AMENDED AND RESTATED MASTER ISSUER CASH          EXHIBIT 4.9
                             MANAGEMENT AGREEMENT

                               21 NOVEMBER 2007

                          PERMANENT MASTER ISSUER PLC
                              (AS MASTER ISSUER)

                                      AND

                             BANK OF SCOTLAND PLC
                        (AS MASTER ISSUER CASH MANAGER)

                                      AND

                             THE BANK OF NEW YORK
                      (AS MASTER ISSUER SECURITY TRUSTEE)

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                                   CONTENTS

CLAUSE                                                                     PAGE

1.       Definitions and Interpretation.......................................1
2.       Appointment of Master Issuer Cash Manager............................2
3.       Master Issuer Cash Management Services...............................2
4.       Payments, Accounts, Ledgers..........................................3
5.       No Liability.........................................................9
6.       Costs and Expenses...................................................9
7.       Information..........................................................9
8.       Remuneration........................................................11
9.       Covenants of Master Issuer Cash Manager.............................11
10.      Non-Exclusivity.....................................................12
11.      Termination.........................................................12
12.      Further Assurance...................................................15
13.      New Notes...........................................................15
14.      Miscellaneous.......................................................15
15.      Confidentiality.....................................................16
16.      Notices.............................................................16
17.      Variation and Waiver................................................17
18.      No Partnership......................................................17
19.      Assignment..........................................................17
20.      Exclusion of Third Party Rights.....................................18
21.      Counterparts........................................................18
22.      Governing Law.......................................................18
23.      Submission to Jurisdiction..........................................18

SCHEDULE

1.       Master Issuer Cash Management Services..............................19
2.       Cash Management and Maintenance of Ledgers..........................21
3.       Form of Master Issuer Quarterly Report..............................30

Signatories..................................................................33

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THIS AMENDED AND RESTATED MASTER ISSUER CASH MANAGEMENT AGREEMENT (this
AGREEMENT) is made as a deed on 21 November 2007

BETWEEN:

(1)      PERMANENT MASTER ISSUER PLC (registered number 5922774), a public
         limited company incorporated under the laws of England and Wales,
         whose registered office is at 35 Great St. Helen's, London EC3A 6AP
         (the MASTER ISSUER);

(2)      BANK OF SCOTLAND PLC (registered number SC327000) (formerly The
         Governor and Company of the Bank of Scotland), a public limited
         company incorporated under the laws of Scotland whose registered
         office is at The Mound, Edinburgh, EH1 1YZ (acting in its capacity as
         the MASTER ISSUER CASH MANAGER); and

(3)      THE BANK OF NEW YORK, a New York banking corporation whose London
         branch address is at One Canada Square, London E14 5AL (acting in its
         capacity as the MASTER ISSUER SECURITY TRUSTEE, which expression shall
         include such company and all other persons and companies for the time
         being acting as security trustee under the Master Issuer Deed of
         Charge).

WHEREAS:

(A)      On the Initial Closing Date and on subsequent Closing Dates the Master
         Issuer will issue Notes constituted by the Trust Deed and/or on
         subsequent Advance Dates the Master Issuer will borrow Master Issuer
         Subordinated Loans pursuant to the Master Issuer Subordinated Loan
         Agreements and/or Master Issuer Start-Up Loans pursuant to the Master
         Issuer Start-up Loan Agreements. The Master Issuer will make the Rated
         Loan Tranches, the Subordinated Loan Tranches and the Start-Up Loan
         Tranches available to Funding 2 from the proceeds of the issue of the
         Notes, the Master Issuer Subordinated Loans and the Master Issuer
         Start-up Loans.

(B)      Halifax (then in its capacity as the Master Issuer Cash Manager)
         agreed to provide cash management services to the Master Issuer and
         the Master Issuer Security Trustee on the terms and subject to the
         conditions contained in the Master Issuer Cash Management Agreement.

(C)      On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
         Act 2006, The Governor and Company of the Bank of Scotland was
         registered as a public company under the Companies Act 1985 and
         changed its name to Bank of Scotland plc and the business and all
         property and liabilities of Halifax (including its rights and
         obligations under the Master Issuer Cash Management Agreement) were
         transferred to Bank of Scotland.

(D)      The parties hereto have agreed to amend and restate the Master Issuer
         Cash Management Agreement on the date hereof as set out herein.

IT IS HEREBY AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      The master definitions and construction schedule signed by, amongst
         others, the parties to this Agreement and dated 21 November 2007 (as
         the same may be amended, varied or supplemented from time to time with
         the consent of the parties thereto) (the MASTER DEFINITIONS AND
         CONSTRUCTION SCHEDULE) and the amended and restated master issuer
         master definitions and construction schedule signed by, amongst
         others, the parties to this Agreement and dated 21 November 2007 (as
         the same may be amended, varied or supplemented from time to time)
         (the MASTER ISSUER MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) are
         expressly and specifically incorporated into this Agreement and,

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         accordingly, the expressions defined in the Master Definitions and
         Construction Schedule and the Master Issuer Master Definitions and
         Construction Schedule shall, except where the context otherwise
         requires and save where otherwise defined herein, have the same
         meanings in this Agreement, including the Recitals hereto, and this
         Agreement shall be construed in accordance with the interpretation
         provisions set out in Clause 3 of the Master Definitions and
         Construction Schedule and in Clause 3 of the Master Issuer Master
         Definitions and Construction Schedule.

1.2      This Agreement amends and restates the Master Issuer Cash Management
         Agreement dated 17 October 2006 (the PRINCIPAL AGREEMENT). As of the
         date of this Agreement, any future rights or obligations (excluding
         such rights and obligations accrued to the date of this Agreement) of
         a party to the Principal Agreement shall be extinguished and shall
         instead be governed by this Agreement.

2.       APPOINTMENT OF MASTER ISSUER CASH MANAGER

2.1      APPOINTMENT

         Until termination pursuant to Clause 11, the Master Issuer and the
         Master Issuer Security Trustee (according to their respective estates
         and interests) have appointed the Master Issuer Cash Manager as their
         lawful agent to provide the Master Issuer Cash Management Services set
         out in this Agreement. The Master Issuer Cash Manager has accepted
         such appointment on the terms and subject to the conditions of this
         Agreement.

2.2      DUTIES PRESCRIBED BY TRANSACTION DOCUMENTS

         For the avoidance of doubt and in connection with the powers conferred
         under Clause 2.1, save as expressly provided elsewhere in this
         Agreement, nothing in this Agreement shall be construed so as to give
         the Master Issuer Cash Manager any powers, rights, authorities,
         directions or obligations other than as specified in this Agreement or
         any of the other Master Issuer Transaction Documents.

2.3      APPOINTMENT CONDITIONAL UPON ISSUANCE OF NOTES

         The appointment pursuant to Clause 2.1 was conditional upon the issue
         of Notes on the Initial Closing Date and was effective upon and from
         the Initial Closing Date automatically without any further action on
         the part of any person PROVIDED THAT if the first issue of Notes had
         not occurred by 30 October 2006, or such later date as the Master
         Issuer and the Lead Managers may have agreed, this Agreement would
         have ceased to be of further effect.

3.       MASTER ISSUER CASH MANAGEMENT SERVICES

3.1      GENERAL

         The Master Issuer Cash Manager shall provide the services set out in
         this Agreement (including, for the avoidance of doubt, the Schedules)
         (the MASTER ISSUER CASH MANAGEMENT SERVICES).

3.2      APPROVALS AND AUTHORISATIONS

         The Master Issuer Cash Manager shall maintain, or procure the
         maintenance of, the approvals, authorisations, consents and licences
         required in connection with the business of the Master Issuer and
         shall prepare and submit, or procure the preparation and submission
         of, on behalf of the Master Issuer, all necessary applications and
         requests for any further approvals, authorisations, consents or
         licences which may be required in connection with the business of the
         Master Issuer and shall, so far as it is reasonably able to do so,
         perform the Master Issuer Cash Management Services in such a way as
         not to prejudice the continuation of any such approvals,
         authorisations, consents or licences.

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3.3      COMPLIANCE WITH TRANSACTION DOCUMENTS, ETC.

         The Master Issuer Cash Management Services shall include procuring (so
         far as the Master Issuer Cash Manager, using its reasonable
         endeavours, is able so to do) compliance by the Master Issuer with all
         applicable legal requirements and with the terms of the Master Issuer
         Transaction Documents, PROVIDED ALWAYS THAT the Master Issuer Cash
         Manager shall not lend or provide any sum to the Master Issuer and
         that the Master Issuer Cash Manager shall have no liability whatsoever
         to the Master Issuer, the Master Issuer Security Trustee or any other
         person for any failure by the Master Issuer to make any payment due
         under any of the Master Issuer Transaction Documents (other than to
         the extent arising from any failure by the Master Issuer Cash Manager
         to perform any of its obligations under any of the Master Issuer
         Transaction Documents).

3.4      LIABILITY OF MASTER ISSUER CASH MANAGER

(a)      The Master Issuer Cash Manager shall indemnify each of the Master
         Issuer and the Master Issuer Security Trustee on demand on an after
         Tax basis for any loss, liability, claim, expense or damage suffered
         or incurred by it in respect of the negligence, fraud or wilful
         default of the Master Issuer Cash Manager in carrying out its
         functions as Master Issuer Cash Manager under, or as a result of a
         breach by the Master Issuer Cash Manager of, the terms and provisions
         of this Agreement or such other Master Issuer Transaction Documents to
         which the Master Issuer Cash Manager is a party (in its capacity as
         such) in relation to such functions.

(b)      For the avoidance of doubt, the Master Issuer Cash Manager shall not
         be liable in respect of any loss, liability, claim, expense or damage
         suffered or incurred by the Master Issuer or the Master Issuer
         Security Trustee or any other person as a result of the proper
         performance of the Master Issuer Cash Management Services by the
         Master Issuer Cash Manager save to the extent that such loss,
         liability, claim, expense or damage is suffered or incurred as a
         result of any negligence, fraud or wilful default of the Master Issuer
         Cash Manager under, or as a result of a breach by the Master Issuer
         Cash Manager of, the terms and provisions of this Agreement or any of
         the other Master Issuer Transaction Documents to which the Master
         Issuer Cash Manager is a party (in its capacity as such) in relation
         to such functions.

