EXHIBIT 4.3





                             Dated 28 January 2004



                               NORTHERN ROCK PLC

                                   as Seller

                       GRANITE FINANCE TRUSTEES LIMITED

                             as Mortgages Trustee

                        GRANITE FINANCE FUNDING LIMITED

                                    - and -

                             THE BANK OF NEW YORK

                              as Security Trustee

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                                EIGHTH AMENDED
                            MORTGAGE SALE AGREEMENT

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

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                                   CONTENTS

Clause                                                                Page No.

1.    Definitions and Construction.........................................4

2.    Sale and Purchase of Initial Mortgage Portfolio......................5

3.    Initial Closing Date.................................................5

4.    Sale and Purchase of New Mortgage Portfolios.........................7

5.    Trust of Monies.....................................................14

6.    Perfection of the Assignment........................................15

7.    Undertakings........................................................17

8.    Warranties and Repurchase by the Seller.............................21

9.    Further Assurance...................................................27

10.   Consequences of Breach..............................................27

11.   Subordination.......................................................27

12.   Non-Merger..........................................................27

13.   No Agency or Partnership............................................27

14.   Payments............................................................28

15.   Assignment..........................................................28

16.   Security Trustee....................................................28

17.   New Intercompany Loans..............................................29

18.   Non Petition Covenant; Limited Recourse.............................29

19.   Amendments and Waiver...............................................30

20.   Notices.............................................................31

21.   Third Party Rights..................................................31

22.   Execution in Counterparts; Severability.............................31

23.   Governing Law and Submission to Jurisdiction........................32

24.   Process Agent.......................................................32

25.   Appropriate Forum...................................................32

26.   Transaction Documents...............................................33


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SCHEDULE 1 REPRESENTATIONS AND WARRANTIES.................................35

SCHEDULE 2 FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND AND
      SCOTTISH TRANSFERS..................................................44

Part 1  FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)............45

Part 2  FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)..........46

Part 3  FORM OF TRANSFER (LAND REGISTER - SCOTLAND).......................48

Part 4  FORM OF TRANSFER (SASINE REGISTER - SCOTLAND).....................50

SCHEDULE 3 ASSIGNMENT OF INSURANCE CONTRACTS..............................51

SCHEDULE 4 INSURANCE CONTRACTS............................................54

SCHEDULE 5 Part 1 ASSIGNMENT OF GUARANTEES................................55

Part 2  ASSIGNATION OF GUARANTEES.........................................57

SCHEDULE 6 NEW MORTGAGE PORTFOLIO NOTICE..................................60

SCHEDULE 7 LOAN REPURCHASE NOTICE.........................................63

SCHEDULE 8 FORM OF NOTIFICATION TO BORROWERS..............................65

SCHEDULE 9 OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE
      LOANS)..............................................................66

SCHEDULE 10  POWER OF ATTORNEY IN FAVOUR OF THE MORTGAGES TRUSTEE,
      FUNDING AND THE SECURITY TRUSTEE....................................67

SCHEDULE 11  FORM OF SCOTTISH TRUST DEED..................................70

SCHEDULE 12  LENDING CRITERIA.............................................77

SCHEDULE 13  STANDARD DOCUMENTATION.......................................80

APPENDIX A THE INITIAL MORTGAGE LOAN PORTFOLIO............................81


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THIS EIGHTH AMENDED MORTGAGE SALE AGREEMENT DATED 28 January 2004 FURTHER
AMENDS AND RESTATES THE MORTGAGE SALE AGREEMENT DATED 26 MARCH 2001 BETWEEN:

(1)    NORTHERN ROCK PLC (registered number 3273685), 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 Seller and in its capacity as a Beneficiary;

(2)    GRANITE FINANCE TRUSTEES LIMITED (registered number 79309), a private
       limited 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 the Mortgages Trustee;

(3)    GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
       limited company incorporated under the laws of Jersey, but acting out
       of its branch office established in England (registered overseas
       company number FC022999 and branch number BR005916) at 4 Royal Mint
       Court, London EC3N 4HJ in its capacity as a Beneficiary; and

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

WHEREAS:

(A)    The Seller carries on the business (inter alia) of originating mortgage
       loans secured on residential properties in England, Wales and Scotland.

(B)    The Seller has agreed to sell and assign to the Mortgages Trustee
       certain mortgage loans, together with the benefit of the related
       security for the same, on the terms and subject to, the conditions set
       out in this Mortgage Sale Agreement (the "Agreement").

(C)    The Mortgages Trustee has agreed to hold certain of the above mentioned
       mortgage loans as bare trustee for the Beneficiaries upon, with and
       subject to the trusts, powers and provisions of the Mortgages Trust
       Deed.

IT IS HEREBY AGREED AS FOLLOWS:

1.     Definitions and Construction

1.1.   The provisions of the Master Definitions Schedule as amended and
       restated by (and appearing in Appendix 1 to) the Master Definitions
       Schedule Seventh Amendment and Restatement Deed made on 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.


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2.     Sale and Purchase of Initial Mortgage Portfolio

2.1    Agreement to Assign: Subject to Clause 2.2 (Conditions), in
       consideration of the Purchase Price for the Initial Mortgage Portfolio
       (which shall be paid in accordance with Clause 3.3 (Effect of Payment
       of Initial Purchase Price)) and the covenant of the Mortgages Trustee
       to hold the Trust Property upon trust for the Seller and Funding as
       beneficiaries of the Mortgages Trust upon, with and subject to all the
       trusts, powers and provisions of the Mortgages Trust Deed and the
       Mortgages Trustee's agreement in Clause 3.5 (Early Repayment Charges)
       to pay to the Seller any and all Early Repayment Charge Receipts, the
       Seller hereby agrees to sell and assign the Initial Mortgage Portfolio
       to the Mortgages Trustee on the Initial Closing Date with full title
       guarantee.

2.2    Conditions: The obligation of the Seller under Clause 2.1 (Agreement to
       Assign) shall be subject to and conditional upon:

       (a)    the issue by the First Issuer of the Notes on the Initial
              Closing Date and the borrowing by Funding of the amount provided
              for under the First Issuer Intercompany Loan Agreement;

       (b)    the constitution of the Mortgages Trust on or prior to the
              Initial Closing Date;

       (c)    the Transaction Documents having been executed and delivered by
              the parties thereto on or before the Initial Closing Date or, in
              the case of any Transaction Documents which are to be executed
              immediately after the Initial Closing Date, the same having been
              executed and being available for delivery and none of the
              parties knowing of any reason why the same should not be
              delivered immediately thereafter;

       (d)    the payment of the Initial Contribution by Funding to the
              Mortgages Trustee in accordance with the terms of the Mortgages
              Trust Deed; and

2.3    the payment of the Initial Purchase Price by the Mortgages Trustee to
       the Seller in accordance with paragraph (a) of Clause 3.2 (Purchase
       Price).

3.     Initial Closing Date

3.1    Initial Closing and Conditions Precedent: A meeting shall take place on
       the Initial Closing Date at the offices of Brown & Wood, 7 Princes
       Court, London EC2R 8AQ, or such offices as the parties may agree, at
       which the Seller shall deliver to the Security Trustee (upon request),
       Funding and the Mortgages Trustee or the representative of such party
       (or procure such delivery to such party of) the following documents:

       (a)    an original power of attorney in the form set out in Schedule 10
              (Power of Attorney in favour of the Mortgages Trustee, Funding
              and the Security Trustee) duly executed by the Seller;

       (b)    a certificate of solvency in relation to the Seller dated as at
              the Initial Closing Date (in the form of the agreed draft) duly
              executed by the Seller;


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       (c)    a list of the Mortgage Loans in the Initial Mortgage Portfolio;

       (d)    an assignment of the Insurance Contracts to the extent that such
              Insurance Contracts relate to the Initial Mortgage Portfolio in
              the form set out in Schedule 3 (Assignment of Insurance
              Contracts) duly executed by the Seller; and

       (e)    a certified copy of the board minutes of the securitisation
              sub-committee of the Seller authorising its duly appointed
              representatives to agree the sale and assignment of the Initial
              Mortgage Portfolio and authorising the execution and performance
              of this Agreement, the Mortgages Trust Deed, the Administration
              Agreement, the other Transaction Documents and all of the
              documentation to be entered into pursuant to the Transaction
              Documents.

3.2    Purchase Price: Subject to fulfilment of the conditions referred to in
       paragraphs (a) to (and including) (d) of Clause 2.2 (Conditions) and
       Clause 3.1 (Initial Closing and Conditions Precedent), the Mortgages
       Trustee shall pay the Purchase Price for the Initial Mortgage Portfolio
       to the Seller, in the manner that the Seller directs, for value, as
       follows:

       (a)    the Initial Purchase Price for the Initial Mortgage Portfolio
              shall be paid by the Mortgages Trustee to the Seller on the
              Initial Closing Date (which Initial Purchase Price shall be paid
              by the Mortgages Trustee from funds received by the Mortgages
              Trustee from Funding on such date in respect of Funding's
              Initial Contribution for the Funding Share of the Closing Trust
              Property pursuant to the Mortgages Trust Deed);

       (b)    subject to and in accordance with the Mortgages Trustee Revenue
              Priority of Payments, an amount of Deferred Purchase Price in
              respect of the Mortgage Portfolio shall be paid by the Mortgages
              Trustee to the Seller on each Distribution Date but only from
              and to the extent (if any) of any Relevant Distribution (as
              defined under paragraph (b) of Clause 4.2 (Consideration
              provided by Funding) of the Mortgages Trust Deed) available for
              payment on such date and in an amount equal to the Deferred
              Contribution for the Funding Share of the Trust Property paid by
              Funding to the Mortgages Trustee on such date or in respect of
              which the payment of such Deferred Contribution is otherwise
              satisfied on such date in accordance with the Mortgages Trust
              Deed; and

       (c)    a final amount of Deferred Purchase Price in respect of the
              Mortgage Portfolio shall be paid by the Mortgages Trustee to the
              Seller following the receipt by the Mortgages Trustee from
              Funding of any Final Deferred Contribution, which payment shall
              be in an amount equal to such Final Deferred Contribution for
              the Funding Share of the Trust Property paid by Funding to the
              Mortgages Trustee or in respect of which the payment of such
              Final Deferred Contribution is otherwise satisfied in accordance
              with the Mortgages Trust Deed.

3.3    Effect of Payment of Initial Purchase Price: The parties hereto
       acknowledge that the effect of the payment to the Seller by the
       Mortgages Trustee of the Initial Purchase Price on the Initial Closing
       Date will be the assignment to the Mortgages Trustee of the beneficial
       ownership of, and all of the Seller's beneficial right, title, interest
       and benefit in and to, the


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       Initial Mortgage Portfolio subject to the terms and provisions of the
       Mortgages Trust Deed, which assignment will be perfected upon the
       occurrence of any of the events set forth in Clause 6 (Perfection of
       the Assignment) and the transfer to the Mortgages Trustee of legal
       title to the Initial Mortgage Portfolio in accordance with Clause 6
       (Perfection of the Assignment).

3.4    Documents: The Seller undertakes that from the Initial Closing Date
       until the perfection of the assignment in accordance with Clause 6.1
       (Perfection Events) and delivery of the Title Deeds in accordance with
       Clause 6.2 (Perfection), the Seller shall hold the deeds and documents
       constituting the Title Deeds and Mortgage Loan Files and all other
       certificates, notices, policies, endorsements and other matters
       necessary to establish title thereto relating to the Mortgage Portfolio
       that are in its possession or under its control or held to its order to
       the order of the Mortgages Trustee or the Security Trustee or as the
       Mortgages Trustee or the Security Trustee shall direct.

3.5    Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
       the Seller as part of the Deferred Purchase Price any and all Early
       Repayment Charge Receipts received by the Mortgages Trustee in respect
       of the Mortgage Loans included in the Initial Mortgage Portfolio
       PROVIDED THAT, if any Mortgage Loans in respect of which Early
       Repayment Charges are payable are the subject of a trust pursuant to
       Clause 5.1 (Trust in favour of Mortgages Trustee), the Seller, the
       Mortgages Trustee, Funding and the Security Trustee agree that the
       benefit of any Early Repayment Charges payable under such Mortgage Loan
       shall, on the date of payment to the Seller of the related Early
       Repayment Charge Receipts, be released from such trust.

3.6    Insurance: The Seller shall as soon as reasonably practical after the
       sale and assignment of the Initial Mortgage Portfolio on the Initial
       Closing Date procure that the respective interests of the Mortgages
       Trustee, Funding and the Security Trustee are noted by the relevant
       insurers in relation to each Insurance Contract.

4.     Sale and Purchase of New Mortgage Portfolios

4.1    Agreement to Assign: Subject to fulfilment of the conditions set out in
       Clauses 2.2 (Conditions), 3.1 (Initial Closing and Conditions
       Precedent), 4.2 (Conditions to Effecting an Assignment of New Mortgage
       Loans) and 4.3 (No Further Assignment), in consideration of either:

       (a)    the Purchase Price, if any is payable (which if it is payable
              shall be paid in accordance with Clause 4.5 (Purchase Price)),
              for the New Mortgage Portfolio and the covenant by the Mortgages
              Trustee to hold the Trust Property upon trust for the Seller and
              Funding as beneficiaries of the Mortgages Trust, upon, and with
              and subject to the trusts, powers and provisions of the
              Mortgages Trust Deed; or

       (b)    the covenant by the Mortgages Trustee to hold the Trust Property
              upon trust for the Seller and Funding as beneficiaries of the
              Mortgages Trust upon, and with and subject to the trusts, powers
              and provisions of the Mortgages Trust Deed,


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       and (in either case) the Mortgages Trustee's agreement in Clause 4.8
       (Early Repayment Charges) to pay to the Seller any and all Early
       Repayment Charge Receipts, if the Seller shall at any time and from
       time to time serve a properly completed New Mortgage Portfolio Notice
       as set out in Schedule 6 (New Mortgage Portfolio Notice) on the
       Mortgages Trustee and Funding with a copy (upon request) to the
       Security Trustee (such service to be in the Seller's sole discretion),
       then on the Assignment Date specified in the New Mortgage Portfolio
       Notice the Seller agrees that it shall sell and assign to the Mortgages
       Trustee the relevant New Mortgage Portfolio with full title guarantee
       (or, in relation to assets and rights situated in or governed by the
       law of Scotland, with absolute warrandice), PROVIDED THAT (a) the
       Seller hereby covenants and undertakes that it will not sell and assign
       New Mortgage Loans to the Mortgages Trustee during any Trust
       Calculation Period prior to the Distribution Date in such Trust
       Calculation Period, and (b) the Seller hereby agrees that it is only
       permitted to make one sale and assignment of New Mortgage Loans to the
       Mortgages Trustee during any Trust Calculation Period.

4.2    Conditions to Effecting an Assignment of New Mortgage Loans: The
       conditions to be met as at each Assignment Date in order to effect a
       sale and assignment of New Mortgage Loans are:

       (a)    the aggregate Arrears of Interest in respect of all of the
              Mortgage Loans in the Mortgages Trust, as a percentage of the
              aggregate gross interest due during the previous 12 months on
              all Mortgage Loans outstanding during all or part of such
              period, does not exceed 2 per cent., or such other percentage as
              agreed to by the Rating Agencies on such Assignment Date.
              "Arrears of Interest" for this purpose in respect of a Mortgage
              Loan on any date means the aggregate amount overdue on the
              Mortgage Loan on that date, but only where such aggregate amount
              overdue equals or exceeds an amount equal to the Monthly Payment
              then due on the Mortgage Loan and such amount has been overdue
              for an entire calendar month;

       (b)    the long term, unsecured, unguaranteed and unsubordinated debt
              obligations of the Seller are rated no lower than A3 by Moody's
              and A- by Fitch at the time of, and immediately following, the
              assignment of the New Mortgage Loans to the Mortgages Trustee;

       (c)    on the relevant Assignment Date, the aggregate Current Balance
              of the Mortgage Loans in the Mortgages Trust, in respect of
              which the aggregate amount is then in arrears for at least 3
              months, is less than 4 per cent. of the aggregate Current
              Balance of all Mortgage Loans in the Mortgages Trust on such
              Assignment Date, unless the Rating Agencies have confirmed that
              the then current ratings of the Notes will not be adversely
              affected;

       (d)    the Lending Criteria applicable at the time of origination of
              each relevant New Mortgage Loan have been applied to the New
              Mortgage Loan and to the circumstances of the Borrower at the
              time the New Mortgage Loan was made, provided that material
              variations from such Lending Criteria may occur so long as the
              Rating Agencies have been notified of any such material
              variations;


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       (e)    no New Mortgage Loan has on the relevant Assignment Date an
              aggregate amount in arrears which is greater than the amount of
              the Monthly Payment then due;

       (f)    the Rating Agencies have not provided written confirmation to
              the Mortgages Trustee, the Security Trustee and the Issuer that
              the assignment to the Mortgages Trustee of the New Mortgage
              Loans on the Assignment Date will adversely affect the then
              current ratings of the existing Notes of any Issuer (provided
              that, in respect of the assignment by the Seller to the
              Mortgages Trustee of a New Mortgage Portfolio in connection with
              the issuance by a New Issuer of New Notes and the drawing by
              Funding of a New Intercompany Loan, the condition to be met at
              the relevant Assignment Date of such New Mortgage Portfolio will
              be that the Rating Agencies have confirmed in writing to the
              Mortgages Trustee, the Security Trustee and the Issuer that the
              assignment to the Mortgages Trustee of the New Mortgage
              Portfolio on such Assignment Date will not adversely affect the
              then current ratings of the existing Notes of any Issuer);

       (g)    the aggregate Current Balance of New Mortgage Loans transferred
              in any one Interest Period does not exceed 10 per cent. of the
              aggregate Current Balance of Mortgage Loans in the Mortgages
              Trust as at the beginning of that Interest Period;

       (h)    each Issuer Reserve Fund is fully funded on the relevant
              Assignment Date up to the relevant required amount or, if any
              Issuer Reserve Fund is not so fully funded, no payments have
              been made from such Issuer Reserve Fund;

       (i)    no Intercompany Loan Enforcement Notice has been served in
              respect of any Intercompany Loan;

       (j)    the assignment of the New Mortgage Portfolio on the relevant
              Assignment Date does not result in the product of WAFF and WALS
              for the Mortgage Portfolio after such purchase, calculated on
              the relevant Assignment Date in the same way as for the Initial
              Mortgage Portfolio (or as agreed by the Administrator and the
              Rating Agencies from time to time), exceeding the product of
              WAFF and WALS for the Mortgage Portfolio calculated on the most
              recent preceding Closing Date plus 0.35 per cent.;

