Exhibit 4.2

                                                             Execution Version


                            Dated 19 January 2005



                              NORTHERN ROCK PLC
                  as Seller, Cash Manager and a Beneficiary



                       GRANITE FINANCE TRUSTEES LIMITED
                             as Mortgages Trustee



                       GRANITE FINANCE FUNDING LIMITED
                         as Funding and a Beneficiary



                                   - and -



                      GRANITE FINANCE FUNDING 2 LIMITED
                        as Funding 2 and a Beneficiary









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                                TENTH AMENDED
                             MORTGAGES TRUST DEED

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                          SIDLEY AUSTIN BROWN & WOOD
                              WOOLGATE EXCHANGE
                             25 BASINGHALL STREET
                               LONDON, EC2V 5HA
                           TELEPHONE 020 7360 3600
                           FACSIMILE 020 7626 7937
                            REF:30507-30040/677664


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                                   CONTENTS

1.    Definitions and Construction............................................2

2.    Creation of Mortgages Trust.............................................2

3.    Conditions Precedent....................................................4

4.    Consideration...........................................................5

5.    Increasing and Decreasing the Seller Share of the Trust
      Property...............................................................10

6.    Increasing the Funding Share and the Funding 2 Share of the Trust
      Property...............................................................11

7.    Initial Funding Share, Initial Seller Share and Initial Funding 2
      Share..................................................................14

8.    Adjustment of Funding Share Percentage, Funding 2 Share Percentage
      and Seller Share Percentage............................................15

9.    Minimum Seller Share...................................................29

10.   Distribution of Revenue Receipts.......................................30

11.   Distribution of Principal Receipts.....................................33

12.   Allocation of Losses...................................................38

13.   Overpayments...........................................................39

14.   Arrears................................................................39

15.   Ledgers................................................................39

16.   Fees and Expenses of the Mortgages Trustee.............................40

17.   Beneficiary Directions.................................................41

18.   Early Termination of the Mortgages Trust...............................43

19.   Audit of Mortgage Loans Constituting the Trust Property................43

20.   Transfers..............................................................43

21.   Representations and Covenants..........................................44

22.   Power to Delegate......................................................45

23.   Power of Investment....................................................45

24.   Other Provisions Regarding the Mortgages Trustee.......................46

25.   No Retirement of Mortgages Trustee.....................................47

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26.   Termination............................................................47

27.   Further Assurances.....................................................48

28.   No Partnership or Agency...............................................48

29.   Calculations...........................................................48

30.   Confidentiality........................................................48

31.   Non Petition Covenant; Limited Recourse................................49

32.   Amendments and Waiver..................................................50

33.   Notices................................................................51

34.   Third Party Rights.....................................................52

35.   Execution in Counterparts; severability................................52

36.   Governing Law and Submission to Jurisdiction...........................52

SCHEDULE 1 REPRESENTATIONS AND WARRANTIES....................................54



                                      ii
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THIS MORTGAGES TRUST DEED WAS MADE ON 26 MARCH 2001 AND AMENDED AND RESTATED
PURSUANT TO THE DEEDS OF AMENDMENT AND RESTATEMENT DATED 23 JULY 2001, 28
SEPTEMBER 2001, 20 MARCH 2002, 23 SEPTEMBER 2002, 27 JANUARY 2003, 21 MAY
2003, 24 SEPTEMBER 2003, 26 JANUARY 2004, 26 MAY 2004 AND 19 JANUARY 2005
BETWEEN:

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

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

(3)      GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
         limited company incorporated under the laws of Jersey, but acting out
         of its office established in England (registered overseas company
         number FC022999 and branch number BR005916) at 69 Park Lane, Croydon,
         CR9 1TQ, in its capacity as a Beneficiary; and

(4)      GRANITE FINANCE FUNDING 2 LIMITED (registered number 5249387), a
         private limited company incorporated under the laws of England and
         Wales, whose registered office is at Fifth Floor, 100 Wood Street,
         London EC2V 7EX, in its capacity as a Beneficiary.

WHEREAS:

(A)      The Mortgages Trustee wishes to declare the following trusts in
         respect of the Trust Property (being on 26 March, 2001, the sum of
         (GBP)100 which monies have been received by and are presently held by
         the Mortgages Trustee or to its order).

(B)      The Mortgages Trustee (acting as principal and not as agent of any
         party) has agreed to hold the Trust Property as bare trustee for the
         Beneficiaries upon, with and subject to the trusts, powers and
         provisions of this Deed. The Mortgages Trustee will receive amounts
         arising from the Trust Property and will distribute such amounts for
         the benefit of the Beneficiaries of the Mortgages Trust. It will
         delegate certain tasks in relation to the Mortgages Trust to the
         Administrator and the Cash Manager.

(C)      The Seller carries on the business of, inter alia, originating
         residential mortgage loans to individual Borrowers in England, Wales
         and Scotland and of managing and administering such mortgage loans.
         The Seller intends to sell and assign from time to time portfolios of
         such mortgage loans to the Mortgages Trustee pursuant to the Mortgage
         Sale Agreement entered into on or about 26 March 2001 (as the same
         have been and may be amended, varied or supplemented from time to
         time), which mortgage loans shall be held by the Mortgages Trustee as
         bare trustee for the Beneficiaries upon, with and subject to the
         trusts, powers and provisions of this Deed.


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NOW THIS DEED WITNESSES:

1.       DEFINITIONS AND CONSTRUCTION

1.1      The provisions of the Programme Master Definitions Schedule signed
         for identification purposes by Sidley Austin Brown & Wood and Allen &
         Overy LLP on 19 January, 2005 (as the same have been and may be
         amended, varied or supplemented from time to time with the consent of
         the parties hereto) are expressly and specifically incorporated into
         and shall apply to this Deed.

2.       CREATION OF MORTGAGES TRUST

2.1      Initial Trust Property

         The Mortgages Trustee hereby declares itself as trustee of the Trust
         Property, being, upon execution of this Deed, the sum of (GBP)100
         (one hundred pounds) (the "Initial Trust Property") which sum shall
         be held on trust by the Mortgages Trustee absolutely as to both
         capital and income for the benefit, as tenants in common (holding
         undivided beneficial interests), of the Seller as to the Initial
         Seller Share Percentage and Funding as to the Initial Funding Share
         Percentage. The Initial Trust Property shall be held by the Mortgages
         Trustee on the Mortgages Trust upon due execution of this Deed by all
         parties to it.

2.2      Closing Trust Property

         Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
         intends to sell and assign the Initial Mortgage Portfolio to the
         Mortgages Trustee on the Initial Closing Date, which Initial Mortgage
         Portfolio including all related rights and benefits shall form part
         of the Trust Property (the "Closing Trust Property").

2.3      New Trust Property

         From time to time and pursuant to the Mortgage Sale Agreement, the
         Seller intends to sell and assign New Mortgage Portfolios to the
         Mortgages Trustee, which New Mortgage Portfolios including all
         related rights and benefits shall form part of the Trust Property
         (the "New Trust Property").

2.4      Other Trust Property

         (A)      In accordance with this Deed, from time to time Funding and
                  the Seller shall, subject to and in accordance with Clause 4
                  (Consideration), Clause 5 (Increasing and Decreasing the
                  Seller Share of the Trust Property) and/or Clause 6
                  (Increasing the Funding Share and the Funding 2 Share of the
                  Trust Property) provide consideration to the Mortgages
                  Trustee in the form of Contributions to be applied by the
                  Mortgages Trustee as set out in this Deed. Any Contribution
                  so provided to the Mortgages Trustee shall, on receipt by
                  the Mortgages Trustee and until it has been applied by the
                  Mortgages Trustee in accordance with the terms of this Deed,
                  form part of the Trust Property.

         (B)      Any Re-draws made under a Flexible Mortgage Loan which is
                  included in the Trust Property will also form part of the
                  Trust Property.

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         (C)      Amounts on deposit (and interest earned on such amounts)
                  from time to time in the Mortgages Trustee Bank Accounts
                  will also form part of the Trust Property.

         (D)      If the Seller subsequently decides not to repurchase any
                  Mortgage Loan (which is the subject of a Further Advance)
                  within the Trust Property and/or to sell and assign the
                  Further Advance to the Mortgages Trustee in accordance with
                  the Mortgage Sale Agreement, any Further Advance made in
                  respect of a Mortgage Loan in the Trust Property will also
                  form part of the Trust Property.

         (E)      Any Permitted Replacement Mortgage Loan and its Related
                  Security (including the rights under any related MIG Policy
                  and other insurance policies arranged by the Seller, but
                  excluding any Early Repayment Charge Receipts paid to the
                  Seller) relating to a Permitted Product Switch effected in
                  relation to a Mortgage Loan which forms part of the Trust
                  Property will also form part of the Trust Property.

         (F)      The proceeds of sale of any Mortgage Loan and its Related
                  Security forming part of the Trust Property pursuant to the
                  Mortgage Sale Agreement or other proceeds of sale of any
                  Trust Property will also form part of the Trust Property.

         (G)      Any Further Draws under a Personal Secured Loan which is
                  included in the Trust Property will also form part of the
                  Trust Property.

2.5      Payments of Early Repayment Charges

         Subject to and in accordance with the Mortgage Sale Agreement, the
         Mortgages Trustee will agree to pay to the Seller any Early Repayment
         Charge Receipts received by the Mortgages Trustee in respect of any
         Mortgage Loan included in the Initial Mortgage Portfolio or any New
         Mortgage Portfolio which the Seller sells and assigns to the
         Mortgages Trustee. Upon any such payment to the Seller, the benefit
         of such Early Repayment Charges will no longer form part of the Trust
         Property.

2.6      Trust Property/Declaration of Trust

         Subject to Clause 3 (Conditions Precedent), the Mortgages Trustee
         shall hold the Trust Property as to both capital and income on trust
         absolutely for Funding, Funding 2 and for the Seller as tenants in
         common upon, with and subject to all the trusts, powers and
         provisions of this Deed (such that each Beneficiary shall have an
         undivided beneficial interest in the Trust Property). For the
         purposes of Clause 2.1 (Initial Trust Property) to Clause 2.6 (Trust
         Property/Declaration of Trust) (inclusive), "Trust Property" means
         the Initial Trust Property, the Closing Trust Property, any New Trust
         Property (but excludes any Early Repayment Charge Receipts which have
         been paid to the Seller and any Mortgage Loans which have been
         purchased or repurchased (as applicable) by the Seller pursuant to
         the Mortgage Sale Agreement) and all Other Trust Property referred to
         under Clause 2.4 (Other Trust Property) less (a) any actual Losses in
         relation to Mortgage Loans and any actual redemptions occurring in
         respect of the Mortgage Loans as described in Clause 8.5 (Adjustments
         to Trust Property) and (b) distributions of principal made from time
         to time to the Beneficiaries.

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2.7      Additional Trust Property/Declaration of Trust

         With effect on and from the Funding 2 Programme Date, the Mortgages
         Trustee hereby declares itself as trustee of all rights, title,
         interest and benefit of all property and assets held by it at any
         time (to the extent that such rights, title, interest and benefit in
         such property and assets do not 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))
         which rights, title, interest and benefit (the "Additional Trust
         Property") shall be held on trust by the Mortgages Trustee absolutely
         as to both capital and income for the benefit of the Seller, Funding
         and Funding 2 as tenants in common upon, with and subject to all of
         the trusts, powers and provisions of this Deed (such that each
         Beneficiary shall have an individual beneficial interest in the
         Additional Trust Property).

2.8      Funding 2 Contributions

         The consideration in the form of Contributions provided by Funding 2
         to the Mortgages Trustee subject to and in accordance with Clause 4
         (Consideration) and/or Clause 6 (Increasing the Funding Share and the
         Funding 2 Share of the Trust Property) to be applied by the Mortgages
         Trustee as set out in this Deed shall, until such Contributions form
         part of the Trust Property referred to in Clause 2.4 (Other Trust
         Property), form part of Additional Trust Property.

3.       CONDITIONS PRECEDENT

3.1      Closing Trust Property

         The Closing Trust Property shall be held by the Mortgages Trustee on
         the Mortgages Trust subject to satisfaction of the following
         conditions precedent:

         (A)      the due execution and delivery of the Mortgage Sale
                  Agreement by all parties to it;

         (B)      the due execution and delivery of this Deed by all parties
                  to it on the Initial Closing Date;

         (C)      the satisfaction or waiver in accordance with the terms of
                  the Mortgage Sale Agreement of the conditions to the sale
                  and assignment of the Initial Mortgage Portfolio as set out
                  in Clause 2 (Sale and Purchase of Initial Mortgage
                  Portfolio) and Clause 3 (Initial Closing Date) of the
                  Mortgage Sale Agreement;

         (D)      the payment by Funding to the Mortgages Trustee of Funding's
                  Initial Contribution for the Initial Funding Share
                  Percentage in accordance with Clause 4 (Consideration); and

         (E)      the payment by the Mortgages Trustee to the Seller of the
                  Initial Purchase Price for the sale and assignment to the
                  Mortgages Trustee of the Initial Mortgage Portfolio.

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3.2      New Trust Property

         Subject to the satisfaction or waiver, in accordance with the terms
         of the Mortgage Sale Agreement, of the conditions referred to in
         Clause 4 (Sale and Purchase of New Mortgage Loan Portfolios) of the
         Mortgage Sale Agreement for the transfer of New Mortgage Loan
         Portfolios to the Mortgages Trustee, any New Trust Property sold and
         assigned to the Mortgages Trustee, shall be held by the Mortgages
         Trustee on the Mortgages Trust .

3.3      Funding 2 Share

         The requirement for the Mortgages Trustee to hold the Trust Property
         on trust for Funding 2 shall be subject to and conditional upon the
         acquisition by Funding 2, by way of assignment, from the Seller of a
         portion of the Seller's beneficial interest in the Mortgages Trust in
         accordance with the terms of the Seller (Mortgages Trust) Assignment
         Agreement.

4.       CONSIDERATION

4.1      Consideration provided by Seller

         The Seller in its capacity as a Beneficiary shall provide
         consideration to the Mortgages Trustee for the Seller Share in the
         Trust Property:

         (A)      on the Initial Closing Date, by selling and assigning to the
                  Mortgages Trustee the Initial Mortgage Portfolio upon
                  payment by the Mortgages Trustee to the Seller of the
                  Initial Purchase Price for the Initial Mortgage Portfolio in
                  accordance with the terms of the Mortgage Sale Agreement;

         (B)      on each date after the Initial Closing Date on which (i) New
                  Mortgage Loans are acquired by the Mortgages Trustee from
                  the Seller in accordance with the Mortgage Sale Agreement
                  and (ii) the consideration provided to the Seller for that
                  sale is or includes the covenant of the Mortgages Trustee to
                  hold the Trust Property on trust for Funding, the Seller
                  and, upon the acquisition by Funding 2, by way of
                  assignment, from the Seller of a portion of the Seller's
                  beneficial interest in the Mortgages Trust in accordance
                  with the terms of the Seller (Mortgages Trust) Assignment
                  Agreement, Funding 2, in accordance with the terms of this
                  Deed, by the sale on such date by the Seller of such New
                  Mortgage Loans either for the payment by the Mortgages
                  Trustee of the Initial Purchase Price paid on such date or
                  (if no Initial Purchase Price is paid) without payment on
                  such date; and

         (C)      on each date on which the Seller increases the Seller Share
                  of the Trust Property in accordance with Clause 5
                  (Increasing and Decreasing the Seller Share of the Trust
                  Property) below, the Seller will pay the consideration to
                  the Mortgages Trustee specified in that Clause.

4.2      Consideration provided by Funding

         Funding in its capacity as a Beneficiary shall provide consideration
         to the Mortgages Trustee for the Funding Share of the Trust Property:

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         (A)      on the Initial Closing Date, by paying to the Mortgages
                  Trustee the Initial Contribution in respect of the Closing
                  Trust Property which shall be equal to (and from which the
                  Mortgages Trustee shall or shall procure that the Cash
                  Manager on its behalf shall pay) the Initial Purchase Price
                  in respect of the Initial Mortgage Portfolio payable by the
                  Mortgages Trustee to the Seller pursuant to the Mortgage
                  Sale Agreement on such date;

         (B)      on each Distribution Date, by paying to the Mortgages
                  Trustee a Deferred Contribution equal to the amount (if any)
                  of:

                  (1)      Mortgages Trustee Available Revenue Receipts to
                           which Funding is entitled on such date in
                           accordance with paragraph (D)(i) of Clause 10.2
                           (Distribution of Mortgages Trustee Available
                           Revenue Receipts); and

                  (2)      the Funding Proportion of the amount of any Early
                           Repayment Charge Receipts payable by the Mortgages
                           Trustee to the Seller under the Mortgage Sale
                           Agreement.