4.       PAYMENTS, ACCOUNTS, LEDGERS

4.1      MASTER ISSUER TRANSACTION ACCOUNT

(a)      The Master Issuer Cash Manager hereby confirms that the Master Issuer
         Transaction Account has been established on or before the date of this
         Agreement and that the mandate in the agreed form applied to this
         Agreement from the Programme Date. The Master Issuer Cash Manager
         undertakes (to the extent to which the same is within its control in
         its capacity as Master Issuer Cash Manager) that from the Programme
         Date the Master Issuer Transaction Account has been and will continue
         to be operative and that the Master Issuer Cash Manager will not
         knowingly create or permit to subsist any Security Interest in
         relation to the Master Issuer Transaction Account other than as
         created under or permitted pursuant to the Master Issuer Deed of
         Charge.

(b)      The Master Issuer Cash Manager shall procure that the following
         amounts are paid into the Master Issuer Transaction Account:

                 (i)     all amounts of interest paid on the Loan Tranches;

                 (ii)    all repayments or prepayments of principal on the Loan
                         Tranches;

                 (iii)   all amounts received by the Master Issuer pursuant to
                         the Master Issuer Swap Agreements (excluding the
                         return or transfer of any Excess Swap Collateral as
                         set

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                         out in the relevant Master Issuer Swap Agreement and
                         in respect of each Master Issuer Swap Provider, prior
                         to the designation of an early termination date under
                         the relevant Master Issuer Swap Agreement and the
                         resulting application of the collateral by way of
                         netting or set-off, an amount equal to the value of
                         all collateral (other than Excess Swap Collateral)
                         provided by such Master Issuer Swap Provider to the
                         Master Issuer pursuant to the relevant Master Issuer
                         Swap Agreement (and any interest or distributions in
                         respect thereof)); and

                 (iv)    any other amounts whatsoever received by or on behalf
                         of the Master Issuer after the Programme Date,

         and the Master Issuer Cash Manager shall procure that all interest
         earned on the Master Issuer Transaction Account and all investment
         proceeds from and income and distributions arising from time to time
         in respect of Authorised Investments purchased from amounts standing
         to the credit of the Master Issuer Transaction Account are credited to
         such account.

(c)      Each of the payments into the Master Issuer Transaction Account
         referred to in Clause 4.1(b) shall be made forthwith upon receipt by
         the Master Issuer or the Master Issuer Cash Manager of the amount in
         question.

(d)      For the avoidance of doubt, as soon as reasonably practicable after
         becoming aware of the same, the Master Issuer Cash Manager may, and
         shall, withdraw Cash from the Master Issuer Transaction Account if,
         and to the extent that, such Cash was credited thereto in error and
         shall use its reasonable endeavours to ensure that such Cash is
         applied correctly thereafter.

(e)      The Master Issuer Cash Manager shall promptly notify each of the
         Master Issuer and the Master Issuer Security Trustee in writing of any
         additional account which supplements or replaces any account
         specifically referred to in the definition of the Master Issuer
         Transaction Account in the Master Issuer Master Definitions and
         Construction Schedule.

(f)      Each of the Master Issuer Cash Manager and the Master Issuer
         undertakes that, so far as it is able to procure the same, the Master
         Issuer Transaction Account and all instructions and mandates in
         relation thereto will continue to be operative and will not, save as
         permitted pursuant to the Master Issuer Bank Account Agreement, be
         changed without the prior written consent of the Master Issuer
         Security Trustee (such consent not to be unreasonably withheld or
         delayed). For the avoidance of doubt, the Master Issuer Cash Manager
         may change the authorised signatories in respect of any instructions
         or mandates without the prior written consent of the Master Issuer
         Security Trustee, in accordance with the terms of the Master Issuer
         Bank Account Agreement.

4.2      ADDITIONAL MASTER ISSUER ACCOUNTS AND MASTER ISSUER SWAP COLLATERAL
         ACCOUNTS

(a)      If established, the Master Issuer Cash Manager will not knowingly
         create or permit to subsist any Security Interest in relation to any
         Additional Master Issuer Account or any Master Issuer Swap Collateral
         Account other than as created under or permitted pursuant to the
         Master Issuer Deed of Charge.

(b)      The Master Issuer Cash Manager shall procure that the relevant amounts
         are paid into the applicable Master Issuer Account or applicable
         Master Issuer Swap Collateral Account and the Master Issuer Cash
         Manager shall procure that all interest earned on the relevant
         Additional Master Issuer Account or relevant Master Issuer Swap
         Collateral Account and all investment proceeds from and income and
         distributions arising from time to time in respect of Authorised
         Investments purchased from amounts standing to the credit of an
         Additional Master Issuer Account are credited to such account.

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(c)      Each of the payments into the Additional Master Issuer Account or any
         Master Issuer Swap Collateral Account referred to in Clause 4.2(b)
         shall be made forthwith upon receipt by the Master Issuer or the
         Master Issuer Cash Manager of the amount in question.

(d)      For the avoidance of doubt, as soon as reasonably practicable after
         becoming aware of the same, the Master Issuer Cash Manager may, and
         shall, withdraw Cash from an Additional Master Issuer Account or a
         Master Issuer Swap Collateral Account if, and to the extent that, such
         Cash was credited thereto in error and shall use its reasonable
         endeavours to ensure that such Cash is applied correctly thereafter.

(e)      The Master Issuer Cash Manager shall promptly notify each of the
         Master Issuer and the Master Issuer Security Trustee in writing of any
         additional account which is established pursuant to clause 3.1 or
         clause 3.3 of the Master Issuer Bank Account Agreement or any account
         established to replace or supplement such account.

(f)      Each of the Master Issuer Cash Manager and the Master Issuer
         undertakes that, so far as it is able to procure the same, the
         Additional Master Issuer Accounts and any Master Issuer Swap
         Collateral Accounts and all instructions and mandates in relation
         thereto will continue to be operative and will not, save as permitted
         pursuant to the Master Issuer Bank Account Agreement be changed
         without the prior written consent of the Master Issuer Security
         Trustee (such consent not to be unreasonably withheld or delayed). For
         the avoidance of doubt, the Master Issuer Cash Manager may change the
         authorised signatories in respect of any instructions or mandates
         without the prior written consent of the Master Issuer Security
         Trustee, in accordance with the terms of the Master Issuer Bank
         Account Agreement.

4.3      WITHDRAWALS

(a)      The Master Issuer Cash Manager may make withdrawals on behalf of the
         Master Issuer from a Master Issuer Account, as permitted by this
         Agreement, until such time as the Master Issuer Cash Manager receives
         a copy of a Note Acceleration Notice served on the Master Issuer, but
         shall not in carrying out its functions as Master Issuer Cash Manager
         under this Agreement otherwise make withdrawals from a Master Issuer
         Account.

(b)      Upon receipt of such a Note Acceleration Notice, no amount shall be
         withdrawn from the Master Issuer Accounts by the Master Issuer Cash
         Manager without the prior written consent of the Master Issuer
         Security Trustee.

4.4      CASH MANAGEMENT

         In administering the Master Issuer Accounts on behalf of the Master
         Issuer and the Master Issuer Security Trustee, the Master Issuer Cash
         Manager shall comply with the provisions of Schedule 2 prior to
         receipt by the Master Issuer Cash Manager of a copy of any Note
         Acceleration Notice served on the Master Issuer. Following service of
         a Note Acceleration Notice on the Master Issuer, the Master Issuer
         Security Trustee or any Receiver appointed by the Master Issuer
         Security Trustee will administer the Master Issuer Accounts in
         accordance with the terms of the Master Issuer Deed of Charge.

4.5      MASTER ISSUER LEDGERS

(a)      The Master Issuer Cash Manager shall open and maintain in the books of
         the Master Issuer the following ledgers:

                 (i)     the Master Issuer Revenue Ledger, which shall record
                         all Master Issuer Revenue Receipts (which shall
                         exclude any fees to be paid by Funding 2 on each
                         Funding 2

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                         Interest Payment Date under the terms of the Master
                         Intercompany Loan Agreement) (other than in respect of
                         any termination payment due by the Master Issuer in
                         respect of any Master Issuer Swap)) standing to the
                         credit of the Master Issuer Accounts from time to time
                         and a sub-ledger in respect of each Series and Class
                         of Notes, each Master Issuer Subordinated Loan and
                         each Master Issuer Start-Up Loan, which shall record
                         interest received in respect of each corresponding
                         Rated Loan Tranche funded by each such Series and
                         Class of Notes, interest received in respect of each
                         corresponding Subordinated Loan Tranche funded by each
                         such Master Issuer Subordinated Loan and interest and
                         principal received in respect of each corresponding
                         Start-Up Loan Tranche funded by each such Master
                         Issuer Start-Up Loan (respectively);

                 (ii)    the Master Issuer Principal Ledger, which shall record
                         all Master Issuer Principal Receipts standing to the
                         credit of the Master Issuer Accounts from time to time
                         and a sub-ledger in respect of each Series and Class
                         of Notes and each Master Issuer Subordinated Loan,
                         which shall record principal repayments in respect of
                         each corresponding Rated Loan Tranche funded by each
                         such Series and Class of Notes and each corresponding
                         Subordinated Loan Tranche funded by each such Master
                         Issuer Subordinated Loan; and

                 (iii)   the Master Issuer Swap Collateral Ledger (which shall
                         comprise of such sub-ledgers as the Master Issuer Cash
                         Manager considers appropriate), to record all
                         payments, transfers and receipts in connection with
                         Swap Collateral, including, without limitation:

                         (A)     the receipt of any Swap Collateral by the
                                 Master Issuer from the Master Issuer Swap
                                 Providers;

                         (B)     the receipt of any income or distributions in
                                 respect of such Swap Collateral;

                         (C)     the payment or transfer of all, or any part
                                 of, such Swap Collateral to the relevant
                                 Master Issuer Swap Provider; and

                         (D)     the payment or transfer of all, or any part
                                 of, such Swap Collateral to the relevant
                                 Master Issuer Accounts,

                 provided that the Master Issuer Swap Collateral Ledger (and
                 sub-ledgers) shall only be established in the event that any
                 Master Issuer Swap Provider pays or transfers Swap Collateral
                 to the Master Issuer in accordance with the relevant Master
                 Issuer Swap Agreement;

                 (iv)    the Master Issuer Expense Ledger, which shall record
                         payments of fees received from Funding 2 under the
                         Master Intercompany Loan and payments out in
                         accordance with the Master Issuer Pre-Enforcement
                         Revenue Priority of Payments;

                 (v)     the Master Issuer Note Ledger, which shall be divided
                         into segregated sub-ledgers each of which shall record
                         payments made under each Series and Class of Notes
                         (each of which shall be further divided into
                         sub-ledgers to record payments of interest and fees
                         and repayments and prepayments of principal made under
                         such Series and Class of Notes together with any
                         termination payment made by the Master Issuer in
                         respect of the corresponding Master Issuer Swap
                         (excluding any Master Issuer Swap Excluded Termination
                         Amount) ;

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                 (vi)    the Master Issuer Subordinated Loan Ledger, which
                         shall be divided into segregated sub-ledgers each
                         which shall record payments made under each Master
                         Issuer Subordinated Loan (each of which shall be
                         further divided into sub-ledgers to record payments of
                         interest and repayments and prepayments of principal
                         made under each Master Issuer Subordinated Loan); and

                 (vii)   the Master Issuer Start-Up Loan Ledger, which shall be
                         divided into segregated sub-ledgers each of which
                         shall record payments made under each Master Issuer
                         Start-up Loan (each of which shall be further divided
                         into sub-ledgers to record payments of interest and
                         repayments and prepayments of principal made under
                         such Master Issuer Start-up Loan).

