Exhibit 4.5.1

                                                           EXECUTION VERSION

                            Dated 19 January, 2005




                               NORTHERN ROCK PLC
     as Cash Manager, Funding 2 Basis Rate Swap Provider and Account Bank


                       GRANITE FINANCE TRUSTEES LIMITED
                             as Mortgages Trustee


                       GRANITE FINANCE FUNDING 2 LIMITED
                                 as Funding 2


                           GRANITE MASTER ISSUER PLC
                               as Master Issuer


                   LAW DEBENTURE CORPORATE SERVICES LIMITED
                        as Corporate Services Provider


                                    - and -


                             THE BANK OF NEW YORK
                       as Funding 2 Security Trustee and
                 Issuer Security Trustee to the Master Issuer







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                           FUNDING 2 DEED OF CHARGE
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                              SIDLEY AUSTIN
                              ----------------|
                              SIDLEY          |



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<TABLE>
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                                   CONTENTS



<S>      <C>                                                                                                <C>
1.       Interpretation.......................................................................................2

2.       Security.............................................................................................3

3.       Release of Funding 2 Charged Property................................................................7

4.       Declaration of Trust.................................................................................8

5.       Restrictions on Exercise of Certain Rights...........................................................8

6.       Enforcement.........................................................................................12

7.       Upon Enforcement....................................................................................15

8.       Receiver............................................................................................18

9.       Further Assurance and Power of Attorney.............................................................23

10.      Crystallisation.....................................................................................24

11.      Provisions relating to the Security.................................................................25

12.      Protection of Third Parties.........................................................................27

13.      Set-Off.............................................................................................27

14.      Representations and Covenants.......................................................................28

15.      Terms of Appointment................................................................................32

16.      Modification and Waiver.............................................................................44

17.      Remuneration of the Funding 2 Security Trustee......................................................45

18.      Appointment, Removal and Retirement of Funding 2 Security Trustee...................................47

19.      Miscellaneous Provisions............................................................................49

20.      Rights cumulative...................................................................................50

21.      Assignment..........................................................................................50

22.      Non Petition Covenant; Corporate Obligations........................................................50

23.      Notices.............................................................................................51

24.      Third Party Rights..................................................................................52

25.      Execution in Counterparts; Severability.............................................................52

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



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SCHEDULE 1  FORM OF SECURITY POWER OF ATTORNEY...............................................................57

SCHEDULE 2  FORM OF DEED OF ACCESSION........................................................................60

SCHEDULE 3  FUNDING 2 PRIORITY OF PAYMENTS Part I Funding 2 Pre-Enforcement Revenue Priority of
         Payments............................................................................................71

Part II  Funding 2 Pre-Enforcement Principal Priority of Payments............................................76

Part III  Funding 2 Post-Enforcement Priority of Payments....................................................87

SCHEDULE 4  FORM OF NOTICE OF ASSIGNMENT.....................................................................92

SCHEDULE 5  UTILISATION OF FUNDING 2 RESERVES................................................................94

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THIS FUNDING 2 DEED OF CHARGE WAS MADE ON 19 JANUARY, 2005 AND AMENDED AND
RESTATED PURSUANT TO THE DEED OF AMENDMENT AND RESTATEMENT DATED 17 MAY, 2007
BETWEEN:

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

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

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

(4)      GRANITE MASTER ISSUER PLC (registered number 5250668), a public
         limited company incorporated under the laws of England and Wales
         whose registered office is at Fifth Floor, 100 Wood Street, London
         EC2V 7EX as Master Issuer;

(5)      LAW DEBENTURE CORPORATE SERVICES LIMITED, a private limited company
         incorporated under the laws of England and Wales whose registered
         office is Fifth Floor, 100 Wood Street, London, EC2V 7EX, in its
         capacity as Corporate Services Provider; and

(6)      THE BANK OF NEW YORK, a New York banking corporation whose London
         branch address is at 40th Floor, One Canada Square, London E14 5AL,
         in its separate capacities as (1) Funding 2 Security Trustee and (2)
         Issuer Security Trustee to the Master Issuer;

WHEREAS:

(A)      Pursuant to the terms of the Mortgage Sale Agreement, the Seller has
         assigned the Initial Mortgage Portfolio and New Mortgage Portfolios
         to the Mortgages Trustee and may, from time to time, assign further
         New Mortgage Portfolios to the Mortgages Trustee upon and subject to
         the terms thereof. Such property assigned to the Mortgages Trustee
         forms part of the Trust Property.