       (k)    to the extent necessary, each Issuer has entered into
              appropriate hedging arrangements in respect of such New Mortgage
              Loans before such Mortgage Loans are assigned to the Mortgage
              Trust;

       (l)    no event of default under the Transaction Documents has occurred
              which is continuing as at the relevant Assignment Date;

       (m)    the weighted average yield on the Mortgage Portfolio together
              with the New Mortgage Portfolio to be assigned to the Mortgages
              Trustee on the relevant Assignment Date is not less than LIBOR
              for three-month sterling deposits plus 0.56 per cent., taking
              into account the weighted average yield on the Mortgage Loans
              and the margins on any Basis Rate Swaps as at the relevant
              Assignment Date;


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       (n)    the assignment of the New Mortgage Portfolio on the relevant
              Assignment Date does not result in the weighted average loan to
              value ratio of Mortgage Loans in the Mortgage Portfolio on the
              relevant Assignment Date (after the purchase of the New Mortgage
              Portfolio) after application of the LTV Test on the relevant
              Assignment Date exceeding the loan to value ratio (based on the
              LTV Test) of Mortgage Loans in the Mortgage Portfolio on the
              most recent preceding Closing Date plus 0.25 per cent.;

       (o)    no New Mortgage Loan has a maturity date on or after January
              2039;

       (p)    the related Borrower under each New Mortgage Loan has made at
              least one Monthly Payment;

       (q)    for so long as any Notes issued by any Issuer that have a Final
              Repayment Date earlier than January 2041 are outstanding, the
              assignment of New Mortgage Loans to the Mortgages Trustee may
              only occur if, following such assignment, the aggregate number
              of Repayment Mortgage Loans in the Mortgage Portfolio is greater
              than or equal to 25 per cent. of the aggregate number of
              Mortgage Loans in the Mortgage Portfolio;

       (r)    the Rating Agencies have provided written confirmation that the
              then current ratings on the Notes would not be adversely
              affected by the assignment to the Mortgages Trustee of a New
              Mortgage Loan in respect of a mortgage loan product having
              characteristics and/or features that differ materially from the
              characteristics and/or features of the Mortgage Loans in the
              Initial Mortgage Portfolio;

       (s)    the Seller shall as at the relevant Assignment Date make the
              Representations and Warranties (which shall apply to Personal
              Secured Loans except where specifically excluded) to the
              Mortgages Trustee, Funding and the Security Trustee in relation
              to each New Mortgage Loan in the New Mortgage Portfolio being
              sold on the relevant Assignment Date in accordance with Clause 8
              (Warranties and Repurchase by the Seller) and such
              Representations and Warranties must be true in relation to each
              New Mortgage Loan (but if such Representation and Warranties are
              only discovered to be untrue after the relevant Assignment Date,
              the Mortgages Trustee's only remedy shall be under Clause 7
              (Undertakings); and

       (t)    following the purchase by the Mortgages Trust of any New
              Mortgage Portfolio, the aggregate Current Balance of Mortgage
              Loans in the Mortgages Trust that are subject to a maximum rate
              of interest and which charge interest at the lesser of the
              Seller's Standard Variable Rate and the maximum rate of interest
              (as specified in the relevant Mortgage Conditions) (the "Capped
              Rate Mortgage Loans") will not exceed 3 per. cent of the
              aggregate Current Balance of all Mortgage Loans in the Mortgages
              Trust (including such Capped Rate Mortgage Loans) as of such
              Assignment Date, unless Moody's has confirmed in writing that
              the then current ratings of the Notes will not be adversely
              affected,

       PROVIDED THAT, if an Initial Purchase Price is payable to the Seller by
       the Mortgages Trustee on the relevant Assignment Date, only the
       conditions set out in paragraphs (e), (f), (i),


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       (k), (l), (m), (o), (p), (q), (r) and (s) are required to be satisfied
       to effect an assignment of the New Mortgage Loans.

       Notwithstanding the foregoing, the Mortgages Trustee may waive or vary
       any of the conditions set forth in Clause 4.2 provided that each of the
       Rating Agencies has confirmed in writing (whether or not such
       confirmation is addressed to the Mortgages Trustee) that the relevant
       waiver or variation will not adversely affect the then current ratings
       of the existing Notes of any Issuer or that it approves the relevant
       waiver or variation.

4.3    No Further Assignment: The Seller and the Mortgages Trustee agree that
       the Seller may not sell and assign any New Mortgage Portfolio after the
       Step-up Date in respect of the Notes of any Issuer if the option to
       redeem any such Notes on the related Step-up Date pursuant to Condition
       5(D) of those Notes is not exercised.

4.4    Closing and Conditions Precedent: A meeting shall take place on the
       date of the sale and assignment of the relevant New Mortgage Portfolio
       at the offices of the Seller or at such other office as may be agreed
       by the parties at which the Seller shall deliver to the Security
       Trustee or its representative the following documents:

       (a)    a certificate of solvency in relation to the Seller dated the
              relevant Assignment Date (in the form of the agreed draft) duly
              executed by the Seller;

       (b)    an assignment of the Insurance Contracts to the extent that such
              Insurance Contracts relate to the New Mortgage Portfolio in the
              form set out in Schedule 3 (Assignment of Insurance Contracts)
              duly executed by the Seller;

       (c)    a certificate of a duly authorised officer of the Seller
              attaching a copy of the board minutes referred to in paragraph
              (e) of Clause 3.1 (Initial Closing and Conditions Precedent) and
              confirming that the resolutions referred to therein are in full
              force and effect and have not been amended or rescinded as at
              the date of the certificate; and

       (d)    a Scottish Trust Deed in respect of the Scottish Mortgage Loans
              in the New Mortgage Portfolio (if any) and their Related
              Security, in the form set out in Schedule 11 and with the
              annexure thereto duly completed, duly executed by the Seller.

4.5    Purchase Price: Subject to fulfilment of the conditions referred to in
       Clauses 4.2 (Conditions to Effecting an Assignment of New Mortgage
       Loans), 4.3 (No Further Assignment) and 4.4 (Closing and Conditions
       Precedent), the Mortgages Trustee shall, if and to the extent that the
       same is payable, pay the Purchase Price for the New Mortgage Portfolio
       to the Seller, in the manner that the Seller directs, for value, as
       follows:

       (a)    (if any Initial Purchase Price is payable in respect of the New
              Mortgage Portfolio which shall only be the case if an Initial
              Contribution is paid by Funding to the Mortgages Trustee on such
              date pursuant to the terms of the Mortgages Trust Deed) the
              Initial Purchase Price for the New Mortgage Portfolio shall be
              paid by the Mortgages Trustee to the Seller on the relevant
              Assignment Date (which Initial Purchase Price shall be paid by
              the Mortgages Trustee from funds received by the Mortgages
              Trustee from Funding on such date in respect of Funding's
              Initial


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              Contribution for the Funding Share of the New Trust Property
              pursuant to the Mortgages Trust Deed), PROVIDED THAT if on any
              date the Seller is obliged to repurchase any Mortgage Loan or
              Mortgage Loans pursuant to Clause 8.4 (Repurchase), 8.5
              (Purchase of Product Switches, Further Advances and purchases
              relating to Personal Secured Loans) or 8.6 (Repurchase of Fixed
              Rate Mortgage Loans), and on such date the Seller sells and
              assigns New Mortgage Loans and their Related Security to the
              Mortgages Trustee, the Seller is entitled to set-off against the
              repurchase price payable by it on such repurchase as set forth
              under Clause 8.7 (Completion of Repurchase) the amount of any
              Initial Purchase Price payable for any such New Mortgage Loans
              and shall instead pay (or be paid) such net amount; and

       (b)    subject to and in accordance with the Mortgages Trustee Revenue
              Priority of Payments, an amount of Deferred Purchase Price in
              respect of the Mortgage Portfolio shall be paid by the Mortgages
              Trustee to the Seller on each Distribution Date but only from
              and to the extent (if any) of any Relevant Distribution (as
              defined under paragraph (b) of Clause 4.2 (Consideration
              provided by Funding) of the Mortgages Trust Deed) available for
              payment on such date and in an amount equal to the Deferred
              Contribution for the Funding Share of the Trust Property paid by
              Funding to the Mortgages Trustee on such date or in respect of
              which the payment of such Deferred Contribution is otherwise
              satisfied on such date in accordance with the Mortgages Trust
              Deed.

4.6    Effect of Payment of Initial Purchase Price or Fulfilment of
       Conditions: The parties hereto acknowledge that the effect of either
       the payment to the Seller by the Mortgages Trustee of the Initial
       Purchase Price on the relevant Assignment Date or, if no Initial
       Purchase Price is payable on such date, the confirmation from the
       Seller of the fulfilment of the conditions referred to in Clauses 4.2
       (Conditions to Effecting an Assignment of New Mortgage Loans) and the
       delivery to the Security Trustee of the documents referred to in Clause
       4.4 (Closing and Conditions Precedent) on such date, will be the
       assignment and transfer to the Mortgages Trustee of the beneficial
       ownership of, and all of the Seller's beneficial right, title, interest
       and benefit in and to, the New Mortgage Portfolio subject to the terms
       and provisions of the Mortgages Trust Deed. Upon payment to the Seller
       by the Mortgages Trustee of the Initial Purchase Price on the relevant
       Assignment Date or, if no Initial Purchase Price is payable on such
       date, upon receipt of confirmation from the Seller of the fulfilment of
       the conditions referred to in Clauses 4.2 (Conditions to Effecting an
       Assignment of New Mortgage Loans), the fact that any of the conditions
       referred to in Clause 4.2 may not have been satisfied or waived, or any
       of the conditions precedent set out in Clause 4.4 (Closing and
       Conditions Precedent) have not been delivered or waived, shall not
       prevent the sale and assignment of the New Mortgage Portfolio to the
       Mortgages Trustee on the relevant Assignment Date (or prevent any
       Scottish Trust Deed from taking effect) and any unsatisfied conditions
       precedent shall deemed to have been waived. The foregoing is without
       prejudice to all of the rights and remedies of the Mortgages Trustee
       against the Seller, including without limitation, all claims for breach
       of Representation and Warranty. Each such assignment and transfer will
       be perfected upon the occurrence of any of the events set forth in
       Clause 6 (Perfection of the Assignment) and the transfer and
       assignation to the Mortgages Trustee of legal title to such New
       Mortgage Portfolio in accordance with Clause 6 (Perfection of the
       Assignment).


                                      12
<PAGE>


4.7    Documents: The Seller undertakes that from the relevant Assignment Date
       until the perfection of the assignment in accordance with Clause 6.1
       (Perfection Events) and the delivery of the Title Deeds in accordance
       with Clause 6.2 (Perfection), the Seller shall hold the deeds and
       documents constituting the Title Deeds and Mortgage Loan Files and all
       other certificates, notices, policies, endorsements and other matters
       necessary to establish title thereto relating to the Mortgage Portfolio
       that are in its possession or under its control or held to its order to
       the order of the Mortgages Trustee or as the Mortgages Trustee shall
       direct.

4.8    Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
       the Seller as part of the Deferred Purchase Price any and all Early
       Repayment Charge Receipts received by the Mortgages Trustee in respect
       of the Mortgage Loans included in the New Mortgage Portfolio PROVIDED
       THAT, if any Mortgage Loans in respect of which Early Repayment Charges
       are payable are the subject of a trust pursuant to Clause 5.1 (Trust in
       favour of Mortgages Trustee), the Seller, the Mortgages Trustee,
       Funding and the Security Trustee agree that the benefit of any Early
       Repayment Charges payable under such Mortgage Loan shall, on the date
       of payment to the Seller of the related Early Repayment Charge
       Receipts, be released from such trust.

4.9    Insurance: The Seller shall as soon as reasonably practical after
       completion of the sale and assignment of each New Mortgage Portfolio
       procure that the respective interests of the Mortgages Trustee, Funding
       and the Security Trustee are noted by the relevant insurers in relation
       to each Insurance Contract.

4.10   Mortgage Portfolio: Prior to the earlier to occur of:

       (a)    a Trigger Event; and

       (b)    (i)    if Funding does not enter into a New Intercompany Loan
                     Agreement, the Payment Date in January 2008; or

              (ii)   if Funding does enter into New Intercompany Loan
                     Agreements, the latest Payment Date specified by Funding
                     by notice in writing to the Seller and the Mortgages
                     Trustee as applying in relation to this covenant,

              the Seller undertakes to use all reasonable efforts to offer to
              sell and assign, in accordance with the provisions of this
              Clause 4 (Sale and Purchase of New Mortgage Portfolios), to the
              Mortgages Trustee and the Mortgages Trustee undertakes to use
              all reasonable endeavours to acquire from the Seller and to hold
              pursuant to the terms of the Mortgages Trust Deed, sufficient
              New Mortgage Loans and their Related Security so that the
              Overcollateralisation Test is not breached on three consecutive
              Distribution Dates PROVIDED THAT the Seller shall not be obliged
              to sell and assign to the Mortgages Trustee, and the Mortgages
              Trustee shall not be obliged to acquire, New Mortgage Loans and
              their Related Security if in the opinion of the Seller the sale
              and assignment to the Mortgages Trustee of New Mortgage Loans
              and their Related Security would adversely affect the business
              of the Seller.


                                      13
<PAGE>


       For the purposes of this Clause 4.10, the "Overcollateralisation Test"
       shall be calculated on each Distribution Date and shall be breached on
       any Distribution Date where the aggregate Current Balance of Mortgage
       Loans in the Mortgage Portfolio on such Distribution Date is less than
       an amount equal to the product of 1.05 and the Principal Amount
       Outstanding of all Notes of all Issuers at such Distribution Date, and
       for this purpose, where such Notes outstanding are Controlled
       Amortisation Notes, the Principal Amount Outstanding of such Notes will
       be calculated on a straight-line basis by applying the appropriate CPR
       to such Notes on a monthly, rather than a quarterly basis.

5.     Trust of Monies

5.1    Trust in favour of Mortgages Trustee: Notwithstanding the assignment
       and transfer effected by this Agreement (or by any Scottish Trust Deed
       made pursuant hereto) if at, or at any other time after, the Initial
       Closing Date or, as the case may be in respect of any New Mortgage
       Portfolio, the relevant Assignment Date (but prior to any repurchase in
       accordance with Clause 8.5 (Purchase of Product Switches, Further
       Advances and purchases relating to Personal Secured Loans)) the Seller
       holds, or there is held to its order, or it receives, or there is
       received to its order any property, interest, right or benefit and/or
       the proceeds thereof hereby agreed to be sold to the Mortgages Trustee,
       the Seller undertakes with the Mortgages Trustee, Funding and the
       Security Trustee that it will hold such property, interest, right or
       benefit and/or the proceeds thereof upon trust for the Mortgages
       Trustee (pursuant, in the case of any property, interest, right or
       benefit and/or the proceeds thereof relating to a Scottish Mortgage
       Loan or its Related Security, to the relevant Scottish Trust Deed)
       subject at all times to the Mortgages Trust. In addition, if for any
       reason the assignment and transfer of the Initial Mortgage Portfolio,
       or any New Mortgage Portfolio (or any part thereof), or any property,
       interest, right or benefit therein or any of the proceeds thereof (each
       a "relevant asset"), is held to be ineffective or unenforceable against
       any Borrower, the Seller undertakes with the Mortgages Trustee, Funding
       and the Security Trustee and hereby declares that it will hold such
       relevant asset upon trust for the Mortgages Trustee. The Mortgages
       Trustee agrees that it will hold its beneficial interest in such
       relevant asset subject at all times to the Mortgages Trust.

5.2    Trust in favour of Seller: If at, or any time after, the Initial
       Closing Date or, as the case may be in respect of any New Mortgage
       Portfolio, the relevant Assignment Date, the Mortgages Trustee holds,
       or there is held to its order, or it receives, or there is received to
       its order, any property, interest, right or benefit relating to:

       (a)    any Mortgage Loan or Mortgage Loans under a Mortgage Account and
              its Related Security repurchased by the Seller pursuant to
              Clause 8 (Warranties and Repurchase by the Seller); or

       (b)    (without prejudice to Clause 10 (Consequences of Breach)) any
              Early Repayment Charges payable by a Borrower in respect of any
              Mortgage Loan in the Mortgages Trust;

       and/or the proceeds thereof, the Mortgages Trustee undertakes with the
       Seller that it will remit, assign or transfer the same to the Seller,
       as the case may require, and until it does so or


                                      14
<PAGE>


       to the extent that the Mortgages Trustee is unable to effect such
       remittance, assignment or transfer, the Mortgages Trustee undertakes to
       hold such property, interest, right or benefit and/or the proceeds
       thereof upon trust for the Seller as the sole beneficial owner thereof
       or as the Seller may direct provided that the Mortgages Trustee shall
       not be in breach of its obligations under this Clause 5 if, having
       received any such moneys and paid them to third parties in error, it
       pays (at the direction of the Beneficiaries) to the Seller an amount
       equal to the moneys so paid in error in accordance with the
       Administration Agreement. In addition, if the Seller is required or
       elects to repurchase any Mortgage Loan and its Related Security
       pursuant to Clauses 8.4 (Repurchase), 8.5 (Purchase of Product
       Switches, Further Advances and purchases relating to Personal Secured
       Loans) or 8.6 (Repurchase of Fixed Rate Mortgage Loans) and such
       Mortgage Loan or its Related Security, or any part thereof, or any
       property, interest, right or benefit therein or any of the proceeds
       thereof (each, a "relevant asset"), is held by the Seller subject to a
       trust pursuant to Clause 5.1 (Trust in favour of Mortgages Trustee),
       then the Seller, the Mortgages Trustee, Funding and the Security
       Trustee agree that such relevant asset shall be released from the trust
       constituted pursuant to Clause 5.1 (Trust in favour of Mortgages
       Trustee) on the date that such relevant asset would otherwise have been
       repurchased or re-transferred pursuant to Clause 8.7 (Completion of
       Repurchase).

