EXHIBIT 4.4





                                Dated 26 May 2004
                                -----------------





                         GRANITE FINANCE FUNDING LIMITED
                                   as Funding



                              THE BANK OF NEW YORK
                               as Security Trustee



                           GRANITE MORTGAGES 04-2 PLC
                                as Current Issuer



                                NORTHERN ROCK PLC
                    as Current Issuer Start-up Loan Provider



                                     - and -


                                     OTHERS







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

                            ISSUER DEED OF ACCESSION

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


                           SIDLEY AUSTIN BROWN & WOOD
                                WOOLGATE EXCHANGE
                              25 BASINGHALL STREET
                                 LONDON EC2V 5HA
                             TELEPHONE 020 7360 3600
                             FACSIMILE 020 7626 7937




<PAGE>


                                    CONTENTS

1.   Interpretation............................................................4

2.   Representations and Warranties............................................4

3.   Accession.................................................................5

4.   Funding Security..........................................................6

5.   Title Guarantee...........................................................8

6.   Application...............................................................8

7.   Scope of the Funding Deed of Charge.......................................8

8.   Notices and Acknowledgements..............................................9

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

10.  Notices and Demands.......................................................9

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

12.  Third Party Rights.......................................................11

13.  Execution in Counterparts................................................11

14.  Governing Law and Jurisdiction; Appropriate Forum........................11

15.  Process Agents...........................................................12

SCHEDULE I  Utilisation of Issuer Reserves....................................18
APPENDIX 1 Amended and Restated Funding Priority of Payments..................19


                                       i

<PAGE>

THIS DEED OF ACCESSION is made on 26 May 2004

BETWEEN:

(1)  GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
     limited liability company incorporated under the laws of Jersey whose
     London branch (registered overseas company number FCO22999 and branch
     number BR005916) is at 69 Park Lane, Croydon CR9 1TQ;

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

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

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

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

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

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

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

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


                                       1
<PAGE>


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

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

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

(13) NORTHERN ROCK PLC (registered number 03273685), a public limited company
     incorporated under the laws of England and Wales whose registered office is
     at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL in its
     capacity as (1) Cash Manager (2) Account Bank and (3) Funding GIC Provider;

(14) LLOYDS TSB BANK PLC, acting through its office at City Office, Bailey
     Drive, Gillingham Business Park, Kent ME8 0LS, in its capacity as Account
     Bank and acting through its office at 25 Monument Street, London EC3R 8BQ
     in its capacity as (1) Funding GIC Provider (2) Stand-by Funding GIC
     Provider and (3) Stand-by Account Bank;

(15) MOURANT & CO. CAPITAL (SPV) LIMITED, a private limited company incorporated
     under the laws of England and Wales whose registered office is 69 Park
     Lane, Croydon CR9 1TQ, in its capacity as Corporate Services Provider;

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

(17) GRANITE MORTGAGES 04-2 PLC (registered number 5057377), a public limited
     company incorporated under the laws of England and Wales whose registered
     office is at Fifth Floor, 100 Wood Street, London EC2V 7EX as Current
     Issuer.

NOW THIS DEED OF ACCESSION WITNESSES AS FOLLOWS

WHEREAS:

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


                                       2
<PAGE>

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

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

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

(E)  Northern Rock as an Account Bank and a Funding GIC Provider has agreed to
     establish a new Funding GIC Account pursuant to the terms of the Funding
     Guaranteed Investment Contract dated 26 May 2004 and the Bank Account
     Agreement, as amended and restated by (and appearing as appendix 1 to) the
     Bank Account Amendment Deed made on 26 May 2004 between, among others,
     Funding and the Account Banks (as may be amended, varied or supplemented
     from time to time).

(F)  Pursuant to the terms of the Stand-by Funding Guaranteed Investment
     Contract, the Stand-by GIC Provider has agreed to establish a Stand-by
     Funding GIC Account, and the Stand-by Account Bank has agreed to operate
     such account under the terms of the Stand-by Account Bank Agreement in the
     event of the termination of the appointment of Northern Rock as an Account
     Bank and the Funding GIC Provider under the agreements referred to in
     paragraph (E) above.

(G)  The Current Issuer Start-up Loan Provider, the Current Issuer, the Stand-by
     Funding GIC Provider, the Stand-by Account Bank and Northern Rock as an
     Account Bank and as a Funding GIC Provider, each of whom is a New Funding
     Secured Creditor, have agreed to enter into this Deed of Accession (this
     "Deed") to accede to the provisions of the Funding Deed of Charge.