(B)      Pursuant to the terms of the Mortgages Trust Deed, the Mortgages
         Trustee holds the Trust Property upon trust for the Seller, Funding
         and Funding 2. Pursuant to the terms of the Mortgages Trust Deed,
         each of Funding and Funding 2 may make Contributions to the Mortgages
         Trustee as consideration for its share of the Trust Property.

(C)      Pursuant to the terms of the Global Intercompany Loan Agreement, the
         Master Issuer has agreed to make Loan Tranches available to Funding 2
         upon and subject to the terms thereof.


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(D)      The Cash Manager has agreed to provide certain cash management
         services to Funding 2 on the terms set out in the Cash Management
         Agreement.

(E)      The Account Bank has agreed to provide certain banking services to
         Funding 2 on the terms set out in the Funding 2 Bank Account
         Agreement.

(F)      The Corporate Services Provider has agreed to provide certain
         corporate services to Funding 2 pursuant to the terms set out in the
         Corporate Services Agreement.

(G)      The Funding 2 Basis Rate Swap Provider has agreed to enter into four
         interest rate swap transactions pursuant to the terms of the Funding
         2 Basis Rate Swap Agreement.

(H)      Funding 2 has agreed to provide the Funding 2 Security Trustee with
         the benefit of the security described in this Funding 2 Deed of
         Charge to secure Funding 2's obligations under the Funding 2
         Transaction Documents, upon and subject to the terms hereof. The
         Funding 2 Security Trustee shall hold such security on trust for the
         benefit of the Funding 2 Secured Creditors.

NOW THIS DEED WITNESSES AS FOLLOWS:

1.       Interpretation

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

1.2      Construction:  In this Deed, except where the context otherwise
         requires:

         (a)      the terms of the Global Intercompany Loan Agreement, the
                  Master Definitions Schedule and of any agreement in
                  existence at the date hereof between the parties hereto in
                  relation to any such documents are incorporated in this Deed
                  to the extent required to ensure that any proposed
                  disposition of the Funding 2 Charged Property contained in
                  this Deed is a valid disposition in accordance with Section
                  2(1) of the Law of Property (Miscellaneous Provisions) Act
                  1989;

         (b)      a reference in this Deed to any property, assets,
                  undertakings or rights includes, unless the context
                  otherwise requires, present and future property, assets,
                  undertakings or rights;

         (c)      "this Funding 2 Deed of Charge", "this Deed of Charge" or
                  "this Deed" means this Funding 2 Deed of Charge and all the
                  Schedules hereto (as from time to time modified and/or
                  supplemented in accordance with the provisions set out
                  herein) and all Deeds of Accession entered into pursuant to
                  this Deed and each other document or deed entered into
                  pursuant hereto (as from time to time modified/and or
                  supplemented as aforesaid) and expressed to be supplemental
                  hereto;

         (d)      any reference in this Deed to a Receiver shall be to the
                  Receiver appointed by the Funding 2 Security Trustee
                  pursuant to the terms of this Deed; and


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         (e)      reference to any agreement or other document (including any
                  of the Funding 2 Transaction Documents) shall be deemed also
                  to refer to such agreement or document as amended, varied,
                  supplemented or novated from time to time; and

         (f)      references to any person shall include references to his
                  successors, transferees and assigns and any person deriving
                  title under or through him.

2.       Security

2.1      Trust Property:

         Funding 2, by way of first fixed security for the payment or
         discharge of the Funding 2 Secured Obligations, subject to Clause 3
         (Release of Funding 2 Charged Property), hereby assigns to the
         Funding 2 Security Trustee all of its right, title, benefit and
         interest, present and future, in, to and under the Funding 2 Share of
         the Trust Property (including, without limitation, all Scottish Trust
         Property, present and future, comprised in the Trust Property),
         including all rights to receive payment of any amounts which may
         become payable to Funding 2 thereunder and all payments received by
         Funding 2 thereunder (including, without limitation, all rights to
         serve notices and/or make demands thereunder and/or to take such
         steps as are required to cause payments to become due and payable
         thereunder and all rights of action in respect of any breach thereof
         and all rights to receive damages or obtain relief in respect
         thereof) and the proceeds of any of the foregoing, TO HOLD the same
         unto the Funding 2 Security Trustee absolutely.

