding thereunder and all payments
                  received by Funding thereunder including, without
                  limitation, all rights to serve notices and/or make demands
                  thereunder and/or to take such steps as are required to
                  cause payments to become due and payable thereunder and all
                  rights of action in respect of any breach thereof and all
                  rights to receive damages or obtain relief in respect
                  thereof and the proceeds of any of the foregoing, TO HOLD
                  the same unto the Security Trustee absolutely;

      (b)  assigns by way of first fixed security in favour of the Security
           Trustee for the benefit of the Current Issuer all of its rights,
           title, benefit and interest, present and future, in and to all
           monies now or at any time hereafter standing to the credit of the
           Funding (Current Issuer) GIC Account and the debts represented by
           them together with all rights and claims relating or attached
           thereto



                                      5
<PAGE>

           including, without limitation, the right to interest and the
           proceeds of any of the foregoing, TO HOLD the same unto the
           Security Trustee absolutely; and

      (c)  charges by way of first fixed security to the Security Trustee for
           the benefit of the Current Issuer all of its right, title, benefit
           and interest, present and future in, to and under any Authorised
           Investment purchased using monies standing to the credit of the
           Funding (Current Issuer) GIC Account and all rights in respect of
           or ancillary to such Authorised Investments, including the right to
           income and the proceeds of any of the foregoing, TO HOLD the same
           unto the Security Trustee absolutely.

4.2   (a)  Funding, by way of first fixed security for the payment or
           discharge of the Funding Secured Obligations, subject to Clause 4
           (Release of Funding Charged Property) of the Funding Deed of
           Charge, hereby assigns to the Security Trustee, save to the extent
           that the same may be situate in Jersey at any relevant time, all of
           its right, title, benefit and interest, present and future, in, to
           and under the Current Issuer Start-up Loan Agreement, including,
           without limitation, all rights to receive payment of any amounts
           which may become payable to Funding thereunder and all payments
           received by Funding thereunder, all rights to serve notices and/or
           make demands thereunder and/or to take such steps as are required
           to cause payments to become due and payable thereunder, all rights
           of action in respect of any breach thereof and all rights to
           receive damages or obtain relief in respect thereof and the
           proceeds of any of the foregoing, TO HOLD the same unto the
           Security Trustee absolutely.

      (b)  To the intent that the Security Trustee shall have a security
           interest in accordance with the Jersey Security Law (and as secured
           party for the purposes of such law) for the payment or discharge of
           the Funding Secured Obligations, subject to Clause 4 (Release of
           Funding Charged Property) of the Funding Deed of Charge, Funding
           (as debtor for the purposes of the Jersey Security Law) hereby
           assigns, to the extent that the same may be situate in Jersey at
           any relevant time to the Security Trustee all of its right, title,
           benefit and interest, present and future, in, to and under the
           Current Issuer Start-up Loan Agreement, including, without
           limitation, all rights to receive payment of any amounts which may
           become payable to Funding thereunder and all payments received by
           Funding thereunder, all rights to serve notices and/or make demands
           thereunder and/or to take such steps as are required to cause
           payments to become due and payable thereunder, all rights of action
           in respect of any breach thereof and all rights to receive damages
           or obtain relief in respect thereof and the proceeds of any of the
           foregoing, TO HOLD the same unto the Security Trustee absolutely.



                                      6
<PAGE>

5.    Title Guarantee

      Each of the dispositions of, assignments of and charges over, property
      effected in or pursuant to Clause 4 (Accounts for Issuers) is made with
      full title guarantee.

6.    Application

      Prior to and following enforcement of the Funding Security all amounts
      at any time held by Funding, the Cash Manager or the Security Trustee in
      respect of the security created under this Deed shall be held and/or
      applied by such person subject to and in accordance with the relevant
      provisions of the Funding Deed of Charge.

7.    Scope of the Funding Deed of Charge

      Funding, the Current Issuer New Funding Secured Creditors and the
      Funding Secured Creditors (including the Security Trustee) hereby agree
      that for the relevant purposes under the Funding Deed of Charge and the
      Master Definitions Schedule:

      (a)  the Current Issuer Intercompany Loan Agreement shall be treated as
           a Funding Transaction Document;

      (b)  the Current Issuer Start-up Loan Agreement shall be treated as a
           Funding Transaction Document;

      (c)  the Funding (Current Issuer) Bank Account Agreement shall be
           treated as a Funding Transaction Document;

      (d)  the Funding (Current Issuer) Guaranteed Investment Contract shall
           be treated as a Funding Transaction Document;

      (e)  the property and assets of Funding expressed to be assigned or
           charged pursuant to this Deed shall constitute Funding Charged
           Property; and

      (f)  each of the Current Issuer New Funding Secured Creditors shall be
           treated as a Funding Secured Creditor.

8.    Notices and Acknowledgements

      (a)  The execution of this Deed by the Current Issuer New Funding
           Secured Creditors shall constitute notice to such Current Issuer
           New Funding Secured Creditors of the assignments made by Funding
           pursuant to Clause 3 (Funding Security) of the Funding Deed of
           Charge. The execution of this Deed by each other Funding Secured
           Creditor shall constitute notice to such Funding Secured Creditor
           of the assignments made by Funding pursuant to this Deed.



                                      7
<PAGE>

      (b)  By its execution of this Deed, each of the Current Issuer New
           Funding Secured Creditors acknowledges that it has notice of and
           consents to the assignments, charges and Security Interests
           (including the Jersey Security Interests) made or granted by
           Funding pursuant to Clause 3 (Funding Security) of the Funding Deed
           of Charge and also acknowledges that as at the date hereof it has
           not received from any other person any notice of any assignment or
           charge of any of the property the subject of such Security
           Interests. By its execution of this Deed, each other Funding
           Secured Creditor acknowledges that it has notice of and consents to
           the assignments, charges and Security Interests made or granted by
           Funding pursuant to this Deed and also acknowledges that as at the
           date hereof it has not received from any other person any notice of
           any assignment or charge of any of the property the subject of such
           Security Interests.

      (c)  Notwithstanding the assignments and charges granted pursuant to
           Clause 3 (Funding Security) of the Funding Deed of Charge or
           pursuant to this Deed, the parties hereto acknowledge that, subject
           as provided otherwise in the Funding Deed of Charge, each Funding
           Secured Creditor and each other party to any Funding Transaction
           Document may continue to make all payments becoming due to Funding
           under any Funding Transaction Document in the manner envisaged by
           such Funding Transaction Document until the receipt of written
           notice from the Security Trustee or any Receiver requiring payments
           to be made otherwise.

9.    Amendment to the Funding Priority of Payments

      The Funding Secured Creditors agree to amend and restate the Funding
      Priority of Payments set out in Part I and Part II of Schedule 3 of the
      Funding Deed of Charge in accordance with Appendix 1 hereto.

