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                                                                     EXHIBIT 4.7

Draft: 25/02/03

THIS AGREEMENT is made on [6th March], 2003

BETWEEN:

(1)      PERMANENT FINANCING (NO. 2) PLC (registered number 4623188), a public
         limited company incorporated under the laws of England and Wales whose
         registered office is Blackwell House, Guildhall Yard, London EC2V 5AE
         (the "SECOND ISSUER");

(2)      CITIBANK, N.A., LONDON BRANCH, acting through its office at 5 Carmelite
         Street, London EC4Y 0PA in its capacity as the Principal Paying Agent;

(3)      CITIBANK, N.A., LONDON BRANCH, acting through its office at 5 Carmelite
         Street, London EC4Y 0PA in its capacity as Agent Bank;

(4)      CITIBANK, N.A., NEW YORK BRANCH, acting through its office at 14th
         Floor, Zone 3, 111 Wall Street, New York, New York 10043 in its
         capacity as the US Paying Agent;

(5)      CITIBANK, N.A., LONDON BRANCH, acting through its office at 5 Carmelite
         Street, London EC4Y 0PA in its capacity as the Registrar;

(6)      CITIBANK, N.A., LONDON BRANCH, acting through its office at 5 Carmelite
         Street, London EC4Y 0PA in its capacity as the Transfer Agent; and

(7)      U.S. BANK NATIONAL ASSOCIATION, a national banking association formed
         under the laws of the United States of America, acting through its
         office at 1 Federal Street, 3rd Floor, Boston, Massachusetts
         02110acting in its capacity as Note Trustee.

WHEREAS:

(A)      Under the Second Issuer Deed of Charge the Second Issuer will charge
         and assign to the Security Trustee all of its right, title, interest
         and benefit, present and future, in, to and under this Agreement and
         the other Second Issuer Transaction Documents.

(B)      The Agents are willing to provide agency services to the Second Issuer
         and the Note Trustee on the terms and subject to the conditions
         contained in this Agreement.

IT IS AGREED AS FOLLOWS:

1.       DEFINITIONS AND INTERPRETATION

         The Amended and Restated Master Definitions and Construction Schedule
         and the Second Issuer Master Definitions and Construction Schedule,
         both signed for the purposes of identification by Allen & Overy and
         Sidley Austin Brown & Wood on [5th March], 2003 (as the same may be
         amended, varied or supplemented from time to time with the consent of
         the parties hereto) are expressly and specifically incorporated into
         this Agreement and, accordingly, the expressions defined in the Amended
         and Restated Master Definitions and Construction Schedule and the
         Second Issuer Master Definitions and Construction Schedule (as so
         amended, varied or supplemented) shall, except where the context
         otherwise requires and save where otherwise defined herein, have the
         same meanings in this Agreement, including the Recitals hereto and this
         Agreement shall be construed in accordance with the interpretation
         provisions set out in CLAUSE 2 of the Amended and Restated Master
         Definitions and Construction Schedule and the Second Issuer Master
         Definitions and Construction Schedule. In the event of a conflict
         between the Amended and Restated Master Definitions


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         and Construction Schedule and the Second Issuer Master Definitions and
         Construction Schedule, the Second Issuer Master Definitions and
         Construction Schedule shall prevail.

2.       APPOINTMENT OF THE AGENTS

2.1      APPOINTMENT

(a)      Upon and subject to the terms of this Agreement, the Second Issuer and,
         for the purposes of CLAUSE 9 only, the Note Trustee, hereby appoints to
         carry out each of its respective obligations on a several but not joint
         basis:

         (i)      the Principal Paying Agent as principal paying agent in
                  respect of the Second Issuer Notes;

         (ii)     the US Paying Agent as paying agent in the United States in
                  respect of the Second Issuer Notes;

         (iii)    the Agent Bank as agent bank for the purpose of determining
                  interest payable in respect of the Second Issuer Notes;

         (iv)     the Registrar as registrar for the purpose of recording the
                  holders of the Second Issuer Notes; and

         (v)      the Transfer Agent as transfer agent in respect of the Second
                  Issuer Notes.

(b)      The Second Issuer appoints the Agent Bank acting through its Specified
         Office as its agent in relation to the Second Issuer Notes for the
         purposes specified in this Agreement and in the Conditions.

2.2      ACCEPTANCE OF APPOINTMENT BY PAYING AGENTS, REGISTRAR AND TRANSFER
         AGENT

         The Agents accept their respective appointments as agent of the Second
         Issuer and, for the purpose of CLAUSE 9 only, as agent of the Note
         Trustee in relation to the Second Issuer Notes and shall comply with
         the provisions of this Agreement.

2.3      ACCEPTANCE OF APPOINTMENT BY AGENT BANK

         The Agent Bank accepts its appointment as agent of the Second Issuer
         for the purpose, inter alia, of calculating the rate of interest on the
         Second Issuer Notes in accordance with the Conditions and this
         Agreement.

3.       THE SECOND ISSUER NOTES

3.1      REG S GLOBAL SECOND ISSUER NOTES AND DOLLAR GLOBAL SECOND ISSUER NOTES

         The Reg S Global Second Issuer Notes and the Dollar Global Second
         Issuer Notes shall be in substantially the form set out in the First
         Schedule to the Second Issuer Trust Deed and shall, in each case, be
         executed manually or in facsimile by an Authorised Signatory of the
         Second Issuer and authenticated manually by or on behalf of the
         Registrar on the Second Issuer Closing Date.


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3.2      DEFINITIVE SECOND ISSUER NOTES

(a)      Each Definitive Second Issuer Note shall:

         (i)      be in substantially the form set out in the Second Schedule to
                  the Second Issuer Trust Deed;

         (ii)     be printed, lithographed or typewritten in accordance with all
                  applicable legal and stock exchange requirements;

         (iii)    bear a unique certificate number; and

         (iv)     be executed manually or in facsimile by an Authorised
                  Signatory of the Second Issuer and authenticated manually by
                  or on behalf of the Registrar.

(b)      If the Second Issuer is required to deliver Definitive Second Issuer
         Notes pursuant to the terms of the relevant Global Second Issuer Note
         and the Second Issuer Trust Deed, the Second Issuer shall arrange for
         Definitive Second Issuer Notes in an aggregate principal amount equal
         to the Principal Amount Outstanding of the relevant Global Second
         Issuer Note to be made available to or to the order of the Registrar by
         the date falling 30 days after the occurrence of the relevant event as
         set out in CLAUSE 3 of the Second Issuer Trust Deed. Any Definitive
         Second Issuer Notes will be in registered form and, in each case, in an
         Authorised Denomination. The Second Issuer shall also arrange, on
         written request by the Registrar, for such Definitive Second Issuer
         Notes as are required to enable the Registrar to perform its
         obligations under CLAUSE 5 to be made available to or to the order of
         the Registrar from time to time.

3.3      FACSIMILE SIGNATURES

         The Second Issuer may use for the purposes of executing any Global
         Second Issuer Notes or Definitive Second Issuer Notes, the facsimile
         signature of any person who at the date of this Agreement was duly
         authorised to sign the same on behalf of the Second Issuer, even if at
         the time of issue of such Global Second Issuer Note or Definitive
         Second Issuer Note, such person no longer holds (for whatever reason
         including death) the relevant office and any Global Second Issuer Notes
         or Definitive Second Issuer Notes so executed and authenticated will be
         valid and binding obligations of the Second Issuer. No Global Second
         Issuer Note or Definitive Second Issuer Note shall be valid for any
         purpose until it has been authenticated by the Registrar, as the case
         may be, in accordance with this Agreement and the Second Issuer Trust
         Deed.

3.4      AVAILABILITY

         The Second Issuer shall, on or prior to the Second Issuer Closing Date,
         deliver each unauthenticated Global Second Issuer Note to or to the
         order of the Registrar for authentication in accordance with CLAUSE
         3.1. The Registrar shall, on or about the Second Issuer Closing Date,
         authenticate and deliver each Global Second Issuer Note:

         (a)      in the case of Reg S Global Second Issuer Notes, to the Common
                  Depositary of Euroclear and Clearstream, Luxembourg against
                  receipt from the Common Depositary of confirmation that the
                  Common Depositary or its nominee is holding the relevant Reg S
                  Global Second Issuer Note in safe custody for the account of
                  Euroclear and Clearstream, Luxembourg; and


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         (b)      in the case of Dollar Global Second Issuer Notes, to a
                  custodian for DTC.

         The Registrar shall hold in safe custody any unauthenticated Global
         Second Issuer Notes delivered to it in accordance with this CLAUSE 3.4
         and shall ensure that they are authenticated and delivered only in
         accordance with this Agreement and the Second Issuer Trust Deed.

3.5      CALCULATION OF INTEREST

         The Agent Bank shall perform such duties at its Specified Office as are
         set forth in this Agreement and in the Conditions and such other duties
         as are reasonably incidental thereto at the request of the Second
         Issuer or the Note Trustee. Save as hereinafter provided, as soon as
         practicable after 11.00 a.m. (London time), on each Interest
         Determination Date, the Agent Bank shall determine the rate of interest
         on each class of the Second Issuer Notes and the Interest Amount
         applicable to the next Interest Period in accordance with the
         Conditions and shall carry out all other relevant calculations under
         the Conditions. Further, the Agent Bank shall notify promptly by
         facsimile transmission, and in any event not later than the third
         Business Day following each such Interest Determination Date, the
         Second Issuer, the Note Trustee, the Principal Paying Agent, the Second
         Issuer Cash Manager and the London Stock Exchange (or such other stock
         exchange, competent listing authority and/or quotation system on or by
         which the Second Issuer Notes are then listed, quoted and/or traded) of
         the rate of interest so determined, the Interest Amount payable in
         respect of interest for such Interest Period and the Interest Payment
         Date in respect of such Interest Period specifying to the Second
         Issuer, the Second Issuer Cash Manager and the Note Trustee the rates
         upon which the same are based and (where relevant) the names of the
         banks quoting such rates provided that the Agent Bank shall make such
         determination and calculation in relation to each class of Second
         Issuer Notes on the basis of CONDITION 4 of the Second Issuer Notes.

3.6      PUBLICATION OF RATE OF INTEREST

         It shall be the responsibility of the Agent Bank to notify to the
         London Stock Exchange and to the relevant class of Noteholders such
         rate of interest described in CLAUSE 3.5 and the Interest Amounts for
         each Interest Period and the immediately succeeding Interest Payment
         Date and to publish such rate and Interest Amounts in accordance with
         CONDITIONS 4 and 14.

3.7      LISTING

         The Second Issuer Notes, on issue, are expected to be listed on the
         official list of the United Kingdom Listing Authority and to be
         admitted to trading on the London Stock Exchange. The Second Issuer
         will advise the Agent Bank and the Note Trustee in writing if such
         listing and/or admission to trading is or are withdrawn or if the
         Second Issuer Notes become listed, quoted and/or traded on or by any
         other stock exchange, competent listing authority and/or quotation
         system.