(b)      The Master Issuer Cash Manager shall make credits and debits to the
         Master Issuer Ledgers in accordance with the provisions of paragraphs
         5 to 10 of Schedule 2 hereto.

4.6      TERMINATION

         If on or prior to the date of the earlier of (i) repayment in full of
         any Series and Class of Notes or (ii) the service of a Note
         Acceleration Notice on the Master Issuer, any of the Master Issuer
         Swaps related to such Series and Class are terminated, the Master
         Issuer Cash Manager (on behalf of the Master Issuer and the Master
         Issuer Security Trustee) shall purchase a replacement hedge (taking
         into account any early termination payment received from the relevant
         Master Issuer Swap Provider) in respect of such Series and Class of
         Notes, against, as appropriate:

         (a)     fluctuations in the relevant currency swap rate between
                 Dollars and Sterling or the possible variance between LIBOR
                 for three-month Sterling deposits and either:

                 (i)     LIBOR for one-month Dollar deposits (in relation to
                         any such Series and Class of Notes that are US Dollar
                         Notes and that are Money Market Notes); or

                 (ii)    LIBOR for three-month Dollar deposits (in relation to
                         any such Series and Class of Notes that are US Dollar
                         Notes and that are not Money Market Notes); or

         (b)     fluctuations in the relevant currency swap rate between Euro
                 and Sterling or the possible variance between LIBOR for
                 three-month Sterling deposits and either:

                 (i)     EURIBOR for one-month Euro deposits (in relation to
                         any such Series and Class of Notes that are the Euro
                         Notes and that are Money Market Notes); or

                 (ii)    EURIBOR for three-month Sterling deposits (in relation
                         to any such Series and Class of Notes that are the
                         Euro Notes and that are not Money Market Notes); or

         (c)     fluctuations in the relevant currency swap rate between the
                 Specified Currency and Sterling or the possible variance
                 between LIBOR for three-month Sterling deposits and either:

                 (i)     LIBOR for one-month deposits of the Specified Currency
                         (in relation to any such Series and Class of Notes of
                         the Specified Currency that are Money Market Notes);
                         or

                 (ii)    LIBOR for three-month deposits of the Specified
                         Currency (in relation to any such Series and Class of
                         Notes that are not Money Market Notes);

         in each case, on terms acceptable to the Rating Agencies and the
         Master Issuer and the Master Issuer Security Trustee and with a swap
         provider whom the Rating Agencies have previously confirmed in

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         writing to the Master Issuer and the Master Issuer Security Trustee
         will not cause the then current ratings of the Notes to be downgraded.

4.7      SWAP COLLATERAL

(a)      In the event that, pursuant to the terms of a Master Issuer Swap
         Agreement, a Master Issuer Swap Provider pays or transfers Swap
         Collateral to the Master Issuer, the Master Issuer Cash Manager shall:

                 (i)     if not already created, create the Master Issuer Swap
                         Collateral Ledger in the books of the Master Issuer so
                         as to record the amount and type of such Swap
                         Collateral and identify the relevant Master Issuer
                         Swap Agreement in respect of which it has been posted;

                 (ii)    upon receipt of such Swap Collateral, credit it to and
                         record the relevant details in the Swap Collateral
                         Ledger;

                 (iii)   to the extent that such Swap Collateral is in the form
                         of Cash, pay it into the relevant Master Issuer Swap
                         Collateral Cash Account; and

                 (iv)    to the extent that such Swap Collateral is in the form
                         of securities, arrange for it to be credited to the
                         relevant Master Issuer Swap Collateral Securities
                         Account.

(b)      Any such Swap Collateral shall not form part of the Master Issuer
         Available Funds provided that, if the terms of the relevant Master
         Issuer Swap Agreement permit such Swap Collateral to be applied in or
         towards satisfaction of the relevant Master Issuer Swap Provider's
         obligations under the relevant Master Issuer Swap Agreement, and in
         the event that such Swap Collateral is to be so applied, the Master
         Issuer Cash Manager shall:

                 (i)     where the relevant Swap Collateral is in the form of
                         Cash, transfer the relevant amount of Cash from the
                         relevant Master Issuer Swap Collateral Cash Account to
                         the Master Issuer Transaction Account; or

                 (ii)    where the relevant Swap Collateral is in the form of
                         securities, realise the Swap Collateral and pay the
                         amount of the net proceeds into the Master Issuer
                         Transaction Account,

         and, in each case, make the appropriate debits and credits to the
         Master Issuer Swap Collateral Ledger. Swap Collateral will form part
         of the Master Issuer Available Revenue Receipts on its transfer or
         payment into the Master Issuer Transaction Account in accordance with
         this Clause 4.7(b).

(c)      To the extent that, pursuant to the terms of the relevant Master
         Issuer Swap Agreement, Swap Collateral is to be transferred or paid to
         the relevant Master Issuer Swap Provider, the Master Issuer Cash
         Manager shall:

                 (i)     where the relevant Swap Collateral is in the form of
                         Cash, pay the relevant amount of Cash out of the
                         relevant Swap Collateral Cash Account to the Master
                         Issuer Swap Provider; or

                 (ii)    where the relevant Swap Collateral is in the form of
                         securities, transfer and deliver the Swap Collateral
                         to the Master Issuer Swap Provider,

         and, in each case, debit the Master Issuer Swap Collateral Ledger as
         appropriate.

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(d)      The terms of this Clause 4.7 shall prevail if and to the extent that
         they are inconsistent with the other paragraphs of this Clause 4.

4.8      NOTIFICATION TO MASTER ISSUER SWAP PROVIDERS

         As soon as practicable following the notification to the Note Trustee
         and the Noteholders of an early redemption of a Series and Class of
         Notes in accordance with Condition 5 of such Notes, the Master Issuer
         Cash Manager shall notify, as soon as is reasonably practicable, the
         relevant Master Issuer Swap Providers (being the Master Issuer Swap
         Providers who have entered into swap transactions with the Master
         Issuer relating to such Notes) of such redemption.

5.       NO LIABILITY

         Save as otherwise provided in this Agreement, the Master Issuer Cash
         Manager shall have no liability for the obligations of either the
         Master Issuer Security Trustee or the Master Issuer under any of the
         Transaction Documents or otherwise and nothing in this Agreement shall
         constitute a guarantee, or similar obligation, by the Master Issuer
         Cash Manager of either Funding 2, the Master Issuer Security Trustee
         or the Master Issuer in respect of any of them.

6.       COSTS AND EXPENSES

         Subject to and in accordance with the Master Issuer Pre-Enforcement
         Revenue Priority of Payments or, as the case may be, the Master Issuer
         Post-Enforcement Priority of Payments, the Master Issuer will on each
         Quarterly Interest Payment Date reimburse the Master Issuer Cash
         Manager for all out-of-pocket costs, expenses and charges (together
         with any amounts in respect of Irrecoverable VAT due thereon) properly
         incurred by the Master Issuer Cash Manager in the performance of the
         Master Issuer Cash Management Services including any such costs,
         expenses or charges not reimbursed to the Master Issuer Cash Manager
         on any previous Quarterly Interest Payment Date and the Master Issuer
         Cash Manager shall (if applicable) supply the Master Issuer with an
         appropriate VAT invoice issued by the Master Issuer Cash Manager or,
         if the Master Issuer Cash Manager has treated the relevant cost,
         expense or charge as a disbursement for VAT purposes, by the person
         making the supply.

7.       INFORMATION

7.1      USE OF I.T. SYSTEMS

(a)      The Master Issuer Cash Manager represents and warrants that as at the
         date hereof, in respect of the software which is to be used by the
         Master Issuer Cash Manager in providing the Master Issuer
         CashManagement Services, it has in place all necessary licences or
         consents from the respective licensor or licensors (if any) of such
         software.

(b)      The Master Issuer Cash Manager undertakes that it shall, for the
         duration of this Agreement, use reasonable endeavours to:

                 (i)     ensure that the licences or consents referred to in
                         paragraph (a) are maintained in full force and effect;
                         and

                 (ii)    except in so far as it would breach any other of its
                         legal obligations, grant to any person to whom it may
                         sub-contract or delegate the performance of all or any
                         of its powers and obligations under this Agreement or
                         to such person as the Master Issuer and the Master
                         Issuer Security Trustee elect as a substitute cash
                         manager in accordance with the terms of this Agreement
                         a licence to use any proprietary software together
                         with any updates which may be made thereto from time
                         to time.

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(c)      The Master Issuer Cash Manager shall use reasonable endeavours to
         maintain in working order the information technology systems used by
         the Master Issuer Cash Manager in providing the Master Issuer Cash
         Management Services.

(d)      The Master Issuer Cash Manager shall pass to any person to whom it may
         sub-contract or delegate the performance of all or any of its powers
         and obligations under this Agreement or to such person as the Master
         Issuer and the Master Issuer Security Trustee elect as a substitute
         cash manager in accordance with the terms of this Agreement the
         benefit of any warranties in relation to the software insofar as the
         same are capable of assignment.