10.   Notices and Demands

      Any notice or communication under or in connection with this Deed shall
      be given in the manner and at the times set out in Clause 24 (Notices)
      of the Funding Deed of Charge. For the purposes of such Clause 24
      (Notices), as at the date of this Deed the relevant contact details for
      the Current Issuer are:

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

           For the attention of:  The Company Secretary



                                      8
<PAGE>

           Telephone:        +44 020 7606 5451
           Facsimile:        +44 020 7606 0643

      and for the Current Issuer Start-up Loan Provider are:

           Northern Rock PLC
           Northern Rock House
           Gosforth
           Newcastle upon Tyne
           NE3 4PL

           For the attention of:  The Group Secretary

           Facsimile:        +44 (0)191 213 2203

      and for the Current Issuer Note Trustee are:

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

           For the attention of:  Corporate Trust (Global Structured Finance)

           Facsimile:        +44 (020) 7964 6399.

11.   Non Petition Covenant

      Each of the parties hereto hereby agrees that it shall not institute
      against Funding, the Mortgages Trustee or any Issuer any winding-up,
      administration, insolvency or similar proceedings in any jurisdiction
      for so long as any sum is outstanding under any Intercompany Loan
      Agreement of any Issuer or for two years plus one day since the last day
      on which any such sum was outstanding provided that the Security Trustee
      may prove or lodge a claim in the event of a liquidation initiated by
      any other person. The provisions of Clause 6 (Restrictions on Exercise
      of Certain Rights) of the Funding Deed of Charge shall prevail in the
      event that and to the extent that they conflict with the provisions of
      this Clause.



                                      9
<PAGE>

12.   Third Party Rights

      A person who is not a party to this Deed may not enforce any of its
      terms under the Contracts (Rights of Third Parties) Act 1999, but this
      shall not affect any right or remedy of a third party which exists or is
      available apart from that Act.

13.   Execution in Counterparts

      This Deed may be executed in any number of counterparts (manually or by
      facsimile) and by different parties hereto in separate counterparts,
      each of which when so executed shall be deemed to be an original and all
      of which when taken together shall constitute one and the same
      instrument.

14.   Governing Law and Jurisdiction; Appropriate Forum

14.1  This Deed is governed by and shall be construed in accordance with
      English law save that those parts of this Deed concerned with the
      creation, subsistence or enforcement of Jersey Security Interests shall
      be governed by and in accordance with Jersey law.

14.2  Each of the parties hereto irrevocably agrees that the courts of England
      shall have jurisdiction to hear and determine any suit, action or
      proceeding, and to settle any disputes, which may arise out of or in
      connection with this Deed and, for such purposes, irrevocably submits to
      the jurisdiction of such courts.

14.3  Each of the parties hereto irrevocably waives any objection which it
      might now or hereafter have to the courts of England being nominated as
      the forum to hear and determine any Proceedings and to settle any
      disputes, and agrees not to claim that any such court is not a
      convenient or appropriate forum.

15.   Process Agents

      Funding irrevocably and unconditionally appoints Mourant & Co. Capital
      (SPV) Limited at 4 Royal Mint Court, London EC3N 4HJ or otherwise at the
      registered office of Mourant & Co. Capital (SPV) Limited for the time
      being as its agent for service of process in England in respect of any
      proceedings in respect of this Agreement and undertakes that in the
      event of Mourant & Co. Capital (SPV) Limited ceasing so to act it will
      appoint another person with a registered office in London as its agent
      for service of process.



                                      10
<PAGE>

DULY EXECUTED AND DELIVERED AS A DEED by each of the parties hereto or on its
behalf on the date appearing on page one.

<TABLE>
<CAPTION>
Funding

<S>                                                                     <C>
Executed by
GRANITE FINANCE FUNDING LIMITED
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       Director


                                                                         Name
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             Director/Secretary

                                                                         Name
                                                                             ------------------------------------------------------




The Security Trustee/The Note Trustee in respect of the Previous Issuers
and the Current Issuer Note Trustee

Executed by
THE BANK OF NEW YORK
as its deed as follows:                                                    By
Signed for and on its behalf by one of its duly authorised                   ------------------------------------------------------
signatories
                                                                         Name
                                                                             ------------------------------------------------------



Executed by
GRANITE MORTGAGES 01-1 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------



                                                                 11
<PAGE>

Executed by
GRANITE MORTGAGES 01-2 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------




Executed by
GRANITE MORTGAGES 02-1 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------




Executed by
GRANITE MORTGAGES 02-2 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------



                                                                 12
<PAGE>

Executed by
GRANITE MORTGAGES 03-1 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                         NameIan Bowden
                                                                             ------------------------------------------------------


Executed by
GRANITE MORTGAGES 03-2 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------


Executed by
GRANITE MORTGAGES 03-3 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------



                                                                 13
<PAGE>

Current Issuer

Executed by
GRANITE MORTGAGES 04-1 PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       for and on behalf of LDC Securitisation Director
                                                                             No.1 Ltd

                                                                        Name Clive Rakestrow
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             for and on behalf of LDC Securitisation Director
                                                                             No.2 Ltd

                                                                        Name Ian Bowden
                                                                             ------------------------------------------------------


The Cash Manager, the Previous Start-up Loan Provider and
the Current Issuer Start-up Loan Provider

Executed by
northern rock plc
as its deed as follows:                                                    By
Signed for and on its behalf by one of its duly authorised                   ------------------------------------------------------
attorneys/signatories                                                        Duly Authorised Attorney/Signatory

                                                                         Name
                                                                             ------------------------------------------------------
Signature
             -----------------------------------------------------
             Witness
Full name
             -----------------------------------------------------
Occupation   Solicitor
             -----------------------------------------------------
Address      c/o Sidley Austin Brown & Wood
             -----------------------------------------------------
             1 Threadneedle Street
             -----------------------------------------------------
             London EC2R 8AW
             -----------------------------------------------------


The Corporate Services Provider

Executed by
MOURANT & CO. CAPITAL (SPV) LIMITED
as its deed as follows:                                                    By
Signed for and on its behalf by one of its directors and by                  ------------------------------------------------------
another of its directors/its secretary                                       Director

                                                                         Name
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             Director/Secretary

                                                                         Name
                                                                             ------------------------------------------------------



                                                                 14
<PAGE>

The Account Bank and the Funding GIC Provider

Executed by
LLOYDS TSB BANK PLC
as its deed as follows:                                                    By
Signed for and on its behalf by one of its duly authorised                   ------------------------------------------------------
attorneys/signatories                                                        Duly Authorised Attorney/Signatory

                                                                         Name
                                                                             ------------------------------------------------------

Signature
             -----------------------------------------------------
             Witness
Full name
             -----------------------------------------------------
Occupation   Solicitor
             -----------------------------------------------------
Address      c/o Sidley Austin Brown & Wood
             -----------------------------------------------------
             1 Threadneedle Street
             -----------------------------------------------------
             London EC2R 8AW
             -----------------------------------------------------


The Mortgages Trustee

Executed by                                                                By
GRANITE FINANCE TRUSTEES LIMITED
as its deed as follows:
Signed for and on its behalf by one of its directors and by
another of its directors/its secretary
                                                                             ------------------------------------------------------
                                                                             Director

                                                                         Name
                                                                             ------------------------------------------------------


                                                                           By
                                                                             ------------------------------------------------------
                                                                             Director/Secretary

                                                                         Name
                                                                             ------------------------------------------------------
</TABLE>



                                                                 15
<PAGE>

                                  SCHEDULE I


                        Utilisation of Issuer Reserves

Reserves for Current Issuer

1.    Current Issuer Reserve Fund:

1.1   Prior to enforcement of the Current Issuer Security, the Current Issuer
      Reserve Fund shall only be applied on any Payment Date to increase that
      portion of Funding Available Revenue Receipts which are allocated to the
      Current Issuer to make payments of interest and fees due under the
      Current Issuer Intercompany Loan.

