Exhibit 10.5.1



                             Dated 19 January 2005









                       GRANITE FINANCE FUNDING 2 LIMITED


















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

                     PROGRAMME MASTER DEFINITIONS SCHEDULE
             (as amended by a Deed of Amendment dated August 2005)

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




                          SIDLEY AUSTIN BROWN & WOOD
                               WOOLGATE EXCHANGE
                             25 BASINGHALL STREET
                                LONDON EC2V 5HA
                            TELEPHONE 020 7360 3600
                            FACSIMILE 020 7626 7937
                            REF:30507-30090/880778


<PAGE>


CONTENTS

1.   Definitions............................................................2
2.   Interpretation and Construction.......................................90
3.   Governing Law.........................................................93




                                      i
<PAGE>


THIS PROGRAMME MASTER DEFINITIONS SCHEDULE is signed for the purposes of
identification on 19 January 2005

BY:

(1)   Sidley Austin Brown & Wood of Woolgate Exchange, 25 Basinghall Street,
      London EC2V 5HA; and

(2)   Allen & Overy LLP of One New Change, London EC4M 9QQ.

1.    Definitions

Words and expressions used in any document which incorporates this clause or
to which this clause applies shall, have the same meanings as are set out in
this Programme Master Definitions Schedule except so far as the context
requires otherwise.

"1925 Act" means The Law of Property Act 1925;

"A Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated A by S&P, A2 by Moody's and A by
Fitch at their date of issue;

"A Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the A Loan Tranches;

"ACA Trigger Event" means, in respect of any Funding Issuer that is an ACA
Issuer, an event which occurs when any Funding Issuer fails to exercise its
option to redeem its Notes on the relevant Step-Up Date pursuant to the terms
and conditions of its Notes;

"ACA Issuer" Granite Mortgages 04-2 plc, Granite Mortgages 04-3 plc and (in
respect of Funding) any new Issuer designated as such;

"ACA Limit Amount" means, in respect of an ACA Issuer, an amount equal to the
greater of:

(A)   the product of:

(i)   the product of (a) the Mortgages Trustee Principal Receipts for that
      Distribution Date, and (b) the Funding Share Percentage or, as
      applicable, the Weighted Average Funding Share Percentage applicable as
      at the later to occur of the immediately preceding Assignment Date, the
      immediately preceding Funding Contribution Date and the immediately
      preceding Distribution Date; and

(ii)  the quotient of (a) the Outstanding Principal Balance of such ACA
      Issuer's Intercompany Loan as at the immediately preceding Payment Date
      (after taking into account principal payments on such Payment Date) less
      the aggregate of amounts recorded on the Principal Deficiency Ledger of
      such ACA Issuer (but only to the extent of Losses on the Mortgage Loans
      allocated to such ACA Issuer and application of Funding Available
      Principal Receipts to fund the Liquidity Reserve Fund of such ACA
      Issuer), divided by (b) the aggregate Outstanding Principal Balance on
      all Funding Intercompany Loans as at the immediately preceding Payment
      Date (after taking into account principal payments on such Payment Date)
      less the sum of (1) the aggregate Outstanding Principal Balance of all
      Special Repayment Notes and (2) the aggregate of amounts recorded on the
      Principal Deficiency Ledgers of all Funding Issuers (but only to the
      extent of Losses on the Mortgage Loans allocated to a


                                      2
<PAGE>


      Funding Issuer and application of Funding Available Principal Receipts
      to fund the Issuer Liquidity Reserve Fund of that Funding Issuer); and

(B)   in respect of such ACA Issuer's Notes, the Controlled Amortisation
      Amount for each Class of Notes of such ACA Issuer as if an ACA Trigger
      Event had not occurred.

"AA Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated AA by S&P, Aa2 by Moody's and AA
by Fitch at their date of issue;

"AA Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the AA Loan Tranches;

"AAA Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated AAA by S&P, Aaa by Moody's and
AAA by Fitch at their date of issue;

"AAA Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the AAA Loan Tranches;

"Accession Undertaking" means a Deed of Accession;

"Account Bank" means, in relation to the Mortgages Trustee, Funding or Funding
2, the bank at which the Mortgages Trustee Bank Accounts or, in the case of
Funding, the Funding Bank Accounts, or, in the case of Funding 2, the Funding
2 Bank Accounts are maintained from time to time, being :

(a)   in relation to the Mortgages Trustee Transaction Account, the Jersey
      Account Bank;

(b)   in relation to the Funding Transaction Account, the UK Account Bank;

(c)   in relation to the Funding 2 Transaction Account, Northern Rock;

(d)   in relation to the Mortgages Trustee GIC Account, Northern Rock;

(e)   in relation to the Funding GIC Account, Northern Rock; and

(f)   in relation to the Funding 2 GIC Account, Northern Rock; and

(g)   in relation to the Funding Issuer GIC Accounts:

      (i)   in respect of any Funding (Issuer) GIC Account established prior
            to 26 May 2004, the UK Account Bank; and

      (ii)  in respect of any Funding (Issuer) GIC Account established on or
            after 26 May 2004, Northern Rock;

or any other Authorised Entity Appointed by the Mortgages Trustee, Funding
and/or Funding 2 in accordance with the Transaction Documents;

"Accrued Interest" means, in respect of any Mortgage Loan as at any date (the
"relevant date"), the aggregate of all interest accrued but not yet due and
payable on such Mortgage Loan from and including the Monthly Payment Date
immediately preceding the relevant date until (but excluding) the relevant
date;

"Additional Tax Representation" means, in relation to a Swap Agreement, the
meaning given such term in that Swap Agreement;


                                      3
<PAGE>


"Additional Termination Event" means, in relation to a Swap Agreement, the
meaning given such term in that Swap Agreement;

"Additional Trust Property" means all rights, title, interest and benefit of
all property and assets held by the Mortgages Trustee at any time, to the
extent that such rights, title, interest and benefit of such property and
assets do not, at such time, form part of the Initial Trust Property, the
Closing Trust Property, the New Trust Property and/or any Trust Property
referred to in Clause 2.4 (Other Trust Property) of the Mortgages Trust Deed;

"Adjusted Funding 2 Reserve Fund Level" means the sum of:

(a)   the amount standing to the credit of the Issuer Reserve Ledger and the
      Funding 2 Reserve Ledger; and

(b)   the amount (if any) then to be credited to the Issuer Reserve Ledger in
      accordance with the Issuer Pre-Enforcement Principal Priority of
      Payments and the amount (if any) then to be credited to the Funding 2
      Reserve Ledger in accordance with the Funding 2 Pre-Enforcement
      Principal Priority of Payments;

"Administration Agreement" means the agreement entered into on or before the
Initial Closing Date, between the Administrator, the Mortgages Trustee,
Funding, the Seller and the Security Trustee pursuant to which the
administrator agrees to provide administration services to the Mortgages
Trustee and the Beneficiaries in relation to the Mortgage Loans and their
Related Security comprised in the Mortgage Portfolio and shall include any
additional and/or replacement administration agreement entered into by such
parties from time to time;

"Administration Fee Rate" means 0.08% per annum (inclusive of VAT) on the
aggregate amount of the Funding Share of the Trust Property and the Funding 2
Share of the Trust Property as determined on that Distribution Date in respect
of the then current Trust Calculation Period, but only to the extent that the
Mortgages Trustee has sufficient funds available to pay such amount in
accordance with the Mortgages Trustee Revenue Priority of Payments or, at any
time when the Administrator is not Northern Rock, such other amount as set
between such substitute administrator and the Mortgages Trustee from time to
time;

"Administration Fee" has the meaning given to it in Clause 13.1
(Administration Fee) of the Administration Agreement;

"Administration Procedures" means the administration, arrears and enforcement
policies and procedures forming part of the Seller's Policy from time to time
or, at any time when the Administrator is not also the Seller, the policies
and procedures from time to time which would be adopted by a reasonable,
prudent mortgage lender and, in either case, shall include the services set
out in Schedule 1 to the Administration Agreement;

"Administrator Termination Event" means any of the events specified in Clause
19 (Termination) of the Administration Agreement;

"Agent Bank" means, in respect of any Issuer, the Agent Bank as defined in the
relevant Issuer Master Definitions Schedule;

"Administrator" means Northern Rock or such other person as may from time to
time be appointed as administrator of the Mortgage Portfolio pursuant to the
Administration Agreement;


                                      4
<PAGE>


"Alternative Insurance Requirements" means the Seller's standard document
entitled Alternative Insurance Requirements, and any other document containing
similar recommendations or requirements which is sent to Borrowers in
accordance with the Administration Procedures;

"Anticipated Cash Accumulation Period" means, on any Trust Determination Date,
the anticipated number of months required to accumulate sufficient principal
receipts to pay the relevant Bullet Repayment Loan Amount, which will be equal
to:

                                   J + K - L
                                  -------------
                                  M x (N x O)

calculated in months and rounded up to the nearest whole number, where:

      J     = the relevant Bullet Repayment Loan Amount;

      K     = the aggregate Principal Amount Outstanding on that Trust
            Determination Date of:

            (i)   each other Bullet Repayment Loan Amount that was not fully
                  repaid on its Bullet Repayment Date and is still
                  outstanding; and

            (ii)  each other Bullet Repayment Loan Amount, the Bullet
                  Repayment Date of which falls on or before the Bullet
                  Repayment Date of the relevant Bullet Repayment Loan Amount;

      L     = the amounts standing to the credit of the Funding 2 Cash
            Accumulation Ledger at the start of that Trust Determination Date
            which are available to pay Bullet Loan Repayment Amounts;

      M     = means the sum of each Monthly CPR on the 12 most recent Trust
            Determination Dates which have occurred prior to that date divided
            by 12;

      N     = 0.85; and

      O     = the aggregate Outstanding Principal Balance of the Mortgage
            Loans included in the Mortgage Portfolio on the previous Trust
            Determination Date.

"Arrears of Interest" means as at any date and in relation to any Mortgage
Loan, interest (other than Capitalised Interest or Accrued Interest) on such
Mortgage Loan which is currently due and payable on such date;

"Arrears or Step-Up Trigger Event" means an event which occurs when (i) the
Outstanding Principal Balance of the Mortgage Loans in arrears for more than
90 days divided by the Outstanding Principal Balance of all of the Mortgage
Loans in the Mortgages Trust (expressed as a percentage) exceeds 2% or (ii) if
(in relation to Funding and the Funding Issuers) any Funding Issuer fails to
exercise its option to redeem its Notes on the relevant Step-Up Date pursuant
to the terms and conditions of its Notes or (in relation to Funding 2 and the
Funding 2 Issuers) any Funding 2 Issuer fails to exercise its option to redeem
its Notes on the relevant Step-Up Date pursuant to the terms and conditions of
its Notes;

"Asset Trigger Event" means the event that occurs when an amount is debited to
the Principal Deficiency Sub Ledger in relation to the Class A Notes of any
Funding 2 Issuer or to the AAA Principal Deficiency Sub-Ledger of Funding 2;


                                      5
<PAGE>


"Assignation of Guarantees" means an assignation to the Mortgages Trustee of
the Seller's right, title, benefit and interest in the Guarantees governed by
Scots law substantially in the form set out in Part 2 of Schedule 5 to the
Mortgage Sale Agreement;

"Assignment Date" means the date of assignment of any New Mortgage Portfolio
to the Mortgages Trustee in accordance with Clause 4 (Sale and Purchase of New
Mortgage Portfolios) of the Mortgage Sale Agreement;

"Assignment of Guarantees" means an assignment to the Mortgages Trustee of the
Seller's right, title, benefit and interest in the Guarantees governed by
English law substantially in the form set out in Part 1 of Schedule 5 to the
Mortgage Sale Agreement;

"Assignment of Insurance Contracts" means an assignment to the Mortgages
Trustee of the Seller's right, title, benefit and interest in the Insurance
Contracts substantially in the form set out in Schedule 3 (Assignment of
Insurance Contracts) to the Mortgage Sale Agreement;

"Auditors" or "auditors" means PricewaterhouseCoopers of 89 Sandyford Road,
Newcastle upon Tyne NE99 1PL or such other internationally recognised
independent firm of auditors selected from time to time by (in the case of the
Mortgages Trustee) the Mortgages Trustee or (in the case of Funding) Funding
or (in the case of Funding 2) Funding 2 or (in the case of any Issuer) the
relevant Issuer and appointed by the Mortgages Trustee, Funding, Funding 2 or,
as the case may be, the relevant Issuer;

"Authorised Entity" means (a) any entity the short term and secured,
unsubordinated, and unguaranteed debt of which is rated at least A-1+ by S&P,
P-1 by Moody's and F1+ by Fitch or (b) any other entity approved in writing by
(in the case of an Authorised Entity to be appointed by the Security Trustee)
the Security Trustee or (in the case of an Authorised Entity to be appointed
by the Funding 2 Security Trustee) the Funding 2 Security Trustee and (in each
case) the Rating Agencies, in each case being an institution authorised to
carry on banking business (including accepting deposits) under the FSMA;

"Authorised Institution" means an institution authorised to accept deposits
under the FSMA;

"Authorised Investments" means:

(a)   sterling gilt-edged securities; and

(b)   sterling demand or time deposits, certificates of deposit and short-term
      debt obligations (including commercial paper) (which may include
      deposits into any account which earns a rate of interest related to
      LIBOR) provided that in all cases such investments have a maturity date
      of 90 days or less and mature on or before the next following Payment
      Date or, in relation to any Mortgages Trustee Bank Account, the next
      following Distribution Date, and the short-term unsecured, unguaranteed
      and unsubordinated debt obligations of the issuing or guaranteeing
      entity or the entity with which the demand or time deposits are made
      (being an authorised institution under the FSMA) are rated at least
      equal to A-1+ by S&P, P-1 by Moody's and F1+ by Fitch or which are
      otherwise acceptable to the Rating Agencies (if they are notified in
      advance) to maintain the then-current rating of the Notes;

"Authorised Signatory" means in relation to:

(a)   any Issuer, any authorised signatory referred to in the relevant Issuer
      Account Mandates;


                                      6
<PAGE>


(b)   the Mortgages Trustee, any authorised signatory referred to in the
      Mortgages Trustee Account Mandates;

(c)   Funding, any authorised signatory referred to in the Funding Account
      Mandates; and

(d)   Funding 2, any authorised signatory referred to in the Funding 2 Account
      Mandates;

"Authorised Third Party" means any Person appointed by a Funding Security
Trustee pursuant to the terms of Schedule 4 of the Administration Agreement
and whom the Rating Agencies have previously confirmed in writing to (where
the Funding Security Trustee is the Security Trustee) Funding and the Security
Trustee or (where the Funding Security Trustee is the Funding 2 Security
Trustee) Funding 2 and the Funding 2 Security Trustee will not cause the then
current ratings of the Notes of any Issuer to be downgraded, withdrawn or
qualified provided that if the responsibilities that such appointed Person
will assume include setting the interest rate applicable to any Mortgage Loan,
such Person must be a lender in the UK residential mortgage market;

"Authorised Underpayment" means a Borrower Underpayment in respect of a
Flexible Mortgage Loan which is funded by, and does not exceed the amount of
any, Overpayments previously made by the Borrower in respect of such Flexible
Mortgage Loan or is otherwise permitted by the Seller in accordance with the
relevant Mortgage Conditions;

"Back-up Functions" has the meaning specified in Schedule 4 (Authorised Third
Party) to the Administration Agreement;

"Back-up Trigger Event" means any of the following circumstances:

(i)   failure by the Seller to comply with any of its obligations under the
      Mortgage Sale Agreement;

(ii)  a Completion Event and any circumstances in connection therewith; or

(iii) an Administrator Termination Event and any circumstances in connection
      therewith;

"BACS Amounts" means the amounts to be received by the Collection Banks from
Borrowers whether under the Direct Debiting Scheme or otherwise and to be
credited by the Collection Banks to the Collection Accounts on each Monthly
Payment Date, which each Collection Bank shall credit to the relevant
Collection Account;

"BACS" means the Bankers' Automated Clearing System as amended or supplemented
from time to time or any scheme replacing the same;

"Bank Account Agreement" means the agreement entered into on or about the
Initial Closing Date between the Account Banks, the Mortgages Trustee, Funding
and the Security Trustee which governs the operation of the Mortgages Trustee
Bank Accounts and the Funding Bank Accounts other than the Funding (Issuer)
GIC Accounts and shall include any additional and/or replacement bank account
agreement entered into by such parties from time to time;

"BBB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated BBB by S&P, Baa2 by Moody's and
BBB by Fitch at their date of issue;

"Bank of England Base Rate" means the Bank of England's official dealing rate
(the repo rate) as set by the UK Monetary Policy Committee and in the event
that such rate ceases to exist or becomes


                                      7
<PAGE>


inappropriate as an index for the Base Rate Pledge such alternative rate or
index, not controlled by the Seller, that the Seller considers to be the most
appropriate in the circumstances;

"Barclays Collection Account" means the account in the name of Northern Rock
(sort code 20/59/42, account number 60655996) held with Barclays Bank PLC and
maintained subject to the Collection Bank Agreement and/or such other accounts
of Northern Rock held with Barclays Bank PLC as may be utilised from time to
time for the purpose of collecting sums due to Northern Rock in respect of the
Mortgage Loans;

"Barclays" means Barclays Bank PLC;

"Base Prospectus" means the base prospectus or preliminary base prospectus
(together with any documents incorporated thereto by reference) prepared in
connection with the Programme and (as revised, supplemented or amended from
time to time by the Master Issuer in accordance with clause 5.2 of the
Programme Agreement) constituting (in the case of Notes to be listed on a
Regulated Market) a "base prospectus" for the purposes of the Prospectus
Directive;

"Base Rate Pledge Period" means, in relation to any Mortgage Loan having the
benefit of the Base Rate Pledge, the period if any during which the Borrower
may be subject to an Early Repayment Charge;

"Base Rate Pledge" means the guarantee of the Seller that where Mortgage Loans
are eligible to be charged at or based on the Standard Variable Rate
(including Fixed Rate Mortgage Loans upon conversion from a Fixed Rate to the
Standard Variable Rate) and they are within the Base Rate Pledge Period, the
actual variable gross interest rate charged on such Mortgage Loans will be the
lower of the following two rates:

(a)   the Standard Variable Rate; or

(b)   the Bank of England base rate plus a margin which is determined by the
      Seller;

such variable gross interest rate to be applied as necessary within one month
of a change in the Bank of England base rate;

"Basis Rate Swap Agreement" means, in relation to:

(a)   the First Issuer, the First Issuer Basis Rate Swap Agreement;

(b)   any other Funding Issuer, the ISDA Master Agreement, Schedule,
      Confirmation and any credit support documents thereto entered into among
      such Funding Issuer, the Basis Rate Swap Provider, the Note Trustee and
      any credit support provider as may be amended, restated, novated, varied
      or supplemented from time to time and shall include any additional
      and/or replacement basis rate swap agreement entered into by such
      Funding Issuer from time to time in connection with the Notes issued by
      such Funding Issuer; and

(c)   Funding 2, the Funding 2 Basis Rate Swap Agreement.

"Basis Rate Swap Provider" means Northern Rock and/or, as applicable, any
other basis rate swap provider appointed from time to time in accordance with
the Transaction Documents;

"Basis Rate Swap Provider Default" means the occurrence of an Event of Default
or a Downgrade Termination Event (as defined in the relevant Basis Rate Swap
Agreement) under a Basis Rate Swap Agreement where the Basis Rate Swap
Provider is the Defaulting Party or the Affected Party (as defined in the
relevant Basis Rate Swap Agreement);


                                      8
<PAGE>


"Basis Rate Swap" means, in relation to:

(a)   the First Issuer, the First Issuer Basis Rate Swap;

(b)   any other Funding Issuer, the swap transaction documented under the
      Basis Rate Swap Agreement for such Funding Issuer; and

(c)   Funding 2, the Funding 2 Basis Rate Swaps;

"BB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated BB by S&P, Ba2 by Moody's and BB
by Fitch at their date of issue;

"BB Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the BB Loan Tranches;

"BBB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which
has been structured so as to reflect the payment obligations on the Notes of
the relevant Funding 2 Issuer which are rated BBB by S&P, Baa2 by Moody's and
BBB by Fitch at their date of issue;

"BBB Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the BBB Loan Tranches;

"Beneficiaries" means Funding, Funding 2, the Seller and any other beneficiary
of the Mortgages Trust, as beneficiaries of the Mortgages Trust and
"Beneficiary" means any of them;

"Block Buildings Policy" means the block buildings insurance policies listed
in paragraph 2 of Schedule 4 (Insurance Contracts) to the Mortgage Sale
Agreement and any endorsements or extensions thereto as issued from time to
time and any additional, replacement or substitute block insurance policy
which relates to Mortgage Loans in the Mortgages Trust from time to time;

"Borrower Underpayment" means a situation where a Borrower makes a Monthly
Payment on its Mortgage Loan which is less than the required Monthly Payment
for that month;

"Borrower" means, in relation to each Mortgage Loan, the person or persons who
is or are named and defined as such in the relevant Mortgage Deed or such
other person or persons (other than a guarantor) who shall become legally
obligated to comply with such Borrower's obligations under the related
Mortgage Loan;

"Buildings Policies" means

(a)   all buildings insurance policies relating to freehold English Properties
      or any Scottish Properties which have been taken out in the name of the
      relevant Borrower or in the name of the Borrower and the Seller or in
      the name of the Borrower with the Seller's interest noted, in accordance
      with the applicable Mortgage Conditions or the Alternative Insurance
      Requirements, including, without limitation, the Block Buildings Policy;
      and

(b)   all landlord's buildings insurance policies relating to leasehold
      Mortgaged Properties;

"Bullet Loan Tranche" means, in relation to Funding 2, any Loan Tranche which
is scheduled to be repaid in full on one Loan Payment Date. Bullet Loan
Tranches will be deemed to be Pass-Through Loan Tranches if:

(a)   a date specified in relation to the same in the applicable Loan Tranche
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs; or


                                      9
<PAGE>


(c)   a Step-Up Date (if any) in relation to such Loan Tranche occurs;

"Bullet Redemption Date" means, for any Series and Class of Bullet Redemption
Notes, the Monthly Payment Date specified for such Notes in the applicable
Final Terms;

"Bullet Redemption Notes" means, in relation to a Funding 2 Issuer, any Series
and Class of Notes issued by such Issuer which is scheduled to be repaid in
full on one Note Payment Date. Bullet Redemption Notes will be deemed to be
Pass-Through Notes if:

(a)   a date specified in relation to the same in the applicable Final Terms
      occurs;

(b)   a Pass-Through Trigger Event occurs;

(c)   the Step-Up Date (if any) in relation to such Notes occurs;

"Bullet Repayment Date" means, for any Bullet Loan Tranche, the Monthly
Payment Date specified as such for such Loan Tranche in the applicable Loan
Tranche Supplement;

"Bullet Repayment Loan Amount" means, in relation to Funding 2, the amount
required to be repaid on the Bullet Repayment Date in respect of a Bullet Loan
Tranche in order to pay such Bullet Loan Tranche in full;

"Business Day" means, in relation to the First Issuer Notes and the First
Issuer Intercompany Loan, a day that is a London Business Day and a New York
Business Day;

"Capital Balance" means, in relation to any Mortgage Loan at any date, the
principal balance of that Mortgage Loan to which the Seller applies the
relevant interest rate at which interest on each Mortgage Loan applies;

"Capital Payment" means a Monthly Payment made by a Borrower under a Mortgage
Loan (other than a Flexible Mortgage Loan) that is greater by (GBP)200 or
more than the amount due for that month, and in respect of which the Borrower
has notified the Seller that such overpayment is intended to reduce the
Capital Balance of the related Mortgage Loan;

"Capitalised Arrears" means, in relation to any Mortgage Loan at any date,
interest or other amounts which are overdue in respect of such Mortgage Loan
and which as at such date have been added to the Capital Balance of such
Mortgage Loan either in accordance with the Mortgage Conditions or otherwise
by arrangement with the relevant Borrower;

"Capitalised Interest" means, in relation to any Mortgage Loan at any date,
interest which is overdue in respect of such Mortgage Loan and which as at
such date has been added to the Capital Balance of such Mortgage Loan in
accordance with the Mortgage Conditions or otherwise by arrangement with the
relevant Borrower (excluding for the avoidance of doubt any Arrears of
Interest which have not been so capitalised on such date);

"Cash" means cash and/or amounts standing to the credit of a bank account, as
the context shall require;

"Cash Accumulation Period" means the period beginning on the earlier to occur
of:

(a)   the date determined after counting back in time from the Bullet
      Repayment Date of the relevant Bullet Repayment Loan Amount, the number
      of months calculated in respect of the Anticipated Cash Accumulation
      Period relating to the relevant Bullet Repayment Loan Amount; and


                                      10
<PAGE>


(b)   in relation to an Original Bullet Loan Tranche, six months prior to the
      Bullet Repayment Date of that Original Bullet Loan Tranche;

and ending when Funding 2 has fully repaid that Bullet Repayment Loan Amount.

"Cash Accumulation Requirement" means on a Trust Determination Date:

(a)   the Outstanding Principal Balance in relation to each Bullet Repayment
      Loan Amount that is within a Cash Accumulation Period;

(b)   plus amounts due on the next following Monthly Payment Date in items
      (A), (B) and (C) of the Funding 2 Pre-Enforcement Principal Priority of
      Payments;

(c)   less the amount standing to the credit of the Funding 2 Cash
      Accumulation Ledger at the last Monthly Payment Date (which amount was
      not to be distributed on that Monthly Payment Date to fund the Bullet
      Repayment Loan Amount of any Loan Tranche);

"Cash Accumulation Shortfall" means at any time that the Funding 2 Cash
Accumulation Ledger Amount is less than the Cash Accumulation Liability;

"Cashback" means, in relation to any Mortgage Loan, the agreement by the
Seller to pay an amount to the relevant Borrower upon completion of the
relevant Mortgage Loan;

"Cash Management Agreement" means the cash management agreement entered into
on or before the Initial Closing Date between the Cash Manager, the Mortgages
Trustee, Funding and the Security Trustee and shall include any additional
and/or replacement cash management agreement entered into by such parties from
time to time in accordance with the Transaction Documents;

"Cash Management Services" means, in relation to any Issuer, the services to
be provided to such Issuer and the Note Trustee or the Issuer Security Trustee
(as applicable) pursuant to the applicable Issuer Cash Management Agreement
and in relation to the Mortgages Trustee, Funding and Funding 2, the services
to be provided to the Mortgages Trustee, Funding and Funding 2 pursuant to the
Cash Management Agreement;

"Cash Manager Termination Event" has the meaning given in Clause 12.1
(Termination) of the Cash Management Agreement;

"Cash Manager" means Northern Rock or such other person or persons for the
time being acting, pursuant to the Cash Management Agreement, as agent for the
Mortgages Trustee, Funding, Funding 2, (following enforcement of the Funding
Security) the Security Trustee and, (following enforcement of the Funding 2
Security) the Funding 2 Security Trustee for the purposes of, inter alia,
managing all cash transactions and maintaining certain ledgers on behalf of
the Mortgages Trustee, Funding, Funding 2, (following enforcement of the
Funding Security) the Security Trustee and (following enforcement of the
Funding 2 Security) the Funding 2 Security Trustee;

"Cash Re-Draw Amount" means, in relation to any Cash Re-Draw, the amount of
monies advanced by the Seller to the relevant Borrower in respect of such Cash
Re-Draw;

"Cash Re-Draw" means a cash payment granted and made by the Seller in
accordance with the Mortgage Conditions at the request of a Borrower after
such Borrower has made an Overpayment in respect of any Flexible Mortgage Loan
but only to the extent of the Overpayment so made;


                                      11
<PAGE>


"Cash Re-Draws Sub-Ledger" means the sub-ledger of the Re-Draws Ledger, which
will be established by the Cash Manager on the Initial Closing Date in order
to record any Cash Re-Draws made on Flexible Mortgage Loans in the Trust
Property;

"CCA" means the Consumer Credit Act 1974 as amended from time to time.