                  The amounts listed under sub-clauses (B)(1) and (B)(2) are,
                  together, referred to as the "Funding Relevant
                  Distribution". The Funding Relevant Distribution and the
                  Funding 2 Relevant Distribution (as defined in Clause 4.3(A)
                  below) are calculated as at such Distribution Date, and
                  shall be equal to (and from which the Mortgages Trustee
                  shall or shall procure that the Cash Manager on its behalf
                  shall pay) such amount of Deferred Purchase Price as is
                  payable by the Mortgages Trustee to the Seller pursuant to
                  the Mortgage Sale Agreement on such date. The parties to
                  this Deed agree that on any Distribution Date, the Funding
                  Relevant Distribution and the Deferred Contribution payable
                  by Funding (as calculated pursuant to this sub-clause (B))
                  to the Mortgages Trustee shall be set off against each other
                  such that, as between the Mortgages Trustee and Funding, no
                  amount shall be payable in respect of such Funding Relevant
                  Distribution or such Deferred Contribution on such date and
                  the Cash Manager on behalf of the Mortgages Trustee shall
                  pay to the Seller (in satisfaction (in part) of the
                  Mortgages Trustee's obligation to pay Deferred Purchase
                  Price to the Seller under the Mortgage Sale Agreement) those
                  funds which, were it not for such set-off, would have been
                  payable to Funding as the Funding Relevant Distribution;

         (C)      on each date after the Initial Closing Date on which (i) an
                  amount of the Initial Purchase Price is payable in respect
                  of New Mortgage Loans which are sold and assigned by the
                  Seller to the Mortgages Trustee on such date and (ii)
                  Funding receives the net proceeds of a Funding Intercompany
                  Loan from a Funding Issuer, by paying to the Mortgages
                  Trustee an Initial Contribution in respect of the Funding
                  Share of the Trust Property which shall be equal to (and
                  from which the Mortgages Trustee shall or shall procure that
                  the Cash Manager on its behalf shall pay) the Initial
                  Purchase Price in respect of such New Mortgage Loans payable
                  by the Mortgages Trustee to the Seller pursuant to the
                  Mortgage Sale Agreement on such date unless, in either case,
                  Funding has given notice to each relevant Funding Issuer of
                  its intention to use the proceeds of a Funding Intercompany
                  Loan to repay one or more of the Funding Intercompany Loans
                  from such Funding Issuers, and subject to



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                  Clause 6 (Increasing the Funding Share and the Funding 2
                  Share of the Trust Property) below;

         (D)      on each other date after the Initial Closing Date on which
                  Funding receives the net proceeds of a Funding Intercompany
                  Loan from a Funding Issuer, by paying to the Mortgages
                  Trustee a Further Contribution in respect of the Funding
                  Share of the Trust Property which shall be equal to (and
                  from which the Mortgages Trustee shall or shall procure that
                  the Cash Manager on its behalf shall pay) the Special
                  Distribution payable to the Seller in accordance with Clause
                  4.4 (Application by Mortgages Trustee) unless Funding has
                  given notice to each relevant Funding Issuer of its
                  intention to use the proceeds of a Funding Intercompany Loan
                  to repay one or more of the Funding Intercompany Loans from
                  such Funding Issuers subject to Clause 6 (Increasing the
                  Funding Share and the Funding 2 Share of the Trust Property)
                  below; and

         (E)      following the Final Repayment Date of the latest maturing
                  Funding Intercompany Loan made by any Funding Issuer to
                  Funding and provided that there are no further claims
                  outstanding under any Funding Intercompany Loan or on such
                  earlier date provided that all Funding Intercompany Loans
                  have either been repaid in full or there are no further
                  claims outstanding under any Funding Intercompany Loan,
                  Funding will make a final payment of Deferred Contribution
                  to the Mortgages Trustee (the "Funding Final Deferred
                  Contribution") in an amount equal to the aggregate amount
                  standing to the credit of the Funding Bank Accounts
                  (including any account established for the purposes of the
                  Issuer Reserve Fund and/or the Issuer Liquidity Reserve Fund
                  of any Funding Issuer) after making any payments ranking in
                  priority thereto, subject to and in accordance with the
                  relevant Funding Priority of Payments. The Funding Final
                  Deferred Contribution shall be in an amount equal to (and
                  from the Funding Final Deferred Contribution the Mortgages
                  Trustee shall or shall procure that the Cash Manager shall
                  on its behalf pay) an amount of Deferred Purchase Price
                  payable by the Mortgages Trustee to the Seller pursuant to
                  and in accordance with the Mortgage Sale Agreement.

4.3      Consideration provided by Funding 2

         Funding 2 in its capacity as a Beneficiary shall provide
         consideration to the Mortgages Trustee for the Funding 2 Share of the
         Trust Property:

         (A)      on each Distribution Date, by paying to the Mortgages
                  Trustee a Deferred Contribution equal to the amount (if any)
                  of:

                  (1)      Mortgages Trustee Available Revenue Receipts to
                           which Funding 2 is entitled on such date in
                           accordance with paragraph (D)(ii) of Clause 10.2
                           (Distribution of Mortgages Trustee Available
                           Revenue Receipts); and

                  (2)      the Funding 2 Proportion of the amount of any Early
                           Repayment Charge Receipts payable by the Mortgages
                           Trustee to the Seller under the Mortgage Sale
                           Agreement.

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                  The amounts listed under sub-clauses (A)(1) and (A)(2) are,
                  together, referred to as the "Funding 2 Relevant
                  Distribution". Together with the Funding Relevant
                  Distribution, the Funding 2 Relevant Distribution shall be
                  applied in accordance with Clause 4.2(B). The parties to
                  this Deed agree that on any Distribution Date, the Funding 2
                  Relevant Distribution and the Deferred Contribution payable
                  by Funding 2 (as calculated pursuant to this sub-clause (A))
                  to the Mortgages Trustee shall be set off against each other
                  such that, as between the Mortgages Trustee and Funding 2,
                  no amount shall be payable in respect of such Funding 2
                  Relevant Distribution or such Deferred Contribution on such
                  date and the Cash Manager on behalf of the Mortgages Trustee
                  shall pay to the Seller (in satisfaction (in part) of the
                  Mortgages Trustee's obligation to pay Deferred Purchase
                  Price to the Seller under the Mortgage Sale Agreement) those
                  funds which, were it not for such set-off, would have been
                  payable to Funding 2 as the Funding 2 Relevant Distribution;

         (B)      on each date after the Funding 2 Programme Date on which (i)
                  an amount of Initial Purchase Price is payable in respect of
                  New Mortgage Loans which are sold and assigned by the Seller
                  to the Mortgages Trustee on such date and (ii) Funding 2
                  receives the net proceeds of a Loan Tranche under the Global
                  Intercompany Loan, by paying to the Mortgages Trustee an
                  Initial Contribution in respect of the Funding 2 Share of
                  the Trust Property which shall be equal to (and from which
                  the Mortgages Trustee shall or shall procure that the Cash
                  Manager on its behalf shall pay) the Initial Purchase Price
                  in respect of such New Mortgage Loans payable by the
                  Mortgages Trustee to the Seller pursuant to the Mortgage
                  Sale Agreement on such date unless Funding 2 has given
                  notice to the Funding 2 Issuer of its intention to use the
                  proceeds of a Loan Tranche under the Global Intercompany
                  Loan to repay (in part or in full) one or more of the Loan
                  Tranches under the Global Intercompany Loan from the Funding
                  2 Issuer and subject to Clause 6 (Increasing the Funding
                  Share and the Funding 2 Share of the Trust Property) below;

         (C)      on each other date after the Funding 2 Programme Date on
                  which Funding 2 receives the net proceeds of a Loan Tranche
                  from the Funding 2 Issuer, by paying to the Mortgages
                  Trustee a Further Contribution in respect of the Funding 2
                  Share of the Trust Property which shall be equal to (and
                  from which the Mortgages Trustee shall pay or shall procure
                  that the Cash Manager on its behalf shall pay):

                  (1)      the Special Distribution payable to the Seller in
                           accordance with Clause 4.4 (Application by
                           Mortgages Trustee); and/or

                  (2)      the Special Distribution payable to Funding in
                           accordance with Clause 4.4 (Application by
                           Mortgages Trustee),

                  unless Funding 2 has given notice to the Funding 2 Issuer of
                  its intention to use the proceeds of a Loan Tranche to repay
                  (in part or in full) one or more of the Loan Tranches each
                  relating to a series and class of notes of the Funding 2
                  Issuer being refinanced and subject to Clause 6 (Increasing
                  the Funding Share and the Funding 2 Share of the Trust
                  Property) below.

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<PAGE>

         (D)      following the Final Repayment Date of the latest maturing
                  Loan Tranche made under the Funding 2 Intercompany Loan
                  Agreement by the Funding 2 Issuer to Funding 2 and provided
                  that there are no further claims outstanding in respect of
                  the Funding 2 Deed of Charge or on such earlier date
                  provided that all Funding 2 Secured Obligations have either
                  been repaid in full or there are no further claims
                  outstanding under the Funding 2 Deed of Charge, Funding 2
                  will make a final payment of Deferred Contribution to the
                  Mortgages Trustee (the "Funding 2 Final Deferred
                  Contribution") in an amount equal to the aggregate amount
                  standing to the credit of the Funding 2 Bank Accounts after
                  making any payments ranking in priority thereto, subject to
                  and in accordance with the relevant Funding 2 Priority of
                  Payments. The Funding 2 Final Deferred Contribution shall be
                  in an amount equal to (and from the Funding 2 Final Deferred
                  Contribution the Mortgages Trustee shall or shall procure
                  that the Cash Manager shall on its behalf pay) an amount of
                  Deferred Purchase Price payable by the Mortgages Trustee to
                  the Seller pursuant to and in accordance with the Mortgage
                  Sale Agreement.

         Funding 2 shall pay or shall procure the payment of the amount of any
         Initial Contribution or Further Contribution to be made by it to the
         Mortgages Trustee into the Mortgages Trustee Transaction Account.

4.4      Application by Mortgages Trustee

         (A)      If the Mortgages Trustee receives any Initial Contribution,
                  Deferred Contribution or the Final Deferred Contribution
                  from a Funding Beneficiary, the parties hereto direct the
                  Mortgages Trustee to, and the Mortgages Trustee covenants
                  that it shall, or shall procure that the Cash Manager on its
                  behalf shall, pay such funds to the Seller in satisfaction
                  of the Mortgages Trustee's obligation to make payment of the
                  Initial Purchase Price or, as the case may be, Deferred
                  Purchase Price in respect of the Initial Mortgage Portfolio
                  or any New Mortgage Loans which are sold and assigned to the
                  Mortgages Trustee by the Seller pursuant to the Mortgage
                  Sale Agreement.

         (B)      If the Mortgages Trustee receives a Further Contribution
                  from any Beneficiary, the parties hereto direct the
                  Mortgages Trustee to, and the Mortgages Trustee covenants
                  that it shall, or shall procure that the Cash Manager on its
                  behalf shall:

                  (1)      where such Further Contribution is made by Funding
                           2:

                           (a)      if Funding 2 so elects, in its sole
                                    discretion, pay all or part of such
                                    Further Contribution as a Special
                                    Distribution to Funding in accordance with
                                    the terms of this Deed provided that the
                                    amounts of such Special Distribution shall
                                    not exceed the aggregate outstanding
                                    principal balance of all Funding
                                    Intercompany Loans, and

                           (b)      if Funding 2 so elects, pay all or part of
                                    such Further Contribution as a Special
                                    Distribution to the Seller in accordance
                                    with the terms of this Deed;

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<PAGE>

                  (2)      where such Further Contribution is made by Funding,
                           pay such funds as a Special Distribution to the
                           Seller in accordance with the terms of this Deed;
                           and

                  (3)      where such Further Contribution is made by the
                           Seller, pay such funds in accordance with the terms
                           of this Deed.

5.       INCREASING AND DECREASING THE SELLER SHARE OF THE TRUST PROPERTY

5.1      Re-draws under Flexible Mortgage Loans

         (A)      If, in respect of any Flexible Mortgage Loan which is
                  included in the Mortgage Portfolio, the relevant Borrower
                  requests a Cash Re-draw and the Administrator (on behalf of
                  the Seller) grants such request pursuant to and in
                  accordance with the terms of the Administration Agreement,
                  the Seller as Beneficiary shall fund that Cash Re-draw in
                  the Mortgages Trust by making payment to the Borrower, in
                  accordance with the terms and conditions of the relevant
                  Mortgage Loan, of the Cash Re-draw Amount. Upon payment by
                  the Seller to the relevant Borrower of the Cash Re-draw
                  Amount, the aggregate Current Balance of the Mortgage Loans
                  included in the Mortgage Portfolio and the amount of the
                  Seller Share of the Trust Property shall be increased by an
                  amount equal to the Cash Re-draw Amount.

         (B)      If, in respect of any Flexible Mortgage Loan which is
                  included in the Mortgage Portfolio, the relevant Borrower
                  requests a Non-Cash Re-draw and the Administrator grants
                  such request or the Administrator otherwise permits the
                  relevant Borrower to take a Non-Cash Re-draw pursuant to and
                  in accordance with the terms of the Administration
                  Agreement, the Seller as Beneficiary shall fund such
                  Non-Cash Re-draw in the Mortgages Trust by making payment to
                  the Mortgages Trustee of a Further Contribution in an amount
                  equal to the Unpaid Interest Amount in respect of such
                  Non-Cash Re-draw. Upon payment by the Seller to the
                  Mortgages Trustee of such Further Contribution, the
                  aggregate Current Balance of the Mortgage Loans included in
                  the Mortgage Portfolio and the Seller Share of the Trust
                  Property shall be increased by an amount equal to the amount
                  of the Further Contribution so made to the Mortgages
                  Trustee. The parties agree that any such Further
                  Contribution received by the Mortgages Trustee from the
                  Seller will be treated as Revenue Receipts and will be
                  distributed to the Beneficiaries on the immediately
                  succeeding Distribution Date in accordance with Clause 10
                  (Distribution of Revenue Receipts) below.

5.2      Further Advances

         If at a future date the Seller does not purchase any Mortgage Loan
         which becomes the subject of a Further Advance from the Mortgages
         Trustee, the Seller will be solely responsible for funding any such
         Further Advance and, subject to the provisions of this Deed, upon the
         making of such Further Advance by the Seller, the aggregate Current
         Balance of the Mortgage Loans included in the Mortgage Portfolio and
         the Seller Share of the Trust Property shall be increased by an
         amount equal to the amount of the Further Advance paid to the
         relevant Borrower.

                                      10
<PAGE>

5.3      Together Connections Mortgage Loans and Connections Mortgage Loans

         If, in respect of any Together Connections Mortgage Loan or any
         Connections Mortgage Loan which is included in the Mortgage
         Portfolio, there has been a reduction in the outstanding balance of
         such Mortgage Loan from the relevant Borrower being allocated a
         portion of the Together Connections Mortgage Benefit or Connections
         Benefit (as the case may be) under such Mortgage Loan, the aggregate
         Current Balance of the Mortgage Loans included in the Mortgage
         Portfolio and the amount of the Seller Share of the Trust Property
         shall be decreased by an amount equal to the portion of the Together
         Connections Benefit or Connections Benefit (as the case may be)
         allocated to such Mortgage Loan.

5.4      Further Draws under Personal Secured Loans

         If, in respect of any Personal Secured Loan included in the Mortgage
         Portfolio which permits Further Draws, the relevant Borrower requests
         a Further Draw and the Administrator grants such request, the Seller
         will as Beneficiary fund such Further Draw in the Mortgages Trust by
         making payment to the Borrower of the Further Draw in accordance with
         the terms and conditions of the relevant Personal Secured Loan. Upon
         payment by the Seller to the relevant Borrower of such Further Draw,
         the aggregate Current Balance of the Mortgage Loans included in the
         Mortgage Portfolio and the amount of the Seller Share of the Trust
         Property shall be increased by an amount equal to the amount of the
         Further Draw paid to the relevant Borrower.

6. INCREASING THE FUNDING SHARE AND THE FUNDING 2 SHARE OF THE TRUST PROPERTY

6.1      Conditions precedent to the increase of the Funding Share

         Subject as provided below, Funding may increase the Funding Share (as
         defined in Clause 7.1 (Initial Funding Share) below) of the Trust
         Property, subject to satisfaction of the following conditions
         precedent:

         (A)      no Funding Event of Default under the Transaction Documents
                  shall have occurred which is continuing at the relevant
                  date;

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

         (C)      the Rating Agencies have confirmed in writing to the
                  Mortgages Trustee, the Security Trustee, the Funding 2
                  Security Trustee and each Issuer that the proposed increase
                  in the Funding Share of the Trust Property would not cause
                  the then-current ratings by the Rating Agencies (or any of
                  them) of the existing Notes of any Issuer to be reduced,
                  withdrawn or qualified;

         (D)      the New Notes have been issued by a Funding Issuer, the
                  subscription proceeds received on behalf of such Funding
                  Issuer and advanced by such Funding Issuer to Funding
                  pursuant to a Funding Intercompany Loan Agreement (which
                  proceeds Funding will pay to the Mortgages Trustee to
                  increase the Funding Share of the Trust Property on the
                  relevant date in accordance with Clause 6.3 (Completion));

                                      11
<PAGE>

         (E)      if necessary, each Funding Issuer, including any New Funding
                  Issuer (if any) has entered into appropriate hedging
                  arrangements;

         (F)      as of the last day of the immediately preceding Trust
                  Calculation Period the aggregate Current Balance of Mortgage
                  Loans in the Mortgage Portfolio which were at such time in
                  arrears for at least 3 months is less than 4 per cent. of
                  the aggregate Current Balance of all Mortgage Loans in the
                  Mortgage Portfolio at such time unless the Rating Agencies
                  have confirmed that the then-current ratings of the Notes of
                  each Funding Issuer will not be adversely affected;

         (G)      as of the last day of the immediately preceding Trust
                  Calculation Period the Moody's Portfolio Variation Test
                  Value of the Mortgage Loans in the Mortgage Portfolio on
                  such date (calculated by applying the Moody's Portfolio
                  Variation Test to such Mortgage Loans on such date) does not
                  exceed the most recently determined Moody's Portfolio
                  Variation Test Threshold Value (as calculated in relation to
                  the Mortgage Loans in the Mortgage Portfolio on the most
                  recent date on which Moody's performed a full pool analysis
                  on the Mortgage Portfolio) plus 0.30 per cent.;

         (H)      in respect of each Funding Issuer, each Issuer Reserve Fund
                  is fully funded on the relevant date up to the relevant
                  Issuer Reserve Required Amount; and

         (I)      as at the most recent Payment Date no deficiency was
                  recorded on the Issuer Principal Deficiency Ledger of any
                  Funding Issuer,

         provided always that Funding shall not be entitled to increase the
         Funding Share after the Payment Date falling in January 2008, if the
         option to redeem the First Issuer Notes on the Payment Date in
         January 2008 pursuant to Condition 5 of the First Issuer Notes is not
         exercised.