2.2      Contractual rights:

         Funding 2, by way of first fixed security for the payment or
         discharge of the Funding 2 Secured Obligations, subject to Clause 3
         (Release of Funding 2 Charged Property), hereby assigns to the
         Funding 2 Security Trustee all of its right, title, benefit and
         interest, present and future, in, to and under each of the Funding 2
         Transaction Documents (other than this Deed and its rights under the
         Seller (Mortgage Trust) Assignment Agreement and provided that the
         assignment of the right, title, benefit and interest of Funding 2
         under the Funding 2 Basis Rate Swap Agreement shall be subject to the
         rights of set-off and netting provided therein) including, without
         limitation, all rights to receive payment of any amounts which may
         become payable to Funding 2 thereunder and all payments received by
         Funding 2 thereunder, all rights to serve notices and/or make demands
         thereunder and/or to take such steps as are required to cause
         payments to become due and payable thereunder and all rights of
         action in respect of any breach thereof and all rights to receive
         damages or obtain relief in respect thereof and the proceeds of any
         of the foregoing, TO HOLD the same unto the Funding 2 Security
         Trustee absolutely.

2.3      Accounts: Funding 2, by way of first fixed security for the payment
         or discharge of the Funding 2 Secured Obligations, subject to Clause
         3 (Release of Funding 2 Charged Property), hereby charges in favour
         of the Funding 2 Security Trustee all of its rights, title, benefit
         and interest, present and future, in, to and under:

         (a)      each Funding 2 Bank Account;


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         (b)      any Funding 2 Swap Collateral Account; and

         (c)      each other account (if any) in which Funding 2 may at any
                  time have or acquire any right, title, benefit or interest,

         and to all monies now or at any time hereafter standing to the credit
         thereof and the debts represented by them together with all rights
         and claims relating or attached thereto, including, without
         limitation, the right to interest and the proceeds of any of the
         foregoing.

2.4      Authorised Investments, Swap Collateral and Seller (Mortgage Trust)
         Assignment Agreement: Funding 2, by way of first fixed security for
         the payment or discharge of the Funding 2 Secured Obligations,
         subject to Clause 3 (Release of Funding 2 Charged Property), hereby
         charges in favour of the Funding 2 Security Trustee all of its right,
         title, benefit and interest, present and future in, to and under

         (a)      any Authorised Investment purchased using monies standing to
                  the credit of any Funding 2 Bank Account and any Swap
                  Collateral in the form of securities for the time being
                  owned by it and all rights in respect of or ancillary to
                  such Authorised Investments and Swap Collateral, including
                  the right to income and the proceeds of any of the
                  foregoing; and

         (b)      the Seller (Mortgage Trust) Assignment Agreement.

2.5      Floating Charge: Funding 2, by way of first floating security for the
         payment or discharge of the Funding 2 Secured Obligations, subject to
         Clause 3 (Release of Funding 2 Charged Property), hereby charges by
         way of first floating charge in favour of the Funding 2 Security
         Trustee the whole of its undertaking and all its property, assets and
         rights, whatsoever and wheresoever, both present and future other
         than any property or assets from time to time or for the time being
         the subject of a fixed charge or effectively assigned by way of
         security pursuant to any of the foregoing provisions of this Clause 2
         (Security) and/or any Deed of Accession (but excluding from the
         foregoing exception all undertaking, property, assets and rights of
         Funding 2, present and future, situated in Scotland or the rights to
         which are governed by the laws of Scotland, all of which are charged
         by the floating charge hereby created).

2.6      Title Guarantee: Each of the dispositions of or charges over property
         effected in or pursuant to this Deed is made with full title
         guarantee (or, in relation to assets or rights situated in or
         governed by the laws of Scotland, with absolute warrandice).

2.7      Further Acquired Items: For the avoidance of doubt, it is hereby
         confirmed that the Security Interests created under or pursuant to
         Clauses 2.1 (Trust Property) through Clause 2.4 (Authorised
         Investments, Swap Collateral and Seller (Mortgage Trust) Assignment
         Agreement) (inclusive) and/or any Deed of Accession are intended to
         be specific and fixed assignments by way of security of, or specific
         and fixed charges over (as the case may be) the property and assets
         to which they relate, both present and future, including property and
         assets which are acquired after the date hereof.