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

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


                                       3
<PAGE>

1.   Interpretation

     The provisions of:

     (a)  the Master Definitions Schedule as amended and restated by (and
          appearing in Appendix 1 to) the Master Definitions Schedule Eighth
          Amendment Deed made on 26 May 2004 between, among others, the Seller,
          Funding and the Mortgages Trustee, and

     (b)  the Issuer Master Definitions Schedule signed for the purposes of
          identification by Sidley Austin Brown & Wood and Allen & Overy LLP on
          26 May 2004,

     (as the same have been and may be amended, varied or supplemented from time
     to time with the consent of the parties hereto) are expressly and
     specifically incorporated into and shall apply to this Agreement. The
     Issuer Master Definitions Schedule specified above shall prevail to the
     extent that it conflicts with the Master Definitions Schedule.

2.   Representations and Warranties

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

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

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

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

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

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

                                       4
<PAGE>

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

3.   Accession

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

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

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

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

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

3.2  The Current Issuer Note Trustee:

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

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


                                       5
<PAGE>

4.   Funding Security

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

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

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

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

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

     (b)  assigns by way of first fixed security in favour of the Security
          Trustee for the benefit of the Current Issuer all of its rights,
          title, benefit and interest, present and future, in and to all monies
          now or at any time hereafter standing to the credit of the Funding
          (Current Issuer) GIC Account and the debts represented by them
          together with all rights and claims relating or attached thereto
          including, without limitation, the right to interest and the proceeds
          of any of the foregoing, TO HOLD the same unto the Security Trustee
          absolutely; and

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

4.2  (a)  Funding, by way of first fixed security for the payment or discharge
          of the Funding Secured Obligations, subject to Clause 4 (Release of
          Funding Charged Property) of the Funding Deed of Charge, hereby
          assigns to the

                                       6
<PAGE>

          Security Trustee, save to the extent that the same may be situate in
          Jersey at any relevant time, all of its right, title, benefit and
          interest, present and future, in, to and under the Current Issuer
          Start-up Loan Agreement, including, without limitation, all rights to
          receive payment of any amounts which may become payable to Funding
          thereunder and all payments received by Funding thereunder, all rights
          to serve notices and/or make demands thereunder and/or to take such
          steps as are required to cause payments to become due and payable
          thereunder, all rights of action in respect of any breach thereof and
          all rights to receive damages or obtain relief in respect thereof and
          the proceeds of any of the foregoing, TO HOLD the same unto the
          Security Trustee absolutely.

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

4.3  Funding, by way of fixed security for the payment or discharge of the
     Funding Secured Obligations, subject to Clause 4 (Release of Funding
     Charged Property) of the Funding Deed of Charge, hereby:

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

          (i)  the Stand-by Bank Account Agreement; and

          (ii) the Stand-by Funding Guaranteed Investment Contract,

          including all rights to receive payment of any amounts which may
          become payable to Funding thereunder and all payments received by
          Funding thereunder including, without limitation, all rights to serve
          notices and/or

                                       7
<PAGE>

          make demands thereunder and/or to take such steps as are required to
          cause payments to become due and payable thereunder and all rights of
          action in respect of any breach thereof and all rights to receive
          damages or obtain relief in respect thereof and the proceeds of any of
          the foregoing, TO HOLD the same unto the Security Trustee absolutely.

5.   Title Guarantee

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

6.   Application

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

7.   Scope of the Funding Deed of Charge

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

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

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

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

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

     (e)  each of the Stand-by Funding Guaranteed Investment Contract and the
          Stand-by Bank Account Agreement shall be treated as a Funding
          Transaction Document;

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

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


                                       8
<PAGE>

8.   Notices and Acknowledgements

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

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

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

9.   Amendment to the Funding Priority of Payments

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

10.  Notices and Demands

     Any notice or communication under or in connection with this Deed shall be
     given in the manner and at the times set out in Clause 24 (Notices) of the
     Funding Deed of


                                       9
<PAGE>

     Charge. For the purposes of such Clause 24 (Notices), as at the date of
     this Deed the relevant contact details for the Current Issuer are:

          Granite Mortgages 04-2 plc
          Fifth Floor
          100 Wood Street
          London EC2V  7EX

          For the attention of:   The Company Secretary

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

     and for the Current Issuer Start-up Loan Provider, Northern Rock as an
     Account Bank and Funding GIC Provider are:

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

          For the attention of:   The Group Secretary

          Facsimile:              +44 (0)191 213 2203

     and for the Current Issuer Note Trustee are:

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

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

          Facsimile:              +44 (020) 7964 6399

     and for the Funding GIC Provider and the Stand-by Funding GIC Provider are:

          Lloyds TSB Bank plc
          25 Gresham Street
          London EC2V 7HN

          For the attention of:   Jason Eperon (Manager, Financial Institutions
                                  & International Trade Finance)

          Facsimile:              020 7661 4790


                                       10
<PAGE>

     and for the Stand-by Account Bank are:

          Lloyds TSB Bank plc
          25 Gresham Street
          London EC2V 7HN

          For the attention of:   Jason Eperon (Manager, Financial Institutions
                                  & International Trade Finance)

          Facsimile:              020 7661 4790

11.  Non Petition Covenant

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

12.  Third Party Rights

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

13.  Execution in Counterparts

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

14.  Governing Law and Jurisdiction; Appropriate Forum

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

14.2 Each of the parties hereto irrevocably agrees that the courts of England
     shall have jurisdiction to hear and determine any suit, action or
     proceeding, and to settle any

                                       11
<PAGE>

     disputes, which may arise out of or in connection with this Deed and, for
     such purposes, irrevocably submits to the jurisdiction of such courts.