3.8      SAFE CUSTODY

         The Registrar shall procure the holding in safe custody of all
         unauthenticated Definitive Second Issuer Notes delivered to it in
         accordance with CLAUSE 3.2(b) and shall ensure that such Definitive
         Second Issuer Notes are authenticated and delivered only in accordance
         with the terms hereof and of the Conditions.


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3.9      AUTHENTICATION

         The Registrar or its designated agent is authorised and instructed by
         the Second Issuer to authenticate such Global Second Issuer Notes or
         Definitive Second Issuer Notes as may be required to be authenticated
         hereunder by the original signature of any of its officers or any other
         person duly authorised for the purpose by the Registrar.

4.       DELIVERY OF DEFINITIVE SECOND ISSUER NOTES; TRANSFERS AND EXCHANGES OF
         GLOBAL SECOND ISSUER NOTES

4.1      DELIVERY OF DEFINITIVE SECOND ISSUER NOTES

         On or after the date for the exchange of any Global Second Issuer Note
         for Definitive Second Issuer Notes in accordance with the Conditions,
         the Registrar shall, against surrender of such Global Second Issuer
         Note authenticate and deliver, or cause to be authenticated and
         delivered on its behalf, Definitive Second Issuer Notes in accordance
         with the Conditions and Clause 5 of the Second Issuer Trust Deed
         provided that in no circumstances shall the aggregate principal amount
         of such Definitive Second Issuer Notes exceed the aggregate principal
         amount of the relevant Global Second Issuer Note.

4.2      ANNOTATION OF GLOBAL SECOND ISSUER NOTES

         In each occasion on which Definitive Second Issuer Notes are so
         delivered, the amount of the relevant Global Second Issuer Note shall
         be reduced by the amount of the Definitive Second Issuer Notes so
         delivered and the Registrar shall procure that there is noted in the
         schedule to the relevant Global Second Issuer Note the amount of
         Definitive Second Issuer Notes so delivered (the "PRINCIPAL AMOUNT")
         and the remaining Principal Amount Outstanding of the relevant Global
         Second Issuer Note and shall procure the signature of such notation on
         its behalf.

5.       REPLACEMENT SECOND ISSUER NOTES

5.1      DELIVERY OF REPLACEMENTS

         The Registrar shall, upon and in accordance with the instructions of
         the Second Issuer (which instructions may, without limitation, include
         such terms as to the payment of expenses and as to evidence, security
         and indemnity as the Second Issuer may reasonably require) and in the
         absence of notice to the Principal Paying Agent, the Registrar or the
         Note Trustee that such Second Issuer Note has been acquired by a bona
         fide purchase, authenticate and deliver a Global Second Issuer Note or
         Definitive Second Issuer Note as a replacement for any such Global
         Second Issuer Note or Definitive Second Issuer Note (of the same form)
         which has been mutilated or defaced or which is alleged to have been
         destroyed, stolen or lost provided that, however, the Registrar shall
         not deliver any such Global Second Issuer Note or Definitive Second
         Issuer Note as a replacement for any Global Second Issuer Note or
         Definitive Second Issuer Note (of the same form) which has been
         mutilated or defaced otherwise than against surrender of the same.

5.2      REPLACEMENTS TO BE NUMBERED

         Each replacement Global Second Issuer Note or Definitive Second Issuer
         Note delivered hereunder shall bear a unique serial number.


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5.3      CANCELLATION AND DESTRUCTION

         The Registrar shall cancel and destroy each mutilated or defaced Global
         Second Issuer Note or Definitive Second Issuer Note surrendered to it
         and in respect of which a replacement has been delivered.

5.4      VERIFICATION

         The Registrar shall obtain verification, in the case of an allegedly
         lost, stolen or destroyed Global Second Issuer Note or Definitive
         Second Issuer Note in respect of which the serial number is known, that
         such Global Second Issuer Note or Definitive Second Issuer Note has not
         previously been redeemed or paid. The Registrar shall not issue any
         replacement Global Second Issuer Note or Definitive Second Issuer Note
         unless and until the Registrar and the Second Issuer agree that the
         applicant therefor has:

         (a)      paid such costs as may be incurred in connection therewith;

         (b)      furnished it with such evidence and indemnification as the
                  Second Issuer and the Registrar may reasonably require; and

         (c)      in the case of any mutilated or defaced Global Second Issuer
                  Note or Definitive Second Issuer Note, surrendered it to the
                  Registrar.

5.5      NOTIFICATION

         The Registrar shall notify the Second Issuer of the delivery by it in
         accordance herewith of any replacement Global Second Issuer Note or
         Definitive Second Issuer Note, specifying the serial number thereof and
         the serial number respectively (if and if known) of the Global Second
         Issuer Note or Definitive Second Issuer Note which it replaces and
         confirm (if such be the case) that the Global Second Issuer Note or
         Definitive Second Issuer Note which it replaces has been cancelled or
         destroyed and the Registrar shall, in addition, as promptly as is
         practicable, enter such details on the Register. Whenever any Global
         Second Issuer Note or Definitive Second Issuer Note for which a
         replacement Global Second Issuer Note or Definitive Second Issuer Note
         has been issued and of which the serial number is known is presented to
         any of the Paying Agents for payment, the relevant Paying Agent shall
         immediately send notice thereof to the Second Issuer, the Principal
         Paying Agent and the Registrar. No payment shall be made on such
         cancelled Global Second Issuer Note or Definitive Second Issuer Note.

6.       PAYMENTS TO THE PRINCIPAL PAYING AGENT

6.1      SECOND ISSUER TO PAY THE PRINCIPAL PAYING AGENT

         In order to provide for the payment of interest and principal in
         respect of the Second Issuer Notes as the same become due and payable
         in accordance with the Conditions and the Second Issuer Trust Deed, the
         Second Issuer shall pay to the Principal Paying Agent or otherwise
         cause the Principal Paying Agent to receive an amount which is equal to
         the amount of principal and interest then falling due in respect of the
         Second Issuer Notes.

6.2      PAYMENT BY SECOND ISSUER

         The Second Issuer shall, not later than 11.00 a.m. (London time) on
         each Interest Payment Date, on which any payment of principal and
         interest in respect of the Second Issuer Notes



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         becomes due, pay or cause to be paid to the Principal Paying Agent such
         amounts in sterling, dollars or euro, as the case may be, in
         immediately available funds as may be required for the purpose of
         paying principal or interest under the Second Issuer Notes (after
         taking account of any cash then held by the Principal Paying Agent and
         available for that purpose) and such amounts shall be paid to the
         credit of suitably designated accounts at such bank or banks in London
         for payment to the Noteholders as shall be notified to the Second
         Issuer by the Principal Paying Agent in writing no later than two weeks
         before the first payment is due to be made to the Noteholders. The
         Principal Paying Agent shall notify the Second Issuer and/or the Note
         Trustee in writing, within five Business Days of any change of those
         accounts, or any of them, and (i) upon the bankruptcy, insolvency,
         winding up or liquidation (other than the passing of any resolution by
         any Paying Agent in connection with any merger, conversion,
         consolidation, or transfer as contemplated by CLAUSE 12.11) of the
         Principal Paying Agent or (ii) upon default being made by any Paying
         Agent in the payment of any amounts in respect of principal or interest
         in accordance with this Agreement or (iii) failing payment within the
         designated periods of prescription specified in CONDITION 7, the
         Principal Paying Agent shall hold all payments on trust for repayment
         to the Second Issuer.

6.3      NOTIFICATION OF PAYMENT BY SECOND ISSUER

         The Second Issuer shall procure that the bank effecting payment on its
         behalf confirms by tested telex or authenticated SWIFT message by 2.00
         p.m. (London time) two Business Days prior to each date on which any
         payment is due to be made under CLAUSE 6.2 that it has issued
         irrevocable payment instructions for the transfer of the relevant sum
         due on that date to the account of the Principal Paying Agent.

6.4      CONFIRMATION BY THE SECOND ISSUER

(a)      The Second Issuer will procure that the bank in London making payments
         on its behalf as referred to in CLAUSE 6.2 will irrevocably confirm in
         writing to the Principal Paying Agent by 11.00 a.m. (London time) on
         each Interest Payment Date, as set out in CLAUSE 6.2, that it has
         credited such account of the Principal Paying Agent as notified by the
         Principal Paying Agent to the Second Issuer from time to time, on such
         payment date.

(b)      Not later than two Business Days before making any payment pursuant to
         CLAUSE 6.2 in respect of any class of the Second Issuer Notes, the
         Second Issuer shall notify, or procure the notification to, the
         Principal Paying Agent and the Note Trustee of the amount of interest
         or principal (as the case may be) payable in respect of each class of
         Second Issuer Notes on the date in question and the apportionment of
         such amount as between principal and interest.

(c)      Whilst the Second Issuer Notes of any class continue to be represented
         by Global Second Issuer Notes, the Principal Paying Agent shall pay or
         cause to be paid all payments of principal or interest (as the case may
         be) due in respect of such Second Issuer Notes to, or to the order of:

         (i)      in the case of Reg S Global Second Issuer Notes, the Common
                  Depository of Euroclear and Clearstream, Luxembourg; and

         (ii)     in the case of Dollar Global Second Issuer Notes, the nominee
                  of DTC,

         and shall give notice of all such payments to the Registrar.

         All such payments will be distributed without deduction or withholding
         for any taxes, duties, assessments or other governmental charges of
         whatever nature except as may be required by



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         law. If any such deduction or withholding is required to be made, then
         neither the Second Issuer nor any other person will be obliged to pay
         any additional amounts in respect thereof.

6.5      EXCLUSION OF LIENS AND INTEREST

         The Principal Paying Agent shall:

         (a)      not exercise any lien, right of set-off or similar claim in
                  respect of monies received by the Principal Paying Agent in
                  connection with its activities hereunder;

         (b)      not be liable to any person for interest thereon; and

         (c)      not be obliged to hold any funds received by it hereunder in a
                  segregated account or accounts.

6.6      APPLICATION BY PRINCIPAL PAYING AGENT

         The Principal Paying Agent shall apply (or direct or cause application
         of) each amount paid to it hereunder in accordance with CLAUSE 7 in
         respect of the Global Second Issuer Notes and Definitive Second Issuer
         Notes (if any) and shall not be obliged to repay any such amount other
         than as provided herein or unless the claim for the relevant payment
         becomes void under the Conditions in which event it shall repay to the
         Second Issuer such portion of such amount as relates to such payment,
         together with the fees applicable thereto (pro rata as to the amount
         and time) to the extent already paid pursuant to CLAUSE 10, by paying
         the same by credit transfer in sterling, dollars or euro, as the case
         may be, to such account with such bank as the Second Issuer has by
         notice to the Principal Paying Agent specified for the purpose.