2.8      No Transfer of Obligations: Notwithstanding anything else in this
         Deed, it is hereby agreed that dispositions of property effected in
         or pursuant to this Deed do not transfer


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         obligations and nothing herein or in any Deed of Accession shall be
         construed as a transfer of obligations to the Funding 2 Security
         Trustee.

2.9      Notice and Acknowledgement:

         (a)      The execution of this Deed and/or any Deed of Accession by
                  each Funding 2 Secured Creditor shall constitute express
                  notice to such Funding 2 Secured Creditor of the
                  assignments, charges and any other Security Interests made
                  by Funding 2 pursuant to this Deed;

         (b)      By its execution of this Deed and/or a Deed of Accession,
                  each Funding 2 Secured Creditor acknowledges that it has
                  notice of and consents to the Funding 2 Security and also
                  acknowledges that as at the date hereof it has not received
                  from any other person any notice of any assignment or charge
                  of any of the Funding 2 Charged Property.

         (c)      Funding 2 hereby intimates and gives notice to the Mortgages
                  Trustee as trustee under and in terms of the Mortgages Trust
                  Deed of the assignations in security made in terms of Clause
                  2.1 (Trust Property) and Clause 2.2 (Contractual rights),
                  and the Mortgages Trustee by its execution of this Deed as
                  such trustee immediately subsequent to the execution hereof
                  by Funding 2 confirms that as at the date hereof it has
                  received no intimation of any other dealing with the Funding
                  2 Share of the Trust Property or any part thereof or the
                  Funding 2 Transaction Documents except in accordance with
                  the terms of the Funding 2 Transaction Documents.

         (d)      Notwithstanding the Funding 2 Security and subject as
                  provided otherwise in this Deed, each of the parties hereto
                  acknowledges that:

                  (i)   each Funding 2 Secured Creditor and each other party
                        to any Funding 2 Transaction Document may continue to
                        make all payments becoming due to Funding 2 under any
                        Funding 2 Transaction Document in the manner provided
                        in such Funding 2 Transaction Document until the
                        receipt of written notice from the Funding 2 Security
                        Trustee or any Receiver requiring payments to be made
                        otherwise; and

                  (ii)  until the Funding 2 Security becomes enforceable in
                        accordance with Clause 6.2 (Enforceable), Funding 2
                        shall be entitled to exercise its rights, powers and
                        discretions and perform its obligations in relation to
                        the Funding 2 Charged Property and under the Funding 2
                        Transaction Documents in accordance with the
                        provisions of the Funding 2 Transaction Documents.

2.10     Funding 2 Security Trustee's Discretion in relation to Funding 2
         Charged Property: Without prejudice to any other rights of the
         Funding 2 Security Trustee after the Funding 2 Security has become
         enforceable and subject to the terms of the Funding 2 Transaction
         Documents, the Funding 2 Security Trustee may at any time after any
         part or parts of the Funding 2 Security have become enforceable:

         (a)      enter into, make, execute, sign, deliver and do all such
                  contracts, agreements, deeds, receipts, payments,
                  assignments, assignations, transfers, conveyances,


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                  assurances and things and bring, prosecute, enforce, defend
                  and abandon all such actions, suits and proceedings in
                  relation to the Funding 2 Charged Property as it may think
                  expedient;

         (b)      exercise or refrain from exercising, in such manner as in
                  its absolute discretion the Funding 2 Security Trustee shall
                  think fit, all or any of the rights, powers, authorities
                  discretions or remedies of Funding 2 under or in relation to
                  the Funding 2 Charged Property or incidental to the
                  ownership thereof and, in particular but without limiting
                  the generality of the foregoing, exercise all rights to vote
                  or to give any consent or notification or make any
                  declaration in relation to such Funding 2 Charged Property.
                  For the avoidance of doubt, the Funding 2 Security Trustee
                  shall not be required to have regard to the interests of
                  Funding 2 in the exercise or non-exercise of any such
                  rights, powers, authorities, discretions and remedies or to
                  comply with any direction given by Funding 2 in relation
                  thereto; and

         (c)      demand, sue for and take any advice or institute any
                  proceedings to recover or obtain payment of any amounts
                  which may then be due and payable to Funding 2 but which
                  remains unpaid under or in respect of the Funding 2 Charged
                  Property or any part thereof either in its own name or in
                  the name of Funding 2.