6.     Perfection of the Assignment

6.1    Perfection Events: The execution of transfers and assignations of the
       Mortgages to the Mortgages Trustee and the notifications to Borrowers
       notifying such Borrowers of the assignment or assignation of their
       Mortgage Loans and Related Security to the Mortgages Trustee shall be
       completed within 20 business days of receipt of a written request in
       accordance with Clause 6.2 (Perfection) upon the occurrence of any of
       the following events:

       (a)    the valid service of an Intercompany Loan Enforcement Notice or
              a Note Enforcement Notice, provided that the perfection of an
              assignment of the Mortgage Portfolio shall not be required if
              the sole reason for the service of any Note Enforcement Notice
              is a default by a Currency Swap Provider of any Issuer; or

       (b)    unless otherwise agreed by the Rating Agencies, the termination
              of the Seller's role as Administrator under the Administration
              Agreement and failure of any substitute administrator to assume
              the duties of the Administrator; or

       (c)    the Seller being required by an order of a court of competent
              jurisdiction, or by a change in law occurring after the Initial
              Closing Date, or by a regulatory authority of which the Seller
              is a member or with whose instructions it is customary that the
              Seller comply, to perfect the transfer of legal title to the
              Mortgage Loans and the Related Security in favour of the
              Mortgages Trustee; or

       (d)    the security under the Funding Deed of Charge or any material
              part of such security being in jeopardy and it being necessary
              to perfect the transfer of legal title to the Mortgage Loans and
              their Related Security in favour of the Mortgages Trustee in
              order to reduce such jeopardy materially; or


                                      15
<PAGE>


       (e)    the occurrence of an Insolvency Event in relation to the Seller;
              or

       (f)    notice in writing from the Seller to the Mortgages Trustee and
              Funding (with a copy to the Security Trustee) requesting such
              transfer.

6.2    Perfection: If an event set forth in any of paragraphs (a) to (f) of
       Clause 6.1 (Perfection Events) occurs and either the Mortgages Trustee
       or Funding (with the consent of the Security Trustee) or the Security
       Trustee so requests in writing, the Seller shall perfect the
       assignments as contemplated by and in accordance with this Clause 6
       (Perfection of the Assignment) in relation to all Mortgage Loans then
       in the Mortgage Portfolio and shall:

       (a)    deliver to the Mortgages Trustee all Title Deeds and (subject to
              receipt of up to date schedules) the transfers and assignations
              referred to in Clause 6.3 (Transfer Documents) duly executed by
              the Seller; and

       (b)    give formal notice of the transfers and assignations to the
              relevant Borrowers, insurers and other persons (all such notices
              being in such form or forms as may be required by the Mortgages
              Trustee or Funding (with the written consent of the Security
              Trustee) or the Security Trustee).

6.3    Transfer Documents: If an event set forth in any of paragraphs (a) to
       (f) of Clause 6.1 (Perfection Events) occurs, the transfers that the
       Seller is required to deliver are:

       (a)    transfers in the form set out in Part 1 of Schedule 2 (Form of
              Transfer (Registered Land - England and Wales)) of all the
              English Mortgages then in the Mortgage Portfolio secured (or
              intended to be secured) over English Properties which comprise
              registered land (including any English Property which is the
              subject of an application for first registration at the Land
              Registry);

       (b)    transfers in the form set out in Part 2 of Schedule 2 (Form of
              Transfer (Unregistered Land - England and Wales)) of all the
              English Mortgages then in the Mortgage Portfolio secured (or
              intended to be secured) over English Properties which comprise
              unregistered land (excluding any which is the subject of an
              application for first registration);

       (c)    assignations in the form set out in Part 3 of Schedule 2 (Form
              of Transfer (Land Register - Scotland)) of all the Scottish
              Mortgages then in the Mortgage Portfolio secured (or intended to
              be secured over Scottish Properties title to which is registered
              (or in the course of being registered) in the Land Register of
              Scotland;

       (d)    assignations in the form set out in Part 4 of Schedule 2 (Form
              of Transfer (Sasine Register - Scotland)) of all the Scottish
              Mortgages then in the Mortgage Portfolio secured (or intended to
              be secured) over Scottish Properties title to which is recorded
              (or in the course of being recorded) in the General Register of
              Sasines;

       (e)    transfers and assignations of the benefit of the Guarantees
              relating to any relevant Mortgage Loan in the form of the
              Assignment of Guarantees set out in Part 1 of Schedule 5
              (Assignment of Guarantees) in relation to Guarantees governed by


                                      16
<PAGE>


              English law and in the form of the Assignation of Guarantees set
              out in Part 2 of Schedule 5 (Assignation of Guarantees) in
              relation to Guarantees governed by Scots law; and

       (f)    transfers and assignations of the Related Security or any other
              property or security sold to the Mortgages Trustee under this
              Agreement in such form as the Mortgages Trustee or the Security
              Trustee may reasonably require.

       The Mortgages Trustee or Funding (with the consent of the Security
       Trustee) or the Security Trustee may require that the form of any
       transfer or assignation referred to in this Clause 6.3 be changed at
       any time to reflect changes in law or relevant registry practice or
       requirements.

6.4    Prior to Perfection: Prior to perfection pursuant to Clause 6.1
       (Perfection Events) and subject to Clause 7.3 (Seller Ratings) and
       Clauses 3.6 (Insurance) and 4.9 (Insurance) neither the Mortgages
       Trustee nor Funding nor the Security Trustee will:

       (a)    register or record itself at, or submit or require the
              submission of any notice, form, request or application to, or
              pay any fee for the registration or recording of, or the noting
              of any interest at, the Land Charges Department of H.M. Land
              Registry or in the Registers of Scotland or at H.M. Land
              Registry in relation to the Mortgages Trustee's and/or Funding's
              interests in the Mortgage Portfolio;

       (b)    give or require the giving of any notice to any Borrower,
              insurer or any other person of the assignment or assignation of
              that Borrower's Mortgage Loan and its Related Security or such
              other property as may be included in the Mortgage Portfolio to
              the Mortgages Trustee or the charge by Funding of Funding's
              beneficial interest in that Borrower's Mortgage Loan and its
              Related Security or such property to the Security Trustee
              pursuant to the Funding Deed of Charge; or

       (c)    send or require to be sent to any solicitor who has acted on
              behalf of the Seller in respect of any Mortgage with respect to
              which the Seller has not received a complete set of the Title
              Deeds a letter or other communication requiring such solicitor
              to hold such documents to the order of the Mortgages Trustee or
              the Security Trustee (as the case may be).

6.5    Further Assurance: The Seller shall, subject to the other provisions of
       this Clause 6 (Perfection of the Assignment), upon request do all such
       other deeds, assurances, agreements, instruments, acts and things as
       the Mortgages Trustee, Funding or the Security Trustee may require in
       order to give effect to the terms of this Agreement and the assignments
       and assignations contemplated herein.

7.     Undertakings

7.1    Administration: The Mortgages Trustee and Funding undertake that they
       will at all times (or will direct the Administrator at all times to)
       administer and enforce (and exercise their powers and rights and
       perform their obligations under) the Mortgage Loans comprised in the
       Mortgage Portfolio and their Related Security in accordance with the
       Administration Procedures (for so long as these exist and thereafter in
       accordance with such policies as would


                                      17
<PAGE>


       be applied by a reasonable, prudent mortgage lender in the conduct of
       its business).

7.2    Reimbursement of Borrower: The Seller hereby undertakes with the
       Mortgages Trustee and Funding that, in the event that any Borrower
       establishes that it has at any time prior to the Initial Closing Date
       or, as the case may be, the relevant Assignment Date, paid to the
       Seller any amounts in excess of sums due to the Seller as at the date
       of payment under the Mortgage Conditions applicable to that Mortgage
       Loan (other than any Overpayment made by a Borrower under Flexible
       Mortgage Loan) the Seller will reimburse the Borrower for such
       overpayment together with any interest, cost or other expense
       associated therewith. The Seller further agrees to hold the Mortgages
       Trustee and Funding harmless against any such claims and to indemnify
       the Mortgages Trustee and Funding on an after Tax basis in relation to
       any costs, expense, loss or other claim which may arise in connection
       therewith. Any payment made by the Seller to the Mortgages Trustee and
       Funding in discharge of the foregoing indemnity shall be regarded as a
       rebate of part of the Purchase Price of the relevant Mortgage Loan.

7.3    Seller Ratings: The Seller hereby undertakes with the Mortgages
       Trustee, Funding and the Security Trustee that if the long term
       unsecured, unsubordinated and unguaranteed debt obligations of the
       Seller cease to be assigned a long term credit rating:

       (a)    from Moody's of no lower than Baal or from Fitch of no lower
              than BBB , the Seller (unless Moody's or Fitch, as applicable,
              confirms that the then current ratings of the Notes will not be
              adversely affected) will deliver to the Mortgages Trustee,
              Funding, the Security Trustee (upon request) and the Rating
              Agencies details of the names and addresses of the Borrowers
              with Mortgage Loans then in the Mortgage Portfolio on computer
              diskette and a draft letter of notice to such Borrowers of the
              sale and assignment of those Mortgage Loans and the Related
              Security to the Mortgages Trustee in the form set out in
              Schedule 8 (Form of Notification to Borrowers); and

       (b)    from S&P of no lower than BBB-, from Moody's of no lower than
              Baa3 or from Fitch of no lower than BBB-, the Seller (unless
              S&P, Moody's and Fitch, as applicable, confirms that the
              then-current ratings of the Notes will not be adversely
              affected) shall within 10 Business Days of such cessation give
              notice of the sale and assignment effected by this Agreement
              (and, in the case of any Scottish Mortgage Loan, the making of
              the relevant Scottish Trust Deed) to each Borrower with a
              Mortgage Loan then in the Mortgage Portfolio in the form set out
              in Schedule 8 (Form of Notification to Borrowers) (and if the
              Seller fails to give such notice, then the Mortgages Trustee
              shall give such notice as the Seller's attorney under the power
              of attorney set out in Schedule 10 (Power of Attorney in favour
              of the Mortgages Trustee, Funding and the Security Trustee)),

       (c)    provided that, in respect of Clause 7.3(a), should the Seller be
              required as described in such Clause to provide the details of
              the names and addresses of Borrowers to the Mortgages Trustee
              and Funding, each of the Mortgages Trustee and Funding (to the
              extent, in respect of Funding, that such information is to be
              delivered to Funding other than at its United Kingdom branch
              office) hereby agrees to appoint an agent that is located in the
              United Kingdom and which maintains all appropriate


                                      18
<PAGE>


              registrations, notifications, licences and authorities (if any)
              required under the Data Protection Act 1998 to receive and
              maintain such information on its behalf, and under no
              circumstances shall either the Mortgages Trustee or Funding
              accept such information at its Jersey registered office or
              otherwise in Jersey (unless Jersey is declared an "approved
              state" by the European Commission, in which case such data may
              be delivered to the Mortgages Trustee and/or Funding at their
              respective Jersey offices).

7.4    Pending Perfection: The Seller undertakes to the Mortgages Trustee,
       Funding and the Security Trustee that, pending perfection under Clause
       6 (Perfection of the Assignment), the Seller:

       (a)    shall promptly notify the Mortgages Trustee, Funding and (upon
              request) the Security Trustee if it receives written notice of
              any litigation or claim calling into question in any material
              way the Seller's or the Mortgages Trustee's title to any
              Mortgage Loan comprised in the Mortgage Portfolio or its Related
              Security or if it becomes aware of any material breach of any of
              the Representations and Warranties or other obligations under
              this Agreement; and

       (b)    shall, if reasonably required so to do by the Mortgages Trustee,
              participate or join in and lend its name to and take such other
              steps as may reasonably be required by the Mortgages Trustee in
              relation to, any legal proceedings in respect of the Mortgage
              Loans and the Related Security to the extent necessary to
              protect, preserve and enforce the Seller's or the Mortgages
              Trustee's or Funding's or the Security Trustee's title to or
              interest in any Mortgage Loan or its Related Security provided
              that the Seller is reimbursed, subject to and in accordance with
              the relevant priority of payments under and in accordance with
              the Transaction Documents, by the Mortgages Trustee or Funding
              for the reasonable legal expenses and costs of such proceedings.

7.5    Responsibility of Seller: The Seller hereby further undertakes with the
       Mortgages Trustee and Funding that it is and at all times shall remain
       solely responsible for any Product Switches (other than a Re-Fixed
       Mortgage Loan), for funding any Cash Re-Draws made by a Borrower under
       a Flexible Mortgage Loan, for funding any request for any Further
       Advance made by a Borrower, for funding any request for any Further
       Draw under a Personal Secured Loan and for paying to the Mortgages
       Trustee from time to time an amount equal to the Unpaid Interest
       associated with any Non-Cash Re-Draw made by a Borrower under a
       Flexible Mortgage Loan. For the avoidance of doubt, neither the
       Mortgages Trustee nor Funding will be required to advance moneys to the
       Seller or to a Borrower in order to fund such a Re-Draw or Further
       Advance or Further Draw in any circumstances whatsoever.

7.6    Product Switches and Further Advances:

       (a)    Neither the Mortgages Trustee nor Funding shall (and each shall
              procure that its agents do not):

              (i)    issue to any Borrower any offer of a Further Advance; or


                                      19
<PAGE>


              (ii)   issue to any Borrower any offer of a Product Switch
                     (other than a Re-Fixed Mortgage Loan),

              without first having given notice in writing to the Seller
              seeking confirmation from the Seller that the Seller will
              repurchase the Mortgage Loan to which such offer relates from
              the Mortgages Trustee in accordance with the terms of this
              Agreement.

       (b)    If the Seller gives such confirmation to the Mortgages Trustee,
              the Mortgages Trustee (or its agents, including the
              Administrator, on its behalf) shall then issue to that Borrower
              the relevant offer referred to in paragraph (a) above and shall
              (in the case of any offer referred to in paragraph (a) above)
              then notify the Seller in writing as soon as the Mortgages
              Trustee has accepted the mortgage documentation completed by the
              Borrower in relation to such offer.

       (c)    The Mortgages Trustee shall not itself make any Further Advance
              or Product Switch (other than in relation to a Re-Fixed Mortgage
              Loan).

7.7    Standard Variable Rate: Subject to the provisions of Clause 7.9, the
       Seller covenants with and undertakes to the Mortgages Trustee, Funding
       and the Security Trustee that, where the Administrator determines on
       any date that there will be a Shortfall during the next succeeding
       Interest Period and notifies the Seller to such effect, the Seller
       shall take all steps which are necessary, including publishing any
       notice which is required in accordance with the Mortgage Conditions, to
       set the Standard Variable Rate and such other discretionary rates and
       margins applicable to the Mortgage Loans at such levels as may be
       notified to the Seller by the Mortgages Trustee, Funding or the
       Security Trustee (which rates shall be the same rates as previously
       notified to the Mortgages Trustee, Funding and the Security Trustee in
       accordance with Clause 4.3(b) of the Administration Agreement) as being
       the rates required in order for no Shortfall to arise.

7.8    Security Powers of Attorney: The Seller shall grant security powers of
       attorney to the Mortgages Trustee, Funding and the Security Trustee in
       the form set out in Schedule 10 (Power of Attorney in favour of the
       Mortgages Trustee, Funding and the Security Trustee) allowing any of
       the Mortgages Trustee, Funding and the Security Trustee and their
       delegates from time to time (inter alia) to set the Standard Variable
       Rate, such other discretionary rates and margins applicable to the
       Mortgage Loans and (save for the Security Trustee) the rate of (and
       terms relating to) the Existing Borrowers' Re-Fix Rate should the
       Seller fail to do so in accordance with its obligations under this
       Agreement, but only to the extent that such rates have been previously
       notified to the Mortgages Trustee, Funding and the Security Trustee in
       accordance with Clause 4.3(b) of the Administration Agreement. Nothing
       in this Clause 7.8 shall prevent the Seller (or any of its attorneys
       from time to time) from setting a higher Northern Rock Standard
       Variable Rate or higher rates for other discretionary rates and margins
       (or in the case of the Existing Borrowers' Re-Fix Rate setting a higher
       rate and imposing terms more advantageous to the Mortgages Trustee)
       than those to be set or required by the Mortgages Trustee, Funding and
       (other than in respect to an Existing Borrower's Re-Fix Rate) the
       Security Trustee.

7.9    Shortfall: Unless any of the Mortgages Trustee, Funding or the Security
       Trustee needs to do


                                      20
<PAGE>


       so to avoid a Shortfall, none of the Mortgages Trustee, Funding or the
       Security Trustee shall set the Standard Variable Rate and other
       discretionary rates and margins for Mortgage Loans which are in the
       Mortgages Trust (disregarding any discounts or additions to it) at
       rates higher than the then equivalent rates for mortgage loans which
       are not in the Mortgages Trust.

7.10   Forwarding of Notice: The Security Trustee undertakes, upon receipt of
       any notice as specified in Clause 8.5(c) of the Mortgages Trust Deed,
       to forward such notice to the Mortgages Trustee, Funding, the Seller
       and the Cash Manager in the manner set forth in Clause 20 within three
       (3) London Business Days of receipt thereof. The Security Trustee shall
       have no other obligation other than the foregoing following receipt of
       such notice.

8.     Warranties and Repurchase by the Seller

8.1    Representations and Warranties: The Seller makes the Representations
       and Warranties set out in Schedule 1 (Representations and Warranties)
       to each of the Mortgages Trustee, Funding and the Security Trustee:

       (a)    in respect of each Mortgage Loan and its Related Security in the
              Initial Mortgage Portfolio as at the date hereof and on the
              Initial Closing Date;

       (b)    in relation to each New Mortgage Loan (other than Personal
              Secured Loans if specifically excluded from a Representation and
              Warranty) and its Related Security in a New Mortgage Portfolio,
              on the date of the service of the relevant New Mortgage
              Portfolio Notice and on the relevant Assignment Date;

       (c)    in the form set out in Part 2 of Schedule 1 (Representations and
              Warranties) in relation to the matters and at the dates set out
              therein; and

       (d)    in the form set out in Part 3 of Schedule 1 (Representations and
              Warranties) in relation to the matters and at the dates set out
              therein.

8.2    Reliance: The Seller acknowledges that the Representations and
       Warranties are made with a view to inducing the Mortgages Trustee,
       Funding and the Security Trustee either to enter into this Agreement
       and the other Transaction Documents to which each is a party or to
       agree to purchase the New Mortgage Loans and their Related Security
       comprised in each New Mortgage Portfolio, and that each of the
       Mortgages Trustee, Funding and the Security Trustee has entered into
       this Agreement and the other Transaction Documents to which it is a
       party in reliance upon the Representations and Warranties
       notwithstanding any information possessed or discoverable by the
       Mortgages Trustee, Funding and/or the Security Trustee. The Mortgages
       Trustee, Funding and the Security Trustee acknowledge that they have
       not entered into this Agreement in reliance upon any representation,
       warranty or undertaking other than those set out in this Agreement or
       upon any other enquiry, investigation or search whatsoever.