1.2   Following enforcement of the Current Issuer Security, to the extent not
      applied on a Payment Date in accordance with 1.1 above, amounts standing
      to the credit of the Current Issuer Reserve Fund Ledger shall only be
      applied in making payments of principal due under the Current Issuer
      Intercompany Loan (but not in respect of any other Intercompany Loan of
      any other Issuer) .

2.    Current Issuer Liquidity Reserve Fund:

2.1   Prior to enforcement of the Current Issuer Security, the Current Issuer
      Liquidity Reserve Fund (if any is required to be established) shall only
      be applied on any Payment Date to:

      (a)  help meet any deficit in Funding Available Revenue Receipts which
           are allocated to the Current Issuer to pay amounts due under the
           Current Issuer Intercompany Loan, but only to the extent necessary
           to fund the payment by the Current Issuer of interest and fees due
           on the relevant Interest Payment Date in respect of the Class A
           Notes and/or the Class B Notes and to credit the Class A Principal
           Deficiency Sub Ledger;

      (b)  (provided that there are no Class A Notes outstanding) help meet
           any deficit in Funding Available Revenue Receipts which are
           allocated to the Current Issuer to pay interest and fees due on the
           Current Issuer Intercompany Loan; and

      (c)  help meet any deficit in Funding Available Principal Receipts which
           are allocated to the Current Issuer to pay all principal due on the
           Final Maturity Date of the Series 1 Class A1 Notes.

2.2   Following enforcement of the Current Issuer Security, to the extent not
      applied on a Payment Date in accordance with 2.1 above, amounts standing
      to the credit of the Current Issuer Liquidity Reserve Ledger shall only
      be applied in making payments of principal due under the Current Issuer
      Intercompany Loan (but not in respect of any other Intercompany Loan of
      any other Issuer).



                                      16
<PAGE>

                                  APPENDIX 1
               Amended and Restated Funding Priority of Payments

                                    Part I

             Funding Pre-Enforcement Revenue Priority of Payments

Distribution of Funding Available Revenue Receipts prior to Enforcement of the
Funding Security

On each Payment Date or, in respect of amounts due to third parties by Funding
under paragraph (B), when due, prior to enforcement of the Funding Security,
the Cash Manager will, subject to the rules for application of Funding
Available Revenue Receipts (set out below), apply Group 1 Available Revenue
Receipts, Group 2 Available Revenue Receipts and amounts standing to the
credit of the Funding Expense Sub-Ledger, as applicable, in the following
order of priority (the "Funding Pre-Enforcement Revenue Priority of
Payments"):

      (A)  first, to pay amounts due to the Security Trustee (together with
           interest and (to the extent not already inclusive) VAT on those
           amounts) and to provide for any amounts due or to become due during
           the following Interest Period to the Security Trustee, under the
           Funding Deed of Charge or any other Transaction Document;

      (B)  second, to pay amounts due to any third party creditors of Funding
           (other than those referred to later in this order of priority of
           payments or in the Funding Pre-enforcement Principal Priority of
           Payments) of which the Cash Manager has notice prior to the
           relevant Payment Date, which amounts have been incurred without
           breach by Funding of the Transaction Documents to which it is a
           party (and for which payment has not been provided for elsewhere)
           and to provide for any such amounts expected to become due and
           payable by Funding during the following Interest Period and to pay
           or discharge any liability of Funding for corporation tax on any
           chargeable income or gain of Funding;

      (C)  third, towards payment of amounts due to the Cash Manager under the
           Cash Management Agreement (together with (to the extent not already
           inclusive) VAT on those amounts);

      (D)  fourth, in no order of priority among them, but in proportion to
           the respective amounts due, towards payment of amounts, if any, due
           to the Account Bank under the terms of the Bank Account Agreement
           and to the Corporate Services Provider under the Corporate Services
           Agreement;



                                      17
<PAGE>

      (E)  fifth, to pay, in no order of priority among them, to each Issuer
           an amount up to its Issuer Allocable Revenue Receipts in respect of
           interest and fees due on that Issuer's Intercompany Loan but not
           exceeding the aggregate amount of, and to be applied in the amounts
           and priorities set forth in, the Issuer Pre-Liquidity Payments for
           that Issuer;

      (F)  sixth, to pay, in no order of priority among them, such amount for
           each Issuer up to its Issuer Allocable Revenue Receipts as is
           necessary to replenish the Issuer Liquidity Reserve Fund, if any,
           established in respect of that Issuer up to the Issuer Liquidity
           Reserve Required Amount (but only to the extent that monies have
           been drawn from the relevant Issuer Liquidity Reserve Fund to pay
           interest and fees due under the relevant Intercompany Loan and only
           to replenish the Issuer Liquidity Reserve Fund of an Issuer to the
           extent that there are Class A Notes issued by the such Issuer
           outstanding on such Payment Date);

      (G)  seventh, to pay, in no order of priority among them, to each Issuer
           an amount up to its Issuer Allocable Revenue Receipts in respect of
           interest and fees due on that Issuer's Intercompany Loan but not
           exceeding the aggregate amount of, and to be applied in the amounts
           and priorities set forth in, the Issuer Post-Liquidity Payments for
           that Issuer;

      (H)  eighth, to pay, in no order of priority among them, such amount for
           each Issuer up to its Issuer Allocable Revenue Receipts as is
           necessary to fund the Issuer Reserve Fund established in respect of
           that Issuer up to the Issuer Reserve Required Amount or to
           replenish such Issuer Reserve Fund up to the related Issuer Reserve
           Required Amount (to the extent that monies have been drawn from
           such Issuer Reserve Fund to pay interest and fees under the
           relevant Intercompany Loan);

      (I)  ninth, to pay in no order of priority among them, to each Issuer an
           amount up to its Issuer Allocable Revenue Receipts in respect of
           interest, principal (in the case of the Special Repayment Notes)
           and fees due on that Issuer's Intercompany Loan but not exceeding
           the aggregate amount of, and to be applied in the amounts and
           priorities set forth in, the Issuer Pre-Reserve Payments for that
           Issuer;

      (J)  tenth, in no order of priority among them, from Issuer Allocable
           Revenue Receipts, to credit the Funding Reserve Ledger in an amount
           up to the Funding Reserve Required Amount;