6.7      FAILURE TO RECEIVE PAYMENT

         The Principal Paying Agent shall as soon as is reasonably practicable
         notify the Note Trustee, the Agent Bank, the other Paying Agents and
         the Second Issuer by facsimile:

         (a)      if, by 5.00 p.m. (New York City time) on each Interest Payment
                  Date, the Principal Paying Agent has not received the dollar
                  deposit required by CLAUSE 6.2 and/or there are not sufficient
                  funds in dollars available to the Principal Paying Agent to
                  discharge the amount of the monies payable thereon in
                  accordance with the Conditions and/or the provisions of the
                  Second Issuer Trust Deed on such Interest Payment Date, and
                  the Principal Paying Agent will in addition notify the Second
                  Issuer by telephone as soon as reasonably practicable after
                  each Interest Payment Date if it has not received the dollar
                  deposit required by CLAUSE 6.2 and/or as otherwise described
                  in accordance with this CLAUSE 6.7(a);

         (b)      if by 5.00 p.m. (London time) on each Interest Payment Date
                  the Principal Paying Agent has not received the sterling
                  deposit and/or the euro deposit required by CLAUSE 6.2 and/or
                  there are not sufficient funds in sterling or euro, as the
                  case may be, available to the Principal Paying Agent to
                  discharge the amount of the monies payable thereon in
                  accordance with the Conditions and/or the provisions of the
                  Second Issuer Trust Deed on such Interest Payment Date, and
                  the Principal Paying Agent will in addition notify the Second
                  Issuer by telephone if by 11.00 a.m. (London time) on each
                  Interest Payment Date it has not received the sterling deposit
                  or euro deposit required by CLAUSE 6.2 and/or as otherwise
                  described in accordance with this CLAUSE 6.7(b).


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7.       PAYMENTS TO NOTEHOLDERS

7.1      PAYMENTS IN RESPECT OF GLOBAL SECOND ISSUER NOTES

         Each Paying Agent acting through its Specified Office shall make
         payments of interest and principal in respect of the Global Second
         Issuer Notes in accordance with the Conditions and the Second Issuer
         Trust Deed provided, however, that:

         (a)      if any Global Second Issuer Note is presented or surrendered
                  for payment to a Paying Agent and such Paying Agent has
                  delivered a replacement therefor or has been notified that the
                  same has been replaced, such Paying Agent shall as soon as is
                  reasonably practicable notify the Second Issuer in writing of
                  such presentation or surrender and shall not make payment
                  against the same until it is so instructed by the Second
                  Issuer and has received the amount to be so paid;

         (b)      each Paying Agent shall cancel each Definitive Second Issuer
                  Note against surrender of which it has made full payment and
                  shall, in the case of a Paying Agent other than the Principal
                  Paying Agent, deliver each Definitive Second Issuer Note so
                  cancelled by it to the Registrar;

         (c)      in the case of payment of interest or principal against
                  presentation of a Global Second Issuer Note, the Registrar
                  shall note or procure that there is noted on the relevant
                  schedule to such Global Second Issuer Note, the amount of such
                  payment and, in the case of payment of principal, the
                  remaining Principal Amount Outstanding of a Global Second
                  Issuer Note and shall procure the signature of such notation
                  on its behalf;

         (d)      a Paying Agent shall not be obliged (but shall be entitled) to
                  make payments of principal or interest if:

                  (i)      in the case of the Principal Paying Agent, it has not
                           received the full amount of any payment due to it
                           under CLAUSE 6.1; or

                  (ii)     in the case of any other Paying Agent it is not able
                           to establish that the Principal Paying Agent has
                           received the full amount of any payment due to it
                           under CLAUSE 6.

7.2      PAYMENTS IN RESPECT OF DEFINITIVE SECOND ISSUER NOTES

         The Registrar will, in the case of Definitive Second Issuer Notes,
         notify the Principal Paying Agent, not later than five days after each
         Record Date, whether any Noteholder has elected to receive payments by
         transfer to a bank account and, if so, the relevant details of such
         bank account. For those Noteholders who have chosen not to receive
         payments by transfer to a bank account, the Registrar will notify the
         Principal Paying Agent of the address of such Noteholder appearing in
         the Register to which cheques should be posted.

7.3      REGISTER

         The Principal Paying Agent shall make or shall procure payments of
         interest and principal in respect of the Definitive Second Issuer Notes
         in accordance with the Conditions and the Second Issuer Trust Deed by
         mailing a dollar cheque drawn on a bank in New York City, in the case
         of the Series 1 Second Issuer Notes, the Series 2 Second Issuer Notes
         and the Series 4 Class A Second Issuer Notes; or a euro cheque drawn on
         a bank in Luxembourg, in the case



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         of the Series 3 Second Issuer Notes, the Series 4 Class B Second Issuer
         Notes and the Series 4 Class C Second Issuer Notes; or a sterling
         cheque drawn on a bank in Luxembourg, in the case of the Series 5
         Second Issuer Notes to the address of the Noteholder appearing in the
         Register on the Record Date or, if the Noteholder has elected to do so,
         by transfer to a dollar, sterling or euro account, as the case may be.

7.4      NO OBLIGATION TO PAY

         No payments in respect of any Definitive Second Issuer Notes will be
         made on the final date for redemption or, as the case may be, payment,
         or such earlier date as the relevant Definitive Second Issuer Notes may
         become repayable or, as the case may be, payable, in whole unless the
         Registrar or any Transfer Agent confirms to the Principal Paying Agent
         that such Definitive Second Issuer Note has been surrendered to it.

7.5      PARTIAL PAYMENT

(a)      The Principal Paying Agent shall not be obliged (but shall be entitled)
         to make payments of interest or principal in respect of a Global Second
         Issuer Note or a Definitive Second Issuer Note (as the case may be) if
         it has not received the full amount of any payment due to it under
         CLAUSE 6.1. If at any time and for any reason the Principal Paying
         Agent makes a partial payment in respect of a Global Second Issuer
         Note, the Registrar shall, in respect of such Global Second Issuer
         Note, endorse thereon a statement indicating the amount and date of
         such payment and in respect of Definitive Second Issuer Notes, the
         Registrar shall annotate the Register with such details.

(b)      (i)      If the Second Issuer intends to redeem all (but not some only)
                  of any class of the Second Issuer Notes prior to their stated
                  maturity date pursuant to and in accordance with the terms of
                  CONDITION 5(D) or (E), it shall give not more than 60 nor less
                  than 30 days' written notice of such intention to the Note
                  Trustee and the Noteholders in accordance with the relevant
                  paragraphs of CONDITION 5 and stating the date on which such
                  Second Issuer Notes are to be redeemed and shall give
                  sufficient notice to the Principal Paying Agent to enable it
                  to notify the Noteholders within such prescribed period.

         (ii)     The Principal Paying Agent shall in accordance with the
                  Conditions on behalf of and at the expense of the Second
                  Issuer publish the notices required in connection with such
                  redemption.

(c)      In the case of a partial redemption of any class of the Second Issuer
         Notes in accordance with CONDITION 5(B), the principal amount of the
         Second Issuer Notes being partially redeemed on an Interest Payment
         Date shall be redeemed on a pro rata basis in accordance with CONDITION
         5(B).

7.6      EXCLUSION OF LIENS AND COMMISSIONS.

         No Paying Agent shall exercise any lien, right of set-off or similar
         claim against any person to whom it makes any payment under CLAUSE 7.1
         or CLAUSE 7.2 in respect thereof, nor shall any commission or expense
         be charged by it to any such person in respect thereof.

7.7      REIMBURSEMENT BY PRINCIPAL PAYING AGENT

         If a Paying Agent other than the Principal Paying Agent makes any
         payment in accordance with CLAUSE 7.1 or CLAUSE 7.2:


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                                       11


         (a)      it shall notify the Principal Paying Agent of the amount so
                  paid by it, the certificate or serial number of the Second
                  Issuer Notes against presentation or surrender of which
                  payment of principal or interest was made; and

         (b)      subject to, and to the extent of, compliance by the Second
                  Issuer with CLAUSE 6.1 (whether or not at the due time), the
                  Principal Paying Agent shall pay to such Paying Agent out of
                  the funds received by the Principal Paying Agent under CLAUSE
                  6.1, by credit transfer in sterling, dollars or euro, as the
                  case may be, and in same day, freely transferable, cleared
                  funds to such account with such bank in London as such Paying
                  Agent has by notice to the Principal Paying Agent specified
                  for the purpose, an amount equal to the amount so paid by such
                  Paying Agent.

7.8      APPROPRIATION BY PRINCIPAL PAYING AGENT

         If the Principal Paying Agent makes any payment in accordance with
         CLAUSE 7.5(a), it shall be entitled to appropriate for its own account
         out of the funds received by it under CLAUSE 6.1 an amount equal to the
         amount so paid by it.

7.9      REIMBURSEMENT BY SECOND ISSUER

         If any Paying Agent (which for the avoidance of doubt includes the
         Principal Paying Agent) makes a payment in respect of the Second Issuer
         Notes at a time which the Principal Paying Agent has not received the
         full amount of the relevant payment due to it under CLAUSE 6.1 and the
         Principal Paying Agent is not able out of the funds received by it
         under CLAUSE 6.1 to reimburse such Paying Agent therefor (whether by
         payment under CLAUSE 7.7 or appropriation under CLAUSE 7.8), the Second
         Issuer shall from time to time on written demand pay to the Principal
         Paying Agent for account of such Paying Agent:

         (a)      the amount so paid out by such Paying Agent and not so
                  reimbursed to it; and

         (b)      interest on such amount from the date on which such Paying
                  Agent made such payment until the date of reimbursement of
                  such amount with proof thereof of such amount,

         provided, however, that any payment under PARAGRAPH (a) above shall
         satisfy pro tanto the Second Issuer's obligations under CLAUSE 6.1.

7.10     INTEREST

         Interest shall accrue for the purpose of CLAUSE 7.9(b) (as well after
         as before judgment) on the basis of a year of 365 days and the actual
         number of days elapsed and at a rate per annum specified by the
         Principal Paying Agent as reflecting its actual cost of funds for the
         time being in relation to the unpaid amount.

8.       MISCELLANEOUS DUTIES OF THE PRINCIPAL PAYING AGENT, THE REGISTRAR AND
         TRANSFER AGENT

8.1      RECORDS

         The Registrar shall:


<PAGE>
                                       12


         (a)      maintain a full and complete record of all Global Second
                  Issuer Notes and Definitive Second Issuer Notes and of their
                  redemption, payment, exchange or cancellation (as the case may
                  be) and of all replacement Global Second Issuer Notes and
                  Definitive Second Issuer Notes issued in substitution for any
                  lost, stolen, mutilated, defaced or destroyed Global Second
                  Issuer Notes or Definitive Second Issuer Notes (as the case
                  may be);

         (b)      make such records available for inspection at all reasonable
                  times by the Second Issuer, the Paying Agents, the Transfer
                  Agent and the Note Trustee; and

         (c)      make copies of this Agreement, the Second Issuer Trust Deed,
                  the Second Issuer Deed of Charge, the Amended and Restated
                  Master Definitions and Construction Schedule and the Second
                  Issuer Master Definitions and Construction Schedule available
                  for inspection at its specified office at all reasonable
                  times.

8.2      INFORMATION FROM PAYING AGENT

         The Paying Agents (other than the Principal Paying Agent) shall make
         available to the Principal Paying Agent such information as is
         reasonably required for the maintenance of the records referred to in
         CLAUSE 8.1.