"Certificate of Title" means a solicitor's or licensed or qualified
conveyancer's report or certificate of title obtained by or on behalf of the
Seller in respect of each Mortgaged Property substantially in the form of the
pro-forma set out in the Standard Documentation;

"Class A Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class B Notes of all Series issued by the Master Issuer, the Class M
      Notes of all Series issued by the Master Issuer, the Class C Notes of
      all Series issued by the Master Issuer and the Class D Notes of all
      Series issued by the Master Issuer (after giving effect to payments of
      principal being made on such Notes on such date); and (ii) the aggregate
      amount of the Funding 2 Reserve Fund and the Issuer Reserve Fund on such
      date; and (iii) Excess Spread;

less

(b)   the amount standing to the credit of the Funding 2 Principal Ledger
      available on such date for the payment of principal on AA Loan Tranches,
      A Loan Tranches, BB Loan Tranches (after giving effect to any payments
      of principal to be made on the Loan Tranches on such date);

"Class A Noteholders" means the holders of the Class A Notes;

"Class A Notes" means, in relation to (a) the First Issuer, the Series 1 Class
A Notes and the Series 2 Class A Notes or any of them as the context may
require; (b) any other Funding Issuer, the Class A Notes as are defined in the
relevant Issuer Master Definitions Schedule; and (c) the Master Issuer, the
Notes of any Series designated as such in the applicable Final Terms;

"Class A Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such
Issuer corresponding to the Class A Notes issued by such Issuer;

"Class A Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                  A x B

where:

A   =    the Class A Required Subordinated Percentage as specified in the
         most recent Final Terms for Class A Notes of any Series; and

B   =    the Principal Amount Outstanding of all Notes on such date (after
         giving effect to any payments of principal to be made on the Notes on
         such date) less the amounts standing to the credit of the Funding 2
         Cash Accumulation Ledger and the Funding 2 Principal Ledger available
         on such date for the repayment of principal on the Loan Tranches
         (after giving effect to any repayments of principal to be made on the
         Loan Tranches on such date);

"Class A Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;


                                      12
<PAGE>


"Class B Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class M Notes of all Series issued by the Master Issuer, the Class C
      Notes of all Series issued by the Master Issuer and the Class D Notes of
      all Series issued by the Master Issuer (after giving effect to payments
      of principal being made on such Notes on such date); and (ii) the
      aggregate amount of the Funding 2 Reserve Fund and the Issuer Reserve
      Fund on such date; and (iii) Excess Spread;

less

(b)   the amounts standing to the credit of Funding 2 Principal Ledger
      available on such date for the payment of principal on the A Loan
      Tranches, BBB Loan Tranches and BB Loan Tranches (after giving effect to
      any payments of principal to be made on the Loan Tranches on such date);

"Class B Noteholders" means, in relation to any Issuer, the holders of the
Class B Notes issued by that Issuer;

"Class B Notes" means, in relation to (a) the First Issuer, the Series 1 Class
B Notes and the Series 2 Class B Notes or any of them as the context may
require; (b) any other Funding Issuer, the Class B Notes as are defined in the
relevant Issuer Master Definitions Schedule; and (c) the Master Issuer, the
Notes of any Series designated as such in the applicable Final Terms;

"Class B Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such
Issuer corresponding to the Class B Notes issued by such Issuer;

"Class B Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                   A x B

where:

A   =    the Class B Required Subordinated Percentage as specified in the
         most recent Final Terms for Class B Notes of any Series; and

B   =    the Principal Amount Outstanding of all Notes on such date (after
         giving effect to any payments of principal to be made on the Notes on
         such date) less the amounts standing to the credit of the Funding 2
         Cash Accumulation Ledger and the Funding 2 Principal Ledger available
         on such date for the repayment of principal on the Loan Tranches
         (after giving effect to any repayments of principal to be made on the
         Loan Tranches on such date);

"Class B Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;

"Class C Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class D Notes of all Series issued by the Master Issuer (after giving
      effect to payments of principal being made on such Notes on such date);
      and (ii) the aggregate amount of the Funding 2 Reserve Fund and the
      Issuer Reserve Fund on such date; and (iii) Excess Spread;


                                      13
<PAGE>


less


(b)   the amounts standing to the credit of the Funding 2 Principal Ledger
      available on such date for the payment of principal on the BB Loan
      Tranches (after giving effect to any payments of principal to be made on
      the Loan Tranches on such date);

"Class C Noteholders" means the holders of the Class C Notes;

"Class C Notes" means, in relation to (a) the First Issuer, the Series 1 Class
C Notes and the Series 2 Class C Notes or any of them as the context may
require; (b) any other Funding Issuer, the Class C Notes as are defined in the
relevant Issuer Master Definitions Schedule; and (c) the Master Issuer, the
Notes of any Series designated as such in the applicable Final Terms;

"Class C Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such
Issuer corresponding to the Class C Notes issued by such Issuer;

"Class C Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                     A x B

where:

A   =    the Class C Required Subordinated Percentage as specified in the
         most recent Final Terms for Class C Notes of any Series; and

B   =    the Principal Amount Outstanding of all Notes on such date (after
         giving effect to any payments of principal to be made on the Notes on
         such date) less the amounts standing to the credit of the Funding 2
         Cash Accumulation Ledger and the Funding 2 Principal Ledger available
         on such date for the payment of principal on the Loan Tranches (after
         giving effect to any payments of principal to be made on the Loan
         Tranches on such date);

"Class C Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;

"Class D Notes" means, in relation to (a) the Second Issuer, the Series 2
Class D Notes; (b) any other Funding Issuer, the Class D Notes as are defined
in the relevant Issuer Master Definitions Schedule; and (c) the Master Issuer,
the Notes of any Series designated as such in the applicable Final Terms;

"Class D Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such
Issuer corresponding to the Class D Notes issued by such Issuer;

"Class M Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class C Notes of all Series issued by the Master Issuer and the Class D
      Notes of all Series issued by the Master Issuer (after giving effect to
      payments of principal being made on such Notes on such date); and (ii)
      the aggregate amount of the Funding 2 Reserve Fund and the Issuer
      Reserve Fund on such date; and (iii) Excess Spread;

less


                                      14
<PAGE>


(b)   the amounts standing to the credit of the Funding 2 Principal Ledger
      available on such date for the payment of principal on the BBB Loan
      Tranches and the BB Loan Tranches (after giving effect to any payments
      of principal to be made on the Loan Tranches on such date);

"Class M Notes" means, in relation to: (a) Granite Mortgages 03-3 plc, the
Series 1 Class M Notes, the Series 2 Class M Notes and the Series 3 Class M
Notes or any of them as the context may require; (b) any other Funding Issuer,
the Class M Notes as defined in the relevant Issuer Master Definitions
Schedule; and (c) the Master Issuer, the Notes of any Series designated as
such in the applicable Note Supplement;

"Class M Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such
Issuer corresponding to the Class M Notes issued by such Issuer;

"Class M Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                    A x B

where:

A   =    the Class M Required Subordinated Percentage as specified in the
         most recent Final Terms for Class M Notes of any Series; and

B   =    the Principal Amount Outstanding of all Notes on such date (after
         giving effect to any payments of principal to be made on the Notes on
         such date) less the amounts standing to the credit of the Funding 2
         Cash Accumulation Ledger and the Funding 2 Principal Ledger available
         on such date for the payment of principal on the Loan Tranches (after
         giving effect to any payments of principal to be made on the Loan
         Tranches on such date);

"Class M Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;

"Class" means in relation to the Notes or the Noteholders, the Class A Notes,
the Class B Notes, the Class M Notes, the Class C Notes or the Class D Notes,
as the context requires;

"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;

"Closing Date" means:

(a)   in relation to the First Issuer, the Initial Closing Date and, in
      relation to any New Issuer that is a Funding Issuer, the date of any
      issue of New Notes by a New Issuer;

(b)   in relation to a Funding 2 Issuer and a Series and Class of Notes issued
      by such Issuer, the date of issue of such Series and Class of Notes;

"Closing Trust Property" means the Initial Mortgage Portfolio assigned by the
Seller to the Mortgages Trustee on the Initial Closing Date;

"Collection Account" means the Barclays Collection Account, the Lloyds TSB
Collection Account and any other account in the name of Northern Rock which is
from time to time used for the purpose of collecting, directly or indirectly,
monies due in respect of Mortgage Loans and/or the Related Security;


                                      15
<PAGE>


"Collection Bank Agreement" means the collection bank agreement entered into
on or about the Initial Closing Date between the Collection Banks, Mortgages
Trustee, Funding, the Seller and the Administrator and shall include any
additional and/or replacement collection bank agreement entered into by such
parties from time to time in accordance with the Transaction Documents;

"Collection Bank" means any of Barclays, acting through its branch at Percy
Street, Newcastle upon Tyne NE99 1JP and Lloyds TSB acting through its branch
at City Office, Bailey Drive, Gillingham Business Park, Kent ME8 0LS and/or
such other banks as may be appointed from time to time under and in accordance
with the Transaction Documents;

"Combined Credit Balance" means the average monthly cleared credit balance of
certain accounts of the Borrower held with the Seller which, pursuant to the
Together Connection Conditions, are required to be deducted from, among other
things, the balance of the Together Connections Mortgage Loan in calculating
the Together Connections Benefit;

"Combined Debit Balance" means the aggregate of the outstanding balances of:

(a)   a Borrower's Together Connections Mortgage Loan; and

(b)   certain other products held with the Seller,

from which the Combined Credit Balance is deducted in calculating the Together
Connections Benefit;

"Common Depositary" means Citibank, N.A., in its capacity as common depositary
for Euroclear and Clearstream, Luxembourg, in relation to the First Issuer
Notes, the CDIs (as defined in the Issuer Master Definitions Schedule relating
to the First Issuer) and, in relation to any New Notes, the Reg S Global Note
Certificates;

"Completion Event" means a Perfection Event;

"Conditions" or "Terms and Conditions" means, in relation to any Notes issued
by any Issuer, the terms and conditions to be endorsed on (or incorporated by
reference into) such Notes in the form or substantially in the form scheduled
to the Issuer Trust Deed entered into by such Issuer with the applicable Note
Trustee, and any reference to a numbered Condition shall be construed
accordingly as modified and supplemented (in the case of any Notes issued by
the Master Issuer) by the Final Terms applicable to such Series and Class of
Notes, in each case as from time to time modified in accordance with the
provisions of the applicable Issuer Trust Deed;

"Connection Conditions" means the Mortgage Conditions of the Seller identified
as Connection Conditions;

"Connection Interest Rate" means the rate or rates of interest which are
applicable to, amongst other things, a Together Connections Mortgage Loan and
a Connections Mortgage Loan, and is calculated in accordance with the Together
Connection Conditions and the Connection Conditions, respectively;

"Connections Benefit" means the amount by which:

(a)   the interest that would be payable on the Connections Debit Balance at
      the Connection Interest Rate exceeds:

(b)   the interest at the Connection Interest Rate that would be payable on
      the amount by which the Connections Debit Balance exceeds the
      Connections Combined Credit Balance;


                                      16
<PAGE>


"Connections Combined Credit Balance" means the average monthly cleared credit
balance in a Borrower's linked Save Direct deposit account (a deposit account
operated by a dedicated savings division of the Seller) and/or current account
with the Seller;

"Connections Debit Balance" means the outstanding balance on a Connections
Mortgage Loan from which the Connections Combined Credit Balance is deducted
in calculating the Connections Benefit;

"Connections Mortgage Loan" means a type of Flexible Mortgage Loan which has
the same basic features as a Together Connections Mortgage Loan but without
the facility for an unsecured loan or credit card;

"Contingency Insurance Policy" means the contingency insurance policy
identified in paragraph 2(d) of Schedule 4 (Insurance Contracts) to the
Mortgage Sale Agreement and any endorsements or extensions thereto as issued
from time to time and any additional, replacement or substitute contingency
insurance policy which relates to Mortgage Loans in the Mortgages Portfolio
from time to time;

"Contributions" means the consideration in the form of cash provided to the
Mortgages Trustee by any Beneficiary in respect of the share of such
Beneficiary in the Trust Property under the Mortgages Trust Deed, being any of
an Initial Contribution, a Further Contribution or a Deferred Contribution;
"Contribution Date" means any date on which Funding or Funding 2 makes a
Further Contribution to the Mortgage Trustee in connection with the purchase
of an increased beneficial interest in the Trust Property, on which date the
Mortgages Trustee will pay to the Seller or to Funding a Special Distribution
equal to the amount of such Further Contribution;

"Contributions Ledger" means the ledger created to record (i) the making by
Funding and Funding 2 of Contributions to the Mortgages Trustee pursuant to
the Mortgages Trust Deed (ii) the making by the Seller of Contributions to the
Mortgages Trustee pursuant to the Mortgages Trust Deed (iii) the payment by
the Mortgages Trustee to the Seller of either (a) amounts of Initial Purchase
Price for the sale of any New Mortgage Portfolio which is acquired by the
Mortgages Trustee from the Seller under the provisions of Mortgage Sale
Agreement (b) amounts of Deferred Purchase Price in accordance with the
Mortgage Sale Agreement and (iv) the payment by the Mortgages Trustee to the
Seller or to Funding of any Special Distribution in accordance with the
Mortgages Trust Deed;

"Contributions" means the consideration in the form of cash provided to the
Mortgages Trustee by any Beneficiary in respect of the share of such
Beneficiary in the Trust Property under the Mortgages Trust Deed, being any of
an Initial Contribution, a Further Contribution or a Deferred Contribution;

"Controlled Amortisation Amount" means on any Payment Date prior to the
occurrence of a Trigger Event or enforcement of the Issuer Security:

(a)   in relation to any Note or class of Notes issued by a Funding Issuer
      which is a Controlled Amortisation Note, the maximum aggregate principal
      amount which may be repaid by such Funding Issuer to the relevant
      Noteholder or Noteholders of such class on such Payment Date in
      accordance with the relevant Conditions and the Issuer Cash Management
      Agreement of such Funding Issuer; or

(b)   in relation to the Intercompany Loan of any Funding Issuer, the maximum
      aggregate principal amount which may be repaid by Funding to such
      Funding Issuer in respect of such Intercompany Loan on such Payment Date
      (which will be equal to the aggregate of the


                                      17
<PAGE>


      Controlled Amortisation Amounts due on such Payment Date under the Notes
      issued by such Issuer);

"Controlled Amortisation Instalment" means, in relation to a Funding 2 Issuer,
for any Series and Class of Notes issued by such Issuer which are Controlled
Amortisation Notes, on any Payment Date before the occurrence of a Trigger
Event or the enforcement of the Issuer Security (in respect of such Issuer),
the maximum aggregate principal amount which may be repaid by such Issuer to
the relevant Noteholder or Noteholders of such Notes on that Payment Date in
accordance with the terms and conditions of such Notes;

"Controlled Amortisation Notes" means, in relation to: (a) any Funding Issuer,
any Note issued by such Funding Issuer pursuant to which prior to the
occurrence of a Trigger Event or enforcement of the applicable Issuer
Security, the Conditions of such Notes impose a limit on the amount of
principal which may be repaid by such Funding Issuer to the relevant
Noteholder in respect of such Note on any Payment Date; and (b) a Funding 2
Issuer, any Series and Class of Notes issued by such Funding 2 Issuer, the
conditions of which impose a limit on the amount of principal which may be
repaid on such Notes on each Controlled Redemption Date for such Notes.
Controlled Amortisation Notes issued by a Funding 2 Issuer will be deemed to
be Pass-Through Notes if:

(a)   a date specified in relation to the same in the applicable Note
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs; or

(c)   the Step-Up Date (if any) in relation to such Notes occurs;

"Controlled Redemption Dates" for any Series and Class of Controlled
Amortisation Notes means the Monthly Payment Dates specified as such for such
Series and Class of Notes in the applicable Final Terms;

"Controlled Repayment Date" means, for any Controlled Repayment Loan Tranche
the Monthly Payment Dates specified as such for such Loan Tranche in the
applicable Loan Tranche Supplement;

"Controlled Repayment Loan Amount" means, in relation to Funding 2, for any
Controlled Repayment Loan Tranche, on any Controlled Repayment Date before the
occurrence of a Trigger Event or the enforcement of the Funding 2 Security,
the maximum aggregate principal amount which may be repaid by Funding 2 to the
relevant Funding 2 Issuer on that Controlled Repayment Date;

"Controlled Repayment Loan Tranche" means, in relation to Funding 2, any Loan
Tranche which by its terms imposes a limit on the amount of principal which
may be repaid on such Loan Tranche on any Controlled Repayment Date.
Controlled Repayment Loan Tranches will be deemed to be Pass-Through Loan
Tranches if:

(a)   a date specified in relation to the same in the applicable Loan Tranche
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs; or

(c)   the Step-Up Date (if any) in relation to such Loan Tranche occurs;

"Controlled Repayment Requirement" means, in relation to Funding 2, on a Trust
Determination Date, the amount required by Funding 2 to repay each Controlled
Repayment Loan Amount which is scheduled to be repaid on any of the three
Monthly Payment Dates immediately following such Trust Determination Date
(after taking into account amounts standing to the credit of the Funding 2
Principal Ledger on such Trust Determination Date which are available
therefor);


                                      18
<PAGE>


"Controlling Beneficiary Deed" means the deed entered into on or about the
Funding 2 Programme Date between the Mortgages Trustee, Funding, Funding 2,
the Security Trustee, the Funding 2 Security Trustee, the Issuer Security
Trustees, the Note Trustee and the Seller;

"Controlling Directions" means:

(a)   in respect of the Funding Beneficiaries, in all cases, the Funding
      Beneficiary representing the Issuer(s) with the highest ranking class of
      Notes then outstanding, and if each Funding Beneficiary represents
      Issuers with the same class as their highest ranking class, the Funding
      Beneficiary representing the Issuer(s) with the greatest Principal
      Amount Outstanding of the highest ranking class of Notes.

(b)   in respect of the Funding Security Trustees in all cases, the directions
      of:

      (i)   in relation to the Funding Issuers, the Note Trustee(s) for the
            holders of the highest ranking class of Notes outstanding; and

      (ii)  in relation to the Funding 2 Issuers, the Issuer Security Trustees
            for the holders of the highest ranking class of Notes outstanding,

         and if there is any conflict between the Controlling Directions, due
         to two or more Issuers (for the purposes of this paragraph, being any
         of the Funding Issuers and the Funding 2 Issuers) having Notes of the
         same class as their highest ranking class, the directions from the
         Note Trustee(s) or Issuer Security Trustee(s), as applicable, for the
         holders of the greatest aggregate Principal Amount Outstanding of the
         highest ranking class of Notes will prevail.

For the purposes of (a) and (b):

(1)      a Funding Beneficiary will be treated as "representing" an Issuer in
         circumstances where the Funding Beneficiary is the debtor under the
         terms of an Intercompany Loan Agreement between the Issuer and that
         Funding Beneficiary;

(2)      all denominations of the principal amount outstanding of any Note
         shall be calculated in Sterling and where the principal amount
         outstanding of any Note of any Funding Issuer or any Funding 2 Issuer
         is not denominated in Sterling, it shall be converted into Sterling
         (in relation to the Funding Issuers) at the rate specified in the
         Currency Swap Agreement applicable to such Note and (in relation to
         the Funding 2 Issuers) at the rate specified in the Issuer Swap
         Agreement applicable to such Note; and

(3)      the highest ranking class of notes outstanding shall mean:

         (A)      in relation to the Funding Issuers, the Class A Notes (for
                  so long as there are Class A Notes outstanding), the Class B
                  Notes (so long as there are no Class A Notes outstanding),
                  the Class M Notes (so long as there are neither Class A
                  Notes nor Class B Notes outstanding) or the Class C Notes
                  (so long as there are neither Class A Notes, Class B Notes
                  nor Class M Notes outstanding); and

         (B)      in relation to the Funding 2 Issuers, the Class A Notes (for
                  so long as there are Class A Notes outstanding), the Class B
                  Notes (so long as there are no Class A Notes outstanding),
                  the Class M Notes (so long as there are neither Class A
                  Notes nor Class B Notes outstanding), the Class C Notes (so
                  long as there


                                      19
<PAGE>


                  are neither Class A Notes, Class B Notes nor Class M Notes
                  outstanding) or the Class D Notes (so long as there are
                  neither Class A Notes, Class B Notes, Class M Notes nor
                  Class C Notes outstanding);

"Corporate Services Agreement" means:

(a)      in relation to any Funding Issuer, the corporate services agreement
         entered into on or before the Closing Date of the issue of the
         relevant Notes among, inter alios, the relevant Corporate Services
         Provider, Holdings, the Post-Enforcement Call Option Holder and such
         Funding Issuer, for the provision by the Corporate Services Provider
         of certain corporate services;

(b)      in relation to Funding 2 and the Master Issuer, the corporate
         services agreement entered into on or before the Funding 2 Programme
         Date among, inter alios, the relevant Corporate Services Provider,
         Holdings, the Post-Enforcement Call Option Holder, Funding 2 and the
         Master Issuer, for the provision by the Corporate Services Provider
         of certain corporate services; and

(c)      in relation to Funding and the Mortgages Trustee, the corporate
         services agreement entered into on or before the Initial Closing Date
         between the relevant Corporate Services Provider and the Mortgages
         Trustee (as the case may be) for the provision by the relevant
         Corporate Services Provider of certain corporate services with
         respect to Funding and Mortgages Trustee,

and shall, in each case, include any additional and/or replacement corporate
services agreement entered into by such parties from time to time in
accordance with the Transaction Documents;

"Corporate Services Provider" means in relation to Funding 2 and any Issuer,
Law Debenture Corporate Services Limited, and in relation to Funding and the
Mortgages Trustee, Mourant & Co. Limited, or any other person or persons for
the time being acting as corporate services provider under the relevant
Corporate Services Agreement;

"CPR" means, unless otherwise defined in the text of the relevant Transaction
Document, the constant rate of scheduled and unscheduled repayments on the
Mortgage Loans in the Mortgage Portfolio each month relative to the aggregate
principal amount outstanding of such Mortgage Loans;

"Credit Support Annex" means, in relation to the Funding 2 Basis Rate Swap
Agreement, the 1995 Credit Support Annex (Bilateral Form-Transfer) between
Funding 2 and the Funding Basis Rate Swap Provider and, in relation to an
Issuer Swap Agreement, means the 1995 Credit Support Annex (Bilateral
Form-Transfer) between the Issuer and the applicable Issuer Swap Provider;

"Currency Swap Agreement" means, for any Issuer, the ISDA Master Agreement(s),
Schedule(s), Confirmation(s) and any credit support documents thereto entered
into among such Issuer, the relevant Currency Swap Provider, the Note Trustee
and any credit support provider, as may be amended, restated, novated, varied
or supplemented from time to time and shall include any additional and/or
replacement currency swap agreement entered into by such Issuer from time to
time in connection with the Notes issued by such Issuer;

"Currency Swap Provider" means in relation to any Issuer the swap counterparty
to such Issuer under any relevant Currency Swap Agreement of such Issuer;

"Currency Swap Provider Default" means the occurrence of an Event of Default
or a Downgrade Termination Event (as defined in the relevant Currency Swap


                                      20
<PAGE>


Agreement) under a Currency Swap Agreement where the Currency Swap Provider is
the Defaulting Party or the Affected Party (each as defined in the relevant
Currency Swap Agreement);

"Current Balance" means in relation to any Mortgage Loan as at any given date,
the aggregate (but avoiding double counting) of:

(a)   the original principal amount advanced to the relevant Borrower and any
      Further Advances on or before the given date to the relevant Borrower
      secured or intended to be secured by the related Mortgage;

(b)   the amount of any Re-Draw under any Flexible Mortgage Loan or of any
      Further Draw under a Personal Secured Loan secured or intended to be
      secured by the related Mortgage;

(c)   any interest, disbursement, legal expense, fee, charge, rent, service
      charge, premium or payment which has been properly capitalised in
      accordance with the relevant Mortgage Conditions or with the relevant
      Borrower's consent and added to the amounts secured or intended to be
      secured by such Mortgage Loan (including interest capitalised on any
      Re-Draw under a Flexible Mortgage Loan); and

(d)   any other amount (other than unpaid interest) which is due or accrued
      (whether or not due) and which has not been paid by the relevant
      Borrower and has not been capitalised in accordance with the relevant
      Mortgage Conditions or with the relevant Borrower's consent but which is
      secured or intended to be secured by that Mortgage Loan, as at the end
      of the London Business Day immediately preceding that given date less
      any repayment or payment of any of the foregoing made on or before the
      end of the London Business Day immediately preceding that given date and
      excluding any retentions made but not released and any Further Advances
      and/or Further Draws committed to be made but not made by the end of the
      London Business Day immediately preceding that given date;

"Current Funding Share" means the amount of Trust Property beneficially owned
by Funding from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Current Funding Share Percentage" means the percentage share of Funding in
the Trust Property from time to time, as determined in accordance with Clause
8 (Adjustment of Funding Share Percentage, Funding 2 Share Percentage and
Seller Share Percentage) of the Mortgages Trust Deed;

"Current Funding 2 Share Percentage" means the percentage share of Funding 2
in the Trust Property from time to time, as determined in accordance with
Clause 8 (Adjustment of Funding Share Percentage, Funding 2 Share Percentage
and Seller Share Percentage) of the Mortgages Trust Deed;

"Current Funding 2 Share" means the amount of Trust Property beneficially
owned by Funding 2 from time to time, as determined in accordance with Clause
8 (Adjustment of Funding Share Percentage, Funding 2 Share Percentage and
Seller Share Percentage) of the Mortgages Trust Deed;

"Current Issuer Available Principal Receipts", with respect to any Funding
Issuer (other than the First Issuer, the Second Issuer and the Third Issuer),
has the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding Issuer, and with respect to any Funding 2 Issuer, has
the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding 2 Issuer;


                                      21
<PAGE>


"Current Issuer Available Revenue Receipts", with respect to any Funding
Issuer (other than the First Issuer, the Second Issuer and the Third Issuer),
has the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding Issuer, and with respect to any Funding 2 Issuer, has
the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding 2 Issuer;

"Current Issuer Bank Account Agreement", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding Issuer, and with respect to any Funding 2 Issuer, has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding 2 Issuer;

"Current Issuer Bank Accounts", with respect to any Funding Issuer (other than
the First Issuer, the Second Issuer and the Third Issuer), has the meaning
given to such term in the Issuer Master Definitions Schedule relating to such
Funding Issuer, and with respect to any Funding 2 Issuer, has the meaning
given to such term in the Issuer Master Definitions Schedule relating to such
Funding 2 Issuer;

"Current Issuer Cash Management Agreement", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding Issuer, and with respect to any Funding 2 Issuer, has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding 2 Issuer;

"Current Issuer Liquidity Reserve Fund", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding Issuer;

"Current Issuer Liquidity Reserve Ledger", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding Issuer;

"Current Issuer Post-Enforcement Priority of Payments", in respect of any
Funding Issuer (other than the First Issuer, the Second Issuer and the Third
Issuer), has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding Issuer, and in respect of any Funding 2
Issuer, has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;

"Current Issuer Pre-Enforcement Principal Priority of Payments", with respect
to any Funding Issuer (other than the First Issuer, the Second Issuer and the
Third Issuer), has the meaning given to such term in the Issuer Master
Definitions Schedule relating to such Funding Issuer, and in respect of any
Funding 2 Issuer, has the meaning given to such term in the Issuer Master
Definitions Schedule relating to such Funding 2 Issuer;

"Current Issuer Pre-Enforcement Priority of Payments", in respect of any
Funding Issuer (other than the First Issuer, the Second Issuer and the Third
Issuer), has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding Issuer, and in respect of any Funding 2
Issuer, has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;


                                      22
<PAGE>


"Current Issuer Pre-Enforcement Revenue Priority of Payments", in respect of
any Funding Issuer (other than the First Issuer, the Second Issuer and the
Third Issuer), has the meaning given to such term in the Issuer Master
Definitions Schedule relating to such Funding Issuer, and in respect of any
Funding 2 Issuer, has the meaning given to such term in the Issuer Master
Definitions Schedule relating to such Funding 2 Issuer;

"Current Issuer Reserve Fund", in respect of any Funding Issuer (other than
the First Issuer and the Second Issuer), has the meaning given to such term in
the Issuer Master Definitions Schedule relating to such Funding Issuer, and in
respect of any Funding 2 Issuer, has the meaning given to such term in the
Issuer Master Definitions Schedule relating to relating to such Funding 2
Issuer;

"Current Issuer Reserve Fund Ledger", in respect of any Funding Issuer (other
than the First Issuer and the Second Issuer), has the meaning given to such
term in the Issuer Master Definitions Schedule relating to such Funding
Issuer, and in respect of any Funding 2 Issuer, has the meaning given to such
term in the Issuer Master Definitions Schedule relating to relating to such
Funding 2 Issuer;

"Current Issuer Reserve Required Amount" in respect of any Funding Issuer
(other than the First Issuer and the Second Issuer), has the meaning given to
such term in the Issuer Master Definitions Schedule relating to such Funding
Issuer, and in respect of any Funding 2 Issuer, has the meaning given to such
term in the Issuer Master Definitions Schedule relating to such Funding
Issuer;

"Current Issuer Secured Creditors" in respect of Funding Issuers, in relation
to any New Issuer, has the meaning given to such term in the Issuer Master
Definitions Schedule relating to that New Issuer;

"Current Issuer Transaction Accounts" in respect of any Issuer (other than the
First Issuer, the Second Issuer and the Third Issuer), has the meaning given
to such term in the Issuer Master Definitions Schedule relating to that
Issuer;

"Current Issuer Transaction Accounts" in respect of any Funding Issuer (other
than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding Issuer, and in respect of any Funding 2 Issuer, has the
meaning given to such term in the Issuer Master Definitions Schedule relating
to such Funding 2 Issuer;

"Current Seller Share Percentage" means the percentage share of the Seller in
the Trust Property from time to time as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Current Seller Share" means the amount of Trust Property beneficially owned
by the Seller from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Dealers" means Barclays Bank PLC, Citigroup Global Markets Limited and
Merrill Lynch International and any other dealers appointed from time to time
in accordance with the Programme Agreement;

"Deed of Accession" means:

(a)   in relation to Funding and the Funding Deed of Charge, a deed executed
      by, inter alios, Funding, the Security Trustee and the Note Trustee and
      any New Funding Secured Creditor in the form set out in Schedule 2 to
      the Funding Deed of Charge or any other form of deed as agreed between
      the parties;


                                      23
<PAGE>


(b)   in relation to Funding 2 and the Funding 2 Deed of Charge, a deed
      executed by, inter alios, Funding 2, the Funding 2 Security Trustee and
      the Issuer Security Trustee in respect of each Funding 2 Issuer and any
      New Funding 2 Secured Creditor in the form set out in Schedule 2 to the
      Funding 2 Deed of Charge or any other form of deed as agreed between the
      parties;

(c)   in relation to a Funding 2 Issuer and the applicable Issuer Deed of
      Charge, a deed of execution by, inter alios, such Funding 2 Issuer and
      the Issuer Security Trustee and any New Issuer Secured Creditor in
      respect of such Funding 2 Issuer in the form set out in the applicable
      Issuer Deed of Charge or any other form of deed as agreed between the
      parties;

"Deed of Consent" means a deed whereby a person in or intended to be in
occupation of a Mortgaged Property agrees with the Seller to postpone his or
her interest (if any) in the Mortgaged Property so that it ranks after the
interest of the Seller created by the relevant Mortgage;

"Deed of Postponement" means a deed whereby a Mortgagee of a Mortgaged
Property agrees with the Seller to postpone its Mortgage over the Mortgaged
Property so that the sums secured by it will rank for repayment after the sums
secured by the relevant Mortgage;

"Deferred Contribution" means:

(a)   the consideration in the form of cash payable by Funding to the
      Mortgages Trustee from time to time in respect of the Funding Share of
      the Trust Property pursuant to and in accordance with the Mortgages
      Trust Deed and/or the Funding Deed of Charge including, for the
      avoidance of doubt, the Funding Final Deferred Contribution; and

(b)   the consideration in the form of cash payable by Funding 2 to the
      Mortgages Trustee from time to time in respect of the Funding 2 Share of
      the Trust Property pursuant to and in accordance with the Mortgages
      Trust Deed and/or the Funding 2 Deed of Charge including, for the
      avoidance of doubt, the Funding 2 Final Deferred Contribution,

which Contributions will fund the payment to the Seller by the Mortgages
Trustee of amounts of Deferred Purchase Price payable by the Mortgages Trustee
to the Seller from time to time pursuant to and in accordance with the
Mortgage Sale Agreement;

"Deferred Purchase Price" means that portion of the Purchase Price for the
sale and assignment of the Initial Mortgage Portfolio or of any New Mortgage
Portfolio sold and assigned to the Mortgages Trustee which is not paid to the
Seller, in the case of the Initial Mortgage Portfolio, on the Initial Closing
Date or, in the case of any New Mortgage Portfolio, on the relevant Assignment
Date and which is to be paid by the Mortgages Trustee to the Seller from time
to time from Deferred Contributions received by the Mortgages Trustee from
Funding and from Funding 2 and otherwise in accordance with the Mortgage Sale
Agreement;

"Direct Debit" means a payment made pursuant to the Direct Debiting Scheme;

"Direct Debiting Scheme" means the scheme for the manual or automated debiting
of bank accounts operated in accordance with the detailed rules of certain
members of the Association for Payment Clearing Services;

"Distribution Date" means the date on which the Mortgages Trust terminates and
the London Business Day as determined by the Cash Manager falling no later
than 6 Business Days after each Trust Determination Date;


                                      24
<PAGE>


"Distribution Period" means the period from, and including, a Distribution
Date to, but excluding, the next following Distribution Date or, in relation
to the first Distribution Period, the period from and including the relevant
Closing Date to, but excluding, the first Distribution Date;

"DTC" means The Depository Trust Company;

"Early Repayment Charge Receipts" means an amount equal to sums received by
the Mortgages Trustee from time to time in respect of Early Repayment Charges;

"Early Repayment Charge" means any charge or fee which the Mortgage Conditions
applicable to a Mortgage Loan require the relevant Borrower to pay in the
event that all or part of that Mortgage Loan is repaid before a certain date,
including without limitation repayment of any "cashback";

"EBRR" has the meaning given to such term in Clause 4.4(c) of the
Administration Agreement;

"Encumbrance" has the same meaning as "Security Interest";

"Enforcement Procedures" means the procedures for the enforcement of Mortgages
undertaken by the Administrator from time to time in accordance with the
Administration Procedures;

"English Mortgage Loan" means a Mortgage Loan secured by an English Mortgage;

"English Mortgage" means, in respect of any Mortgage Loan in the Mortgage
Portfolio, a Mortgage secured over an English Property;

"English Property" means a Mortgaged Property situated in England or Wales;

"EU Regulation" means Council regulation (EC) No. 1346/2000 of 29 May 2000 on
Insolvency Proceedings;

"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System;

"Event of Default" means, as the context requires, a Funding Event of Default
and/or a Funding 2 Event of Default;

"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended;

"Existing Borrower's Re-Fix Rate" means at any date the fixed rate then being
offered to those of the Seller's existing Borrowers who at that date are
seeking to fix the rate of interest payable under their existing Fixed Rate
Mortgage Loan with the Seller for the applicable period;

"Final Deferred Contribution" means, as applicable, the Funding Final Deferred
Contribution and/or the Funding 2 Final Deferred Contribution;

"Final Maturity Date" means, in respect of any Series and Class of Notes, the
date specified for such Series and Class of Notes in the related Note
Supplement;