      (K)  eleventh, to pay to each Issuer, in no order of priority among them
           but in proportion to the respective amounts due, an amount up to
           its Issuer Allocable



                                      18
<PAGE>

           Revenue Receipts in respect of interest and fees due on that
           Issuer's Intercompany Loan but not exceeding the aggregate amount
           of, and to be applied in the amounts and priorities set forth in,
           the Issuer Post-Reserve Payments for that Issuer;

      (L)  twelfth, in no order of priority among them, but in proportion to
           the respective amounts due, from Issuer Allocable Revenue Receipts,
           towards payment of interest and principal amounts due to each
           Issuer Start-up Loan Provider under the relevant Issuer Start-up
           Loan Agreement;

      (M)  thirteenth, in no order of priority among them, but in proportion
           to the respective amounts due, to pay to each Issuer an amount up
           to its Issuer Allocable Revenue Receipts in respect of interest and
           fees and any other amount (if any) due on that Issuer's
           Intercompany Loan but not exceeding the aggregate amount of, and to
           be applied in the amounts and priorities set forth in, the Issuer
           Post Start-up Payments for that Issuer;

      (N)  fourteenth, to the extent required, to apply, on the Payment Date
           for Group 1 Issuers, all Group 1 Shared Issuer Revenue Receipts or,
           on the Payment Date for Group 2 Issuers, Group 2 Shared Issuer
           Revenue Receipts, as applicable, in the priorities set forth in
           items (E) through (M) above;

      (O)  fifteenth, towards payment to Funding of an amount equal to 0.01%
           per annum of the Funding Available Revenue Receipts, which amount
           will be retained by Funding as profit less corporation tax in
           respect of those profits provided for or paid at item (B) above;

      (P)  sixteenth, towards payment of any Deferred Contribution due to the
           Mortgages Trustee pursuant to the terms of the Mortgages Trust
           Deed; and

      (Q)  last, towards payment to the shareholders of Funding of any
           dividend declared by Funding.

PROVIDED THAT no amount will be applied in replenishing any of the reserve
funds held by Funding in respect of an Issuer under paragraphs (F) and/or (H)
above following an enforcement of the Issuer Security relating to that Issuer.

For the avoidance of doubt, references to the Issuer Allocable Revenue
Receipts for a particular Issuer in items (E) through (M) (inclusive) above
shall be reduced by any amounts already allocated to that Issuer in the above
Priority of Payments on that Payment Date.



                                      19
<PAGE>

Rules for application of Funding Available Revenue Receipts


(1)   (A)  Subject as provided in paragraphs (2) through (9) below, the
           portion of Issuer Allocable Revenue Receipts for all Group 1
           Issuers remaining after item (M) of the Funding Pre-Enforcement
           Revenue Priority of Payments, together with any additional Funding
           Available Revenue Receipts under paragraph (3) below, shall
           constitute "Group 1 Shared Issuer Revenue Receipts". Group 1 Shared
           Issuer Revenue Receipts will be reallocated by the Cash Manager on
           a Payment Date for Group 1 Issuers in accordance with item (N) of
           the Funding Pre-Enforcement Revenue Priority of Payments and will
           continue to be distributed on such Payment Date in accordance with
           items (E) through (M) of the Funding Pre-Enforcement Revenue
           Priority of Payments until there are no remaining amounts of Group
           1 Shared Issuer Revenue Receipts to be reallocated and distributed
           on such Payment Date. If there is more than one Group 1 Issuer that
           is entitled to Group 1 Shared Issuer Revenue Receipts then each
           such Group 1 Issuer will be reallocated a portion of the Group 1
           Shared Issuer Revenue Receipts equal to:


<TABLE>
<CAPTION>
           <S>                                                  <C>
                                                                Outstanding Principal Balance of
                                                                the Intercompany Loan of such Group 1 Issuer
           Amount of Shared Group 1 Issuer Revenue Receipts  x  ---------------------------------------------
                                                                Aggregate Outstanding Principal Balance of
                                                                the Intercompany Loans of all Group 1 Issuers
</TABLE>


      (B)  Subject as provided in paragraphs (2) through (4) below, the
           portion of Issuer Allocable Revenue Receipts for all Group 2
           Issuers remaining after item (M) of the Funding Pre-Enforcement
           Revenue Priority of Payments, together with any additional Funding
           Available Revenue Receipts under paragraph (3) below, shall
           constitute "Group 2 Shared Issuer Revenue Receipts". Group 2 Shared
           Issuer Revenue Receipts will be reallocated by the Cash Manager on
           a Payment Date for Group 2 Issuers distributed on such Payment Date
           in accordance with item (N) of the Funding Pre-Enforcement Revenue
           Priority of Payments and will continue to be distributed on such
           Payment Date in accordance with items (E) through (M) of the
           Funding Pre-Enforcement Revenue Priority of Payments until there
           are no remaining amounts of Group 2 Shared Issuer Revenue Receipts
           to be reallocated and distributed on such Payment Date. If there is
           more than one Group 2 Issuer that is entitled to Group 2 Shared
           Issuer Revenue Receipts, then each such Group 2 Issuer will be
           reallocated a portion of Shared Issuer Revenue Receipts equal to:



                                      20
<PAGE>

<TABLE>
<CAPTION>
           <S>                                                  <C>
                                                                Outstanding Principal Balance of
                                                                the Intercompany Loan of such Group 2 Issuer
           Amount of Shared Group 2 Issuer Revenue Receipts  x  ---------------------------------------------
                                                                Aggregate Outstanding Principal Balance of
                                                                the Intercompany Loans of all Group 2 Issuers
</TABLE>


(2)   No Issuer shall be entitled to or shall receive any amount of Issuer
      Allocable Revenue Receipts from Funding on a Payment Date on which such
      Issuer is not required by that Issuer to make a payment on that date in
      accordance with the relevant Issuer Pre-Enforcement Revenue Priority of
      Payments or other relevant Issuer Priority of Payments which applies to
      that Issuer on that date, and the Cash Manager will take account of all
      of the funds which are or will become available to that Issuer on that
      Payment Date and which constitute Issuer Available Revenue Receipts
      (including any payments due under any Swap Agreement and any interest or
      other income received or to be received) for that Issuer for the purpose
      of making this determination.

(3)   Unless and until the Intercompany Loan of any Issuer has been repaid in
      full and Funding has no further liability under the relevant
      Intercompany Loan Agreement, amounts standing to the credit of the
      Issuer Reserve Ledger and the Issuer Liquidity Reserve Ledger, if any,
      established by Funding for that Issuer may only be utilized by Funding
      in making payments due under that Issuer's Intercompany Loan and may not
      be used in or towards the payment of any other liability of Funding. On
      the Payment Date following the repayment in full of the Intercompany
      Loan of that Issuer and provided that Funding has no further liability
      in respect of the relevant Intercompany Loan Agreement, any remaining
      amounts standing to the credit of the Issuer Reserve Ledger and the
      Issuer Liquidity Reserve Ledger, if any, of that Issuer will constitute
      additional Funding Available Revenue Receipts for the purpose of
      paragraphs (N) through (Q) of the Funding Pre-Enforcement Revenue
      Priority of Payments and may be utilized by Funding in paying any other
      liability of Funding subject to and in accordance with the relevant
      Funding Priority of Payments.