8.3      DEFINITIVE SECOND ISSUER NOTES IN ISSUE

         As soon as practicable (or in any event within five Business Days)
         after a request therefor by the Second Issuer or the Note Trustee, the
         Registrar shall (on the basis of the information maintained in
         accordance with CLAUSE 8) notify the Second Issuer or the Note Trustee
         (as the case may be) in writing of the number of any Definitive Second
         Issuer Notes against surrender of which payment has been made and of
         the number of any Definitive Second Issuer Notes which have not yet
         been surrendered for payment and the details of all the Second Issuer
         Notes redeemed and cancelled.

8.4      FORWARDING OF COMMUNICATIONS

         The Principal Paying Agent shall promptly forward to the Second Issuer
         and the Note Trustee a copy of any notice or communication addressed to
         the Second Issuer by any Noteholder which is received by the Principal
         Paying Agent. The Transfer Agent or Registrar shall promptly notify the
         Principal Paying Agent in the event that it receives any such notice or
         communication and promptly forward such notice or communication to the
         Principal Paying Agent.

8.5      PUBLICATION OF NOTICES

         The Principal Paying Agent shall, upon and in accordance with the
         instructions, and at the expense of, the Second Issuer but not
         otherwise, arrange for the publication in accordance with CONDITION 14
         of any notice which is to be given to the Noteholders and shall
         promptly supply two copies thereof to the Note Trustee and a copy
         thereof to each other Paying Agent.

8.6      DESTRUCTION

         The Principal Paying Agent may destroy each Definitive Second Issuer
         Note delivered to or cancelled by it in accordance with CLAUSE 7.1(b),
         in which case it shall promptly furnish the Second Issuer and the Note
         Trustee, with a certificate as to such destruction, specifying the


<PAGE>
                                       13


         reason for such destruction and the certificate or serial numbers of
         the relevant Definitive Second Issuer Note.

8.7      VOTING CERTIFICATES AND BLOCK VOTING INSTRUCTIONS

         In the event of a meeting of the Noteholders the Principal Paying Agent
         shall, at the request of any Noteholder in accordance with the Second
         Issuer Trust Deed, issue voting certificates and block voting
         instructions in a form and manner which comply with the provisions of
         the SCHEDULE 4 to the Second Issuer Trust Deed (except that it shall
         not be required to issue the same less than 48 hours before the time
         for which the meeting or the poll to which the same relates has been
         convened or called). The Principal Paying Agent shall keep a full
         record of voting certificates and block voting instructions issued by
         it and will give to the Second Issuer, not less than one Business Day
         before the time appointed for any meeting or adjourned meeting, full
         particulars of all voting certificates and block voting instructions
         issued by it in respect of such meeting or adjourned meeting.

8.8      DUTIES OF THE TRANSFER AGENT

         If and to the extent so specified by the Conditions and in accordance
         therewith and with the terms of this Agreement, or if otherwise
         requested by the Second Issuer, the Transfer Agent shall:

         (a)      on behalf of the Registrar, authenticate Definitive Second
                  Issuer Notes upon any transfer or exchange of interests in a
                  Global Second Issuer Note for Definitive Second Issuer Notes;

         (b)      on behalf of the Registrar, make available forms of transfer,
                  forms of proxy and any certificates as to beneficial ownership
                  in respect of the Second Issuer Notes, receive requests for
                  the transfer of such Second Issuer Notes, forms of transfer,
                  forms of proxy, certificates and other evidence, inform the
                  Registrar of the name and address of the holder of each such
                  Second Issuer Note, the serial numbers of any Definitive
                  Second Issuer Notes, the name and address of the relevant
                  person to be inserted in the Register, forward each such
                  document to the Registrar and, upon being informed by the
                  Registrar that the appropriate entries have been made in the
                  Register and all formalities complied with, forthwith issue
                  Definitive Second Issuer Notes on behalf of the Registrar
                  representing the relevant Second Issuer Notes to be
                  transferred;

         (c)      keep the Registrar informed of all transfers and exchanges;
                  and

         (d)      carry out such other acts as may be necessary to give effect
                  to the Conditions, this Agreement and the Regulations.

8.9      AUTHENTICATION AND DELIVERY OF DEFINITIVE SECOND ISSUER NOTES AND
         MAINTENANCE OF REGISTER BY REGISTRAR

         The Registrar shall authenticate and it shall deliver, or cause the
         Transfer Agent to deliver, any Second Issuer Note issued upon transfer
         in accordance with the Second Issuer Trust Deed and shall so long as
         any Definitive Second Issuer Notes are outstanding maintain a register
         in London, or at such other place as the Note Trustee may approve in
         writing, in accordance with the Conditions, the Regulations and this
         Agreement. The Register shall show the Principal Amount Outstanding or
         total number outstanding, as the case may be, of each Definitive Second
         Issuer Note, the serial numbers thereof and the respective dates of
         issue and all subsequent transfers, cancellations and replacements
         thereof and all changes of



<PAGE>
                                       14


         ownership and the names and addresses of the holders of such Second
         Issuer Notes. The Registrar shall at all reasonable times during its
         office hours make the Register available to the Second Issuer, the
         Paying Agents and the Transfer Agent or any person authorised by any of
         them for inspection and for the taking of copies thereof or extracts
         therefrom and the Registrar shall deliver to such persons all such
         lists of Noteholders, their addresses and holdings as they may request.

8.10     TRANSFER OF DEFINITIVE SECOND ISSUER NOTES

         The Registrar shall make available forms of transfer, forms of proxy,
         and certificates as to beneficial ownership in respect of the
         Definitive Second Issuer Notes, receive requests for the transfer of
         Definitive Second Issuer Notes, forms of transfer, forms of proxy,
         certificates and other evidence, effect the necessary entries and
         formalities and procure that it or the Transfer Agent on its behalf
         endorses the name and address of the transferee on each Definitive
         Second Issuer Note and delivers the same to the person entitled
         thereto. No transfer shall be registered for a period of 15 days
         immediately preceding any due date for payment in respect of the Second
         Issuer Notes or, as the case may be, the due date for redemption, or as
         the case may be, payment of any of the relevant Second Issuer Notes.

8.11     ADDITIONAL DUTIES

         The Registrar shall:

         (a)      register all transfers of Definitive Second Issuer Notes in
                  accordance with the terms of those Definitive Second Issuer
                  Notes, the Second Issuer Trust Deed and the Conditions;

         (b)      receive any document relating to or affecting the title to any
                  of the Definitive Second Issuer Notes including all forms of
                  transfer, forms of exchange, probates, letters of
                  administration and powers of attorney;

         (c)      maintain proper records of the details of all documents
                  received;

         (d)      prepare all such lists of the holders of the Definitive Second
                  Issuer Notes as may be required by the Second Issuer, any
                  Paying Agent, the Note Trustee or any person authorised by any
                  of them;

         (e)      comply with the proper and reasonable requests of the Second
                  Issuer with respect to the maintenance of the Register and
                  give to the Paying Agents such information as may be
                  reasonably required by it for the proper performance of its
                  duties;

         (f)      forthwith, and in any event within three Business Days of the
                  relevant request (or within such longer period as may be
                  required to comply with any applicable fiscal or other
                  regulations), upon receipt by it of, or receipt by it of
                  notification from the Transfer Agent of delivery to it of,
                  Definitive Second Issuer Notes duly endorsed for transfer in
                  the name of the registered holders or subsequent to the
                  endorsement of a reduction in nominal amount of a Global
                  Second Issuer Note for exchange into Definitive Second Issuer
                  Notes, authenticate and issue duly dated and completed
                  Definitive Second Issuer Notes and deliver the Definitive
                  Second Issuer Notes in the name of the registered holders at
                  its Specified Office or (at the risk of the relevant
                  registered holders) send the Definitive Second Issuer Notes to
                  such address as the registered holders may request; and


<PAGE>
                                       15


         (g)      carry out such other acts as may reasonably be necessary to
                  give effect to the Conditions, the Second Issuer Trust Deed,
                  this Agreement and the Regulations. In carrying out its
                  functions the Registrar shall act in accordance with the terms
                  of this Agreement, the Second Issuer Trust Deed, the
                  Regulations and the Conditions.

8.12     SUPPLIES OF ADDITIONAL DEFINITIVE SECOND ISSUER NOTES

         The Second Issuer will deliver to the Transfer Agent and the Registrar
         for the performance of their duties hereunder from time to time so long
         as any of the Second Issuer Notes are outstanding, sufficient
         additional Definitive Second Issuer Notes as may be required for the
         performance of the duties of the Transfer Agent and the Registrar.

8.13     SAFE CUSTODY OF THE DEFINITIVE SECOND ISSUER NOTES

         Each of the Registrar and the Transfer Agent shall maintain in safe
         custody all Definitive Second Issuer Notes delivered to and held by it
         hereunder and shall ensure such Definitive Second Issuer Notes are
         issued only in accordance with the Conditions, the Second Issuer Trust
         Deed and the terms of this Agreement.

8.14     CERTIFICATION OF DEFINITIVE SECOND ISSUER NOTES HELD

         Within five Business Days of any request therefor by the Second Issuer
         or any of the Paying Agents, so long as any of the Second Issuer Notes
         are outstanding, the Registrar and the Transfer Agent shall certify to
         the Second Issuer, the Paying Agents and the Note Trustee the number of
         unauthenticated Definitive Second Issuer Notes held by it hereunder.

8.15     PROVISION OF INFORMATION

         Each of the Transfer Agent and the Registrar will give to the Paying
         Agents and, as appropriate, the Registrar or the Transfer Agent such
         further information with regard to its activities hereunder as may
         reasonably be required by them for the proper carrying out of their
         respective duties.

8.16     REGULATIONS FOR THE DUTIES OF THE TRANSFER AGENT AND THE REGISTRAR

         In the event that Definitive Second Issuer Notes are required to be
         issued, the Registrar shall (after consultation with the Second Issuer,
         the Paying Agents, the Transfer Agent and the Note Trustee) promulgate
         reasonable regulations concerning the carrying out of their respective
         duties, including the carrying out of transfers and exchanges of
         Definitive Second Issuer Notes and the forms and evidence to be proved.
         All such transfers and exchanges will be made subject to the
         Regulations. The initial Regulations are set out in SCHEDULE 2 hereto.
         The Regulations may be changed by the Second Issuer with the prior
         written approval of the Registrar and the Note Trustee, which approval
         shall not be unreasonably withheld or delayed. A copy of the current
         Regulations will be sent by the Registrar to any holder of a Definitive
         Second Issuer Note who so requests.

8.17     NOTIFICATION OF THE PRINCIPAL AMOUNT OUTSTANDING

         The Registrar shall, on the Business Day prior to each Interest Payment
         Date notify the Principal Paying Agent, the Second Issuer and the
         Second Issuer Cash Manager of the aggregate Principal Amount
         Outstanding of Definitive Second Issuer Notes.