7.2      BANK ACCOUNT STATEMENTS

         The Master Issuer Cash Manager shall take all reasonable steps to
         ensure that it receives a monthly bank statement in relation to each
         of the Master Issuer Accounts (subject to clause 6.3 of the Master
         Issuer Bank Account Agreement) and that it furnishes a copy of such
         statements to the Master Issuer and the Master Issuer Security
         Trustee, unless otherwise agreed.

7.3      ACCESS TO BOOKS AND RECORDS

         Subject to all applicable laws, the Master Issuer Cash Manager shall
         permit the Auditors of the Master Issuer and any other person
         nominated by the Master Issuer Security Trustee (to whom the Master
         Issuer Cash Manager has no reasonable objection) at any time during
         normal office hours upon reasonable notice to have access, or procure
         that such person or persons are granted access, to all books of record
         and account relating to the Master Issuer Cash Management Services
         provided by the Master Issuer Cash Manager and related matters in
         accordance with this Agreement.

7.4      STATUTORY OBLIGATIONS

         The Master Issuer Cash Manager will use its reasonable endeavours, on
         behalf of the Master Issuer, to prepare or procure the preparation of
         and file all reports, annual returns, financial statements, statutory
         forms and other returns which the Master Issuer is required by law to
         prepare and file. Subject to approval thereof by the directors of the
         Master Issuer, the Master Issuer Cash Manager shall cause such
         accounts to be audited by the Auditors and shall procure so far as it
         is able to do so that the Auditors shall make a report thereon as
         required by law and copies of all such documents shall be delivered to
         the Master Issuer Security Trustee, the Master Issuer and the Rating
         Agencies as soon as practicable after the end of each accounting
         reference period of the Master Issuer.

7.5      INFORMATION COVENANTS

(a)      The Master Issuer Cash Manager shall provide the Master Issuer, the
         Master Issuer Security Trustee, the Seller and the Rating Agencies
         with a quarterly report substantially in the form set out in Schedule
         3, or in such other form reasonably acceptable to the recipients
         thereof, in respect of the Master Issuer. Each such quarterly report
         shall be delivered to the Master Issuer, the Master Issuer Security
         Trustee, the Seller and the Rating Agencies by the last Business Day
         of the month in which each Interest Payment Date occurs.

(b)      The Master Issuer Cash Manager shall provide, or procure the provision
         of, to the Master Issuer, the Master Issuer Security Trustee and the
         Rating Agencies copies of any annual returns or financial statements
         referred to in Clause 7.4 as soon as reasonably practicable after the
         preparation thereof upon the request of any such person.

(c)      The Master Issuer Cash Manager shall notify the Rating Agencies in
         writing of the details of:

                 (i)     any material amendment to the Master Issuer
                         Transaction Documents;

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                 (ii)    the occurrence of a Note Event of Default; and

                 (iii)   any other information relating to the Master Issuer
                         Cash Manager as the Rating Agencies may reasonably
                         request in connection with its obligations under this
                         Agreement, PROVIDED THAT such request does not
                         adversely interfere with the Master Issuer Cash
                         Manager's day-to-day provision of the Master Issuer
                         Cash Management Services under the other terms of this
                         Agreement.

(d)      The Master Issuer Cash Manager shall, at the request of the Master
         Issuer Security Trustee, furnish the Master Issuer Security Trustee
         and the Rating Agencies with such other information relating to its
         business and financial condition as it may be reasonable for the
         Master Issuer Security Trustee to request in connection with this
         Agreement PROVIDED THAT the Master Issuer Security Trustee shall not
         make such a request more than once every three months unless, in the
         belief of the Master Issuer Security Trustee, a Master Intercompany
         Loan Event of Default, Note Event of Default or Master Issuer Cash
         Manager Termination Event (as defined in Clause 11.1) shall have
         occurred and is continuing or may reasonably be expected to occur and
         PROVIDED FURTHER THAT such request does not adversely interfere with
         the Master Issuer Cash Manager's day-to-day provision of the Master
         Issuer Cash Management Services under the other terms of this
         Agreement.

8.       REMUNERATION

8.1      FEE PAYABLE

         On each Quarterly Interest Payment Date, the Master Issuer shall pay
         to the Master Issuer Cash Manager for the Master Issuer Cash
         Management Services a cash management fee (which shall be inclusive of
         VAT) in arrear calculated in relation to each Interest Period the
         basis of the number of days elapsed and a 365 day year at the rate of
         0.025 per cent. per annum, on the aggregate Principal Amount
         Outstanding of the Notes and the Subordinated Loans as at the most
         recent anniversary of the Programme Date (or as otherwise agreed in
         writing between the Master Issuer, the Master Issuer Security Trustee
         and the Master Issuer Cash Manager from time to time).

8.2      PAYMENT OF FEE

         The cash management fee referred to in Clause 8.1 shall be paid to the
         Master Issuer Cash Manager in arrear on each Quarterly Interest
         Payment Date in the manner contemplated by and in accordance with the
         provisions of the Master Issuer Pre-Enforcement Revenue Priority of
         Payments or, as the case may be, the Master Issuer Post-Enforcement
         Priority of Payments.

9.       COVENANTS OF MASTER ISSUER CASH MANAGER

9.1      COVENANTS

         The Master Issuer Cash Manager hereby covenants with and undertakes to
         each of the Master Issuer and the Master Issuer Security Trustee that
         without prejudice to any of its specific obligations under this
         Agreement:

         (a)     it will devote all due skill, care and diligence to the
                 performance of its obligations and the exercise of its
                 discretions under this Agreement;

         (b)     it will comply with any proper directions, orders and
                 instructions which the Master Issuer or the Master Issuer
                 Security Trustee may from time to time give to it in
                 accordance with the provisions of this Agreement and, in the
                 event of any conflict, those of the Master Issuer Security
                 Trustee shall prevail;

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<PAGE>

         (c)     it will use its reasonable endeavours to keep in force all
                 licences, approvals, authorisations and consents which may be
                 necessary in connection with the performance of the Master
                 Issuer Cash Management Services and prepare and submit all
                 necessary applications and requests for any further approval,
                 authorisation, consent or licence required in connection with
                 the performance of the Master Issuer Cash Management Services;

         (d)     save as otherwise agreed with the Master Issuer and the Master
                 Issuer Security Trustee, it will provide free of charge to the
                 Master Issuer during normal office hours office space,
                 facilities, equipment and staff sufficient to fulfil the
                 obligations of the Master Issuer under this Agreement;

         (e)     it will not knowingly fail to comply with any legal
                 requirements in the performance of the Master Issuer Cash
                 Management Services;

         (f)     it will make all payments required to be made by it pursuant
                 to this Agreement on the due date for payment thereof for
                 value on such day without set-off (including, without
                 limitation, in respect of any fees owed to it) or
                 counterclaim; and

         (g)     it will not, without the prior written consent of the Master
                 Issuer Security Trustee, amend or terminate any of the Master
                 Issuer Transaction Documents save in accordance with their
                 terms.

9.2      DURATION OF COVENANTS

         The covenants of the Master Issuer Cash Manager in Clause 9.1 shall
         remain in force until this Agreement is terminated but without
         prejudice to any right or remedy of the Master Issuer or the Master
         Issuer Security Trustee arising from breach of any such covenant prior
         to the date of termination of this Agreement.

10.      NON-EXCLUSIVITY

         Nothing in this Agreement shall prevent the Master Issuer Cash Manager
         from rendering or performing services similar to those provided for in
         this Agreement to or for itself or other persons, firms or companies
         or from carrying on business similar to or in competition with the
         business of the Master Issuer or the Master Issuer Security Trustee.

11.      TERMINATION

11.1     MASTER ISSUER CASH MANAGER TERMINATION EVENTS

         If any of the following events (MASTER ISSUER CASH MANAGER TERMINATION
         EVENTS) shall occur:

         (a)     default is made by the Master Issuer Cash Manager in the
                 payment on the due date of any payment due and payable by it
                 under this Agreement and such default continues unremedied for
                 a period of three London Business Days after the earlier of
                 the Master Issuer Cash Manager becoming aware of such default
                 and receipt by the Master Issuer Cash Manager of written
                 notice from the Master Issuer or the Master Issuer Security
                 Trustee, as the case may be, requiring the same to be
                 remedied; or

         (b)     default is made by the Master Issuer Cash Manager in the
                 performance or observance of any of its other covenants and
                 obligations under this Agreement, which in the reasonable
                 opinion of the Master Issuer Security Trustee is materially
                 prejudicial to the interests of the Master Issuer Secured
                 Creditors and such default continues unremedied for a period
                 of twenty London Business Days after the earlier of the Master
                 Issuer Cash Manager becoming aware

                                      12

<PAGE>

                 of such default and receipt by the Master Issuer Cash Manager
                 of written notice from the Master Issuer Security Trustee
                 requiring the same to be remedied; or

         (c)     while the Master Issuer Cash Manager is the Seller, an
                 Insolvency Event occurs with respect to the Master Issuer Cash
                 Manager,

         then the Master Issuer Security Trustee may at once or at any time
         thereafter while such default continues by giving notice in writing to
         the Master Issuer Cash Manager terminate its appointment as Master
         Issuer Cash Manager under this Agreement with effect from a date (not
         earlier than the date of the notice) specified in the notice.

11.2     RESIGNATION OF MASTER ISSUER CASH MANAGER

         The appointment of the Master Issuer Cash Manager under this Agreement
         may be terminated upon the expiry of not less than 12 months' written
         notice of termination given by the Master Issuer Cash Manager to the
         Master Issuer and the Master Issuer Security Trustee PROVIDED THAT:

         (a)     the Master Issuer and the Master Issuer Security Trustee
                 consent in writing to such termination;

         (b)     a substitute cash manager shall be appointed, such appointment
                 to be effective not later than the date of such termination;

         (c)     such substitute cash manager has cash management experience
                 and is approved by the Master Issuer and the Master Issuer
                 Security Trustee;

         (d)     such substitute cash manager enters into an agreement
                 substantially on the same terms as this Agreement or on such
                 terms as are satisfactory to the Master Issuer and the Master
                 Issuer Security Trustee and the Master Issuer Cash Manager
                 shall not be released from its obligations under this
                 Agreement until such substitute cash manager has entered into
                 such new agreement and the rights of the Master Issuer under
                 such agreement are charged in favour of the Master Issuer
                 Security Trustee on terms satisfactory to the Master Issuer
                 Security Trustee; and

         (e)     the then current ratings (if any) of the Notes are not
                 adversely affected as a result thereof (unless otherwise
                 agreed by an Extraordinary Resolution of each Class of the
                 Noteholders).