(4)   If on any Payment Date any Issuer Allocable Revenue Receipts and/or any
      Group 1 Shared Issuer Revenue Receipts or Group 2 Shared Issuer Revenue
      Receipts, as applicable, are paid to an Issuer and are applied by that
      Issuer, in reducing any deficiency recorded on the Issuer Principal
      Deficiency Ledger of that Issuer (but only to the extent that any
      deficiency which has arisen as a result of (i) losses on the Mortgage
      Loans allocated by Funding to the Issuer and/or (ii) the application of
      Funding Available Principal Receipts to fund the Issuer Liquidity
      Reserve Fund of the Issuer, but not as a result of any other principal
      deficiency of the Issuer), then the Issuer Allocable Revenue Receipts
      and/or Group 1 Shared Issuer Revenue Receipts or Group 2 Shared Issuer
      Revenue Receipts, as applicable, so applied shall constitute



                                      21
<PAGE>

      repayments of principal under the relevant Intercompany Loan and shall
      reduce the Outstanding Principal Balance of that Intercompany Loan
      accordingly.

      To the extent that (a) an amount payable to an Issuer pursuant to the
      Funding Pre-Enforcement Revenue Priority of Payments on any Payment Date
      would, in accordance with the Issuer Pre-Enforcement Revenue Priority of
      Payments relating to the Issuer, be credited by the Issuer to its Issuer
      Principal Deficiency Ledger, and (b) the amount to be treated as
      principal as a result of making such credit would result in the Issuer
      Available Principal Receipts of that Issuer on that Payment Date being
      in excess of the Principal Amount to be repaid by that Issuer in respect
      of its Notes on that Payment Date, then an amount equal to that excess
      shall be reapplied by Funding as Group 1 Available Principal Receipts or
      Group 2 Available Principal Receipts, as applicable.

(5)   The Cash Manager will distribute Group 1 Available Revenue Receipts only
      on each Payment Date for Group 1 Issuers and Group 2 Available Revenue
      Receipts only on each Payment Date for Group 2 Issuers. Group 1
      Available Revenue Receipts and Group 2 Available Revenue Receipts will
      be applied (subject to paragraph (7) below) to pay amounts set forth in
      paragraphs (E)-(Q) of the Funding Pre-Enforcement Revenue Priority of
      Payments and (D)-(G) of the Funding Post-Enforcement Priority of
      Payments.

(6)   All references to an "Issuer" or "Issuers" in the Funding
      Pre-Enforcement Revenue Priority of Payments shall be construed to refer
      to an Issuer or Issuers in Group 1 on a Payment Date for Group 1 Issuers
      and in Group 2 on a Payment Date for Group 2 Issuers.

(7)   On Payment Dates for both Group 1 Issuers and Group 2 Issuers, the Cash
      Manager will apply amounts standing to the credit of the Funding Expense
      Sub-Ledger on the immediately preceding Distribution Date to pay the
      amounts set forth in paragraphs (A)-(D) of the Funding Pre-Enforcement
      Revenue Priority of Payments and paragraph (A)-(C) of the Funding
      Post-Enforcement Priority of Payments.

(8)   To the extent that on any Payment Date for Group 1 Issuers or Payment
      Date for Group 2 Issuers amounts standing to the credit of the Funding
      Expense Sub-Ledger distributed pursuant to paragraph (7) above are
      insufficient to pay all amounts described in such paragraph (7), then
      the Cash Manager will apply amounts standing to the credit of the
      Funding Reserve Ledger to meet such a shortfall. To the extent that on
      any Payment Date amounts standing to the credit of the Funding Reserve
      Ledger and applied pursuant to the preceding sentence are insufficient
      to pay all amounts described in paragraph (7) above, then the Cash
      Manager will apply on the Payment Date for Group 1 Issuers, Group 1
      Available Revenue Receipts or on the Payment Date for Group 2 Issuers,
      Group 2 Available Revenue Receipts, as applicable, to pay such amounts.
      To the extent that amounts standing to the credit of the Funding Reserve
      Ledger are applied to pay any amounts described in paragraph (7) above
      then the amounts standing to the credit of the Funding Reserve Ledger as
      at the Distribution Date immediately preceeding the relevant Payment
      Date



                                      22
<PAGE>

      (unless such Payment Date is also a Funding Reserve Adjustment Date, in
      which case the relevant date will be the Distribution Date immediately
      preceding the immediately preceding Payment Date) above shall be deemed
      to have been reduced by the amount applied to pay amounts described in
      paragraph 7 above.

(9)   Group 1 Available Revenue Receipts may not be used to make payments to
      Group 2 Issuers and Group 2 Available Revenue Receipts may not be used
      to make payments to Group 1 Issuers.



                                      23
<PAGE>

                                    Part II

            Funding Pre-Enforcement Principal Priority of Payments

On each Payment Date prior to enforcement of the Funding Security, the Cash
Manager will, subject to the rules for application of Funding Available
Principal Receipts set forth below, apply Group 1 Available Principal Receipts
or Group 2 Available Principal Receipts, as applicable, as follows (the
"Funding Pre-Enforcement Principal Priority of Payments"):

(1)   On each Payment Date for Group 1 Issuers, Group 1 Available Principal
      Receipts to each Group 1 Issuer in the following order of priority:

      (A)  first, to fund or replenish, as the case may be, the Issuer
           Liquidity Reserve Fund, if any, of each Group 1 Issuer up to the
           Issuer Liquidity Reserve Required Amount but only from and to the
           extent of the Issuer Allocable Principal Receipts for that Issuer;

      (B)  second, to pay to (or, if required under that Issuer's Intercompany
           Loan, set aside for) each Group 1 Issuer an amount up to its Issuer
           Allocable Principal Receipts in respect of principal due (or, if
           required under that Issuer's Intercompany Loan, to become due) on
           that Issuer's Intercompany Loan, which shall be an amount up to the
           aggregate amount of, and shall be applied in the amounts and
           priorities set forth in, the Issuer Principal Payments for that
           Issuer;

      (C)  third, to pay to (or, if required under that Issuer's Intercompany
           Loan, set aside for) each Group 1 Issuer an amount up to its
           allocable portion of Group 1 Shared Issuer Principal Receipts in
           respect of principal due (or, if required under that Issuer's
           Intercompany Loan, to become due) on that Issuer's Intercompany
           Loan, which in the case of that Group 1 Issuer shall be an amount
           up to the aggregate amount of, and shall be applied in the amounts
           and priorities set forth in, the Issuer Principal Payments for that
           Issuer until there are no remaining Group 1 Available Principal
           Receipts on such Payment Date; and

      (D)  last, to credit any remaining amounts to the Funding Principal
           Ledger.