<PAGE>
                                       16


9.       AGENTS TO ACT FOR NOTE TRUSTEE

9.1      At any time after an Event of Default in respect of the Second Issuer
         Notes or any of them shall have occurred:

         (a)      the Principal Paying Agent, the US Paying Agent, the Transfer
                  Agent and the Registrar shall (where such agents act on behalf
                  of the Second Issuer), if so required by notice in writing
                  given by the Note Trustee to the Second Issuer and the
                  Principal Paying Agent, the US Paying Agent, the Transfer
                  Agent and the Registrar:

                  (i)      thereafter act as agents of the Note Trustee under
                           the terms of the Second Issuer Trust Deed on the
                           terms mutatis mutandis contained herein (save that
                           the Note Trustee's liability under any provision
                           herein contained for the remuneration and
                           indemnification of such Agents shall be limited to
                           the amount for the time being held by the Note
                           Trustee on the trusts of the Second Issuer Trust Deed
                           which is available to be applied by the Note Trustee
                           for such purpose) and thereafter hold all Second
                           Issuer Notes and all sums, documents and records held
                           by them in respect of the Second Issuer Notes on
                           behalf of the Note Trustee; and/or

                  (ii)     deliver up all Second Issuer Notes and all sums,
                           documents and records held by them in respect of the
                           Second Issuer Notes to the Note Trustee or as the
                           Note Trustee shall direct in such notice,

                  provided that such notice shall be deemed not to apply to any
                  document or record which the relevant Agent is obliged not to
                  release by any applicable law or regulation; and/or

         (b)      the Agent Bank shall, if so required by notice in writing
                  given by the Note Trustee to the Agent Bank and until such
                  appointment is terminated by the Note Trustee by notice in
                  writing:

                  (i)      thereafter act as Agent Bank of the Note Trustee in
                           relation to calculations and other related functions
                           to be made or performed by, or on behalf of, the Note
                           Trustee under the terms of the Second Issuer Trust
                           Deed mutatis mutandis on the terms contained herein
                           (save that the Note Trustee's liability under any
                           provision hereof for the remuneration and
                           indemnification of the Agent Bank shall be limited to
                           the amounts for the time being held by the Note
                           Trustee in respect of principal and interest on the
                           Second Issuer Notes on the trusts of the Second
                           Issuer Trust Deed which is available to be applied by
                           the Note Trustee for such purposes) and thereafter to
                           hold on behalf of the Note Trustee all documents and
                           records held by it in respect of principal and
                           interest on the Second Issuer Notes; and/or

                  (ii)     deliver up all documents and records held by it in
                           respect of principal and interest on the Second
                           Issuer Notes to the Note Trustee or as the Note
                           Trustee shall direct in such notice,

         provided that such notice shall be deemed not to apply to any document
         or record which the Agent Bank is obliged not to release by any
         applicable law or regulation.

9.2      The Note Trustee at any time may, if any Event of Default is remedied
         to the reasonable satisfaction of the Note Trustee during any
         applicable grace period, by notice in writing to the



<PAGE>
                                       17


         Second Issuer and the relevant Agents, withdraw any notice given by the
         Note Trustee pursuant to CLAUSE 9.1 whereupon such Agents shall act as
         agents of the Second Issuer in accordance with the terms hereof. The
         withdrawal of any notice given by the Note Trustee pursuant to CLAUSE
         9.1 shall not preclude the Note Trustee from issuing any other or
         further notices pursuant to that Clause on any subsequent occasion and
         at any time after the occurrence of an Event of Default, no notice
         given by the Note Trustee pursuant to CLAUSE 9.1 shall be withdrawn
         except at the absolute discretion of the Note Trustee.

10.      FEES AND EXPENSES

10.1     FEES

         The Second Issuer shall pay to the Principal Paying Agent during the
         period when any of the Second Issuer Notes remain outstanding for its
         own account and for the account of the other Agents, such fees as may
         have been agreed in writing between the Second Issuer and the relevant
         Agent in respect of the services of the Agents hereunder (together with
         any amounts in respect of value added tax or similar tax payable in
         respect thereof (against production of a valid tax invoice)). If any
         Agent shall cease to be an Agent hereunder, it shall repay to the
         Second Issuer, the unearned portion, calculated on a pro rata basis of
         the said fees.

10.2     FRONT-END EXPENSES

         The Second Issuer shall after receipt of an account of such expenses
         reimburse each Agent for its own account for all out-of-pocket expenses
         properly incurred by it in the negotiation, preparation and execution
         of this Agreement and for its own account for all out-of-pocket
         expenses (including, without limitation, reasonable legal fees and any
         reasonable communication, courier, postage and other out-of-pocket
         expenses) properly incurred in connection with its services hereunder
         (together with any amounts in respect of value added tax (against
         production of a valid tax invoice)) provided that such expenses shall
         not have been incurred as a result of the Agent's negligence, fraud or
         wilful misconduct. The Principal Paying Agent will be responsible for
         distributing the remuneration and the relevant expenses of the Agent
         Bank, any other Paying Agent, any Transfer Agent and Registrar
         appointed hereunder.

10.3     STAMP DUTY, ETC.

         The Second Issuer shall pay all stamp, registration and other similar
         taxes and duties (including any interest and penalties thereon or in
         connection therewith) which are payable upon or in connection with the
         execution and delivery of this Agreement.

10.4     Save as provided in this CLAUSE 10 or as expressly provided elsewhere
         in this Agreement, the Second Issuer shall have no liability in respect
         of any fees or expenses of any Agents incurred by any of them in
         connection with the performance of their respective obligations
         hereunder.

11.      TERMS OF APPOINTMENT

11.1     RIGHTS AND POWERS OF THE PAYING AGENTS

(a)      The Paying Agents shall (except as ordered by a court of competent
         jurisdiction or as required by law or otherwise instructed in writing
         by the Second Issuer or the Note Trustee) in connection with their
         services hereunder (whether or not the relevant Second Issuer Note
         shall be overdue and notwithstanding any notice to the contrary or
         writing shown thereon or any notice of previous loss or theft or of
         trust or other interest therein shown on the register) be


<PAGE>
                                       18


         entitled to treat the registered holder of any Second Issuer Note as
         the absolute owner of such Second Issuer Note for all purposes and make
         payments thereon accordingly provided that where the Registrar has
         notified the Second Issuer of the presentation or surrender of any
         Second Issuer Note in accordance with CLAUSE 7.1(a), the relevant
         Paying Agent shall not make payment thereon until so instructed by the
         Second Issuer.

(b)      Each of the Paying Agents, the Agent Bank, the Registrar and the
         Transfer Agent may in connection with its services hereunder:

         (i)      rely without further investigation or inquiry upon the terms
                  of any notice, communication or other document reasonably
                  believed by it to be genuine;

         (ii)     engage and pay for the advice or services of any lawyers or
                  other experts whose advice or services it considers necessary,
                  acting reasonably, and rely upon any written advice so
                  obtained (and such Agent shall be protected and shall incur no
                  liability as against the Second Issuer in respect of any
                  action taken, or suffered to be taken in good faith, in
                  accordance with such advice except to the extent that such
                  liability arises out of any breach of contract, fraud, wilful
                  default or negligence on the part of such Agent);

         (iii)    assume that the terms of each Global Second Issuer Note or (as
                  the case may be) Definitive Second Issuer Note as issued are
                  correct;

         (iv)     refer any question relating to the ownership of any Global
                  Second Issuer Note or Definitive Second Issuer Note (as the
                  case may be), or the adequacy or sufficiency of any evidence
                  supplied in connection with the replacement, transfer or
                  exchange of any Global Second Issuer Note or Definitive Second
                  Issuer Note (as the case may be) to the Second Issuer for
                  determination by the Second Issuer and in good faith
                  conclusively rely upon any determination so made; and

         (v)      whenever in the administration of this Agreement it shall deem
                  it desirable that a matter be proved or established prior to
                  taking, suffering or omitting any action hereunder, in the
                  absence of bad faith or negligence or wilful misconduct on its
                  part, accept a certificate signed by any person duly
                  authorised on behalf of the Second Issuer as to any fact or
                  matter prima facie within the knowledge of the Second Issuer
                  as sufficient evidence thereof.

11.2     PROVISION OF SPECIMEN SIGNATURES

         The Second Issuer will supply the Principal Paying Agent with the names
         and specimen signatures of its Authorised Signatories.

11.3     EXTENT OF DUTIES

         Each Agent shall only be obliged to perform the duties set out herein
         and such other duties as are necessarily incidental thereto. No Agent
         shall (i) be under any fiduciary duty towards any person other than the
         Second Issuer, (ii) be responsible for or liable in respect of the
         authorisation, validity or legality of any Global Second Issuer Note or
         Definitive Second Issuer Note (as the case may be) amount paid by it
         hereunder or any act or omission of any other person including, without
         limitation, any other Agent (except to the extent that such liability
         arises out of any breach of contract, bad faith, wilful misconduct or
         negligence on the part of any such Agent), (iii) be under any
         obligation towards any person other than the Note Trustee, the Second
         Issuer and the other Agents or (iv) assume any relationship of agency
         or



<PAGE>
                                       19


         trust for or with any Noteholder except that funds received by the
         Paying Agents for the payment of any sums due in respect of any Second
         Issuer Notes shall be held by the Paying Agents to the extent required
         by the Trust Indenture Act for and on behalf of the relevant
         Noteholders until the expiration of the relevant prescription period
         under the Second Issuer Trust Deed.

11.4     FREEDOM TO TRANSACT

         Each Agent may purchase, hold and dispose of beneficial interests in a
         Global Second Issuer Note or any Definitive Second Issuer Note (as the
         case may be) and may enter into any transaction (including, without
         limitation, any depository, trust or agency transaction) with the
         Second Issuer or any holders or owners of any Second Issuer Notes or
         with any other party hereto in the same manner as if it had not been
         appointed as the agent of the Second Issuer or the Note Trustee in
         relation to the Second Issuer Notes.

11.5     INDEMNITY

(a)      The Second Issuer agrees to indemnify each Agent for, and to hold such
         Agent harmless against, any loss, liability or expense incurred without
         negligence or wilful misconduct on its part, arising out of, or in
         connection with, the acceptance and provision of any services by such
         Agent under this Agreement, including the costs and expenses (including
         legal fees and expenses properly incurred) of defending itself against
         any claim in connection with the exercise or performance of any of its
         powers or duties under this Agreement.

(b)      The Agents shall severally indemnify the Second Issuer and, for the
         purposes of CLAUSE 9, the Note Trustee against any loss, liability,
         reasonable costs and expenses including any claim, action or demand
         which the Second Issuer or Note Trustee may incur or which may be made
         against it as a result of the breach by any Agent of the terms of this
         Agreement or its negligence, breach of contract, bad faith or wilful
         misconduct or that of its officers or employees including any failure
         to obtain and maintain in existence any consent, authorisation,
         permission or licence required by it for the assumption, exercise and
         performance of its powers and duties hereunder.

(c)      No termination of this Agreement shall affect the obligations created
         by CLAUSE 11.5(a) and 11.5(b) of the Second Issuer and any Agent,
         respectively, to indemnify any Agent or, as the case may be, the Second
         Issuer under the Conditions and to the extent set forth in this
         Agreement.