8.3    Remedies: The Mortgages Trustee's, Funding's and the Security Trustee's
       sole remedy in respect of a breach of any of the Representations and
       Warranties shall be to take action under this Clause 8 (Warranties and
       Repurchase by the Seller) or under Clause 8.4 (Adjustments to Trust
       Property) of the Mortgages Trust Deed. Furthermore, in respect of any
       actual or


                                      21
<PAGE>


       alleged breach of Clause 8.1 (Representations and Warranties), the
       Mortgages Trustee, Funding or the Security Trustee shall, as
       applicable:

       (a)    notify the Seller as soon as reasonably practicable following
              any claim or intimation of claim by any person of or arising
              from such actual or alleged breach and thereafter keep the
              Seller informed in relation to such claim or intimation;

       (b)    not settle or compromise any such claim made or intimated or
              otherwise do anything which may be prejudicial to the position
              of the Seller in relation thereto having regard to this
              Agreement, except pursuant to the written directions of the
              Seller or with the Seller's prior written approval, such
              directions and approval not to be unreasonably withheld; and

       (c)    comply with the Seller's reasonable directions as to answering,
              disputing, defending, compromising, settling, or otherwise in
              relation to the claim made or initiated (including without
              limitation the instruction of particular legal advisers), and if
              and to the extent required by the Seller, do such things as the
              Seller may reasonably require to enable and authorise the Seller
              or persons nominated by the Seller to answer, dispute, defend,
              compromise, settle or otherwise deal with any such claim or
              intimated claim, or mitigate loss or potential loss on behalf of
              the Mortgages Trustee, subject in each case to the Seller
              indemnifying the Mortgages Trustee, Funding and the Security
              Trustee against the consequences of complying with the Seller's
              directions and requirements.

8.4    Repurchase: Subject to Clause 8.14 (Repurchase Not Possible), in the
       event of a material breach of any of the Representations or Warranties
       in respect of any Mortgage Loan and/or its Related Security as at the
       Initial Closing Date or, as the case may be, the relevant Assignment
       Date, which could have a material adverse effect on the Mortgage Loan
       and/or its Related Security (having regard to, among other things,
       whether a loss is likely to be incurred in respect of the Mortgage Loan
       to which the breach relates after taking account of the likelihood of
       recoverability or otherwise of any sums under any applicable insurance
       policies), and further provided that:

       (a)    the Mortgages Trustee, Funding or the Security Trustee has given
              the Seller not less than 28 days' notice in writing;

       (b)    the Mortgages Trustee has obtained the consent of the Security
              Trustee; and

       (c)    such breach, where capable of remedy, is not remedied to the
              satisfaction of Funding and the Security Trustee within the 28
              day period referred to in (a) (or such longer period as Funding
              and the Security Trustee may direct the Mortgages Trustee),

       then at Funding's (with the consent of the Security Trustee) or the
       Security Trustee's direction, the Mortgages Trustee may serve upon the
       Seller a notice in the form of the Loan Repurchase Notice whereupon the
       Seller will be required to repurchase (i) the relevant Mortgage Loan
       and its Related Security, (ii) any other Mortgage Loan secured or
       intended to be secured by that Related Security or any part of it and
       (iii) any other Mortgage Loan secured on the same


                                      22
<PAGE>


       Mortgaged Property as the relevant Mortgage Loan to which the breach
       relates in accordance with Clause 8.7 (Completion of Repurchase),
       provided, however, that the Security Trustee shall have no duty to
       provide any such notice to the Seller or consider granting its consent
       pursuant to this Clause 8.4 unless the Security Trustee has been
       notified by a party to a Transaction Document of such material breach
       of such Representation or Warranty which, in the opinion of such party
       (as communicated to the Security Trustee), could have a material
       adverse effect on the related Mortgage Loan and/or its Related
       Security, taking into account the considerations provided in this
       Clause 8.4, and further provided that prior to receipt of such notice
       the Security Trustee shall be entitled to assume that no such material
       breach has occurred.

8.5    Purchase of Product Switches, Further Advances and purchases relating
       to Personal Secured Loans: In the event of there being at any date in
       respect of any Mortgage Loan assigned to the Mortgages Trustee
       hereunder a PS/FA/PSL Event (other than a Mortgage Loan becoming a
       Re-Fixed Mortgage Loan, such PS/FA/PSL Event being dealt with under
       Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans)), the Seller may
       at any time serve notice in the form of the Loan Repurchase Notice on
       the Mortgages Trustee whereupon the Mortgages Trustee will be required
       to sell and to transfer to the Seller in accordance with Clause 8.7
       (Completion of Repurchase):

       (a)    any Mortgage Loan subject to a PS/FA/PSL Event, together with
              its Related Security;

       (b)    any other Mortgage Loan secured or intended to be secured by the
              Related Security referred to in (a) above or any part of it; and

       (c)    any other Mortgage Loan secured on the same Mortgaged Property
              that secures the Mortgage Loan subject to a PS/FA/PSL Event,
              together with its Related Security,

       each such Mortgage Loan to be identified in the Loan Repurchase Notice
       (any such Mortgage Loan or Mortgage Loans, a "PS/FA/PSL Mortgage
       Loan"), free from the Mortgages Trust and any right or interest that
       the Security Trustee may have in such PS/FA/PSL Mortgage Loan and its
       Related Security under the Funding Deed of Charge. Any PS/FA/PSL
       Mortgage Loan purchased by the Seller shall be released from the
       Mortgages Trust and shall no longer constitute Trust Property and shall
       be released from any right or interest that the Security Trustee may
       have had in such Mortgage Loan and its Related Security under the
       Funding Deed of Charge prior to such repurchase.

8.6    Repurchase of Fixed Rate Mortgage Loans

       (a)    Where a Mortgage Loan bears interest at a fixed rate for a
              certain period (the "initial fixed rate period"), after the
              expiry of which the Borrower is entitled to apply for a new
              fixed rate (whether or not subject to certain conditions), the
              Mortgages Trustee may by notice in writing to the Seller given
              at any time not more than 60 days before the expiry of that
              initial fixed rate period (which for the avoidance of doubt
              shall exclude any period of extension to which the relevant
              Borrower is entitled), offer to re-sell to the Seller that
              Mortgage Loan together with its Related Security if that
              Mortgage Loan becomes a Re-Fixed Mortgage Loan during the
              3-month period immediately following the end of that initial
              fixed rate period. The offer will be in


                                      23
<PAGE>


              writing in the form set out in Schedule 9 (Offer under Clause
              8.6 ) and will be signed by or on behalf of the Mortgages
              Trustee.

       (b)    The Seller may accept the offer made in accordance with
              paragraph (a) above on the date on which that Mortgage Loan
              becomes a Re-Fixed Mortgage Loan during the 3-month period
              immediately following the end of the initial fixed rate period
              relating to it, only by payment to the Mortgages Trustee of the
              consideration payable for the repurchase of the relevant
              Mortgage Loan and its Related Security in accordance with Clause
              8.7 (Completion of Repurchase).

       (c)    The parties hereto acknowledge that the effect of the payment to
              the Mortgages Trustee by the Seller of the consideration for the
              repurchase of the relevant Mortgage Loan and its Related
              Security in accordance with paragraph (b) above will be the
              assignment and transfer to the Seller of the beneficial
              ownership of, and all of the Mortgages Trustee's beneficial
              right, title, interest and benefit in and to, that Mortgage
              Loan, and completion of the repurchase shall be effected by the
              parties in accordance with Clause 8.7 (Completion of
              Repurchase).

       (d)    The Seller hereby covenants and undertakes that if it does not
              accept the offer made by the Mortgages Trustee in accordance
              with paragraph (b) above, then whether or not the Mortgage Loan
              becomes a Re-Fixed Mortgage Loan, it will set the Existing
              Borrowers' Re-Fix Rate applicable for the 3-month period
              immediately after expiry of the initial fixed rate period
              relating to that Mortgage Loan at a rate not less than that (and
              on terms not less advantageous to the Mortgages Trustee or
              Funding than those) notified from time to time to the Seller by
              the Mortgages Trustee, Funding or the Administrator as being
              required by the Mortgages Trustee or Funding.

8.7    Completion of Repurchase: Completion of any repurchase or re-transfer
       or purchase or transfer, as applicable, shall take place:

       (a)    in the case of any repurchase or re-transfer pursuant to Clause
              8.4 (Repurchase) or any purchase or transfer pursuant to Clause
              8.5 (Purchase of Product Switches, Further Advances and
              purchases relating to Personal Secured Loans) on the first
              London Business Day immediately following expiry of a period of
              10 days following the date of the service upon the Seller of the
              relevant Loan Repurchase Notice or at the Seller's earlier
              election; or

       (b)    in the case of any repurchase or re-transfer pursuant to Clause
              8.6 (Repurchase of Fixed Rate Mortgage Loans), immediately upon
              the Mortgage Loan becoming a Re-Fixed Mortgage Loan,


       whereupon, the Seller shall pay to the Mortgages Trustee an amount
       equal to the Current Balance of such Mortgage Loan or Mortgage Loans
       and any Related Security and all Arrears of Interest and Accrued
       Interest relating thereto as at the date of completion of such
       repurchase. The provisions of Clause 8.8 (Transfers), Clause 8.9
       (Documentation) and Clause 8.16 (Scottish Trust) shall apply to any
       such repurchase or re-transfer.


                                      24
<PAGE>


8.8    Transfers: On the date of completion of any repurchase of a Mortgage
       Loan and its Related Security in accordance with this Clause 8
       (Warranties and Repurchase by the Seller), the Mortgages Trustee and
       Funding shall at the cost of the Seller execute and deliver or cause
       their respective duly authorised attorneys to execute and deliver to
       the Seller:

       (a)    if perfection of the assignment and assignation to the Mortgages
              Trustee has occurred in accordance with Clause 6 (Perfection of
              the Assignment):

              (i)    if the relevant Mortgage is over Registered Land, a
                     transfer of such Mortgage to the Seller in the form of
                     the Registered Transfer; or

              (ii)   if the relevant Mortgage is over Unregistered Land, a
                     transfer to the Seller in the form of the Unregistered
                     Transfer; or

              (iii)  if the relevant Mortgage is a Scottish Mortgage, an
                     assignation to the Seller in the applicable form of
                     Scottish Transfer;

       (b)    a re-assignment or retrocession of the rights of the Mortgages
              Trustee in respect of the relevant Related Security each in a
              form reasonably acceptable to the Seller (which shall, in the
              case of the re-assignment of the Insurance Contracts, be
              substantially in the form of the Assignment of Insurance
              Contracts set out in Schedule 3 (Assignment of Insurance
              Contracts); and

       (c)    a notification to the Administrator that all further sums due in
              respect of such repurchased Mortgage Loan are for the Seller's
              account.

8.9    Documentation: Upon any completion of the repurchase of any Mortgage
       Loan and its Related Security in accordance with this Clause 8
       (Warranties and Repurchase by the Seller) the Seller shall cease to be
       under any further obligation to hold any Title Deeds or other documents
       relating to such Mortgage Loan or Mortgage Loans and its Related
       Security to the order of the Mortgages Trustee and the Security Trustee
       and if the Mortgages Trustee or the Security Trustee then holds the
       Title Deeds, the Mortgages Trustee or, as the case may be, the Security
       Trustee shall forthwith return them to the Seller. Any such repurchase
       by the Seller of a Mortgage Loan or Mortgage Loans and its or their
       Related Security shall constitute a discharge and release of the Seller
       from any claims which the Mortgages Trustee and/or Funding or the
       Security Trustee may have against the Seller arising from the relevant
       Representation or Warranty in relation to that Mortgage Loan or
       Mortgage Loans and its or their Related Security only, but shall not
       affect any rights arising from a breach of any other express provision
       of this Agreement or any Representation or Warranty in relation to any
       other Mortgage Loan and other Related Security.

8.10   Notification: Forthwith after the Seller becomes aware of any event
       which may reasonably give rise to an obligation under Clause 8
       (Warranties and Repurchase by the Seller) to repurchase any Mortgage
       Loan it shall notify the Mortgages Trustee, Funding and the Security
       Trustee in writing thereof as soon as reasonably practicable.

8.11   No Prejudice: The terms of this Clause 8 (Warranties and Repurchase by
       the Seller) shall not prejudice the rights of the Mortgages Trustee or
       the Beneficiaries under the Mortgages


                                      25
<PAGE>


       Trust Deed.

8.12   Claims against Seller: If a breach of a Representation or Warranty
       arises in respect of any Mortgage Loan and (in either case) no
       repurchase requirement arises in respect of the Seller pursuant to this
       Clause 8 (Warranties and Repurchase by the Seller), neither the
       Mortgages Trustee, Funding nor the Security Trustee shall have any
       claim against the Seller in respect of, or in relation to, such breach
       of Representation or Warranty in relation to that Mortgage. For the
       avoidance of doubt, save as provided for in this Clause 8 (Warranties
       and Repurchase by the Seller), the Seller is not obliged to repurchase
       any other Mortgage Loan or its Related Security.

8.13   Assignment: If the Seller makes any payment to the Mortgages Trustee
       GIC Account (or as the Mortgages Trustee shall direct) in full
       satisfaction of any claim made by the Mortgages Trustee, Funding or the
       Security Trustee in relation to any Representation or Warranty set out
       in Schedule 1 (Representations and Warranties), the Mortgages Trustee,
       Funding or the Security Trustee, as the case may be, shall assign to
       the Seller such rights as they have against any third party which
       relate to such claim.

8.14   Repurchase Not Possible: If a Mortgage Loan has never existed, or has
       ceased to exist, such that it is not outstanding on the date on which
       it is due to be repurchased pursuant to this Clause 8 (Warranties and
       Repurchase by the Seller), the Seller shall not be obliged to
       repurchase the Mortgage Loan and the Related Security but shall instead
       indemnify the Mortgages Trustee, Funding and the Security Trustee
       against any loss suffered by reason of any Representation or Warranty
       relating to or otherwise affecting that Mortgage Loan being untrue or
       incorrect by reference to the facts subsisting at the date on which the
       relevant Representation or Warranty was given, provided that the amount
       of such indemnity shall not exceed the sum of (i) the Current Balance
       of the Mortgage Loan that would have been payable by the Borrower in
       respect of such Mortgage Loan on and after the relevant completion date
       for the repurchase in relation to such Mortgage Loan had the Mortgage
       Loan existed and complied with each of the Representations and
       Warranties set out Schedule 1 (Representations and Warranties) as at
       such date in relation to such Mortgage Loan and (ii) interest thereon
       from such relevant completion date at the weighted average yield of the
       Mortgage Loans.

8.15  Indemnity: The Seller shall indemnify the Mortgages Trustee against any
      loss suffered as a result of any Borrower exercising a Right of Set Off
      against the Mortgages Trustee provided that the amount of such indemnity
      in relation to any Mortgage Loan shall not exceed the sum of the Current
      Balance of that Mortgage Loan and interest payable by the Borrower under
      that Mortgage Loan as at the date that the Borrower exercises the Right
      of Set Off. In this clause "Right of Set Off" means any right of set off
      arising from a deposit of money made by the Borrower with the Seller or
      from any transaction between the Borrower and the Seller other than one
      relating to the Mortgage Loan.

8.16   Scottish Trust: Upon any completion of the repurchase or purchase by
       the Seller of any Scottish Mortgage Loan and its Related Security in
       accordance with this Clause 8 (Warranties and Repurchase by the Seller)
       such Scottish Mortgage Loan and its Related Security shall thereupon be
       released from the Scottish Trust and shall cease to form part of the
       Scottish


                                      26
<PAGE>


       Trust Property.

9.     Further Assurance

       The parties hereto agree that they will co-operate fully to do all such
       further acts and things and execute any further documents that may be
       necessary or desirable to give full effect to the transactions
       contemplated by this Agreement (but subject always to Clause 6
       (Perfection of the Assignment)).

10.    Consequences of Breach

       Without prejudice to Clause 8 (Warranties and Repurchase by the
       Seller), the Mortgages Trustee, Funding and the Security Trustee
       severally acknowledge to and agree with the Seller, and the Security
       Trustee acknowledges to and agrees with Funding and the Mortgages
       Trustee, that the Seller shall have no liability or responsibility
       (whether, in either case, contractual, tortious or delictual, express
       or implied) for any loss or damage for or in respect of any breach of,
       or any act or omission in respect of, any of its obligations hereunder
       other than loss or damage directly (and not indirectly or
       consequentially) suffered by the Mortgages Trustee and/or Funding or
       the assets comprised in the Funding Security constituted by the Funding
       Deed of Charge by reason of such breach, act or omission. For this
       purpose (and without limiting the scope of the above exclusion in
       respect of indirect or consequential loss or damage) any loss or damage
       suffered by the Mortgages Trustee and/or Funding or such assets which
       would not have been suffered by it or such assets had the breach, act
       or omission in question not also been or given rise to an Event of
       Default or enforcement of the security constituted by the Funding Deed
       of Charge shall be treated as indirect or consequential loss or damage.

11.    Subordination

       The Seller agrees with the Mortgages Trustee, Funding and the Security
       Trustee that on the enforcement of any Mortgage any sums owed to the
       Seller by a Borrower secured under such Mortgage and the rights and
       remedies of the Seller in respect of the sums owed to the Seller shall
       at all times be subject and subordinated to any sums owed to the
       Mortgages Trustee by the Borrower and to the rights and remedies of the
       Mortgages Trustee in respect of such sums owed to the Mortgages Trustee
       by the Borrower.

12.    Non-Merger

       Any term of this Agreement to which effect is not given on the Initial
       Closing Date or on any Assignment Date (including in particular, but
       without limitation, the liability of the Seller under the
       Representations and Warranties and the provisions of Clause 4 (Sale and
       Purchase of New Mortgage Portfolios)) shall not merge and shall remain
       in full force and effect notwithstanding the sale and purchase
       contemplated by this Agreement.

13.    No Agency or Partnership

       It is hereby acknowledged and agreed by the parties that nothing in
       this Agreement shall be construed as giving rise to any relationship of
       agency, save as expressly provided herein, or


                                      27
<PAGE>


       partnership between the parties and that in fulfilling its obligations
       hereunder, each party shall be acting entirely for its own account.

14.    Payments

       All payments to be made pursuant to this Agreement shall be made in
       sterling in immediately available funds without exercising or seeking
       to exercise any right of set-off as may otherwise exist and shall be
       deemed to be made when they are received by the payee and shall be
       accounted for accordingly unless failure to receive any payment is due
       to an error by the payee's bank.