2.11     New Intercompany Loan: At any time after the Funding 2 Programme
         Date, Funding 2 may, with the prior written consent of the Funding 2
         Security Trustee enter into another Funding 2 Intercompany Loan
         Agreement with a new Funding 2 Issuer provided that:

         (a)      each of the Rating Agencies has confirmed in writing to the
                  Funding 2 Security Trustee and the Issuer Security Trustee
                  that any funding arrangements entered into by the applicable
                  Funding 2 Issuer will not cause the current ratings by the
                  Rating Agencies of the existing Notes of any Funding 2
                  Issuer to be reduced, withdrawn or qualified;

         (b)      no Funding 2 Intercompany Loan Event of Default is
                  continuing or unwaived at the relevant drawdown date;

         (c)      there is no debit balance on any Principal Deficiency Ledger
                  as at the relevant drawdown date;

         (d)      Funding 2 has entered into, as required by the Rating
                  Agencies or otherwise, any additional agreements (including
                  any new bank account agreement, any basis rate swap
                  agreement and/or any guaranteed investment contract), if
                  required, in relation to the applicable Funding 2
                  Intercompany Loan Agreement and the Funding 2 Issuer;

         (e)      any other relevant creditors, as determined by the Funding 2
                  Security Trustee, shall have acceded to the terms of this
                  Deed by executing a Deed of Accession; and

         (f)      Funding 2 shall have provided confirmation to the parties to
                  this Deed that the Note Trustee in respect of the Notes to
                  be issued by the new Funding 2 Issuer


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                  and the Issuer Security Trustee in respect of the security
                  to be granted by such Funding 2 Issuer over its assets shall
                  be the same legal entity as the existing Note Trustee(s) and
                  Issuer Security Trustee(s) at the time of the issuance of such
                  Notes.

         Each other party to this Deed agrees that it shall enter into the
         relevant Deed of Accession required under sub-clause (e) above.

3.       Release of Funding 2 Charged Property

3.1      Release, Reassignment or Discharge: Upon the irrevocable and
         unconditional payment in full or discharge (or any combination of the
         foregoing) of all the Funding 2 Secured Obligations and upon the
         Funding 2 Security Trustee being satisfied that Funding 2 is under no
         further actual or contingent obligation under this Deed or any other
         Funding 2 Transaction Document, the Funding 2 Security Trustee shall
         at the request and cost of Funding 2 release, reassign and/or
         discharge from the Funding 2 Security all of the relevant Funding 2
         Charged Property to, or to the order of, Funding 2.

3.2      Disposal of Authorised Investments and Swap Collateral: On the making
         at any time by the Cash Manager on behalf of Funding 2 or the Funding
         2 Security Trustee of a disposal of any Authorised Investment or Swap
         Collateral charged pursuant to this Deed, the Funding 2 Security
         Trustee shall, if so requested by the Cash Manager (and at the sole
         cost and expense of Funding 2), but without the Funding 2 Security
         Trustee being responsible for any loss, costs, claims or liabilities
         whatsoever occasioned by so acting upon such request, release,
         reassign or discharge from the Funding 2 Security the relevant
         Authorised Investments or Swap Collateral provided that in the case
         of a disposal of an Authorised Investment, the proceeds of such
         disposal are paid by Funding 2 into the Funding 2 Bank Account(s)
         from which the monies to make such Authorised Investment were
         originally drawn, and that, in the case of a disposal of Swap
         Collateral, the proceeds of such disposal are paid by Funding 2 into
         the relevant Funding 2 Swap Collateral Account or Funding 2 Bank
         Account (as appropriate in accordance with the Cash Management
         Agreement and the Funding 2 Basic Rate Swap Agreement) subject to and
         in accordance with the provisions of this Deed and the other Funding
         2 Transaction Documents.

3.3      Trust Property: On the purchase or repurchase (as applicable) by the
         Seller from the Mortgages Trustee of any Mortgage Loan together with
         its Related Security pursuant to and in accordance with the terms of
         the Mortgage Sale Agreement, such Mortgage Loan and its Related
         Security shall no longer form part of the Trust Property (or, in the
         case of any Scottish Mortgage Loan and its Related Security, the
         Scottish Trust Property in accordance with Clause 9 (Termination of
         Trust) of the relevant Scottish Trust Deed) and shall automatically
         be released and retrocessed from any Security Interest created under
         or pursuant to this Deed in respect of the Funding 2 Share of the
         Trust Property.