"Final Repayment Date" means:

(a)   in respect of the First Issuer Intercompany Loan, the Payment Date
      falling in January, 2041 and in relation to any New Intercompany Loan
      relating to a Funding Issuer the date specified under the relevant
      Issuer Transaction Documents and as defined in the relevant Issuer
      Master Definitions Schedule; or

(b)   in relation to any Loan Tranche under a Funding 2 Intercompany Loan
      Agreement between Funding 2 and a Funding 2 Issuer, the date identified
      as such for that Loan Tranche in the related Loan Tranche Supplement;


                                      25
<PAGE>


"Final Terms" means, in relation to any Series and Class of Notes issued by a
Funding 2 Issuer, the final terms issued in relation to such Series and Class
of Notes giving details of, inter alia, the amount and price of such Series of
Notes and which, together with the Base Prospectus, forms part of the Reg S
Prospectus in relation to such Series of Notes;

"Financial Period" means a Financial Year or any other period in respect of
which accounts are required to be prepared and certified by the auditors of
the relevant company to enable it to comply with all relevant legal and
accounting requirements and all requirements of any stock exchange on which
any securities of the company are listed;

"First Issuer" means Granite Mortgages 01-1 plc;

"First Issuer Available Principal Receipts" has the meaning given to such term
in the First Issuer Master
Definitions Schedule;

"First Issuer Available Revenue Receipts" has the meaning given to such term
in the First Issuer Master
Definitions Schedule;

"First Issuer Bank Account Agreement" has the meaning given to such term in
the First Issuer Master
Definitions Schedule;

"First Issuer Bank Accounts" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Basis Rate Swap" has the meaning given to such term in the First
Issuer Master Definitions
Schedule;

"First Issuer Basis Rate Swap Agreement" has the meaning given to such term in
the First Issuer Master
Definitions Schedule;

"First Issuer Cash Management Agreement" has the meaning given to such term in
the First Issuer Master
Definitions Schedule;

"First Issuer Cash Manager" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Deed of Charge" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Intercompany Loan" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Intercompany Loan Agreement" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Intercompany Loan Event of Default" has the meaning given to such term
in the First Issuer Master Definitions Schedule;

"First Issuer Liquidity Reserve Fund" has the meaning given to such term in
the First Issuer Master
Definitions Schedule;

"First Issuer Liquidity Reserve Ledger" has the meaning given to such term in
the First Issuer Master
Definitions Schedule;

"First Issuer Liquidity Reserve Required Amount" has the meaning given to such
term in the Issuer Master Definitions Schedule relating to the First Issuer;


                                      26
<PAGE>


"First Issuer Master Definitions Schedule" means, in respect of the First
Issuer, the master definitions schedule signed for the purposes of
identification by Sidley Austin Brown & Wood and Clifford Chance LLP on the
Initial Closing Date (as amended, varied or supplemented from time to time);

"First Issuer Note Event of Default" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Notes" has the meaning given to such term in the First Issuer
Master Definitions Schedule;

"First Issuer Paying Agent and Agent Bank Agreement" has the meaning given to
such term in the First Issuer
Master Definitions Schedule;

"First Issuer Post-Enforcement Priority of Payments" has the meaning given to
such term in the First Issuer Master Definitions Schedule;

"First Issuer Pre-Enforcement Priority of Payments" has the meaning given to
such term in the First Issuer Master Definitions Schedule;

"First Issuer Pre-Enforcement Principal Priority of Payments" has the meaning
given to such term in the First Issuer Master Definitions Schedule;

"First Issuer Pre-Enforcement Revenue Priority of Payments" has the meaning
given to such term in the First Issuer Master Definitions Schedule;

"First Issuer Reserve Fund" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Reserve Fund Ledger" has the meaning given to such term in the
First Issuer Master Definitions
Schedule;

"First Issuer Reserve Required Amount" has the meaning given to such term in
the First Issuer Master
Definitions Schedule;

"First Issuer Secured Creditors" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Security" has the meaning given to such term in the First Issuer
Master Definitions Schedule;

"First Issuer Transaction Accounts" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Transaction Documents" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Trust Deed" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"Fitch" means Fitch Ratings Limited and includes any successor to its ratings
business;

"Fixed Rate Note" means a Note, the interest basis of which is specified in
the applicable Final Terms as being fixed rate;

"Fixed Rate Mortgage Loan" means a Mortgage Loan which is subject to a fixed
rate of interest set by reference to a predetermined rate or series of rates
for a fixed period or periods;


                                      27
<PAGE>


"Fixed Rate Period" means, in relation to any Fixed Rate Mortgage Loan or
other Mortgage Loan offered with a fixed rate, the period agreed between the
Borrower and the Seller or Administrator (as applicable) as set out under the
terms and conditions of such Mortgage Loan during which the interest rate
applicable to such Mortgage Loan will remain fixed;

"Flexible Cash Re-Draw Capacity" has the meaning given to it in Clause 9.2
(Fluctuation of Minimum Seller Share on each Distribution Date) of the
Mortgages Trust Deed;

"Flexible Mortgage Loan" means a type of Mortgage Loan (other than a Personal
Secured Loan) product that typically incorporates features that give the
Borrower options (which may be subject to certain conditions) to, among other
things, make further drawings on the mortgage loan account and/or to overpay
or underpay interest and principal in a given month and/or to take a Payment
Holiday;

"Flexible Overpayments Sub Ledger" means the sub-ledger of the Overpayments
Ledger which will be established by the Cash Manager on the Initial Closing
Date in order to record any Overpayments made on Flexible Mortgage Loans;

"FSMA" means the Financial Services and Markets Act 2000, as amended;

"Full Repayment Amount" means the proceeds of a Loan Tranche which is to be
used to refinance another Loan Tranche;

"Funding 2" means Granite Finance Funding 2 Limited, a private limited company
incorporated in England and Wales with registered number 05249387;

"Funding 2 Available Principal Receipts" in respect of a Monthly Payment Date
will be calculated by the Cash Manager or otherwise on behalf of Funding 2
(or, following enforcement of the Funding 2 Security, the Funding 2 Security
Trustee) on the Distribution Date immediately preceding the relevant Monthly
Payment Date and will be an amount equal to the sum of:

(a)   all Funding 2 Principal Receipts standing to the credit of the Funding 2
      Cash Accumulation Ledger which are to be applied on the relevant Monthly
      Payment Date to repay a Bullet Repayment Loan Amount or to make a
      payment under items (A), (B) or (C) of the Funding 2 Pre-enforcement
      Principal Priority of Payments and, if such Monthly Payment Date occurs
      on or after a Trigger Event or enforcement of the Issuer Security, the
      remainder of such receipts standing to the credit of the Funding 2 Cash
      Accumulation Ledger;

(b)   all other Mortgages Trustee Principal Receipts received by Funding 2
      from the Mortgages Trustee which are to be applied on the relevant
      Monthly Payment Date to repay a Scheduled Repayment Loan Instalment, a
      Controlled Repayment Loan Amount or a Principal Amount repayable in
      respect of a Pass-Through Loan Tranche standing to the credit of the
      Funding 2 Principal Ledger;

(c)   the amounts, if any, credited to the Principal Deficiency Ledger
      pursuant to items (I), (L), (N), (P) and (R) of the Funding 2
      Pre-Enforcement Revenue Priority of Payments;

(d)   in so far as needed to make a Funding 2 Reserve Principal Payment, any
      amount available to be drawn under the Funding 2 Reserve Fund less any
      amounts applied or to be applied on the relevant Monthly Payment Date in
      payment of interest and expenses under the Funding 2 Pre-Enforcement
      Revenue Priority of Payments, plus any amounts to be credited to the
      Funding 2 Reserve Ledger on the relevant Monthly Payment Date;


                                      28
<PAGE>


(e)   in so far as needed to make a Funding 2 liquidity reserve principal
      payment, any amount available to be drawn under the Funding 2 Liquidity
      Reserve Fund less any amounts applied or to be applied on the relevant
      Monthly Payment Date in payment of interest and expenses under the
      Funding 2 Pre-Enforcement Revenue Priority of Payments, plus any amounts
      to be credited to the Funding 2 Liquidity Reserve Ledger on the relevant
      Monthly Payment Date;

(f)   in so far as needed, any amount available to be drawn under the Funding
      2 Liquidity Facility to make a Funding 2 Liquidity Facility Principal
      Payment;

less

(g)   amounts to be applied on the relevant Monthly Payment Date to any items
      (H), (J), (M), (O) and (Q) of the Funding 2 Pre-Enforcement Revenue
      Priority Payments.

"Funding 2 Available Revenue Receipts" in respect of any Monthly Payment Date
will be calculated by the Cash Manager on the Distribution Date immediately
preceding such Payment Date and will be an amount equal to the sum of:

(a)      all Mortgages Trustee Available Revenue Receipts distributed to
         Funding 2 during the Interest Period ending on the relevant Monthly
         Payment Date;

(b)      other net income of Funding 2 including all amounts of interest
         received on the Funding 2 GIC Account and the Funding 2 Transaction
         Account, and/or all income from Funding 2's Authorised Investments,
         on the Distribution Date(s) during the Interest Period ending on such
         Monthly Payment Date, in each case to be received on or prior to such
         Monthly Payment Date; and

(c)      amounts received from the Funding 2 Basis Rate Swap Provider under
         the Funding 2 Basis Rate Swap Agreement (excluding Swap Collateral
         standing to the credit of the Funding 2 Swap Collateral Accounts)
         including any Swap Termination Payments (other than such Swap
         Termination Payments applied or to be applied by Funding 2 in the
         purchase of one or more replacement hedging transactions) recovered
         by Funding 2 under the Funding 2 Basis Rate Swap Agreement;

(d)      (only to the extent required after making the calculation set out in
         Rule 2 under the heading "Rules for Application of Funding 2
         Principal Receipts" in Part II to Schedule 3 of the Funding 2 Deed of
         Charge the aggregate of amounts standing to the credit of the Funding
         2 Principal Ledger or the Funding 2 Cash Accumulation Ledger (as
         applicable) which are to be applied on the relevant payment date to
         pay items (H), (J), (M), (O), and (Q) of the Funding 2
         Pre-Enforcement Revenue Priority of Payments;

(e)      the amounts available to be drawn under the Funding 2 Reserve Fund,
         subject to any limits or conditions on the purposes for which the
         Funding 2 Reserve Fund may be utilised; and

(f)      the amounts available to be drawn under the Funding 2 Liquidity
         Reserve Fund, if any, subject to any limits or conditions on the
         purposes for which the Funding 2 Liquidity Reserve Fund may be
         utilised.

(g)      in so far as is needed, any amount available to be drawn under the
         Funding 2 Liquidity Facility, if any, for the payment of interest and
         expenses.


                                      29
<PAGE>


"Funding 2 Bank Account Agreement" means the agreement entered into on or
about the Funding 2 Programme Date between the Account Bank, Funding 2 and the
Funding 2 Security Trustee which governs the operation of the Funding 2 Bank
Accounts;

"Funding 2 Bank Accounts" means the Funding 2 GIC Account and the Funding
Transaction Account and each such additional or replacement account in the
name of Funding that may be opened with the prior approval of the Funding 2
Security Trustee after the Funding 2 Programme Date;

"Funding 2 Basis Rate Swap Agreement" means the ISDA Master Agreement,
Schedule and Confirmations thereto each entered into on or about the Funding 2
Programme Date and any Credit Support Annex or other credit support documents
entered into at any time among Funding 2 and the Funding 2 Basis Rate Swap
Provider and/or any credit support provider and shall include any additional
basis rate swap agreement entered into by Funding 2 from time to time in
accordance with the Transaction Documents;

"Funding 2 Basis Rate Swap Excluded Termination Amount" means, in relation to
the Funding 2 Basis Rate Swap Agreement, following the application of all or
part of any Swap Replacement Premium in accordance with Clause 7.8 of the
Funding 2 Deed of Charge and Clause 4.12 of the Cash Management Agreement,
covering an amount equal to any termination payment due and payable to the
Funding 2 Basis Rate Swap Provider as a result of a Swap Provider Default in
respect of the Funding 2 Basis Rate Swap Provider;

"Funding 2 Basis Rate Swap Provider" means Northern Rock and/or, as
applicable, any other basis rate swap provider appointed from time to time by
Funding 2 in accordance with the Transaction Documents;

"Funding 2 Basis Rate Swaps" means the swap transactions as documented under
the Funding 2 Basis Rate Swap Agreement;


"Funding 2 Cash Accumulation Ledger Amount" means, at any time, the amount
standing to the credit of the Funding 2 Cash Accumulation Ledger at that time
(immediately prior to any drawing to be applied on any Payment Date and prior
to any payment under item (I) of the Funding 2 Pre-Enforcement Principal
Priority of Payments);

"Funding 2 Cash Accumulation Ledger" means the ledger on which the Cash
Manager will record the amounts accumulated by Funding 2 to pay Bullet
Repayment Loan Amounts;

"Funding 2 Charged Property" means the property, assets and undertakings of
Funding 2 which from time to time are or are expressed to be mortgaged,
charged, assigned, pledged or otherwise encumbered to, or in favour of the
Funding 2 Security Trustee for itself and for the Funding 2 Secured Creditors
under the Funding 2 Deed of Charge or any other Funding Transaction Document;

"Funding 2 Deed of Charge" means the deed of charge entered into on or about
the Funding 2 Programme Date between Funding 2, the Funding 2 Security
Trustee, the Issuer Security Trustee, Granite Master Issuer plc, the Funding 2
Basis Rate Swap Provider, the Corporate Services Provider, the Account Bank,
the Funding 2 GIC Provider, the Mortgages Trustee and the Cash Manager and the
Schedules thereto and including each Deed of Accession or Accession
Undertaking entered into in connection therewith;

"Funding 2 Event of Default" means, as the context requires, any of the
following:


                                      30
<PAGE>


(a)   in relation to the Notes issued by any Funding 2 Issuer, the occurrence
      a Note Event of Default pursuant to the terms and conditions of such
      Notes;

(b)   in relation to any Funding 2 Intercompany Loan Agreement, the occurrence
      of a Funding 2 Intercompany Loan Event of Default;

"Funding 2 Expense Sub-Ledger" means a sub-ledger of the Funding 2 Revenue
Ledger on which receipts and payments of Funding 2 Revenue Receipts allocable
to the payment of expenses will be recorded by the Cash Manager;

"Funding 2 Final Deferred Contribution" has the meaning given such term in
Clause 4.3(D) of the Mortgages Trust Deed;

"Funding 2 GIC Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding 2 GIC Account substantially in
the form set out in Schedule 1 to the Funding 2 Bank Account Agreement;

"Funding 2 GIC Account" means the account in the name of Funding 2 (sort code
30-00-59, account number 150858) held at Northern Rock, and maintained subject
to the Funding 2 Guaranteed Investment Contract and the Funding 2 Bank Account
Agreement and such additional or replacement accounts as may for the time
being be in place with the prior consent of the Funding 2 Security Trustee;

"Funding 2 GIC Provider" means, Northern Rock or such other person or persons
as are for the time being the GIC Provider to Funding under the Funding 2
Guaranteed Investment Contract;

"Funding 2 Guaranteed Investment Contract" means the guaranteed investment
contract entered into on or about the Funding 2 Programme Date between Funding
2, the Funding 2 GIC Provider, the Cash Manager and the Funding 2 Security
Trustee under which the Funding 2 GIC Provider agrees to pay Funding 2 a
guaranteed rate of interest on the balance from time to time of the Funding 2
GIC Account and shall include any additional and/or replacement guaranteed
investment contract entered into by Funding 2 in accordance with the
Transaction Documents;

"Funding 2 Intercompany Loan Agreement" means an intercompany loan agreement
entered into between Funding 2 and a Funding 2 Issuer in relation to a Funding
2 Intercompany Loan;

"Funding 2 Intercompany Loan Enforcement Notice" means an enforcement notice
served by the Funding 2 Security Trustee on Funding 2 in relation to the
enforcement of the Funding 2 Security following the occurrence of a Funding 2
Intercompany Loan Event of Default;

"Funding 2 Intercompany Loan Event of Default" means, in relation to the
Global Intercompany Loan Agreement, the occurrence of an event of default
specified as such in Clause 15 (Default) of the Global Intercompany Loan
Agreement, and in relation to any other Funding 2 Intercompany Loan Agreement,
the occurrence of an event of default specified as such in such Funding 2
Intercompany Loan Agreement;

"Funding 2 Intercompany Loan Ledger" means the ledger on which the Cash
Manager will record payments of interest and repayments of principal made
under any Funding 2 Intercompany Loan;

"Funding 2 Intercompany Loan" means a loan (or the aggregate of a number of
separate loans) of the net proceeds of any issue (or all issues) of Notes by a
Funding 2 Issuer, such loan(s) being advanced to Funding 2 by such Funding 2
Issuer pursuant to the terms of a Funding 2 Intercompany Loan Agreement;


                                      31
<PAGE>


"Funding 2 Interest Rate Shortfall" has the meaning given in Clause 4.3(A)(2)
of the Administration Agreement;

"Funding 2 Issuer" means Granite Master Issuer plc;

"Funding 2 Ledgers" means the Funding 2 Principal Ledger, the Funding 2
Revenue Ledger, the Funding 2 Reserve Ledger, the Funding 2 Liquidity Reserve
Ledger (if any), the Funding 2 Liquidity Facility Ledger (if any), the Funding
2 Principal Deficiency Ledger, the Funding 2 Cash Accumulation Ledger, the
Funding 2 Intercompany Loan Ledger and the Funding 2 Swap Collateral Ledger;

"Funding 2 Liquidity Facility Agreement" means any agreement entered into by
Funding 2 relating to the provision of a Funding 2 Liquidity Facility;

"Funding 2 Liquidity Facility Drawings" means any drawing made pursuant to the
terms of the Funding 2 Liquidity Facility Agreement (if any);

"Funding 2 Liquidity Facility Ledger" means the ledger maintained by the Cash
Manager in the name of Funding 2 pursuant to the Cash Management Agreement to
record drawings from and repayment of the Funding 2 Liquidity Facility from
time to time;

"Funding 2 Liquidity Facility Principal Payment means the payments specified
as such in the Funding 2 Liquidity Facility Agreement (if any);

"Funding 2 Liquidity Facility Provider" means such person or persons for the
time being the provider of liquidity under any Funding 2 Liquidity Facility
Agreement;

"Funding 2 Liquidity Facility Repayments" means any payment made by Funding 2
in accordance with the terms of the Funding 2 Liquidity Facility Agreement (if
any) and the Funding 2 Priority of Payments;

"Funding 2 Liquidity Facility Subordinated Amounts" means the amounts
specified as such in any Funding 2 Liquidity Facility Agreement (if any);

"Funding 2 Liquidity Facility" means a liquidity facility entered into by
Funding 2 at any time after the Funding 2 Programme Date;

"Funding 2 Liquidity Reserve Fund" means the liquidity reserve fund which
Funding 2 will be required to establish if the long term, unsecured,
unsubordinated and unguaranteed debt obligations of the Seller cease to be
rated at least A3 by Moody's or A- by Fitch (unless Moody's or Fitch, as
applicable, confirms that the then-current ratings of the Notes of any Funding
2 Issuer will not be adversely affected) and will be funded to the relevant
Funding 2 Liquidity Reserve Required Amount;

"Funding 2 Liquidity Reserve Ledger" means the ledger maintained by the Cash
Manager in the name of Funding 2 pursuant to the Cash Management Agreement to
record the amount standing to the credit of the Funding 2 Liquidity Reserve
Fund from time to time;

"Funding 2 Liquidity Reserve Principal Payment" means any drawing from the
Funding 2 Liquidity Reserve Fund to help meet any deficit in Funding 2
Available Principal Receipts available for:

(a)   prior to the occurrence of a Trigger Event, repayment of principal due
      and payable in respect of Original Bullet Loan Tranches (which are AAA
      Loan Tranches); and


                                      32
<PAGE>


(b)   on or after the occurrence of a Trigger Event, repayment of principal
      due and payable in respect of Original Bullet Loan Tranches (which are
      AAA Loan Tranches) on their respective Final Repayment Dates,

in each case, prior to the service of a Funding 2 Intercompany Loan
Enforcement Notice;

"Funding 2 Liquidity Reserve Rating Event" means where the long term,
unsecured, unsubordinated and unguaranteed debt obligations of the Seller
cease to be rated at least A3 by Moody's or A- by Fitch (unless Moody's or
Fitch, as applicable, confirms that the then current rating of the Notes
issued by a Funding 2 Issuer will not be reduced, withdrawn or qualified by
the ratings downgrade);

"Funding 2 Liquidity Reserve Required Amount" means an amount as of any
Monthly Payment Date equal to the excess, if any, of 3% of the aggregate
outstanding balance of the Notes on that Monthly Payment Date over the
aggregate of the amounts standing to the credit of the Funding 2 Reserve Fund
and the Issuer Reserve Fund on that Monthly Payment Date;

"Funding 2 Post-Enforcement Priority of Payments" means the rules and the
order of priority in which Funding 2 Available Revenue Receipts, Funding 2
Available Principal Receipts and all other monies, income, receipts and
recoveries of Funding 2 or the Funding 2 Security Trustee or any Receiver of
Funding 2 and the proceeds of enforcement of the Funding 2 Security are to be
applied following service of a Funding 2 Intercompany Loan Enforcement Notice
or otherwise following an enforcement of the Funding 2 Security as set out in
Part III of Schedule 3 (Funding 2 Priority of Payments) to the Funding 2 Deed
of Charge, as the same may be amended, varied or superseded from time to time
in accordance with the terms of the Funding 2 Deed of Charge;

"Funding 2 Pre-Enforcement Principal Priority of Payments" means the rules and
the order of priority in which Funding 2 Available Principal Receipts will be
applied prior to the enforcement of the Funding 2 Security as set out in Part
II of Schedule 3 (Funding 2 Priority of Payments) to the Funding 2 Deed of
Charge, as the same may be amended, varied or superseded from time to time in
accordance with the terms of the Funding 2 Deed of Charge;

"Funding 2 Pre-Enforcement Revenue Priority of Payments" means the rules and
the order of priority in which Funding 2 Available Revenue Receipts will be
applied prior to the enforcement of the Funding 2 Security as set out in Part
I of Schedule 3 (Funding 2 Priority of Payments) to the Funding 2 Deed of
Charge, as the same may be amended, varied or superseded from time to time in
accordance with the terms of the Funding 2 Deed of Charge;

"Funding 2 Principal Deficiency Ledger" means the ledger maintained by the
Cash Manager in the name of Funding 2 which will be established on the Funding
2 Programme Date and will be sub-divided into sub ledgers corresponding to the
AAA Loan Tranches, the AA Loan Tranches, the A Loan Tranches, the BBB Loan
Tranches and the BB Loan Tranches in order to record Losses on Mortgage Loans
allocated to Funding 2, the application of Funding 2 Available Principal
Receipts in paying interest on the Funding 2 Intercompany Loans and certain
amounts ranking in priority thereto in accordance with the Funding 2
Pre-Enforcement Revenue Priority of Payments and the application of Funding 2
Principal Receipts to fund or replenish the Funding 2 Liquidity Reserve Fund
(if any);

"Funding 2 Principal Ledger" means the ledger maintained by the Cash Manager
in the name of Funding 2 pursuant to the Cash Management Agreement to record
receipts and payments of Funding 2 Principal Receipts (other than any Funding
2 Principal Receipts constituting the Cash Accumulation


                                      33
<PAGE>


Requirement) which ledger will be divided into sub-ledgers for each Loan
Tranche which shall record receipts and payments of Funding 2 Principal
Receipts allocable to each Loan Tranche (other than Funding 2 Principal
Receipts allocable to each Loan Tranche which are credited to the Funding 2
Cash Accumulation Ledger);

"Funding 2 Principal Receipts" means the Principal Receipts received by
Funding 2 from the Mortgages Trustee on each Distribution Date;

"Funding 2 Priority of Payments" means, as applicable, any of the Funding 2
Pre-Enforcement Revenue Priority of Payments, the Funding 2 Pre-Enforcement
Principal Priority of Payments or the Funding 2 Post-Enforcement Priority of
Payments;

"Funding 2 Program Date"  means 19 January 2005;

"Funding 2 Proportion" means, on a Distribution Date, Assignment Date or
Contribution Date, an amount equal to:


                                      B
                                    -----
                                     A+B

      where:

      A   =    the Funding Share on that date; and

      B   =    the Funding 2 Share on that date;

"Funding 2 Relevant Distribution" has the meaning given such term in Clause
4.3(A)(2) of the Mortgages Trust Deed;

"Funding 2 Reserve Fund" means the reserve fund established in the name of
Funding 2 on the Funding 2 Programme Date in an amount up to the Funding 2
Reserve Required Amount, which, prior to enforcement of the Funding 2
Security, may be allocated to help meet any deficit in Funding Available
Revenue Receipts and thereby any deficit recorded on the Funding 2 Principal
Deficiency Ledgers and/or utilised to fund expenses in connection with the
issuance of Notes by Funding 2 Issuers and/or any deficit in Funding Available
Principal Receipts available for the repayment of Bullet Loan Tranches;

"Funding 2 Reserve Fund Threshold" means, in any date, the lesser of:

(a)   the Target Reserve Required Amount; and

(b)   the highest amount which the Adjusted Funding 2 Reserve Fund Level has
      been since the first Loan Payment Date upon which interest is due and
      payable in respect of Loan Tranches advanced or the Closing Date
      relating to the then most recent issue of Funding 2 Notes;

"Funding 2 Reserve Required Amount" means, as at any date, the amount (if any)
by which the Target Reserve Required Amount (as at such date) exceeds the
Issuer Reserve Minimum Amount (as at such date);

"Funding 2 Reserve Principal Payment" means any drawing from the Funding 2
Reserve Fund to help meet any deficit in Funding 2 Available Principal
Receipts available for:

(a)   prior to the occurrence of a Trigger Event, repayment of principal due
      and payable in respect of Original Bullet Loan Tranches (which are AAA
      Loan Tranches); and


                                      34
<PAGE>


(b)   on or after the occurrence of a Trigger Event, repayment of principal
      due and payable in respect of Original Bullet Loan Tranches (which are
      AAA Loan Tranches) on their respective Final Repayment Dates.

in each case, prior to the service of a Funding 2 Intercompany Loan
Enforcement Notice;

"Funding 2 Revenue Ledger" means the ledger maintained by the Cash Manager in
the name of Funding 2 pursuant to the Cash Management Agreement to record all
monies received by Funding 2 during an Interest Period other than the Funding
2 Principal Receipts and the Swap Collateral Excluded Amounts which ledger
will be sub-divided into sub-ledgers for each Loan Tranche which shall record
receipts and payments of Funding 2 Revenue Receipts allocable to each Loan
Tranche;

"Funding 2 Revenue Receipts" means the Mortgages Trustee Available Revenue
Receipts received by Funding 2 from the Mortgages Trustee on each Distribution
Date;

"Funding 2 Secured Creditors" means the Funding 2 Security Trustee (and any
Receiver of Funding 2 appointed pursuant to the Funding 2 Deed of Charge),
Granite Master Issuer plc, the Corporate Services Provider in relation to
Funding 2, the Account Bank, the Mortgages Trustee, the Funding 2 Basis Rate
Swap Provider, the Cash Manager and each New Funding 2 Secured Creditor who
accedes to the Funding 2 Deed of Charge from time to time pursuant to a Deed
of Accession (including, for the avoidance of doubt, any new Funding 2
Issuer);

"Funding 2 Secured Obligations" means any and all of the monies, obligations
and liabilities due, owing, payable or owed by it to any Funding 2 Secured
Creditor under and pursuant to the Funding 2 Transaction Documents;

"Funding 2 Security Trustee" means The Bank of New York, whose principal
office is at 48th Floor, One Canada Square, London E14 5AL, or such other
persons and all other persons for the time being acting as the security
trustee or security trustees pursuant to the Funding 2 Deed of Charge;

"Funding 2 Security" means the security granted by Funding 2 under or pursuant
to the Funding 2 Deed of Charge in favour of the Funding 2 Security Trustee
for the benefit of the Funding 2 Secured Creditors or any of them including
the security granted by Funding 2 under or pursuant to any Deed of Accession;

"Funding 2 Share Percentage" means the Current Funding 2 Share Percentage;

"Funding 2 Share" means the Current Funding 2 Share;

"Funding 2 Swap Collateral Accounts" means the Funding 2 Swap Collateral Cash
Account and the Funding 2 Swap Collateral Securities Account;

"Funding 2 Swap Collateral Ancillary Documents" means any document (including,
without limitation, any custodial agreement or bank account agreement but
excluding the Funding 2 Basis Rate Swap Agreement, the Cash Management
Agreement and the Funding 2 Deed of Charge) as may be entered into by Funding
2 from to time in connection with Swap Collateral;

"Funding 2 Swap Collateral Cash Account" means an account opened in the name
of Funding 2 for the purpose of holding Swap Collateral in Cash and maintained
in accordance with the terms of the Cash Management Agreement;

"Funding 2 Swap Collateral Ledger" means the ledger maintained by the Cash
Manager in the books of Funding 2 in accordance with Clause 4.4 (Funding 2
Ledgers) of the Cash Management Agreement;


                                      35
<PAGE>


"Funding 2 Swap Collateral Securities Account" means a securities account
opened in the name of the Funding 2 for the purpose of holding Swap Collateral
in the form of securities and maintained in accordance with the terms of the
Cash Management Agreement;

"Funding 2 Transaction Account Mandate" means the resolutions, instructions
and signature authorities relating to the Funding 2 Transaction Account
substantially in the form set out in Schedule 1 to the Funding 2 Bank Account
Agreement;

"Funding 2 Transaction Account" means the account in the name of Funding 2
(account no. 000000, reference 150857, sort code 30-00-59) held with the
Account Bank and maintained subject to the terms of the Funding 2 Bank Account
Agreement and the Funding 2 Deed of Charge or any additional or replacement
account as may for the time being be in place with the prior consent of the
Funding 2 Security Trustee;

"Funding 2 Transaction Documents" means each of the following documents:

(a)   the Mortgages Trust Deed;

(b)   the Mortgage Sale Agreement;

(c)   the Administration Agreement;

(d)   the Funding 2 Deed of Charge;

(e)   the Corporate Services Agreement;

(f)   the Bank Account Agreement

(g)   the Funding 2 Bank Account Agreement;

(h)   the Stand-by Bank Account Agreement;

(i)   the Funding 2 Guaranteed Investment Contract;

(j)   the Cash Management Agreement;

(k)   the Collection Bank Agreement;

(l)   the Global Intercompany Loan Agreement;

(m)   each Loan Tranche Supplement entered into pursuant to the Global
      Intercompany Loan Agreement;

(n)   the Controlling Beneficiary Deed;

(o)   the Seller (Mortgages Trust) Assignment Agreement;

(o)   each other Transaction Document to which Funding 2 is a party; and

(n)   each other deed, document, agreement, instrument or certificate entered
      into or to be entered into by Funding 2 (including each document under
      which Funding 2 assumes any obligations to any New Funding 2 Secured
      Creditor) under or in connection with any of the documents set out in
      paragraphs (a) through (n) above or the transactions contemplated in
      them;

"Funding Available Principal Receipts" in respect of any Payment Date will be
calculated by the Cash Manager or otherwise on behalf of Funding (or,
following enforcement of the Funding Security, the Security Trustee) on the
Distribution Date immediately preceding such Payment Date and will be an
amount equal to the sum of all Funding Principal Receipts received by Funding
from the


                                      36
<PAGE>


Mortgages Trustee and recorded on the Group 1 Principal Sub-Ledger or Group 2
Principal Sub-Ledger, as applicable, during the Interest Period ending on the
relevant Payment Date plus amounts transferred from the Funding Principal
Ledger to the Group 1 Principal Sub-ledger or the Group 2 Principal Sub-Ledger
during the Interest Period ending on the relevant Payment Date; provided that,
subject as otherwise provided in the Transaction Documents, for the purpose
only of determining the amount of Funding Available Principal Receipts which
may be allocated to any Funding Issuer (but not to any other Issuer) following
an enforcement of the Issuer Security relating to that Funding Issuer, it may
also include the aggregate of any amounts standing to the credit of the Issuer
Liquidity Reserve Ledger, if any, and the Issuer Reserve Fund Ledger of such
Funding Issuer remaining on that Payment Date after the application of such
reserve funds in accordance with the Funding Pre-Enforcement Revenue Priority
of Payments. Provided, further, that in respect of a Funding Issuer the Notes
of which include a Class or Classes of Money Market Notes having a Final
Maturity Date on such Payment Date, Funding Available Principal Receipts will
include the amount, if any, standing to the credit of the Issuer Liquidity
Reserve Ledger in respect of that Funding Issuer on the Distribution Date
immediately preceding such Payment Date required (after taking into account
Funding Available Principal Receipts otherwise available to such Funding
Issuer) to pay such Class of Money Market Notes on such Payment Date;

"Funding Available Revenue Receipts" in respect of any Payment Date will be
calculated by the Cash Manager on the Distribution Date immediately preceding
such Payment Date and will be an amount equal to the sum of:

(1)   all Mortgages Trustee Available Revenue Receipts distributed to Funding
      during the Interest Period ending on the relevant Payment Date and
      recorded on the Group 1 Revenue Sub-Ledger, the Group 2 Revenue
      Sub-Ledger and the Funding Expense Sub-Ledger;

(2)   other net income of Funding, including all amounts of interest received
      on the Funding GIC Account and the Funding Transaction Account, and/or
      all income from Authorised Investments (in each case to be received on
      or prior to the relevant Payment Date) as allocated by Funding between
      Group 1 and Group 2 in proportion to the Group 1 Share Percentage and
      the Group 2 Share Percentage and recorded on the Group 1 Revenue
      Sub-Ledger and Group 2 Revenue Sub-Ledger on each Distribution Date
      during the Interest Period ending on the relevant Payment Date; and

(3)   the amount standing to the credit of the Funding Reserve Ledger,

PROVIDED THAT for the purpose only of the payments to be made to any Funding
Issuer on the relevant Payment Date in respect of the Intercompany Loan made
by that Funding Issuer (but not for the purpose of any other payment to be
made by Funding on the relevant Payment Date including any payment in respect
of any other Intercompany Loan made by any other Issuer), Funding Available
Revenue Receipts shall also include the sum of:

(4)   the amount standing to the credit of the Issuer Reserve Fund Ledger in
      respect of such Funding Issuer (but not in respect of any other Issuer),
      subject to any limits or conditions on the purposes for which that
      reserve may be utilised as set out in the Funding Deed of Charge; and

(5)   the amount standing to the credit of the Issuer Liquidity Reserve
      Ledger, if any, in respect of such Issuer (but not in respect of any
      other Issuer), subject to any limits or conditions on the purposes for
      which that reserve may be utilised as set out in the Funding Deed of
      Charge; and


                                      37
<PAGE>


PROVIDED FURTHER THAT, as set forth in Rule (3) of the Rules for application
of Funding Available Revenue Receipts, on the Payment Date following the
repayment in full of the Intercompany Loan of any Issuer and provided that
Funding has no further liability under the relevant Intercompany Loan
Agreement, subject to any limits or conditions on the purposes for which the
related Issuer Reserve Fund or Issuer Liquidity Reserve Fund, if any, may be
utilised as set out in the Funding Deed of Charge, any remaining amounts
standing to the credit of the Issuer Reserve Fund Ledger and the Issuer
Liquidity Reserve Ledger, if any, of that Funding Issuer will constitute
additional Funding Available Revenue Receipts for the purpose of items (N)
through (Q) of the Funding Pre-Enforcement Revenue Priority of Payments and
may be utilised by Funding in paying any other liability of Funding
(including, without limitation, payment of interest and principal amounts due
to each Start-up Loan Provider under the relevant Start-up Loan Agreement and
payment of any Deferred Contribution due to the Mortgages Trustee under the
Mortgages Trust Deed), in each case, subject to and in accordance with the
relevant Funding Priority of Payments.