(2)   On each Payment Date for Group 2 Issuers, Group 2 Available Principal
      Receipts to each Group 2 Issuer in the following order of priority:

      (A)  first, to fund (either initially or to replenish, as the case may
           be) the Issuer Liquidity Reserve Fund, if any, of each Group 2
           Issuer up to the Issuer Liquidity Reserve Required Amount but only
           from and to the extent of the Issuer Allocable Principal Receipts
           for that Issuer;



                                      24
<PAGE>

      (B)  second, to pay to (or, if required under that Issuer's Intercompany
           Loan, set aside for) each Group 2 Issuer an amount up to its Issuer
           Allocable Principal Receipts in respect of principal due (or, if
           required under that Issuer's Intercompany Loan, to become due) on
           that Issuer's Intercompany Loan, which shall be an amount up to the
           aggregate amount of, and shall be applied in the amounts and
           priorities set forth in, the Issuer Principal Payments for that
           Issuer;

      (C)  third, to pay to (or, if required under the Issuer's Intercompany
           Loan, set aside for) each Group 2 Issuer an amount up to its
           allocable portion of Group 2 Shared Issuer Principal Receipts in
           respect of principal due (or, if required under that Issuer's
           Intercompany Loan, to become due) on that Issuer's Intercompany
           Loan, which in the case of that Group 2 Issuer shall be an amount
           up to the aggregate amount of, and shall be applied in the amounts
           and priorities set forth in, the Issuer Principal Payments for that
           Issuer until there are no remaining Group 2 Available Principal
           Receipts on such Payment Date; and

      (D)  last, to credit any remaining amounts to the Funding Principal
           Ledger.

PROVIDED THAT no amount will be applied in replenishing the Issuer Liquidity
Reserve Fund held by Funding in respect of an Issuer under paragraphs (1)(A)
or (2)(A) above following an enforcement of the Issuer Security relating to
that Issuer.

Rules for application of Funding available principal receipts


(1)   (A) On the Distribution Date immediately preceding a Payment Date for
      Group 1 Issuers, the Cash Manager will calculate the "Issuer Allocable
      Principal Receipts" for each such Issuer in respect of the relevant
      Payment Date which, subject as provided in paragraphs (2) through (8)
      below, is for any Issuer an amount which is equal to the sum of:

      (a)  the aggregate of:

           (i)    for any Group 1 Issuer, the amount, if any, by which the
                  Issuer Liquidity Reserve Fund relating to that Issuer will
                  be less than the Issuer Liquidity Reserve Required Amount in
                  each case prior to the distribution of Group 1 Available
                  Principal Receipts on the Payment Date for Group 1 Issuers
                  immediately succeeding such Distribution Date; and

           (ii)   for any Group 1 Issuer which has a Money Market Note still
                  outstanding up to the amount equal to the Controlled
                  Amortization



                                      25
<PAGE>

                  Amount due on such Money Market Note, if any, on the Payment
                  Date for Group 1 Issuers immediately succeeding such
                  Distribution Date;

      (b)  for any Group 1 Issuer, an amount equal to the lesser of:

           (i)    (only if relevant) the principal amount due on the
                  Intercompany Loan of such Issuer which is an amount equal to
                  the Controlled Amortisation Amount due, if any, on the
                  Payment Date for Group 1 Issuers immediately succeeding such
                  Distribution Date (excluding any amount calculated in
                  accordance with paragraph 1(A)(a)); and

           (ii)   an amount equal to:

<TABLE>
<CAPTION>
                  <S>                                                               <C>
                  Group 1 Available Principal Receipts minus the aggregate          Outstanding Principal Balance on such
                  amount under (1)(A)(a) above in respect of the relevant     x      Group 1 Issuer's Intercompany Loan
                  Issuer on such Payment Date                                       -------------------------------------
                                                                                        Aggregate Outstanding Principal
                                                                                     Balance of all Intercompany Loans of
                                                                                                Group 1 Issuers
</TABLE>


      (B)  On the Distribution Date immediately preceding a Payment Date for
           Group 2 Issuers, the Cash Manager will calculate the "Issuer
           Allocable Principal Receipts" for each such Issuer in respect of
           the relevant Payment Date which, subject as provided in paragraphs
           (2) through (8) below, is an amount which is equal to the sum of:

      (a)  the aggregate of:

           (i)    for any Group 2 Issuer, the amount, if any, by which the
                  Issuer Liquidity Reserve Fund relating to that Issuer will
                  be less than the Issuer Liquidity Reserve Required Amount in
                  each case prior to the distribution of Group 2 Available
                  Principal Receipts on the Payment Date for Group 2 Issuers
                  immediately succeeding such Distribution Date; and

           (ii)   for any Group 2 Issuer which has a Money Market Note still
                  outstanding, up to the amount equal to the Controlled
                  Amortization Amount due on each Money Market Note, if any,
                  on the Payment Date for Group 2 Issuers immediately
                  succeeding such Distribution Date; and

      (b)  for any Group 2 Issuer, an amount equal to the lesser of:

           (i)    (only if relevant) the principal amount due on the
                  Intercompany Loan of such Issuer which is an amount equal to
                  the Controlled Amortization Amount due, if any, on the
                  Payment Date for Group 2 Issuers immediately succeeding such
                  Distribution Date (excluding any amount calculated in
                  accordance with paragraph 1(B)(a)); and



                                      26
<PAGE>

           (ii)   an amount equal to:

<TABLE>
<CAPTION>
                  <S>                                                               <C>
                  Group 2 Available Principal Receipts minus the aggregate          Outstanding Principal Balance on such
                  amount under (1)(B)(a) above in respect of the relevant     x       Group 2 Issuer's Intercompany Loan
                  Issuer on such Payment Date                                       -------------------------------------
                                                                                        Aggregate Outstanding Principal
                                                                                     Balance of all Intercompany Loans of
                                                                                                Group 2 Issuers
</TABLE>


PROVIDED THAT,

      (a)  subject as provided in paragraphs (2) through (8) below, for the
           purpose only of determining the amount of Issuer Allocable
           Principal Receipts which may be allocated and paid to the relevant
           Group 1 Issuer or Group 2 Issuer (but not to any other Issuer) in
           accordance with this paragraph (1), following an enforcement of the
           Issuer Security relating to that Issuer the amount so determined
           may be increased to the extent of the aggregate of any amounts
           standing to the credit of the Issuer Liquidity Reserve Ledger, if
           any, and the Issuer Reserve Ledger of that Issuer remaining on the
           relevant Payment Date after the application of such reserve funds
           in accordance with the Funding Pre-Enforcement Revenue Priority of
           Payments; and

      (b)  for the purposes only of determining the amount of Group 1 Shared
           Issuer Principal Receipts and Group 2 Shared Issuer Principal
           Receipts in accordance with paragraph (6) below, Issuer Allocable
           Principal Receipts (in respect of a Group 1 Issuer) shall be an
           amount equal to the amount calculated in accordance with paragraphs
           1(A)(a) and (1)(A)(b)(ii) and paragraph (1)(A)(b)(i) shall not
           apply and (in respect of a Group 2 Issuer) shall be an amount equal
           to the amount calculated in accordance with paragraphs (1)(B)(a)
           and (1)(B)(b)(ii) above paragraph (1)(B)(b)(i) above shall not
           apply.