11.3     EFFECT OF TERMINATION

(a)      On and after termination of the appointment of the Master Issuer Cash
         Manager under this Agreement pursuant to this Clause 11, all authority
         and power of the Master Issuer Cash Manager under this Agreement shall
         be terminated and be of no further effect and the Master Issuer Cash
         Manager shall not thereafter hold itself out in any way as the agent
         of the Master Issuer or the Master Issuer Security Trustee pursuant to
         this Agreement.

(b)      Upon termination of the appointment of the Master Issuer Cash Manager
         under this Agreement pursuant to this Clause 11, the Master Issuer
         Cash Manager shall:

                 (i)     forthwith deliver (and in the meantime hold on trust
                         for, and to the order of, the Master Issuer or the
                         Master Issuer Security Trustee, as the case may be) to
                         the Master Issuer or the Master Issuer Security
                         Trustee, as the case may be or as it shall direct in
                         writing, all books of account, papers, records,
                         registers, correspondence and documents in its
                         possession or under its control relating to the
                         affairs of or belongings of the Master Issuer or the
                         Master Issuer Security Trustee, as the case

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<PAGE>

                         may be, (if practicable, on the date of receipt) any
                         monies then held by the Master Issuer Cash Manager on
                         behalf of the Master Issuer or the Master Issuer
                         Security Trustee and any other assets of the Master
                         Issuer and the Master Issuer Security Trustee;

                 (ii)    take such further action as the Master Issuer or the
                         Master Issuer Security Trustee, as the case may be,
                         may reasonably direct at the expense of the Master
                         Issuer or the Master Issuer Security Trustee, as the
                         case may be (including in relation to the appointment
                         of a substitute cash manager), provided that the
                         Master Issuer Security Trustee shall not be required
                         to take or direct to be taken such further action
                         unless it has been indemnified or secured to its
                         satisfaction;

                 (iii)   provide all relevant information contained on computer
                         records in the form of magnetic tape, together with
                         details of the layout of the files encoded on such
                         magnetic tapes; and

                 (iv)    co-operate and consult with and assist the Master
                         Issuer or the Master Issuer Security Trustee or its
                         nominee, as the case may be (which shall, for the
                         avoidance of doubt, include any Receiver appointed by
                         it) for the purposes of explaining the file layouts
                         and the format of the magnetic tapes generally
                         containing such computer records on the computer
                         system of the Master Issuer or the Master Issuer
                         Security Trustee or such nominee, as the case may be.

11.4     NOTICE OF EVENT OF DEFAULT

         The Master Issuer Cash Manager shall deliver to the Master Issuer and
         the Master Issuer Security Trustee as soon as reasonably practicable
         but in any event within three London Business Days of becoming aware
         thereof a notice of any Master Issuer Cash Manager Termination Event
         or any Note Event of Default or any event which with the giving of
         notice or expiry of any grace period or certification, as specified in
         such Master Issuer Cash Manager Termination Event or Note Event of
         Default, would constitute the same.

11.5     GENERAL PROVISIONS RELATING TO TERMINATION

(a)      Termination of the appointment of the Master Issuer Cash Manager under
         this Agreement shall be without prejudice to the liabilities of the
         Master Issuer and the Master Issuer Security Trustee to the Master
         Issuer Cash Manager or vice versa incurred before the date of such
         termination. The Master Issuer Cash Manager shall have no right of
         set-off or any lien in respect of such amounts against amounts held by
         it on behalf of the Master Issuer or the Master Issuer Security
         Trustee.

(b)      This Agreement shall terminate at such time as the Master Issuer
         Secured Liabilities have been fully discharged.

(c)      On termination of the appointment of the Master Issuer Cash Manager
         under the provisions of this Clause 11, the Master Issuer Cash Manager
         shall be entitled to receive all fees and other moneys accrued up to
         (but excluding) the date of termination but shall not be entitled to
         any other or further compensation. The Master Issuer shall pay such
         moneys so receivable by the Master Issuer Cash Manager in accordance
         with the Master Issuer Pre-Enforcement Revenue Priority of Payments
         or, as the case may be, the Master Issuer Post-Enforcement Priority of
         Payments, on the dates on which they would otherwise have fallen due
         hereunder. Such termination shall not affect the Master Issuer Cash
         Manager's rights to receive payment of all amounts (if any) due to it
         from the Master Issuer other than under this Agreement.

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<PAGE>

(d)      Any provision of this Agreement which is stated to continue after
         termination of this Agreement shall remain in full force and effect
         notwithstanding termination.

12.      FURTHER ASSURANCE

12.1     CO-OPERATION, ETC.

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

12.2     POWERS OF ATTORNEY

         Without prejudice to the generality of Clause 12.1, the Master Issuer
         and the Master Issuer Security Trustee shall upon request by the
         Master Issuer Cash Manager forthwith give to the Master Issuer Cash
         Manager such further powers of attorney or other written
         authorisations, mandates or instruments as are necessary to enable the
         Master Issuer Cash Manager to perform the Master Issuer Cash
         Management Services.

12.3     CHANGE OF MASTER ISSUER SECURITY TRUSTEE

         In the event that there is any change in the identity of the Master
         Issuer Security Trustee or an additional Master Issuer Security
         Trustee is appointed in accordance with the Master Issuer Deed of
         Charge, the existing Master Issuer Security Trustee, the new Master
         Issuer Security Trustee or the retiring Master Issuer Security
         Trustee, as the case may be, the Master Issuer Cash Manager and the
         Master Issuer shall execute such documents and take such actions as
         such of the existing Master Issuer Security Trustee, the new Master
         Issuer Security Trustee and/or the retiring Master Issuer Security
         Trustee, as applicable shall agree are reasonably necessary for the
         purpose of vesting in such new Master Issuer Security Trustee the
         rights and benefits of the Master Issuer Security Trustee under this
         Agreement and under the Master Issuer Deed of Charge and, if relevant,
         releasing the retiring Master Issuer Security Trustee from its future
         obligations hereunder or thereunder.

12.4     NO OBLIGATION ON MASTER ISSUER SECURITY TRUSTEE

         Nothing contained in this Agreement shall impose any obligation or
         liability on the Master Issuer Security Trustee to assume or perform
         any of the obligations of the Master Issuer or the Master Issuer Cash
         Manager under this Agreement or render it liable for any breach
         thereof.

13.      NEW NOTES

         On each occasion that the Master Issuer issues a new Series and Class
         of Notes, the Master Issuer Cash Manager, the Master Issuer and the
         Master Issuer Security Trustee shall execute such documents and take
         such action as may be necessary or required by the Rating Agencies for
         the purpose of including any Master Issuer Swap Provider and any other
         person who is required to execute an Accession Undertaking or any
         other Master Issuer Transaction Document relating to such new Series
         and Class of Notes to the Master Issuer Deed of Charge.

14.      MISCELLANEOUS

14.1     NO SET-OFF

         The Master Issuer Cash Manager agrees that it will not:

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<PAGE>

         (a)     set-off or purport to set-off any amount which either the
                 Master Issuer is or will become obliged to pay to it under
                 this Agreement against any amount from time to time standing
                 to the credit of or to be credited to any Master Issuer
                 Account; or

         (b)     make or exercise any claims or demands, any rights of
                 counterclaim or any other equities against or withhold payment
                 of any and all sums of money which may at any time and from
                 time to time be standing to the credit of any Master Issuer
                 Account.

14.2     NO PETITION AND LIMITED RECOURSE

         Clauses 5.3 and 5.4 of the Master Issuer Deed of Charge shall also
         apply to this Agreement as if expressly incorporated herein.

15.      CONFIDENTIALITY

         During the continuance of this Agreement or after its termination,
         each of the Master Issuer, the Master Issuer Cash Manager and the
         Master Issuer Security Trustee shall use its best endeavours not to
         disclose to any person, firm or company any information relating to
         the business, finances or other matters of a confidential nature of
         any other party to this agreement of which it may exclusively by
         virtue of being party to the Transaction Documents have become
         possessed and shall use all reasonable endeavours to prevent any such
         disclosure as aforesaid, PROVIDED HOWEVER THAT the provisions of this
         Clause 15 shall not apply:

         (a)     to any information already known to the recipient otherwise
                 than as a result of entering into any of the Transaction
                 Documents;

         (b)     to any information subsequently received by the recipient
                 which it would otherwise be free to disclose;

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

         (d)     to any extent that the recipient is required to disclose the
                 same pursuant to any law or order of any court of competent
                 jurisdiction or pursuant to any direction, request or
                 requirement (whether or not having the force of law) of any
                 central bank or any governmental or other authority
                 (including, without limitation, any official bank examiners or
                 regulators);

         (e)     to the extent that the recipient needs to disclose the same
                 for determining the existence of, or declaring, a Note Event
                 of Default, or a Master Issuer Cash Manager Termination Event,
                 the protection or enforcement of any of its rights under any
                 of the Transaction Documents or in connection therewith or for
                 the purpose of discharging, in such manner as it thinks fit,
                 its duties under or in connection with such agreements in each
                 case to such persons as require to be informed of such
                 information for such purposes; or

         (f)     in relation to any information disclosed to the professional
                 advisers of the recipient or (in connection with a prospective
                 rating of any debt to be issued by the Master Issuer) to any
                 Rating Agency or any prospective new cash manager or Master
                 Issuer Security Trustee.