3.4      Withdrawals from Funding 2 Bank Accounts and Funding 2 Swap
         Collateral Accounts: Subject to and in accordance with this Deed and
         the other Funding 2 Transaction Documents, the Cash Manager, on
         behalf of Funding 2 and the Funding 2 Security Trustee, is permitted
         pursuant to Clause 5 (Restrictions on Exercise of Certain Rights)
         from time to time to withdraw amounts from the Funding 2 Bank


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         Accounts in order to apply such amounts in accordance with the
         relevant Funding 2 Priority of Payments or, in the case of the
         Funding 2 Swap Collateral Accounts, to apply in accordance with the
         terms of the Cash Management Agreement and the Funding 2 Basis Rate
         Swap Agreement. Any amount so withdrawn shall be released from the
         Funding 2 Security provided that such amount is applied in accordance
         with and subject to the relevant Funding 2 Priority of Payments or,
         in the case of any amount withdrawn from the Funding 2 Swap
         Collateral Accounts, the Cash Management Agreement and the Funding 2
         Basis Rate Swap Agreement.

4.       Declaration of Trust

         Each of the Funding 2 Secured Creditors declares the Funding 2
         Security Trustee as trustee of, and the Funding 2 Security Trustee
         hereby declares that it holds on trust for the Funding 2 Secured
         Creditors, upon and subject to the terms and conditions of this Deed,
         all of the covenants, undertakings and representations made to the
         Funding 2 Security Trustee under this Deed and the other Funding 2
         Transaction Documents and all of the charges, assignments and other
         Security Interests made or given to the Funding 2 Security Trustee or
         to be made or given to it for the purpose of securing the Funding 2
         Secured Obligations under or pursuant to this Deed and any other
         Funding 2 Transaction Document.

5.       Restrictions on Exercise of Certain Rights

5.1      Funding 2 Bank Accounts and Funding 2 Swap Collateral Accounts: At
         all times prior to the release, reassignment, retrocession or
         discharge of the Funding 2 Security pursuant to Clause 3 (Release of
         Funding 2 Charged Property):

         (a)      save as otherwise provided in the Funding 2 Transaction
                  Documents or unless the Funding 2 Security Trustee otherwise
                  agrees in writing (and then only on such terms and in such
                  manner as the Funding 2 Security Trustee may require),
                  Funding 2 shall procure that:

                  (i)   any distribution of Mortgages Trustee Available
                        Revenue Receipts to Funding 2 and any distribution of
                        Principal Receipts to Funding 2 pursuant to the
                        Mortgages Trust is deposited into the Funding 2 GIC
                        Account;

                  (ii)  all Swap Collateral delivered to Funding 2 (if any)
                        pursuant to the Funding 2 Basis Rate Swap Agreement is
                        deposited into a Funding 2 Swap Collateral Account;

                  (iii) all proceeds from a Loan Tranche which are to be
                        applied in or towards repayment of another Loan
                        Tranche are, pending such repayment, deposited into
                        the Funding 2 GIC account;

                  (iv)  all other income of Funding 2 (if any) is deposited
                        into the Funding 2 GIC Account; and

         (b)      save as otherwise expressly permitted in the Funding 2
                  Transaction Documents, Funding 2 shall not be entitled to
                  withdraw or transfer from any Funding 2 Bank Account or any
                  Funding 2 Swap Collateral Account any


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                  monies or securities standing to the credit thereof or direct
                  any payment or transfer to be made therefrom to any person
                  without the Funding 2 Security Trustee's prior written
                  consent.

5.2      Permitted Withdrawals from Funding 2 Bank Accounts and Funding 2 Swap
         Collateral Accounts; Authorised Investments:

         (a)      Funding 2 covenants with the Funding 2 Security Trustee that
                  the amounts standing to the credit of the Funding 2 Bank
                  Accounts and any Swap Collateral standing to the credit of
                  the Funding 2 Swap Collateral Accounts may only be withdrawn
                  in accordance with this Clause 5.2 (Permitted Withdrawals
                  from Funding 2 Bank Accounts and Funding 2 Swap Collateral
                  Accounts; Authorised Investments).