15.    Assignment

15.1   Assignment: Subject always to the provisions of Clause 16 (Security
       Trustee), no party hereto shall be entitled to assign all or any part
       of its rights or obligations hereunder to any other party without the
       prior written consent of each of the other parties hereto (which shall
       not, if requested, be unreasonably withheld) save that Funding shall be
       entitled to assign by way of security all or any of its rights under
       this Agreement without such consent to the Security Trustee pursuant to
       the Funding Deed of Charge and the Security Trustee may at its sole
       discretion assign all or any of its rights under or in respect of this
       Agreement without such consent to any successor Security Trustee under
       the Funding Deed of Charge and may assign all of any part of the
       Funding Security upon an enforcement of the Funding Security in
       accordance with the Funding Deed of Charge.

15.2   Acknowledgement of Security Assignment: The Seller acknowledges that on
       the assignment pursuant to the Funding Deed of Charge by Funding to the
       Security Trustee of Funding's rights under this Agreement the Security
       Trustee may enforce such rights in the Security Trustee's own name
       without joining Funding in any such action (which right the Seller
       hereby waives) and the Seller hereby waives as against the Security
       Trustee any rights or equities in its favour arising from any course of
       dealing between the Seller and Funding.

16.    Security Trustee

16.1   Vesting of Rights: If there is any change in the identity of the
       security trustee in accordance with the Funding Deed of Charge, the
       Seller, the Mortgages Trustee and Funding shall execute such documents
       and take such action as the successor security trustee and the outgoing
       security trustee may require for the purpose of vesting in the
       successor security trustee the rights and obligations of the outgoing
       security trustee hereunder and releasing the outgoing security trustee
       from its future obligations under this Agreement and the Seller shall
       give notice thereof to the Rating Agencies.

16.2   No Assumption: It is hereby acknowledged and agreed that by its
       execution of this Agreement the Security Trustee shall not assume or
       have any of the obligations or liabilities of the Seller or Funding or
       the Mortgages Trustee hereunder. Furthermore, any liberty or power
       which may be exercised or any determination which may be made hereunder
       by the Security Trustee may be exercised or made in the Security
       Trustee's absolute discretion without any obligation to give reasons
       therefor, but in any event must be exercised or made in


                                      28
<PAGE>


       accordance with the provisions of the Funding Deed of Charge. Without
       prejudice to the generality of the foregoing, all references to the
       Security Trustee taking action in connection with any duty of the
       Seller shall also be read subject to Clause 25 and Schedule 4 of the
       Administration Agreement.

17.    New Intercompany Loans

       If Funding enters into a New Intercompany Loan Agreement, then the
       Seller, the Mortgages Trustee, Funding and the Security Trustee shall
       execute such documents and take such action as may be required by the
       Rating Agencies for the purpose of including the New Issuer in the
       Transaction including, without limitation:

       (a)    effecting any necessary changes to Clause 4 (Sale and Purchase
              of New Mortgage Portfolios);

       (b)    ensuring that any Transaction Document relevant to a New Issuer
              has been executed and delivered prior to the relevant Closing
              Date;

       (c)    executing and delivering all documents required by Clause 4.4
              (Closing and Conditions Precedent) in relation to any New
              Mortgage Portfolio.

18.    Non Petition Covenant; Limited Recourse

18.1   Non Petition Covenant: Each of the parties hereto hereby agrees that it
       shall not institute against either Funding or the Mortgages Trustee any
       winding-up, administration, insolvency or similar proceedings 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.

18.2   Limited Recourse: Each of the parties hereto agrees that:

       (a)    in relation to the Mortgages Trustee, any amount payable by the
              Mortgages Trustee to any other party to this Agreement under
              this Agreement not being an amount payable out of the Trust
              Property in accordance with the terms of the Mortgages Trust
              Deed shall only be payable to the extent that on that date the
              Mortgages Trustee has sufficient funds to pay such amount out of
              fees paid to it under the Mortgages Trust Deed; and

       (b)    in relation to Funding:

              (i)    only the Security Trustee may enforce the security
                     created in favour of the Security Trustee under the
                     Funding Deed of Charge in accordance with the provisions
                     thereof;

              (ii)   notwithstanding any other provision of this Agreement or
                     any other Transaction Document, no sum due or owing to
                     any party to this Agreement from or by Funding under this
                     Agreement shall be payable by Funding except to the
                     extent that Funding has sufficient funds available or
                     (following


                                      29
<PAGE>


                     enforcement of the Funding Security) the Security Trustee
                     has realised sufficient funds from the Funding Security
                     to pay such sum subject to and in accordance with the
                     relevant Funding Priority of Payments and provided that
                     all liabilities of Funding required to be paid in
                     priority thereto or pari passu therewith pursuant to such
                     Funding Priority of Payments have been paid, discharged
                     and/or otherwise provided for in full; and

              (iii)  it shall not take any steps for the purpose of recovering
                     any amount payable by Funding or enforcing any rights
                     arising out of this Agreement against Funding otherwise
                     than in accordance with the Funding Deed of Charge.

18.3   Corporate Obligations: To the extent permitted by law, no recourse
       under any obligation, covenant, or agreement of any person contained in
       this Agreement shall be had against any shareholder, officer or
       director of such person as such, by the enforcement of any assessment
       or by any legal proceeding, by virtue of any statute or otherwise; it
       being expressly agreed and understood that this Agreement is a
       corporate obligation of each person expressed to be a party hereto and
       no personal liability shall attach to or be incurred by the
       shareholders, officers, agents or directors of such person as such, or
       any of them, under or by reason of any of the obligations, covenants or
       agreements of such person contained in this Agreement, or implied
       therefrom, and that any and all personal liability for breaches by such
       person of any of such obligations, covenants or agreements, either
       under any applicable law or by statute or constitution, of every such
       shareholder, officer, agent or director is hereby expressly waived by
       each person expressed to be a party hereto as a condition of and
       consideration for the execution of this Agreement.

19.    Amendments and Waiver

19.1   Entire Agreement: This Agreement sets out the entire agreement and
       understanding between the parties with respect to the subject matter of
       this Agreement superseding all prior oral or written understandings
       other than the other Transaction Documents.

19.2   Amendments and Waiver: No amendment or waiver of any provision of this
       Agreement nor consent to any departure by any of the parties therefrom
       shall in any event be effective unless the same shall be in writing and
       signed by each of the parties hereto. In the case of a waiver or
       consent, such waiver or consent shall be effective only in the specific
       instance and as against the party or parties giving it for the specific
       purpose for which it is given.

19.3   Rights cumulative: The respective rights of each of the parties to this
       Agreement are cumulative and may be exercised as often as they consider
       appropriate. No failure on the part of any party to exercise, and no
       delay in exercising, any right hereunder shall operate as a waiver
       thereof, nor shall any single or partial exercise of any such right
       preclude any other or further exercise thereof or the exercise of any
       other right. The remedies in this Agreement are cumulative and not
       exclusive of any remedies provided by law.


                                      30
<PAGE>


20.    Notices

       Any notices or other communication or document to be given or delivered
       pursuant to this Agreement to any of the parties hereto shall be
       sufficiently served if sent by prepaid first class post, by hand or by
       facsimile transmission and shall be deemed to be given (in the case of
       facsimile transmission) when despatched or (where delivered by hand) on
       the day of delivery if delivered before 17.00 hours on a London
       Business Day or on the next London Business Day if delivered thereafter
       or (in the case of first class post) when it would be received in the
       ordinary course of the post and shall be sent:

       (a)    in the case of the Seller, to Northern Rock plc, Northern Rock
              House, Gosforth, Newcastle upon Tyne NE3 4PL (facsimile number
              0191 213 2203) for the attention of the Group Secretary;

       (b)    in the case of the Mortgages Trustee, to Granite Finance
              Trustees Limited, 22 Grenville Street, St. Helier, Jersey JE4
              8PX, Channel Islands, (facsimile number 01534-609-333) for the
              attention of the Company Secretary;

       (c)    in the case of Funding, to Granite Finance Funding Limited, 4
              Royal Mint Court, London EC3N 4HJ, (facsimile number
              0207-332-6199) for the attention of the Company Secretary; and

       (d)    in the case of the Security Trustee, to The Bank of New York
              (London Branch), at One Canada Square, 48th Floor, London E14
              5AL (facsimile number 020-7964-6399) for the attention of
              Corporate Trust (Global Structured Finance),

       or to such other address or facsimile number or for the attention of
       such other person or entity as may from time to time be notified by any
       party to the others by fifteen days prior written notice in accordance
       with the provisions of this Clause 20.

21.    Third Party Rights

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

22.    Execution in Counterparts; Severability

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

22.2   Severability: Where any provision in or obligation under this Agreement
       shall be invalid, illegal or unenforceable in any jurisdiction, the
       validity, legality and enforceability of the remaining provisions or
       obligations under this Agreement, or of such provision or obligation in
       any other jurisdiction, shall not be affected or impaired thereby.


                                      31
<PAGE>


23.    Governing Law and Submission to Jurisdiction

23.1   Governing Law: This Agreement is governed by, and shall be construed in
       accordance with, English law (PROVIDED THAT any terms of this Agreement
       which are particular to the law of Scotland shall be construed in
       accordance with Scots law).

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

24.    Process Agent

       The Mortgages Trustee irrevocably and unconditionally appoints Mourant
       & Co. Capital (SPV) Limited at 4 Royal Mint Court, London EC3N 4HJ or
       otherwise at its registered office 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.

25.    Appropriate Forum

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


                                      32
<PAGE>


26.    Transaction Documents

       To the extent necessary to comply with the requirements of Section 2
       Law of Property (Miscellaneous Provisions) Act 1989, this Agreement
       incorporates by reference to them the Transaction Documents.

AS WITNESS whereof the parties hereto have executed this Agreement for
delivery on the day and year first before written.

EXECUTED for and on behalf of                   )
NORTHERN ROCK PLC                               )
by:                                             )


------------------------------
Authorised Signatory


Title:
            -------------------


EXECUTED for and on behalf of                   )
GRANITE FINANCE TRUSTEES LIMITED                )
by:                                             )

------------------------------
Authorised Signatory


Name:


Title:


EXECUTED for and on behalf of                   )
GRANITE FINANCE FUNDING LIMITED                 )
by:                                             )


------------------------------
Authorised Signatory


Name:


Title:



                                      33
<PAGE>


EXECUTED for and on behalf of                   )
THE BANK OF NEW YORK                            )
by:                                             )


------------------------------
Authorised Signatory


Name:


Title:



                                      34
<PAGE>


                                  SCHEDULE 1
                        REPRESENTATIONS AND WARRANTIES

                                    Part 1

1.     The particulars of each Mortgage Loan and its related Mortgage in the
       Initial Mortgage Portfolio set out in Appendix A to this Agreement are
       complete, true and accurate in all material respects.

2.     Immediately prior to a Closing Date or an Assignment Date, as the case
       may be, subject to completion of any registration or recording which
       may be pending at H.M. Land Registry or the Registers of Scotland, the
       Seller was the absolute beneficial and legal owner of the Mortgages,
       the Related Security and the other property to be assigned and
       transferred by the Seller to the Mortgages Trustee under this Agreement
       at such Closing Date or such Assignment Date, as the case may be, and
       the Seller has not assigned (whether by way of absolute assignment or
       by way of security only), transferred, charged, disposed of or dealt
       with the benefit of any of the Mortgage Loans or their related
       Mortgages, any of the other rights relating thereto or any of the
       property, rights, titles, interests or benefits to be sold or assigned
       pursuant to this Agreement other than pursuant to this Agreement.

3.     With the exception of Personal Secured Loans, each Mortgage Loan and
       its related Mortgage and the Related Security constitutes a valid and
       binding obligation of the Borrower enforceable in accordance with its
       terms (save any terms which are not binding by virtue of the Unfair
       Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in
       Consumer Contracts Regulations 1999) and each such related Mortgage and
       the Related Security secures the repayment of all advances, interest,
       costs and expenses payable by the relevant Borrower to the Seller in
       priority to any other charges registered against the relevant Mortgaged
       Property.

4.     At the time that it was made, each Mortgage Loan (other than Personal
       Secured Loans) complied in all respects with applicable laws and
       regulations including, without limitation, consumer protection, data
       protection and contract law.

5.     Subject to completion of any registration which may be pending at H.M.
       Land Registry or the Registers of Scotland, each Mortgage (other than a
       Mortgage in respect of a Personal Secured Loan) either constitutes, or
       will constitute, following registration at H.M. Land Registry (in
       England and Wales), a first ranking charge by way of legal mortgage or
       following registration or recording at the Registers in Scotland, a
       first ranking standard security over the relevant Mortgaged Property.

6.     Each relevant Mortgaged Property is located in England, Wales or
       Scotland.

7.     All steps necessary to perfect the Seller's title to each Mortgage Loan
       and its related Mortgage were duly taken at the appropriate time or are
       in the process of being taken with all due diligence.

8.     No lien or right of set-off or counterclaim (other than a Right of
       Set-off referred to in Clause 8.15 (Indemnity)) has been created or
       arisen between the Seller and any Borrower which


                                      35
<PAGE>


       would entitle such Borrower to reduce the amount of any payment
       otherwise due under the relevant Mortgage Loan save in relation to the
       Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
       in Consumer Contracts Regulations 1999 and save in relation to section
       75 of the Consumer Credit Act 1974.

9.     Prior to making a Mortgage Loan to a Borrower, the Seller instructed or
       required to be instructed on its behalf solicitors to carry out in
       relation to the relevant Mortgaged Property all investigations,
       searches and other actions that would have been undertaken by the
       Seller acting in accordance with standards consistent with those of a
       reasonable and prudent mortgage lender, lending to Borrowers in England
       and Wales (in respect of English Mortgage Loans) and Scotland (in
       respect of Scottish Mortgage Loans), when advancing money in an amount
       equal to such advance to an individual to be secured on a mortgaged
       property of the kind permitted under the Lending Criteria and a report
       on title was received by or on behalf of the Seller from such
       solicitors which, either initially or after further investigation
       revealed no material matter which would cause the Seller, acting
       reasonably, to decline the Mortgage Loan having regard to the Lending
       Criteria.

10.    In relation to each Mortgage the Borrower has a good and marketable
       title to the relevant Mortgaged Property.

11.    Prior to making a Mortgage Loan the relevant Mortgaged Property was
       valued by an independent valuer from the panel of valuers from time to
       time appointed by the Seller or by an employee valuer of the Seller,
       and the results of such valuation would be acceptable to a reasonable
       and prudent mortgage lender.

12.    Prior to making a Mortgage Loan, the nature and amount of such Mortgage
       Loan, the circumstances of the relevant Borrower and nature of the
       relevant Mortgaged Property satisfied the Lending Criteria in force at
       that time in all material respects.

13.    The exercise of any discretion by the Seller in the making of any
       Mortgage Loan has been consistent with the practice of a reasonable and
       prudent mortgage lender.

14.    Each Mortgage Loan and its related Mortgage has been made on the terms
       of the Standard Mortgage Documentation (so far as applicable) which has
       not been varied in any material respect, save for the making of the
       Base Rate Pledge.

15.    With the exception of agreements for Personal Secured Loans, no
       agreement for any Mortgage Loan (other than to the extent it relates to
       the funding of buildings insurance premiums) is or has ever been,
       wholly or partly regulated by the Consumer Credit Act 1974 (other than
       by Sections 137 to 140 of such Act) or constitutes an extortionate
       credit bargain under Sections 137 to 140 of such Act or, to the extent
       it is so regulated or partly regulated, all the requirements of the
       Consumer Credit Act have been met in full. No Mortgage Loan is, or has
       ever been, a linked transaction within Section 19 of the Consumer
       Credit Act.

16.    Interest on each Mortgage Loan: (a) is charged on the capital balance
       of each Mortgage Loan in accordance with the provisions of that
       Mortgage Loan and its related Mortgage; (b) is not in any event
       adjusted by reference to the principal amount due thereunder; (c) is
       payable


                                      36
<PAGE>


       monthly in advance; and (d) is calculated by reference to the Standard
       Variable Rate or the Bank of England Base Rate, subject to any
       applicable caps, discounts and fixed rates and the Base Rate Pledge;
       and (e) subject to (d) above, may be set by the Seller and its
       successors and assigns to that Mortgage Loan.

17.    No payment of interest (or in the case of Repayment Mortgage Loans,
       principal and interest) equivalent to an amount in excess of one
       month's instalment at the applicable rate in respect of a Mortgage Loan
       in the Initial Mortgage Portfolio was at any time during the 12 months
       before the relevant Closing Date or Assignment Date, as the case may
       be, in arrears.

18.    So far as the Seller is aware, no Borrower is in material breach of its
       Mortgage.

19.    So far as the Seller is aware, the underwriting, origination and
       completion of each Mortgage Loan is not the subject of fraud by any
       person (including, without limitation, the Borrower or any professional
       or third party employed or engaged on behalf of the Seller).

20.    As at the date of this Agreement, the first payment due has been paid
       by the relevant Borrower in respect of each Mortgage Loan and each
       Mortgage Loan was fully performing.

21.    Where any Borrower is or was entitled to repayment of any early
       repayment charge in respect of any mortgage previously held by the
       Borrower with the Seller, that repayment has been or will be made by
       the Seller.

22.    Except where a Mortgaged Property was at completion of the relevant
       Mortgage (or, where appropriate, in the case of self-build properties,
       at the date of completion of the relevant mortgaged property) covered
       by the Block Buildings Policy or a block buildings policy providing
       equivalent cover, the Seller took all reasonable steps to ensure that
       at the date of completion of the relevant Mortgage Loan each Mortgaged
       Property was:

       (a)    insured under a buildings policy either (i) in the joint names
              of the Borrower and the Seller or (ii) with the interest of the
              Seller noted thereon;

       (b)    insured under a Block Buildings Policy; or

       (c)    with respect to leasehold properties, insured by the relevant
              landlord with the Seller's approval,

       and in all cases against risks usually covered by a comprehensive
       buildings policy and to an amount not less than the full reinstatement
       cost of such Mortgaged Property as determined by an independent valuer
       or a valuer employed by the Seller.

23.    The Block Buildings Policy referred to above covers such fire and other
       commercial risks as would be required by the Seller acting in
       accordance with its normal standard for an amount not less than the
       full reinstatement value of the Properties covered by the Block
       Buildings Policy.

24.    The Insurance Contracts are in full force and effect and all premiums
       thereon due on or before the date of this Agreement have been paid in
       full and the Seller is not aware of any


                                      37
<PAGE>


       circumstances giving the insurer under the Insurance Contracts the
       right to avoid or terminate such policy in so far as it relates to the
       Mortgaged Properties or the Mortgage Loans. Where the Lending Criteria
       then in force required that a Mortgage Loan was covered by the
       Insurance Contract referred to in paragraph 1 of Schedule 4 (Insurance
       Contracts), that Mortgage Loan is covered by such Insurance Contract.