16.      NOTICES

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

                                      16

<PAGE>

         delivered thereafter or on a day which is not a Business Day or (in
         the case of first class post) when it would be received in the
         ordinary course of the post and shall be sent:

         (a)     in the case of the Master Issuer Cash Manager: to Bank of
                 Scotland plc, Halifax Division, Level 3, Lovell Park, 1 Lovell
                 Park Road, Leeds LS1 1NS (facsimile number +44 (0)113 235
                 7511) for the attention of the Head of Mortgage Securitisation
                 with a copy to Bank of Scotland plc, Treasury Division, 33 Old
                 Broad Street, London EC2N 1HZ (facsimile no. +44 (0) 20 7574
                 8303) for the attention of Head of Mortgage Securitisation and
                 Covered Bonds;

         (b)     in the case of the Master Issuer: to Permanent Master Issuer
                 PLC, 35 Great St. Helen's, London EC3A 6AP (facsimile number
                 +44 (0) 20 7398 6325) for the attention of the Directors with
                 a copy to Bank of Scotland plc, Halifax Division, Trinity Road
                 (LP/3/3/SEC), Halifax, West Yorkshire HX1 2RG (facsimile
                 number +44 (0)113 235 7511) for the attention of the Head of
                 Mortgage Securitisation; and

         (c)     in the case of the Master Issuer Security Trustee: to The Bank
                 of New York, One Canada Square, London E14 5AL (facsimile
                 number +44 (0) 20 7964 2533) for the attention of Corporate
                 Trust Administration - ABS/MBS,

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

17.      VARIATION AND WAIVER

         No variation or waiver of this Agreement shall be effective unless it
         is in writing and signed by (or by some person duly authorised by)
         each of the parties. No single or partial exercise of, or failure or
         delay in exercising, any right under this Agreement shall constitute a
         waiver or preclude any other or further exercise of that or any other
         right.

18.      NO PARTNERSHIP

         It is hereby acknowledged and agreed by the parties that nothing in
         this Agreement shall be construed as giving rise to any partnership
         between any of the parties.

19.      ASSIGNMENT

19.1     ASSIGNMENT BY THE MASTER ISSUER

         The Master Issuer may not assign or transfer any of its rights and
         obligations under this Agreement without the prior written consent of
         each of the Master Issuer Security Trustee and the Master Issuer Cash
         Manager, except that the Master Issuer may assign its rights hereunder
         without such consent pursuant to the Master Issuer Deed of Charge.

19.2     NO ASSIGNMENT BY MASTER ISSUER CASH MANAGER

         The Master Issuer Cash Manager may not assign or transfer any of its
         rights and obligations under this Agreement without the prior written
         consent of the Master Issuer and the Master Issuer Security Trustee,
         such consent not to be unreasonably withheld or delayed.

                                      17

<PAGE>

20.      EXCLUSION OF THIRD PARTY RIGHTS

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

21.      COUNTERPARTS

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

22.      GOVERNING LAW

         This Agreement is governed by, and shall be construed in accordance
         with, the laws of England and Wales.

23.      SUBMISSION TO JURISDICTION

         Each party to this Agreement hereby irrevocably submits to the
         exclusive jurisdiction of the English courts in any action or
         proceeding arising out of or relating to this Agreement, and hereby
         irrevocably agrees that all claims in respect of such action or
         proceeding may be heard and determined by such courts. Each party to
         this Agreement hereby irrevocably waives, to the fullest extent it may
         possibly do so, any defence or claim that the English courts are an
         inconvenient forum for the maintenance or hearing of such action or
         proceeding.

IN WITNESS whereof the parties have caused this Agreement to be executed and
delivered as a deed the day and year first before written.

                                      18

<PAGE>

                                  SCHEDULE 1

                    MASTER ISSUER CASH MANAGEMENT SERVICES

The Master Issuer Cash Manager shall:

(a)      operate the Master Issuer Accounts and ensure that payments are made
         into and from such accounts in accordance with this Agreement, the
         Master Issuer Deed of Charge, the Master Issuer Bank Account Agreement
         and any other relevant Master Issuer Transaction Document, PROVIDED
         HOWEVER THAT nothing herein shall require the Master Issuer Cash
         Manager to make funds available to the Master Issuer to enable such
         payments to be made other than as expressly required by the provisions
         of this Agreement;

(b)      keep records for all taxation purposes (including, without limitation,
         those relating to VAT);

(c)      subject to any applicable law, assist the Auditors of the Master
         Issuer and provide such information to them as they may reasonably
         request for the purpose of carrying out their duties as auditors of
         the Master Issuer;

(d)      make all filings, give all notices and make all registrations and
         other notifications required in the day-to-day operation of the
         business of the Master Issuer or required to be given by the Master
         Issuer pursuant to the Master Issuer Transaction Documents;

(e)      arrange for all payments due to be made by the Master Issuer under any
         of the Master Issuer Transaction Documents, PROVIDED THAT such moneys
         are at the relevant time available to the Master Issuer and PROVIDED
         FURTHER THAT nothing herein shall constitute a guarantee by the Master
         Issuer Cash Manager of all or any of the obligations of the Master
         Issuer under any of the Master Issuer Transaction Documents;

(f)      without prejudice to the role of and in conjunction with the Master
         Issuer Corporate Services Provider under the Master Issuer Corporate
         Services Agreement, keep general books of account and records of the
         Master Issuer; provide accounting services, including reviewing
         receipts and payments, supervising and assisting in the preparation of
         interim statements and final accounts and supervising and assisting in
         the preparation of tax returns;

(g)      without prejudice to the role of and in conjunction with the Master
         Issuer Corporate Services Provider under the Master Issuer Corporate
         Services Agreement, provide or procure the provision of company
         secretarial and administration services to the Master Issuer including
         the keeping of all registers and the making of all returns and filings
         required by applicable law or by US or UK regulatory authorities,
         co-operate in the convening of board and general meetings and provide
         registered office facilities;

(h)      on behalf of the Master Issuer, PROVIDED THAT monies are at the
         relevant time available to the Master Issuer, pay all out-of-pocket
         expenses of the Master Issuer, incurred by the Master Issuer Cash
         Manager on behalf of the Master Issuer in the performance of the
         Master Issuer Cash Manager's duties hereunder including without
         limitation:

         (i)     all Taxes which may be due or payable by the Master Issuer;

         (ii)    all necessary filing and other fees in compliance with
                 regulatory requirements;

         (iii)   all legal and audit fees and other professional advisory fees;
                 and

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         (iv)    all communication expenses including postage, courier and
                 telephone charges;

(i)      with the prior written consent of the Master Issuer Security Trustee,
         invest monies standing from time to time to the credit of a Master
         Issuer Account in Authorised Investments, subject to the following
         provisions:

         (i)     any such Authorised Investment shall be made in the joint
                 names of the Master Issuer and the Master Issuer Security
                 Trustee;

         (ii)    any costs properly and reasonably incurred in making and
                 changing Authorised Investments will be reimbursed to the
                 Master Issuer Cash Manager and the Master Issuer Security
                 Trustee by the Master Issuer; and

         (iii)   all income and other distributions arising on, or proceeds
                 following the disposal or maturity of, Authorised Investments
                 shall be credited to the relevant Master Issuer Account.

         The Master Issuer Security Trustee and the Master Issuer Cash Manager
         shall not be responsible (save where any loss results from the Master
         Issuer Security Trustee's or the Master Issuer Cash Manager's, as the
         case may be, own fraud, wilful default or negligence or that of their
         respective officers or employees) for any loss occasioned by reason of
         any such Authorised Investments whether by depreciation in value or
         otherwise provided that such Authorised Investments were made in
         accordance with the above provisions;

(j)      (i)     if necessary, perform all currency conversions free of charge,
                 cost or expense at the relevant exchange rate; and

         (ii)    for the purposes of any calculations referred to in
                 sub-paragraph (i) above, any currency amounts used in or
                 resulting from such calculations will be rounded in accordance
                 with the relevant market practice;

(k)      make all returns and filings required to be made by the Master Issuer
         and provide or procure the provision of company secretarial and
         administration services to the Master Issuer;

(l)      arrange payment of all fees to the London Stock Exchange plc or, as
         applicable, the UK Listing Authority of the Financial Services
         Authority;

(m)      provide services in relation to Swap Collateral (including, without
         limitation, (i) in connection with the transfer, receipt,
         administration or holding of Swap Collateral, (ii) the making of
         calculations, determinations, communications or valuations (iii) the
         opening and maintenance of the Master Issuer Swap Collateral Accounts
         and the Master Issuer Swap Collateral Ledger and (iv) the entering
         into of Master Issuer Swap Collateral Ancillary Documents); and

(n)      provide the Master Issuer, Funding 2, the Master Issuer Security
         Trustee and the Rating Agencies with quarterly reports in relation to
         the Master Issuer.

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                                  SCHEDULE 2

                  CASH MANAGEMENT AND MAINTENANCE OF LEDGERS

1.       DETERMINATION

1.1      On each Note Determination Date, the Master Issuer Cash Manager shall
         determine each of the following in accordance with this paragraph 1:

         (a)     the amount of any Master Issuer Principal Receipts and Master
                 Issuer Revenue Receipts available as at the following
                 Quarterly Interest Payment Date; and

         (b)     the Principal Amount Outstanding of the Notes, the Pool
                 Factor, and the Note Principal Payment of the Notes in
                 accordance with the Conditions.

1.2      The Master Issuer Cash Manager shall determine and notify the Master
         Issuer, the Note Trustee, the Registrar and the Paying Agents on or
         prior to 11.00 a.m. (London time) on the last day of each Interest
         Period of any Additional Amount payable in respect of such Interest
         Period.

1.3      (a)     The Master Issuer Cash Manager may make all the determinations
                 referred to in paragraph 1.1 and paragraph 1.2 on the basis of
                 any reasonable and proper assumptions as the Master Issuer
                 Cash Manager considers appropriate (including, without
                 limitation, as to the amount of any payments to be made under
                 paragraph 3 below during the period from and including the
                 Note Determination Date to but excluding the next Quarterly
                 Interest Payment Date).

         (b)     The Master Issuer Cash Manager shall on request notify the
                 Master Issuer and the Master Issuer Security Trustee in
                 writing of any such other assumptions and shall take account
                 of any representations made by the Master Issuer and the
                 Master Issuer Security Trustee (as the case may be) in
                 relation thereto.

1.4      Each determination made in accordance with this paragraph 1 shall (in
         the absence of fraud, wilful default, negligence or manifest error) be
         final and binding on all persons.

2.       NOTIFICATION OF DETERMINATIONS

2.1      The Master Issuer Cash Manager will cause each determination of Master
         Issuer Available Funds to be notified forthwith to the Master Issuer.

2.2      The Master Issuer Cash Manager shall procure that the determinations
         and notifications required to be made pursuant to Condition 5.3 are
         made.

2.3      The Master Issuer Cash Manager will promptly notify the Master Issuer
         and each Calculation Agent (as defined in each of the Funding 2 Swap
         Agreement and each relevant Master Issuer Swap Agreement) of the
         relevant Note Principal Payment determined in accordance with
         paragraph 1.1(b) above.