11.6     AGENTS' COMMITMENTS

         No provisions of this Agreement shall require any Agent or the Note
         Trustee to expend its own funds or assume a financial commitment to a
         person not party to this Agreement (other than in the ordinary course
         of its business) in the performance of any of its duties hereunder, or
         in the exercise of any of its rights or powers hereunder, if it shall
         have reasonable grounds for believing that repayment of such funds or
         adequate indemnity against such commitment is not reasonably assured to
         it.

11.7     EXCLUSION OF LIABILITY

         Notwithstanding anything in this Agreement to the contrary, in no event
         shall any party to this Agreement be liable under or in connection with
         this Agreement for indirect, special or consequential losses or damages
         of any kind, including lost profits, even if such party has



<PAGE>
                                       20


         been advised of the possibility thereof and regardless of the form of
         action by which such losses or damages may be claimed.

12.      TERMINATION OF APPOINTMENT

12.1     RESIGNATION

         Subject to CLAUSE 12.9, the Paying Agents in respect of any or all
         classes of Second Issuer Notes or the Agent Bank, the Registrar or the
         Transfer Agent may resign its appointment upon not less than 60 days'
         written notice to the Second Issuer and the Note Trustee (with a copy
         to the Principal Paying Agent) to that effect, which notice shall
         expire not less than 30 days before a Interest Payment Date related to
         the affected class of Second Issuer Notes.

12.2     REVOCATION

         Subject to CLAUSE 12.9, the Second Issuer may at any time with the
         prior written consent of the Note Trustee revoke its appointment of any
         Agent as its agent in relation to the Second Issuer Notes by not less
         than 60 days' written notice to the Note Trustee and such Agent whose
         appointment is to be revoked (with a copy to the Principal Paying
         Agent), which notice shall expire not less than 30 days before an
         Interest Payment Date.

12.3     TERMINATION

         If at any time:

         (a)      a secured party takes possession, or a receiver, manager or
                  other similar officer is appointed, of the whole or any part
                  of the undertaking, assets and revenues of any Agent;

         (b)      any Agent admits in writing its insolvency or inability to pay
                  its debts as they fall due or suspends payments of its debts;

         (c)      an administrator or liquidator of any Agent of the whole or
                  any part of the undertaking, assets and revenues of any Agent
                  is appointed (or application for any such appointment is
                  made);

         (d)      any Agent takes any action for a readjustment or deferment of
                  any of its obligations or makes a general assignment or an
                  arrangement or composition with or for the benefit of its
                  creditors or declares a moratorium in respect of any of its
                  indebtedness;

         (e)      an order is made or an effective resolution is passed for the
                  winding up of any Agent; or

         (f)      any event occurs which has an analogous effect to any of the
                  foregoing,

         the Second Issuer may with the prior written approval of the Note
         Trustee (which approval shall not be unreasonably withheld or delayed)
         forthwith terminate without notice the appointment of such Agent and
         the remaining Agents and the Second Issuer (or the Note Trustee, as
         applicable) shall give notice thereof to the Note Trustee and to the
         Noteholders in accordance with CONDITION 14. On the occurrence of any
         of the above, the relevant Agent shall forthwith notify the Second
         Issuer.


<PAGE>
                                       21


12.4     ADDITIONAL AND SUCCESSOR AGENTS

         The Second Issuer may with the prior written approval of the Note
         Trustee (such approval not to be unreasonably withheld or delayed):

         (a)      appoint a Successor Principal Paying Agent or any other
                  Successor Paying Agent; and/or

         (b)      appoint a Successor Agent Bank; and/or

         (c)      appoint one or more additional Paying Agents in respect of any
                  class of Second Issuer Notes; and/or

         (d)      appoint an alternative Agent Bank in respect of any class of
                  Second Issuer Notes; and/or

         (e)      appoint an alternative Registrar in respect of any class of
                  Second Issuer Notes; and/or

         (f)      appoint an alternative Transfer Agent in respect of any class
                  of Second Issuer Notes,

         and shall forthwith give notice of any such appointment to the
         continuing Agents and the Noteholders.

12.5     AGENT MAY APPOINT SUCCESSOR

         If any Agent gives notice of its resignation in accordance with CLAUSE
         12.1 and by the tenth day before the expiration of such notice a
         Successor Agent has not been duly appointed, such Agent may itself,
         following such consultation with the Second Issuer as is practicable in
         the circumstances and with the prior written approval of the Note
         Trustee and the Second Issuer (provided such failure to appoint was not
         due to default by the Second Issuer), appoint as its Successor Agent
         any reputable and experienced bank or financial institution and give
         notice of such appointment to the Second Issuer, the remaining Agents
         and the Noteholders.

12.6     RIGHTS OF SUCCESSOR AGENT

         Upon the execution by the Second Issuer and any Successor Agent of an
         instrument effecting the appointment of a Successor Agent, such
         Successor Agent shall, without any further act, deed or conveyance,
         become vested with all the authority, rights, powers, trusts,
         immunities, duties and obligations of its predecessor with like effect
         as if originally named as the relevant Agent herein and such
         predecessor, upon payment to it of the pro rata proportion of its
         administration fee and disbursements then unpaid (if any), shall
         thereupon become obliged to transfer, deliver and pay over, and such
         Successor Agent shall be entitled to receive, all monies, records and
         documents (including any Definitive Second Issuer Notes of the relevant
         class or classes of Second Issuer Notes, if any) held by such
         predecessor hereunder.

12.7     NOTICE TO NOTEHOLDERS

         The Second Issuer shall, within 30 days of the revocation of the
         appointment of any Agent, the appointment of a new Agent or the
         resignation of any Agent, give to the relevant Noteholders written
         notice thereof in accordance with CONDITION 14. Any costs incurred in
         connection with the publication of the revocation of the appointment of
         any Agent or the appointment of any Agent shall be for the Account of
         the Second Issuer; any such costs



<PAGE>
                                       22


         incurred in connection with the resignation of any Agent shall be for
         the account of the resigning Agent.

12.8     CHANGE OF SPECIFIED OFFICE

         If any Agent shall determine to change its Specified Office (which, in
         the case of the Paying Agents, may only be effected within the same
         city) it shall give to the Second Issuer and the Note Trustee written
         notice of such determination giving the address of the new Specified
         Office and stating the date on which such change is to take effect,
         which date shall not be less than 30 days after the date of such
         notice, provided that no such notice shall take effect within the
         period of 30 days before or after any Interest Payment Date. The Second
         Issuer shall, within 40 days of receipt of such notice (unless the
         appointment is pursuant to a revocation or termination under CLAUSE
         12.2 or 12.3 above on or prior to the date of such change), give to the
         Noteholders notice of such change as approved by the Note Trustee and
         of the address of the Specified Office in accordance with CONDITION 14
         but the costs of giving such notice shall be borne by such Agent
         changing its office and not by the Second Issuer.

12.9     LIMITATIONS ON RESIGNATION AND REVOCATION

         Notwithstanding CLAUSES 12.1 and 12.2:

         (a)      if there is only one Paying Agent, no resignation by or
                  termination of the appointment of the Paying Agent shall take
                  effect until a new Paying Agent in respect of the affected
                  class or classes of Second Issuer Notes, approved in writing
                  by the Note Trustee, has been appointed on terms previously
                  approved in writing by the Note Trustee;

         (b)      no resignation by or termination of the appointment of any
                  Paying Agent shall take effect if as a result of such
                  resignation or termination there would cease to be a Paying
                  Agent in respect of the affected class or classes of Second
                  Issuer Notes having a Specified Office in London;

         (c)      if the proposed European Union Directive on Taxation of
                  Savings implementing the conclusions of the ECOFIN Council
                  Meeting on 21st January, 2003 or any law implementing or
                  complying with, or introduced in order to conform to those
                  conclusions is introduced, no appointment or termination of
                  the appointment of a Paying Agent shall take effect if as a
                  result of such resignation or termination there would cease to
                  be a Paying Agent in a member state of the European Union that
                  will not be obliged to withhold or deduct tax pursuant to such
                  Directive or law;

         (d)      no appointment or termination of the appointment of a Paying
                  Agent shall take effect unless and until notice thereof shall
                  have been given to the relevant Noteholders in accordance with
                  the Second Issuer Trust Deed and the Conditions;

         (e)      no resignation by or revocation of the appointment of the
                  Agent Bank shall take effect until a new Agent Bank having its
                  Specified Office in London has been appointed;

         (f)      no resignation by or termination of the appointment of the
                  Registrar shall take effect until a new Registrar having its
                  Specified Office in London has been appointed; and

         (g)      the appointment of any additional Paying Agent shall be
                  mutatis mutandis on the terms and subject to the conditions of
                  this Agreement and each of the parties hereto



<PAGE>
                                       23


                  shall co-operate fully to do all such further acts and things
                  and execute any further documents as may be necessary or
                  desirable to give effect to the appointment of such Paying
                  Agent.

12.10    EFFECT OF RESIGNATION, REVOCATION AND TERMINATION

         Upon any resignation or revocation taking effect under CLAUSE 12.1 or
         12.2 or any termination under CLAUSE 12.3, the relevant Agent shall:

         (a)      without prejudice to any accrued liabilities and obligations,
                  be released and discharged from any further obligations under
                  this Agreement (save that it shall remain entitled to the
                  benefit of, and subject to, CLAUSES 10, 11 and 12);

         (b)      repay to the Second Issuer such part of any fee paid to it in
                  accordance with CLAUSE 10.1 as shall relate to any period
                  thereafter;

         (c)      deliver to the Second Issuer and to its Successor Agent a
                  copy, certified as true and up-to-date by an officer of such
                  Agent, of the records maintained by it pursuant to this
                  Agreement;

         (d)      forthwith transfer all monies and papers (including any
                  unissued Definitive Second Issuer Notes held by it hereunder)
                  to its successor in that capacity and provide reasonable
                  assistance to its successor for the discharge by it of its
                  duties and responsibilities hereunder; and

         (e)      in the case of a Paying Agent, pay to the Successor Paying
                  Agent any amount held by it for payment of principal or
                  interest in respect of the relevant Second Issuer Notes.

12.11    MERGER

         Any legal entity into which any Agent is merged or converted or any
         legal entity resulting from any merger or conversion to which such
         Agent is a party shall, to the extent permitted by applicable law, be
         the successor to such Agent without any further formality, whereupon
         the Second Issuer, the Note Trustee, the other Agents and such
         successor shall acquire and become subject to the same rights and
         obligations between themselves as if they had entered into an agreement
         in the form mutatis mutandis of this Agreement. Written notice of any
         such merger or conversion shall forthwith be given by such successor to
         the Second Issuer, the Note Trustee and the other Agents.

13.      NON-PETITION

(a)      Each of the Agents and the Note Trustee, in relation to any fees, costs
         and expenses payable to the Note Trustee but without prejudice to the
         rights of the Note Trustee under and the provisions of, the Second
         Issuer Deed of Charge, undertakes to the Second Issuer that until one
         year and one day has elapsed since the last day on which the Second
         Issuer has discharged all of its obligations in relation to all the
         Second Issuer Notes, none of them will petition or commence proceedings
         for the administration or winding up of the Second Issuer (nor join any
         person in such proceedings or commencement of proceedings) nor commence
         any legal proceedings against the Second Issuer.