25.    To the extent that a Guarantee was required under the Lending Criteria
       in relation to a particular Mortgage Loan, that Guarantee constitutes
       the valid, binding and enforceable obligations of the guarantor
       thereunder (save to the extent that the Guarantee is not valid, binding
       or enforceable by virtue of the Unfair Terms in Consumer Contracts
       Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations
       1999).

26.    If a Mortgaged Property is leasehold or long leasehold, written notice
       has been given to the landlord of the creation of the Mortgage.

27.    In relation to each English Mortgage, any person who at the date when
       the Mortgage Loan was made has been identified by the Borrower to the
       Seller as residing or about to reside in the relevant Mortgaged
       Property is either named as a joint Borrower or has signed a form of
       consent declaring that he or she agrees that any present or future
       rights or interests as he or she may have or acquire over or in respect
       of the relevant Mortgaged Property shall be postponed and made subject
       to the rights, interests and remedies of the Seller under the relevant
       Mortgage and that he or she shall not claim any such rights or
       interests against the Seller. In relation to each Scottish Mortgage,
       all necessary MHA Documentation has been obtained to as to ensure that
       neither the relevant Mortgage nor the relevant Mortgaged Property is
       subject to or affected by any statutory right of occupancy.

28.    No Borrower was under 18 years of age at the time of completion of the
       relevant Mortgage Loan.

29.    No Mortgage Loan has a final maturity beyond January 2039.

30.    The Seller has procured that full and proper accounts, books and
       records have been kept showing clearly all material transactions,
       payments, receipts and proceedings relating to that Mortgage Loan and
       its Mortgage and all such accounts, books and records are up to date
       and in the possession of the Seller or held to its order (subject to
       the provisions of the Mortgages Trust Deed).

31.    The origination and collection practices employed by the Seller with
       respect to the Mortgage Loans have been, in all respects, legal and
       consistent with the practice of a reasonable and prudent mortgage
       lender.

32.    The Seller has not received written notice of any litigation or claim
       calling into question in any material way its title to any Mortgage
       Loan and its Mortgage or the value of any security. The Seller is not
       engaged in any litigation, and no litigation is pending or threatened
       by the Seller, against any person in connection with any report,
       valuation, opinion, certificate, consent or other statement of fact or
       opinion given in connection with any Mortgage Loan received by the
       Seller in connection with the origination of any Mortgage Loan.


                                      38
<PAGE>


33.    In respect of any Mortgaged Property which is subject to a second or
       subsequent mortgage or standard security, the Seller has first priority
       for the full amount of the Mortgage Loan (other than in respect of a
       Personal Secured Loan) and all costs, fees and expenses relative
       thereto.

34.    Subject to completion of any registration or recording which may be
       pending at the H.M. Land Registry or the Registers of Scotland, all
       Property Deeds and Mortgage Loan Files are held by, or to the order of,
       the Seller.

35.    Each Borrower is a natural person, and no Borrower is at present an
       employee or an officer of the Seller.

36.    All Mortgage Loans were originated by or on behalf of the Seller in the
       ordinary course of the Seller's residential secured lending activities.
       No Mortgage Loan was acquired by the Seller subject to any discount and
       no Mortgage Loan has been written down by the Seller in its accounts.

37.    The Mortgage Loans and their related Mortgages contain no obligations
       on the part of the Seller to make any further advances, and all costs,
       fees and expenses incurred in making, closing or registering the
       Mortgage Loans and the Related Security have been paid in full.

38.    All formal approvals, consents and other steps necessary to permit a
       legal or equitable or beneficial transfer or a transfer of servicing
       away from the Seller of the Mortgage Loans and their related Mortgages
       to be sold under this Agreement whenever required under the Transaction
       Documents have been obtained or taken and there is no requirement in
       order for the transfer to be effective to notify the Borrower before,
       on or after any equitable or beneficial transfer or before any legal
       transfer of the Mortgage Loans and their related Mortgages.

39.    So far as the Seller is aware, none of the terms in any Mortgage Loan
       and its related Mortgage are unfair terms within the meaning of the
       Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
       in Consumer Contracts Regulations 1999 in any material respect save
       those which impose Early Repayment Charges.

40.    The Seller has confirmed to all relevant Borrowers that where any
       Mortgage Loan provides that where any Early Repayment Charge is payable
       at any time when the interest rate payable under that Mortgage Loan is
       equal to or set by reference to the Standard Variable Rate (including
       without limitation where the Mortgage Loan provides for a capped or
       discounted rate), the interest rate payable under that Mortgage Loan
       will be no more than 1.99 per cent. above the Bank of England's base
       rate.

41.    In relation to a Right to Buy Mortgage Loan:

(a)    in the case of each English Mortgage Loan the Seller was at the time of
       origination of that Mortgage Loan an approved lending institution
       within the meaning given to that expression in the Housing Act 1985;

       (b)    the original advance was made to the person exercising the right
              to buy; and


                                      39
<PAGE>


       (c)    the original advance was made for the purposes of enabling the
              recipient thereof to purchase the relevant Mortgaged Property.

       For the purpose of this paragraph 41, "Right to Buy Mortgage Loan"
       means (i) in relation to an English Mortgage Loan, a Mortgage Loan in
       respect of which the "right to buy" provisions of the Housing Act 1985
       apply (other than any Mortgage Loan in respect of which the period
       during which the statutory charge referred to in section 156 of that
       Act would have existed, had the relevant circumstances applied, has
       expired) and (ii) in relation to a Scottish Mortgage Loan, a Mortgage
       Loan in respect of which the "right to buy" provisions of the Housing
       (Scotland) Act 1987 apply (other than any Mortgage Loan in respect of
       which the period during which the seller's standard security referred
       to in section 72 of that Act remains in effect has expired).

42.    The loyalty discount applicable to certain Mortgage Loans after seven
       years will not apply to any such Mortgage Loans during any period when
       the interest rate is fixed.

43.    The Seller has paid to the relevant Borrower the full amount of the
       cashback payment in relation to any Cashback Mortgage Loan, either upon
       completion of the relevant Mortgage Loan or, if subsequent to
       completion, prior to the assignment of such Mortgage Loan to the
       Mortgages Trustee.

44.    No Mortgage Loan has a Current Balance of more than (pound)500,000.

45.    Each English Mortgage Loan and its Related Security in the Mortgage
       Portfolio was made not earlier than 1 July 1995 and each Scottish
       Mortgage Loan and its Related Security in the Mortgage Portfolio was
       made not earlier than 1 July 2001.

46.    Each Mortgage Loan was originated by the Seller in pounds sterling and
       is denominated in pounds sterling (or originated and denominated in
       euro at any time when the euro has been adopted as the lawful currency
       of the United Kingdom) and is currently repayable in pounds sterling.

47.    The Seller's Lending Criteria are consistent with the criteria that
       would be used by a reasonable and prudent mortgage lender.

48.    The Seller is not aware of any material claim outstanding under any of
       the Buildings Policies relating to a Mortgaged Property.

49.    No Mortgage Loan has an LTV greater than 95 per cent. In relation to
       Personal Secured Loans, the combined LTV of the maximum amount of
       credit provided under a Personal Secured Loan and the other Mortgage
       Loans secured on the same property is not greater than 95 per cent.

50.    Each Mortgage Loan (other than a Personal Secured Loan) has been made
       for one of the following purposes:

       (a)    the purchase of land; or


                                      40
<PAGE>


       (b)    the provisions of dwellings or business premises on any land; or

       (c)    the alteration, enlarging, repair or improvement of a dwelling
              or business premises on any land provided the creditor is the
              creditor under (i) an agreement by which the debtor is provided
              with credit for any of the purposes in (a) or (b) above or (ii)
              an agreement refinancing an agreement under which the debtor is
              provided with credit for any of the purposes in (a) or (b)
              above; or (iii) a debtor-creditor agreement secured by any land
              mortgage or standard security to refinance any existing
              indebtedness of the debtor, whether to the creditor or another
              person, under any agreement by which the debtor was provided
              with credit for any of the purposes in (a) and (b) above.


                                      41
<PAGE>


                                    Part 2

1.     In respect of each of the Preliminary Prospectus as of its date (except
       insofar as the information contained therein has been amended,
       supplemented or deleted in the Prospectus) and the Prospectus as at the
       date thereof:

       (a)    each of them contained all information with respect to the
              Seller, the Initial Mortgage Portfolio and to the Notes which
              was material in the context of the issue and offering of the
              Notes (including all information required by English law);

       (b)    the statements contained in each of them relating to the Seller
              and the Initial Mortgage Portfolio were in every material
              particular true and accurate and not misleading;

       (c)    the opinions and intentions expressed in each of them with
              regard to the Seller and the Initial Mortgage Portfolio were
              honestly held, were reached after considering all relevant
              circumstances and were based on reasonable assumptions;

       (d)    there were no other facts in relation to the Seller, the Initial
              Mortgage Portfolio or the Notes the omission of which would, in
              the context of the issue and offering of the Notes, make any
              statement in either of them misleading; and

       (e)    all reasonable enquiries had been made by the Seller to
              ascertain such facts and to verify the accuracy of all such
              information and statements.

2.     The Seller has not acquired or owned or possessed any rights in the
       Mortgages Trustee or Funding such that it would "control" the Mortgages
       Trustee or Funding within the meaning of section 416 ICTA 1988.

       There is not any "connection" (within the meaning of section 87 Finance
       Act 1996) between either the Mortgages Trustee or Funding,
       respectively, and any Borrower.


                                      42
<PAGE>


                                    Part 3

The Seller makes the following representations and warranties to each of the
Mortgages Trustee, Funding and the Security Trustee:

1.     Status: It is a public limited company duly incorporated, validly
       existing and registered under the laws of the jurisdiction in which it
       is incorporated, capable of being sued in its own right and not subject
       to any immunity from any proceedings, and it has the power to own its
       property and assets and to carry on its business as it is being
       conducted.

2.     Powers and authority: It has the power to enter into, perform and
       deliver, and has taken all necessary corporate and other action to
       authorise the execution, delivery and performance by it of each of the
       Transaction Documents to which it is or will be a party, and each such
       Transaction Document has been duly executed and delivered by it.

3.     Legal validity: Each Transaction Document to which it is or will be a
       party constitutes or when executed in accordance with its terms will
       constitute its legal, valid and binding obligation.

4.     Non-conflict: The execution by it of each of the Transaction Documents
       to which it is a party and the exercise by it of its rights and the
       performance of its obligations under such Transaction Documents will
       not:

       (a)    result in the existence or imposition of, nor oblige it to
              create, any Security Interest in favour of any person over all
              or any of its present or future revenues or assets save for any
              which are created under or pursuant to the Funding Deed of
              Charge;

       (b)    conflict with any document which is binding upon it or any of
              its assets;

       (c)    conflict with its constitutional documents; or

       (d)    conflict with any law, regulation or official or judicial order
              of any government, governmental body or court, domestic or
              foreign, having jurisdiction over it.

5.     No litigation: It is not a party to any material litigation,
       arbitration or administrative proceedings and, to its knowledge, no
       material litigation, arbitration or administrative proceedings are
       pending or threatened against it.

6.     Consents and Licences: All governmental consents, licences and other
       approvals and authorisations required in connection with the entry
       into, performance, validity and enforceability of, and the transactions
       contemplated by, the Transaction Documents have been obtained or
       effected (as appropriate) and are in full force and effect.


                                      43
<PAGE>


                                  SCHEDULE 2
            FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND
                            AND SCOTTISH TRANSFERS



                                      44
<PAGE>



                                    Part 1

           FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)

                 In the form of H.M. Land Registry Form TR4



                                      45
<PAGE>



                                    Part 2

          FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)

This Transfer of Mortgages is made on [ ] between NORTHERN ROCK PLC
(registered number 3273685) whose registered office is at Northern Rock House,
Gosforth, Newcastle upon Tyne NE3 4PL (hereinafter called the "Transferor") of
the one part and GRANITE FINANCE TRUSTEES LIMITED (registered number 79309)
whose registered office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX,
Channel Islands (hereinafter called the "Transferee") of the other part.

WHEREAS:

(A)    By the charges by way of legal mortgage ("Mortgages") brief particulars
       of which are set out in the Annexure hereto the properties brief
       particulars of which are similarly set out ("Properties") became
       security for the repayment of the moneys therein mentioned.

(B)    By a mortgage sale agreement dated 26 March 2001 made between inter
       alios the Transferor and the Transferee (as amended, restated, varied,
       supplemented or novated from time to time), the Transferor has agreed
       to sell and the Transferee has agreed to buy all right, title, interest
       and benefit (both present and future) in and under the Mortgages for
       the consideration hereinafter mentioned.

NOW THIS DEED WITNESSETH as follows:

1.     In consideration of the sums payable and the other consideration under
       the Agreement by the Transferee (receipt of which is hereby
       acknowledged) the Transferor with full title guarantee hereby transfers
       unto the Transferee all right, title, interest and benefit (both
       present and future) in and under the Mortgages including for the
       avoidance of doubt:

       (i)    the right to demand, sue for, recover, receive and give receipts
              for all principal moneys payable or to become payable under the
              Mortgages or the unpaid part thereof and the interest due or to
              become due thereon; and

       (ii)   the benefit of all securities for such principal moneys and
              interest, the benefit of all consents to mortgage signed by
              occupiers of the Properties, and the benefit of and the right to
              sue on all covenants with the Transferor in each Mortgage and
              the right to exercise all powers of the Transferor in relation
              to each Mortgage; and

       (iii)  all the estate and interest in the Properties vested in the
              Transferor subject to redemption or cesser; and

       (iv)   all causes of action of the Transferor against any person in
              connection with any report, valuation, opinion, certificate or
              other statement of fact or opinion or consent to mortgage given
              in connection with any Mortgage or affecting the Transferor's
              decision to make the relevant advance.


                                      46
<PAGE>


IN WITNESS of which NORTHERN ROCK PLC has caused this Transfer to be executed
and delivered as a deed on the date which appears first above.


EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed by order of the Board of Directors      )
in the presence of:                             )

------------------------------
Authorised Signatory



Name:

Title:


------------------------------
Authorised Signatory



Name:

Title:



[Alternative methods of executing as a deed will be acceptable if effective]




                                      47
<PAGE>


                                    Part 3

                FORM OF TRANSFER (LAND REGISTER - SCOTLAND)

We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:

1      the Standard Securities granted by the respective parties whose names
       are specified in Column 3 of the Schedule annexed and executed as
       relative hereto in favour of us the Transferor for all sums due and to
       become due, to the extent of all sums now due and which may at any time
       or times hereafter become due under the said Standard Securities,
       registered said Standard Securities in the Land Register under the
       Title Number specified in the relative entry in Column 4 of the said
       Schedule on the date specified in the relative entry in Column 5 of the
       said Schedule; and

2      the whole rights and interest of us the Transferor in and under all and
       any personal bonds, credit agreements or agreements for loan (however
       constituted) secured by the said Standard Securities and granted by or
       entered into with the said respective parties whose names are specified
       in Column 3 of the said Schedule, together with all sums, present and
       future, due thereunder and all other rights, interests and benefits
       pertaining thereto:

With interest from and also arrears and accumulations of interest due and
unpaid as at [                  ]: And we grant warrandice: IN WITNESS WHEREOF
these presents typewritten on this [and the preceding] page are together with
the Schedule annexed hereto executed at [                  ] on the
[         ] day of [         ] as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

by ..............................       ..................................

and .............................       ..................................



                                      48
<PAGE>


             Schedule referred to in the foregoing Assignation by
                               Northern Rock plc
                 in favour of GRANITE FINANCE TRUSTEES LIMITED


      1           2              3                4               5

 Account No.   Address     Borrowers Full   Title Number  Registration Date
                               Names






                                      49
<PAGE>


                                    Part 4

               FORM OF TRANSFER (SASINE REGISTER - SCOTLAND)


We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:

1      the Standard Securities granted by the respective parties whose names
       are specified in Column 3 of the Schedule annexed and executed as
       relative hereto in favour of us the Transferor for all sums due and to
       become due, to the extent of all sums now due and which may at any time
       or times hereafter become due under the said Standard Securities,
       recorded said Standard Securities in the Register for the County
       specified in the relative entry in Column 4 of the said Schedule on the
       date specified in the relative entry in Column 5 of the said Schedule;
       and

2      the whole rights and interest of us the Transferor in and under all and
       any personal bonds, credit agreements or agreements for loan (however
       constituted) secured by the said Standard Securities and granted by or
       entered into with the said respective parties whose names are specified
       in Column 3 of the said Schedule, together with all sums, present and
       future, due thereunder and all other rights, interests and benefits
       pertaining thereto:

With interest from and also arrears and accumulations of interest due and
unpaid as at [                  ]: And we grant warrandice: IN WITNESS WHEREOF
these presents typewritten on this [and the preceding] page are together with
the Schedule annexed hereto executed at [                  ] on the
[         ] day of [                  ] as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

by ..............................       ..................................

and .............................       ..................................



REGISTER on behalf of the within named GRANITE FINANCE  TRUSTEES  LIMITED as
trustee   within   mentioned   in  the   REGISTERS   of  the   COUNTIES   of
[                  ]


                                      50
<PAGE>


   Schedule referred to in the foregoing Assignation by Northern Rock PLC
               in favour of Granite Finance Trustees Limited



      1          2              3               4                5

 Account No.  Address    Borrowers Full      County        Recording Date
                              Names




                                      51
<PAGE>


                                  SCHEDULE 3
                       ASSIGNMENT OF INSURANCE CONTRACTS

THIS ASSIGNMENT is made by way of deed on [         ]

BETWEEN

NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL ("Northern Rock");
and

GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
(the "Mortgages Trustee")

WHEREAS

(A)    By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time "Mortgage Sale Agreement")
       and made between Northern Rock, as Seller, the Mortgages Trustee,
       Granite Finance Funding Limited ("Funding") and The Bank of New York,
       as security trustee (the "Security Trustee"), certain mortgages and
       standard securities (the "Mortgages") and the loans secured thereby
       were agreed to be transferred to the Mortgages Trustee.

(B)    Northern Rock has the benefit of the Insurance Contracts, as defined in
       the Master Definitions Schedule dated 26 March 2001 (as amended,
       varied, supplemented or novated from time to time) which relate to the
       Mortgages and the mortgaged properties upon which they are secured (the
       "Mortgaged Properties") as well as to certain mortgages and properties
       in which the Mortgages Trustee have no interest.

(C)    This Assignment is supplemental to the Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee absolutely all the estate and interest in
the Insurance Contracts including the rights to receive the proceeds of any
claim to the extent only that such estate, interest, and rights relate to the
Mortgaged Properties and/or the Mortgages, to hold the same unto the Mortgages
Trustee absolutely.