"Funding Bank Accounts" means the Funding GIC Account, the Funding Transaction
Account and the Funding (First Issuer) GIC Account and each other Funding
(Issuer) GIC Account established after the Initial Closing Date and each such
additional or replacement account in the name of Funding that may be opened
with the prior approval of the Security Trustee after the Initial Closing
Date;

"Funding Beneficiaries" means Funding and Funding 2, as beneficiaries of the
Mortgages Trust and "Funding Beneficiary" means either of them;

"Funding Contribution Date" means any date on which Funding makes a Further
Contribution to the Mortgages Trustee in connection with Funding's purchase of
an increased beneficial interest in the Trust Property, on which date the
Mortgages Trustee will also pay to the Seller an Initial Purchase Price or a
Special Distribution equal to the amount of such Further Contribution;

"Funding Deed of Charge" means the deed of charge entered into on or about the
Initial Closing Date between Funding, the Security Trustee, the First Issuer,
the Corporate Services Provider, the Account Bank, the Funding GIC Provider,
the Mortgages Trustee, the Start-up Loan Provider and the Cash Manager and the
Schedules thereto and including each Deed of Accession or Accession
Undertaking entered into in connection therewith as may be amended, restated,
novated, varied or supplemented from time to time;

"Funding Charged Property" means the property, assets and undertakings of
Funding which from time to time are or are expressed to be mortgaged, charged,
assigned, pledged or otherwise encumbered to, or in favour of the Security
Trustee for itself and for the Funding Secured Creditors under the Funding
Deed of Charge or any other Funding Transaction Document;

"Funding Event of Default" means, as the context requires, any of the
following:

(a)   in relation to the Notes issued by any Funding Issuer, the occurrence of
      a Note Event of Default pursuant to the Terms and Conditions of such
      Notes;

(b)   in relation to any Funding Intercompany Loan Agreement, the occurrence
      of a Funding Intercompany Loan Event of Default;

"Funding Expense Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger
on which receipts and payments of Funding Revenue Receipts allocable to the
payment of expenses will be recorded by the Cash Manager;


                                      38
<PAGE>


"Funding GIC Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding GIC Account substantially in the
form set out in Schedule 1 to the Bank Account Agreement;

"Funding GIC Account" means the account in the name of Funding (sort code
30-00-59, account number 00000000) held at Northern Rock, and maintained
subject to the Funding Guaranteed Investment Contract and the Bank Account
Agreement and such additional or replacement accounts as may for the time
being be in place with the prior consent of the Security Trustee;

"Funding GIC Provider" means:

(a)   in relation to the Funding GIC Account, Northern Rock;

(b)   in relation to any Funding (Issuer) GIC Account established prior to 26
      May 2004, Lloyds TSB Bank plc Financial Markets Division, 25 Monument
      Street, London EC3R 8BQ; and

(c)   in relation to any Funding (Issuer) GIC Account established on or after
      26 May 2004 (including, for the avoidance of doubt, the Funding (Issuer)
      GIC Account relating to Granite Mortgages 04-2 plc and Granite Mortgages
      04-3 plc), Northern Rock,

or such other person or persons as are for the time being the GIC Provider to
Funding under the Funding Guaranteed Investment Contract and any Funding
(Issuer) Guaranteed Investment Contract;

"Funding Guaranteed Investment Contract" means the guaranteed investment
contract entered into on or about the Initial Closing Date between Funding,
the Funding GIC Provider, the Cash Manager and the Security Trustee under
which the Funding GIC Provider agrees to pay Funding a guaranteed rate of
interest on the balance from time to time of the Funding GIC Account as may be
amended, restated, novated, varied or supplemented from time to time and shall
include any additional and/or replacement guaranteed investment contract
entered into by Funding in accordance with the Transaction Documents;

"Funding Intercompany Loan" means a loan of the net proceeds of any issue of
Notes by a Funding Issuer, such loan being advanced to Funding by such Funding
Issuer pursuant to the terms of a Funding Intercompany Loan Agreement;

"Funding Intercompany Loan Agreement" means an intercompany loan agreement
entered into between Funding and a Funding Issuer in relation to a Funding
Intercompany Loan;

"Funding Intercompany Loan Enforcement Notice" means an enforcement notice
served by the Security Trustee on Funding in relation to the enforcement of
the Funding Security following the occurrence of an Intercompany Loan Event of
Default;

"Funding Intercompany Loan Event of Default" means the occurrence of an event
of default as specified in Clause 14 (Default) of the Intercompany Loan Terms
and Conditions;

"Funding Intercompany Loan Ledger" means the ledger on which the Cash Manager
will record payments of interest and repayments of principal made under any
Funding Intercompany Loan;

"Funding Interest Rate Shortfall" has the meaning given in Clause
4.3(a)(iii)(A) of the Administration Agreement;

"Funding Issuer" means a wholly-owned subsidiary of Funding, which is
established to issue Notes and to make a Funding Intercompany Loan to Funding;


                                      39
<PAGE>


"Funding (Issuer) GIC Account" means, in relation to any Funding Issuer, the
account in the name of Funding held at the Account Bank and maintained subject
to the terms of the relevant Funding (Issuer) Guaranteed Investment Contract,
the relevant Funding (Issuer) Bank Account Agreement and the Funding Deed of
Charge or such additional or replacement account as may for the time being be
in place with the prior consent of the Security Trustee;

"Funding Jersey Secured Property" means, at any time, the Funding Charged
Property which is situated in Jersey at such time;

"Funding Ledgers" means the Funding Principal Ledger, the Funding Revenue
Ledger, the Funding Reserve Ledger, the Funding Principal Deficiency Ledger,
the Intercompany Loan Ledger and each Issuer Reserve Fund Ledger and each
Issuer Liquidity Reserve Ledger;

"Funding Post-Enforcement Priority of Payments" means the rules and the order
of priority in which Funding Available Revenue Receipts, Funding Available
Principal Receipts and all other monies, income, receipts and recoveries of
Funding or the Security Trustee or any Receiver of Funding and the proceeds of
enforcement of the Funding Security are to be applied following service of an
Intercompany Loan Enforcement Notice or otherwise following an enforcement of
the Funding Security as set out in Part III of Schedule 3 (Funding Priority of
Payments) to the Funding Deed of Charge, as the same may be amended, varied or
superseded from time to time in accordance with the terms of the Funding Deed
of Charge;

"Funding Pre-Enforcement Principal Priority of Payments" means the rules and
the order of priority in which Funding Available Principal Receipts will be
applied prior to the enforcement of the Funding Security as set out in Part II
of Schedule 3 (Funding Priority of Payments) to the Funding Deed of Charge, as
the same may be amended, varied or superseded from time to time in accordance
with the terms of the Funding Deed of Charge;

"Funding Pre-Enforcement Revenue Priority of Payments" means the rules and the
order of priority in which Funding Available Revenue Receipts will be applied
prior to the enforcement of the Funding Security as set out in Part I of
Schedule 3 (Funding Priority of Payments) to the Funding Deed of Charge, as
the same may be amended, varied or superseded from time to time in accordance
with the terms of the Funding Deed of Charge;

"Funding Principal Deficiency Ledger" means the ledger maintained by the Cash
Manager in the name of Funding pursuant to the Cash Management Agreement to
record the aggregate position of the Principal Deficiency Ledgers of all
Funding Issuers as to Losses on the Mortgage Loans and the application of
Funding Available Principal Receipts to fund the Issuer Liquidity Reserve
Funds of the Funding Issuers;

"Funding Principal Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record
receipts and payments of Funding Principal Receipts which ledger will be
divided into two sub-ledgers: (i) the Group 1 Principal Sub-Ledger and (ii)
the Group 2 Principal Sub-Ledger;

"Funding Principal Receipts" means the Principal Receipts received by Funding
from the Mortgages Trustee on each Distribution Date;

"Funding Priority of Payments" means, as applicable, any of the Funding
Pre-Enforcement Revenue Priority of Payments, the Funding Pre-Enforcement
Principal Priority of Payments or the Funding Post-Enforcement Priority of
Payments;


                                      40
<PAGE>


"Funding Proportion" means, on a Distribution Date, Assignment Date or
Contribution Date, an amount equal to:

                                      A
                                    -----
                                     A+B

      where:

      A   =   the Funding Share on that date; and

      B   =   the Funding 2 Share on that date;

"Funding Relevant Distribution" has the meaning given such term in Clause
4.2(B) of the Mortgages Trust Deed;

"Funding Reserve Additional Amount" means following the occurrence of a
Funding Step-Up Trigger Event, an amount equal to the sum of the Funding
Reserve Required Amount and (GBP)22,100,000;

"Funding Reserve Adjustment Date" means a Payment Date in respect of which (i)
a Funding Reserve Decrease has occurred on the immediately preceding Payment
Date and (ii) such immediately preceding Payment Date was not also a Funding
Reserve Adjustment Date; provided that a Funding Reserve Adjustment Date shall
not occur on any Payment Date for Group 1 Issuers or Payment Date for Group 2
Issuers if only Notes of Group 1 Issuers or Group 2 Issuers, respectively, are
outstanding;

"Funding Reserve Decrease" means a reduction in the amount standing to the
credit of the Funding Reserve Ledger resulting from the application of such
amount to the payment of items in accordance with the Funding Pre-Enforcement
Revenue Priority of Payments (except items (A)-(D)) or the Funding
Post-Enforcement Priority of Payments (except items (A)-(C));

"Funding Reserve Fund" means the reserve fund established in the name of
Funding on the Initial Closing Date in an amount up to the Funding Reserve
Required Amount, which prior to enforcement may be (a) allocated among Issuers
and between Groups to help meet any deficit in Funding Available Revenue
Receipts and thereby any deficit recorded on the Issuer Principal Deficiency
Ledgers and/or (b) utilised to fund initial reserves and other expenses in
connection with the issuance of Notes by New Issuers;

"Funding Reserve Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record the
amount standing to the credit of the Funding Reserve Fund from time to time;

"Funding Reserve Required Amount" means the amount from time to time which is
equal to the sum of (1) the product of 1 per cent. and the greater of (a) the
aggregate Principal Amount Outstanding of the Notes outstanding of all Issuers
on the relevant determination date and (b) the aggregate Outstanding Principal
Balance of the Intercompany Loans of all Issuers on the relevant determination
date, or such other amount as may be agreed from time to time with the Rating
Agencies. As at the Initial Closing Date, the Funding Reserve Required Amount
will be zero;

"Funding Revenue Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record all
monies received by Funding during an Interest Period other than the Funding
Principal Receipts which ledger will be sub-divided


                                      41
<PAGE>


into three sub-ledgers: (i) the Group 1 Revenue Sub-Ledger, (ii) the Group 2
Revenue Sub-Ledger and (iii) the Funding Expense Sub-Ledger;

"Funding Revenue Receipts" means the Mortgages Trustee Available Revenue
Receipts received by Funding from the Mortgages Trustee on each Distribution
Date;

"Funding Secured Creditors" means the Security Trustee (and any Receiver of
Funding appointed pursuant to the Funding Deed of Charge), the First Issuer,
the Corporate Services Provider in relation to Funding, the Account Bank, the
Funding GIC Provider, the Mortgages Trustee, the Start-up Loan Provider, the
Cash Manager and each New Funding Secured Creditor who accedes to the Funding
Deed of Charge from time to time pursuant to a Deed of Accession (including,
for the avoidance of doubt, any New Issuer);

"Funding Secured Obligations" means any and all of the monies, obligations and
liabilities which Funding covenants to pay or discharge under or pursuant to
Clause 2 (Covenant to pay and to Perform) of the Funding Deed of Charge and
all other amounts owed by it to the Funding Secured Creditors pursuant to the
Funding Transaction Documents;

"Funding Security" means the security granted by Funding under or pursuant to
the Funding Deed of Charge in favour of the Security Trustee for the benefit
of the Funding Secured Creditors or any of them including the security granted
by Funding under or pursuant to any Deed of Accession and the security granted
by Funding under or pursuant to the Second Priority Funding Deed of Charge;

"Funding Security Trustees" means the Security Trustee and the Funding 2
Security Trustee and "Funding Security Trustee" means either of them;

"Funding Share" means, prior to the first Distribution Date, the Initial
Funding Share and thereafter means the Current Funding Share;

"Funding Share/Funding 2 Share/Seller Share Ledger" means the ledger to be
maintained by the Cash Manager, on behalf of the Mortgages Trustee and the
Beneficiaries, to record the Current Funding Share, the Current Funding Share
Percentage, the Current Funding 2 Share, the Current Funding 2 Share
Percentage, the Current Seller Share and the Current Seller Share Percentage
of the Trust Property;

"Funding Share Percentage" means, prior to the first Distribution Date, the
Initial Funding Share Percentage and thereafter means the Current Funding
Share Percentage;

"Funding Transaction Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding Transaction Account
substantially in the form set out in Schedule 1 to the Bank Account Agreement;

"Funding Transaction Account" means the account in the name of Funding
(account no. 0625898, sort code 30-00-02) held with the Account Bank and
maintained subject to the terms of the Bank Account Agreement and the Funding
Deed of Charge or any additional or replacement account as may for the time
being be in place with the prior consent of the Security Trustee;

"Funding Transaction Document" means each of the following documents:

(a)   the Mortgages Trust Deed;

(b)   the Mortgage Sale Agreement;

(c)   the Administration Agreement;


                                      42
<PAGE>


(d)   the Funding Deed of Charge;

(e)   the Second Priority Funding Deed of Charge;

(f)   the Corporate Services Agreement;

(g)   the Bank Account Agreement;

(h)   the Stand-by Bank Account Agreement;

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

(j)   the Funding Guaranteed Investment Contract;

(k)   the Stand-by Funding Guaranteed Investment Contract

(l)   the Funding (Issuer) Guaranteed Investment Contract;

(m)   the Cash Management Agreement;

(n)   the Start-up Loan Agreement;

(o)   each New Start-up Loan Agreement to be entered into by Funding after the
      Initial Closing Date;

(p)   the Collection Bank Agreement;

(q)   the First Issuer Intercompany Loan Agreement;

(r)   each New Intercompany Loan Agreement to be entered into by Funding after
      the date hereof;

(s)   the Stand-by Funding (Issuer) Guaranteed Investment Contract; and

(t)   each other deed, document, agreement, instrument or certificate entered
      into or to be entered into by Funding pursuant to or in connection with
      any of the documents set out in paragraphs (a) through (r) above
      including any agreement entered into by Funding as a replacement of any
      of the above agreements upon the termination thereof;

"Funding" means Granite Finance Funding Limited, a company incorporated with
limited liability in Jersey, registered number 79308;

"Further Advance" means, in relation to a Mortgage Loan, any advance of
further money to the relevant Borrower following the making of the initial
advance of monies in respect of such Mortgage Loan (the "Initial Advance")
which is secured by the same Mortgage as the Initial Advance but does not
include the amount of any retention advanced to the relevant Borrower as part
of the Initial Advance after completion of the Mortgage and does not include
any Re-Draw or Further Draw. For the avoidance of doubt, an Unregulated
Personal Secured Loan is not a Further Advance in relation to a Mortgage Loan
(other than any other Unregulated Personal Secured Loan) which is secured by
the same Mortgage;

"Further Contribution" means the consideration in the form of cash payable to
the Mortgages Trustee by any Beneficiary to increase the Funding Share, the
Funding 2 Share or, as the case may be, the Seller Share of the Trust Property
pursuant to and in accordance with the Mortgages Trust Deed but excluding any
Initial Contribution or Deferred Contribution paid by Funding or by Funding 2
to the Mortgages Trustee;


                                      43
<PAGE>


"Further Draw" means additional amounts drawn by a Borrower in respect of a
Personal Secured Loan in aggregate up to the fixed amount of credit extended
under the terms of the related Mortgage Conditions at the inception of the
Borrower's Personal Secured Loan;

"Further Draw Capacity" means an amount equal to the difference between (1)
the maximum amount of Further Draws that Borrowers may make under Personal
Secured Loans included in the Trust Property (whether or not drawn) as at the
last day of the immediately preceding Trust Calculation Period and (2) the
aggregate Current Balance of Personal Secured Loans which form part of the
Trust Property as at the last day of the immediately preceding Trust
Calculation Period;

"Further Draw Ledger" means the ledger on which Further Draws under Personal
Secured Loans will be recorded by the Cash Manager

"Further Mortgage Loan" means any Mortgage Loan which was assigned by the
Seller to the Mortgages Trustee after March 26, 2001 under the terms of the
Mortgage Sale Agreement and referenced by its mortgage loan identifier number
and comprising the aggregate of all principal sums, interest, costs, charges,
expenses and other monies (including all further advances) due or owing with
respect to that Mortgage Loan under the relevant Mortgage Conditions by a
borrower on the security of a Mortgage from time to time outstanding or, as
the context may require, the Borrower's obligations in respect of the same;

"Further Mortgage Portfolios" means the portfolios of Further Mortgage Loans,
their Related Security, accrued interest and other amounts derived from such
Further Mortgage Loans that the Seller assigned to the Mortgages Trustee after
March 26, 2001;

"GIC Provider" means in relation to any person the provider of guaranteed
investment services to such person pursuant to a guaranteed investment
contract;

"Global Intercompany Loan Agreement" means the Funding 2 Intercompany Loan
Agreement entered into on or around the Funding 2 Programme Date between the
Issuer, Funding 2, the Funding 2 Security Trustee and the Agent Bank;

"Global Intercompany Loan" means, at any time, the aggregate of the
Outstanding Principal Balance of the Loan Tranches made by the Master Issuer
to Funding 2 under the Global Intercompany Loan Agreement;

"Global Loan Facility" means the facility in an aggregate amount equal to the
Total Credit Commitment made available to Funding 2 by the Issuer pursuant to
the Global Intercompany Loan Agreement;

"Global Note Certificates" means the note certificates representing the Notes
in global form;

"Group" means either of Group 1 or Group 2;

"Group 1" means all Group 1 Issuers;

"Group 1 Available Principal Receipts" means, in respect of a Payment Date for
Group 1 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to all Mortgages Trustee Principal Receipts received
by Funding from the Mortgages Trustee plus any amounts transferred from the
Funding Principal Ledger to the Group 1 Principal Sub-Ledger during the
Interest Period ending on the relevant Payment Date;

"Group 1 Available Revenue Receipts" means, in respect of a Payment Date for
Group 1 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to the sum of (a) the


                                      44
<PAGE>


amount of Mortgages Trustee Available Revenue Receipts distributed to Funding
during the Interest Period ending on the relevant Payment Date and recorded on
the Group 1 Revenue Sub-Ledger (b) other net income of Funding (including all
amounts of interest on the Funding GIC Account and the Funding Transaction
Account, and/or all income from Authorised Investments, in each case received
on or prior to the relevant Payment Date), as allocated by Funding to Group 1
in proportion to the Group 1 Share Percentage and recorded on the Group 1
Revenue Sub-Ledger on each Distribution Date during the related Interest
Period ending on the relevant Payment Date, and (c) the product of the amount
standing to the credit of the Funding Reserve Ledger on such Distribution Date
multiplied by the Group 1 Share Percentage, in each case as on such
Distribution Date (unless the related Payment Date for Group 1 Issuers is also
a Funding Reserve Adjustment Date, in which case the product of the amount
standing to the credit of the Funding Reserve Ledger multiplied by the Group 1
Share Percentage, in each case as on the Distribution Date immediately
preceding the immediately preceding Payment Date for Group 2 Issuers);

"Group 1 Issuer" means any Funding Issuer which applies Issuer Available
Revenue Receipts and Issuer Available Principal Receipts in accordance with
the relevant priority of payments on the Payment Date falling in July,
October, January and April of each year;

"Group 1 Principal Sub-Ledger" means a sub-ledger of the Funding Principal
Ledger on which receipts and payments of Funding Principal Receipts allocable
to Group 1 are recorded by the Cash Manager;

"Group 1 Revenue Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger
on which receipts and payments of Funding Revenue Receipts allocable to Group
1 are recorded by the Cash Manager;

"Group 1 Share Percentage" means

   Aggregate Outstanding Principal Balance of all Group 1 Intercompany Loans
   -------------------------------------------------------------------------
       Aggregate Outstanding Principal Balance of all Intercompany Loans

PROVIDED THAT on any Distribution Date with respect to which Funding has made
a Further Contribution to the Mortgages Trustee in connection with Funding's
purchase of an increased beneficial interest in the Trust Property during the
immediately preceding Trust Calculation Period, the Outstanding Principal
Balance of any Intercompany Loan entered into during such Trust Calculation
Period shall be deemed to be (only for the purposes of the numerator and
denominator of the formula above) the Outstanding Principal Balance of such
Intercompany Loan multiplied by the number of days during which such
Intercompany Loan was outstanding during such Trust Calculation Period divided
by the number of days in such Trust Calculation Period;

"Group 1 Shared Issuer Revenue Receipts" has the meaning given in the rules
for application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 1 Shared Principal Receipts" has the meaning given in the rules for
application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 2" means all Group 2 Issuers;

"Group 2 Available Principal Receipts" means, in respect of a Payment Date for
Group 2 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to all Mortgages Trustee


                                      45
<PAGE>


Principal Receipts received by Funding from the Mortgages Trustee plus any
amounts transferred from the Funding Principal Ledger to the Group 2 Principal
Sub-Ledger during the Interest Period ending on the relevant Payment Date;

"Group 2 Available Revenue Receipts" means, in respect of a Payment Date for
Group 2 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to the sum of (a) the amount of Mortgages Trustee
Available Revenue Receipts distributed to Funding Interest Period ending on
the relevant Payment Date and recorded on the Group 2 Revenue Sub-Ledger (b)
other net income of Funding (including all amounts of interest on the Funding
GIC Account and the Funding Transaction Account, and/or all income from
Authorised Investments, in each case received on or prior to the relevant
Payment Date), as allocated by Funding to Group 2 in proportion to the Group 2
Share Percentage and recorded on the Group 2 Revenue Sub-Ledger on each
Distribution Date during the related Interest Period ending on the relevant
Payment Date, and (c) the product of the amount standing to the credit of the
Funding Reserve Ledger on such Distribution Date multiplied by the Group 2
Share Percentage, in each case as on such Distribution Date (unless the
related Payment Date for Group 2 Issuers is also a Funding Reserve Adjustment
Date, in which case the product of the amount standing to the credit of the
Funding Reserve Ledger multiplied by the Group 2 Share Percentage, in each
case as on the Distribution Date immediately preceding the immediately
preceding Payment Date for Group 1 Issuers);

"Group 2 Issuer" means any Funding Issuer which applies Issuer Available
Revenue Receipts and Issuer Available Principal Receipts in accordance with
the relevant priority of payments on the Payment Date falling in March, June,
September and December of each year;

"Group 2 Principal Sub-Ledger" means a sub-ledger of the Funding Principal
Ledger on which receipts and payments of Funding Principal Receipts allocable
to Group 2 are recorded by the Cash Manager;

"Group 2 Revenue Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger
on which receipts and payments of Funding Revenue Receipts allocable to Group
2 are recorded by the Cash Manager;

"Group 2 Share Percentage" means

   Aggregate Outstanding Principal Balance of all Group 2 Intercompany Loans
   -------------------------------------------------------------------------
       Aggregate Outstanding Principal Balance of all Intercompany Loans

PROVIDED THAT on any Distribution Date with respect to which Funding has made
a Further Contribution to the Mortgages Trustee in connection with Funding's
purchase of an increased beneficial interest in the Trust Property during the
immediately preceding Trust Calculation Period, the Outstanding Principal
Balance of any Intercompany Loan entered into during such Trust Calculation
Period shall be deemed to be (only for the purposes of the numerator and
denominator of the formula above) the Outstanding Principal Balance of such
Intercompany Loan multiplied by the number of days during which such
Intercompany Loan was outstanding during such Trust Calculation Period divided
by the number of days in such Trust Calculation Period.