3.       PRIORITY OF PAYMENTS FOR MASTER ISSUER REVENUE RECEIPTS

         Except for amounts due to third parties by the Master Issuer under
         item (b) below, amounts due to the Master Issuer Account Bank under
         item (c) below or amounts payable to any replacement swap provider
         using any termination payment received by the Master Issuer in respect
         of the corresponding Master Issuer Swap Agreement or amounts payable
         to a Master Issuer Swap Provider

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         (other than amounts pursuant to (i) below) using any premium recovered
         from any replacement swap provider, which will be paid when due, on
         each Quarterly Interest Payment Date, prior to the service of a note
         acceleration notice on the Master Issuer or until such time as there
         are no Master Issuer Secured Liabilities outstanding, the Master
         Issuer Cash Manager will apply Master Issuer Revenue Receipts in the
         following priority (in each case only if and to the extent that
         provisions of a higher priority have been made in full and to the
         extent that such withdrawal does not cause the Master Issuer
         Transaction Account to become overdrawn (the MASTER ISSUER
         PRE-ENFORCEMENT REVENUE PRIORITY OF PAYMENTS):

         (a)     firstly, without priority among them, but in proportion to the
                 respective amounts due, to pay amounts due to:

                 (i)     the Master Issuer Security Trustee, together with
                         interest and any amount in respect of VAT on those
                         amounts, and to provide for any amounts due or to
                         become due during the following interest period to the
                         Master Issuer Security Trustee under the Master Issuer
                         Deed of Charge;

                 (ii)    the Note Trustee, together with interest and any
                         amount in respect of VAT on those amounts, and to
                         provide for any amounts due or to become due during
                         the following interest period to the Note Trustee
                         under the Master Issuer Trust Deed; and

                 (iii)   the Agent Bank, the Paying Agents, the Registrar and
                         the Transfer Agent, together with interest and any
                         amount in respect of VAT on those amounts, and any
                         costs, charges, liabilities and expenses then due or
                         to become due during the following interest period to
                         the Agent Bank, the Registrar, the Transfer Agent and
                         the Paying Agents under the Master Issuer Paying Agent
                         and Agent Bank Agreement;

         (b)     secondly, to pay amounts due to any third party creditors of
                 the Master Issuer (other than those referred to later in this
                 priority of payments), which amounts have been incurred
                 without breach by the Master Issuer 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 of those
                 amounts expected to become due and payable during the
                 following interest period by the Master Issuer and to pay or
                 discharge any liability of the Master Issuer for corporation
                 tax on any chargeable income or gain of the Master Issuer;

         (c)     thirdly, without priority among them, but in proportion to the
                 respective amounts due, to pay amounts due to:

                 (i)     the Master Issuer Cash Manager, together with any
                         amount in respect of VAT on those amounts, and to
                         provide for any amounts due, or to become due to the
                         Master Issuer Cash Manager in the immediately
                         succeeding interest period, under the Master Issuer
                         Cash Management Agreement;

                 (ii)    the Master Issuer Corporate Services Provider,
                         together with VAT on those amounts, and to provide for
                         any amounts due, or to become due to the Master Issuer
                         Corporate Service Provider in the immediately
                         succeeding interest period under the Master Issuer
                         Corporate Services Agreement; and

                 (iii)   the Master Issuer Account Bank, together with VAT on
                         those amounts, and to provide for any amounts due, or
                         to become due to the Master Issuer Account Bank in the
                         immediately succeeding interest period under the
                         Master Issuer Bank Account Agreement;

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<PAGE>

         (d)     fourthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each AAA Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class A Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class A Notes on such
                         Interest Payment Date;

         (e)     fifthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each AA Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class B Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class B Notes on such
                         Interest Payment Date;

         (f)     sixthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each A Loan Tranche
                 (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class M Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class M Notes on such
                         Interest Payment Date;

         (g)     seventhly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each BBB Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class C Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

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<PAGE>

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class C Notes on such
                         Interest Payment Date;

         (h)     eighthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each BB Loan
                 Tranche (and, in respect of (ii) below, the amounts (if any),
                 excluding principal, received from the Master Issuer Swap
                 Provider(s) under the Master Issuer Swap Agreement(s) in
                 respect of the related Series and Class of Notes):

                 (i)     to pay the amounts due and payable to the relevant
                         Master Issuer Swap Provider(s) (if any) in respect of
                         the related Series and Class of Class D Notes
                         (including any termination payment but excluding any
                         Master Issuer Swap Excluded Termination Amount) in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreement; and

                 (ii)    to pay interest due and payable (if any) on the
                         related Series and Class of Class D Notes on such
                         Interest Payment Date;

         (i)     ninthly, from amounts (excluding principal) received by the
                 Master Issuer from Funding 2 in respect of each Subordinated
                 Loan Tranche to pay interest due and payable (if any) on the
                 related Master Issuer Subordinated Loan on such quarterly
                 Interest Payment Date;

         (j)     tenthly, without priority among them but in proportion to the
                 respective amounts due, to pay any Master Issuer Swap Excluded
                 Termination Payment due to a Master Issuer Swap Provider;

         (k)     eleventhly, from amounts received by the Master Issuer from
                 Funding 2 in respect of each Start-Up Loan Tranche, to pay all
                 amounts due and payable (if any) on the related Master Issuer
                 Start-Up Loan on such Quarterly Interest Payment Date; and

         (l)     twelfthly, the balance (if any) to the Master Issuer.

4.       PRIORITY OF PAYMENTS FOR MASTER ISSUER PRINCIPAL RECEIPTS

         Subject to Condition 5 of the Notes, until enforcement of the Master
         Issuer Security pursuant to the Master Issuer Deed of Charge or until
         such time as there are no Notes or Master Issuer Subordinated Loans
         outstanding, Master Issuer Principal Receipts will be applied as
         follows:

         (a)     the Class A Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each AAA Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class A Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class A Notes;

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<PAGE>

         (b)     the Class B Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each AA Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class B Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class B Notes;

         (c)     the Class M Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each A Loan Tranche
                 (and in respect of (ii) below, the principal amounts received
                 (if any) from the Master Issuer Swap Providers under the
                 relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class M Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class M Notes;

         (d)     the Class C Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each BBB Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class C Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class C Notes;

         (e)     the Class D Notes: from principal amounts received by the
                 Master Issuer from Funding 2 in respect of each BB Loan
                 Tranche (and in respect of (ii) below, the principal amounts
                 received (if any) from the Master Issuer Swap Providers under
                 the relevant Master Issuer Swap Agreements in respect of the
                 related Series and Class of Notes):

                 (i)     to pay amounts due and payable (in respect of
                         principal) on such Interest Payment Date to the
                         relevant Master Issuer Swap Providers in respect of
                         the related Series and Class of Class D Notes in
                         accordance with the terms of the relevant Master
                         Issuer Swap Agreements; and

                 (ii)    to pay amounts due and payable in respect of principal
                         (if any) on such Interest Payment Date on the related
                         Series and Class of Class D Notes; and

         (f)     the Master Issuer Subordinated Loans: from principal amounts
                 received by the Master Issuer from Funding 2 in respect of
                 each Subordinated Loan Tranche to pay amounts due and

                                      25

<PAGE>

                 payable in respect of principal (if any) on such quarterly
                 Interest Payment Date on the related Master Issuer
                 Subordinated Loan;

         The amounts standing to the credit of any sub-ledger of the Master
         Issuer Principal Ledger (in respect of a Series and Class of Notes or,
         as applicable, Master Issuer Subordinated Loans) may only be applied
         by the Master Issuer Cash Manager to pay the principal amounts due (if
         any) in respect of such Series and Class of Notes or, as applicable,
         Master Issuer Subordinated Loan under the above Master Issuer
         Pre-Enforcement Principal Priority of Payments.

5.       USE OF LEDGERS

         The Master Issuer Cash Manager shall forthwith record monies received
         or payments made by it on behalf of the Master Issuer in the ledgers
         in the manner set out in this Agreement. If, at any time, the Master
         Issuer Cash Manager is in any doubt as to which ledger a particular
         amount should be credited or debited, it shall consult with the Master
         Issuer Security Trustee thereon.

         A debit item shall only be made in respect of any of the Master Issuer
         Ledgers, and the corresponding payment or transfer (if any) may only
         be made from the Master Issuer Accounts, to the extent that such entry
         does not cause the relevant ledger to have a debit balance.

6.       MASTER ISSUER REVENUE LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     the following amounts shall be credited to the Master Issuer
                 Revenue Ledger:

                 (i)     all interest and any other amount (not including
                         principal and fees), if any, paid by Funding 2 to the
                         Master Issuer under the terms of the Master
                         Intercompany Loan Agreement;

                 (ii)    all principal, if any, repaid by Funding 2 to the
                         Master Issuer with respect to any Start-up Loan
                         Tranche under the terms of the Master Intercompany
                         Loan Agreement;

                 (iii)   all interest received by the Master Issuer in respect
                         of the Master Issuer Accounts;

                 (iv)    all amounts received by the Master Issuer representing
                         income on any Issuer Authorised Investments;

                 (v)     all revenue amounts (including any early termination
                         payment which is to be used to acquire, if necessary,
                         a new currency or interest rate swap) received by the
                         Master Issuer under the Master Issuer Swap Agreements;

         (b)     any payment or provision made under paragraph 3 of this
                 Schedule 2 shall be debited to the Master Issuer Revenue
                 Ledger and the applicable sub-ledger; and

         (c)     the amounts received from Funding 2 in respect of interest due
                 on a Rated Loan Tranche shall be credited to a sub-ledger (in
                 respect of the Series and Class of Notes that funded such
                 Rated Loan Tranche) to the Master Issuer Revenue Ledger and
                 payments of interest in respect of such Series and Class of
                 Notes by the Master Issuer shall be debited to such
                 sub-ledger.

         (d)     the amounts received from Funding 2 in respect of interest due
                 on a Subordinated Loan Tranche shall be credited to a
                 sub-ledger (in respect of the Master Issuer Subordinated Loan

                                      26

<PAGE>

                 that funded such Subordinated Loan Tranche) to the Master
                 Issuer Revenue Ledger and payments of interest in respect of
                 such Master Issuer Subordinated Loan by the Master Issuer
                 shall be debited to such sub-ledger;

         (e)     the amounts received from Funding 2 in respect of interest due
                 on a Start-Up Loan Tranche shall be credited to a sub-ledger
                 (in respect of the Master Issuer Start-Up Loan that funded
                 such Start-Up Loan Tranche) to the Master Issuer Revenue
                 Ledger and payments of interest in respect of such Master
                 Issuer Start-Up Loan by the Master Issuer shall be debited to
                 such sub-ledger; and

         (f)     the amounts received from Funding 2 in respect of principal
                 due on a Start-Up Loan Tranche shall be credited to a
                 sub-ledger (in respect of the Master Issuer Start-Up Loan that
                 funded such Start-Up Loan Tranche) to the Master Issuer
                 Revenue Ledger and repayments of principal in respect of such
                 Master Issuer Start-Up Loan by the Master Issuer shall be
                 debited to such sub-ledger.