                                      52
<PAGE>


IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a Deed or the date which first appears above.

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed by order of the Board of Directors      )
in the presence of:                             )


------------------------------
Authorised Signatory



Name:

Title:

------------------------------
Authorised Signatory



Name:

Title:




                                      53
<PAGE>


<TABLE>
<CAPTION>

                                      SCHEDULE 4
                                  INSURANCE CONTRACTS

Policy number          Insurer                  Policy name/type        Date of Policy

<S>                   <C>                      <C>                     <C>
1. NR 9501             Northern Rock Mortgage   Mortgage Indemnity      18.07.1996
                       Indemnity Company
                       Limited

2.(a)BL-HHS            AXA General Insurance    Supercover              01.01.1997
                       Limited                  Buildings and
                                                Contents

(b)DR-FHH              AXA General Insurance    Superchoice             01.01.1997
                       Limited                  Buildings and
                                                Contents

(c)DR-SGD              AXA General Insurance    Supercover Gold         01.11.1999
                       Limited                  Buildings and
                                                Contents

(d)AG112/Z1413248      AXA General Insurance    Contingency             18.10.1999
                       Limited Insurance

(e)AG112/Z1413256      AXA General Insurance    Properties in           18.10.1999
                       Limited Possession

(f)BL-BBR              AXA General Insurance    Cover Me                18.12.2000
                       Limited                  Buildings and
                                                Contents

</TABLE>


                                          54
<PAGE>


                                  SCHEDULE 5
                                    Part 1
                           ASSIGNMENT OF GUARANTEES

THIS ASSIGNMENT is made by way of deed on [         ]

BETWEEN:

NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL ("Northern Rock");
and

GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
(the "Mortgages Trustee")

WHEREAS:

(A)    By a mortgage sale agreement dated 26 March 2001 ( as amended, varied,
       supplemented or novated from time to time the "Mortgage Sale
       Agreement") and made between Northern Rock, the Mortgages Trustee,
       Granite Finance Funding Limited and The Bank of New York, certain
       mortgages (the "Mortgages") were agreed to be transferred and assigned
       to the Mortgages Trustee.

(B)    Northern Rock has the benefit of the Guarantees as defined in the
       Master Definitions Agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time) which relate to certain of
       the Mortgages.

(C)    This Assignment is made pursuant to the Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee all its right, title, interest and benefit
(both present and future) in the Guarantees relating to the Mortgages the
subject of a Transfer of even date herewith including for the avoidance of
doubt:

(i)    the benefit of and the right to sue on all covenants with and
       undertakings to Northern Rock in each Guarantee and the right to
       exercise all powers of Northern Rock in relation to each Guarantee; and

(ii)   all the estate and interest in the Guarantees vested in Northern Rock;

to hold the same unto the Mortgages Trustee absolutely.

IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a deed on the date which first appears above.


                                      55
<PAGE>


EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed by order of the Board of Directors      )
in the presence of:                             )


------------------------------
Authorised Signatory



Name:

Title:

------------------------------
Authorised Signatory



Name:

Title:

[Alternative methods of executing as a deed will be acceptable if effective]



                                      56
<PAGE>


                                    Part 2

                           ASSIGNATION OF GUARANTEES


ASSIGNATION

by

NORTHERN  ROCK PLC,  incorporated  in England  (Registered  Number  3273685)
whose  Registered  Office is at  Northern  Rock House,  Gosforth,  Newcastle
upon Tyne NE3 4PL (Northern Rock);

in favour of

GRANITE FINANCE TRUSTEES LIMITED, incorporated in Jersey (Registered Number
79309) whose Registered Office is at 22 Grenville Street, St Helier, Jersey
JE4 8PX, Channel Islands (the "Mortgages Trustee")

WHEREAS:

(A)    By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time, the "Mortgage Sale
       Agreement") and made between Northern Rock, the Mortgages Trustee,
       Granite Finance Funding Limited and The Bank of New York, certain
       mortgage loans and their related security (the "Mortgages") were agreed
       to be transferred and assigned to the Mortgages Trustee;

(B)    Northern Rock has the benefit of the Guarantees as defined in the
       Master Definitions Agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time) which relate to certain of
       the Mortgages;

(C)    This Assignation is made pursuant to the Mortgage Sale Agreement;

NOW THEREFORE the parties hereby AGREE as follows:

1      Assignation

       Northern Rock hereby assigns to the Mortgage Trustee with absolute
       warrandice its whole right, title, benefit and interest, present and
       future, in and to the Guarantees governed by Scots law and detailed in
       the Schedule hereto (the "Scottish Guarantees") relating to the
       Mortgages including for the avoidance of doubt the benefit of and the
       right to sue on all obligations and undertakings to Northern Rock in
       each Scottish Guarantee and the right to exercise all powers of
       Northern Rock in relation to each Scottish Guarantee.


                                      57
<PAGE>


2      Intimation

       Northern Rock hereby undertakes to the Mortgages Trustee that it will,
       within fourteen days of the execution of this deed, serve a notice of
       assignation by recorded delivery post in such form as the Mortgage
       Trustee shall approve upon each of the Guarantors pursuant to each
       Scottish Guarantee.

3      Governing Law

       This deed shall be governed by Scots law and the parties hereto submit
       to the non-exclusive jurisdiction of the Scottish courts.

IN WITNESS WHEREOF these presents consisting of this and the preceding page
together with the Schedule annexed hereto are executed as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

at ..............................       ..................................

on ..............................       ..................................

by ..............................

and .............................


SUBSCRIBED for and on behalf of the
said
GRANITE FINANCE TRUSTEES LIMITED

at ..............................       ..................................

on ..............................       ..................................

by ..............................

and .............................




                                      58
<PAGE>


     Schedule referred to in the foregoing Assignation of Guarantees by
      Northern Rock PLC in favour of Granite Finance Trustees Limited

                            [Details of Guarantees]





                                      59
<PAGE>


                                  SCHEDULE 6
                         NEW MORTGAGE PORTFOLIO NOTICE

                                                    Dated [                  ]

1.     It is hereby agreed for the purpose of this notice the "Principal
       Agreement" shall mean the Mortgage Sale Agreement dated 26 March 2001
       made between (1) NORTHERN ROCK PLC (the "Seller"), (2) GRANITE FINANCE
       TRUSTEES LIMITED (the "Mortgages Trustee") (3) GRANITE FINANCE FUNDING
       LIMITED ("Funding") and (4) THE BANK OF NEW YORK (the "Security
       Trustee"), as the same may be amended, varied, supplemented or novated
       from time to time.

2.     Save where the context otherwise requires, words and expressions in
       this notice shall have the same meanings respectively as when used in
       the Principal Agreement.

3.     In accordance with and subject to Clause 4.1 (Agreement to Assign) of
       the Principal Agreement, upon receipt by the Seller of the duplicate of
       this notice signed by the Mortgages Trustee, there shall exist between
       the Seller and the Mortgages Trustee an agreement (the "Agreement for
       Sale") for the sale and assignment by the Seller to the Mortgages
       Trustee of the New Mortgage Loans and the Related Security more
       particularly described in the Schedule hereto (other than any New
       Mortgage Loans and their Related Security which have been redeemed in
       full prior to the next following Assignment Date). Completion of such
       sale shall take place, subject to the provisions of the Principal
       Agreement, on [               ] (the "Assignment Date").

4.     The Seller hereby confirms that the conditions required to be fulfilled
       pursuant to Clause 4.2 (Conditions to Effecting an Assignment of New
       Mortgage Loans) of the Principal Agreement have been fulfilled [/save
       for conditions ( ) ( ) and ( )]

5.     The Agreement for Sale shall incorporate, mutatis mutandis, the
       relevant provisions of the Principal Agreement.

Signed for and on behalf of                     )
NORTHERN ROCK PLC                               )
by:                                             )

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

[On duplicate

We hereby acknowledge receipt of the New Mortgage Portfolio Notice dated [
], and confirm [that the conditions set out in paragraph ( ) ( ) and ( ) of
Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage Loans) have
been waived and] the sale and assignment of the New Mortgage Loans as set out
in that notice.


                                      60
<PAGE>


Signed for and on behalf of                     )
GRANITE FINANCE TRUSTEES LIMITED                )
by:                                             )

------------------------------]





                                      61
<PAGE>


                                   Schedule

1              2                       3                         4

Account No.    Property Address        Name(s)                   Date of
                                                                 Mortgage
                                                                 Completion






                                      62
<PAGE>


                                  SCHEDULE 7
                            LOAN REPURCHASE NOTICE

                                                    Dated [                  ]

1.     We refer to the Mortgage Sale Agreement dated 26 March 2001 (as
       amended, varied, supplemented or novated from time to time the
       "Principal Agreement") made between (1) NORTHERN ROCK PLC (the
       "Seller"), (2) GRANITE FINANCE TRUSTEES LIMITED (the "Mortgages
       Trustee") (3) GRANITE FINANCE FUNDING LIMITED ("Funding") and (4) THE
       BANK OF NEW YORK (the "Security Trustee").

2.     Save where the context otherwise requires, words and expressions in
       this notice shall have the same meanings respectively as when used in
       the Principal Agreement.

3.     We hereby send this notice pursuant to and in accordance with Clause
       [8.4 (Repurchase)/8.5 (Purchase of Product Switches, Further Advances
       and purchases relating to Personal Secured Loans)]* of the Principal
       Agreement, upon receipt of which you as [the Seller/the Mortgages
       Trustee]* will be required to [repurchase from us/re-sell to
       us/purchase from us/sell to us]* the Mortgage Loan(s) and Related
       Security set out in the attached schedule in accordance with the terms
       of Clause 8 (Repurchase) of the Principal Agreement on [insert date].

Signed for and on behalf of                     )
[GRANITE FINANCE TRUSTEES                       )
LIMITED/NORTHERN ROCK PLC]                      )
by:                                             )



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




* Delete as appropriate



                                      63
<PAGE>


                                   Schedule

1              2                       3                         4

Account No.    Property Address        Name(s)                   Date of
                                                                 Mortgage
                                                                 Completion






                                      64
<PAGE>


                                  SCHEDULE 8
                       FORM OF NOTIFICATION TO BORROWERS

[To:      Borrower]

Dear Sirs,

Northern Rock

Account No.[                  ]

We hereby notify you that on [        ] 2001, Northern Rock agreed to sell your
mortgage to Granite Finance Trustees Limited.

[Additional text will be allowed with Mortgages Trustee's and Security
Trustee's consent]

Yours faithfully,




Northern Rock plc




                                      65
<PAGE>


                                  SCHEDULE 9
      OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE LOANS)



To:   Northern Rock plc
      Northern Rock House
      Gosforth
      Newcastle upon Tyne
      NE3 4PL

From: Granite Finance Trustees Limited
      22 Grenville Street
      St Helier
      Jersey
      Channel Islands
      JE4 8PX

Date: [                  ]

Pursuant to Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans) of the
mortgage sale agreement dated 26 March 2001 made between (1) Northern Rock
plc, (2) Granite Finance Funding Limited, (3) Granite Finance Trustees Limited
and (4) The Bank of New York (as amended, varied, supplemented or novated from
time to time the "Agreement") we hereby offer to re-sell to you the Mortgage
Loan(s) together with their Related Security, details of which are set out in
the attached print out, if such Mortgage Loan(s) become Re-Fixed Mortgage
Loans within 3 months of the expiry of the relevant initial fixed rate periods
applicable to that/those Mortgage Loans. If you wish to do so, please accept
this offer by payment to us of the consideration for the repurchase of the
relevant Mortgage Loan(s) and Related Security in accordance with Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans) of the Agreement if such Mortgage
Loan(s) become Re-Fixed Mortgage Loans within 3 months of the expiry of the
relevant initial fixed rate periods applicable to that/those Mortgage Loans.
Capitalised terms used in this notice and not defined herein have the meanings
given to them in the Agreement.

Signed by or on behalf of                       )
GRANITE FINANCE TRUSTEES LIMITED                )
as Seller                                       )
[acting as its attorney NORTHERN ROCK PLC:]     )



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



                                      66
<PAGE>


                                  SCHEDULE 10

                        POWER OF ATTORNEY IN FAVOUR OF
          THE MORTGAGES TRUSTEE, FUNDING AND THE SECURITY TRUSTEE

THIS DEED OF POWER OF ATTORNEY is made on the [o] by:

(1)    NORTHERN ROCK PLC whose registered office is at Northern Rock House,
       Gosforth, Newcastle upon Tyne NE3 4PL (registered number 3273685) in
       its capacity as Seller,

in favour of each of:

(2)    GRANITE FINANCE TRUSTEES LIMITED whose registered office is at 22
       Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
       (registered number 79309) in its capacity as Mortgages Trustee;

(3)    GRANITE FINANCE FUNDING LIMITED, acting out of its branch office
       established in England (registered overseas company number FC022999 and
       branch number BR005916) at 4 Royal Mint Court, London EC3N 4HJ and

(4)    THE BANK OF NEW YORK a New York Banking Corporation whose London branch
       address is at 48th Floor, One Canada Square, London E14 5AL in its
       capacity as Security Trustee.

WHEREAS:

(A)    By virtue of a mortgage sale agreement (the "Mortgage Sale Agreement")
       dated 26 March 2001 and as subsequently amended, and made between (1)
       the Seller, (2) the Mortgages Trustee (3) Funding and (4) the Security
       Trustee, provision was made for the execution by the Seller of this
       Power of Attorney.

(B)    The provisions of the Master Definitions Schedule as amended and
       restated by (and appearing in Appendix 1 to) the Master Definitions
       Schedule [ ] Amendment and Restatement Deed made on [ ] 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 Deed.

NOW THIS DEED WITNESSETH:

1.     The Seller irrevocably and by way of security for the performance of
       the covenants, conditions and undertakings on the part of the Seller
       contained in the Mortgage Sale Agreement and the Administration
       Agreement HEREBY APPOINTS each of Funding, the Mortgages Trustee and
       the Security Trustee (each an "Attorney") and any receiver and/or
       administrator appointed from time to time in respect of Funding and/or
       the Mortgages Trustee or their assets severally to be its true and
       lawful attorney for the Seller and in the Seller's name or otherwise to
       do any act, matter or thing which any Attorney considers necessary for


                                      67
<PAGE>


       the protection or preservation of that Attorney's interest in the
       Mortgage Loans, the Mortgages, the Mortgage Deeds and their Related
       Security or which ought to be done under the covenants, undertakings
       and provisions contained in the Mortgage Sale Agreement including
       (without limitation) any or all of the following that is say:

       (a)    to exercise its rights, powers and discretions under the
              Mortgage Loans, the Mortgages, the Mortgage Deeds and the
              Related Security including the right to fix the rate or rates of
              interest payable under the Mortgage Loans in accordance with the
              terms thereof (including whilst such Mortgage Loans subsist and
              subject to the consent of the Mortgages Trustee being given to
              the setting of such rates, setting the Standard Variable Rate of
              the Seller, such other discretionary rates and margins
              applicable to the Mortgage Loans and (other than in respect of
              the Security Trustee) the rate of (and terms relating to) the
              Existing Borrowers' Re-Fix Rate in the circumstances referred to
              in Clause 4 (Interest Rates) of the Administration Agreement
              provided that nothing in this Clause shall prevent the Seller
              (or any of its attorneys from time to time) from setting higher
              rates (and in the case of the Existing Borrowers' Re-Fix Rate,
              imposing terms more advantageous to the Mortgages Trustee) than
              those set or to be set or required or to be required by the
              Mortgages Trustee or Funding under this power of attorney;

       (b)    to exercise all the powers exercisable by the Seller by reason
              of its remaining for the time being the registered owner at H.M.
              Land Registry or registered or recorded heritable creditor in
              the Registers of Scotland of any of the Mortgage Loans, the
              Mortgages, the Mortgage Deeds and the Related Security and in
              particular, but without prejudice to the generality of the
              foregoing, to make Further Advances to Borrowers;

       (c)    to demand, sue for and receive all moneys due or payable under
              the Mortgage Loans, the Mortgages, the Mortgage Deeds and the
              Related Security or any such collateral security or related
              rights;

       (d)    to execute, sign, seal and deliver (using the company seal of
              the Seller where appropriate) a conveyance, assignation or
              transfer of the Mortgage Loans, the Mortgages, the Mortgage
              Deeds and the Related Security or any of them to the Mortgages
              Trustee and its successors in title or other person or persons
              entitled to the benefit thereof;

       (e)    to execute, sign, seal and deliver (using the company seal of
              the Seller where appropriate) a conveyance, assignment,
              assignation or transfer of the Related Security or any item
              comprised therein (to the extent only that such item or items
              relate to the Mortgage Loans) to the Mortgages Trustee and its
              successors in title or other person or persons entitled to the
              benefit thereof or entitled to be registered or recorded at H.M.
              Land Registry or the Registers of Scotland as proprietor or
              heritable creditor thereof (as the case may be);

       (f)    to discharge the Mortgages or the Related Security or any of
              them and to sign, seal, deliver and execute such receipts,
              releases, surrenders, instruments and deeds as may


                                      68
<PAGE>


              be required or advisable in order to discharge the relevant
              Mortgaged Property or Properties from the Mortgages or any of
              them; and

       (g)    to do every other act or thing which the Seller is obliged to do
              under the Mortgage Sale Agreement or which that Attorney may
              otherwise consider to be necessary proper or expedient for fully
              and effectually vesting or transferring the interests sold
              thereunder in the Mortgage Loans, the Mortgages, the Mortgage
              Deeds and their Related Security or any or each of them and/or
              the Seller's estate right and title therein or thereto in the
              Mortgages Trustee and its successors in title or other person or
              persons entitled to the benefit thereof (as the case may be) in
              the same manner and as fully and effectually in all respects as
              the Seller could have done.

2.     Each Attorney shall have the power by writing under its hand by an
       officer of the Attorney from time to time to appoint a substitute who
       shall have power to act on behalf of the Seller as if that substitute
       shall have been originally appointed Attorney by this deed (including,
       without limitation, the power of further substitution) and/or to revoke
       any such appointment at any time without assigning any reason therefor.

3.     The laws of England shall apply to this deed and the interpretation
       thereof and to all acts of the Attorney carried our or purported to be
       carried out under the terms hereof.

4.     The Seller hereby agrees at all times hereafter to ratify and confirm
       whatsoever the said Attorney or its attorneys shall lawfully do or
       cause to be done in and concerning the Mortgage Loans, the Mortgages or
       the Mortgage Deeds or their Related Security by virtue of this deed.