6.2      Conditions precedent to the increase of the Funding 2 Share

         Subject as provided below, Funding 2 may increase the Funding 2 Share
         of the Trust Property, subject to satisfaction of the following
         conditions precedent:

         (A)      no Funding 2 Event of Default under the Transaction
                  Documents shall have occurred which is continuing at the
                  relevant date;

         (B)      no Intercompany Loan Enforcement Notice has been served in
                  respect of any Funding 2 Intercompany Loan;

         (C)      the Rating Agencies have confirmed in writing to the
                  Mortgages Trustee, the Security Trustee, the Funding 2
                  Security Trustee and each Funding 2 Issuer that the proposed
                  increase in the Funding 2 Share of the Trust Property would
                  not cause the then-current ratings by the Rating Agencies
                  (or any of them) of the existing Notes of any Issuer to be
                  reduced, withdrawn or qualified;

         (D)      the New Notes have been issued by the Funding 2 Issuer, the
                  subscription proceeds received on behalf of the Funding 2
                  Issuer and advanced by the Funding 2 Issuer to Funding 2
                  pursuant to a Funding 2 Intercompany Loan Agreement (which
                  proceeds Funding 2 will pay to the Mortgages Trustee to

                                      12
<PAGE>

                  increase the Funding 2 Share of the Trust Property on the
                  relevant date in accordance with Clause 6.3 (Completion));

         (E)      if necessary, Funding 2 and/or the Funding 2 Issuer have
                  entered into appropriate hedging arrangements;

         (F)      as of the last day of the immediately preceding Trust
                  Calculation Period the aggregate Current Balance of Mortgage
                  Loans in the Mortgage Portfolio which were at such time in
                  arrears for at least 3 months is less than 4 per cent. of
                  the aggregate Current Balance of all Mortgage Loans in the
                  Mortgage Portfolio at such time unless the Rating Agencies
                  have confirmed that the then-current ratings of the existing
                  Notes of the Funding 2 Issuer will not be adversely
                  affected;

         (G)      as of the last day of the immediately preceding Trust
                  Calculation Period the Moody's Portfolio Variation Test
                  Value of the Mortgage Loans in the Mortgage Portfolio on
                  such date (calculated by applying the Moody's Portfolio
                  Variation Test to such Mortgage Loans on such date) does not
                  exceed the most recently determined Moody's Portfolio
                  Variation Test Threshold Value (as calculated in relation to
                  the Mortgage Loans in the Mortgage Portfolio on the most
                  recent date on which Moody's performed a full pool analysis
                  on the Mortgage Portfolio) plus 0.30 per cent.;

         (H)      as at the most recent Monthly Payment Date no deficiency was
                  recorded on the Funding 2 Principal Deficiency Ledger,

         provided always that Funding 2 shall not be entitled to increase the
         Funding 2 Share of the Trust Property after the date falling 12
         months after the occurrence of a Step-Up Date (the "twelve-month
         date") in respect of any Series and Class of Notes of a Funding 2
         Issuer, if the option to redeem such Notes by such twelve-month date
         pursuant to the terms and conditions of such Notes is not exercised.

6.3      Completion

         Subject to satisfaction of the conditions precedent set out in Clause
         6.1 (Conditions precedent to the Increase of the Funding Share) or
         Clause 6.2 (Conditions precedent to the Increase of the Funding 2
         Share) above, Funding or Funding 2, as applicable, shall pay to the
         Mortgages Trustee the consideration for such increase in the Funding
         Share or the Funding 2 Share, as applicable, in accordance with
         Clause 4 (Consideration) and the Current Funding Share, the Current
         Funding Share Percentage, the Current Funding 2 Share and the Current
         Funding 2 Share Percentage (as applicable) shall be recalculated in
         accordance with Clause 8.2 (Current Funding Share Percentage and
         Current Funding 2 Share Percentage) and Clause 8.4 (Current Funding
         Share and Current Funding 2 Share).

6.4      Distribution

         The parties hereto agree that any Initial Contribution or Further
         Contribution received by the Mortgages Trustee from a Funding
         Beneficiary in accordance with Clause 4 (Consideration) on any date
         shall be allocable and payable by the Mortgages Trustee to:

                                      13
<PAGE>

         (A)      the Seller (in its capacity as a Beneficiary of the
                  Mortgages Trust) as Initial Purchase Price or as a Special
                  Distribution; and/or

         (B)      Funding (in its capacity as a Beneficiary of the Mortgages
                  Trust) as a Special Distribution (in respect of Further
                  Contributions made by Funding 2),

         in each case, on such date whether or not such date is a Distribution
         Date. Any such Initial Purchase Price or Special Distribution shall
         reduce the Seller Share or the Funding Share of the Trust Property
         (as applicable) by the amount of such Initial Purchase Price or
         Special Distribution received by it.

7. INITIAL FUNDING SHARE, INITIAL SELLER SHARE AND INITIAL FUNDING 2 SHARE

7.1      Initial Funding Share

         The "Initial Funding Share" of the Trust Property shall be (GBP)86.61
         at 26 March, 2001 and (GBP)1,500,000,000 at the Initial Closing Date
         and the "Initial Funding Share Percentage" shall be the Initial
         Funding Share expressed as a percentage of the Trust Property at such
         date, that is to say, 86.61 per cent. References herein to the
         "Funding Share" shall mean, prior to the first Distribution Date, the
         Initial Funding Share and thereafter shall mean the Current Funding
         Share (as defined below).

7.2      Initial Seller Share

         The "Initial Seller Share" of the Trust Property shall be the sum
         which remains of the Trust Property after deduction of the Initial
         Funding Share. The Initial Seller Share of the Trust Property will be
         (GBP)13.39 at 26 March, 2001 and (GBP)232,000,000 at the Initial
         Closing Date and the "Initial Seller Share Percentage" shall be equal
         to 100 per cent. minus the Initial Funding Share Percentage, that is
         to say, 13.39 per cent. The amount of the Initial Seller Share and
         the Initial Seller Share Percentage on the Initial Closing Date will
         be determined immediately after the Initial Closing Date. References
         herein to the "Seller Share" shall mean, prior to the first
         Distribution Date, the Initial Seller Share and thereafter shall mean
         the Current Seller Share (as defined below).

7.3      Initial Funding 2 Share

         The "Initial Funding 2 Share" of the Trust Property shall, following
         the acquisition by Funding 2, by way of assignment, from the Seller
         of a portion of the Seller's beneficial interest in the Mortgages
         Trust in accordance with the Seller (Mortgages Trust) Assignment
         Agreement, be (GBP)100. References herein to the "Funding 2 Share"
         shall, from (and including) the Funding 2 Programme Date to (but
         excluding) the first Closing Date in relation to the issue of Notes
         by a Funding 2 Issuer, mean the Initial Funding 2 Share and
         thereafter shall mean the Current Funding 2 Share.

7.4      Rounding of percentage shares

         Except for the Initial Closing Date on which the Funding Share
         Percentage and the Seller Share Percentage shall be calculated to two
         decimal places, and unless otherwise agreed by the Beneficiaries, the
         Current Funding Share Percentage, the

                                      14
<PAGE>

         Current Funding 2 Share Percentage and the Current Seller Share
         Percentage shall be calculated to five decimal places.

8.       ADJUSTMENT OF FUNDING SHARE PERCENTAGE, FUNDING 2 SHARE PERCENTAGE
         AND SELLER SHARE PERCENTAGE

8.1      Effective Periods

         (A)      Subject to Clause 8.1(B) below, the Cash Manager will (on
                  behalf of the Beneficiaries) recalculate the Funding Share,
                  the Funding Share Percentage, the Funding 2 Share, the
                  Funding 2 Share Percentage, the Seller Share and the Seller
                  Share Percentage in respect of each Trust Calculation Period
                  on the Distribution Date occurring in such Trust Calculation
                  Period, based on the aggregate Current Balance of the
                  Mortgage Loans in the Mortgage Portfolio (as adjusted from
                  time to time) on the last day of the Trust Calculation
                  Period immediately preceding such Distribution Date.

         (B)      Notwithstanding Clause 8.1(A) above, if during any Trust
                  Calculation Period the Seller sells and assigns New Mortgage
                  Loans to the Mortgages Trustee or if a Funding Beneficiary
                  makes a Contribution (excluding any Deferred Contribution)
                  to the Mortgages Trustee to increase its respective share of
                  the Trust Property, the recalculation of the Funding Share,
                  the Funding Share Percentage, the Funding 2 Share, the
                  Funding 2 Share Percentage, the Seller Share and the Seller
                  Share Percentage made by the Cash Manager on the
                  Distribution Date occurring in such Trust Calculation Period
                  will be effective only in respect of the period beginning on
                  (and including) the first day of such Trust Calculation
                  Period and ending on (but excluding) the first Assignment
                  Date or Contribution Date, as applicable, to occur during
                  such Trust Calculation Period (such period in respect of
                  such Distribution Date, an "Interim Calculation Period"),
                  based on the aggregate Current Balance of the Mortgage Loans
                  in the Mortgage Portfolio (as adjusted from time to time) on
                  the last day of the Trust Calculation Period immediately
                  preceding such Distribution Date.

         (C)      In addition to the foregoing, if during any Trust
                  Calculation Period the Seller sells and assigns New Mortgage
                  Loans to the Mortgages Trustee or if a Funding Beneficiary
                  makes a Contribution (excluding any Deferred Contribution)
                  to the Mortgages Trustee to increase its respective share of
                  the Trust Property, the Cash Manager will (on behalf of the
                  Mortgages Trustee and the Beneficiaries) recalculate the
                  Funding Share, the Funding Share Percentage, the Funding 2
                  Share, the Funding 2 Share Percentage, the Seller Share and
                  the Seller Share Percentage on such Assignment Date or
                  Contribution Date, as applicable, in respect of the period
                  beginning on (and including) such Assignment Date or
                  Contribution Date, as applicable, and ending on the last day
                  of such Trust Calculation Period (and including such last
                  day of such Trust Calculation Period) (each such period in
                  respect of each Assignment Date or Contribution Date, as
                  applicable, an "Interim Calculation Period"), based on the
                  aggregate Current Balance of the Mortgage Loans in the
                  Mortgage Portfolio (as adjusted from time to time) on such
                  Assignment Date or Contribution Date, as applicable.

                                      15
<PAGE>

         The parties acknowledge and agree that the Mortgage Sale Agreement
         provides that (a) the Seller may not sell and assign New Mortgage
         Loans to the Mortgages Trustee during any Trust Calculation Period
         prior to the Distribution Date in such Trust Calculation Period, and
         (b) the Seller may only make one sale and assignment of New Mortgage
         Loans to the Mortgages Trustee during any Trust Calculation Period.

8.2      Current Funding Share Percentage and Current Funding 2 Share
         Percentage

         I.       Current Funding Share Percentage:

         (A)      On each Distribution Date (the "Relevant Distribution
                  Date"), the "Current Funding Share Percentage" will be
                  calculated by the Cash Manager in respect of the
                  then-current Trust Calculation Period or related Interim
                  Calculation Period, as applicable, for the purpose of
                  calculating the distributions to be made from the Trust
                  Property on the immediately succeeding Distribution Date,
                  and such Current Funding Share Percentage will be an amount,
                  expressed as a percentage (calculated to an accuracy of five
                  decimal places (rounded upwards)), equal to:

                                     A-B-C+D
                                     ------- X 100
                                        G
                  where,

                  A =      the Current Funding Share as calculated (a) on the
                           later of the Distribution Date, the Assignment Date
                           or Contribution Date (if any) immediately preceding
                           such Relevant Distribution Date, or (b) in the case
                           of the first Distribution Date, the Initial Funding
                           Share as at the Initial Closing Date;

                  B =      the amount of any Principal Receipts distributed to
                           Funding on such Relevant Distribution Date in
                           accordance with the provisions described in Clause
                           11 (Distribution of Principal Receipts) below;

                  C =      the amount of any Losses sustained on the Mortgage
                           Loans during the Trust Calculation Period
                           immediately preceding such Relevant Distribution
                           Date and the amount of any reductions occurring in
                           respect of the Mortgage Loans as described in
                           paragraph (A) of Clause 8.5 (Adjustments to Trust
                           Property) below which have been allocated to
                           Funding in the Trust Calculation Period ending on
                           the Relevant Distribution Date (based on (a) the
                           Current Funding Share Percentage thereof calculated
                           on the Distribution Date immediately preceding such
                           Relevant Distribution Date (provided that the
                           Seller had not sold and assigned New Mortgage Loans
                           to the Mortgages Trustee or that Funding had not
                           paid a Further Contribution to the Mortgages
                           Trustee in the Trust Calculation Period immediately
                           preceding such Relevant Distribution Date), or (b)
                           to the extent that the Seller had sold and assigned
                           New Mortgage Loans to the Mortgages Trustee or that
                           Funding had paid a Further Contribution to the
                           Mortgages Trustee during the Trust Calculation
                           Period immediately preceding such Relevant
                           Distribution Date, the Weighted Average Funding
                           Share

                                      16
<PAGE>

                           Percentage (as defined below) thereof calculated on
                           such Relevant Distribution Date prior to the
                           distribution to be made on such Relevant
                           Distribution Date, or (c) in the case of the first
                           Distribution Date, the Initial Funding Share
                           Percentage);

                  D =      an amount equal to any Capitalised Arrears which
                           have been allocated to Funding during the Trust
                           Calculation Period immediately preceding such
                           Relevant Distribution Date (based on the Current
                           Funding Share Percentage thereof calculated on the
                           Distribution Date immediately preceding such
                           Relevant Distribution Date or, in the case of the
                           first Distribution Date, the Initial Funding Share
                           Percentage); and

                  G =      the amount of the Mortgages Trustee Retained
                           Principal Receipts (if any) plus the aggregate
                           Current Balance of all the Mortgage Loans in the
                           Mortgage Portfolio as at the last day of the Trust
                           Calculation Period immediately preceding such
                           Relevant Distribution Date or, if applicable, on
                           the relevant Assignment Date or Contribution Date,
                           after making the distributions, allocations and
                           additions referred to in (B), (C) and (D) above and
                           after taking account of the following (being "Trust
                           Property Calculation Adjustments") (i) any
                           distribution of Principal Receipts to the Seller,
                           Funding and Funding 2, (ii) the amount of any
                           Losses or Capitalised Arrears allocated to the
                           Seller, Funding and Funding 2, (iii) the
                           adjustments referred to in paragraphs (A) through
                           (E) of Clause 8.5 (Adjustments to Trust Property)
                           (inclusive) below (or, if the Seller Share is zero,
                           the adjustments referred to in paragraph (A) only);
                           (iv) the amount of any other additions to or
                           removals from the Trust Property during such Trust
                           Calculation Period, including without limitation,
                           any additions to the Trust Property resulting from
                           Cash Re-draws, Non-Cash Redraws and Further Draws
                           by Borrowers under Flexible Mortgage Loans which
                           are in the Trust Property or (if the Seller
                           subsequently elects not to purchase Mortgage Loans
                           which are the subject of Further Advances from the
                           Mortgages Trustee) Further Advances sold and
                           assigned by the Seller; but excluding the addition
                           of Mortgage Loans on an Assignment Date and any
                           Initial Contribution or Further Contribution made
                           by Funding or Funding 2 during such Trust
                           Calculation Period and (v) any reduction in the
                           outstanding principal balances of Together
                           Connections Mortgage Loans and Connections Mortgage
                           Loans resulting from Borrowers being allocated a
                           portion of the related Together Connections Benefit
                           and Connections Benefit, respectively, under such
                           Mortgage Loans.

         (B)      If during any Trust Calculation Period the Seller sells and
                  assigns New Mortgage Loans to the Mortgages Trustee, the
                  Cash Manager will recalculate the Current Funding Share
                  Percentage on each such Assignment Date which is not also a
                  Contribution Date (the "Relevant Assignment Date") in
                  respect of the related Interim Calculation Period, for the
                  purposes of calculating the distributions to be made from
                  the Trust Property on the immediately succeeding
                  Distribution Date and determining the amount of Losses to be
                  allocated to Funding, and such Current Funding Share
                  Percentage will be an

                                      17
<PAGE>

                  amount, expressed as a percentage (calculated to an accuracy
                  of five decimal places (rounded upwards)), equal to:


                                     A+E
                                     --- X 100
                                      H


                  where,

                  A =      the Current Funding Share as calculated on the
                           Distribution Date immediately preceding such
                           Relevant Assignment Date;

                  E =      an amount equal to any Initial Contribution paid by
                           Funding to the Mortgages Trustee on such Relevant
                           Assignment Date in relation to the Funding Share of
                           any New Mortgage Loans assigned to the Mortgages
                           Trustee on such Relevant Assignment Date (which
                           amount the Mortgages Trustee is required pursuant
                           to Clause 4.4 (Application by Mortgages Trustee) to
                           pay to the Seller in satisfaction (in part) of the
                           Mortgages Trustee's obligation to pay to the Seller
                           the Initial Purchase Price in respect of New
                           Mortgage Loans sold and assigned to the Mortgages
                           Trustee on such Relevant Assignment Date); and

                  H =      the amount of the Mortgages Trustee Retained
                           Principal Receipts (if any), plus the aggregate
                           Current Balance of all the Mortgage Loans in the
                           Trust Property as at the Distribution Date
                           immediately preceding such Relevant Assignment Date
                           (after making the distributions, allocations and
                           additions on that preceding Distribution Date),
                           plus the aggregate Current Balance of the New
                           Mortgage Loans sold and assigned to the Mortgages
                           Trustee on such Relevant Assignment Date and after
                           taking account of Trust Property Calculation
                           Adjustments.