(2)   If the Notes of any Issuer have become immediately due and payable as a
      result of the service of a Note Enforcement Notice or if the
      Intercompany Loan of any Issuer and the other Intercompany Loans of any
      other Issuers have become immediately due and payable as a result of the
      service of an Intercompany Loan Enforcement Notice or otherwise on any
      Payment Date following the occurrence of any Asset Trigger Event,
      principal payments in respect of any Intercompany Loan may be made in
      excess of any Controlled Amortisation Amount and paragraphs (1)(A)(a)
      and 1(A)(b)(i) (in respect of a Group 1 Issuer), or paragraphs (1)(B)(a)
      and 1(B)(b)(i) above (in respect of a Group 2 Issuer) shall no longer
      apply in relation to that Issuer and the amount of Issuer Allocable
      Principal Receipts payable to that Issuer on the relevant Payment Date
      may not exceed the amount determined under paragraphs



                                      27
<PAGE>

      (1)(A)(b)(ii) and (1)(B)(b)(ii) above (save that no deduction shall be
      made from Funding Available Principal Receipts) but subject always to
      any increase in that amount as a result of the utilisation of the Issuer
      Reserve Fund and the Issuer Liquidity Reserve Fund (if any) following
      enforcement of the Issuer Security relating to that Issuer as provided
      in that paragraph. Following the occurrence of any Non-Asset Trigger
      Event (but prior to the occurrence of an Asset Trigger Event), (1) the
      reference in paragraph (1)(A)(a)(ii) and (1)(B)(a)(ii) above to the
      "Controlled Amortization Amount due on such Money Market Note" shall be
      deemed to refer to the "Outstanding Principal Balance of such Money
      Market Note", and (2) paragraph (1)(A)(b)(i) above (in respect of a
      Group 1 Issuer), or paragraph (1)(B)(b)(i) above (in respect of a Group
      2 Issuer) shall no longer apply in relation to the relevant Issuer and
      the amount of Issuer Allocable Principal Receipts payable to that Issuer
      on the relevant Payment Date may not exceed the amount determined under
      paragraph (1)(A)(b)(ii) above (in respect of a Group 1 Issuer) and
      (1)(B)(b)(ii) above (in respect of a Group 2 Issuer, subject to the same
      qualifications set forth in the immediately preceding paragraph.

(3)   For the purpose of determining the amount of Issuer Allocable Principal
      Receipts and/or any Group 1 Shared Issuer Principal Receipts or Group 2
      Shared Issuer Principal Receipts which may be paid to any Issuer on a
      Payment Date pursuant to paragraph (1) above or paragraph (6) below, the
      Outstanding Principal Balance of the relevant Intercompany Loan shall be
      deemed to be reduced by the amount of:

      (A)  any deficiency recorded on the Issuer Principal Deficiency Ledger
           of the relevant Issuer as at the relevant Payment Date, but only to
           the extent that such deficiency has arisen as a result of (i)
           losses on the Mortgage Loans allocated by Funding to that Issuer
           and/or (ii) the application of Funding Available Principal Receipts
           to fund the Issuer Liquidity Reserve Fund of that Issuer but not as
           a result of any other principal deficiency of that Issuer; and

      (B)  the Outstanding Principal Balance as at such Payment Date of any
           Special Repayment Notes issued by that Issuer.

(4)   The amount of Funding Available Principal Receipts payable to each
      Issuer on a Payment Date will be reduced by an amount equal to the
      aggregate of the Issuer Available Revenue Receipts of that Issuer which
      are to be applied on that Payment Date in reducing deficiencies recorded
      on the Issuer Principal Deficiency Ledgers, but only to the extent that
      the Issuer Available Revenue Receipts which are to be so applied on that
      Payment Date would not otherwise be payable as principal on the relevant
      Notes on such Payment Date.



                                      28
<PAGE>

(5)   No Issuer shall be entitled to, or shall receive on a Payment Date, any
      amount of Issuer Allocable Principal Receipts from Funding which is not
      required by that Issuer to make a payment on that date in accordance
      with the relevant Issuer Pre-Enforcement Principal Priority of Payments
      or otherwise to make a payment of principal on the Notes.

(6)   (A)  The portion of Issuer Allocable Principal Receipts (calculated in
           accordance with paragraph 1(A)(b)(ii) above), if any, not required
           to be applied by a Group 1 Issuer to pay principal on the Notes on
           a Payment Date for Group 1 Issuers together with the portion of
           Issuer Allocable Principal Receipts relating to all other Group 1
           Issuers not required to be so applied by such other Group 1 Issuers
           (or otherwise required to be set aside by Funding for any Group 1
           Issuer) on that Payment Date (excluding the amount of any Group 1
           Issuer Reserve Fund or Issuer Liquidity Reserve Fund (if any) of
           any Group 1 Issuer), shall constitute "Group 1 Shared Issuer
           Principal Receipts". Group 1 Shared Issuer Principal Receipts will
           be reallocated by the Cash Manager and distributed on such Payment
           Date among the Group 1 Issuers until there are no remaining amounts
           of Group 1 Shared Issuer Principal Receipts to be reallocated and
           distributed on such Payment Date. Save as provided in paragraph (2)
           above, if there is more than one Group 1 Issuer that is entitled to
           Group 1 Shared Issuer Principal Receipts, then each such Issuer
           will be reallocated a portion of the Group 1 Shared Issuer
           Principal Receipts equal to:

<TABLE>
<CAPTION>
      <S>                                                    <C>
                                                             Outstanding Principal Balance of
                                                             the Intercompany Loan of such Group 1 Issuer
      amount of Shared Group 1 Issuer Principal Receipts  x  --------------------------------------------
                                                             Aggregate Outstanding Principal Balance of
                                                             the Intercompany Loan of all Group 1 Issuers
</TABLE>

(B)   The portion of Issuer Allocable Principal Receipts (calculated in
      accordance with paragraph (1)(B)(b)(ii) above), if any, not required to
      be applied by a Group 2 Issuer to pay principal of the Notes on a
      Payment Date for Group 2 Issuers together with the portion of Issuer
      Allocable Principal Receipts relating to all other Group 2 Issuers not
      required to be so applied by such other Group 2 Issuers (or otherwise
      required to be set aside by Funding for any Group 2 Issuer) on that
      Payment Date (excluding the amount of any Issuer Reserve Fund or Issuer
      Liquidity Reserve Fund (if any) of any Group 2 Issuer) shall constitute
      "Group 2 Shared Issuer Principal Receipts". Group 2 Shared Issuer
      Principal Receipts will be reallocated by the Cash Manager and
      distributed on such Payment Date among the Group 2 Issuers until there
      are no remaining amounts of Group 2 Shared Issuer Principal Receipts to
      be reallocated and distributed on such Payment Date. Save as provided in
      paragraph (2) above, if there is more than one Group 2 Issuer that is
      entitled to Group 2 Shared Issuer Principal Receipts, then each such
      Group 2 Issuer will