(b)      Each of the Agents and the Note Trustee shall have recourse only to the
         Second Issuer Charged Property subject always to the charges set out in
         the Second Issuer Deed of Charge and the priority of payments set out
         therein. Upon final realisation of the Second Issuer



<PAGE>
                                       24


         Charged Property, none of the Agents and the Note Trustee or any person
         acting on its behalf shall be entitled to take any further steps
         against the Second Issuer to recover any sums due to each of the Agents
         and the Note Trustee but still unpaid and all claims in respect of such
         sums due but still unpaid shall be extinguished.

(c)      Each of the Agents hereby undertakes to and agrees with the Second
         Issuer and the Note Trustee that:

         (i)      only the Note Trustee may enforce the security created in
                  favour of the Note Trustee by the Second Issuer Deed of Charge
                  in accordance with its provisions; and

         (ii)     it will not in relation to the matters contemplated in this
                  Agreement take any steps for the purpose of recovering any
                  sums due under this Agreement or enforcing any rights arising
                  out of this Agreement or institute against the Second Issuer
                  or join any other person in instituting against the Second
                  Issuer any winding up, arrangement, reorganisation,
                  liquidation, bankruptcy, insolvency or other proceedings under
                  any similar law for a period of one year and one day after all
                  the Second Issuer Notes issued by the Second Issuer have been
                  redeemed.

(d)      Notwithstanding any other provisions of this Agreement, each of the
         Agents hereby agrees to be bound by the provisions of the Second Issuer
         Deed of Charge and in particular confirms that no sum due under the
         Second Issuer Deed of Charge will be due and payable by the Second
         Issuer except in accordance with the Second Issuer Deed of Charge,
         unless and until all sums thereby required to be paid in priority
         thereto have been paid or discharged in full and agrees that the Second
         Issuer Deed of Charge will prevail if and to the extent it is
         inconsistent with this CLAUSE 13.

(e)      Each of the Agents hereby undertakes with the Note Trustee and the
         Second Issuer that if, whether in the liquidation of the Second Issuer
         or otherwise (and notwithstanding the provisions of this CLAUSE 13),
         any payment is made to or amount recovered by any Agent other than in
         accordance with or the Second Issuer Deed of Charge, the amount so paid
         or recovered shall be paid by such Agent to the Note Trustee; provided
         however that this CLAUSE 13 shall have effect only to the extent it
         does not create and is not deemed to create or constitute a Security
         Interest.

14.      ASSIGNMENT

14.1     ASSIGNMENT BY THE SECOND ISSUER

         The Second Issuer may assign its rights hereunder without consent
         subject to and in accordance with the terms of the Second Issuer Deed
         of Charge.

14.2     NO ASSIGNMENT BY AGENTS

         The Agents may not assign or transfer any of their respective rights
         and obligations under this Agreement without the prior written consent
         of the Second Issuer and the Note Trustee, such consent not to be
         unreasonably withheld or delayed.

15.      TIME

         Any date or period specified herein may be postponed or extended by
         mutual agreement among the parties but, as regards any date or period
         originally fixed or so postponed or extended, time shall be of the
         essence.


<PAGE>
                                       25


16.      NOTICES AND DEMANDS

16.1     SERVICE OF NOTICES

         Any notice, communication or demand made under or in connection with
         this Agreement shall be in writing and shall be delivered personally,
         or by post, fax or cable to the addresses given in CLAUSE 16.2 or at
         such other address as the recipient may have notified to the other
         party in writing. Proof of posting or despatch of any notice or
         communication shall be deemed to be proof of receipt:

         (a)      in the case of a letter, on the third business day after
                  posting; and

         (b)      in the case of a facsimile on the business day of despatch.

16.2     ADDRESS

         The addresses referred to in this CLAUSE 16.2 are as follows:

         (a)      in the case of the Second Issuer, to Permanent Financing (No.
                  2) PLC, Blackwell House, Guildhall Yard, London EC2V 5AE
                  (facsimile number +44 20 7556 0975) for the attention of the
                  Directors with a copy to Halifax plc, Trinity Road, Halifax,
                  West Yorkshire HX1 2RG (facsimile number +44 (0) 14 22 391
                  299) for the attention of Mortgage Securitisation Manager;

         (b)      in the case of the Principal Paying Agent, to Citibank, N.A.,
                  London Branch, 5 Carmelite Street, London EC4Y 0PA (facsimile
                  number +44 (0) 20 7508 3878) for the attention of Agency and
                  Trust;

         (c)      in the case of the Agent Bank, to Citibank N.A., London
                  Branch, 5 Carmelite Street, London EC4Y 0PA (facsimile number
                  +44 (0) 20 7508 3881) for the attention of Agency and Trust;

         (d)      in the case of the US Paying Agent, to Citibank, N.A., New
                  York Branch, 14th Floor, Zone 3, 111 Wall Street, New York,
                  New York 10043 (facsimile number +44 (0) 20 7508 3878) for the
                  attention of Agency and Trust;

         (e)      in the case of the Registrar, to Citibank, N.A., London
                  Branch, 5 Carmelite Street, London EC4Y 0PA (facsimile number
                  +44 (0) 20 7508 3878) for the attention of Agency and Trust;

         (f)      in the case of the Transfer Agent, to Citibank, N.A., London
                  Branch, 5 Carmelite Street, London EC4Y 0PA (facsimile number
                  +44 (0) 20 7508 3878) for the attention of Agency and Trust;

         (g)      in the case of the Note Trustee, to U.S. Bank National
                  Association, 1 Federal Street, 3rd Floor, Boston,
                  Massachusetts 02110, (facsimile number + 1 (617) 603 6638) for
                  the attention of Corporate Trust Services;

         (h)      in the case of Moody's, to Moody's Investor Services, 2
                  Minster Court, Mincing Lane, London EC3R 7XB (facsimile number
                  +44 (0) 20 7772 5400) for the attention of Asset Backed
                  Finance;


<PAGE>
                                       26


         (i)      in the case of S&P, to Standard & Poor's, Garden House, 18
                  Finsbury Circus, London EC2M 7BP (facsimile number +44 (0) 20
                  7826 3598) for the attention of the Structured Finance
                  Surveillance Group; and

         (j)      in the case of Fitch, to Fitch Ratings Limited, Eldon House, 2
                  Eldon Street, London EC2M 7UA (facsimile number +44 (0) 20
                  7417 6262) for the attention of European Structured Finance;

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by any
         party to the others by written notice in accordance with the provisions
         of this CLAUSE 16.

17.      MISCELLANEOUS

17.1     COUNTERPARTS

         This Agreement may be executed in any number of counterparts each of
         which, when executed and delivered, shall constitute an original, but
         all the counterparts shall together constitute but one and the same
         instrument Provided, however, that this Agreement shall have no force
         or effect until it is executed by the last party to execute the same
         and shall be deemed to have been executed and delivered in the place
         where such last party executed this Agreement.

17.2     AMENDMENTS

         This Agreement may be amended by the parties hereto, without the
         consent of any Noteholder, for the purpose of curing any ambiguity or
         of curing, correcting or supplementing any defective provision
         contained herein or in any manner which the parties may agree is
         necessary or desirable, provided that such amendment shall not be
         inconsistent with the Conditions and, in the Note Trustee's sole
         discretion, shall not be materially prejudicial to the Noteholders of
         any class.

18.      EXCLUSION OF THIRD PARTY RIGHTS

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

19.      GOVERNING LAW

19.1     GOVERNING LAW

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

19.2     JURISDICTION

(a)      The Agents irrevocably agree for the benefit of the Second Issuer and
         the Note Trustee that the courts of England are to have jurisdiction to
         settle any dispute which may arise out of or in connection with this
         Agreement and that accordingly any suit, action or proceedings arising
         out of or in connection with this Agreement (together referred to as
         "PROCEEDINGS") may be brought in the courts of England.


<PAGE>
                                       27


(b)      The Agents irrevocably and unconditionally waive and agree not to raise
         any objection which they may have now or subsequently to the laying of
         the venue of any Proceedings in the courts of England and any claim
         that any Proceedings have been brought in an inconvenient forum and
         further irrevocably and unconditionally agrees that a judgement in any
         Proceedings brought in the courts of England shall be conclusive and
         binding upon the Agents and may be enforced in the courts of any other
         jurisdiction.

(c)      Nothing contained in this Clause shall limit any right to take
         Proceedings against any party to this Agreement in any other court of
         competent jurisdiction, nor shall the taking of Proceedings in one or
         more jurisdictions preclude the taking of Proceedings in any other
         jurisdiction, whether concurrently or not.

(d)      The US Paying Agent irrevocably and unconditionally appoints the
         Principal Paying Agent at its registered office for the time being as
         its agent for service of process in England in respect of any
         Proceedings and undertakes that in the event of it ceasing so to act it
         will appoint another person with a registered office in London as its
         agent for service of process.

(e)      The Paying Agents:

         (i)      agree to procure that, so long as any of the Second Issuer
                  Notes remains liable to prescription, there shall be in force
                  an appointment of such a person approved by the Note Trustee
                  with an office in London with authority to accept service as
                  aforesaid;

         (ii)     agree that failure by any such person to give notice of such
                  service of process to the relevant Paying Agent shall not
                  impair the validity of such service or of any judgement based
                  thereon;

         (iii)    consent to the service of process in respect of any
                  Proceedings by the airmailing of copies, postage prepaid, to
                  the relevant Paying Agent in accordance with CLAUSE 16; and

         (iv)     agree that nothing in this Agreement shall affect the right to
                  serve process in any other manner permitted by law.

19.3     APPROPRIATE FORUM

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

19.4     NON-EXCLUSIVITY

         The submission to the jurisdiction of the courts of England shall not
         (and shall not be construed so as to) limit the right of the parties or
         any of them to take Proceedings in any other court of competent
         jurisdiction, nor shall the taking of Proceedings in any one or more
         jurisdictions preclude the taking of Proceedings in any other
         jurisdiction (whether concurrently or not) if and to the extent
         permitted by law.

20.      EXCLUSION OF LIABILITY

         The Note Trustee is a party to this Agreement only to receive the
         benefit of the provisions in this Agreement and has no liability under
         this Agreement.


<PAGE>
                                       28


IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date
first mentioned above.



<PAGE>
                                       29


                                   SCHEDULE 1

                         SPECIFIED OFFICES OF THE AGENTS


THE PRINCIPAL PAYING AGENT

5 Carmelite Street
London
EC4Y 0PA


THE US PAYING AGENT

14th Floor
Zone 3
111 Wall Street
New York
New York 10043


THE AGENT BANK

5 Carmelite Street
London
EC4Y 0PA


THE REGISTRAR

5 Carmelite Street
London
EC4Y 0PA


THE TRANSFER AGENT

5 Carmelite Street
London
EC4Y 0PA



<PAGE>
                                       30


                                   SCHEDULE 2


                REGULATIONS CONCERNING THE TRANSFER, EXCHANGE AND
          REGISTRATION OF THE REGISTERED DEFINITIVE SECOND ISSUER NOTES

1.       In this Schedule, any reference to "SECOND ISSUER NOTE" or "SECOND
         ISSUER NOTES" shall be construed as a reference to a Definitive Second
         Issuer Note in registered form. The Second Issuer Notes are in
         Authorised Denominations.