         (C)      If during any Trust Calculation Period a Funding Beneficiary
                  pays a Contribution (excluding a Deferred Contribution) to
                  the Mortgages Trustee to increase its share of the Trust
                  Property or receives from the Mortgages Trustee a Special
                  Distribution (where such Special Distribution is not made on
                  a Distribution Date) in accordance with Clause 11
                  (Distribution of Principal Receipts), the Cash Manager will
                  recalculate the Current Funding Share Percentage on each
                  such Contribution Date (the "Relevant Contribution Date") in
                  respect of the related Interim Calculation Period, for the
                  purposes of calculating the distributions to be made from
                  the Trust Property and determining the amount of Losses to
                  be allocated to Funding on the immediately succeeding
                  Distribution Date, and such Current Funding Share Percentage
                  will be an amount, expressed as a percentage (calculated to
                  an accuracy of five decimal places (rounded upwards)), equal
                  to:


                                     A+E+F-I
                                     ------- X 100
                                        J

                  where,

                  A =      the Current Funding Share as calculated on the
                           Distribution Date immediately preceding such
                           Relevant Contribution Date;

                                      18
<PAGE>

                  E =      (1) if that Relevant Contribution Date is also an
                           Assignment Date, the amount of any Initial
                           Contribution paid by Funding to the Mortgages
                           Trustee on that Contribution Date in respect of the
                           Funding Share of any New Trust Property, and (2) in
                           all other cases, zero;

                  F =      an amount equal to any Further Contribution paid by
                           Funding to the Mortgages Trustee on such Relevant
                           Contribution Date to increase Funding's beneficial
                           interest in the Trust Property;

                  I =      the amount of the Special Distribution distributed
                           to Funding on such date in accordance with the
                           provisions described in Clause 11 (Distribution of
                           Principal Receipts); and

                  J =      the amount of the Mortgages Trustee Retained
                           Principal Receipts (if any) plus the aggregate
                           Current Balance of all the Mortgage Loans in the
                           Trust Property as at the Distribution Date
                           immediately preceding such Relevant Contribution
                           Date (after making the distributions, allocations
                           and additions on that preceding Distribution Date)
                           plus the aggregate Current Balance of the New
                           Mortgage Loans sold and assigned to the Mortgages
                           Trustee on that Relevant Assignment Date and after
                           taking account of Trust Property Calculation
                           Adjustments.

         II.      Current Funding 2 Share Percentage

         (A)      On each Relevant Distribution Date falling after the Funding
                  2 Programme Date, the "Current Funding 2 Share Percentage"
                  will be calculated by the Cash Manager in respect of the
                  then-current Trust Calculation Period or related Interim
                  Calculation Period, as applicable, for the purpose of
                  calculating the distributions to be made from the Trust
                  Property on the immediately succeeding Distribution Date,
                  and such Current Funding 2 Share Percentage will be an
                  amount, expressed as a percentage (calculated to an accuracy
                  of five decimal places (rounded upwards)), equal to:


                                     A-B-C+D
                                     ------- X 100
                                        G

                  where, "A", "B", "C", "D" and "G" have the meanings
                  specified in Clause 8.2(I)(A), provided however that:

                  (1)      references to Funding (including references in any
                           defined term) are to be read as references to
                           Funding 2;

                  (2)      references to the first Distribution Date are to be
                           read as the first Distribution Date following the
                           Funding 2 Programme Date; and

                  (3)      references to the Initial Closing Date are to be
                           read as the Funding 2 Programme Date;

                  (4)      prior to the Funding 2 Programme Date, each of the
                           Current Funding 2 Share and the Current Funding 2
                           Share Percentage shall be zero.

                                      19
<PAGE>

         (B)      On each Relevant Assignment Date, the Cash Manager will
                  recalculate the Current Funding 2 Share Percentage in
                  respect of the related Interim Calculation Period, for the
                  purposes of calculating the distributions to be made from
                  the Trust Property on the immediately succeeding
                  Distribution Date and determining the amount of Losses to be
                  allocated to Funding 2, and such Current Funding 2 Share
                  Percentage will be an amount, expressed as a percentage
                  (calculated to an accuracy of five decimal places (rounded
                  upwards)), equal to:


                                     A+E
                                     --- X 100
                                      H

                  where, "A", "E" and "H" have the meanings specified in
                  clause 8.2(I)(B), provided, however that references to
                  Funding (including references in any defined term) are to be
                  read as references to Funding 2.

         (C)      On each Relevant Contribution Date, the Cash Manager will
                  recalculate the Current Funding 2 Share Percentage in
                  respect of the related Interim Calculation Period, for the
                  purposes of calculating the distributions to be made from
                  the Trust Property and determining the amount of Losses to
                  be allocated to Funding 2 on the immediately succeeding
                  Distribution Date, and such Current Funding 2 Share
                  Percentage will be an amount, expressed as a percentage
                  (calculated to an accuracy of five decimal places (rounded
                  upwards)), equal to:


                                     A+E+F
                                     ----- X 100
                                       J


                  where, "A", "E", "F" and "J" have the meanings specified in
                  clause 8.2(I)(C), provided, ED] however that references to
                  Funding (including references in any defined term) are to be
                  D] read as references to Funding 2. D]

         (D)      For the purposes of Clauses 8.2(II)(A), 8.2(II)(B) and
                  8.2(II)(C) above, in respect of the earliest to occur,
                  following the Funding 2 Programme Date, of (a) a
                  Distribution Date, (b) a Contribution Date or (c) an
                  Assignment Date, item "A" shall be the Initial Funding 2
                  Share.

8.3      Weighted Average Funding Share Percentage and Weighted Average
         Funding 2 Share Percentage

         (A)      Weighted Average Funding Share Percentage:

                  On any Distribution Date in respect to which:

                  (1)      the Seller had sold and assigned New Mortgage Loans
                           to the Mortgages Trustee; or

                  (2)      a Funding Beneficiary had made a Contribution
                           (excluding any Deferred Contribution) to the
                           Mortgages Trustee to increase its share of the
                           Trust Property; or

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<PAGE>

                  (3)      Funding had received a Special Distribution from
                           the Mortgages Trustee,

                  during the Trust Calculation Period immediately preceding
                  such Distribution Date, the Cash Manager (on behalf of the
                  Beneficiaries) will calculate (for the sole purpose of
                  making the distributions to be made on such Distribution
                  Date) the Weighted Average of the Current Funding Share
                  Percentages that were calculated previously in respect of
                  each Interim Calculation Period occurring in such
                  immediately preceding Trust Calculation Period based on the
                  amount of Revenue Receipts and Principal Receipts received
                  and Losses sustained during each such Interim Calculation
                  Period. The "Weighted Average Funding Share Percentage" for
                  any such Distribution Date will be equal to:

                  (i)      in respect of the distribution of Revenue Receipts
                           to be made on such Distribution Date, an amount
                           determined in accordance with the formula set forth
                           below:

                                     (AxB) + (CxD)

                           where,

                           A =      the related Current Funding Share
                                    Percentage for Interim Calculation Period
                                    1;

                           B =      the number of days in Interim Calculation
                                    Period 1 divided by the number of days in
                                    the Trust Calculation Period;

                           C =      the related Current Funding Share
                                    Percentage for Interim Calculation Period
                                    2; and

                           D =      the number of days in Interim Calculation
                                    Period 2 divided by the number of days in
                                    the Trust Calculation Period;

                  (ii)     in respect of the distribution of Principal
                           Receipts to be made on such Distribution Date, an
                           amount determined in accordance with the formula
                           set forth below:

                                     (AxB) + (CxD)

                           where, "A", "B", "C" and "D" have the meanings
                           specified in Clause 8.3(A)(i) above.

                  (iii)    in respect of the allocation of Losses to be made
                           on such Distribution Date, an amount determined in
                           accordance with the formula set forth below:

                                     (AxB) + (CxD)


                           where, "A", "B", "C" and "D" have the meanings
                           specified in Clause 8.3(A)(i) above.

                                      21
<PAGE>

         (B)      Weighted Average Funding 2 Share Percentage

                  On any Distribution Date in respect to which:

                  (1)      the Seller had sold and assigned New Mortgage Loans
                           to the Mortgages Trustee; or

                  (2)      a Funding Beneficiary had made a Contribution
                           (excluding any Deferred Contribution) to the
                           Mortgages Trustee to increase its share of the
                           Trust Property; or

                  (3)      Funding had received a Special Distribution from
                           the Mortgages Trustee,

                  during the Trust Calculation Period immediately preceding
                  such Distribution Date, the Cash Manager (on behalf of the
                  Beneficiaries) will calculate (for the sole purpose of
                  making the distributions to be made on such Distribution
                  Date) the Weighted Average of the Current Funding 2 Share
                  Percentages that were calculated previously in respect of
                  each Interim Calculation Period occurring in such
                  immediately preceding Trust Calculation Period based on the
                  amount of Revenue Receipts and Principal Receipts received
                  and Losses sustained during each such Interim Calculation
                  Period. The "Weighted Average Funding 2 Share Percentage"
                  for any such Distribution Date will be equal to:

                  (i)      in respect of the distribution of Revenue Receipts
                           to be made on such Distribution Date, an amount
                           determined in accordance with the formula set forth
                           below:

                                     (AxB) + (CxD)

                           where, "A", "B", "C" and "D" have the meanings
                           specified in Clause 8.3(A)(i) MITTED] above;
                           provided however that the references to Current
                           Funding Share Percentage are to be read as
                           references to Current Funding 2 Share Percentage.

                  (ii)     in respect of the distribution of Principal
                           Receipts to be made on such Distribution Date, an
                           amount determined in accordance with the formula
                           set forth below:

                                     (AxB) + (CxD)

                           where, "A", "B", "C" and "D" have the meanings
                           specified in Clause 8.3(A)(i) above; provided
                           however that the references to Current Funding
                           Share Percentage are to be read as references to
                           Current Funding 2 Share Percentage.

                  (iii)    in respect of the allocation of Losses to be made
                           on such Distribution Date, an amount determined in
                           accordance with the formula set forth below:

                                      22
<PAGE>

                                     (AxB) + (CxD)

                           where, "A", "B", "C" and "D" have the meanings
                           specified in Clause 8.3(A)(i) above; provided
                           however that the references to Current Funding
                           Share Percentage are to be read as references to
                           Current Funding 2 Share Percentage.

8.4      Current Funding Share and Current Funding 2 Share

         I.       Current Funding Share

         (A)      On each Distribution Date, the "Current Funding Share" will
                  be calculated by the Cash Manager in respect of the
                  then-current Trust Calculation Period or the related Interim
                  Calculation Period, as applicable, and will be an amount
                  equal to:

                                           A-B-C+D

                  where "A", "B", "C" and "D" have the meanings specified in
                  Clause 8.2(I)(A) above.

         (B)      On each Assignment Date (which is not also a Contribution
                  Date), the Current Funding Share will be calculated by the
                  Cash Manager in respect of the related Interim Calculation
                  Period and will be an amount equal to:

                                           A+E

                  where "A" and "E" have the meanings specified in Clause
                  8.2(I)(B) above.

         (C)      On each Contribution Date, the Current Funding Share will be
                  calculated by the Cash Manager in respect of the related
                  Interim Calculation Period and will be an amount equal to:

                                           A+E+F-I

                  where "A", "E" and "F" and "I" have the meanings specified
                  in Clause 8.2(I)(C) above. TTED]

         II.      Current Funding 2 Share

         (A)      On each Distribution Date, the "Current Funding 2 Share"
                  will be calculated by the Cash Manager in respect of the
                  then-current Trust Calculation Period or the related Interim
                  Calculation Period, as applicable, and will be an amount
                  equal to:

                                           A-B-C+D

                  where (subject to Clause 8.2(II)(D)) "A", "B", "C" and "D"
                  have the meanings specified in Clause 8.2(II)(A) above.

                                      23
<PAGE>

         (B)      On each Assignment Date (which is not also a Contribution
                  Date), the Current Funding 2 Share will be calculated by the
                  Cash Manager in respect of the related Interim Calculation
                  Period and will be an amount equal to:

                                     A + E

                  where (subject to Clause 8.2(II)(D)) "A" and "E" have the
                  meanings specified in Clause 8.2(II)(B).

         (C)      On each Contribution Date, the Current Funding 2 Share will
                  be calculated by the Cash Manager in respect of the related
                  Interim Calculation Period and will be an amount equal to:

                                   A + E + F

                  where (subject to Clause 8.2(II)(D)) "A", "E" and "F" have
                  the meanings specified in Clause 8.2(II)(C) above.

8.5      Adjustments to Trust Property

         If any of the following events has occurred during a Trust
         Calculation Period, then (subject to the Cash Manager receiving
         notice or otherwise being aware of the occurrence of the event) for
         the purposes of making the Trust Property Calculation Adjustments,
         the aggregate Current Balance of the Mortgage Loans in the Mortgage
         Portfolio shall be reduced or, as the case may be, deemed to be
         reduced:

         (A)      any Borrower exercises a right of set-off in relation to any
                  Mortgage Loan in the Mortgage Portfolio so that the amount
                  of principal and/or interest owing under such Mortgage Loan
                  is reduced but no corresponding payment is received by the
                  Mortgages Trustee, in which event the aggregate Current
                  Balance of the Mortgage Loans in the Mortgage Portfolio
                  shall be reduced by an amount equal to the amount so set-off
                  by such Borrower; and/or

         (B)      a Mortgage Loan or (as applicable) its Related Security (i)
                  was assigned to the Mortgages Trustee in breach of the
                  Representations and Warranties in the Mortgage Sale
                  Agreement as at the Initial Closing Date or, as the case may
                  be, the relevant Assignment Date or (ii) is the subject of a
                  Product Switch or a Further Advance or in respect of which
                  the Borrower has accepted an offer by the Seller of a
                  Personal Secured Loan and the Seller has elected to purchase
                  the relevant Mortgage Loan or Mortgage Loans and Related
                  Security, and in the case of (i) above the Seller fails to
                  repurchase and in the case of (ii) above the Seller fails to
                  purchase, the relevant Mortgage Loan or Mortgage Loans under
                  the relevant Mortgage Account and their Related Security as
                  required by the terms of the Mortgage Sale Agreement; in
                  which event the aggregate Current Balance of the Mortgage
                  Loans in the Mortgage Portfolio shall be deemed to be
                  reduced for the purposes of making the Trust Property
                  Calculation Adjustments by an amount equal to the Current
                  Balance of the relevant Mortgage Loan or Mortgage Loans
                  under the relevant Mortgage Account (together with Arrears
                  of Interest and Accrued Interest) which the Seller has
                  failed to repurchase or purchase, as applicable; and/or


                                      24
<PAGE>

         (C)      both the Security Trustee and the Funding 2 Security Trustee
                  are notified that a Flexible Mortgage Loan or part thereof
                  has been determined by a court judgment on the point or as a
                  result of a determination by a relevant regulatory authority
                  (whether or not in relation to an analogous flexible
                  mortgage loan product of another UK mortgage lender):

                  (1)      to be unenforceable; and/or

                  (2)      not to fall within the first ranking charge by way
                           of legal mortgage or first ranking standard
                           security over the relevant Mortgaged Property,

                  and, in either case, such Flexible Mortgage Loan is not
                  otherwise subject to the repurchase obligation under the
                  Mortgage Sale Agreement, in which event, the aggregate
                  Current Balance of the Mortgage Loans in the Mortgage
                  Portfolio shall be deemed to be reduced for the purposes of
                  making the Trust Property Calculation Adjustments by an
                  amount equal to that portion of the Current Balance of the
                  Flexible Mortgage Loan which is so determined to be
                  unenforceable or not to fall within the first ranking charge
                  by way of legal mortgage or first ranking standard security
                  over the relevant Mortgaged Property; and/or

         (D)      (i) in respect of breaches of Representations and Warranties
                  in the Mortgage Sale Agreement, the Seller would be required
                  to repurchase a Mortgage Loan and its Related Security and
                  (ii) in respect of a Mortgage Loan subject to a Further
                  Advance or a Product Switch or in respect of which the
                  Borrower has accepted an offer by the Seller of a Personal
                  Secured Loan, the Seller elects to purchase the relevant
                  Mortgage Loan or Mortgage Loans under the relevant Mortgage
                  Account (including any Personal Secured Loans and any
                  Further Draws made thereunder secured over the same
                  Mortgaged Property) and their Related Security in accordance
                  with the terms of the Mortgage Sale Agreement, but such
                  Mortgage Loan and its Related Security are not capable of
                  being repurchased or purchased, as applicable; in which
                  event the aggregate Current Balance of the Mortgage Loans in
                  the Mortgage Portfolio shall be deemed to be reduced for the
                  purposes of making the Trust Property Calculation
                  Adjustments by an amount equal to the Current Balance of the
                  relevant Mortgage Loan (together with Arrears of Interest
                  and Accrued Interest) which is not capable of being
                  repurchased or purchased, as applicable; and/or

         (E)      the Seller breaches any other material warranty under the
                  Mortgage Sale Agreement and/or (for so long as it is the
                  Administrator) the Administration Agreement, in which event
                  the aggregate Current Balance of Mortgage Loans in the
                  Mortgage Portfolio shall be deemed for the purposes of
                  making the Trust Property Calculation Adjustments to be
                  reduced by an amount equivalent to all losses, costs,
                  liabilities, claims, expenses and damages incurred by the
                  Beneficiaries as a result of such breach.