                                      29
<PAGE>


      be reallocated a portion of the Group 2 Shared Issuer Principal Receipts
      equal to:

<TABLE>
<CAPTION>
      <S>                                                     <C>
                                                             Outstanding Principal Balance of
                                                             the Intercompany Loan of such Group 2 Issuer
      Amount of Shared Group 2 Issuer Principal Receipts  x  --------------------------------------------
                                                             Aggregate Outstanding Principal Balance of
                                                             the Intercompany Loan of all Group 2 Issuers
</TABLE>


(7)   The repayment of any Intercompany Loan prior to the occurrence of a
      Trigger Event, enforcement of the Issuer Security by the Note Trustee
      under the relevant Issuer Deed of Charge or enforcement of the Funding
      Security by the Security Trustee under the Funding Deed of Charge will
      be made in accordance with the terms of the relevant Intercompany Loan
      Agreement.

(8)   The Cash Manager will distribute only Group 1 Available Principal
      Receipts on each Payment Date for Group 1 Issuers and only Group 2
      Available Principal Receipts on each Payment Date for Group 2 Issuers.
      No payment may be made to Group 1 Issuers from Group 2 Available
      Principal Receipts and no payment may be made to Group 2 Issuers from
      Group 2 Available Principal Receipts.



                                      30
<PAGE>

                                   Part III

                 Funding Post-Enforcement Priority of Payments

At any time after the security created under the Funding Deed of Charge has
become enforceable in accordance with Clause 7.2 (Enforceable) thereof and
provided that the Intercompany Loan Enforcement Notice has not been withdrawn,
all Funding Available Revenue Receipts, Funding Available Principal Receipts
and all other monies paid to or received or recovered by or on behalf of
Funding or the Security Trustee or any Receiver appointed on its behalf,
including all proceeds following any sale, realisation or enforcement of the
security created under the Funding Deed of Charge and all amounts not
previously distributed and/or standing to the credit of any Funding Bank
Account and all monies standing to the credit of the Funding Reserve Ledger
(if any) shall (if not already received by the Security Trustee) be paid to
and held by the Security Trustee on trust to apply the same (save to the
extent required otherwise by applicable law) in accordance with the rules and
the order of priority of the Funding Post-Enforcement Priority of Payments.

The Security Trustee (or the Cash Manager on its behalf) will, subject to the
rules for application of Funding Available Principal Receipts and Funding
Available Revenue Receipts set out in Part I and Part II of this Schedule,
apply all such amounts received or recovered following enforcement of the
Funding Security on each Payment Date in accordance with the following order
of priority (the "Funding Post-Enforcement Priority of Payments"):

      (A)  first, from amounts standing to the credit of the Funding Expense
           Sub-Ledger in respect of such Payment Date, to pay amounts due to
           the Security Trustee and any Receiver appointed by the Security
           Trustee, together with interest and (to the extent not already
           inclusive) VAT on those amounts, and to provide for any amounts due
           or to become due to the Security Trustee and the Receiver in the
           following Interest Period under the Funding Deed of Charge or any
           other Transaction Document;

      (B)  second, from amounts standing to the credit of the Funding Expense
           Sub-Ledger in respect of such Payment Date, towards payment of
           amounts due and payable to the Cash Manager and any costs, charges,
           liabilities and expenses then due or to become due and payable to
           the Cash Manager under the Cash Management Agreement, together with
           (to the extent not already inclusive) VAT on those amounts;

      (C)  third, from amounts standing to the credit of the Funding Expense
           Sub-Ledger in respect of such Payment Date, (in no order of
           priority among them but in proportion to the respective amounts
           due) towards payment of amounts (if any) due to the Account Bank
           under the terms of the Bank Account



                                      31
<PAGE>

           Agreement and to the Corporate Services Provider under the
           Corporate Services Agreement;

      (D)  fourth, (1) from Group 1 Available Revenue Receipts and Group 1
           Available Principal Receipts in respect of each Payment Date for
           Group 1 Issuers, (in no order of priority among them but in
           proportion to the respective amounts due) to each Group 1 Issuer
           its share of Issuer Allocable Revenue Receipts and Issuer Allocable
           Principal Receipts towards payment of amounts of interest,
           principal and fees due to such Group 1 Issuer under such Issuer's
           Intercompany Loan Agreement, which in the case of that Issuer shall
           be up to the aggregate amount of the amounts, and shall be applied
           in the amounts and priorities, as set forth in the Issuer
           Post-Enforcement Priority of Payments for that Issuer;

      (2)  from Group 2 Available Revenue Receipts and Group 2 Available
           Principal Receipts in respect of each Payment Date for Group 2
           Issuers (in no order of priority among them but in proportion to
           the respective amounts due) to each Group 2 Issuer its Issuer
           Allocable Revenue Receipts and Issuer Allocable Principal Receipts,
           respectively, towards payment of amounts of interest, principal and
           fees due to such Group 2 Issuer under such Issuer's Intercompany
           Loan Agreement, which in the case of that Group 2 Issuer shall be
           up to the aggregate of the amounts, and shall be applied in the
           amounts and priorities, as set forth in the Issuer Post-Enforcement
           Priority of Payments for that Issuer;

      (E)  fifth, (1) from Group 1 Available Revenue Receipts and Group 1
           Available Principal Receipts in respect of each Payment Date for
           Group 1 Issuers, towards payment of amounts due to each Issuer
           Start-Up Loan Provider under the relevant Issuer Start-up Loan
           Agreement for each Group 1 Issuer;

           (2) from Group 2 Available Revenue Receipts and Group 2 Available
           Principal Receipts in respect of each Payment Date for Group 2
           Issuers, towards the payment of amounts due to each Issuer Start-up
           Loan Provider under the relevant Issuer Start-up Loan Agreement for
           each Group 2 Issuer;

      (F)  sixth, from any remaining Funding Available Revenue Receipts (being
           the remaining Group 1 Available Revenue Receipts, the Group 1
           Available Principal Receipts, the Group 2 Available Revenue
           Receipts and the Group 2 Available Principal Receipts) in respect
           of such Payment Date, towards payment of any Deferred Contribution
           due to the Mortgages Trustee under the Mortgages Trust Deed; and

      (G)  last, to pay any amount remaining following the application of
           principal and revenue set forth in paragraphs (A) through (F)
           above, to Funding,



                                      32
<PAGE>

PROVIDED THAT, to the extent that there is a shortfall in the amounts standing
to the credit of the Funding Expense Sub-Ledger, amounts payable under (A)
through (C) above may also be paid from Group 1 Available Revenue Receipts or
Group 2 Available Revenue Receipts as applicable to the relevant Payment Date.



                                      33