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

15.  Process Agents

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


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<PAGE>


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

Funding

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

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






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

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




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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------


                                       13
<PAGE>


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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------



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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------



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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------


                                       14
<PAGE>


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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------



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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------

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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------


                                       15
<PAGE>


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

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------

Current Issuer

Executed by
GRANITE MORTGAGES 04-2 PLC
as its deed as follows:                                         By
Signed for and on its behalf by one of its directors              ----------------------------------------------
and by another of its directors/its secretary                     for and on behalf of LDC Securitisation
                                                                  Director No.1 Ltd

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

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

                                                             Name Sharon Tyson
                                                                  ----------------------------------------------


The Cash Manager, the Previous Start-up Loan Provider
the Current Issuer Loan Provider, an Account Bank and
the Funding GIC Provider

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


Signature
           ----------------------------------------------
           Witness

Full name
           ----------------------------------------------
Occupation Solicitor
           ----------------------------------------------
Address    c/o Sidley Austin Brown & Wood
           ----------------------------------------------
           Woolgate Exchange
           ----------------------------------------------
           25 Basinghall Street
           ----------------------------------------------
           London EC2V 5HA
           ----------------------------------------------



                                       16
<PAGE>


<CAPTION>
<S>                                                           <C>
The Corporate Services Provider

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





An Account Bank, Funding GIC Provider,
the Stand-by Account Bank and the Stand-by
Funding GIC Provider

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


Signature
           ----------------------------------------------
           Witness

Full name
           ----------------------------------------------
Occupation Solicitor
           ----------------------------------------------
Address    c/o Sidley Austin Brown & Wood
           ----------------------------------------------
           Woolgate Exchange
           ----------------------------------------------
           25 Basinghall Street
           ----------------------------------------------
           London EC2V 5HA
           ----------------------------------------------


The Mortgages Trustee

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


                                       17
<PAGE>


                                   SCHEDULE I

                         Utilisation of Issuer Reserves

Reserves for Current Issuer

1.   Current Issuer Reserve Fund:

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

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

2.   Current Issuer Liquidity Reserve Fund:

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

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

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

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


                                       18
<PAGE>


                                   APPENDIX 1
                Amended and Restated Funding Priority of Payments

                                     Part I

              Funding Pre-Enforcement Revenue Priority of Payments

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

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

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

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

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

     (D)  fourth, in no order of priority among them, but in proportion to the
          respective amounts due, towards payment of amounts, if any, due to (i)
          the Account Bank under the terms of the Bank Account Agreement (ii) to
          the Stand-by Account Bank under the terms of the Stand-by Bank Account
          Agreement and (iii) to



                                       19
<PAGE>

          the Corporate Services Provider under the terms of the Corporate
          Services Agreement;

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

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

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

     (H)  eighth, to pay, in no order of priority among them, such amount for
          each Issuer up to its Issuer Allocable Revenue Receipts as is
          necessary to fund the Issuer Reserve Fund established in respect of
          that Issuer up to the Issuer Reserve Required Amount or to replenish
          such Issuer Reserve Fund up to the related Issuer Reserve Required
          Amount (to the extent that monies have been drawn from such Issuer
          Reserve Fund to pay interest and fees under the relevant Intercompany
          Loan) or if an Arrears or Step-Up Trigger Event has occurred, to
          credit the Issuer Reserve Ledger with the applicable Issuer Reserve
          Additional Amount;

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


                                       20
<PAGE>

     (J)  tenth, in no order of priority among them, from Issuer Allocable
          Revenue Receipts, to credit the Funding Reserve Ledger in an amount up
          to the Funding Reserve Required Amount or if a Funding Step-Up Trigger
          Event has occurred to credit the Funding Reserve Ledger with the
          Funding Reserve Additional Amount;

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

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

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

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

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

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

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


                                       21
<PAGE>

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

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

Rules for application of Funding Available Revenue Receipts


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

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


     (B)  Subject as provided in paragraphs (2) through (4) below, the portion
          of Issuer Allocable Revenue Receipts for all Group 2 Issuers remaining
          after item (M) of the Funding Pre-Enforcement Revenue Priority of
          Payments, together with any additional Funding Available Revenue
          Receipts under paragraph (3) below, shall constitute "Group 2 Shared
          Issuer Revenue Receipts". Group 2 Shared Issuer Revenue Receipts will
          be reallocated by the Cash Manager on a Payment Date for Group 2
          Issuers distributed on such Payment Date in accordance with item (N)
          of the Funding Pre-Enforcement Revenue Priority of Payments and will
          continue to be distributed on such Payment Date in accordance with
          items (E) through (M) of the Funding Pre-Enforcement