                  The reductions and deemed reductions set out in paragraphs
                  (A), (B), (C), (D) and (E) (including any resulting loss in
                  respect thereof) of this Clause and any losses arising in
                  respect of any Personal Secured Loans shall, subject to
                  Clause 9.1 (Initial Minimum Seller Share), be allocated on
                  the relevant Distribution

                                      25
<PAGE>

                  Date, Assignment Date or Contribution Date (as applicable)
                  first to the Seller Share of the Trust Property (or for the
                  purposes of calculating the Seller Share of the Trust
                  Property as the case may be) until the Seller Share is zero
                  and thereafter (in respect of paragraph (A) only) shall be
                  allocated to the Funding Share and the Funding 2 Share of
                  the Trust Property pro rata in accordance with the Funding
                  Proportion and the Funding 2 Proportion. If at, or any time
                  after the Initial Closing Date the Mortgages Trustee holds,
                  or there is held to its order, or it receives, or there is
                  received to its order, any property, interest, right or
                  benefit relating to the whole or that portion of any
                  Mortgage Loan and its Related Security which is or has been
                  subject to any matter described in paragraphs (A) through
                  (E) above or any Personal Secured Loan in respect of which
                  losses have arisen and in respect of which the Seller Share
                  of the Trust Property has been reduced or deemed reduced
                  such property, interest, right or benefit will constitute a
                  Revenue Receipt and the Mortgages Trustee will remit, assign
                  or transfer the same to Funding and to Funding 2 pro rata in
                  accordance with the Funding Proportion and the Funding 2
                  Proportion (but only if and to the extent that the related
                  reductions or deemed reductions were applied against the
                  Funding Share and the Funding 2 Share of the Trust Property)
                  and thereafter to the Seller, as the case may require, and
                  until it does so or to the extent that the Mortgages Trustee
                  is unable to effect such remittance, assignment or transfer,
                  the Mortgages Trustee will hold such property, interest,
                  right or benefit and/or the proceeds thereof upon trust
                  absolutely for Funding and/or Funding 2 and/or the Seller
                  (separate from the Mortgages Trust), as the case may
                  require.

8.6      Current Seller Share Percentage

         (A)      On each Relevant Distribution Date, the "Current Seller
                  Share Percentage" will be calculated by the Cash Manager in
                  respect of the then-current Trust Calculation Period or the
                  related Interim Calculation Period, as applicable, and the
                  distributions to be made from the Trust Property on the
                  immediately succeeding Distribution Date, and will be a
                  percentage equal to:

                  100% minus the sum of the Current Funding Share Percentage
                  and the Current Funding 2 Share Percentage

                  where the Current Funding Share Percentage and the Current
                  Funding 2 Share Percentage are calculated on such Relevant
                  Distribution Date in accordance with Clause 8.2(I)(A) and
                  (subject to Clause 8.2(II)(D)) Clause 8.2(II)(A)
                  respectively.

         (B)      On each Relevant Assignment Date, the Cash Manager will
                  recalculate the Current Seller Share Percentage in respect
                  of the related Interim Calculation Period and the
                  distributions to be made from the Trust Property on the
                  immediately succeeding Distribution Date and will be a
                  percentage equal to:

                  100% minus the sum of the Current Funding Share Percentage
                  and the Current Funding 2 Share Percentage

                  where the Current Funding Share Percentage and the Current
                  Funding 2 Share Percentage are as calculated on such
                  Relevant Assignment Date in accordance

                                      26
<PAGE>

                  with Clause 8.2(I)(B) and (subject to Clause 8.2(II)(D))
                  Clause 8.2(II)(B) respectively.

         (C)      On each Relevant Contribution Date, the Cash Manager will
                  recalculate the Current Seller Share Percentage in respect
                  of the related Interim Calculation Period and the
                  distributions to be made from the Trust Property on the
                  immediately succeeding Distribution Date and will be a
                  percentage equal to:

                  100% minus the sum of the Current Funding Share Percentage
                  and the Current Funding 2 Share Percentage

                  where the Current Funding Share Percentage and the Current
                  Funding 2 Share Percentage are as calculated on such
                  Relevant Contribution Date in accordance with Clause
                  8.2(I)(C) and (subject to Clause 8.2(II)(D)) Clause
                  8.2(II)(C) respectively.

8.7      Weighted Average Seller Share Percentage

         On any Distribution Date in respect to which:

         (1)      the Seller has assigned New Mortgage Loans to the Mortgages
                  Trustee; or

         (2)      a Funding Beneficiary has made a Contribution (excluding a
                  Deferred Contribution) to the Mortgages Trustee to increase
                  its share of the Trust Property; or

         (3)      Funding had received a Special Distribution from the
                  Mortgages Trustee,

         during the Trust Calculation Period immediately preceding such
         Distribution Date, the Cash Manager will calculate (for the sole
         purpose of making the distributions to be made on such Distribution
         Date) the Weighted Average of the Seller Share Percentages that were
         calculated previously in respect of the Revenue Receipts and
         Principal Receipts received, and Losses sustained, during each
         Interim Calculation Period occurring in such immediately preceding
         Trust Calculation Period and will be a percentage equal to:

         (A)      in respect of the distribution of Revenue Receipts to be
                  made on such Distribution Date:

                  100% minus the sum of the Weighted Average Funding Share
                  Percentage and the Weighted Average Funding 2 Share
                  Percentage

                  where such Weighted Average Funding Share Percentage and
                  Weighted Average Funding 2 Share Percentage are as
                  calculated on such Distribution Date in accordance with
                  Clauses 8.3(A)(i) and 8.3(B)(i) respectively;

         (B)      in respect of the distribution of Principal Receipts to be
                  made on such Distribution Date:

                  100% minus the sum of the Weighted Average Funding Share
                  Percentage and the Weighted Average Funding 2 Share
                  Percentage

                                      27
<PAGE>

                  where such Weighted Average Funding Share Percentage and
                  Weighted Average Funding 2 Share Percentage are as
                  calculated on such Distribution Date in accordance with
                  Clauses 8.3(A)(ii) and 8.3(B)(ii) respectively; and

         (C)      in respect of the allocation of Losses to be made on such
                  Distribution Date:

                  100% minus the sum of the Weighted Average Funding Share
                  Percentage and the Weighted Average Funding 2 Share
                  Percentage

                  where such Weighted Average Funding Share Percentage and
                  Weighted Average Funding 2 Share Percentage are as
                  calculated on such Distribution Date in accordance with
                  Clauses 8.3(A)(iii) and 8.3(B)(iii) respectively.

8.8      Current Seller Share

         (A)      On each Relevant Distribution Date, the "Current Seller
                  Share" will be calculated by the Cash Manager in respect of
                  the then-current Trust Calculation Period or the related
                  Interim Calculation Period, as applicable, and will be an
                  amount equal to:

                  The aggregate amount of the Trust Property (excluding
                  Revenue Receipts) as at the Relevant Distribution Date minus
                  the sum of the Current Funding Share and the Current Funding
                  2 Share

                  where "Current Funding Share" and "Current Funding 2 Share"
                  are as calculated on such Relevant Distribution Date in
                  accordance with Clauses 8.4(I)(A) and 8.4(II)(A)
                  respectively.

         (B)      On each Relevant Assignment Date, the Current Seller Share
                  will be calculated by the Cash Manager in respect of the
                  related Interim Calculation Period and will be an amount
                  equal to:

                  The aggregate amount of the Trust Property (excluding
                  Revenue Receipts) as at an Assignment Date minus the sum of
                  the Current Funding Share and the Current Funding 2 Share

                  where "Current Funding Share" and "Current Funding 2 Share"
                  are as calculated on such Relevant Assignment Date in
                  accordance with Clauses 8.4(I)(B) and 8.4(II)(B) above.

         (C)      On each Relevant Contribution Date, the Current Seller Share
                  will be calculated by the Cash Manager in respect of the
                  Interim Calculation Period and will be an amount equal to:

                  The aggregate amount of the Trust Property (excluding
                  Revenue Receipts) as at a Contribution Date minus the sum of
                  the Current Funding Share and the Current Funding 2 Share

                  where "Current Funding Share" and "Current Funding 2 Share"
                  are as calculated on such Relevant Contribution Date in
                  accordance with Clauses 8.4(I)(C) and 8.4(II)(C)
                  respectively.

                                      28
<PAGE>

8.9      Funding Share/Funding 2 Share/Seller Share

         The Funding Share, the Funding 2 Share and the Seller Share may not
         be reduced below zero. At all times the sum of the Funding Share
         Percentage, the Funding 2 Share Percentage and the Seller Share
         Percentage shall be equal to 100 per cent. of the Trust Property.

9.       MINIMUM SELLER SHARE

9.1      Initial Minimum Seller Share

         The Seller Share of the Trust Property includes an amount equal to
         the Minimum Seller Share. Unless and until both the Funding Share and
         the Funding 2 Share of the Trust Property are in an amount equal to
         zero or following the occurrence of an Asset Trigger Event, the
         Seller will not be entitled to receive Mortgages Trustee Principal
         Receipts which would reduce the Seller Share of the Trust Property to
         an amount less than the Minimum Seller Share and the Seller consents
         and directs the Mortgages Trustee accordingly.

9.2      Fluctuation of Minimum Seller Share on each Distribution Date

         At the Initial Closing Date, the Minimum Seller Share will be
         (GBP)50,000,000. The amount of the Minimum Seller Share will be
         recalculated on each Distribution Date in accordance with the
         following formula:

                                       W+X+Y+Z

         where:

         W =      100% of the sum of the average cleared credit balance of all
                  applicable accounts linked to Together Connections Mortgage
                  Loans and Connections Mortgage Loans in respect of each
                  calendar month or any part of any such calendar month;

         X =      2.0% of the aggregate Current Balance of all Mortgage Loans
                  in the Mortgage Portfolio as at the last day of the
                  immediately preceding Trust Calculation Period;

         Y =      the product of: p x q x r where:

                  p =      8%;

                  q =      the sum of (i) the "Flexible Cash Re-Draw
                           Capacity", being an amount equal to the difference
                           between (1) the maximum amount of Cash Re-draws
                           that Borrowers may draw under Flexible Mortgage
                           Loans included in the Mortgage Portfolio (whether
                           or not drawn) as at the last day of the immediately
                           preceding Trust Calculation Period and (2) the
                           aggregate Current Balance of Cash Re-draws in
                           respect of Mortgage Loans included in the Mortgage
                           Portfolio as at the last day of the immediately
                           preceding Trust Calculation Period; and (ii) the
                           "Further Draw Capacity", being an amount equal to
                           the difference between (1) the maximum amount of
                           Further Draws that Borrowers



                                      29
<PAGE>

                           may make in respect of Personal Secured Loans
                           included in the Mortgage Portfolio (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 are included in the Mortgage Portfolio as at
                           the last day of the immediately preceding Trust
                           Calculation Period; and

                  r =      3; and

         Z =      the aggregate Current Balance of (i) Re-Draws and (ii)
                  Personal Secured Loans in the Mortgage Portfolio, in each
                  case as at the last day of the immediately preceding Trust
                  Calculation Period.

9.3      Recalculation of Minimum Seller Share following occurrence of
         exceptional events

         The calculation of the Minimum Seller Share in accordance with Clause
         9.2 (Fluctuation of Minimum Seller Share on each Distribution Date)
         above will be recalculated by the Cash Manager with the agreement of
         the parties hereto subject to the approval of the Rating Agencies if
         the Seller merges or otherwise combines its business with another
         bank or other financial institution so as to increase the risks
         associated with Borrowers holding deposits in Northern Rock accounts.

10.      DISTRIBUTION OF REVENUE RECEIPTS

10.1     Distribution of Third Party Amounts

         Pursuant to the Cash Management Agreement, the Cash Manager (at the
         direction of the Mortgages Trustee acting on behalf of the
         Beneficiaries at their direction and with their consent which is
         hereby given) will deduct, as and when identified, Third Party
         Amounts from the Revenue Receipts standing to the credit of the
         Mortgages Trustee GIC Account or Mortgages Trustee Transaction
         Account, and pay over the same to the proper recipients thereof. The
         Mortgages Trustee and the Beneficiaries hereby consent to such
         deductions.

10.2     Distribution of Mortgages Trustee Available Revenue Receipts

         Subject as provided in Clause 8.5 (Adjustments to Trust Property), on
         each Distribution Date the Cash Manager (at the direction of the
         Mortgages Trustee acting on behalf of the Beneficiaries at their
         direction and with their consent which is hereby given) will
         distribute Mortgages Trustee Available Revenue Receipts in the
         following order of priority:

         (A)      first, in no order of priority between them but in
                  proportion to the respective amounts due of:

                  (1)      any fees, costs, charges, liabilities and expenses
                           then due or to become due to the Mortgages Trustee
                           under the provisions of this Deed together with (if
                           applicable) VAT thereon (to the extent not already
                           included) as provided herein; and

                                      30
<PAGE>

                  (2)      any amounts due and payable by the Mortgages
                           Trustee to third parties in respect of the
                           Mortgages Trust but only if incurred without breach
                           by the Mortgages Trustee of the documents to which
                           it is a party and payment has not been provided for
                           elsewhere;

         (B)      second, in no order of priority between them but in
                  proportion to the respective amounts due of:

                  (1)      any remuneration then due and payable to the
                           Administrator and any costs, charges, liabilities
                           and expenses then due or to become due to the
                           Administrator under the provisions of the
                           Administration Agreement prior to the immediately
                           succeeding Distribution Date, in each case together
                           with (if applicable) VAT thereon (to the extent not
                           already included) as provided therein; and

                  (2)      any remuneration then due and payable to the Cash
                           Manager and any costs, charges, liabilities and
                           expenses then due or to become due to the Cash
                           Manager under the provisions of the Cash Management
                           Agreement prior to the immediately succeeding
                           Distribution Date, in each case together with (if
                           applicable) VAT thereon (to the extent not already
                           included) as provided therein;

         (C)      third, in no order of priority between them but in
                  proportion to the respective amounts due, and subject to the
                  proviso below, to allocate and pay Mortgages Trustee
                  Available Revenue Receipts to:

                  (1)      the Seller in an amount determined by multiplying
                           the total amount of the remaining Mortgages Trustee
                           Available Revenue Receipts by the Current Seller
                           Share Percentage of the Trust Property, as
                           determined on the immediately preceding
                           Distribution Date or, in the case of the first
                           Distribution Date immediately following the
                           relevant Closing Date, as of such Closing Date; and

                  (2)      Funding, in an amount which is equal to the lesser
                           of:

                           (i)      the aggregate of the amounts to be applied
                                    on the immediately succeeding Payment Date
                                    for Group 1 Issuers and the immediately
                                    succeeding Payment Date for Group 2
                                    Issuers as set forth under the Funding
                                    Pre-Enforcement Revenue Priority of
                                    Payments or, as the case may be, the
                                    Funding Post-Enforcement Priority of
                                    Payments (but excluding any principal
                                    amount due under any Funding Intercompany
                                    Loan (save that, for the avoidance of
                                    doubt, such exclusion shall not apply in
                                    respect of any Funding Available Revenue
                                    Receipts which are applied by a Funding
                                    Issuer to credit that Funding Issuer's
                                    Principal Deficiency Ledger and thereby
                                    reduce the principal payable under that
                                    Funding Issuer's Intercompany Loan) and
                                    any amount of Deferred Contribution due
                                    under paragraph (p) of the Funding
                                    Pre-Enforcement Revenue Priority of
                                    Payments and/or paragraph (F) of the
                                    Funding Post-Enforcement Priority of
                                    Payments), less all other amounts (not
                                    derived from the

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                                    distribution of Mortgages Trustee
                                    Available Revenue Receipts under this
                                    Deed) which will constitute Funding
                                    Available Revenue Receipts on the
                                    immediately succeeding Payment Date, such
                                    amount not to be less than zero; and

                           (ii)     an amount determined by multiplying the
                                    total amount of the remaining Mortgages
                                    Trustee Available Revenue Receipts by the
                                    Current Funding Share Percentage of the
                                    Trust Property, as determined on the
                                    immediately preceding Distribution Date
                                    (or, in the case of the first Distribution
                                    Date, the Initial Funding Share
                                    Percentage);

                  (3)      Funding 2 in an amount which is equal to the lesser
                           of:

                           (i)      the aggregate of the amounts to be applied
                                    on the immediately succeeding Monthly
                                    Payment Date as set forth under the
                                    Funding 2 Pre-Enforcement Revenue Priority
                                    of Payments or, as the case may be, the
                                    Funding 2 Post-Enforcement Priority of
                                    Payments (but excluding any principal
                                    amount due under the Global Intercompany
                                    Loan Agreement (save that, for the
                                    avoidance of doubt, such exclusion shall
                                    not apply in respect of any Funding 2
                                    Available Revenue Receipts which are
                                    applied by Funding 2 to credit any
                                    Principal Deficiency Subledgers and
                                    thereby reduce the principal payable under
                                    the related Loan Tranches) and any amount
                                    of Deferred Contribution under paragraph
                                    (X) of the Funding 2 Pre-Enforcement
                                    Revenue Priority of Payments and/or
                                    paragraph (O) of the Funding 2
                                    Post-Enforcement Priority of Payments),
                                    less all other amounts (not derived from
                                    the distribution of Mortgages Trustee
                                    Available Revenue Receipts under this
                                    Deed) which will constitute Funding 2
                                    Available Revenue Receipts on the
                                    immediately succeeding Monthly Payment
                                    Date, such amount not to be less than
                                    zero; and

                           (ii)     an amount determined by multiplying the
                                    total amount of the remaining Mortgages
                                    Trustee Available Revenue Receipts by the
                                    Current Funding 2 Share Percentage of the
                                    Trust Property, as determined on the
                                    immediately preceding Distribution Date;

         (D)      fourth, to allocate:

                  (i)      to Funding but pay at the direction of Funding to
                           the Seller an amount equal to the Funding
                           Proportion of YY - ZZ; and

                  (ii)     to Funding 2 but pay at the direction of Funding 2
                           to the Seller an amount equal to the Funding 2
                           Proportion of YY - ZZ,

                  where "YY" is the amount of the Mortgages Trustee Available
                  Revenue Receipts and "ZZ" is the amount of such Mortgages
                  Trustee Available Revenue Receipts applied and/or allocated
                  under items (A) to (C) above, such


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<PAGE>

                  amount to be in satisfaction of amounts of Deferred Purchase
                  Price due to the Seller under the terms of the Mortgage Sale
                  Agreement;

         PROVIDED THAT if an Assignment Date or a Contribution Date has
         occurred during the Trust Calculation Period immediately preceding
         such Distribution Date, then the Cash Manager will use (i) the
         Weighted Average Seller Share Percentage (instead of the Current
         Seller Share Percentage) as calculated pursuant to Clause 8.7(A)
         above in determining the amount of Mortgages Trustee Available
         Revenue Receipts to distribute to the Seller pursuant to Clause
         10.2(C)(1) above, (ii) the Weighted Average Funding Share Percentage
         (instead of the Current Funding Share Percentage) as calculated
         pursuant to Clause 8.3(A) above in determining the Funding (Mortgages
         Trust) Revenue Amounts pursuant to Clause 10.2(C)(2) and Clause 10.3
         (Calculation of Funding (Mortgages Trust) Revenue Amount and Funding
         2 (Mortgages Trust) Revenue Amount) and (iii) the Weighted Average
         Funding 2 Share Percentage (instead of the Current Funding 2 Share
         Percentage) as calculated pursuant to Clause 8.3(B) above in
         determining the amount of Funding 2 (Mortgages Trust) Revenue Amounts
         pursuant to Clause 10.2(C)(2) and Clause 10.3 (Calculation of Funding
         (Mortgages Trust) Revenue Amount and Funding 2 (Mortgages Trust)
         Revenue Amount).

11.      DISTRIBUTION OF PRINCIPAL RECEIPTS

11.1     Distribution of Principal Receipts prior to the occurrence of a
         Trigger Event

         Subject as provided in Clause 8.6 (Adjustments to Trust Property),
         prior to the occurrence of a Trigger Event (and whether or not there
         has been an enforcement of the Funding Security, the Funding 2
         Security, any Funding Issuer Security or any Funding 2 Issuer
         Security), on each Distribution Date (or, in respect of any Initial
         Purchase Price or Special Distribution, on any Contribution Date),
         the Cash Manager (at the direction of the Mortgages Trustee acting on
         behalf of the Beneficiaries at their direction and with their consent
         which is hereby given) shall, subject to the provisos below, allocate
         and distribute Mortgages Trustee Principal Receipts as follows:

         (A)      first, to the Seller an amount in respect of any Initial
                  Purchase Price (if any) or Special Distribution which is
                  then allocable and payable to the Seller under Clause 6.4
                  (Distribution) above;

         (B)      second, to Funding the amount of any Special Distribution
                  which is then allocable and payable to Funding in accordance
                  with Clause 6.4 (Distribution) above;

         (C)      third, in no order of priority between them but in
                  proportion to the respective amounts due:

                  (1)      to Funding an amount in respect of each Funding
                           Issuer which is equal to the lesser of:

                           (a)         (i)   prior to the occurrence of an ACA
                                             Trigger Event, the principal
                                             amount due on the Funding
                                             Intercompany Loan of such Funding
                                             Issuer equal to the Controlled
                                             Amortisation Amounts due, if any,
                                             on such Funding

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<PAGE>

                                             Issuer's Payment Date immediately
                                             succeeding such Distribution Date
                                             (in each case determined on the
                                             assumption that the Issuer
                                             Reserve Requirement, the Issuer
                                             Arrears Test and the Subordinated
                                             Principal Test (as applicable)
                                             are satisfied on such date; that
                                             the Controlled Amortisation
                                             Amount is the relevant amount as
                                             set forth in the tables contained
                                             in Schedule 4 to the Current
                                             Issuer Cash Management Agreement;
                                             and that the proviso appearing at
                                             the end of such tables does not
                                             apply); and

                                    (ii)     upon and after the occurrence of
                                             an ACA Trigger Event, (x) in
                                             respect of each Funding Issuer
                                             that is not an ACA Issuer, an
                                             amount as set forth in (1)(a)(i)
                                             above; and (y) in respect of each
                                             ACA Issuer, up to an amount equal
                                             to the ACA Limit Amount in
                                             respect of such ACA Issuer; and

                           (b)      an amount in respect of each Funding
                                    Issuer equal to:

                            Current Funding Share          Outstanding
                                Percentage as            Principal Balance
                              calculated on the           on such Funding
                           immediately preceding          Issuer's Funding
                           Distribution Date (or,        Intercompany Loan
                                                         ------------------
          Mortgages      in the case of the first            Aggregate
            Trustee  x      Distribution Date        x      Outstanding
 Principal Receipts       following the Closing          Principal Balance
                          Date in respect of such         on all Funding
                            Issuer, as of the              Intercompany
                           relevant Closing Date)           Loans


                  (2)      to Funding 2 in an amount equal to the lesser of:

                           (a)      if Funding 2 has a Repayment Requirement
                                    on that Distribution Date, the amount of
                                    such Repayment Requirement; and

                           (b)      an amount determined by multiplying the
                                    total amount of remaining Mortgages
                                    Trustee Principal Receipts by the Current
                                    Funding 2 Share Percentage of the Trust
                                    Property;

         (D)      fourth, in no order between them but in proportion to the
                  respective amounts due to Funding and Funding 2, to the
                  extent not already paid pursuant to item (C) above, up to
                  the amounts set forth in item (C)(1)(a) and item (C)(2)(a)
                  above, respectively; and

         (E)      fifth, if such Distribution Date is not a Seller Share Event
                  Distribution Date, to allocate to the Seller an amount equal
                  to AA - BB, where "AA" is the amount of Mortgages Trustee
                  Principal Receipts and "BB" is the amount of such Mortgages
                  Trustee Principal Receipts applied and/or allocated under
                  (A) through (D) above;

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<PAGE>

         provided that, if an Assignment Date or a Contribution Date has
         occurred during the Trust Calculation Period immediately preceding
         that Distribution Date, then the Cash Manager will use (i) the
         Weighted Average Funding 2 Share Percentage (instead of the Funding 2
         Share Percentage) in determining the amount of Mortgages Trustee
         Principal Receipts to distribute to Funding 2 on that Distribution
         Date and (ii) the Weighted Average Funding Share Percentage in
         determining the amount of Mortgages Trustee Principal Receipts to
         distribute to Funding on that Distribution Date.

PROVIDED THAT in relation to (A) through (E) above the following rules (the
"Rules for the application of Mortgages Trustee Principal Receipts") shall
apply:

          (1)        (a)   If the Notes of any Funding Issuer have become
                           immediately due and payable as a result of the
                           service of a Note Enforcement Notice or if the
                           Intercompany Loan of any Funding Issuer has (and
                           the other Intercompany Loans of any other Funding
                           Issuers have) become immediately due and payable as
                           a result of the service of an Intercompany Loan
                           Enforcement Notice on Funding, principal payments
                           in respect of the Intercompany Loan of that Funding
                           Issuer may be made in excess of any Controlled
                           Amortisation Amount and paragraph (C)(1)(a) above
                           shall no longer apply in relation to that Funding
                           Issuer and, except following a Non-Asset Trigger
                           Event, the amount of Mortgages Trustee Principal
                           Receipts to be distributed to Funding in respect of
                           that Funding Issuer on that Distribution Date may
                           not exceed the amount determined under paragraph
                           (C)(1)(b) above.

                  (b)      If the Notes of any Funding 2 Issuer have become
                           immediately due and payable as a result of the
                           service of an Issuer Enforcement Notice or if the
                           Loan Tranches under any Funding 2 Intercompany Loan
                           Agreement have become immediately due and payable
                           as a result of the service of a Funding 2
                           Intercompany Loan Enforcement Notice, principal
                           payments in respect of the Funding 2 Intercompany
                           Loan may be made in excess of any Bullet Repayment
                           Loan Amount, Scheduled Repayment Loan Amount or
                           Controlled Repayment Loan Amount and paragraph
                           (C)(2)(a) above shall no longer apply and, except
                           following a Non-Asset Trigger Event, the amount of
                           Mortgages Trustee Principal Receipts to be
                           distributed to Funding 2 on that Distribution Date
                           may not exceed the amount determined under
                           paragraph (C)(2)(b) above.

          (2)     (a)      If the Notes of any Funding Issuer have become
                           immediately due and payable as a result of the
                           service of a Note Enforcement Notice or if the
                           Intercompany Loan of any Funding Issuer has (and
                           the other Intercompany Loans of any other Funding
                           Issuers have) become immediately due and payable as
                           a result of the service of an Intercompany Loan
                           Enforcement Notice on Funding, then for the purpose
                           of calculating the amount in respect of that
                           Funding Issuer under paragraph (C)(1)(b) above,
                           that amount may be reduced to the extent of any
                           remaining amounts standing to the credit of the
                           Issuer Reserve Ledger and/or the Issuer Liquidity
                           Reserve Ledger (if any) for

                                      35
<PAGE>

                           that Funding Issuer which are to be utilised on the
                           immediately succeeding Payment Date to repay
                           principal on that Funding Issuer's Intercompany
                           Loan, but only to the extent that those amounts
                           would not otherwise be payable on that Funding
                           Intercompany Loan on that Payment Date.

                  (b)      If the Notes of any Funding 2 Issuer have become
                           immediately due and payable as a result of the
                           service of an Issuer Enforcement Notice or if the
                           Loan Tranches advanced under the Intercompany Loan
                           Agreement of any Funding 2 Issuer has (and the Loan
                           Tranches advanced under any Intercompany Loan
                           Agreements of any other Funding 2 Issuers have)
                           become immediately due and payable as a result of
                           the service of an Intercompany Loan Enforcement
                           Notice on Funding 2, then for the purpose of
                           calculating the amount under paragraph (C)(2)(b)
                           above, that amount will be reduced to the extent of
                           any remaining amounts standing to the credit of the
                           Funding 2 Reserve Ledger and/or the Funding 2
                           Liquidity Reserve Ledger (if any) which are to be
                           utilised on the immediately succeeding Monthly
                           Payment Date to repay principal on that Funding 2
                           Issuer's Intercompany Loan, but only to the extent
                           that those amounts would not otherwise be payable
                           on any Funding 2 Intercompany Loan on that Monthly
                           Payment Date.

         (3)      (a)      The amount of Mortgages  Trustee  Principal Receipts
                           payable to Funding in respect of each Funding
                           Issuer on a Distribution Date will be reduced in
                           proportion to the aggregate of the Issuer Available
                           Revenue Receipts of that Funding Issuer which are
                           to be applied on the immediately succeeding Payment
                           Date in reduction of deficiencies recorded on the
                           Issuer Principal Deficiency Ledger of that Funding
                           Issuer, but only to the extent that the Funding
                           Issuer Available Revenue Receipts which are to be
                           so applied on that Payment Date would not otherwise
                           be payable as principal on the relevant Notes on
                           that Payment Date.

                  (b)      The amount of Mortgages Trustee Principal Receipts
                           payable to Funding 2 on a Distribution Date will be
                           reduced in proportion to the aggregate of Mortgages
                           Trustee Available Revenue Receipts allocable to
                           Funding 2 on such Distribution Date which are to be
                           applied on the immediately succeeding Monthly
                           Payment Date in reduction of deficiencies recorded
                           on the Funding 2 Principal Deficiency Ledger, but
                           only to the extent that the Mortgages Trustee
                           Available Revenue Receipts which are to be so
                           applied on that Monthly Payment Date would not
                           otherwise be payable as principal of the relevant
                           Notes to be paid on that Monthly Payment Date.

         (4)      For the purpose of determining the Mortgages Trustee
                  Principal Receipts to be distributed to Funding in respect
                  of the amount due on the Intercompany Loan of any Funding
                  Issuer under (B) and (D) above, the Outstanding Principal
                  Balance of that Intercompany Loan shall be deemed to be
                  reduced by the amount of:

                                      36
<PAGE>

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

                  (b)      the Outstanding Principal Balance as at such
                           Distribution Date of any Special Repayment Notes
                           issued by that Issuer

         (5)      Funding will not be entitled to receive and the Cash Manager
                  shall procure that Funding does not receive any amount of
                  Mortgages Trustee Principal Receipts from the Mortgages
                  Trustee on a Distribution Date which is not required by
                  Funding to repay principal falling due on any Intercompany
                  Loan on the immediately succeeding Payment Date in order to
                  fund payments of principal falling due on any Notes issued
                  by any Funding Issuer on that Payment Date.

         (6)      The Mortgages Trustee will not distribute any Overpayment
                  (other than a Capital Payment) in respect of any
                  Non-Flexible Mortgage Loan until the first Distribution Date
                  following December 31 of the year in which such Overpayment
                  is received; provided that if a Borrower has made an
                  Underpayment of principal in respect of such Non-Flexible
                  Mortgage Loan following the Overpayment then the Mortgages
                  Trustee will distribute principal in an amount up to the
                  amount of such Underpayment (but not exceeding the amount of
                  the Overpayment previously made) on the immediately
                  succeeding Distribution Date.

         (7)      On a Seller Share Event Distribution Date, the Cash Manager
                  shall not distribute the remaining Mortgages Trustee
                  Principal Receipts to the Seller and shall deposit all
                  Mortgages Trustee Retained Principal Receipts in the
                  Mortgages Trustee GIC Account and make a corresponding
                  credit to the Mortgages Trustee Principal Ledger.

11.2     Distribution of Mortgages Trustee Principal Receipts on or after the
         occurrence of an Asset Trigger Event

         On or after the occurrence of an Asset Trigger Event, the Cash
         Manager (at the direction of the Mortgages Trustee acting on behalf
         of the Beneficiaries at their direction and with their consent which
         is hereby given) shall, on each Distribution Date (including, if
         applicable, any Distribution Date on which an Asset Trigger Event
         occurs), allocate and distribute all Mortgages Trustee Principal
         Receipts as follows:

         (a)      if the immediately preceding Distribution Date was a Seller
                  Share Event Distribution Date, all of the Mortgages Trustee
                  Retained Principal Receipts to Funding and Funding 2 in no
                  order of priority among them and pro rata in accordance with
                  the Funding Proportion and the Funding 2 Proportion; and
                  then

                                      37
<PAGE>

         (b)      among Funding, Funding 2 and the Seller, in no order of
                  priority among them and pro rata according to their
                  respective Shares of the Trust Property until the Funding
                  Share and the Funding 2 Share of the Trust Property are
                  reduced to zero (and, for the avoidance of doubt, such
                  payments may reduce the Seller Share of the Trust Property
                  to an amount less than the Minimum Seller Share).
                  Notwithstanding the foregoing, if an Assignment Date or a
                  Contribution Date has occurred during the Trust Calculation
                  Period immediately preceding any such Distribution Date, the
                  Cash Manager will apply all Mortgages Trustee Principal
                  Receipts remaining after (a) above among Funding, Funding 2
                  and the Seller in no order of priority between them but in
                  proportion to the Weighted Average Funding Share Percentage,
                  the Weighted Average Funding 2 Share Percentage and the
                  Weighted Average Seller Share Percentage, each in respect of
                  Mortgages Trustee Principal Receipts, for that Distribution
                  Date until the Funding Share and Funding 2 Share of the
                  Trust Property is zero.

11.3     Distribution of Principal Receipts on or after the occurrence of a
         Non-Asset Trigger Event

         On or after the occurrence of a Non-Asset Trigger Event and until the
         occurrence of an Asset Trigger Event, the Cash Manager (at the
         direction of the Mortgages Trustee acting on behalf of the
         Beneficiaries at their direction and with their consent which is
         hereby given) shall, on each Distribution Date (including, if
         applicable, any Distribution Date on which a Non-Asset Trigger Event
         occurs), apply all Mortgages Trustee Principal Receipts to Funding
         and Funding 2 in no order of priority among them and pro rata in
         accordance with the Funding Proportion and the Funding 2 Proportion
         until the Funding Share and the Funding 2 Share of the Trust Property
         have been reduced to zero and shall thereafter, on each Distribution
         Date, apply all Mortgages Trustee Principal Receipts to the Seller.