"Group 2 Shared Issuer Revenue Receipts" has the meaning given in the rules
for application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;


                                      46
<PAGE>


"Group 2 Shared Principal Receipts" has the meaning given in the rules for
application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Guarantee" means each guarantee in support of the obligations of a Borrower
under a Mortgage Loan;

"Heritable Creditor" means, in relation to Scottish Mortgage Loans, the holder
of a standard security over heritable or long leasehold property in Scotland;

"Holdings" means Granite Finance Holdings Limited, a private limited company
incorporated under the laws of England and Wales, registered number 4127787;

"ICTA" means the Income and Corporation Taxes Act 1988;

"in Arrears" or "in arrears" means, in respect of a Mortgage Account, that
amount equal in the aggregate to one or more Monthly Payments in respect of
such Mortgage Account are overdue and unpaid by a Borrower;

"Independent Certificates" means certificates of independent parties in
accordance with Trust Indenture Act Sections 314(c) and 314(d)(1);

"Individual Note Certificate" means the note certificates representing the
Notes in definitive form;

"Initial Closing Date" means 26 March 2001;

"Initial Contribution" means the consideration in the form of cash payable by
Funding to the Mortgages Trustee in respect of the Funding Share of the Trust
Property or by Funding 2 to the Mortgages Trustee in respect of the Funding 2
Share of the Trust Property (as applicable) pursuant to and in accordance with
the Mortgages Trust Deed, which Contribution is to fund the payment to the
Seller by the Mortgages Trustee of (and is equal to) the Initial Purchase
Price in respect of the Initial Mortgage Portfolio or (if any is payable) any
New Mortgage Portfolio sold and assigned to the Mortgages Trustee and is to be
funded from the proceeds of an Intercompany Loan;

"Initial Funding Share" means the share of Funding in the Trust Property on
the Initial Closing Date, being an amount equal to approximately
(GBP)1,500,000,000;

"Initial Funding Share Percentage" means the percentage share of Funding in
the Trust Property on the Initial Closing Date being approximately 86.61 per
cent.;

"Initial Funding 2 Share" means the share of Funding 2 in the Trust Property
on the Funding 2 Programme Date being an amount equal to (GBP)100;

"Initial Mortgage Loans" means the portfolio of residential first Mortgage
Loans and their Related Security to be sold and assigned by the Seller to the
Mortgages Trustee on the Initial Closing Date pursuant to the Mortgage Sale
Agreement;

"Initial Mortgage Portfolio" means the Initial Mortgage Loans and their
Related Security, particulars of which are set out in Appendix A to the
Mortgage Sale Agreement but excluding any such Mortgage Loan and its Related
Security which has been redeemed in full on or before the Initial Closing
Date, and (subject where applicable to the subsisting rights of redemption of
the Borrowers) all right, title, interest and benefit of the Seller in and to:

(a)   all sums of principal, interest (including, for the avoidance of doubt,
      all Accrued Interest, Arrears of Interest and Capitalised Arrears) and
      any other sum due or to become due under or


                                      47
<PAGE>


      in respect of such Mortgage Loans and their Related Security on or after
      the Initial Closing Date and including, without limitation, the right to
      demand, sue for, recover and give receipts for all such principal,
      interest or other amounts, the right to sue on all covenants and
      undertakings made or expressed to be made in favour of the Seller under
      the applicable Mortgage and all sums due or to become due in respect of
      any Early Repayment Charge;

(b)   the benefit of all securities for such principal, interest and other
      sums payable (including without limitation any interest of the Seller in
      any Life Policy), the benefit of all Deeds of Consent, MHA Documentation
      and Deeds of Postponement, any Guarantee in respect of such Mortgage
      Loan or any other collateral security for the repayment of the relevant
      Mortgage Loans secured by the Mortgages;

(c)   the right to exercise all the powers of the Seller in relation thereto
      subject to and in accordance with the relevant Mortgage Conditions;

(d)   all the estate and interest in the Mortgaged Properties in relation
      thereto vested in the Seller;

(e)   to the extent they are assignable, each Certificate of Title and
      Valuation Report and any right of action of the Seller against any
      solicitor, valuer or other person in connection with any report,
      valuation, opinion, certificate or other statement of fact or opinion
      given in connection with any Mortgage Loan and its Related Security, or
      any part thereof affecting the decision of the Seller to make or offer
      to make the relevant Mortgage Loan or part thereof;

(f)   the Buildings Policies and Insurance Contracts, in each case so far as
      they relate to such Mortgage Loans comprised in that portfolio of
      Mortgage Loans and their Related Security, including the right to
      receive the proceeds of all claims made or to be made by or on behalf of
      the Seller or to which the Seller is or may become entitled;

(g)   the MIG Policies, so far as they relate to such Mortgage Loans comprised
      in that portfolio of Mortgage Loans and their Related Security,
      including the right to receive of all claims made or to be made by or on
      behalf of the Seller or to which the Seller is or may become entitled;

"Initial Purchase Price" means that portion of the purchase price paid by the
Mortgages Trustee to the Seller on the Initial Closing Date in consideration
for the assignment to the Mortgages Trustee of the Initial Mortgage Portfolio
or that portion of the purchase price (if any) payable by the Mortgages
Trustee to the Seller on the relevant Assignment Date in consideration for the
assignment to the Mortgages Trustee of the Further Mortgage Portfolios or any
New Mortgage Portfolio, in each case in accordance with the provisions of the
Mortgage Sale Agreement;

"Initial Relevant Screen Rate" means, in respect of a Loan Tranche, the
Initial Relevant Screen Rate for such Loan Tranche specified as such in the
applicable Loan Tranche Supplement;

"Initial Seller Share Percentage" means the percentage share of the Seller in
the Trust Property on the Initial Closing Date being approximately 13.39 per
cent.;

"Initial Seller Share" means the share of the Seller in the Trust Property on
the Initial Closing Date being an amount equal to approximately
(GBP)232,000,000;

"Initial Trust Property" means the sum of (GBP)100 (one hundred pounds) held
on trust absolutely as to both capital and income by the Mortgages Trustee for
the benefit of the Seller and Funding pursuant to Clause 2.1 (Initial Trust
Property) of the Mortgages Trust Deed;

"Inland Revenue" means H.M. Revenue and Customs;


                                      48
<PAGE>


"Insolvency Act" means the Insolvency Act 1986;

"Insolvency Event" in respect of the Seller, the Administrator, the Cash
Manager or any Issuer Cash Manager (each, for the purposes of this definition,
a "Relevant Entity") means:

(a)   an order is made or an effective resolution passed for the winding-up of
      the Relevant Entity or the appointment of an administrator over the
      Relevant Entity (except, in any such case, a winding-up or dissolution
      for the purpose of a reconstruction or amalgamation the terms of which
      have been previously approved by the Funding 2 Security Trustee);

(b)   the Relevant Entity ceases or threatens to cease to carry on its
      business or stops payment or threatens to stop payment of its debts or
      is deemed unable to pay its debts within the meaning of section 123(a),
      (b), (c) or (d) of the Insolvency Act (as amended, modified or
      re-enacted) or becomes unable to pay its debts as they fall due or the
      value of its assets falls to less than the amounts of its liabilities
      (taking into account, for both these purposes, contingent and
      prospective liabilities) or otherwise becomes insolvent;

(c)   proceedings are initiated against the Relevant Entity under any
      applicable liquidation, insolvency, composition, reorganisation (other
      than a reorganisation where the Relevant Entity is solvent) or other
      similar laws (including, but not limited to, application or pending
      application for an administration order or presentation of a petition
      for a winding-up order) save where such proceedings are being contested
      in good faith; an administration order being granted or an
      administrative or other receiver, administrator, liquidator or other
      similar official is appointed in relation to the whole or any
      substantial part of the undertaking or assets of the Relevant Entity; or
      a distress, execution, diligence or other process is enforced upon the
      whole or any substantial part of the undertaking or assets of the
      Relevant Entity and in any of the foregoing cases it is not discharged
      within 30 London Business Days; or if the Relevant Entity initiates or
      consents to judicial proceedings relating to itself under any applicable
      liquidation, administration, insolvency, reorganisation or other similar
      laws or makes a conveyance or assignment for the benefit of its
      creditors generally;

"Insurance Contracts" means the insurance contracts or policies described in
Schedule 4 to the Mortgage Sale Agreement and any other additional, substitute
or replacement insurance contract or policy arranged by the Seller from time
to time relating to the Mortgage Loans in the Mortgages Trust;

"Insurance Policies" means:

(a)   the MIG Policies;

(b)   the Properties in Possession Policy;

(c)   the Contingency Insurance Policy; and

(d)   the Buildings Policies;

"Intercompany Loan Agreements" means the Funding Intercompany Loan Agreements
and the Funding 2 Intercompany Loan Agreements and "Intercompany Loan
Agreement" means, as applicable, a Funding Intercompany Loan Agreement or a
Funding 2 Intercompany Loan Agreement;

"Intercompany Loan Confirmation" means a document substantially in the form
set out in Schedule 2 (Form of Intercompany Loan Confirmation) to the
Intercompany Loan Terms and Conditions


                                      49
<PAGE>


confirming the principal terms of each Intercompany Loan Agreement between
Funding, any Funding Issuer, the Security Trustee and the Agent Bank;

"Intercompany Loan Enforcement Notice" means, as applicable:

(a)   in respect of Funding, a Funding Intercompany Loan Enforcement Notice;
      and/or

(b)   in respect of Funding 2, a Funding 2 Intercompany Loan Enforcement
      Notice;

"Intercompany Loan Event of Default" means, as applicable:

(a)   in respect of Funding, a Funding Intercompany Loan Event of Default;
      and/or

(b)   in respect of Funding 2, a Funding 2 Intercompany Loan Event of Default;

"Intercompany Loan Ledger" means:

(a)   in respect of Funding, the Funding Intercompany Loan Ledger;

(b)   in respect of Funding 2, the Funding 2 Intercompany Loan Ledger;

"Intercompany Loan Terms and Conditions" means the general terms and
conditions applicable to each Funding Intercompany Loan Agreement, which have
been signed for the purposes of identification by the Security Trustee, the
Agent Bank and Funding on the Initial Closing Date, as amended, restated,
novated, varied or supplemented from time to time and shall include any
additional and/or replacement intercompany loan terms and conditions entered
into from time to time in accordance with the Transaction Documents;

"Intercompany Loans" means the Funding Intercompany Loans and the Funding 2
Global Intercompany Loan and "Intercompany Loan" means, as applicable, a
Funding Intercompany Loan or a Funding 2 Intercompany Loan;

"Interest Commencement Date" means, in respect of any Series and Class of
Notes, the closing date of such notes or such other date as may be specified
as such in the applicable Prospectus Supplement;

"Interest Determination Date" means in respect of any Series and Class of
Notes, the date(s) specified as such (if any) in the applicable Note
Supplement;

"Interest Period" or "Fixed Interest Period" means:

(a)   in respect of any Series and Class of Notes, (i) with respect to the
      first Note Payment Date for such Notes, the period from (and including)
      the applicable Interest Commencement Date to (but excluding) such first
      Note Payment Date, and (ii) thereafter, with respect to each Note
      Payment Date for such Notes, the period from and including the preceding
      Note Payment Date to but excluding such current Note Payment Date; and

(b)   in respect of any Loan Tranche, (i) with respect to the first Loan
      Payment Date for such Loan Tranche, the period from (and including) the
      applicable Interest Commencement Date to (but excluding) such first Loan
      Payment Date, and (ii) thereafter, with respect to each Loan Payment
      Date for such Loan Tranche, the period from (and including) the
      preceding Loan Payment Date to (but excluding) such current Loan Payment
      Date;

"Interest Rate Shortfalls" means the Funding Interest Rate Shortfall and the
Funding 2 Interest Rate Shortfall and "Interest Rate Shortfall" means, as
applicable, the Funding Interest Rate Shortfall and/or the Funding 2 Interest
Rate Shortfall;


                                      50
<PAGE>


"Interim Calculation Period" means the portion of a Trust Calculation Period
that is less than a full Trust Calculation Period during which any single
calculation of the Funding Share, Funding Share Percentage, Seller Share,
Funding 2 Share, Funding 2 Share Percentage and Seller Share Percentage
applies;

"Irrecoverable VAT" means any amount in respect of VAT incurred by a party to
the Transaction Documents (for the purposes of this definition, a "Relevant
Party") as part of a payment in respect of which it is entitled to be
indemnified under the relevant Transaction Documents to the extent that the
Relevant Party does not or will not receive and retain a credit or repayment
of such VAT as input tax (as that expression is defined in section 24(1) of
the Value Added Tax Act 1994) for the prescribed accounting period (as that
expression is used in section 25(1) of the Value Added Tax Act 1994) to which
such input tax relates;

"Issuer Account Bank" means, in relation to: (a) any Funding Issuer, the bank
at which the Issuer Bank Accounts of such Funding Issuer are maintained from
time to time pursuant to the relevant Issuer Transaction Documents; and (b)
any Funding 2 Issuer, the bank at which the Issuer Bank Accounts of such
Funding 2 Issuer are maintained from time to time pursuant to the relevant
Issuer Transaction Documents;

"Issuer Account Mandates" means, in relation to any Issuer, the resolutions,
instructions, and Authorised Signatories relating to the applicable Issuer
Bank Accounts substantially in the form scheduled to the relevant Issuer Bank
Account Agreement;

"Issuer Allocable Principal Receipts" has the meaning given to it in the rules
for application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Principal Priority of Payments set out in Part II of Schedule
3 to the Funding Deed of Charge;

"Issuer Allocable Revenue Receipts" has the meaning given to it in the rules
for application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Revenue Priority of Payments set out in Part I of Schedule 3
to the Funding Deed of Charge;

"Issuer Arrears Test":

(a)   in relation to a Funding Issuer, is satisfied on a Payment Date if any
      Issuer Cash Manager or the Cash Manager calculates on the Distribution
      Date immediately preceding such Payment Date that as of the last day of
      the Trust Calculation Period immediately preceding that Payment Date (i)
      the aggregate current balance of the Mortgage Loans which are then in
      arrears for at least 3 months is less than 4% of the aggregate Current
      Balance of all Mortgage Loans, unless the Rating Agencies have confirmed
      that the then-current ratings of the Notes will not be adversely
      affected by such test not having been met; and (ii) the aggregate
      Interest Arrears in respect of all of the Mortgage Loans in the Mortgage
      Portfolio as a percentage of the aggregate gross interest due on all
      Mortgage Loans during the previous 12 months, does not exceed 2%, or
      such other percentage as is then acceptable to the then-current Rating
      Agencies at such time; or

(b)   in relation to the Master Issuer, is satisfied on a Loan Payment Date if
      the Master Issuer or the applicable Issuer Cash Manager on its behalf
      calculates on the Distribution Date immediately preceding that Payment
      Date that, as of the last day of the Trust Calculation Period
      immediately preceding that Distribution Date (i) the aggregate current
      balance of the Mortgage Loans which are then in arrears for at least 3
      months is less than 4% of the


                                      51
<PAGE>


      aggregate current balance of all Mortgage Loans, unless the Rating
      Agencies have confirmed that the then current ratings of the Notes will
      not be reduced, withdrawn or qualified if the Issuer Arrears Test is not
      met at that time; and (ii) the aggregate interest arrears in respect of
      all the Mortgage Loans in the Mortgage Portfolio as a percentage of the
      aggregate gross interest due on such Mortgage Loans during the previous
      12 months does not exceed 2%, or such other percentage as is then
      acceptable to the Rating Agencies at such time.

"Issuer Available Principal Receipts" means, in relation to: (a) the First
Issuer, the Second Issuer and the Third Issuer, the First Issuer Available
Principal Receipts, the Second Issuer Available Principal Receipts, and the
Third Issuer Available Principal Receipts respectively; (b) any other Funding
Issuer, the Current Issuer Available Principal Receipts; and (c) any Funding 2
Issuer, the Issuer Available Principal
Receipts;

"Issuer Available Revenue Receipts" means, in relation to: (a) the First
Issuer, the Second Issuer and the Third Issuer, the First Issuer Available
Revenue Receipts, the Second Issuer Available Revenue Receipts, and the Third
Issuer Available Revenue Receipts respectively; (b) any other Funding Issuer,
the Current Issuer Available Revenue Receipts; and (c) any Funding 2 Issuer,
the Issuer Available Revenue Receipts as defined in the Issuer Master
Definitions Schedule;

"Issuer Bank Account Agreement" means, in relation to: (a) the First Issuer,
the Second Issuer and the Third Issuer, the First Issuer Bank Account
Agreement, the Second Issuer Bank Account Agreement and the Third Issuer Bank
Account Agreement respectively; (b) any other Funding Issuer, the Current
Issuer Bank Account Agreement relating to such Funding Issuer; and (c) any
Funding 2 Issuer, the Issuer Bank Account Agreement as defined in the Issuer
Master Definitions Schedule;

"Issuer Bank Accounts" means in relation to: (a) the First Issuer, the Second
Issuer and the Third Issuer, the First Issuer Bank Accounts, the Second Issuer
Bank Accounts and the Third Issuer Bank Accounts respectively; (b) any other
Funding Issuer, the Current Issuer Bank Accounts; and (c) any Funding 2
Issuer, the Issuer Bank Accounts as defined in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;

"Issuer Cash Management Agreement" means, in relation to: (a) the First
Issuer, the Second Issuer and the Third Issuer, the First Issuer Cash
Management Agreement, the Second Issuer Cash Management Agreement and the
Third Issuer Cash Management Agreement respectively; (b) any other Funding
Issuer, the Current Issuer Cash Management Agreement; and (c) any Funding 2
Issuer, the Issuer Cash Management Agreement as defined in the Issuer Master
Definitions Schedule relating to such Funding 2 Issuer;

"Issuer Cash Manager" means, in relation to: (a) the First Issuer, the First
Issuer Cash Manager; (b) any other Funding Issuer, the person identified as
managing all cash transactions and maintaining certain ledgers on behalf of
such Funding Issuer pursuant to the relevant Issuer Cash Management Agreement
or such other person as may from time to time be appointed as cash manager for
such Funding Issuer pursuant to the relevant Issuer Cash Management Agreement;
and (c) any Funding 2 Issuer, the Issuer Cash Manager as defined in the Issuer
Master Definitions Schedule relating to such Funding 2 Issuer;

"Issuer Deed of Charge" means:

                                      52
<PAGE>

(a)   in respect of the Funding Issuer, in relation to the First Issuer, the
      First Issuer Deed of Charge and in relation to any other Funding Issuer,
      the deed of charge entered into such Issuer with the Note Trustee;

(b)   in respect of any Funding 2 Issuer, the deed of charge entered into such
      Funding 2 Issuer with the Issuer Security Trustee;

"Issuer Enforcement Notice" means, in relation to a Funding 2 Issuer, a notice
issued by the applicable Note Trustee to such Funding 2 Issuer, the applicable
Issuer Security Trustee and the Funding 2 Security Trustee declaring all Notes
issued by such Funding 2 Issuer to be due and payable pursuant to the terms
and conditions of such Notes;

"Issuer Liquidity Reserve Fund" means, in relation to: (a) the First Issuer
and the Second Issuer, the First Issuer Liquidity Reserve Fund and the Second
Issuer Liquidity Reserve Fund, respectively; (b) any other Funding Issuer, the
Current Issuer Liquidity Reserve Fund; which in each case Funding will be
required to establish pursuant to and in the circumstances set out in the
Intercompany Loan of such Funding Issuer;

"Issuer Liquidity Reserve Ledger" means, in relation to: (a) the First Issuer
and the Second Issuer, the First Issuer Liquidity Reserve Ledger and the
Second Issuer Liquidity Reserve Ledger, respectively; any other Funding
Issuer, the Current Issuer Liquidity Reserve Ledger; in each case maintained
by the Cash Manager in the name of Funding to record the balance from time to
time of the Issuer Liquidity Reserve Fund, if any;

"Issuer Liquidity Reserve Required Amount" means, in relation to: (a) the
First Issuer, the First Issuer Liquidity Reserve Required Amount; (b) the
Second Issuer, the Second Issuer Liquidity Reserve Required Amount; (c) any
other Funding Issuer, the Current Issuer Liquidity Reserve Required Amount; in
each case required to be maintained in the Issuer Liquidity Reserve Fund, if
any;

"Issuer Master Definitions Schedule" means, in relation to: (a) the First
Issuer, the First Issuer Master Definitions Schedule; (b) any other Funding
Issuer, the relevant master definitions schedule relating to such Funding
Issuer; and (c) any Funding 2 Issuer, the relevant master definitions schedule
relating to such Funding 2 Issuer;

"Issuer Notes" means, in respect of the Master Issuer, the Notes issued by the
Master Issuer;

"Issuer Post-Enforcement Priority of Payments" means, in relation to: (a) the
First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Post-Enforcement Priority of Payments, the Second Issuer Post-Enforcement
Priority of Payments and the Third Issuer Post-Enforcement Priority of
Payments, respectively; (b) any other Funding Issuer, the Current Issuer
Post-Enforcement Priority of Payments; and (c) any Funding 2 Issuer, the
Issuer Post-Enforcement Priority of Payments;

"Issuer Pre-Enforcement Principal Priority of Payments" means, in relation to:
(a) the First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Principal Priority of Payments, the Second Issuer
Pre-Enforcement Principal Priority of Payments and the Third Issuer
Pre-Enforcement Principal Priority of Payments, respectively; (b) any other
Funding Issuer, the Current Issuer Pre-Enforcement Principal Priority of
Payments; and (c) any Funding 2 Issuer, the Issuer Pre-Enforcement Principal
Priority of Payments;

"Issuer Pre-Enforcement Priority of Payments" means, in relation to: (a) the
First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Priority of Payments, the Second Issuer Pre-Enforcement
Priority of Payments and the Third Issuer Pre-Enforcement Priority of


                                      53
<PAGE>


Payments, respectively; (b) any other Funding Issuer, the Current Issuer
Pre-Enforcement Priority of Payments; and (c) any Funding 2 Issuer, the Issuer
Pre-Enforcement Priority of Payments;

"Issuer Pre-Enforcement Revenue Priority of Payments" means:

(a)   in respect of the Funding Issuers, in relation to the First Issuer, the
      Second Issuer and the Third Issuer, the First Issuer Pre-Enforcement
      Revenue Priority of Payments, the Second Issuer Pre-Enforcement Revenue
      Priority of Payments and the Third Issuer Pre-Enforcement Revenue
      Priority of Payments respectively, and in relation to any New Issuer,
      the Current Issuer Pre-Enforcement Revenue Priority of Payments as
      defined in the Issuer Master Definitions Schedule relating to that New
      Issuer;

(b)   in respect of any Funding 2 Issuers, the Issuer Pre-Enforcement Revenue
      Priority of Payments as defined in the Issuer Master Definitions
      Schedule relating to that Funding 2 Issuer;

"Issuer Principal Deficiency Ledger" means, in relation to the First Issuer,
the First Issuer Principal Deficiency Ledger and in relation to any other
Issuer, the ledger maintained by the Issuer Cash Manager in the name of such
Issuer which will be established on the relevant Closing Date (for any Funding
Issuer) and will be sub-divided into sub ledgers corresponding to the classes
of Notes issued by such Issuer in order to record Losses allocated to the
Intercompany Loan (in respect of any Funding Issuer) of such Issuer which are
to be allocated to such Notes, the application of Issuer Available Principal
Receipts of such Issuer in paying interest on the Notes issued by such Issuer
and certain amounts ranking in priority thereto in accordance with the Issuer
Pre-Enforcement Revenue Priority of Payments of such Issuer and the
application by Funding of Issuer Allocable Principal Receipts of the such
Issuer to fund or replenish the Issuer Liquidity Reserve Fund (if any) of such
Issuer;

"Issuer Reserve Fund Ledger" means, in relation to: (a) the First Issuer and
the Second Issuer, the First Issuer Reserve Fund Ledger and the Second Issuer
Reserve Fund Ledger, respectively; (b) any other Funding Issuer, the Current
Issuer Reserve Fund Ledger as defined in the Issuer Master Definitions
Schedule relating to such Funding Issuer; and (c) any Funding 2 Issuer, the
Issuer Reserve Fund Ledger as defined in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer, in each case maintained by the
Cash Manager in the name of Funding or Funding 2 (as applicable) to record the
amount credited to the Issuer Reserve Fund held by Funding or Funding 2 (as
applicable) in respect of such Issuer on the relevant Closing Date, and
subsequent withdrawals and deposits in respect of the Issuer Reserve Fund;

"Issuer Reserve Fund" means:

(a)   with respect to the Funding Issuers, in relation to the First Issuer,
      the First Issuer Reserve Fund, in relation to the Second Issuer, the
      Second Issuer Reserve Fund and in relation to any other Funding Issuer,
      the Current Issuer Reserve Fund as defined in the Issuer Master
      Definitions Schedule relating to that Funding Issuer, in each case
      established in the name of Funding in respect of such Funding Issuer as
      required under the terms of the relevant Intercompany Loan of such
      Funding Issuer on the relevant Closing Date in an amount equal to the
      Issuer Reserve Required Amount; and

(b)   with respect to the Funding 2 Issuers, the Issuer Reserve Fund as
      defined in the Issuer Master Definitions Schedule relating to that
      Funding 2 Issuer, in each case established on the relevant


                                      54
<PAGE>


      Closing Date in an amount equal to the Issuer Reserve Required Amount as
      defined in the Issuer Master Definitions Schedule relating to that
      Funding 2 Issuer;

"Issuer Reserve Minimum Amount" means, in relation to any Funding 2 Issuer, on
any date and subject to amendment as described in Schedule 4 to the Issuer
Deed of Charge, the amount calculated as the product of (a) one per cent. and
(b) the aggregate Principal Amount Outstanding of the Notes (including the
Principal Amount Outstanding of Notes issued by such Funding 2 Issuer on such
date;

"Issuer Reserve Required Amount" means, in relation to: (a) the First Issuer,
the First Issuer Reserve Required Amount (as defined in the Issuer Master
Definitions Schedule relating to the First Issuer); (b) the Second Issuer, the
Second Issuer Reserve Required Amount (as defined in the Issuer Master
Definitions Schedule relating to the Second Issuer); (c) any other Funding
Issuer, the Current Issuer Reserve Required Amount; and (d) any Funding 2
Issuer, the Issuer Reserve Required Amount as defined in the Issuer Master
Definitions Schedule relating to such Funding Issuer, in each case required to
be maintained in the Issuer Reserve Fund of such Issuer;

"Issuer Reserve Requirement" means:

(a)   in relation to Funding and the Funding Issuers, a requirement that will
      be satisfied in respect of any Funding Issuer if, after taking account
      of the application of any Funding Available Revenue Receipts to the
      credit of the Issuer Reserve Fund Ledgers, the amount of funds in the
      Issuer Reserve Fund of such Issuer is equal to the relevant Issuer
      Reserve Required Amount;

(b)   in relation to Funding 2 and the Funding 2 Issuers, a requirement that
      will be satisfied on a Monthly Payment Date if, after taking account of
      the payment of any Funding 2 Available Revenue Receipts to the credit of
      the Funding 2 Reserve Ledger and any payment of Issuer Available Revenue
      Receipts to the Issuer Reserve Ledger, the amount of funds in the
      Funding 2 Reserve Fund and the Issuer Reserve Fund is equal to the
      Programme Reserve Required Amount;

"Issuer Secured Creditors" means:

(a)   in respect of the Funding Issuers, in relation to the First Issuer, the
      Second Issuer and the Third Issuer, the First Issuer Secured Creditors,
      the Second Issuer Secured Creditors and the Third Issuer Secured
      Creditors respectively and in relation to any New Issuer, the Current
      Issuer Secured Creditors as defined in the Issuer Master Definitions
      Schedule relating to that New Issuer;

(b)   in respect of any Funding 2 Issuer, the Issuer Secured Creditors as
      defined in the Issuer Master Definitions Schedule relating to that
      Funding 2 Issuer;

"Issuer Security" means in relation any Issuer, the security created by such
Issuer pursuant to the relevant Issuer Deed of Charge for the benefit of the
relevant Issuer Secured Creditors;

"Issuer Security Trustee" means the Bank of New York , whose principal office
is at 48th Floor, One Canada Square, London E14 5AL, or such other persons and
all other persons for the time being acting as the security trustee or
security trustees pursuant to the Issuer Deed of Charge

"Issuer Start-up Loan Agreement" means:

(a)   in relation to any Funding Issuer, the agreement entered into on or
      about the Closing Date in relation to that Issuer between Funding, the
      relevant Start-up Loan Provider and the Security Trustee relating to the
      provision of the Issuer Start-up Loan to Funding and shall include any


                                      55
<PAGE>


      additional and/or replacement start-up loan agreement entered into by
      such parties in accordance with the Transaction Documents;

(b)   in relation to any Funding 2 Issuer, the agreement(s) entered into on or
      after the Funding 2 Programme Date between that Issuer, the relevant
      Start-up Loan Provider and the Funding 2 Security Trustee relating to
      the provision of the Issuer Start-up Loans to that Issuer and shall
      include any additional and/or replacement start-up loan agreement
      entered into by such parties in accordance with the Transaction
      Documents;

"Issuer Start-Up Loan Provider" means Northern Rock, in its capacity as
provider of an Issuer Start-Up Loan and/or such other person or persons for
the time being the lender under the relevant Issuer Start-Up Loan Agreement;

"Issuer Swap Agreements", in respect of any Funding 2 Issuer, means the ISDA
Master Agreements, Schedules thereto and Confirmations thereunder relating to
the Issuer Swaps to be entered into on or about each Closing Date, and any
Credit Support Annexes or other credit support documents entered into at any
time, as amended from time to time, among the Issuer, the applicable Issuer
Swap Provider and the applicable Issuer Security Trustee and/or any credit
support provider and includes any additional and/or replacement Issuer Swap
Agreement entered into by the Issuer from time to time in connection with the
Notes;

"Issuer Swap Excluded Termination Amount" means, in relation to an Issuer Swap
Agreement, following the application of all or any part of any Swap
Replacement Premium in accordance with the applicable Issuer Deed of Charge
and the applicable Issuer Cash Management Agreement, an amount equal to any
termination payment due and payable to the relevant Issuer Swap Provider as a
result of a Swap Provider Default in relation to that Issuer Swap Provider;

"Issuer Swap Provider" means, in respect of any Funding 2 Issuer, the
institutions identified in respect of each Issuer Swap in the Note Supplement
and the Issuer Swap Agreement related to the relevant Series and Class of
Notes;

"Issuer Swaps" means the currency and interest rate swaps entered into between
a Funding 2 Issuer and an Issuer Swap Provider which enable such Funding 2
Issuer to receive and pay amounts under the relevant Funding 2 Intercompany
Loan Agreement in sterling and to receive and pay amounts under the Notes
issued by such Issuer not denominated in sterling in the applicable Specified
Currency and/or which will hedge such Funding 2 Issuer's payment obligations
against movement in interest rates where there is a possible difference
between an interest rate applicable to amounts received by such Issuer under a
Loan Tranche and the interest rate applicable to amounts to be paid by the
Issuer in respect of the related Series and Class of Notes;

"Issuer Transaction Accounts" means, in relation to the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Transaction Accounts, the
Second Issuer Transaction Accounts and the Third Issuer Transaction Accounts
and in relation to any other Issuer, the Current Issuer Transaction Accounts
or Issuer Transaction Accounts as defined in the Issuer Master Definitions
Schedule relating to that Issuer;

"Issuer Transaction Documents" means, in relation to: (a) the First Issuer,
the Second Issuer and the Third Issuer, the First Issuer Transaction
Documents, the Second Issuer Transaction Documents and the Third Issuer
Transaction Documents, respectively; (b) any other Funding Issuer, the Current
Issuer Transaction Documents as defined in the Issuer Master Definitions
Schedule relating to such Funding


                                      56
<PAGE>


Issuer; and (c) any Funding 2 Issuer, the Issuer Transaction Documents as
defined in the Issuer Master Definitions Schedule relating to such Funding 2
Issuer;

"Issuer Trust Deed", in relation to any Issuer, means the trust deed entered
into between the Issuer and the Note Trustee which constitutes the Notes
issued and to be issued by such Issuer;

"Issuer" means, as applicable, a Funding Issuer or a Funding 2 Issuer;

"Jersey Account Bank" means Lloyds TSB Bank plc, Jersey International Branch,
4 Bond Street, St Helier, Jersey JE4 8ZE, Channel Islands;

"Lead Manager" means, in relation to any Series of Notes, the person named as
the Lead Manager in the applicable Subscription Agreement or, when only one
Dealer signs such Subscription Agreement, such Dealer;

"Lending Criteria" means the lending criteria of the Seller in respect of
Mortgage Loans other than Personal Secured Loans which may be amended from
time to time (forming part of the Seller's Policy) which as at 1 January 2004
is set out in Schedule 12 (Lending Criteria) to the Mortgage Sale Agreement
and/or such other criteria as would be acceptable to a reasonable, prudent
mortgage lender. Lending Criteria for Personal Secured Loans are generally
similar though not as extensive as the Lending Criteria applicable to other
Mortgage Loans;

"Liabilities" means all liabilities, losses, damages, costs, expenses,
actions, proceedings, claims and demands (including, without limitation, legal
fees and any applicable value added tax or similar tax;

"LIBOR" means, in relation to Funding and the Funding Issuers, unless stated
otherwise, the London inter-bank offered rate for deposits in the relevant
currency, as determined by the relevant Agent Bank in respect of the related
Notes as specified in the Conditions or otherwise on the following basis:

(a)   on the applicable Interest Determination Date the Agent Bank will
      determine the offered quotation to leading banks for deposits in the
      relevant currency for a period equal to the relevant period, to be
      determined by reference to the display as quoted on the
      Dow-Jones/Telerate Page No. 3750. If the Telerate Page No. 3750 stops
      providing these quotations, the replacement page for the purposes of
      displaying this information will be used. If the replacement page stops
      displaying the information, another service as determined by the
      relevant Issuer with the approval of the Note Trustee will be used. In
      each of these cases, such determination will be made as at or about
      11.00 a.m. (London time) on such date;

(b)   if, on any such Interest Determination Date, the screen rate is
      unavailable, the Agent Bank will:

      (i)   request the principal London office of each of the Reference Banks
            to provide the Agent Bank with its offered quotation to leading
            banks for deposits in the relevant currency of the equivalent
            amount, and for a time equal to the relevant period, in the London
            inter-bank market as at or about 11.00 a.m. (London time) on such
            date; and

      (ii)  calculate the arithmetic mean, rounded upwards to five decimal
            places, of those quotations;

(c)   if on any such Interest Determination Date, the screen rate is
      unavailable and only two or three of the Reference Banks provide offered
      quotations, the relevant rate for the relevant period will be the
      arithmetic mean of the quotations as calculated in (b); and


                                      57
<PAGE>


(d)   if fewer than two Reference Banks provide quotations, the Agent Bank
      will consult with the Note Trustee and the relevant Issuer for the
      purpose of agreeing a total of two banks to provide such quotations and
      the relevant rate for the relevant period will be the arithmetic mean of
      the quotations as calculated in (b). If no such banks agree then the
      relevant rate for the relevant period will be the rate in effect for the
      last preceding such period for which (a) or (b) was applicable; and

in relation to Funding 2 and the Funding 2 Issuers, the London Interbank
Offered Rate for deposits in the relevant currency;

"Life Policy" means each life insurance and/or assurance policy which serves
as collateral security for the repayment of a Mortgage Loan;