                                       22
<PAGE>

          Revenue Priority of Payments until there are no remaining amounts of
          Group 2 Shared Issuer Revenue Receipts to be reallocated and
          distributed on such Payment Date. If there is more than one Group 2
          Issuer that is entitled to Group 2 Shared Issuer Revenue Receipts,
          then each such Group 2 Issuer will be reallocated a portion of Shared
          Issuer Revenue Receipts equal to:


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



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


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


(4)  If on any Payment Date any Issuer Allocable Revenue Receipts and/or any
     Group 1 Shared Issuer Revenue Receipts or Group 2 Shared Issuer Revenue
     Receipts, as applicable, are paid to an Issuer and are applied by that
     Issuer, in reducing any deficiency recorded on the Issuer Principal
     Deficiency Ledger of that Issuer (but only


                                       23
<PAGE>

     to the extent that any deficiency which has arisen as a result of (i)
     losses on the Mortgage Loans allocated by Funding to the Issuer and/or (ii)
     the application of Funding Available Principal Receipts to fund the Issuer
     Liquidity Reserve Fund of the Issuer, but not as a result of any other
     principal deficiency of the Issuer), then the Issuer Allocable Revenue
     Receipts and/or Group 1 Shared Issuer Revenue Receipts or Group 2 Shared
     Issuer Revenue Receipts, as applicable, so applied shall constitute
     repayments of principal under the relevant Intercompany Loan and shall
     reduce the Outstanding Principal Balance of that Intercompany Loan
     accordingly.

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

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

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

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

(8)  To the extent that on any Payment Date for Group 1 Issuers or Payment Date
     for Group 2 Issuers amounts standing to the credit of the Funding Expense
     Sub-Ledger distributed pursuant to paragraph (7) above are insufficient to
     pay all amounts described in such paragraph (7), then the Cash Manager will
     apply amounts standing


                                       24
<PAGE>

     to the credit of the Funding Reserve Ledger to meet such a shortfall. To
     the extent that on any Payment Date amounts standing to the credit of the
     Funding Reserve Ledger and applied pursuant to the preceding sentence are
     insufficient to pay all amounts described in paragraph (7) above, then the
     Cash Manager will apply on the Payment Date for Group 1 Issuers, Group 1
     Available Revenue Receipts or on the Payment Date for Group 2 Issuers,
     Group 2 Available Revenue Receipts, as applicable, to pay such amounts. To
     the extent that amounts standing to the credit of the Funding Reserve
     Ledger are applied to pay any amounts described in paragraph (7) above then
     the amounts standing to the credit of the Funding Reserve Ledger as at the
     Distribution Date immediately preceding the relevant Payment Date (unless
     such Payment Date is also a Funding Reserve Adjustment Date, in which case
     the relevant date will be the Distribution Date immediately preceding the
     immediately preceding Payment Date) above shall be deemed to have been
     reduced by the amount applied to pay amounts described in paragraph 7
     above.

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


                                       25
<PAGE>

                                     Part II

             Funding Pre-Enforcement Principal Priority of Payments

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

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

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

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

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

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

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

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


                                       26
<PAGE>

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

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

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

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

Rules for application of Funding available principal receipts


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

     (a)  the aggregate of:

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

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


                                       27
<PAGE>

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

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

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

          (ii) an amount equal to:

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


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

     (a)  the aggregate of:

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

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

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

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


                                       28
<PAGE>

          (ii) an amount equal to:

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



     PROVIDED THAT,

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

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

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

                                       29
<PAGE>

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

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

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

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

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


                                       30
<PAGE>

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

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

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


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


                                       31
<PAGE>

               Principal Receipts to be reallocated and distributed on such
               Payment Date. Save as provided in paragraph (2) above, if there
               is more than one Group 2 Issuer that is entitled to Group 2
               Shared Issuer Principal Receipts, then each such Group 2 Issuer
               will be reallocated a portion of the Group 2 Shared Issuer
               Principal Receipts equal to:

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



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


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



                                       32
<PAGE>

                                    Part III

                  Funding Post-Enforcement Priority of Payments

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

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

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

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

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

                                       33
<PAGE>

          Agreement, (ii) to the Stand-by Account Bank under the Stand-by Bank
          Account Agreement and (iii) to the Corporate Services Provider under
          the Corporate Services Agreement;

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

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

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

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

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


                                       34
<PAGE>

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

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



                                       35
<PAGE>