2.       Subject to PARAGRAPH 6 below, a Second Issuer Note may be transferred
         by execution of the relevant form of transfer under the hand of the
         transferor or, where the transferor is a corporation, under its common
         seal or under the hand of two of its officers duly authorised in
         writing. Where the form of transfer is executed by an attorney or, in
         the case of a corporation, under seal or under the hand of two of its
         officers duly authorised in writing, a copy of the relevant power of
         attorney certified by a financial institution in good standing or a
         notary public or in such other manner as the Registrar may require or,
         as the case may be, copies certified in the manner aforesaid of the
         documents authorising such officers to sign and witness the affixing of
         the seal must be delivered with the form of transfer. In this Schedule,
         "TRANSFEROR" shall, where the context permits or requires, include
         joint transferors and shall be construed accordingly.

3.       Each Second Issuer Note to be transferred or exchanged must be
         surrendered for registration, together with a duly completed and
         executed form of transfer (including any certification as to compliance
         with restrictions on transfer included in such form of transfer) at the
         Specified Office of the Paying Agents, the Registrar or the Transfer
         Agent, together with such evidence as the Paying Agents, the Registrar
         or the Transfer Agent may reasonably require to prove the title of the
         transferor and the authority of the persons who have executed the form
         of transfer. The signature of the person effecting a transfer or
         exchange of a Second Issuer Note shall conform to any list of duly
         authorised specimen signatures supplied by the holder of such Second
         Issuer Note or be certified by a financial institution in good
         standing, notary public or in such other manner as the Paying Agents,
         the Registrar or the Transfer Agent may require.

4.       No Noteholder may require the transfer of a Second Issuer Note to be
         registered during the period of 15 calendar days ending on an Interest
         Payment Date in respect of such Second Issuer Note.

5.       The executors or administration of a deceased holder of any Second
         Issuer Notes (not being one of several joint holders) and, in the case
         of the death of one or more of several joint holders, the survivor or
         survivors of such joint holders, shall be the only persons recognised
         by the Second Issuer as having any title to such Second Issuer Notes.

6.       Any person becoming entitled to any Second Issuer Notes in consequence
         of the death or bankruptcy of the holder of such Second Issuer Notes
         may, upon producing such evidence that he holds the position in respect
         of which he proposes to act under this paragraph or of his title as the
         Paying Agents, the Registrar or the Transfer Agent shall require
         (including legal opinions), become registered himself as the holder of
         such Second Issuer Notes or, subject to the provisions of these
         Regulations, the Second Issuer Notes and the relevant Conditions as to
         transfer, may transfer such Second Issuer Notes. The Second Issuer, the
         Transfer Agent, the Registrar and the Paying Agents shall be at liberty
         to retain any amount payable upon the Second Issuer Notes to which any
         person is so entitled until such person shall be registered as
         aforesaid or shall duly transfer the relevant Second Issuer Notes.


<PAGE>
                                       31


7.       Unless otherwise required by him and agreed by the Second Issuer, the
         holder of any Second Issuer Notes shall be entitled to receive only one
         Second Issuer Note in respect of his holding.

8.       The joint holders of any Second Issuer Note shall be entitled to one
         Second Issuer Note only in respect of their joint holding which shall,
         except where they otherwise direct, be delivered to the joint holder
         whose name appears first in the Register in respect of the joint
         holding.

9.       Where there is more than one transferee (to hold other than as joint
         holders), separate forms of transfer (obtainable from the specified
         office of a Paying Agent, the Registrar or the Transfer Agent) must be
         completed in respect of each new holding.

10.      Where a holder of Second Issuer Notes has transferred part only of his
         holding comprised therein, there shall be delivered to him a new Second
         Issuer Note in respect of the balance of such holding.

11.      The Second Issuer, the Transfer Agent, a Paying Agent and the Registrar
         shall, save in the case of the issue of replacement Second Issuer Notes
         pursuant to the Conditions, make no charge to the holders for the
         registration of any holding of Second Issuer Notes or any transfer
         thereof or for the issue of any Second Issuer Notes or for the delivery
         thereof at the Specified Office of the Transfer Agent, such Paying
         Agent or the Registrar or by uninsured post to the address specified by
         the holder, but such registration, transfer, issue or delivery shall be
         effected against such indemnity from the holder or the transferee
         thereof as the Paying Agents, the Registrar or the Transfer Agent may
         require in respect of any tax or other duty of whatever nature which
         may be levied or imposed in connection with such registration,
         transfer, issue or delivery.

12.      Provided a transfer of a Second Issuer Note is duly made in accordance
         with all applicable requirements and restrictions upon transfer and the
         Second Issuer Note(s) transferred are presented to the Transfer Agent
         and/or a Paying Agent in accordance with the Second Issuer Paying Agent
         and Agent Bank Agreement and these Regulations and subject to
         unforeseen circumstances beyond the control of the Transfer Agent, a
         Paying Agent or the Registrar arising, such Transfer Agent, Paying
         Agent and the Registrar will, within five business days of the request
         for transfer being duly made, deliver at its Specified Office or
         despatch to the transferee by uninsured post (at the request and risk
         of the transferee) to such address as the transferee entitled to the
         Second Issuer Notes may have specified, a Second Issuer Note in respect
         of which entries have been made in the Register, all formalities
         complied with and the name of the transferee completed on the Second
         Issuer Note by or on behalf of the Registrar; and, for the purposes of
         this paragraph, "BUSINESS DAY" means a day (other than a Saturday or a
         Sunday) on which commercial banks are open for business (including
         dealings in foreign currencies) in the cities in which the Paying
         Agents, the Registrar and the Transfer Agent have their respective
         Specified Office.



<PAGE>
                                       32


                                   SIGNATORIES


SIGNED by                                                )
for and on behalf of                                     )
PERMANENT FINANCING (NO. 2) PLC                          )


SIGNED by                                                )
for and on behalf of                                     )
CITIBANK, N.A. LONDON BRANCH                             )
(as Principal Paying Agent)                              )


SIGNED by                                                )
for and on behalf of                                     )
CITIBANK, N.A. LONDON BRANCH                             )
(as Agent Bank)                                          )


SIGNED by                                                )
for and on behalf of                                     )
CITIBANK, N.A. NEW YORK BRANCH                           )
(as US Paying Agent)                                     )


SIGNED by                                                )
for and on behalf of                                     )
CITIBANK, N.A. LONDON BRANCH                             )
(as Registrar)                                           )


SIGNED by                                                )
for and on behalf of                                     )
CITIBANK, N.A. LONDON BRANCH                             )
(as Transfer Agent)                                      )

SIGNED by                                                )
for and on behalf of                                     )
U.S. BANK NATIONAL ASSOCIATION                           )
(as Note Trustee)                                        )


<PAGE>


                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                                                    PAGE
------                                                                                                    ----
<S>                                                                                                       <C>
1.    Definitions and Interpretation.........................................................................1
2.    Appointment of the Agents..............................................................................2
3.    The Second Issuer Notes................................................................................2
4.    Delivery of Definitive Second Issuer Notes; Transfers and Exchanges of Global Second Issuer Notes......5
5.    Replacement Second Issuer Notes........................................................................5
6.    Payments to the Principal Paying Agent.................................................................6
7.    Payments to Noteholders................................................................................9
8.    Miscellaneous Duties of the Principal Paying Agent, the Registrar and Transfer Agent..................11
9.    Agents to act for Note Trustee........................................................................16
10.   Fees and Expenses.....................................................................................17
11.   Terms of Appointment..................................................................................17
12.   Termination of Appointment............................................................................20
13.   Non-Petition..........................................................................................23
14.   Assignment............................................................................................24
15.   Time    ..............................................................................................24
16.   Notices and Demands...................................................................................25
17.   Miscellaneous.........................................................................................26
18.   Exclusion of Third Party Rights.......................................................................26
19.   Governing Law.........................................................................................26
20.   Exclusion of Liability................................................................................27
1.    Specified offices of the Agents.......................................................................29
2.    Regulations Concerning the Transfer, Exchange and Registration of the Registered Definitive Second
      Issuer Notes..........................................................................................30
SIGNATORIES   ..............................................................................................32
</TABLE>



<PAGE>



                                  ALLEN & OVERY
                                     London
                                  ICM: 638829.1
                             DATED [6TH MARCH], 2003

                         PERMANENT FINANCING (NO. 2) PLC

                                     - and -

                          CITIBANK, N.A., LONDON BRANCH
                           (as Principal Paying Agent)

                                     - and -

                          CITIBANK, N.A., LONDON BRANCH
                                 (as Agent Bank)

                                     - and -

                         CITIBANK, N.A., NEW YORK BRANCH
                              (as US Paying Agent)

                                     - and -

                          CITIBANK, N.A., LONDON BRANCH
                                 (as Registrar)

                                     - and -

                          CITIBANK, N.A., LONDON BRANCH
                               (as Transfer Agent)

                                     - and -

                         U.S. BANK NATIONAL ASSOCIATION
                                (as Note Trustee)

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

               SECOND ISSUER PAYING AGENT AND AGENT BANK AGREEMENT
                                  in respect of

                   US$[1,000,000,000] SERIES 1 CLASS A ASSET
                  BACKED FLOATING RATE NOTES DUE [MARCH 2004]
                     US$[34,000,000] SERIES 1 CLASS B ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                     US$[34,000,000] SERIES 1 CLASS C ASSET
                    BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                   US$[1,750,000,000] SERIES 2 CLASS A ASSET
                BACKED FLOATING RATE NOTES DUE [SEPTEMBER 2007]
                     US$[61,000,000] SERIES 2 CLASS B ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                     US$[61,000,000] SERIES 2 CLASS C ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                   EURO[1,250,000,000] SERIES 3 CLASS A ASSET
                 BACKED FLOATING RATE NOTES DUE [DECEMBER 2032]
                    EURO[43,500,000] SERIES 3 CLASS B ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                    EURO[43,500,000] SERIES 3 CLASS C ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                   US$[1,750,000,000] SERIES 4 CLASS A ASSET
                 BACKED FLOATING RATE NOTES DUE [DECEMBER 2007]
                    EURO[56,500,000] SERIES 4 CLASS B ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
                    EURO[56,500,000] SERIES 4 CLASS C ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
              POUND STERLING[750,000,000] SERIES 5 CLASS A ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
               POUND STERLING[26,000,000] SERIES 5 CLASS B ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]
               POUND STERLING[26,000,000] SERIES 5 CLASS C ASSET
                   BACKED FLOATING RATE NOTES DUE [JUNE 2042]

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


                                 ALLEN & OVERY
                                     LONDON
                                 ICM: 638829.1