"Lloyds TSB Collection Account" means the account in the name of Northern Rock
as Administrator (sort code 30/00/02, account number 0893639) held with Lloyds
TSB Bank plc and maintained subject to the terms of the Collection Bank
Agreement or such additional or replacement account as may for the time being
be in place;

"Lloyds TSB" means Lloyds TSB Bank plc;

"Loan Payment Date" means, in respect of a Loan Tranche, the Monthly Payment
Date(s) specified in the Loan Tranche Supplement for the payment of interest
and/or principal, subject to the terms of the Global Intercompany Loan
Agreement;

"Loan Tranches" means the AAA Loan Tranches, the AA Loan Tranches, the A Loan
Tranches, the BBB Loan Tranches and the BB Loan Tranches, being the advances
made by the Master Issuer to Funding 2 pursuant to the Global Intercompany
Loan Agreement, each being funded from proceeds received by the Master Issuer
from the issue of a Series and Class of Notes;

"Loan Repurchase Notice" means the notice served upon the Seller by the
Mortgages Trustee or upon the Mortgages Trustee by the Seller requiring the
repurchase by or re-transfer to (pursuant to Clause 8.4 (Repurchase) of the
Mortgage Sale Agreement) or purchase by or transfer to (pursuant to Clause 8.5
(Purchase of Product Switches, Further Advances and purchases relating to
Personal Secured Loans) of the Mortgage Sale Agreement) the Seller of
specified Mortgage Loans and their Related Security, as set forth in Schedule
7 to the Mortgage Sale Agreement;

"Loan Tranche Interest Amount" in respect of a Loan Tranche, has the meaning
given to it in Clause 7.3 (Determination of Loan Tranche Interest Amount) of
the Global Intercompany Loan Agreement;

"Loan Tranche Interest Commencement Date" means, in respect of a Loan Tranche,
the Closing Date for such Loan Tranche specified as such in the applicable
Loan Tranche Supplement;

"Loan Tranche Interest Determination Date" means, in respect of a Loan
Tranche, for any Loan Tranche Interest Period for which the applicable Loan
Tranche Rate of Interest will apply, the first day of such Loan Tranche
Interest Period;

"Loan Tranche Interest Period" means, in relation to a Loan Tranche and any
Loan Payment Date, the period from (and including) the immediately preceding
Loan Payment Date for such Loan Tranche (or, in respect of the first Loan
Tranche Interest Period, the Loan Tranche Interest Commencement Date) to (but
excluding) the next following (or first) Loan Payment Date for such Loan
Tranche;


                                      58
<PAGE>


"Loan Tranche Interest Reset Date" means, in respect of a Loan Tranche, the
dates specified for such Loan Tranche in the applicable Loan Tranche
Supplement;

"Loan Tranche Notice" means a document substantially in the form set out in
Schedule 1 (Form of Loan Tranche Notice) to the Global Intercompany Loan
Agreement setting out, amongst other things, the principal amount of each Loan
Tranche available for drawing on the next Closing Date;

"Loan Tranche Rate of Interest" in respect of a Loan Tranche, has the meaning
given to it in Clause 7.3 (Determination of Loan Tranche Interest Amount) of
the Global Intercompany Loan Agreement;

"Loan Tranche Rating" means the designated rating assigned to a Loan Tranche
which corresponds to the rating of the series and class of notes when first
issued to provide funds for that loan tranche so that, for example, any AAA
loan tranche has a loan tranche rating of "AAA" to reflect the ratings of
AAA/Aaa/AAA then assigned to the corresponding series and class of notes;

"Loan Tranche Supplement" means, in relation to any Loan Tranche, means the
document between, amongst others, Funding 2 and applicable Funding 2 Issuer
substantially in the form set out in Schedule 2 (Form of Loan Tranche
Supplement) to the Funding 2 Intercompany Loan Agreement entered into between
Funding 2 and such Funding 2 Issuer recording the principal terms of such Loan
Tranche;

"Loan Tranches" means the AAA loan tranches, the AA loan tranches, the A loan
tranches, the BBB loan tranches and the BB loan tranches, being the advances
made by a Funding 2 Issuer to Funding 2, pursuant to the Funding 2
Intercompany Loan Agreement between such Issuer and Funding 2, each being
funded from proceeds received by such Funding 2 Issuer from the issue of a
Series and Class of Notes;

"London Business Day" means a day (other than a Saturday or Sunday or public
holiday) on which banks are generally open for business in London;

"London Stock Exchange" means at any time the London Stock Exchange plc or any
other Person which at that time administers and manages the relevant primary
market in the United Kingdom upon which the Notes are formally admitted for
public trading;

"Losses Ledger" means the ledger of such name created and maintained by the
Cash Manager in the name of the Mortgages Trustee pursuant to the Cash
Management Agreement to record the Losses on the Mortgage Portfolio;

"Losses" means the realised losses experienced on the Mortgage Loans which are
in the Mortgages Portfolio;

"LTV ratio" or "loan-to-value ratio" means , in respect of any Mortgage Loan
assigned to the Mortgages Trustee, the ratio of the outstanding balance of
such Mortgage Loan to the value of the Mortgaged Property securing such
Mortgage Loan; and in respect of the Seller's decision as to whether to make a
mortgage loan to a prospective borrower and for purposes of determining
whether a MIG Policy is necessary in connection with a mortgage loan, the
ratio of the outstanding balance of such mortgage loan to the lower of the
purchase price or valuation of the mortgages property securing such mortgage
loan as determined by the relevant valuation by the Seller;

"LTV tests" mean two tests which assign a credit enhancement value (i) to each
Mortgage Loan in the Mortgage Portfolio based on its current LTV ratio and the
amount of mortgage indemnity cover on that Mortgage Loan, and (ii) calculated
to include any related unsecured portion of a Mortgage


                                      59
<PAGE>


Loan in respect of the Together product based on its current LTV ratio and the
amount of mortgage indemnity cover on that mortgage loan. The weighted average
credit enhancement value of the Mortgage Portfolio is then determined;

"Mandates" means the resolutions, instructions and signature authorities
relating to any of the Barclays Collection Account, the Lloyds TSB Collection
Account, the Mortgages Trustee Bank Accounts, the Funding Bank Accounts, the
Funding 2 Bank Accounts and the Issuer Transaction Accounts in the respective
forms agreed between the relevant parties from time to time in accordance with
the Collection Bank Agreement, the Bank Account Agreement, the Funding 2 Bank
Account Agreement, the relevant Funding (Issuer) Bank Account Agreement and
the relevant Issuer Bank Account Agreement, as applicable;

"Market" means the London Stock Exchange's Gilt Edged and Fixed Interest
Market or such other market of the London Stock Exchange as shall be
designated as a "regulated market" within the meaning of Directive 93/22/EC;

"Master Definitions Schedule" means this Master Definitions Schedule signed
for the purposes of identification by Brown & Wood and Clifford Chance Limited
Liability Partnership on or about the Initial Closing Date, as the same may be
amended, varied or supplemented from time to time, which is a schedule of the
definitions used in the Transaction Documents;

"Master Issuer" means Granite Master Issuer plc;

"MHA Documentation" means an affidavit, consent or renunciation granted in
terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 in
connection with a Scottish Mortgage or the Mortgaged Property secured thereby;

"MIG Policies" means the MIG insurance policy identified in paragraph 1 of
Schedule 4 (Insurance Contracts) to the Mortgage Sale Agreement and any
endorsements or extensions thereto as issued from time to time and any
additional, replacement or substitute MIG insurance policy which relates to
the Mortgage Loans in the Mortgages Portfolio from time to time;

"Minimum Seller Share" means an amount included in the Initial Seller Share
which is calculated in accordance with Clause 9.2 (Fluctuation of Minimum
Seller Share on each Distribution Date) of the Mortgages Trust Deed and which,
as at the Initial Closing Date was (GBP)50,000,000. The Minimum Seller Share
may be recalculated in accordance with the Mortgages Trust Deed;

"Money Market Notes" means, in respect of any Issuer, the Money Market Notes
as defined in the relevant Issuer Master Definitions Schedule and eligible for
purchase by money market funds under Rule 2a-7 of the US Investment Company
Act of 1940, as amended;

"Monthly CPR" means, on any Trust Determination Date, the total Mortgages
Trustee Principal Receipts received by the Mortgages Trustee during the
immediately preceding Trust Calculation Period date divided by the aggregate
Outstanding Principal Balance of the Mortgage Loans comprised in the Trust
Property as at the immediately preceding Trust Determination Date.

"Monthly Payment Date" means:

(a)   in respect of any Mortgage Loan, the date in each month on which the
      relevant Borrower is required to make a payment of interest and, if
      applicable, principal for that Mortgage Loan, as required by the
      applicable Mortgage Conditions; and


                                      60
<PAGE>


(b)   in respect of the Master Issuer (and each Series and Class of Notes) and
      Funding 2 (and each Loan Tranche), the date falling on the 20th day of
      each calendar month subject to the appropriate business day convention
      (if any) specified (in relation to a Series and Class of Notes) in the
      applicable Note Supplement or (in relation to a Loan Tranche) in the
      applicable Loan Tranche Supplement;

"Monthly Payment" means, in respect of a Mortgage Loan, the amount which the
applicable Mortgage Conditions require a Borrower to pay on a Monthly Payment
Date in respect of such Mortgage Loan;

"Moody's" means Moody's Investors Services Inc. and includes any successor to
its rating business;

"Moody's Portfolio Variation Test" means the calculation methodology provided
by Moody's to the Administrator from time to time for the purpose of
calculating the Moody's Portfolio Variation Test Value;

"Moody's Portfolio Variation Test Value" means a certain percentage resulting
from the application of the Moody's Portfolio Variation Test;

"Mortgage" means (i) in respect of any Mortgage Loan in the Mortgage Portfolio
(other than Regulated Personal Secured Loans), the first priority charge by
way of legal mortgage (in relation to English Mortgage Loans) or first
priority standard security (in relation to Scottish Mortgage Loans), in each
case which secures the repayment of that Mortgage Loan including the Mortgage
Conditions applicable to it; and (ii) in respect of any Regulated Personal
Secured Loan in the Mortgage Portfolio, the second priority or lower ranking
charge by way of legal mortgage (in relation to English Mortgage Loans) or the
second priority or lower ranking standard security (in relation to Scottish
Mortgage Loans), in each case which secures the repayment of that Regulated
Personal Secured Loan including the Mortgage Conditions applicable to it;

"Mortgage Account" means as the context requires (i) all Mortgage Loans
secured on the same Mortgaged Property and thereby forming a single mortgage
account or (ii) an account maintained by the Administrator in respect of a
particular Mortgage Loan to record all amounts due in respect of that Mortgage
Loan (whether by way of principal, interest or otherwise) and all amounts
received in respect thereof;

"Mortgage Conditions" means, in relation to a Mortgage Loan, the terms and
conditions applicable to that Mortgage Loan and its Related Security as set
out in the relevant Seller's "Mortgage Conditions" booklet and the Seller's
relevant general conditions from time to time as varied by the relevant
Mortgage Loan Agreement and the relevant Mortgage Deed, and any variation or
supplement thereto;

"Mortgage Deed" means, in relation to each Mortgage, the deed creating such
Mortgage including, unless the context otherwise requires, the Mortgage
Conditions applicable thereto;

"Mortgage Loan Agreement" means, in relation to any Mortgage Loan, the
agreement, facility letter or accepted offer of advance pursuant to which the
monies secured by the relevant Mortgage were advanced to the Borrower (as
varied from time to time in accordance with the applicable Mortgage Conditions
and including any modifying agreement within the meaning of Section 82 of the
Consumer Credit Act 1974 insofar as it relates to that Mortgage Loan);

"Mortgage Loan Files" means, in relation to each Mortgage Loan, the file or
files (including files kept in microfiche format or similar electronic data
retrieval system) containing correspondence


                                      61
<PAGE>


between the Borrower and the Seller and including the Standard Mortgage
Documentation applicable to that Mortgage Loan, each letter of offer in
respect of such Mortgage Loan and other relevant documents;

"Mortgage Loan" means unless specified otherwise any mortgage loan (including
for the avoidance of doubt any Personal Secured Loan) and any Permitted
Replacement Mortgage Loan which is sold and assigned by the Seller to the
Mortgages Trustee from time to time pursuant to the terms of the Mortgage Sale
Agreement and referenced by its mortgage loan identifier number and comprising
the aggregate of all principal sums, interest, costs, charges, expenses and
other monies (including all Further Advances) due or owing with respect to
that Mortgage Loan under the relevant Mortgage Conditions by a Borrower on the
security of a Mortgage from time to time outstanding or, as the context may
require, the Borrower's obligations in respect of the same;

"Mortgage Portfolio" means, as of any date of determination, the Initial
Mortgage Portfolio and the Further Mortgage Portfolios assigned to the
Mortgages Trustee prior to such date of determination, taking account of,
among other things, amortisation of Mortgage Loans in that portfolio and the
addition and/or removal of any Mortgage Loans to or from that portfolio since
the last such assignment;

"Mortgage Rate" means the rate at which interest accrues on a Mortgage Loan
from time to time;

"Mortgage Sale Agreement" means the mortgage sale agreement entered into on or
about the Initial Closing Date among the Seller, the Mortgages Trustee,
Funding and the Security Trustee in relation to the assignment from time to
time of the Mortgage Portfolio to the Mortgages Trustee as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement mortgage sale agreement entered into by such
parties from time to time in accordance with the Transaction Documents;

"Mortgage Terms" means, in relation to a Mortgage Loan and the relevant
Mortgage, the applicable Mortgage Conditions;

"Mortgaged Property" means, in relation to any Mortgage Loan, the freehold or
leasehold property in England and Wales or (as applicable) the heritable or
long leasehold property in Scotland and, in each case, all rights and security
attached or appurtenant or related thereto and all buildings and fixtures
thereon which are subject to the Mortgage securing repayment of such Mortgage
Loan;

"Mortgagee" means, in relation to any Mortgage Loan, the person for the time
being entitled to exercise the rights of the mortgagee or (in Scotland)
Heritable Creditor under the relevant Mortgage securing repayment of such
Mortgage Loan;

"Mortgages Trust Deed" means the mortgages trust deed entered into among the
Mortgages Trustee, Funding and the Seller on 26 March 2001 and shall include
any additional and/or replacement mortgage trust deed entered into by such
parties from time to time in accordance with the Transaction Documents;

"Mortgages Trust Transaction Documents" means the Mortgages Trust Deed, the
Controlling Beneficiary Deed, the Mortgages Sale Agreement, the Cash
Management Agreement, the Administration Agreement, the Bank Account
Agreement, the Collection Bank Agreement, the Mortgages Trust Guaranteed
Investment Contract, the Stand-by Bank Account Agreement; the Stand-by
Mortgages Trustee Guaranteed Investment Contract, and any other deed,
agreement or other document to which the Mortgages Trustee is a party.


                                      62
<PAGE>


"Mortgages Trust" means the bare trust of the Trust Property as to both
capital and income, held by the Mortgages Trustee on trust absolutely for
Funding (as to the Funding Share), Funding 2 (as to the Funding 2 Share) and
the Seller (as to the Seller Share) pursuant to the Mortgages Trust Deed so
that each Beneficiary has an undivided beneficial interest therein;

"Mortgages Trustee Available Revenue Receipts" means on any Distribution Date
an amount equal to the aggregate of (in each case in the period prior to the
end of the immediately preceding Trust Calculation Period):

(a)   Revenue Receipts received by the Mortgages Trustee (which shall include,
      in respect of any Non-Flexible Mortgage Loan only, the amount of any
      Overpayment made by the Borrower in respect of such Mortgage Loan as is
      equal to the amount of any Underpayment of interest made by such
      Borrower in respect of such Mortgage Loan in the immediately preceding
      Trust Calculation Period provided that such Underpayment of interest is
      made prior to 31 December in the year in which such Overpayment is
      received from the Borrower),

(b)   interest payable to the Mortgages Trustee on the Mortgages Trustee Bank
      Accounts, which will be received on or prior to the relevant
      Distribution Date, and

(c)   any Contribution paid by the Seller to the Mortgages Trustee to fund any
      Non-Cash Re-Draw in respect of any Flexible Mortgage Loan,

      less

(d)   Third Party Amounts, and

(e)   amounts distributed on each previous Distribution Date in accordance
      with the Mortgages Trust Distribution of Revenue Receipts

PROVIDED THAT Revenue Receipts in paragraph (a) above shall for this purpose
include such amount of any Overpayment made by a Borrower in respect of a
Non-Flexible Mortgage Loan and standing to the credit of the Overpayments
Ledger as is applied on such date in reduction of any Underpayment of Interest
made by such Borrower in respect of such Mortgage Loan in the immediately
preceding Trust Calculation Period (provided that such Underpayment of
Interest is made prior to 31 December in the year in which such Overpayment is
received from the Borrower) in accordance with Clause 13.1 (Non-Flexible
Mortgage Loans) of the Mortgages Trust Deed;

"Mortgages Trustee Bank Accounts" means the Mortgages Trustee Transaction
Account and the Mortgages Trustee GIC Account;

"Mortgages Trustee Collection Accounts Amounts" means all amounts from time to
time standing to the credit of the Collection Accounts to the extent that such
amounts represent payments into the Collection Accounts of sums derived or
resulting from the Mortgage Loans and their Related Security sold to the
Mortgages Trustee pursuant to the Mortgage Sale Agreement;

"Mortgages Trustee Distribution of Principal Receipts" means the order in
which the Cash Manager will apply the Mortgages Trustee Principal Receipts on
each Distribution Date, as set forth in Clause 11 (Distribution of Principal
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Distribution of Revenue Receipts" means the order in which
the Cash Manager will apply the Mortgages Trustee Available Revenue Receipts
on each Distribution Date, as set forth in Clause 10 (Distribution of Revenue
Receipts) of the Mortgages Trust Deed;


                                      63
<PAGE>


"Mortgages Trustee GIC Account Mandate" means the resolutions, instructions
and signature authorities relating to the Mortgages Trustee GIC Account
substantially in the form set out in Schedule 1 to the Bank Account Agreement;

"Mortgages Trustee GIC Account" means the account in the name of the Mortgages
Trustee (sort code 30-00-59, account number 00000000, reference 1322000) held
at Northern Rock and maintained subject to the terms of Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement and such
additional or replacement bank accounts of the Mortgages Trustee as may for
the time being be in place with the prior consent of the Security Trustee;

"Mortgages Trustee GIC Provider" means Northern Rock or such other person or
persons as are for the time being the GIC Provider to the Mortgages Trustee
under the Mortgages Trustee Guaranteed Investment Contract;

"Mortgages Trustee Guaranteed Investment Contract" means the guaranteed
investment contract dated on or about the Initial Closing Date between the
Mortgages Trustee, the Mortgages Trustee GIC Provider, the Security Trustee
and the Cash Manager under which the Mortgages Trustee GIC Provider agrees to
pay the Mortgages Trustee a guaranteed rate of interest on the balance of the
Mortgages Trustee GIC Account from time to time and shall include any
additional and/or replacement guaranteed investment contract entered into by
the Mortgages Trustee from time to time in accordance with the Transaction
Documents;

"Mortgages Trustee Ledgers" means all of the ledgers as are required to be
maintained pursuant to Clause 15 (Ledgers) of the Mortgages Trust Deed;

"Mortgages Trustee Principal Priority of Payments" means the order in which
the Cash Manager will apply the Mortgages Trustee Principal Receipts on each
Distribution Date, as set forth in Clause 11 (Distribution of Principal
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Principal Receipts" means, on any Distribution Date, any
Mortgages Trustee Retained Principal Receipts plus the Principal Receipts
received by the Mortgages Trustee in the immediately preceding Trust
Calculation Period which may be distributed, subject to Clause 13
(Overpayments) of the Mortgages Trust Deed, in accordance with Clause 11 of
the Mortgages Trust Deed;

"Mortgages Trustee Priority of Payments" means, as applicable, the Mortgages
Trustee Revenue Priority of Payments or the Mortgages Trustee Principal
Priority of Payments;

"Mortgages Trustee Retained Principal Receipts" means on a Seller Share Event
Distribution Date, the Mortgages Trustee Principal Receipts which are not
distributed to the Seller by the Cash Manager and which are instead deposited
into the Mortgages Trustee GIC Account pursuant to the Mortgages Trust Deed;

"Mortgages Trustee Revenue Priority of Payments" means the order in which the
Cash Manager will apply the Mortgages Trustee Available Revenue Receipts on
each Distribution Date, as set forth in Clause 10 (Distribution of Revenue
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Transaction Account Mandate" means the resolutions,
instructions and signature authorities relating to the Mortgages Trustee
Transaction Account substantially in the form set out in Schedule 1 to the
Bank Account Agreement;


                                      64
<PAGE>


"Mortgages Trustee Transaction Account" means the account in the name of the
Mortgages Trustee (sort code 30/16/63, account number 27033010) held at the
Account Bank and maintained subject to the terms of the Bank Account
Agreement, or such additional or replacement bank account of the Mortgages
Trustee as may for the time being be in place;

"Mortgages Trustee" means Granite Finance Trustees Limited, a company
incorporated with limited liability under the laws of Jersey, registered
number 79309;

"New Funding 2 Secured Creditor" means any person identified as such in any
Deed of Accession executed pursuant to the Funding 2 Deed of Charge by such
person and the other parties thereto;

"New Funding Secured Creditor" means any person identified as such in any Deed
of Accession executed pursuant to the Funding Deed of Charge by such person
and the other parties thereto;

"New Intercompany Loan" means a loan of the net proceeds of any issue of New
Notes, such loan being advanced to Funding by a New Issuer pursuant to the
terms of a New Intercompany Loan Agreement;

"New Intercompany Loan Agreement" means a new intercompany loan agreement
entered into between Funding and a New Issuer in relation to a New
Intercompany Loan;

"New Issuer" means, in respect of: (a) Funding, a new wholly-owned subsidiary
of Funding, which is established to issue New Notes and to make a New
Intercompany Loan to Funding; and (b) in respect of Funding 2, a new
wholly-owned subsidiary of Funding 2, which is established to issue New Notes
and to make a Funding 2 Intercompany Loan to Funding 2 and may also be
referred to as "New Funding 2 Issuer";

"New Mortgage Loans" means Mortgage Loans, other than the Initial Mortgage
Loans, which the Seller may sell and assign, from time to time, to the
Mortgages Trustee after the Initial Closing Date pursuant to the Mortgage Sale
Agreement;

"New Mortgage Portfolio" means any portfolio of Mortgage Loans and their
Related Security which are sold and assigned to the Mortgages Trustee on or
about the relevant Assignment Date, particulars of which are set out in the
Schedule to each New Mortgage Portfolio Notice delivered pursuant to the
Mortgage Sale Agreement but excluding any such Mortgage Loan and its Related
Security which has been redeemed in full on or before the relevant Assignment
Date, and (subject where applicable to the subsisting rights of redemption of
the Borrowers) all right, title, interest and benefit of the Seller in and to:

(a)   all sums of principal, interest (including, for the avoidance of doubt,
      all Accrued Interest, Arrears of Interest and Capitalised Arrears) and
      any other sum due or to become due under or in respect of such Mortgage
      Loans and their Related Security on or after such Closing Date and all
      sums of interest and other sums payable (but not paid before such
      Closing Date) in respect of any period before such Closing Date and
      including, without limitation, the right to demand, sue for, recover and
      give receipts for all such principal, interest or other amounts, the
      right to sue on all covenants and undertakings made or expressed to be
      made in favour of the Seller under the applicable Mortgage and all sums
      due or to become due in respect of any Early Repayment Charge;

(b)   the benefit of all securities for such principal, interest and other
      sums payable (including without limitation any interest of the Seller in
      any Life Policy), the benefit of all Deeds of Consent, MHA Documentation
      and Deeds of Postponement, any Guarantee in respect of such


                                      65
<PAGE>


      Mortgage Loan or any other collateral security for the repayment of the
      relevant Mortgage Loans secured by the Mortgages;

(c)   the right to exercise all the powers of the Seller in relation thereto
      subject to and in accordance with the relevant Mortgage Conditions;

(d)   all the estate and interest in the Mortgaged Properties in relation
      thereto vested in the Seller;

(e)   to the extent they are assignable, each Certificate of Title and
      Valuation Report and any right of action of the Seller against any
      solicitor, valuer or other person in connection with any report,
      valuation, opinion, certificate or other statement of fact or opinion
      given in connection with any Mortgage Loan and its Related Security in
      that portfolio of Mortgage Loans, or any part thereof or affecting the
      decision of the Seller to make or offer to make the relevant Mortgage
      Loan or part thereof;

(f)   the Buildings Policies and Insurance Contracts, in each case so far as
      they relate to such Mortgage Loans comprised in that portfolio of
      Mortgage Loans and their Related Security, including the right to
      receive the proceeds of all claims made or to be made by or on behalf of
      the Seller or to which the Seller is or may become entitled;

(g)   the MIG Policies, so far as they relate to such Mortgage Loans comprised
      in that portfolio of Mortgage Loans and their Related Security,
      including the right to receive of all claims made or to be made by or on
      behalf of the Seller or to which the Seller is or may become entitled;

"New Notes" means the notes issued and/or to be issued by the New Issuers to
investors;

"New Start-Up Loan Agreement" means, in relation to: (a) Funding, any new
start-up loan agreement entered into from time to time between Funding and a
New Start-Up Loan Provider pursuant to which a New Start-Up Loan is advanced
to Funding; and (b) any Funding 2 Issuer, any new start-up loan agreement
entered into from time to time between such Funding 2 Issuer and a New
Start-Up Loan Provider pursuant to which a New Start-Up Loan is advanced to
such Funding 2 Issuer;

"New Start-Up Loan Provider" means the lender under any New Start-Up Loan
Agreement;

"New Start-Up Loan" means, in relation to: (a) Funding, a start-up loan made
by a New Start-Up Loan Provider to Funding under a New Start-Up Loan
Agreement; and (b) any Funding 2 Issuer, a start-up loan made by a New
Start-Up Loan Provider to such Funding 2 Issuer under a New Start-Up Loan
Agreement;

"New York Business Day" means a day (other than a Saturday or a Sunday or
public holiday) on which banks are generally open in the city of New York;

"New Trust Property" means as the context requires, each New Mortgage
Portfolio from time to time sold and assigned by the Seller to the Mortgages
Trustee or as of any Closing Date the New Mortgage Portfolio sold and assigned
to the Mortgages Trustee on such date or as of any Distribution Date, any and
all New Mortgage Portfolios assigned by the Seller to the Mortgages Trustee
during the immediately preceding Trust Calculation Period;

"Non-Asset Trigger Event" means the occurrence of any of the following events:

(a)   an Insolvency Event occurs in relation to the Seller;

(b)   the role of the Seller as Administrator under the Administration
      Agreement is terminated and a new Administrator is not appointed within
      60 days; or


                                      66
<PAGE>


(c)   on the Distribution Date immediately succeeding a Seller Share Event
      Distribution Date, the Current Seller Share is equal to or less than the
      Minimum Seller Share (determined using the amounts of the Current Seller
      Share and Minimum Seller Share that would exist after making
      distributions of Mortgages Trustee Principal Receipts due on that
      Distribution Date on the basis that the Cash Manager assumes that those
      Mortgages Trustee Principal Receipts are distributed in the manner
      described under the Mortgages Trustee Principal Priority of Payments set
      forth in Clause 11.1 of the Mortgages Trust Deed;

"Non-Cash Re-Draw" means an Authorised Underpayment or a Payment Holiday under
a Flexible Mortgage Loan included in the Mortgages Trust, which will result in
the Seller being required to pay to the Mortgages Trustee an amount equal to
the Unpaid Interest associated with that Authorised Underpayment or Payment
Holiday;

"Non-Cash Re-Draws Sub Ledger" means the sub-ledger of the Re-Draws Ledger,
which will be established by the Cash Manager on the Initial Closing Date in
order to record any Non-Cash Re-Draws made with respect to Flexible Mortgage
Loans;

"Non-Flexible Mortgage Loan" means a Mortgage Loan other than a Flexible
Mortgage Loan;

"Non-Flexible Overpayments Sub Ledger" means the sub-ledger of the
Overpayments Ledger corresponding to Non-Flexible Mortgage Loans, which was
established by the Cash Manager on the Initial Closing Date in order to record
any Overpayments made with respect to Non-Flexible Mortgage Loans;

"Non-Flexible Underpayments Ledger" means the ledger maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record any Underpayments made with respect to Non-Flexible
Mortgage Loans in the Mortgages Trust from time to time;

"Northern Rock Collection Accounts Amounts" means all amounts from time to
time standing to the credit of the Collection Accounts to the extent that such
amounts represent payments into the Collection Accounts of sums derived or
resulting from mortgage loans originated by Northern Rock which have not been
sold to the Mortgages Trustee pursuant to the Mortgage Sale Agreement;

"Northern Rock" means 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;

"Note Enforcement Notice" means, in relation to any Funding Issuer, a notice
issued by the Notes Trustee to such Funding Issuer and the Security Trustee
declaring the Notes issued by such Funding Issuer or any class of such Notes
to be due and repayable pursuant to the Conditions of such New Notes;

"Note Event of Default" means, in relation to a Funding 2 Issuer, the
occurrence of an event of default by such Issuer as specified in the terms and
conditions of the Notes;

"Note Payment Date" means, in respect of a Series and Class of Notes, the
Monthly Payment Date(s) specified in the Note Supplement for the payment of
interest and/or principal subject to the Terms and Conditions of the Notes;

"Note Principal Payment" means the principal amount redeemable from time to
time on each Note in accordance with the Conditions;


                                      67
<PAGE>


"Note Supplement" means, as applicable, either (a) a Prospectus Supplement; or
(b) any Final Terms;

"Note Trust Deed" means, in relation to any Issuer, the trust deed entered
into between that Issuer and the Note Trustee in respect of that Issuer
(together with any supplemental deed) that constitutes the Notes of that
Issuer;

"Note Trustee" means The Bank of New York, or such person or persons for the
time being acting as note trustee or trustees under the Trust Deeds relating
to the Notes;

"Noteholders" means, in relation to: (a) the First Issuer Notes, the Class A
Noteholders, the Class B Noteholders and the Class C Noteholders or any of
them; and (b) any New Notes, the holders for the time being of such New Notes;

"Notes" means, in relation to the First Issuer, the First Issuer Notes and, in
relation to any other Issuer, the Notes issued by such Issuer;

"Offer Conditions" means the terms and conditions applicable to a specified
Mortgage Loan as set out in the relevant offer letter to the Borrower;

"Official List" means the Official List maintained by the UK Listing Authority;

"Operating Agreements" means the Administration Agreement, the Mortgage Sale
Agreement, the Seller's Power of Attorney and the Mortgages Trust Deed;

"Original Bullet Loan Tranche" means a Loan Tranche which has, at any time,
been a Bullet Loan Tranche, even if such Loan Tranche has subsequently become
a Pass-Through Loan Tranche;

"Original Pass-Through Loan Tranche" means a Loan Tranche which, at the time
it was advanced, was a Pass-Through Loan Tranche;

"outstanding" when used in respect of any Notes, has the meaning set out in
the Issuer Trust Deed constituting such Notes;

"Outstanding Principal Balance" means:

(a)   in relation to any Note and as of any date, means the unpaid principal
      balance of that Note at such date; and

(b)   in relation to any Intercompany Loan and as of any date, means the
      unpaid principal balance of that Intercompany Loan at such date; and

(c)   means, in relation to any Loan Tranche and as of any date, means the
      unpaid principal balance of that Loan Tranche at such date;

"Overpayment" means in respect of any Mortgage Loan, any additional amounts of
Principal Receipts received in a month above the regular, scheduled Monthly
Payment, paid by the relevant Borrower which (a) is permitted by the terms of
such Mortgage Loan or by agreement with the Borrower and (b) reduces the
Current Balance of such Mortgage Loan;