12.      ALLOCATION OF LOSSES

12.1     Subject as provided otherwise herein (including Clause 8.5
         (Adjustments to Trust Property) of this Deed), all Losses sustained
         on the Mortgage Loans (other than any Personal Secured Loans) during
         a Trust Calculation Period shall be applied in reducing pro rata the
         Funding Share of the Trust Property, the Funding 2 Share of the Trust
         Property and the Seller Share of the Trust Property on the
         Distribution Date immediately succeeding such Trust Calculation
         Period by multiplying the Losses sustained in the relevant Trust
         Calculation Period by the Funding Share Percentage and the Funding 2
         Share Percentage, respectively, (in each case as calculated on the
         Distribution Date immediately preceding such Trust Calculation
         Period) until the Funding Share of the Trust Property and the Funding
         2 Share of the Trust Property are both zero, PROVIDED THAT if during
         the Trust Calculation Period immediately preceding a Distribution
         Date the Seller has sold and assigned New Mortgage Loans to the
         Mortgages Trustee or if Funding or Funding 2 made a Further
         Contribution to the Mortgages Trustee to increase the Funding Share
         or the Funding 2 Share of the Trust Property, such Losses shall be
         multiplied by the Weighted Average Funding Share Percentage and the
         Weighted Average Funding 2 Share Percentage, as applicable (in each
         case as calculated on such Distribution Date pursuant to Clause
         8.3(A)(3) or 8.3(B)(3) above) rather than the Funding Share
         Percentage and/or the Funding 2 Share Percentage. The remainder of
         such Losses shall be allocated to the Seller.

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<PAGE>

12.2     All losses sustained during a Trust Calculation Period on Personal
         Secured Loans in the Mortgage Portfolio shall be applied first to
         reduce the Seller Share of the Trust Property (including, for the
         avoidance of doubt, that portion of the Seller Share which represents
         the Minimum Seller Share) on the Distribution Date immediately
         succeeding such Trust Calculation Period until the Seller Share is
         zero and thereafter shall be applied to reduce the Funding Share and
         the Funding 2 Share of the Trust Property on a pro rata basis in
         accordance with the Funding Proportion and the Funding 2 Proportion.

13.      OVERPAYMENTS

13.1     Non-Flexible Mortgage Loans
         The Mortgages Trustee shall not distribute to the Beneficiaries any
         Overpayment in respect of any Non-Flexible Mortgage Loan which does
         not constitute a Capital Payment until the first Distribution Date
         following 31st December of the year in which such Overpayment is
         received, save to the extent that any such Overpayment by a Borrower
         is applied in reduction of an Underpayment by such Borrower in
         respect of such Mortgage Loan prior to such date. Any such
         Overpayment shall be retained in the Mortgages Trustee GIC Account
         and the Cash Manager will maintain a separate ledger to record its
         receipt and subsequent payment from time to time. Where any such
         Overpayment has been made in error the Cash Manager and/or the
         Administrator will be authorised to refund the amount of such
         Overpayment to the relevant Borrower at any time prior to 31st
         December of the year in which such Overpayment was made.

13.2     Flexible Mortgage Loans

         Overpayments in respect of any Flexible Mortgage Loan (including the
         amount of any Together Connections Benefit applied to the related
         Together Connections Mortgage Loans or any Connections Benefit
         applied to the related Connections Mortgage Loans) will not be
         retained in the Mortgages Trustee GIC Account but will be distributed
         to the Beneficiaries on the immediately succeeding Distribution Date
         as Principal Receipts.

14.      ARREARS

         The aggregate Current Balance of the Mortgage Loans in the Mortgage
         Portfolio will be increased at any time by the amount in which the
         Mortgage Loans that have been sold and assigned to the Mortgages
         Trustee are in arrears and those arrears have been capitalised. Such
         increase shall be allocated to the Beneficiaries at any time in
         proportion to their respective percentage shares in the Trust
         Property as determined in respect of the Trust Calculation Period or
         Interim Calculation Period, as the case may be, in which the arrears
         occur.

15.      LEDGERS

         The Mortgages Trustee shall maintain, or shall procure that the Cash
         Manager shall maintain, the following Mortgages Trustee Ledgers:

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<PAGE>

         (a)      the Principal Ledger, which shall record (i) all receipts of
                  Principal Receipts and distribution of the same to Funding,
                  Funding 2 and the Seller and (ii) any Mortgages Trustee
                  Retained Principal Receipts;

         (b)      the Revenue Ledger, which shall record all receipts of
                  Revenue Receipts and distribution of the same in accordance
                  with this Deed;

         (c)      the Losses Ledger, which shall record Losses in relation to
                  the Mortgage Loans;

         (d)      the Funding Share/Funding 2 Share/Seller Share Ledger which
                  shall record the Funding Share, the Funding 2 Share and the
                  Seller Share of the Trust Property, and the Funding Share
                  Percentage, the Funding 2 Share Percentage and the Seller
                  Share Percentage;

         (e)      the Overpayments Ledger; which shall be divided into sub
                  ledgers to record (i) Overpayments on Non-Flexible Mortgage
                  Loans received into and paid out of the Mortgages Trustee
                  GIC Account from time to time and (ii) Overpayments on
                  Flexible Mortgage Loans;

         (f)      the Non-Flexible Underpayments Ledger; which shall record
                  Underpayments on Non-Flexible Mortgage Loans from time to
                  time;

         (g)      the Re-Draw Ledger, which shall be divided into sub ledgers
                  to record (i) Cash Re-Draws made in respect of Flexible
                  Mortgage Loans and (ii) Non-Cash Re-Draws made in respect of
                  Flexible Mortgage Loans;

         (h)      the Contributions Ledger, which will be divided into sub
                  ledgers to record (i) the making by Funding of Contributions
                  to the Mortgages Trust, (ii) the making by Funding 2 of
                  Contributions to the Mortgages Trust, (iii) the making by
                  the Seller of Contributions to the Mortgages Trust and the
                  application of such Contributions by the Mortgages Trustee
                  in payment to the Seller of (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 the Mortgage Sale Agreement or (b) amounts of
                  Deferred Purchase Price in accordance with the Mortgage Sale
                  Agreement or (c) any Special Distribution in accordance with
                  the terms of this Deed and the application of such
                  Contributions by the Mortgages Trustee in payment to Funding
                  of any Special Distribution in accordance with the terms of
                  this Deed; and

         (i)      the Further Draw Ledger, which shall record all Further
                  Draws in relation to Personal Secured Loans.

16.      FEES AND EXPENSES OF THE MORTGAGES TRUSTEE

16.1     Remuneration

         The Mortgages Trustee shall be entitled to charge and be remunerated
         for the work undertaken by it as trustee of the trusts created by
         this Deed. The remuneration shall be on such terms (if any) as the
         Mortgages Trustee may from time to time agree with the Beneficiaries
         in writing.

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<PAGE>

16.2     Expenses and Liabilities

         Each Beneficiary shall indemnify the Mortgages Trustee from time to
         time with such regularity as is reasonably agreed between the
         parties, in respect of the Funding Share, the Funding 2 Share and the
         Seller Share, respectively, of the documentable costs, expenses
         and/or liabilities directly and properly incurred by the Mortgages
         Trustee in performing its obligations hereunder or otherwise in
         acting as trustee in accordance with the terms of this Deed and the
         other Transaction Documents to which the Mortgages Trustee is a party
         inclusive (if applicable) of any amounts in respect of Irrecoverable
         VAT incurred in respect of such costs and expenses.

17.      BENEFICIARY DIRECTIONS

17.1     Administration Agreement  and Cash Management Agreement

         On the Initial Closing Date the Mortgages Trustee shall enter into
         the Administration Agreement and the Cash Management Agreement.

17.2     Directions from Beneficiaries

         Subject to Clause 17.3 (No Breach), Clause 17.7 (Controlling
         Directions) and to any agreement between the Beneficiaries, the
         Mortgages Trustee covenants with the Beneficiaries that the Mortgages
         Trustee shall take all necessary steps and do everything which the
         Funding Beneficiaries and the Seller (acting together) may reasonably
         request or direct it to do in order to give effect to the terms of
         this Deed or the other Transaction Documents to which the Mortgages
         Trustee is a party; provided that at any time after the Funding Share
         and the Funding 2 Share have both been reduced to zero the Mortgages
         Trustee shall not be required to act at the direction of the Funding
         Beneficiaries and the Seller (acting together) and shall instead act
         in accordance with any direction given solely by the Seller.

17.3     No breach

         Each of Funding, Funding 2 and the Seller covenants with each other
         and with the Mortgages Trustee that none of them shall direct or
         request the Mortgages Trustee to do any act or thing which breaches
         the terms of, or is otherwise expressly dealt with (such that the
         Mortgages Trustee has no discretion) under any of the Transaction
         Documents.

17.4     Mortgages Trustee entitled to decline to follow directions

         The Mortgages Trustee shall have the right to decline to follow any
         such direction if the Mortgages Trustee, being advised by counsel,
         determines that the proceedings, actions or steps may not be lawfully
         taken or if the Mortgages Trustee in good faith determines that the
         proceedings, actions or steps so directed would be illegal or involve
         it in personal liability (save where it has been indemnified and/or
         secured to its satisfaction against such liability).

17.5     Mortgages Trustee to provide information

         When the Mortgages Trustee is required to take any proceedings,
         actions or steps under or in connection with the Transaction
         Documents for which it requires

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<PAGE>

         directions from the Funding Beneficiaries and the Seller, it shall as
         soon as reasonably practicable, provide sufficient information to the
         Funding Beneficiaries and the Seller as they may require in order to
         be able to give such directions.

17.6     Timing of directions

         Where a Beneficiary directs the Mortgages Trustee as to any matter,
         such Beneficiary shall give written particulars of such direction to
         the Mortgages Trustee and each other Beneficiary.

17.7     Controlling Directions

         Except in the case of Clause 18 (Early Termination of the Mortgages
         Trust), in which case the terms of Clause 18 (Early Termination of
         the Mortgages Trust) shall prevail, in the event of any conflict
         between the directions of the Beneficiaries then each Beneficiary
         irrevocably agrees that the Controlling Directions shall apply and as
         such, the Mortgages Trustee is to follow the Controlling Directions
         as if it were the direction of all Beneficiaries but if there is no
         Controlling Directions the Mortgages Trustee shall not act.

17.8     No requirement to act

         The Mortgages Trustee will not be bound and shall have no power to
         take any proceedings, actions or steps under or in connection with
         any of this Deed or the other Transaction Documents to which it is a
         party unless:

         (a)      it shall have been directed to do so by the Beneficiaries or
                  it is required to do so under any express provision of this
                  Deed or the other Transaction Documents (but subject to
                  Clause 17.2 (Directions from Beneficiaries) in respect of
                  conflict of directions); and

         (b)      it shall have been indemnified to its satisfaction against
                  all liabilities, proceedings, claims and demands to which it
                  may be or become liable and all costs, charges and expenses
                  which may be incurred by it in connection therewith and the
                  terms of such indemnity may include the provision of a
                  fighting fund, non-recourse loan or other similar
                  arrangement.

17.9     Covenant of the Mortgages Trustee

         Subject to the foregoing provision of this Clause 17 (Beneficiary
         Directions) the Mortgages Trustee covenants with each of the Seller,
         Funding and Funding 2 to exercise all of its rights arising under or
         in respect of the Trust Property (including without limitation any
         rights of enforcement) for the benefit of and on behalf of the
         Beneficiaries.

17.10    Mortgages Trustee not liable

         Provided that the Mortgages Trustee has complied with the provisions
         of this Clause 17 (Beneficiary directions), the Mortgages Trustee
         shall not be liable to the Beneficiaries notwithstanding that the way
         in which the relevant discretion, trust, power or remedy was
         exercised by the Mortgages Trustee did not reflect the particular
         wishes of any Beneficiary.

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18.      EARLY TERMINATION OF THE MORTGAGES TRUST

         Prior to its termination in accordance with Clause 26 (Termination),
         provided that all amounts due from Funding to the Funding Secured
         Creditors have been repaid in full and the Funding Share of the Trust
         Property has been reduced to zero, and further provided that all
         amounts due from Funding 2 to the Funding 2 Secured Creditors have
         been repaid in full and the Funding 2 Share of the Trust Property has
         been reduced to zero, the Mortgages Trust constituted by this Deed
         may be terminated at the option of the Seller, following a request in
         writing by the Seller to the Mortgages Trustee (which shall be copied
         to Funding, Funding 2 and the Cash Manager) at any time on or after
         the date on which all of the Intercompany Loans have been repaid in
         full or there is no further claim under any Intercompany Loan or such
         other date as may be agreed in writing between the Mortgages Trustee,
         Funding, Funding 2 and the Seller.

19.      AUDIT OF MORTGAGE LOANS CONSTITUTING THE TRUST PROPERTY

         If the long term, unsecured, unguaranteed and unsubordinated debt
         obligations of the Seller fall below A3 by Moody's then, if required
         by Moody's, the Beneficiaries shall appoint a firm of independent
         auditors (approved by the Rating Agencies) to determine whether the
         Mortgage Loans and their Related Security (or any part of them) in
         the Mortgage Portfolio complied with the representations and
         warranties set out in Schedule 1 (Representations and Warranties) of
         the Mortgage Sale Agreement as at the date such Mortgage Loans were
         sold and assigned to the Mortgages Trustee. The costs of such
         independent auditors shall be borne by the Beneficiaries pro rata
         according to their respective current percentage shares in the Trust
         Property.

20.      TRANSFERS
20.1     Funding shall not assign

         Subject to the right of Funding to assign by way of security its
         right, title, benefit and interest in the Trust Property and/or under
         this Deed to the Security Trustee under the Funding Deed of Charge
         and subject to the right of the Security Trustee or a Receiver to
         sell the Funding Share of the Trust Property and/or such right and
         interest under this Deed following the service on Funding of an
         Intercompany Loan Enforcement Notice (which right is hereby
         conferred), Funding covenants with each of the Seller and Funding 2
         that it shall not, and shall not purport to, sell, assign, transfer,
         convey, charge, declare a trust over, create any beneficial interest
         in, or otherwise dispose of the Funding Share in the Trust Property,
         or any of Funding's rights, title, interest or benefit in any of the
         Mortgage Portfolio or the Trust Property.

20.2     Funding 2 shall not assign

         Subject to the right of Funding 2 to assign by way of security its
         right, title, benefit and interest in the Trust Property and/or under
         this Deed to the Funding 2 Security Trustee under the Funding 2 Deed
         of Charge and subject to the right of the Funding 2 Security Trustee
         or a Receiver to sell the Funding 2 Share of the Trust Property
         and/or such right and interest under this Deed following the service
         on Funding 2 of an Intercompany Loan Enforcement Notice (which right
         is hereby conferred), Funding 2 covenants with each of the Seller and
         Funding that it shall not, and shall not purport

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         to, sell, assign, transfer, convey, charge, declare a trust over,
         create any beneficial interest in, or otherwise dispose of the
         Funding 2 Share in the Trust Property, or any of Funding 2's rights,
         title, interest or benefit in any of the Mortgage Portfolio or the
         Trust Property.

20.3     Seller shall not assign

         The Seller covenants with each of Funding and Funding 2 that it shall
         not, and shall not purport to, sell, assign, transfer, convey,
         charge, declare a trust over, create any beneficial interest in, or
         otherwise dispose of the Seller Share in the Trust Property or any of
         the Seller's rights, title, interest or benefit in the Trust
         Property, other than pursuant to the Transaction Documents.

21.      REPRESENTATIONS AND COVENANTS

21.1     Representations

         On the date hereof, each of the parties to this Deed makes the
         representations and warranties set out in Schedule 1 (Representation
         and Warranties) to this Deed to each of the other parties hereto.

21.2     Covenants of the Mortgages Trustee

         Save with the prior written consent of or at the direction of the
         Beneficiaries or as provided in or envisaged by this Deed and/or the
         other Transaction Documents, the Mortgages Trustee shall not, so long
         as it is acting as Mortgages Trustee hereunder:

         (a)      Negative Pledge: create or permit to subsist any mortgage,
                  standard security, pledge, lien, charge or other security
                  interest whatsoever (unless arising by operation of law),
                  upon the whole or any part of its assets (including any
                  uncalled capital) or its undertakings (present or future) or
                  (to the extent that it is within the control of the
                  Mortgages Trustee) upon the whole or any part of the Trust
                  Property;

         (b)      Disposal: transfer, sell, lend, part with or otherwise
                  dispose of, or deal with, or grant any option or present or
                  future right to acquire any of its assets or undertakings or
                  (to the extent that it is within the control of the
                  Mortgages Trustee) the Trust Property or any interest,
                  estate, right, title or benefit therein or thereto or agree
                  or attempt or purport to do so;

         (c)      Equitable Interest: knowingly permit any person other than
                  the Beneficiaries to have any equitable or beneficial
                  interest in any of its assets or undertakings or (to the
                  extent that it is within the control of the Mortgages
                  Trustee) the Trust Property or any interest, estate, right,
                  title or benefit therein;

         (d)      Bank Accounts: have an interest in any bank account, other
                  than as set out in the Transaction Documents.