7.       MASTER ISSUER PRINCIPAL LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     all principal paid by Funding 2 to the Master Issuer under the
                 terms of the Master Intercompany Loan Agreement (except in
                 respect of any Start-Up Loan Tranche) shall be credited to the
                 Master Issuer Principal Ledger;

         (b)     any payment or provision made under paragraph 4 of Schedule 2
                 of the Master Issuer Deed of Charge shall be debited to the
                 Master Issuer Principal Ledger; and

         (c)     the amounts of principal received from Funding 2 in respect of
                 a Rated Loan Tranche shall be credited to a sub-ledger to the
                 Master Issuer Principal Ledger in respect of the Series and
                 Class of Notes which funded such Rated Loan Tranche and
                 repayments of principal in respect of such Series and Class of
                 Notes by the Master Issuer or on its behalf shall be debited
                 to such sub-ledger; and

         (d)     the amounts of principal received from Funding 2 in respect of
                 a Subordinated Loan Tranche shall be credited to a sub-ledger
                 to the Master Issuer Principal Ledger in respect of the Master
                 Issuer Subordinated Loan which funded such Subordinated Loan
                 Tranche and repayments of principal in respect of such Master
                 Issuer Subordinated Loan by the Master Issuer or on its behalf
                 shall be debited to such sub-ledger.

         The Master Issuer Cash Manager shall ensure that, prior to the
         enforcement of the Master Issuer Security, on each Quarterly Interest
         Payment Date, the amounts standing to the credit of any sub-ledger of
         the Master Issuer Principal Ledger (in respect of a Series and Class
         of Notes or Master Issuer Subordinated Loan, as the case may be) may
         only be applied by the Master Issuer Cash Manager to pay the principal
         amounts due (if any) in respect of such Series and Class of Notes or,
         such Master Issuer Subordinated Loan, as the case may be, under the
         Master Issuer Pre-Enforcement Principal Priority of Payments.

8.       MASTER ISSUER START-UP LOANS

         Prior to the service of a Note Acceleration Notice on the Master
         Issuer, on each Quarterly Interest Payment Date, the amounts standing
         to the credit of any sub-ledger of the Master Issuer Revenue Ledger in
         respect of amounts (excluding principal) of a Master Issuer Start-Up
         Loan may only be applied by the Master Issuer Cash Manager to pay
         interest, capitalised interest and other amounts due (except for
         principal) in respect of such Master Issuer Start-Up Loan and the
         amounts standing

                                      27

<PAGE>

         to the credit of any sub-ledger of the Master Issuer Revenue Ledger in
         respect of principal of a Master Issuer Start-Up Loan may only be
         applied by the Master Issuer Cash Manager to repay principal due in
         respect of such Master Issuer Start-Up Loan.

9.       RECORDS

         The Master Issuer Cash Manager shall ensure that a separate record is
         kept of any amount received from each of the Master Issuer Swap
         Providers pursuant to each of the Master Issuer Swap Agreements.

10.      MASTER ISSUER SWAP COLLATERAL LEDGER

         In connection with Swap Collateral the Master Issuer Cash Manager
         shall ensure that the appropriate debits and credits are made to the
         Master Issuer Swap Collateral Ledger in accordance with Clause 4.7
         (Swap Collateral).

11.      MASTER ISSUER EXPENSES LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     any fees paid by Funding 2 on each Funding 2 Interest Payment
                 Date under the terms of the Master Intercompany Loan Agreement
                 shall be credited to the Master Issuer Expenses Ledger; and

         (b)     any payment or provision of fees made under the Master Issuer
                 Priority of Payments using fees paid by Funding 2 under the
                 terms of the Master Intercompany Loan Agreement shall be
                 debited to the Master Issuer Expenses Ledger.

12.      MASTER ISSUER NOTE LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     The following amounts shall be debited on a sub-ledger to the
                 Master Issuer Note Ledger in respect of a Series and Class of
                 Notes:

                 (i)     all interest (not including principal), if any, paid
                         by the Master Issuer in respect of such Series and
                         Class of Notes under the terms and conditions of such
                         Series and Class of Notes; and

                 (ii)    all amounts of principal, if any, paid by the Master
                         Issuer in respect of such Series and Class of Notes
                         under the terms and conditions of such Series and
                         Class of Notes.

         (b)     The following amounts shall be credited on such sub-ledger to
                 the Master Issuer Note Ledger in respect of a Series and Class
                 of Notes.

                 (i)     the initial Principal Amount Outstanding of such
                         Series and Class of Notes; and

                 (ii)    all interest accrued in respect of such Series and
                         Class of Notes under the terms and conditions of such
                         Series and Class of Notes.

13.      MASTER ISSUER SUBORDINATED LOAN LEDGER

         The Master Issuer Cash Manager shall ensure that:

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<PAGE>

         (a)     The following amounts shall be debited on a sub-ledger to the
                 Master Issuer Subordinated Loan Ledger in respect of a Master
                 Issuer Subordinated Loan:

                 (i)     all interest (not including principal), if any, paid
                         by the Master Issuer in respect of such Master Issuer
                         Subordinated Loan under the terms and conditions of
                         such Master Issuer Subordinated Loan; and

                 (ii)    all amounts of principal, if any, paid by the Master
                         Issuer in respect of such Master Issuer Subordinated
                         Loan under the terms and conditions of such Master
                         Issuer Subordinated Loan.

         (b)     The following amounts shall be credited on such sub-ledger to
                 the Master Issuer Subordinated Loan Ledger in respect of a
                 Master Issuer Subordinated Loan.

                 (i)     the initial Principal Amount Outstanding of such
                         Master Issuer Subordinated Loan; and

                 (ii)    all interest accrued in respect of such Master Issuer
                         Subordinated Loan under the terms and conditions of
                         such Master Issuer Subordinated Loan.

14.      MASTER ISSUER START-UP LOAN LEDGER

         The Master Issuer Cash Manager shall ensure that:

         (a)     The following amounts shall be debited on a sub-ledger to the
                 Master Issuer Start-Up Loan Ledger in respect of a Master
                 Issuer Start-Up Loan:

                 (i)     all interest (not including principal), if any, paid
                         by the Master Issuer in respect of such Master Issuer
                         Start-Up Loan under the terms and conditions of such
                         Master Issuer Start-Up Loan; and

                 (ii)    all amounts of principal, if any, paid by the Master
                         Issuer in respect of such Master Issuer Start-Up Loan
                         under the terms and conditions of such Master Issuer
                         Start-Up Loan.

         (b)     The following amounts shall be credited on such sub-ledger to
                 the Master Issuer Start-Up Loan Ledger in respect of a Master
                 Issuer Start-Up Loan.

                 (i)     the initial Principal Amount Outstanding of such
                         Master Issuer Start-Up Loan; and

                 (ii)    all interest accrued in respect of such Master Issuer
                         Start-Up Loan under the terms and conditions of such
                         Master Issuer Start-Up Loan.

                                      29

<PAGE>

                                  SCHEDULE 3

                    FORM OF MASTER ISSUER QUARTERLY REPORT

PERMANENT MASTER ISSUER PLC

NOTES OUTSTANDING
PERIOD ENDED
ISSUE 200[*] NOTES

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS A       CLASS A       CLASS A        CLASS A

<S>                       <C>           <C>           <C>            <C>
Moody's Current           Aaa           [Aaa          Aaa            Aaa
Rating
Fitch Current Rating      AAA           AAA           AAA            AAA
S&P Current Rating        AAA           AAA           AAA            AAA

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS B       CLASS B       CLASS B        CLASS B

<S>                       <C>           <C>           <C>            <C>
Moody's Current           Aa3           Aa3           Aa3            Aa3
Rating
Fitch Current Rating      AA            AA            AA             AA
S&P Current Rating        AA            AA            AA             AA

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS M       CLASS M       CLASS M        CLASS M

<S>                       <C>           <C>           <C>            <C>
Moody's Current           A2            A2            A2             A2
Rating
Fitch Current Rating      A             A             A              A
S&P Current Rating        A             A             A              A

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS C       CLASS C       CLASS C        CLASS C

<S>                       <C>           <C>           <C>            <C>
Moody's Current           Baa2          Baa2          Baa2           Baa2
Rating
Fitch Current Rating      BBB           BBB           BBB            BBB
S&P Current Rating        BBB           BBB           BBB            BBB

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                          SERIES [*]    SERIES [*]    SERIES [*]     SERIES [*]
                          CLASS D       CLASS D       CLASS D        CLASS D

<S>                       <C>           <C>           <C>            <C>
Moody's Current Rating    Ba2           Ba2           Ba2            Ba2
Fitch Current Rating      BB            BB            BB             BB
S&P Current Rating        BB            BB            BB             BB

Initial Note Balance
Previous Quarters Note
Principal
Note Redemptions
Outstanding Note
Principal

Note Interest Margins
Step Up Dates
Step Up Margins

Interest Payment Cycle
Interest Payment Date
Next Interest Payment
Date
</TABLE>

<PAGE>

                                  SIGNATORIES

MASTER ISSUER CASH MANAGER

EXECUTED as a DEED by             ) /S/ IAN STEWART
BANK OF SCOTLAND PLC              )
acting by its attorney            ) /S/ DAVID WILKINSON
in the presence of:               )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

MASTER ISSUER

EXECUTED as a DEED by             ) /S/ CLAUDIA WALLACE
PERMANENT                         )
MASTER ISSUER PLC                 ) /S/ HELENA WHITAKER
acting by                         )

Director

Director/Secretary

MASTER ISSUER SECURITY TRUSTEE

EXECUTED as a DEED                ) /S/ VINCENT GIRAUD
for and on behalf of              )
THE BANK OF NEW YORK              )
by its authorised signatory       )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

                                      33