"Overpayments Ledger" means the ledger of such name maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record Overpayments on Mortgage Loans in the Mortgages Trust from
time to time which ledger will be sub-divided into two sub ledgers: (i) the
Non-Flexible Overpayments Sub Ledger corresponding to Overpayments


                                      68
<PAGE>


made on Non-Flexible Mortgage Loans, and (ii) the Flexible Overpayments Sub
Ledger corresponding to Overpayments made on Flexible Mortgage Loans;

"Pass-Through Loan Tranche" means, in relation to Funding 2, a Loan Tranche
which has no specified repayment dates other than the Final Repayment Date. On
the occurrence of a dated specified for a Bullet Loan Tranche, a Scheduled
Repayment Loan Tranche or a Controlled Amortisation Loan Tranches in the
applicable Loan Tranche Supplement occurs or if a Step-Up Date (if any) in
relation to such Loan Tranche occurs or if a Pass-Through Trigger Event
occurs, then that Loan Tranche will be deemed to be a Pass-Through Loan
Tranche;

"Pass-Through Notes" means, in relation to a Funding 2 Issuer, any Series and
Class of Notes issued by such Issuer which has no specified redemption date
other than the Final Maturity Date. On the occurrence of a date specified for
a Series and Class of Bullet Redemption Notes, Scheduled Redemption Notes or
Controlled Amortisation Notes in the applicable Final Terms occurs or if a
Step-Up Date in relation to such Series and Class of Notes occurs or if a
Pass-Through Trigger Event occurs, then such Notes will be deemed to be
Pass-Through Notes;

"Pass-Through Requirement" means, in relation to Funding 2, on any Trust
Determination Date, the lesser of:

(a)   the aggregate of the Outstanding Principal Balance of each Pass-Through
      Loan Tranche (excluding any Original Bullet Loan Tranches) which has
      become due; and

(b)   the greater of:

      (i)   the product of:

            (A)   the Funding 2 Share Percentage as at the start of the
                  immediately preceding Trust Calculation Period (provided
                  that if an Assignment Date or a Contribution Date has
                  occurred during such Trust Calculation Period then the
                  Weighted Average Funding 2 Share Percentage will be used);



            (B)   the aggregate amount of Principal Receipts received by the
                  Mortgages Trustee during the immediately preceding trust
                  Calculation Period; and

            (C)   the aggregate Outstanding Principal Balance determined as of
                  the most recent Monthly Payment Date, of the Pass-Through
                  Loan Tranches excluding any original Bullet Loan Tranches
                  which are due (in the case of Rule (2)) on the next
                  following Monthly Payment Date,

      divided by the aggregate Outstanding Principal Balance of the Global
      Intercompany Loan of the most recent Payment Date; and

            on the next following Monthly Payment Date,

      (ii)  the product of:

            (A)   the Funding 2 Share Percentage as at the start of the
                  immediately preceding Trust Calculation Period (provided
                  that if an Assignment Date or a Contribution Date has
                  occurred during such Trust Calculation Period then the
                  Weighted Average Funding 2 Share Percentage will be used);


                                      69
<PAGE>


            (B)   the aggregate amount of Principal Receipts received by the
                  Mortgages Trustee during the immediately preceding Trust
                  Calculation Period;

            less

(C) the sum of the Cash Accumulation Requirement, the Scheduled Amortisation
Requirement and the Controlled Amortisation Requirement as calculated for such
Trust Determination Date as described above;

"Pass-Through Trigger Event" means any of the following events:

(a)   a Trigger Event;

(b)   the service of an Issuer Enforcement Notice by the Note Trustee on the
      Master Issuer; or

(c)   the service of a Funding 2 Intercompany Loan Enforcement Notice by the
      Funding 2 Security Trustee on the Issuer;

"Paying Agent and Agent Bank Agreement" means, in relation to: (a) the First
Issuer, the First Issuer Paying Agent and Agent Bank Agreement; and (b) any
New Issuer, has the meaning specified under the relevant Issuer Transaction
Documents;

"Paying Agents" means, in relation to:

(a)   the First Issuer, the Principal Paying Agent and the US Paying Agent
      initially appointed as paying agents pursuant to the First Issuer Paying
      and Agent Bank Agreement; and

(b)   any New Issuer, the Principal Paying Agent and US Paying Agent appointed
      pursuant to the Paying Agent and Agent Bank Agreement relating to that
      New Issuer,

or if applicable, any successor paying agents;

"Payment Date" means: (i) in relation to any Group 1 Issuer, the twentieth day
of July, October, January and April in each year, or if such day is not a
Business Day, the next succeeding Business Day, and (ii) in relation to any
Group 2 Issuer, the twentieth day of March, June, September and December or,
if such day is not a Business Day, the next succeeding Business Day, unless
otherwise indicated in the relevant Issuer Master Definitions Schedule for any
Funding Issuer;

"Payment Holiday" means, in respect of any Flexible Mortgage Loan, a period of
one or more Monthly Payment Dates when the relevant Borrower under such
Mortgage Loan is permitted by the Seller in accordance with the relevant
Mortgage Conditions not to make its regular Monthly Payment;

"Perfection Date" means the date of any Perfection;

"Perfection Event" means any of the events specified in Clause 6.1 (Perfection
Events) of the Mortgage Sale Agreement;

"Perfection" means the perfection of the assignment and assignation of the
Mortgage Portfolio pursuant to and in accordance with Clause 6 (Perfection of
the Assignment) of the Mortgage Sale Agreement;

"Permitted Product Switch" means any variation in the financial terms and
conditions of a Mortgage Loan in which a Borrower exchanges its then-current
Mortgage Loan product for a different mortgage loan product offered by the
Seller or (in limited circumstances) the Administrator from time to time,
provided that such new mortgage loan for which the prior Mortgage Loan is to
be exchanged is a Permitted Replacement Mortgage Loan, and further provided
that no such product switch shall be


                                      70
<PAGE>


permitted unless at the date of such product switch each of the conditions set
out in Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage
Loans) of the Mortgage Sale Agreement is satisfied (save to the extent that
conditions (a), (c), (k), (n) and (o) of such Clause must only be satisfied on
the most recent Assignment Date for the assignment of New Mortgage Loans to
the Mortgages Trust);

"Permitted Replacement Mortgage Loan" means a mortgage loan (i) that is
subject to a variable rate of interest, (ii) that has a maturity date prior to
January 2039, and (iii) upon which the related Borrower has made at least one
Monthly Payment;

"Person" means a reference to any person, individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organisation, governmental entity or other
entity of similar nature (whether or not having separate legal personality);

"Personal Secured Loan" means a Mortgage Loan for unrestricted purposes
offered to a Borrower who has an existing Mortgage Loan (other than a Personal
Secured Loan) with the Seller, which is secured on the same Mortgaged Property
which secures the Borrower's existing Mortgage Loan. A Personal Secured Loan
is governed by separate terms and conditions from the existing Mortgage Loan
and is documented either as a Regulated Personal Secured Loan or an
Unregulated Personal Secured Loan depending on the purposes for which it is
used. Certain Personal Secured Loans permit the Borrower to make Further Draws
up to the fixed amount of credit extended under the related Mortgage
Conditions at the inception of the Personal Secured Loan;

"Post-Enforcement Call Option Agreement" means, in respect of: (a) a Funding
Issuer, the post-enforcement call option agreement entered into on or about a
Closing Date between the relevant Funding Issuer, the relevant
Post-Enforcement Call Option Holder and the Note Trustee; (b) the Master
Issuer, the post-enforcement call option agreement entered into on or about
the Funding 2 Programme Date between the Master Issuer, the relevant
Post-Enforcement Call Option Holder and the Note Trustee; and (c) the Start-Up
Loan Provider, the post-enforcement call option agreement entered into on or
about the Funding 2 Programme Date between the Start-Up Loan Provider, the
relevant Post-Enforcement Call Option Holder and the Master Issuer;

"Post-Enforcement Call Option Holder" means, in respect to the Master Issuer,
GPCH Limited, a company incorporated with limited liability under the laws of
England and Wales, registered number 4128437, or such other person or persons
for the time being acting as post-enforcement call option holder under the
relevant Post-Enforcement Call Option Agreement, and, in relation to any New
Issuer, has the meaning specified under the relevant Issuer Master Definitions
Schedule;

"Potential Intercompany Loan Event of Default" means the occurrence of any
event which with the giving of notice, any relevant certificate, the lapse of
time or fulfilment of any other condition (or any combination of the
foregoing) would become an Intercompany Loan Event of Default;

"Potential Funding 2 Intercompany Loan Event of Default" means the occurrence
of any event which with the giving of notice, any relevant certificate, the
lapse of time or fulfilment of any other condition (or any combination of the
foregoing) would become a Funding 2 Intercompany Loan Event of Default;


                                      71
<PAGE>


"Potential Note Event of Default" means any condition, event or act which with
the lapse of time and/or the giving of any notice and/or determination of
materiality and/or fulfilment of any similar condition would constitute a Note
Event of Default;

"Principal Amount Outstanding" means for each Series and Class of Notes and as
of any date of determination, the Initial Principal Amount of such Series and
Class of Notes less (in each case) the aggregate amount of all principal
payments in respect of such Series and Class of Notes that have been paid
since the Closing Date for such Series, and Notes that have been paid since
the Closing Date for such Series and Class of Notes on or prior to that date
of determination (as set out in Condition 5(c) of the Terms and Conditions);

"Principal Deficiency Ledger" means, in relation to any Issuer, the ledger of
such name maintained by the Issuer Cash Manager pursuant to the Issuer Cash
Management Agreement, comprising such sub-ledgers as relate to the classes of
Notes of differing ratings issued by such Issuer as contemplated in the
relevant Issuer Cash Management Agreement;

"Principal Directions" means with respect to the Security Trustee, the
directions of the Note Trustee(s) for the Holders of the highest ranking class
of Notes outstanding (meaning the Class A Notes for so long as there are Class
A Notes outstanding and thereafter, the Class B Notes so long as there are no
Class A Notes outstanding and thereafter, the Class C Notes so long as there
are neither Class A Notes nor Class B Notes outstanding and thereafter, the
Class D Notes for so long as there are no Class A Notes, Class B Notes nor
Class C Notes outstanding;

"Principal Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record
any Mortgages Trustee Retained Principal Receipts plus the Principal Receipts
on the Mortgage Loans and distributions of such Principal Receipts to the
Seller, Funding and Funding 2 on each Distribution Date;

"Principal Paying Agent" Citibank, N.A., acting through its London Branch at 5
Carmelite Street, London EC4Y 0PA;

"Principal Receipts" means, in relation to the Mortgages Trustee, any payment
in respect of principal received in respect of any Mortgage Loan, whether as
all or part of a Monthly Payment in respect of such Mortgage Loan, on
redemption (including partial redemption) of such Mortgage Loan, on
enforcement or on the disposal of such Mortgage Loan or otherwise (including
payments pursuant to any Insurance Policy)(and which may include the amount of
any Overpayment in respect of any Non-Flexible Mortgage Loan, but only to the
extent permitted by Clause 13.1 (Non-Flexible Mortgage Loans) of the Mortgages
Trust Deed, and which also may include the amount of any Further Contribution
made by Funding from time to time) and in relation to any distributions of
Principal Receipts which have been or are to be made on a Distribution Date,
Principal Receipts shall mean Mortgages Trustee Principal Receipts;

"Proceedings" means any suit, action or proceedings arising out of or in
connection with any of the Transaction Documents;

"Product Switch" means a variation to the financial terms and conditions of
any Mortgage Loan but excluding:

(a)   any variation in the financial terms and conditions of a Mortgage Loan
      involving a Permitted Product Switch;

(b)   variation agreed with a Borrower to control or manage arrears on a
      Mortgage Loan;


                                      72
<PAGE>


(c)   variation in the maturity date of a Mortgage Loan unless, while the
      First Issuer Intercompany Loan is outstanding, it is extended beyond
      January 2039;

(d)   variation imposed by statute;

(e)   variation of the rate of interest payable in respect of Mortgage Loan
      where that rate is offered to the Borrowers of more than 10 per cent. by
      Current Balance of Mortgage Loans comprised in the Trust Property in any
      Interest Period;

(f)   a change between interest-only and repayment Mortgage Loans;

(g)   a transfer of equity; and/or

(h)   a release of a party to a Mortgage Loan or a release of part of the land
      subject to the Mortgage;

"Programme" means the (GBP)20 billion Mortgage-Backed Note Programme
established by the Master Issuer;

"Programme Agreement" means the agreement entered into on or around the
Funding 2 Programme Date, as amended from time to time, between amongst
others, the Master Issuer, Funding 2 and the dealers named therein (or deemed
named therein);

"Programme Reserve Required Amount" means, in relation to Funding 2 and the
Funding 2 Issuers, as at any date, the amount calculated as the product of (a)
the Programme Reserve Required Percentage and (b) the aggregate Outstanding
Principal Balance of all Loan Tranches outstanding under the Global
Intercompany Loan Agreement (including the Principal Amount Outstanding of any
Loan Tranche (or the increase in the Principal Amount Outstanding of any
existing Loan Tranche) that is made on such date).

 "Properties in Possession Policy" means the properties in possession
insurance policy identified in paragraph 2(e) of Schedule 4 (Insurance
Contracts) to the Mortgage Sale Agreement and any endorsements or extensions
thereto as issued from time to time and any additional, replacement or
substitute properties in possession insurance policy which relates to Mortgage
Loans in the Mortgages Trust from time to time;

"Prospectus" means the prospectus in relation to the US Notes issued by any
Issuer, the meaning given such term in the Issuer Master Definitions Schedule
relating to that Issuer;

"Prospectus Directive" means Directive 2003/71/EC of the European Parliament
and of the Council of 4 November 2003 on the prospectus to be published when
securities are offered to the public or admitted to trading and amending
Directive 2001/34/EC;

"Prospectus Rules" means the Prospectus Rules of the FSA made pursuant to Part
VI of the FSMA;

"Prospectus Supplement" means each prospectus supplement relating to one or
more Series and Classes of Issuer Notes issued on a single Closing Date;

"PS/FA/PSL Event" means the occurrence of either (i) confirmation from
Northern Rock that it will purchase the relevant Mortgage Loans which are
subject to any Further Advances or Product Switches (other than Re-Fixed
Mortgage Loans) in accordance with Clause 8.5 (Purchase of Product Switches
and Further Advances and purchases related to Personal Secured Loans) under
the Mortgage Sale Agreement, (ii) any Mortgage Loan becoming a Re-Fixed
Mortgage Loan, or (iii) Northern Rock making a Personal Secured Loan to the
Borrower of a Mortgage Loan;


                                      73
<PAGE>


"PS/FA/PSL Event" means the occurrence of either (i) confirmation from
Northern Rock that it will purchase the relevant Mortgage Loans which are
subject to any Further Advances or Product Switches (other than Re-Fixed
Mortgage Loans) in accordance with Clause 8.5 (Purchase of Product Switches
and Further Advances and purchases related to Personal Secured Loans) under
the Mortgage Sale Agreement, (ii) any Mortgage Loan becoming a Re-Fixed
Mortgage Loan, or (iii) Northern Rock making a Personal Secured Loan to the
Borrower of a Mortgage Loan;

"Purchase Price" means:

(a)   in respect of the Initial Mortgage Portfolio, the amount payable
      therefor by the Mortgages Trustee pursuant to Clause 3.2 (Purchase
      Price) of the Mortgage Sale Agreement; and

(b)   in respect of each New Mortgage Portfolio, the amount payable therefor
      by the Mortgages Trustee pursuant to Clause 4.5 (Purchase Price) of the
      Mortgage Sale Agreement;

"Rating Agencies" means S&P, Moody's and Fitch, and "Rating Agency" means any
of them;

"Receiver" means, in relation to the Funding Deed of Charge or the Funding 2
Deed of Charge, any person or persons appointed (and any additional person or
persons appointed or substituted) as an administrative receiver, receiver,
manager, or receiver and manager of the Funding Charged Property or the
Funding 2 Charged Property (as applicable) by the Funding Security Trustee or
the Funding 2 Security Trustee pursuant the Funding Deed of Charge or the
Funding 2 Deed of Charge (as applicable) and in relation to any Issuer Deed of
Charge, any person or persons appointed (and any additional person or persons
appointed or substituted) pursuant thereto by the Note Trustee as an
administrative receiver, receiver, manager, or receiver and manager of the
property charged or secured under such Issuer Deed of Charge;

"Re-Draw" means either a Cash Re-Draw or a Non-Cash Re-Draw;

"Re-Draws Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record
Re-Draws on Flexible Mortgage Loans in the Mortgages Trust from time to time
which ledger shall be sub-divided into two sub ledgers: (i) the Non-Cash
Re-Draws Sub Ledger corresponding to Non-Cash Re-Draws and (ii) the Cash
Re-Draws Sub Ledger corresponding to Cash Re-Draws;

"Re-Fixed Mortgage Loan" means, as at any given date, a Mortgage Loan which on
or before such date had been a Fixed Rate Mortgage Loan in respect of which
the fixed period by reference to which the relevant fixed interest was charged
had come to an end, but as at or before that such date, the interest charged
under such Mortgage Loan was again fixed for a further fixed period by the
Seller or the Administrator as the case may be (following an election by the
Borrower) in accordance with the original terms of the Fixed Rate Mortgage
Loan;

"Reference Banks" means the principal London offices of Citibank N.A., ABN
AMRO Bank N.V., Barclays Bank plc and JPMorgan Chase Bank, or such other major
bank selected by the Cash Manager from time to time.

"Reg S Global Note Certificates" or "Regulation S Global Note Certificates"
means the Global Note Certificates in registered form representing the Reg S
Notes;

"Reg S Individual Note Certificates" or "Regulation S Individual Note
Certificates" means the Individual Note Certificates in registered form
representing the Reg S Notes;


                                      74
<PAGE>


"Reg S Notes" means generally all Notes which are issued pursuant to Reg S and
in relation to an Issuer means the Notes issued or to be issued by that Issuer
pursuant to Reg S;

"Reg S Prospectus" means, in relation to any Series and Class of Notes, the
Base Prospectus and the Final Terms relating to such Series and Class of
Notes;

"Reg S" means Regulation S under the United States Securities Act of 1933, as
amended;

"Registered Land" means land in England or Wales, title to which is registered
at H.M. Land Registry;

"Registered Transfer" means, in relation to Registered Land, a deed of
transfer of a Mortgage or Mortgages over registered land in the form referred
to in paragraph (a) of Clause 6.3 (Transfer Documents) of the Mortgage Sale
Agreement with such modifications as may be permitted from time to time in
accordance with such Clause;

"Registers of Scotland" means the Land Register of Scotland and/or the General
Register of Sasines;

"Regulated Market" means a regulated market as defined in Council Directive
93/22/EEC of 10 May 1993 on investment services in the securities field, as
will be replaced by Directive 2004/39/EC of the European Parliament and of the
Council of 21 April 2004 on markets in financial instruments amending Council
Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European
Parliament and of the Council and repealing Council Directive 93/22/EEC;

"Regulated Personal Secured Loan" means a Personal Secured Loan which is
documented as an agreement regulated by the CCA and which is secured pursuant
to a second priority or lower ranking charge by way of legal mortgage (in
relation to English Mortgage Loans) or second priority or lower ranking
standard security (in relation to Scottish Mortgage Loans) over the same
property which secures the relevant |Borrower's existing Mortgage Loan;

"Regulations" means as the context may require either (i) the Unfair Terms in
Consumer Contracts Regulations 1999 and/or, as applicable, the Unfair Terms in
Consumer Contracts Regulations 1994 or (ii) the Regulations set out in
Schedule 2 to the First Issuer Paying Agent and Agent Bank Agreement;

"Related Security" means, in relation to a Mortgage Loan, the security for the
repayment of such Mortgage Loan including the relevant Mortgage and all other
documents, matters and things related thereto acquired and referred to as part
of the Initial Mortgage Portfolio or, as the case may be, the New Mortgage
Portfolio, sold to the Mortgages Trustee pursuant to the Mortgage Sale
Agreement and which constitute all or part of the security for the payment of
all sums due in respect of such Mortgage Loan, including for the avoidance of
doubt, guarantees, MIG Policies and assignments and charges over Life
Policies;

"Relevant Distribution" has the meaning given to it in Clause 4.2
(Consideration) of the Mortgages Trust Deed;

and in respect of Funding, Funding 2 or any Issuer (each, for the purposes of
this definition, a "Relevant Entity"), "Insolvency Event" means:

(a)   except for the purposes of an amalgamation or restructuring as described
      in sub-clause (b) of this definition, the Relevant Entity ceases or
      threatens to cease to carry on all or a substantial part of its business
      or the Relevant Entity is deemed unable to pay its debts within the
      meaning of section 123(1)(a), (b), (c) or (d) of the Insolvency Act (as
      that section may be amended) or becomes unable to pay its debts within
      the meaning of section 123(2) of the Insolvency Act (as that section may
      be amended, modified or re-enacted); or


                                      75
<PAGE>


(b)   an order is made or an effective resolution is passed for the winding-up
      of the Relevant Entity or the appointment of an administrator over the
      Relevant Entity (except for the purposes of or pursuant to an
      amalgamation, restructuring or merger previously approved by the Note
      Trustee or the Security Trustee, as the case may be, or as approved in
      writing by an Extraordinary Resolution (as defined in the Issuer Trust
      Deed) of the Class A Noteholders);

      or

(c)   proceedings are otherwise initiated against the Relevant Entity under
      any applicable liquidation, insolvency, composition, reorganisation or
      other similar laws (including, but not limited to, application or
      pending application for an administration order or presentation of a
      petition for a winding-up order) and (except in the case of an
      application or pending application for an administration order) such
      proceedings are not, in the opinion of the Note Trustee or the Issuer
      Security Trustee (as the case may be), being disputed in good faith with
      a reasonable prospect of success; or an administration order being
      granted or an administrative receiver or other receiver, administrator,
      liquidator or other similar official being appointed in relation to the
      Relevant Entity or in relation to the whole or any substantial part of
      the undertaking or assets of the Relevant Entity; or an encumbrancer
      taking possession of the whole or any substantial part of the
      undertaking or assets of the Relevant Entity, or a distress, execution,
      diligence or other process being levied or enforced upon or sued out
      against the whole or any substantial part of the undertaking or assets
      of the Relevant Entity and such possession or process (as the case may
      be) not being discharged or not otherwise ceasing to apply within 30
      days; or the Relevant Entity initiating or consenting to judicial
      proceedings relating to itself under applicable liquidation,
      administration, insolvency, composition, reorganisation or other similar
      laws or making a conveyance or assignment for the benefit of its
      creditors generally;

"Relevant Margin" means, in respect of a Loan Tranche, the Relevant Margin for
such Loan Tranche specified as such in the applicable Loan Tranche Supplement;

"Relevant Screen Rate" means, in respect of a Loan Tranche:

(a)   for the first Loan Tranche Interest Period, the Initial Relevant Screen
      Rate; and

(b)   in respect of subsequent Loan Tranche Interest Periods, the Relevant
      Screen Rate for such Loan Tranche specified as such in the applicable
      Loan Tranche Supplement;;

"Repayment Mortgage Loan" means a Mortgage Loan in respect of which the
Borrower is under an obligation to the mortgagee to make monthly payments of
principal so that the whole principal (in addition to interest) is repaid by
the stated maturity date for that Mortgage Loan;

"Repayment Requirement" means, in relation to Funding 2, on any Trust
Determination Date, the amount, if any, equal to the sum of:

(a)   the Cash Accumulation Requirement;

(b)   the Controlled Amortisation Requirement;

(c)   the Scheduled Repayment Requirement; and

(d)   the Pass-Through Requirement;

"Representations and Warranties" means the representations and warranties set
out in Schedule 1 (Representations and Warranties) to the Mortgage Sale
Agreement;


                                      76
<PAGE>


"Required Rate and Terms" has the meaning given to such term in Clause 4.4(c)
of the Administration Agreement;

"Revenue Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record
Revenue Receipts received by the Mortgages Trustee and the payment of the same
on each Distribution Date in accordance with the terms of the Mortgages Trust
Deed;

"Revenue Receipts" means, in relation to the Mortgages Trustee, any payment
received in respect of any Mortgage Loan, whether as all or part of a Monthly
Payment in respect of such Mortgage Loan, on redemption (including partial
redemption) of such Mortgage Loan, on enforcement of such Mortgage Loan
(including the proceeds of sale thereof), on the disposal of such Mortgage
Loan or otherwise (including payments pursuant to any Insurance Policy) which
in any such case is not a Principal Receipt in respect of such Mortgage Loan;

"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 the period during which the
seller's standard security referred to in section 72 of that Act remains in
effect has expired);

"S&P" and "Standard & Poor's" means Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., and includes any successor to its
rating business;

"Scheduled Redemption Notes" means, in relation to a Funding 2 Issuer, any
Series and Class of Notes issued by such Issuer scheduled to be repaid in full
in two or more instalments on Scheduled Redemption Dates. Such Scheduled
Redemption Notes will be deemed to be Pass-Through Notes if:

(a)   a date specified in relation to the same in the applicable Note
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs; or

(c)   the Step-Up Date (if any) in relation to such Notes occurs;

"Scheduled Repayment Date" means the dates specified as such in the Loan
Tranche Supplement for a Scheduled Repayment Loan Tranche;

"Scheduled Repayment Loan Instalment" means that part of a Scheduled Repayment
Loan Tranche which is due on each of the Scheduled Repayment Dates of that
Loan Tranche;

"Scheduled Repayment Loan Tranches" means, in relation to Funding 2, any Loan
Tranche which is scheduled to be repaid on two or more instalments on
Scheduled Repayment Dates. Scheduled Repayment Loan Tranches will be deemed to
be Pass-Through Loan Tranches if:

(a)   a date specified in relation to the same in the applicable Loan Tranche
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs;

(c)   a Step-Up Date (if any) in relation to such Loan Tranche occurs.

"Scheduled Repayment Requirement" means, on a Trust Determination Date, the
amount required by Funding 2 to repay:


                                      77
<PAGE>


(a)   each Scheduled Repayment Loan Instalment which is scheduled to be repaid
      on any of the three Monthly Payment Dates immediately following such
      Trust Determination Date; and

(b)   the aggregate outstanding amount on that Trust Determination Date of
      each Scheduled Repayment Loan Instalment then outstanding that was not
      fully repaid on its Scheduled Repayment Date,

after taking into account amounts standing to the credit of the Funding 2
Principal Ledger on such Trust Determination Date which are available
therefor;

"Scottish Mortgage Loan" means each Mortgage Loan secured by a Scottish
Mortgage;

"Scottish Mortgage" means, in respect of any Mortgage Loan in the Mortgage
Portfolio, a Mortgage secured over a Scottish Property;

"Scottish Property" means a Mortgaged Property situated in Scotland;

"Scottish Transfer" means an assignation of a Scottish Mortgage or Mortgages
in the relevant form referred to in paragraphs (c) and (d) of Clause 6.3
(Transfer Documents) of the Mortgage Sale Agreement with such modifications as
may be permitted from time to time in accordance with such Clause;

"Scottish Trust Deed" means a declaration of trust substantially in the form
set out in Schedule 11 to the Mortgage Sale Agreement declared by the Seller
in favour of the Mortgages Trustee over its whole right, title, benefit and
interest in and to the Scottish Trust Property specified therein;

"Scottish Trust Property" has the meaning given to it in each Scottish Trust
Deed and means, collectively, the whole trust property forming the subjects of
each such Scottish Trust Deed;

"Scottish Trust" means, collectively, the trusts declared and created in terms
of each Scottish Trust Deed;

"SEC" means the United States Securities and Exchange Commission;

"Second Issuer" means Granite Mortgages 01-2 plc;

"Second Issuer Available Principal Receipts" has the meaning given to such
term in the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Available Revenue Receipts" has the meaning given to such term
in the Issuer Master Definitions Schedule relating to the Second Issuer.

"Second Issuer Bank Account Agreement" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Bank Accounts" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Cash Management Agreement" has the meaning given to such term
in the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Cash Manager" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Liquidity Reserve Fund" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer;


                                      78
<PAGE>


"Second Issuer Liquidity Reserve Ledger" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer.