         (e)      Restrictions on Activities: carry on any business other than
                  as described in this Deed and the Transaction Documents;

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         (f)      Borrowings: incur any indebtedness in respect of borrowed
                  money whatsoever or give any guarantee or indemnity in
                  respect of any such indebtedness;

         (g)      Merger: consolidate or merge with any other person or convey
                  or transfer its properties or assets substantially or as an
                  entirety to any other person;

         (h)      Premises or Employees: have any premises or employees or
                  subsidiaries; or

         (i)      Further shares: issue any further shares;

         (j)      United States activities: engage in any activities in the
                  United States (directly or through agents) or derive any
                  income from United States sources as determined under United
                  States income tax principles or hold any property if doing
                  so would cause it to be engaged or deemed to be engaged in a
                  trade or business within the United States as determined
                  under United States tax principles;

         (k)      Conduct of affairs: take any management decisions or direct
                  the conduct of its affairs in any Member State of the
                  European Union, including holding any board meetings in any
                  Member State of the European Union.

22.      POWER TO DELEGATE

22.1     Power to delegate

         Subject to Clause 22.2 (No further appointments), the Mortgages
         Trustee may (notwithstanding any rule of law or equity to the
         contrary) delegate (revocably or irrevocably and for a limited or
         unlimited period of time) the performance of all or any of its
         obligations and the exercise of all or any of its powers under this
         Deed or imposed or conferred on it by law or otherwise to any person
         or body of persons fluctuating in number selected by it and any such
         delegation may be by power of attorney or in such other manner as the
         Mortgages Trustee may think fit and may be made upon such terms and
         conditions (including the power to sub-delegate) as the Mortgages
         Trustee may think fit.

22.2     No further appointments

         Notwithstanding the provisions of Clause 22.1 (Power to delegate),
         the Mortgages Trustee shall not appoint any agent, attorney or other
         delegate having power to act in respect of the Trust Property unless
         it is directed in writing to do so by the Beneficiaries. The
         appointment of any agent, attorney or other delegate hereunder above
         shall terminate immediately upon the occurrence of a Trigger Event.

23.      POWER OF INVESTMENT

         The Mortgages Trustee may invest, and may appoint the Cash Manager to
         invest on its behalf, any amounts standing to the credit of the
         Mortgages Trustee Transaction Account in Authorised Investments. Save
         as expressly provided in this Deed, the Mortgages Trustee Guaranteed
         Investment Contract and the Bank Account Agreement, the Mortgages
         Trustee shall have no further or other powers of investment with
         respect to the Trust Property and (to the extent permitted by
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         applicable law) the Trustee Act 2000 shall not nor shall any other
         provision relating to trustee powers of investment implied by statute
         or general law shall apply to the Mortgages Trust.

24.      OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE

24.1     No action to impair Trust Property

         Except for actions expressly authorised by this Deed, the Mortgages
         Trustee shall take no action reasonably likely to impair the
         interests of the Beneficiaries in any Trust Property now existing or
         hereafter created or to impair the value of any Mortgage Loan or its
         Related Security subject to the Mortgages Trust.

24.2     Litigation

         The Mortgages Trustee must not prosecute or defend any legal or other
         proceedings anywhere in the world (at the cost of the Trust Property)
         unless it obtains legal or other advice that it is in the interests
         of the Beneficiaries to do so.

24.3     No Implied Duties

         The duties and obligations of the Mortgages Trustee under the
         Mortgages Trust shall be determined solely by the express provisions
         of this Deed (but without prejudice to the duties and obligations of
         the Mortgages Trustee under any of the other Transaction Documents).
         The Mortgages Trustee shall not be liable under this Deed except for
         the performance of such duties and obligations as shall be
         specifically set forth in this Deed. No implied covenants or
         obligations shall be read into this Deed against the Mortgages
         Trustee, and the permissible right of the Mortgages Trustee to do
         things set out in this Deed shall not be construed as a duty.

24.4     No Liability

         Neither the Mortgages Trustee, Funding (in its capacity as a
         Beneficiary hereunder), Funding 2 (in its capacity as a Beneficiary
         hereunder) nor the Seller (in its capacity as a Beneficiary
         hereunder) shall be liable to each other, in the absence of wilful
         default, gross negligence or breach of the terms of this Deed, in
         respect of any loss or damage which arises out of the exercise or
         attempted or purported exercise or failure to exercise any of their
         respective powers.

24.5     Reliance on Certificates

         The Mortgages Trustee may rely on and shall be protected in acting
         on, or in refraining from acting in accordance with, any resolution,
         officer's certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document believed
         by it to be genuine and to have been signed or presented to it
         pursuant to the Transaction Documents by the proper party or parties.

24.6     Reliance on Third Parties

         The Mortgages Trustee may, in relation to these presents, act on the
         opinion or advice of or a certificate or any information obtained
         from any lawyer, banker, valuer,

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         broker, accountant, financial adviser, securities dealer, merchant
         bank, computer consultant or other expert in the United Kingdom or
         elsewhere and shall not, provided that it shall not have acted
         fraudulently or in breach of any of the provisions of the Transaction
         Documents, be responsible for any loss occasioned by so acting. Any
         such opinion, advice, certificate or information may be sent or
         obtained by letter, telemessage, telex, cable or facsimile device and
         the Mortgages Trustee shall not be liable for acting on any opinion,
         advice, certificate or information purporting to be so conveyed
         although the same shall contain some error or shall not be authentic,
         provided that such error or lack of authenticity shall not be
         manifest.

24.7     MIG Policies

         The Mortgages Trustee is not required to maintain any MIG Policy with
         the then-current insurer and may contract for mortgage indemnity
         guarantee protection from any insurer then providing MIG insurance
         policies, subject to prior agreement with the Rating Agencies and
         confirmation that the then-current ratings by the Rating Agencies (or
         any of them) of the Notes issued by any Issuer would not be adversely
         affected.

25.      NO RETIREMENT OF MORTGAGES TRUSTEE

25.1     No Retirement

         The Mortgages Trustee shall not, and shall not purport to, retire as
         the trustee of the Mortgages Trust or appoint any additional trustee
         of the Mortgages Trust and shall have no power to retire or appoint
         any additional trustee under the Trustee Act 1925 or otherwise.

25.2     No Replacement

         Neither the Seller, Funding nor Funding 2 shall at any time remove or
         purport to remove and/or replace the Mortgages Trustee as the trustee
         of the Mortgages Trust.

25.3     No Termination

         Prior to the payment by Funding and Funding 2 of all amounts owing
         under the Funding Intercompany Loan Agreements and/or the Funding 2
         Intercompany Loan Agreements, as applicable, and under the other
         Transaction Documents, neither the Seller, Funding nor Funding 2
         shall at any time, except in accordance with the provisions of Clause
         18 (Early Termination of the Mortgages Trust) and Clause 26
         (Termination), terminate or purport to terminate the Mortgages Trust
         and, in particular, but without prejudice to the generality of the
         foregoing, the Seller, Funding and Funding 2 shall not in reliance on
         their absolute beneficial interests in the Trust Property call for
         the transfer to them or vesting in them of the legal estate in all or
         any part of the Trust Property.

26.      TERMINATION

         Subject to Clause 18 (Early Termination of the Mortgages Trust), the
         Mortgages Trust hereby constituted shall terminate upon the date upon
         which the Trust Property is zero.

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27.      FURTHER ASSURANCES

         The parties agree that they will co-operate fully to do all such
         further acts and things and execute any further documents as may be
         necessary or desirable to give full effect to the arrangements
         contemplated by this Deed.

28.      NO PARTNERSHIP OR AGENCY

         Nothing in this Deed shall be taken to constitute or create a
         partnership between any of the parties to this Deed or to make or
         appoint the Seller the agent of Funding (or vice versa) or the agent
         of Funding 2 (or vice versa) or Funding the agent of Funding 2 (or
         vice versa).

29.      CALCULATIONS

         In the absence of manifest error, any determination or calculation by
         or on behalf of the Mortgages Trustee in connection with the
         provisions of this Deed shall be deemed to be conclusive.

30.      CONFIDENTIALITY

30.1     General Obligation of Confidentiality

         Unless otherwise required by applicable law, and subject to Clause
         30.2 (Exceptions) below, each of the parties agrees to maintain the
         confidentiality of this Deed in its communications with third parties
         and otherwise. None of the parties shall disclose to any person any
         information relating to the business, finances or other matters of a
         confidential nature of or relating to any other party to this Deed or
         any of the Transaction Documents which it may have obtained as a
         result of having entered into this Deed or otherwise.

30.2     Exceptions

         The provisions of Clause 30.1 (General Obligation of Confidentiality)
         above shall not apply:

         (a)      to the disclosure of any information to any person who is a
                  party to any of the Transaction Documents as expressly
                  permitted by the Transaction Documents;

         (b)      to the disclosure of any information which is or becomes
                  public knowledge otherwise than as a result of the wrongful
                  conduct of the recipient;

         (c)      to the extent that the recipient is required to disclose the
                  same pursuant to any law or order of any court or pursuant
                  to any direction or requirement (whether or not having the
                  force of law) of any central bank or any governmental or
                  other regulatory or Taxation authority;

         (d)      to the disclosure of any information to professional
                  advisers who receive the same under a duty of
                  confidentiality;

         (e)      to the disclosure of any information with the consent of the
                  parties hereto;

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<PAGE>

         (f)      to the disclosure to the Rating Agencies or any of them of
                  such information as may be requested by any of them for the
                  purposes of setting or reviewing the rating assigned to the
                  Notes (or any of them), provided that no information which
                  would disclose the identity of a Borrower shall be disclosed
                  to the Rating Agencies or any of them;

         (g)      to the disclosure of any information disclosed to a
                  prospective assignee of Funding or Funding 2 (provided that
                  it is disclosed on the basis that the recipient will hold it
                  confidential); or

         (h)      to any disclosure for the purposes of collecting in or
                  enforcing the Trust Property or any of it.

31.      NON PETITION COVENANT; LIMITED RECOURSE

31.1     Non Petition Covenant

         Each of the parties hereto hereby agrees that it shall not institute
         against either Funding, Funding 2 or the Mortgages Trustee any
         winding-up, administration, insolvency or similar proceedings so long
         as any sum is outstanding under any Intercompany Loan Agreement of
         any Issuer or for two years plus one day since the last day on which
         any such sum was outstanding.

31.2     Limited Recourse

         Each of the parties hereto agrees that:

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

         (b)      in relation to Funding:

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

                  (B)      notwithstanding any other provision of this Deed or
                           any other Transaction Document, no sum due or owing
                           to any party to this Deed from or by Funding under
                           this Deed shall be payable by Funding except to the
                           extent that Funding has sufficient funds available
                           or (following enforcement of the Funding Security)
                           the Security Trustee has realised sufficient funds
                           from the Funding Security to pay such sum subject
                           to and in accordance with the relevant Funding
                           Priority of Payments and provided that all
                           liabilities of Funding required to be paid in
                           priority thereto or pari passu therewith pursuant
                           to such Funding Priority of Payments have been
                           paid, discharged and/or otherwise provided for in
                           full; and

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<PAGE>

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

         (c) in relation to Funding 2:

                  (A)      only the Funding 2 Security Trustee may enforce the
                           security created in favour of the Funding 2
                           Security Trustee under the Funding 2 Deed of Charge
                           in accordance with the provisions thereof;

                  (B)      notwithstanding any other provision of this Deed or
                           any other Transaction Document, no sum due or owing
                           to any party to this Deed from or by Funding 2
                           under this Deed shall be payable by Funding 2
                           except to the extent that Funding 2 has sufficient
                           funds available or (following enforcement of the
                           Funding 2 Security) the Funding 2 Security Trustee
                           has realised sufficient funds from the Funding 2
                           Security to pay such sum subject to and in
                           accordance with the relevant Funding 2 Priority of
                           Payments and provided that all liabilities of
                           Funding 2 required to be paid in priority thereto
                           or pari passu therewith pursuant to such Funding 2
                           Priority of Payments have been paid, discharged
                           and/or otherwise provided for in full; and

                  (C)      it shall not take any steps for the purpose of
                           recovering any amount payable by Funding 2 or
                           enforcing any rights arising out of this Deed
                           against Funding 2 otherwise than in accordance with
                           the Funding 2 Deed of Charge.

31.3     Corporate Obligations

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

32.      AMENDMENTS AND WAIVER

32.1     Entire Agreement

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

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<PAGE>

32.2     Amendments and Waiver

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

32.3     Rights cumulative

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

33.      NOTICES

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

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

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

         (c)      in the case of Funding, to Granite Finance Funding Limited
                  69 Park Lane, Croydon, CR9 1TQ (facsimile number 020 8409
                  8911) for the attention of the Company Secretary (with a
                  copy to the Seller in accordance with (a) above);

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

         (e)      in the case of Funding 2, to Granite Finance Funding 2
                  Limited situated at Fifth Floor, 100 Wood Street, London
                  EC2V 7EX (facsimile number 020 7606 0643) for the attention
                  of The Company Secretary (with a copy to the Seller in
                  accordance with (a) above);

         (f)      in the case of the Funding 2 Security Trustee, to The Bank
                  of New York, 48th Floor, One Canada Square, London, E14 5AL
                  (facsimile number 020 7964 6399) for the attention of the
                  Global Structured Finance (Corporate Trust);

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<PAGE>

         (g)      in the case of the Fitch Ratings Ltd, to Fitch Ratings Ltd,
                  Eldon House, 2 Eldon Street, London EC2M 7UA (facsimile
                  number 020 7417 6262) for the attention of European
                  Structured Finance Surveillance;

         (h)      in the case of Moody's, to Moody's, 1st Floor, 2 Minster
                  Court, Mincing Lane, London EC3R 7XB (facsimile number 020
                  7772 5400) for the attention of Head of Monitoring Group,
                  Structured Finance (with a copy to the Seller in accordance
                  with (a) above);

         (i)      in the case of Standard & Poor's, to Standard & Poor's, 20
                  Cannon Square, Canary Wharf, London E14 5LH (facsimile
                  number 020 7826 3598) for the attention of Structured
                  Finance Surveillance Group (with a copy to the Seller in
                  accordance with (a) above),

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by
         any party to the others by fifteen days prior written notice in
         accordance with the provisions of this Clause 33.

34.      THIRD PARTY RIGHTS

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

35.      EXECUTION IN COUNTERPARTS; SEVERABILITY

35.1     Counterparts

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

35.2     Severability

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

36.      GOVERNING LAW AND SUBMISSION TO JURISDICTION

36.1     Governing Law

         This Deed is governed by, and shall be construed in accordance with,
         English law.

36.2     Submission to Jurisdiction

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

                                      52
<PAGE>

36.3     Process Agent

         The Mortgages Trustee irrevocably and unconditionally appoints
         Mourant & Co. Capital (SPV) Limited at 69 Park Lane, Croydon CR9 1TQ
         or otherwise at its registered office for the time being as its agent
         for service of process in England in respect of any proceedings in
         respect of this Agreement and undertakes that in the event of Mourant
         & Co. Capital (SPV) Limited ceasing so to act it will appoint another
         person with a registered office in London as its agent for service of
         process.

36.4     Forum

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

                                      53
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                                  SCHEDULE 1
                        REPRESENTATIONS AND WARRANTIES

1.       Status

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

2.       Powers and authority

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

3.       Legal validity

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

4.       Non-conflict

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

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

         (b)      conflict with its constitutional documents; or

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

5.       No litigation

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

6.       Consents and Licences

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

                                      54
<PAGE>

                                EXECUTION PAGE

IN WITNESS WHEREOF this Deed has been executed as a deed and delivered by the
parties hereto on the day and year first above written.

as Beneficiary, Cash Manager and Seller
EXECUTED AND DELIVERED AS A DEED          )
for and on behalf of                      )
NORTHERN ROCK PLC                         )
by its duly authorised attorney           )



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


Name:


in the presence of:
                                  Signature      ______________________________
                                                 Witness
                                  Full name
                                  Occupation     Trainee Solicitor
                                  Address        c/o Sidley Austin Brown & Wood
                                                 Woolgate Exchange
                                                 25 Basinghall Street
                                                 London EC2V 5HA

                                      55
<PAGE>


as Mortgages Trustee
EXECUTED AND DELIVERED AS A DEED                              )
for and on behalf of                                          )
GRANITE FINANCE TRUSTEES LIMITED                              )
a company incorporated in Jersey, Channel Islands, by         )
               and                  , being persons           )
who, in accordance with the laws of that territory are        )
acting under the authority of the company                     )



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


Name:




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


Name:


in the presence of:
                                  Signature      ______________________________
                                                 Witness
                                  Full name
                                  Occupation
                                  Address


                                      56
<PAGE>


as Funding and a Beneficiary

EXECUTED AND DELIVERED AS A DEED                          )
for and on behalf of                                      )
GRANITE FINANCE FUNDING LIMITED                           )
a company incorporated in Jersey, Channel Islands, by     )
           and                      , being persons       )
who, in accordance with the laws of that territory are    )
acting under the authority of the company                 )



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


Name:




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


Name:


in the presence of:
                                  Signature      ______________________________
                                                 Witness
                                  Full name
                                  Occupation
                                  Address




                                      57
<PAGE>



as Funding 2 and a Beneficiary
EXECUTED AND DELIVERED AS A DEED    )
for and on behalf of                )
GRANITE FINANCE FUNDING 2 LIMITED   )
acting by two directors             )



-------------------------------
for and on behalf of
LDC Securitisation Director No. 1 Limited
Director

Name:




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

Name:



                                      58
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