IN WITNESS whereof the Seller has executed this document as a deed the day and
year first before written.

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed in the presence of:                     )


------------------------------
Authorised Signatory


Name:

Title:

------------------------------
Authorised Signatory

Name:

Title:



                                      69
<PAGE>


                                  SCHEDULE 11

                          FORM OF SCOTTISH TRUST DEED

DECLARATION OF TRUST

among

NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(registered number 3273685), having its registered office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (in its capacity as seller of the
Mortgage Loans, the "Seller" and, in its capacity as a beneficiary of the
Mortgages Trust, the "Seller Beneficiary");

GRANITE FINANCE TRUSTEES LIMITED, incorporated under the laws of Jersey
(registered number 79309), and having its registered office at 22 Grenville
Street, St. Helier, Jersey, JE4 8PX, Channel Islands (the "Mortgages
Trustee"); and

GRANITE FINANCE FUNDING LIMITED, incorporated under the laws of Jersey
(registered number 79308), but acting out of its branch office established in
England (registered overseas company number FC022999 and branch number
BR005916) at 4 Royal Mint Court, London EC3N 4HJ ("Funding" and, in its
capacity as a beneficiary of the Mortgages Trust, the "Funding Beneficiary"
and, together with the Seller Beneficiary, the "Beneficiaries" and each a
"Beneficiary").

WHEREAS:

(A)    Title to the Scottish Trust Property referred to below is held by and
       vested in the Seller;

(B)    In terms of the Mortgages Trust Deed entered into among the Seller,
       Funding and the Mortgages Trustee dated 26 March 2001 (as amended,
       restated, varied, supplemented or novated from time to time, the
       "Mortgages Trust Deed") and the Mortgages Trust constituted in terms
       thereof the Mortgages Trustee holds the Trust Property on trust for the
       Beneficiaries;

(C)    In terms of the Mortgage Sale Agreement entered into among the Seller,
       the Mortgages Trustee, Funding and the Security Trustee dated 26 March
       2001 (as amended, restated, varied, supplemented or novated from time
       to time, the "Mortgage Sale Agreement") the Seller has agreed to sell
       and assign the Scottish Trust Property to the Mortgages Trustee to be
       held thereafter by the Mortgages Trustee under and in terms of the
       Mortgages Trust; and

(D)    In implementation of Clause 4.4 of the Mortgage Sale Agreement and
       pending the taking of legal title to the Scottish Trust Property by the
       Mortgages Trustee, the Seller has undertaken to grant this deed;

NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:


                                      70
<PAGE>


1      Interpretation

In this deed:-

1.1    Words and expressions defined in the Master Definitions Schedule as
       amended and restated by (and appearing in Appendix 1 to) the Master
       Definitions [ ] Amendment and Restatement Deed made on [ ] between,
       among others, the parties hereto (as the same have been and may be
       further amended , restated, varied or supplemented from time to time
       with the consent of the parties thereto) shall, except where the
       context otherwise requires and save where otherwise defined herein,
       have the same meanings in this deed, including the recitals hereto, and
       this deed shall be construed in accordance with the interpretation
       provisions set out in Clause 2 thereof; and

1.2    "Scottish Trust Property" shall mean the Scottish Mortgage Loans and
       the Scottish Mortgages and other Related Security relative thereto
       brief particulars of which are detailed in the schedule annexed and
       executed as relative hereto, together with:

       a)     all principal sums (including all Further Advances, Further
              Draws and Re-Draws), interest and expenses, present or future,
              comprised therein and secured thereby and the right to demand,
              recover, receive and give receipts for the same;

       b)     the Seller's whole right and interest in the Mortgaged
              Properties secured by the said Scottish Mortgages;

       c)     all rights of action of the Seller against any person in
              connection with any report, valuation, opinion, certificate,
              consent or other statement of fact or opinion given in
              connection with any of the said Scottish Mortgage Loans and
              their Related Security;

       d)     all powers and remedies for enforcing the said Scottish Mortgage
              Loans and their Related Security and all proceeds resulting
              therefrom; and

       e)     all other monies, rights, interests, benefits and others
              pertaining thereto or deriving therefrom, including the benefit
              and proceeds of any insurance policy pertaining thereto.

2      Declaration of Trust

       The Seller hereby DECLARES that from and after the date hereof it holds
       and, subject to Clause 9 (Termination of Trust) hereof, shall
       henceforth hold the Scottish Trust Property and its whole rights,
       title, benefit and interest, present and future, therein and thereto in
       trust absolutely for the Mortgages Trustee and its assignees (whether
       absolutely or in security) whomsoever.

3      Intimation

       The Seller hereby intimates to the Mortgages Trustee the coming into
       effect of the trust hereby declared and created and the Mortgages
       Trustee by its execution hereof immediately subsequent to the execution
       of this Deed by the Seller acknowledges such intimation.


                                      71
<PAGE>


4      Dealings with Trust Property and Negative Pledge

       The Seller warrants and undertakes to the Mortgages Trustee that:

       4.1    as at the date hereof, it holds (subject to any pending
              registration or recording in the Registers of Scotland) legal
              title to the Scottish Trust Property unencumbered by any fixed
              or floating charge or other Security Interest;

       4.2    it shall not create or agree to create any fixed or floating
              charge or other Security Interest over or which may attach to or
              affect the whole or any part of the Scottish Trust Property or
              otherwise dispose of the same at any time when such property or
              part thereof remains subject to the trust hereby created; and

       4.3    it shall deal with the Scottish Trust Property (including
              without limitation the calculation and setting of any interest
              rate applicable thereto) in accordance with the provisions of
              the Transaction Documents and the specific written instructions
              (if any) of the Mortgages Trustee or its foresaids and shall
              take, subject to Clause 9 (Termination of Trust) hereof, any
              such action as may be necessary (including without limitation
              the raising or defending of any proceedings in any court of law
              whether in Scotland or elsewhere) to secure or protect the title
              to the Scottish Trust Property but only in accordance with the
              specific written instructions (if any) of the Mortgages Trustee
              or its foresaids.

5      Change of Trustee

       Except with the prior written consent of the Mortgages Trustee or its
       foresaids and (for so long as each retains any right or interest in the
       Scottish Trust Property) Funding and the Security Trustee, the Seller
       shall not be entitled to resign office as a trustee or assume a new
       trustee or trustees under this Deed.

6      Power of Beneficiary

       6.1    The Mortgages Trustee, as beneficiary hereunder, shall have the
              right in the circumstances stated in Clause 6 (Perfection of the
              Assignment) of the Mortgage Sale Agreement to complete its title
              to the Scottish Trust Property or any part thereof or to call
              upon the Seller to execute and deliver to the Mortgages Trustee
              or its foresaids valid assignations and transfers (including
              where applicable Scottish Transfers) of the Scottish Trust
              Property or any part thereof, and that notwithstanding the
              winding-up of the Seller or the administration of the Seller, or
              the appointment of any receiver to all or any part of the
              Scottish Trust Property.

       6.2    Without prejudice to the generality of Clause 6.1, the Seller
              undertakes to the Mortgages Trustee and binds and obliges itself
              that, upon the occurrence of any one of the events specified in
              Clause 6.1(a) to (f) of the Mortgage Sale Agreement, it will
              within five London Business Days of such occurrence provide such
              information as is necessary to enable the Mortgages Trustee to
              complete Scottish Transfers (including all schedules and
              annexures thereto) in relation to the whole of the Scottish
              Mortgages comprised within the Scottish Trust Property.


                                      72
<PAGE>


       6.3    For further assuring the said rights and powers specified in
              this Clause 6, the Seller has granted a power of attorney in
              favour of the Mortgages Trustee, Funding and the Security
              Trustee substantially in the form set out in Schedule 10 to the
              Mortgage Sale Agreement.

7      Mortgages Trustee Declaration of Trust

       7.1    The Mortgages Trustee by its said execution of this Deed hereby
              DECLARES that its whole right, title and beneficial interest in
              and to the Scottish Trust Property in terms of this Deed are and
              shall be held (to the extent not already so held) by the
              Mortgages Trustee under and in terms of the Mortgages Trust and
              all monies received or held by the Mortgages Trustee relating
              thereto or deriving therefrom have been and shall be comprised
              in the Trust Property as defined in the Mortgages Trust Deed and
              shall be subject to and administered by the whole terms and
              conditions of the Mortgages Trust Deed and the Administration
              Agreement.

       7.2    Each of the Seller, the Seller Beneficiary, Funding and the
              Funding Beneficiary hereby acknowledge, accept and agree to the
              declaration constituted by and the whole other terms and
              conditions of the foregoing Clause 7.1.

8      Mortgages Trust Intimation

       The Mortgages Trustee hereby intimates to the Beneficiaries of the
       Mortgages Trust, the declaration of trust made in terms of Clause 7
       hereof and the Beneficiaries of the Mortgages Trust by their respective
       executions of this Deed acknowledge such intimation.

9      Termination of Trust

       If at any time during the subsistence of the trust hereby declared and
       created:

       9.1    full legal title to any part or parts of the Scottish Trust
              Property is taken by the Mortgages Trustee or its foresaids in
              accordance with the provisions of Clause 6 (Perfection of the
              Assignment) of the Mortgage Sale Agreement (which in the case of
              any Scottish Mortgage shall be constituted by the registration
              or recording of the title thereto in the Registers of Scotland);
              or

       9.2    any Scottish Mortgage Loan and Related Security comprised within
              the Scottish Trust Property has been repurchased by the Seller
              pursuant to Clauses 8.4 to 8.6 (inclusive) of the Mortgage Sale
              Agreement; or

       9.3    any such Scottish Mortgage Loan and Related Security has been
              redeemed in full and therefore no longer forms part of the
              Mortgage Portfolio; then

       the trust hereby declared and created shall (but only when the relevant
       events or transaction have been completed irrevocably, validly and
       full) ipso facto fall and cease to be of effect in respect of such part
       or parts of the Scottish Trust Property but shall continue in full
       force and effect in respect of the whole remainder (if any) of the
       Scottish Trust Property.


                                      73
<PAGE>


10     Variation

       This Deed and the trust hereby declared and created shall not be varied
       in any respect without the consent in writing of the Mortgages Trustee
       or its foresaids and (for so long as each retains any right or interest
       in the Scottish Trust Property) Funding and the Security Trustee.

11     Governing Law

11.1   This Deed shall be governed by, and construed in accordance with, Scots
       law, other than Clauses 7 and 8 hereof which shall be governed by, and
       construed in accordance with, English law.

11.2   The parties hereto submit to the non-exclusive jurisdiction of the
       Scottish courts so far as not already subject thereto and waive any
       right or plea of forum non conveniens in respect of such jurisdiction.

12     Registration

       The parties consent to the registration of this deed for preservation.

IN WITNESS WHEREOF these presents consisting of this and the preceding [four]
pages together with the Schedule hereto are subscribed by the Seller, the
Mortgages Trustee and Funding as follows:

As Seller and as Seller Beneficiary:

SUBSCRIBED by
NORTHERN ROCK PLC
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)



......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on



                                      74
<PAGE>


As Mortgages Trustee:

SUBSCRIBED by
GRANITE FINANCE TRUSTEES LIMITED
acting by:



......................   Director          .....................      Director
(Print Full Name)                               (Signature)



......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on



As Funding and as Funding Beneficiary:

SUBSCRIBED by
GRANITE FINANCE FUNDING LIMITED
acting by:



......................   Director          .....................      Director
(Print Full Name)                               (Signature)



......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on


                                      75
<PAGE>


This is the Schedule to the foregoing Scottish Trust Deed between Northern
Rock PLC, Granite Finance Trustees Limited and Granite Finance Funding
Limited

                Scottish Mortgage Loans and Related Security

   1                   2                        3                  4

Account No.    Property Address        Borrower Name(s)          Date of
                                                                 Mortgage
                                                                 Completion





                                      76
<PAGE>


                                  SCHEDULE 12

                              LENDING CRITERIA /1/

General

To proceed with obtaining a Mortgage Loan, each prospective Borrower completes
an application form which includes information with respect to the applicant's
income from all sources, current employment details, bank account information
(where the Borrower has a bank account), current mortgage information (if
applicable) and certain other personal information. A credit reference agency
search is made against each Borrower at their current address and, if
necessary, former addresses, in all cases which will give details of any
public information which includes county court judgements and details of any
bankruptcy.

Employment details

The Seller operates the following policy in respect of the verification of
Borrower income details. Under this policy, Borrowers are categorised as
either "employed" or "self-employed" by the Seller.

Proof of income for employed prospective Borrowers may be established by:

(a)    two current cumulative monthly payslips or, if paid weekly, the last
       three consecutive payslips; or

(b)    Form P60, or employer's reference, with evidence of continued
       employment.

Proof of income for self-employed prospective Borrowers may be established by:

(a)    a letter from the Borrower's accountant in acceptable form; or

(b)    acceptable confirmation of self-employment which might include any of a
       tax return, accountant's letter or a trade invoice, together with a
       certificate from the Borrower as to income.

For certain Mortgage Loan products, particularly those that may involve larger
maximum loan amounts or higher loan to value ("LTV") ratios, the Seller
generally will require an acceptable accountant's letter or audited accounts.

Income Capacity

The following maximum income multiples are applied in determining the amount
of the Mortgage Loan:

(a)    Single applicant- 3.50 times gross income for all Mortgage Loans (other
       than Together Mortgage Loans); 3.80 times gross income for Together
       Mortgage Loans.

--------
/1/ These Lending Criteria apply to Mortgage Loans other than Personal Secured
Loans.


                                      77
<PAGE>


(b)    Joint applicants - a sum equal to: (1) the higher of 2.75 times the
       joint gross income of the applicants (3.00 times joint gross income for
       Together Mortgage Loans), or 3.50 times the highest earning applicant's
       gross income (3.80 times the highest joint gross income for Together
       Mortgage Loans) plus (2) the gross income of the other applicant.

Valuation

The Seller requires that a valuation of the Mortgaged Property be obtained
either from its in-house valuation department or from an independent firm of
professional valuers selected from a panel of approved valuers. Details of
professional indemnity insurance held by panel valuers are kept by the Seller.
All valuations of Properties are reviewed by the person underwriting the
Mortgage Loan and/or the valuation team.

Property Types

The Seller applies the criteria set out below in determining the eligibility
of Properties to serve as security for Mortgage Loans. Under these criteria,
eligible property types include freehold, heritable and leasehold houses,
leasehold and heritable flats and mixed commercial and residential use
properties where there is a separate entrance for the residential part of the
Mortgaged Property. In the case of a Mortgage Loan secured by a leasehold
property, the Seller requires that the unexpired term of the lease be at least
30 years from the end of the agreed mortgage term, with a minimum remaining
term of 50 years from the beginning of the mortgage term.

Certain property types falling outside the criteria may be considered on a
case by case basis. However, certain property types will not be considered for
the purposes of providing security for a Mortgage Loan. The types of property
falling within this category comprise freehold flats (in England and Wales),
shared ownership or shared equity schemes and properties of non-standard
construction of a type considered to be defective.

Loan Amount

Generally, the maximum loan amount is (pound)500,000, but this varies
according to the application in question. In exceptional cases, this limit may
be exceeded.

Term

Each Mortgage Loan must have an initial term of between 7 and 30 years (in the
case of a Together Mortgage Loan, a Together Connections Mortgage Loan and a
Connections Mortgage Loan) or between 7 and 35 years in the case of all other
Mortgage Loans.

Age of applicant

All Borrowers in respect of non-Together Mortgage Loans must be aged 18 or
over. All Borrowers in respect of Together Mortgage Loans must be aged 21 or
over. There are no maximum age limits.


                                      78
<PAGE>


Discretion to lend outside Lending Criteria

On a case-by-case basis, and within approved limits as detailed in the
Seller's lending policy, the Seller may have determined that, based upon
compensating factors, a prospective Borrower who did not strictly qualify
under its lending criteria warranted an underwriting exception. Compensating
factors may include, but are not limited to, a low LTV ratio, stable
employment and time in residence at the applicant's current residence.

Maximum Loan To Value

For Mortgage Loans up to (pound)250,000, the maximum LTV ratio permitted is 95
per cent. of the current market value of the Mortgaged Property determined by
the valuation. For Mortgage Loans up to (pound)400,000 the maximum LTV ratio
permitted is 90 per cent. of the current market value of the Mortgaged
Property determined by relevant valuation. For Mortgage Loans of over
(pound)400,000 the maximum LTV ratio permitted is 85 per cent. of the current
market value of the Mortgaged Property determined by valuation.




                                      79
<PAGE>


<TABLE>
<CAPTION>

                                         SCHEDULE 13

                                    STANDARD DOCUMENTATION

Doc No.          Document                                                Period in Use

<S>             <C>                                                     <C>
1.               (a) NRBS Mortgage Offer - General Conditions            01/07/95 to 31/12/95

                 (b)NRBS Mortgage Offer - General Conditions             01/01/96 to 30/11/96

                 (c)NRBS Mortgage Offer - General Conditions             01/12/96 to 30/09/97

2.               NRBS Mortgage Deed                                      01/07/95 to 30/09/97

3.               NRBS Mortgage Conditions Booklet 1995                   01/07/95 to 30/09/97

4.               (a)NR plc Mortgage Offer - General Conditions           01/10/97 to 31/12/97

                 (b)NR plc Mortgage Offer - General Conditions           01/12/97 to 31/12/97

                 (c)NR plc Mortgage Offer - General Conditions           01/01/98 to 31/05/98

                 (d)NR plc Mortgage Offer - General Conditions           01/06/98 to 31/12/98

                 (e)NR plc Mortgage Offer - General Conditions           01/01/99 to present

5.               NRBS/NR plc Transitional Mortgage Deed                  01/07/97 to 01/10/97

6.               NR plc Mortgage Deed                                    01/10/97 to present

7.               NR plc Mortgage Conditions 1997                         01/10/97 to present

8.               NR plc "Together" Mortgage Deed                         01/04/99 to present

9.               Discounted Mortgage Brochures

10.              Discounted Mortgage Special Conditions

11.              Cashback Mortgage Brochures

12.              Cashback Mortgage Special Conditions

13.              Fixed Rate Mortgage Brochures

14.              Fixed Rate Mortgage Special Conditions

15.              Together Mortgage Brochures

16.              Together Mortgage Special Conditions

</TABLE>


                                             80
<PAGE>


<TABLE>
<CAPTION>

                                                           APPENDIX A
                                              THE INITIAL MORTGAGE LOAN PORTFOLIO

Account No            Property Address            Name of Borrower(s)        Date of Mortgage Completion        Current Balance

<S>                  <C>                         <C>                        <C>                                <C>



</TABLE>

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