"Second Issuer Liquidity Reserve Required Amount" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Second
Issuer;

"Second Issuer Master Definition Schedule" means, in respect of the Second
Issuer, the master definitions schedule signed for the purposes of
identification by Sidley Austin Brown & Wood and Clifford Chance LLP on 28
September 2001 (as amended, varied or supplemented from time to time);

"Second Issuer Post-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Second
Issuer;

"Second Issuer Pre-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Second
Issuer;

"Second Issuer Pre-Enforcement Principal Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Second Issuer;

"Second Issuer Pre-Enforcement Revenue Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Second Issuer;

"Second Issuer Reserve Fund" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Reserve Fund Ledger" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Reserve Required Amount" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Secured Creditors" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Security" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Transaction Accounts" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Transaction Documents" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Priority Funding Deed of Charge" means the deed of charge entered into
on or about 28 January 2004 between Funding and the Security Trustee as
amended, restated, novated, varied or supplemented from time to time;

"Securities Act" means the United States Securities Act of 1933, as amended;

"Security Documents" means, in relation to: (a) Funding, any Issuer Deed of
Charge relating to any Funding Issuer, the Funding Deed of Charge, the Second
Priority Funding Deed of Charge and each Deed of Accession entered into
pursuant to the Funding Deed of Charge, the Second Priority Funding Deed of
Charge and any other security document entered into pursuant to any of the
foregoing; and (b) Funding 2, any Issuer Deed of Charge relating to any
Funding 2 Issuer, the Funding 2 Deed of


                                      79
<PAGE>


Charge and each Deed of Accession entered into pursuant to the Funding 2 Deed
of Charge and any other security document entered into pursuant to any of the
foregoing;

"Security Interest" or "Encumbrance" means any mortgage or sub mortgage,
standard security, charge or sub charge (whether legal or equitable),
encumbrance, pledge, lien, hypothecation, assignment or assignation by way of
security or other security interest or title retention arrangement and any
agreement, trust or arrangement having substantially the same economic or
financial effect as any of the foregoing (other than a lien arising in the
ordinary course of business or by operation of law);

"Security Power of Attorney for Funding 2" means the power of attorney granted
by Funding 2 in favour of the Security Trustee on the Funding 2 Programme Date
pursuant to the Funding 2 Deed of Charge;

"Security Trustee" means the Bank of New York , whose principal office is at
48th Floor, One Canada Square, London E14 5AL, or such other persons and all
other persons for the time being acting as the security trustee or security
trustees pursuant to the Funding Deed of Charge;

"Seller Share" means, prior to the first Distribution Date, the Initial Seller
Share and thereafter, shall mean the Current Seller Share;

"Seller Share Event Distribution Date" means a Distribution date on which a
Seller Share Event occurs;

"Seller Share Event" means the event which will occur if, on a Distribution
Date, (i) the result of the calculation of the Current Seller Share for such
Distribution Date would be equal to or less than the Minimum Seller Share for
such Distribution Date (determined using the amounts of the Current Seller
Share and Minimum Seller Share that would exist after making the distributions
of Mortgages Trustee Principal Receipts due in that Distribution Date on the
basis that the Cash Manager assumes that those Mortgages Trustee Principal
Receipts are distributed in the manner described under the Mortgages Trustee
Principal Priority of Payments set forth in Clause 11.1 of the Mortgages Trust
Deed, and (ii) a Seller Share Event has not occurred on the immediately
preceding Distribution Date;

"Seller Share Ledger" means a ledger which shall record the Seller Share of
the Trust Property and the Seller Share Percentage;

"Seller (Mortgages Trust) Assignment Agreement" means the assignment agreement
entered into on or before the Funding 2 Programme Date between the Seller,
Funding 2, Funding, the Funding Security Trustees, the Mortgages Trustee and
the Note Trustees in respect of the existing Issuers;

"Seller Share Percentage" means, prior to the first Distribution Date, the
Initial Seller Share Percentage and thereafter shall mean the Current Seller
Share Percentage;

"Seller" means Northern Rock plc;

"Seller's Policy" means the originating, lending and underwriting,
administration, arrears and enforcement policies and procedures which are
applied from time to time by the Seller to mortgage loans and the security for
their repayment which are beneficially owned solely by the Seller and which
may be amended by the Seller from time to time;

"Seller's Power of Attorney" means (i) the power of attorney granted by the
Seller in favour of the Funding Beneficiaries, the Mortgages Trustee and the
Security Trustee substantially in the form set


                                      80
<PAGE>


out in Part 2 of Schedule 10 (Power of Attorney in favour of the Mortgages
Trustee, each Funding Beneficiary and each Funding Security Trustee) to the
Mortgage Sale Agreement;

"Series" in relation to any Notes issued by any Issuer has the meaning given
to it in the relevant Issuer Master Definitions Schedule;

"Services" has the meaning set out in Clause 3.1 (General) of the
Administration Agreement; "Share Trust Deed" means the share trust deed dated
23 January 2001 between the Share Trustee and Holdings as has been and may be
amended, restated, novated, varied or supplemented from time to time;

"Share Trustee" means The Law Debenture Intermediary Corporation P.L.C. as
share trustee under the Share Trust Deed;

"Shortfall" or "Interest Rate Shortfall" means, as of any Payment Date and in
respect of Funding, a deficiency of Funding Available Revenue Receipts over
the amounts due by Funding under the Funding Pre-Enforcement Revenue Priority
of Payments on such Payment Date, and, as of any Payment Date and in respect
of any Issuer, the deficiency of Issuer Allocable Revenue Receipts over the
amounts due by such Issuer under the relevant Issuer Pre-Enforcement Revenue
Priority of Payments, as the context requires;

"Special Distribution" means a payment made by the Mortgages Trustee:

(a)   to the Seller (excluding any payment of Initial Purchase Price) which is
      funded by a Further Contribution made to the Mortgages Trustee by
      Funding or by Funding 2; or

(b)   to Funding, which is funded by a Further Contribution made to the
      Mortgages Trustee by Funding 2;

"Special Repayment Notes" means , in relation to the Second Issuer, the
(GBP)10,000,000 Series 2 Class D Floating Rate Notes issued by the Second
Issuer and, in relation to any other Funding Issuer, means any Series and/or
class of Notes issued by such Funding Issuer that are either:

(a)   interest only Notes; or

(b)   Notes, the Outstanding Principal Balance of which is to be repaid solely
      from the Issuer Available Revenue Receipts,

and that are designated as Special Repayment Notes in the Issuer Master
Definitions Schedule relating to such Funding Issuer;

"Specified Currency Exchange Rate" means, in relation to a Series and Class of
Notes, the exchange rate specified in the Issuer Swap Agreement relating to
such Series and Class of Notes or, if the Issuer Swap Agreement has been
terminated, the applicable spot rate;

"Specified Date" means the date on which the United Kingdom participates in
the third stage of European economic and monetary union pursuant to the Treaty
establishing the European Community or otherwise participates in European
economic and monetary union in a manner with an effect similar to such third
stage;

"Standard Documentation" or "Standard Mortgage Documentation" means:

(a)   in relation to the First Issuer the standard documentation referred to
      in Schedule 12 (Standard Documentation) to the Mortgage Sale Agreement
      as at 26 March 2001,


                                      81
<PAGE>


(b)   in relation to the Second Issuer, the standard documentation referred to
      in Schedule 12 (Standard Documentation) to the Mortgage Sale Agreement
      as at 28 September 2001, and

(c)   in relation to any other Issuer, the standard documentation referred to
      in Schedule 1 (Standard Documentation) to the relevant Issuer Master
      Definitions Schedule

or, in each case, any update or replacement therefor as the Seller may from
time to time introduce acting in accordance with the standards of a
reasonable, prudent mortgage lender;

"Standard Variable Rate" or "SVR" means, as applicable, the Northern Rock
standard variable mortgage base rate and/or the standard variable mortgage
base rate applicable to Mortgage Loans within the Mortgages Trust in
accordance with the Mortgage Conditions;

"Stand-by Account Bank Notice" means a written notice served on the Stand-by
Account Bank by the Cash Manager, Funding or the Mortgages Trustee, as
applicable, pursuant to the provisions of the Bank Account Agreement;

"Stand-by Account Bank" means the bank at which the Stand-by Mortgages Trustee
GIC Account, the Stand-by Funding GIC Account and, in relation to any Funding
Issuer the relevant Stand-by Funding (Issuer) GIC Account (if any) for that
Funding Issuer is maintained from time to time being, Lloyds TSB Bank plc,
Financial Markets Division, 25 Monument Street, London EC3R 8BQ;

"Stand-by Bank Account Agreement" means the agreement entered into on or about
26 May 2004 between the Stand-by Account Bank, the Stand-by Funding GIC
Provider, the Stand-by Mortgages Trustee GIC Provider, the Cash Manager and
the Security Trustee as may be amended, restated, varied or supplemented from
time to time and shall include any additional and/or replacement stand-by bank
account agreement entered into in accordance with the Transaction Documents;

"Stand-by Funding GIC Account" means the account in the name of Funding held
with the Stand-by Bank Account established pursuant to and on the terms of the
Stand-by Funding Guaranteed Investment Contract and the Stand-by Bank Account
Agreement;

"Stand-by Funding Guaranteed Investment Contract" means the guaranteed
investment contract entered into on or about 26 May 2004 between Funding, the
Stand-by Funding GIC Provider, the Cash Manager and the Security Trustee under
which the Stand-by GIC Provider agrees to provide the Stand-by Funding GIC
Account and to pay to Funding a guaranteed rate of interest on the balance
from time to time of such Stand-by Funding GIC Account if the appointment of
Northern Rock as Funding GIC Provider under the Funding Guaranteed Investment
Contract is terminated, as may be amended, restated, varied or supplemented
from time to time and shall include any additional or replacement stand-by
guaranteed investment contract entered into by Funding in accordance with the
Transaction Documents;

"Stand-by Mortgages Trustee GIC Rate" means a rate of interest per amount
equal to LIBOR for three-monthly Sterling deposits minus 0.375 per cent.;

"Stand-by Mortgages Trustee GIC Account" means the account in the name of
Mortgages Trustee held with the Stand-by Bank Account established pursuant to
and on the terms of the Stand-by Mortgages Trustee Guaranteed Investment
Contract and the Stand-by Bank Account Agreement.

"Stand-by Mortgages Trustee GIC Provider" means Lloyds TSB Bank plc, Financial
Markets Division, 25 Monument Street, London EC3R 8BQ or such other person or
persons who are for the

                                      82
<PAGE>


time being GIC Provider to the Mortgages Trustee under the Stand-by Mortgages
Trustee Guaranteed Investment Contract;

"Stand-by Mortgages Trustee Guaranteed Investment Contract" means the
guaranteed investment contract entered into on or about 26 May 2004 between
Funding, the Stand-by Mortgages Trustee GIC Provider, the Cash Manager and the
Security Trustee under which the Stand-by GIC Provider agrees to provide the
Stand-by Mortgages Trustee GIC Account and to pay to the Mortgages Trustee a
guaranteed rate of interest on the balance from time to time of such Stand-by
Mortgages Trustee GIC Account if the appointment of Northern Rock as Mortgages
Trustee GIC Provider under the Mortgages Trustee Guaranteed Investment
Contract is terminated, as may be amended, restated, varied or supplemented
from time to time and shall include any additional or replacement stand-by
guaranteed investment contract entered into by the Mortgages Trustee in
accordance with the Transaction Documents;

"Start-up Loan Agreement" means, in respect of the Master Issuer, the
agreement entered into on or about the Funding 2 Programme Date, as amended
from time to time, between the Master Issuer, Northern Rock plc and the Issuer
Security Trustee relating to the provision of the Start-up Loan Tranches to
the Master Issuer;

"Start-up Loan Provider" means Northern Rock, in its capacity as provider of
the Start-up Loans or such other person who provides a Start-Up Loan Tranche
to the Master Issuer pursuant to a start-up loan agreement;

"Start-Up Loan Tranches" means each loan made by a Start-Up Loan Provider to
the Master Issuer under a Start-Up Loan Agreement and collectively, the
"Start-Up Loans";

"Step-Up Date" means the Payment Date or Note Payment Date, as applicable, or
the Loan Payment Date in respect of a Loan Tranche, as applicable, in respect
of an Issuer on which the interest rate on Notes issued by such Issuer or the
interest rate on a Loan Tranche made by a Funding 2 Issuer to Funding 2
increases by a pre-determined amount following the payment made by such Issuer
on such Payment Date, Note Payment Date or Loan Payment Date, as applicable,
or which date in respect of the First Issuer is the Payment Date occurring in
January 2008, and, in relation to any New Issuer or any Funding 2 Issuer, has
the meaning specified under the relevant Issuer Master Definitions Schedule;

"Stock Exchange" means, the London Stock Exchange or any other stock
exchange(s) on which any Notes may from time to time be listed or admitted to
trading and references to the relevant Stock Exchange shall, in relation to
any Notes, be references to the Stock Exchange on which such Notes are, from
time to time, or are intended to be, listed or admitted to trading;

"Subordinated Principal Test" means:

(a)   in respect of the First Issuer Notes, the test which is satisfied (1) on
      any Payment Date occurring on or after the fourth anniversary of the
      Initial Closing Date; and (2) on any Payment Date on which (a) the
      percentage equal to the aggregate Principal Amount Outstanding of the
      Class B Notes and the Class C Notes as at that Payment Date over the
      aggregate Principal Amount Outstanding of the First Issuer Notes as at
      that Payment Date is greater than (b) the product of (i) 2 and (ii) the
      percentage equal to the aggregate Principal Amount Outstanding of the
      Class B Notes and the Class C Notes as at the Initial Closing Date


                                      83
<PAGE>


      over the aggregate Principal Amount Outstanding of the First Issuer
      Notes as at the Initial Closing Date; or

(b)   in respect of any Notes issued by any other Funding Issuer, has the
      meaning given to it under the relevant Issuer Transaction Documents and
      as defined in the Issuer Master Definitions Schedule relating to such
      Funding Issuer;

"Subscription Agreement" means an agreement supplemental to the Programme
Agreement (by whatever name called) in or substantially in the form set out in
Appendix 5 to the Programme Agreement or in such other form as may be agreed
between the Master Issuer and the Lead Arrangers or one or more Dealers (as
the case may be);

"Swap Agreements" means, in relation to Funding 2 and the Funding 2 Issuers,
the Funding 2 Basis Rate Swap Agreement and each Issuer Swap Agreement

"Swap Collateral" means, in respect of the Funding 2 Basis Rate Swap
Agreement, any asset (including, without limitation, Cash and/or securities)
delivered to Funding 2 by the Funding 2 Basis Rate Swap Provider in accordance
with the terms of the Funding 2 Basis Rate Swap Agreement in respect of the
Funding 2 Basis Rate Swap Provider's obligations under the Funding 2 Basis
Rate Swap Agreement;

"Swap Collateral Ancillary Document" means, in respect of the Funding 2 Basis
Rate Swap Agreement, any document (including , without limitation, any
custodial agreement or bank account agreement but excluding the Swap
Agreements, the Cash Management Agreement and the Funding 2 Deed of Charge) as
may be entered into by Funding 2 from time to time in connection with the Swap
Collateral;

"Swap Early Termination Event" means the circumstances in which swap
transactions under a swap agreement can be terminated before their respective
scheduled termination dates;

"Swap Provider Default" means the occurrence of an Event of Default or swap
provider termination event (each as defined in the relevant Swap Agreement)
where the relevant Swap Provider is the Defaulting Party or the Affected Party
(each as defined in the relevant Swap Agreement);

"Swap Provider" means each of the Funding 2 Basis Rate Swap Provider and the
Issuer Swap Providers, or any one of them as the context requires;

"Swap Replacement Premium" means any payment received from a replacement swap
provider upon entry into an agreement with such replacement swap provider
replacing a Swap Agreement;

"Swap Termination Payment" means the amount payable because of a Swap Early
Termination Event;

"TARGET Business Day" means a day on which the Trans-European Automated
Real-time Gross settlement Express (TARGET) system is open;

"Target Reserve Required Amount" means, as at any date, the amount specified
as such in the most recent Final Terms;

"Taxes" means all present and future taxes, levies, imposts, duties (other
than stamp duty), fees, deductions, withholdings or charges of any nature
whatsoever and wheresoever imposed, including, without limitation, value added
tax or other tax in respect of added value and any franchise, transfer, sales,
gross receipts, use, business, occupation, excise, personal property, real
property or other tax


                                      84
<PAGE>


imposed by any national, local or supranational taxing or fiscal authority or
agency together with any penalties, fines or interest thereon and "Tax" and
"Taxation" shall be construed accordingly;

"Termination Event" has the meaning given to such term in Clause 19 of the
Administration Agreement;

"Terms and Conditions" has the same meaning as "Conditions";

"Third Issuer" means Granite Mortgages 02-1 plc;

"Third Issuer Available Principal Receipts" has the meaning given to such term
in the Issuer Master Definitions Schedule relating to the Third Issuer;


"Third Issuer Available Revenue Receipts" has the meaning given to such term
in the Issuer Master Definitions Schedule relating to the Third Issuer.

"Third Issuer Bank Account Agreement" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Bank Accounts" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Cash Management Agreement" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Cash Manager" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Post-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Third
Issuer;

"Third Issuer Pre-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Third
Issuer;

"Third Issuer Pre-Enforcement Principal Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Third Issuer;

"Third Issuer Pre-Enforcement Revenue Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Third Issuer;

"Third Issuer Secured Creditors" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Transaction Accounts" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Transaction Documents" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Party Amounts" means:

(a)   payments of insurance premiums, if any, due to the Seller in respect of
      any Insurance Policy arranged by the Seller and/or the MIG provider to
      the extent not paid or payable by the Seller (or to the extent such
      insurance premiums have been paid by the Seller in respect of any
      Further Advance which is not repurchased by the Seller to reimburse the
      Seller);


                                      85
<PAGE>


(b)   amounts under an unpaid Direct Debit which are repaid by the
      Administrator to the bank making such payment if such bank is unable to
      recoup that amount itself from the relevant customer's account;

(c)   other charges the benefit of which have been re-assigned to the Seller
      (excluding Early Repayment Charges); and/or

(d)   recoveries in respect of amounts deducted from Mortgage Loans as
      described in paragraphs (a) through (e) of Clause 8.5 (Adjustments to
      Trust Property) (inclusive) of the Mortgages Trust Deed;

"Tier" means all the Loan Tranches having the same designated credit rating;

"Title Deeds" means, in relation to each Mortgage Loan and its Related
Security and the Mortgaged Property relating thereto, all conveyancing deeds
and documents which make up the title to the Mortgaged Property and the
security for the Mortgage Loan and all searches and enquiries undertaken in
connection with the grant by the Borrower of the related Mortgage including,
in the case of Registered Land, the relevant Charge Certificate;

"Together Connection Conditions" means the Mortgage Conditions of the Seller
identified as Together Connection Conditions;

"Together Connections Benefit" means the amount by which:

(a)   the interest that would be payable on the Combined Debit Balance at the
      Connection Interest Rate exceeds:

(b)   the interest at the Connection Interest Rate that would be payable on
      the amount by which the Combined Debit Balance exceeds the Combined
      Credit Balance;

"Together Connections Mortgage Loans" means a type of Flexible Mortgage Loan
which has the same basic features as a Together Mortgage Loan, but also allows
the Borrower to link the Mortgage Loan with certain accounts that are held
with the Seller, the balance amounts of which, pursuant to the Together
Connection Conditions, are required to be included in the calculation of the
Combined Credit Balance;

"Together Mortgage Loan" means a type of Flexible Mortgage Loan which allows a
Borrower to obtain an additional unsecured drawdown loan and, in some cases, a
credit card;

"Total Credit Commitment" means an amount equal to the Programme Limit from
time to time;

"Total Property" means at any time the aggregate amount standing to the credit
of the Collection Accounts and held by Northern Rock on trust for the
Mortgages Trustee and itself, subject to and in accordance with the Collection
Bank Agreement;

"Transaction" means the transaction contemplated by the Transaction Documents;

"Transaction Documents" means any of the following documents:

(a)   the Programme Agreement;

(b)   each Subscription Agreement;

(c)   each Underwriting Agreement;

(d)   each Intercompany Loan Agreement;


                                      86
<PAGE>


(e)   the Mortgages Trust Deed;

(f)   the Mortgage Sale Agreement;

(g)   each Issuer Deed of Charge;

(h)   the Funding Deed of Charge;

(i)   the Funding 2 Deed of Charge;

(j)   the Basis Rate Swap Agreement;

(k)   each Issuer Swap Agreement;

(l)   each Issuer Trust Deed;

(m)   each Issuer Paying Agent and Agent Bank Agreement;

(n)   the Administration Agreement;

(o)   the Cash Management Agreement;

(p)   each Issuer Cash Management Agreement;

(q)   the Issuer Guaranteed Investment Contract;

(r)   each Funding 2 Guaranteed Investment Contract;

(s)   the Mortgages Trustee Guaranteed Investment Contract;

(t)   each Post-Enforcement Call Option Agreement;

(u)   the Bank Account Agreement;

(v)   the Funding 2 Bank Account Agreement;

(w)   each Issuer Bank Account Agreement;

(x)   the Collection Bank Agreement;

(y)   each Start-Up Loan Agreement;

(z)   the Corporate Services Agreement;

(aa)  the Stand-by Bank Account Agreement;

(bb)  the Controlling Beneficiary Deed;

(cc)  the Seller (Mortgages Trust) Assignment Agreement;

(dd)  each other document relating to the Transaction expressly designated in
      its terms to be a Transaction Document;

(ee)  each other deed, document, agreement, instrument or certificate entered
      into or to be entered into by Funding 2 under or in connection with any
      of the documents set out in paragraphs (a) through (cc) above or the
      transactions contemplated in them, including each document under which
      Funding 2 assumes any obligations to any New Funding 2 Secured Creditor;

"Trigger Event" means any of an Asset Trigger Event or a Non-Asset Trigger
Event, as the case may be;


                                      87
<PAGE>


"Trust Calculation Period" means the period from (and including) the first
date of each calendar month (or in the case of the first such Trust
Calculation Period, the Initial Closing Date) to (and including) the last day
of the same calendar month;

"Trust Corporation" means a corporation entitled by rules made under the
Public Trustee Act 1906, or entitled pursuant to any comparable legislation
applicable to a trustee in any jurisdiction, to carry out the function of a
custodian trustee;

"Trust Determination Date" means the first day (or, if not a London Business
Day, the next succeeding London Business Day) of each calendar month;

"Trust Indenture Act" means the United States Trust Indenture Act of 1939, as
amended;

"Trust Property" means:

(a)   the Initial Trust Property;

(b)   the Closing Trust Property (excluding any Mortgage Loans that have been
      repurchased by the Seller pursuant to the Mortgage Sale Agreement and
      any Early Repayment Charge Receipts that have been paid to the Seller
      pursuant to the Mortgage Sale Agreement);

(c)   any New Trust Property (excluding any Mortgage Loans that have been
      repurchased by the Seller pursuant to the Mortgage Sale Agreement and
      any Early Repayment Charge Receipts that have been paid to the Seller
      pursuant to the Mortgage Sale Agreement);

(d)   any Scottish Trust Property;

(e)   any Contribution made from time to time to the Mortgages Trustee by any
      Beneficiary until it has been applied by the Mortgages Trustee in
      accordance with the Mortgages Trust Deed;

(f)   any Re-Draw made under a Flexible Mortgage Loan which forms part of the
      Trust Property;

(g)   any Further Draw made under a Personal Secured Loan which forms part of
      the Trust Property;

(h)   any Further Advances made by the Seller to existing Borrowers which are
      assigned to the Trust in accordance with the Mortgage Sale Agreement;

(i)   amounts on deposit (and interest earned on such amounts) from time to
      time in the Mortgages Trustee Bank Accounts;

(j)   any Permitted Replacement Mortgage Loan and its Related Security
      (excluding any Early Repayment Charge Receipts that have been paid to
      the Seller pursuant to the Mortgage Sale Agreement) relating to a
      Permitted Product Switch; (k) the proceeds of sale of any Mortgage Loan
      and its Related Security forming part of the Trust Property;

(l)   all other property which shall form part of the Trust Property pursuant
      to Clause 2 (Creation of Mortgages Trust) of the Mortgages Trust Deed;
      and

(m)   any Additional Trust Property;

      less


                                      88
<PAGE>


(1)   any actual Losses in relation to the Mortgage Loans and any actual
      reductions occurring in respect of the Mortgage Loans as described in
      Clause 8.5 (Adjustments to Trust Property) of the Mortgages Trust Deed;
      and

(2)      distributions of principal made from time to time to the
         Beneficiaries of the Mortgages Trust;

"Trust Property Calculation Adjustments" has the meaning set out in the
Mortgages Trust Deed;

"Trustee Acts" means the Trustee Act 1925 and the Trustee Act 2000;

"UK Account Bank" means Lloyds TSB Bank plc, City Office, Bailey Drive,
Gillingham Business Park, Kent ME8 0LS;

"UK Listing Authority" means at any time the Financial Services Authority in
its capacity as competent authority for the purposes of Part VI of the FSMA or
such other Person which at that time performs an analogous role in relation to
the regulation of financial markets and the issue of public debt securities in
the United Kingdom;

"Unauthorised Underpayment" means a Borrower Underpayment in respect of a
Mortgage Loan which is not funded by, or exceeds the amount of any,
Overpayments previously made by the Borrower in respect of such Mortgage Loan
or is otherwise not permitted by the Seller in accordance with the relevant
Mortgage Conditions;

"Underpayment" means any Authorised Underpayment or Unauthorised Underpayment;

"Underwriting Agreement" means an underwriting agreement relating to the sale
of a Series or Class of US Notes among the Master Issuer and the underwriters
designated therein;

"United Kingdom" means the United Kingdom of Great Britain and Northern Ireland;

"United States" means the United States of America;

"Unpaid Interest Amount" means the amount of the Unpaid Interest in relation
to any Non-Cash Re-Draw on any Flexible Mortgage Loan;

"Unpaid Interest" means, in relation to any Non-Cash Re-Draw of any Flexible
Mortgage Loan, the interest which would, but for such Non-Cash Re-Draw, have
been payable in respect of that Mortgage Loan on the relevant Monthly Payment
Date for such Mortgage Loan;

"Unregistered Land" means land in England or Wales, title to which is not
registered at H.M. Land Registry;

"Unregistered Transfer" means, in relation to Unregistered Land, a deed of
transfer of a Mortgage or Mortgages in the form referred to in paragraph (b)
of Clause 6.3 of the Mortgage Sale Agreement with such modifications as may be
permitted from time to time in accordance with such Clause;

"Unregulated Personal Secured Loan" means a Personal Secured Loan which is
documented as an agreement not regulated by the CCA and which is secured
pursuant to the relevant Borrower's existing Mortgage;

"US Global Note Certificates" or "US Global Note Certificate" means the Global
Note Certificates in registered form representing the US Notes;

"US Individual Note Certificates" or "US Individual Note Certificate" means
the Individual Note Certificates in registered form representing the US Notes;


                                      89
<PAGE>


"US Notes" means generally the Notes which are not Reg S Notes and in relation
to an Issuer the Notes issued by that Issuer which are not Reg S Notes;

"US Paying Agent" means Citibank N.A., acting through its office at 14 Floor,
388 Greenwich Street, New York, New York 10013;

"Valuation Report" means the valuation report or reports for mortgage
purposes, in the form of the pro-forma contained in the Standard
Documentation, obtained by the Seller from a Valuer in respect of each
Mortgaged Property or a valuation report in respect of a valuation made using
a methodology which would be acceptable to a reasonable prudent mortgage
lender;

"Valuer" means an Associate or Fellow of the Royal Institution of Chartered
Surveyors or the Incorporated Society of Valuers and Auctioneers who was at
the relevant times either a member of a firm which was on the list of Valuers
approved by or on behalf of the Seller from time to time or an Associate or
Fellow of the Royal Institute of Chartered Surveyors or the Incorporated
Society of Valuers and Auctioneers employed in-house by the Seller acting for
the Seller in respect of the valuation of a Mortgaged Property;

"WAFF" means the weighted average repossession frequency in respect of the
Mortgage Portfolio; and

"WALS" means the weighted average loss severity in respect of the Mortgage
Portfolio.

"Weighted Average Funding Share Percentage" means the weighted percentage
share of Funding in the Trust Property from time to time, as determined in
accordance with Clause 8 (Adjustment of Funding Share Percentage, Funding 2
Share Percentage and Seller Share Percentage) of the Mortgages Trust Deed;

"Weighted Average Funding 2 Share Percentage" means the weighted percentage
share of Funding 2 in the Trust Property from time to time, as determined in
accordance with Clause 8 (Adjustment of Funding Share Percentage, Funding 2
Share Percentage and Seller Share Percentage) of the Mortgages Trust Deed;

"Weighted Average Seller Share Percentage" means the weighted percentage share
of the Seller in the Trust Property from time to time, as determined in
accordance with Clause 8 (Adjustment of Funding Share Percentage, Funding 2
Share Percentage and Seller Share Percentage) of the Mortgages Trust Deed;

2.    Interpretation and Construction

Any reference in this Programme Master Definitions Schedule or any Transaction
Document to:

      "agreed form" means, in relation to any document, the draft of that
      document the form of which has been agreed between the parties thereto
      (or if such document is delivered pursuant to another Transaction
      Document, between the parties to such Transaction Document) and
      initialled on their behalf for the purpose of identification;

      the "assets" of any person shall be construed as a reference to the
      whole or any part of its business, undertakings, property, intellectual
      property, shares, securities, debts, accounts, revenues (including any
      right to receive revenues), goodwill, shareholdings and uncalled capital
      including premium whether now or hereafter acquired and any other assets
      whatsoever;


                                      90
<PAGE>


      the "assignment" of any Mortgage Loan shall be construed, in relation to
      any Scottish Mortgage Loan and its Related Security, so as to include
      the transfer of the beneficial interest therein and/or the legal title
      thereto, and the terms "assign" and "assigned" shall in that context be
      construed accordingly;

      "disposal" shall be construed as any sale, lease, transfer, conveyance,
      assignment, assignation, licence, sub-licence or other disposal and
      "dispose" shall be construed accordingly;

      a "guarantee" means any guarantee, bond, indemnity, letter of credit,
      third party security or other legally binding assurance against
      financial loss granted by one person in respect of any indebtedness of
      another person, or any agreement to assume any indebtedness of any other
      person or to supply funds or to invest in any manner whatsoever in such
      other person by reason of, or otherwise in relation to, indebtedness of
      such other person;

      "indebtedness" shall be construed so as to include any obligation
      (whether incurred as principal or as surety) for the payment or
      repayment of money, whether present or future, actual or contingent;

      a "month" is a reference to a period starting on one day in a calendar
      month and ending on the numerically corresponding day in the next
      calendar month save that, where any such period would otherwise end on a
      day which is not a business day, it shall end on the next business day,
      unless that day falls in the calendar month succeeding that in which it
      would otherwise have ended, in which case it shall end on the preceding
      business day, provided that, if a period starts on the last business day
      in a calendar month or if there is no numerically corresponding day in
      the month in which that period ends, that period shall end on the last
      business day in that later month (and references to "months" shall be
      construed accordingly);

      "party" shall be construed as a party to a particular agreement, as the
      case may be;

      "subsidiary" means, (a) a subsidiary within the meaning of Section 736
      of the Companies Act 1985, and (b) unless the context requires
      otherwise, a subsidiary undertaking within the meaning of Section 258 of
      the Companies Act 1985;

      "VAT" means value added tax imposed by the United Kingdom as referred to
      in the Value Added Tax Act 1994 and legislation (whether delegated or
      otherwise) replacing the same or supplemental thereto or in any primary
      or subordinate legislation promulgated by the European Union or any
      official body or agency thereof, and any similar turnover tax replacing
      or introduced in addition to any of the same;

      a "wholly-owned subsidiary" of a company or corporation shall be
      construed as a reference to any company or corporation which has no
      other members except that other company or corporation and that other
      company's or corporation's wholly-owned subsidiaries or persons acting
      on behalf of that other company or corporation or its wholly-owned
      subsidiaries; and

      the "winding-up" or "administration" of a company or corporation shall
      be construed so as to include any equivalent or analogous proceedings
      under the law of the jurisdiction in which such company or corporation
      is incorporated or any jurisdiction in which such company or corporation
      carries on business including the seeking of liquidation, winding-up,
      bankruptcy,


                                      91
<PAGE>


      reorganisation, dissolution, administration, arrangement, adjustment,
      protection or relief of debtors.

2.1   "(GBP)", "sterling", "Sterling" or "pounds sterling" denotes the
      lawful currency for the time being of the United Kingdom of Great
      Britain and Northern Ireland; "(euro)", "euro" or "Euro" denotes the
      lawful currency for the time being of the member states of the European
      Union that adopt the single currency introduced at the start of the
      third stage of European Economic Monetary Union pursuant to the Treaty
      of Rome of 25th March, 1957, establishing the European Community as
      amended from time to time and as amended by, inter alia, the Treaty of
      European Union of 7th February, 1992; "$", "US$", "US dollars",
      "dollars" or "Dollars" denotes the lawful currency for the time being of
      the United States of America.

2.2   In this Programme Master Definitions Schedule and in any of the
      Transaction Documents in which this Programme Master Definitions
      Schedule is expressed to be incorporated or to which this Programme
      Master Definitions Schedule is expressed to apply:

      (a)   words denoting the singular number only shall include the plural
            number also and vice versa;

      (b)   words denoting one gender only shall include the other genders;

      (c)   words denoting persons only shall include firms and corporations
            and vice versa;

      (d)   references to any statutory provision shall be deemed also to
            refer to any statutory modification or re-enactment thereof or any
            statutory instrument, order or regulation made thereunder or under
            any such re-enactment;

      (e)   references to any agreement or other document (including any of
            the Transaction Documents) shall be deemed also to refer to such
            agreement or document as amended, varied, supplemented or novated
            from time to time;

      (f)   clause, paragraph and schedule headings are for ease of reference
            only;

      (g)   reference to a statute shall be construed as a reference to such
            statute as the same may have been, or may from time to time be,
            amended or re-enacted to the extent such amendment or re-enactment
            is substantially to the same effect as such statute on the date
            hereof;

      (h)   unless stated otherwise reference to a time of day shall be
            construed as a reference to London (GMT) time; and

      (i)   references to any person shall include references to his
            successors, transferees and assigns and any person deriving title
            under or through him.

2.3   Save as provided otherwise, where any obligation in a Transaction
      Document is owed to more than one party that obligation is owed to each
      of them separately and may be enforced by any of them.

2.4   Any reference in any Mortgages Trust Transaction Document to any
      discretion, power or right on the part of the Mortgages Trustee shall
      (where otherwise expressly provided in such Mortgages Trust Transaction
      Document) be expressed by the Mortgages Trustee only as directed by the
      Beneficiary but subject in each case to the provisions of the Mortgages
      Trust Deed and the Controlling Beneficiary Deed.


                                      92
<PAGE>


3.    Governing Law

This Programme Master Definitions Schedule is governed by, and shall be
construed in accordance with, the laws of England.



SIGNATORIES

SIDLEY AUSTIN BROWN & WOOD



By:



ALLEN & OVERY LLP



By:






                                      93
<PAGE>