         (b)      On any day during an Interest Period prior to the Funding 2
                  Security becoming enforceable pursuant to Clause 6.2
                  (Enforceable), the Funding 2 Security Trustee hereby
                  authorises the Cash Manager to withdraw such monies from the
                  Funding 2 GIC Account as are to be applied on such date to
                  meet any amounts then due and payable by Funding 2 to third
                  parties in accordance with item (C) of the Funding 2
                  Pre-Enforcement Revenue Priority of Payments and to apply
                  such monies in making such payments on behalf of Funding 2.
                  For the purpose of this paragraph (b), the remaining
                  provisions of this Clause 5.2 (Permitted Withdrawals from
                  Funding 2 Bank Accounts; Authorised Investments), Clause 5.3
                  (Funding 2 Pre-Enforcement Revenue Priority of Payments) and
                  Clause 5.4 (Funding 2 Pre-Enforcement Principal Priority of
                  Payments), the Cash Manager shall be entitled to assume that
                  the Funding 2 Security is not enforceable pursuant to Clause
                  6.2 (Enforceable) unless it has received notice from Funding
                  2 or the Funding 2 Security Trustee or is otherwise aware
                  that the Funding 2 Security has become so enforceable and
                  shall not be liable to the Funding 2 Security Trustee,
                  Funding 2 or any other Funding 2 Secured Creditor for making
                  payments based on this assumption.

         (c)      The Funding 2 Security Trustee hereby authorises the Cash
                  Manager, prior to the Funding 2 Security becoming
                  enforceable pursuant to Clause 6.2 (Enforceable), to make
                  withdrawals from:

                  (i)   the relevant Funding 2 Bank Accounts for the purposes
                        of acquiring Authorised Investments provided that all
                        amounts received in respect of the Authorised
                        Investments (including earnings thereon) shall be
                        deposited into the relevant Funding 2 Bank Account
                        from which they were originally drawn; and

                  (ii)  the relevant Funding 2 Swap Collateral Account for the
                        purpose of (A) returning Swap Collateral to the
                        Funding 2 Basis Rate Swap Provider pursuant to the
                        terms of the Funding 2 Basis Rate Swap Agreement or
                        (B) transferring Swap Collateral to the Funding 2
                        Transaction Account pursuant to the terms of the
                        Funding 2 Basis Rate Swap Agreement and the Cash
                        Management Agreement.

5.3      Funding 2 Pre-Enforcement Revenue Priority of Payments: On each
         Monthly Payment Date falling in a Monthly Payment Period prior to the
         Funding 2 Security


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         becoming enforceable pursuant to Clause 6.2 (Enforceable), the Funding
         2 Security Trustee hereby authorises Funding 2 or the Cash Manager on
         its behalf to withdraw Funding 2 Available Revenue Receipts from the
         Funding 2 GIC Account that have been allocated towards the payments
         and provisions in respect of amounts due on that Monthly Payment Date
         in accordance with the rules and the order of priority of the Funding
         2 Pre-Enforcement Revenue Priority of Payments and the provisions of
         the Cash Management Agreement and to apply such monies to the making
         of such payments and provisions.

5.4      Funding 2 Pre-Enforcement Principal Priority of Payments: On each
         Monthly Payment Date falling in a Monthly Payment Period prior to the
         Funding 2 Security becoming enforceable pursuant to Clause 6.2
         (Enforceable), the Funding 2 Security Trustee hereby authorises
         Funding 2 or the Cash Manager on its behalf to make withdrawals of
         Funding 2 Available Principal Receipts standing to the credit of the
         Funding 2 GIC Account that have been allocated towards the payments
         and provisions in respect of principal amounts due and payable by
         Funding 2 under each Funding 2 Intercompany Loan Agreement or
         otherwise on the relevant Monthly Payment Date in accordance with the
         rules and the order of priority of the Funding 2 Pre-Enforcement
         Principal Priority of Payments and the provisions of the Cash
         Management Agreement and to apply such monies to the making of such
         payments and provisions.

5.5      Amendment to Funding 2 Priority of Payments: On the making available
         of any Loan Tranches by the Master Issuer to Funding 2 or if any
         other Funding 2 Intercompany Loans are made available by another
         Funding 2 Issuer to Funding 2 in accordance with the terms of the
         Funding 2 Transaction Documents, if any amendment to the Funding 2
         Priority of Payments is required as a result thereof, then, subject
         to the parties to this Deed agreeing the necessary amendments to the
         priority of payments, the parties to this Deed, together with any
         person entering into a Deed of Accession, shall set out the new
         Funding 2 Priority of Payments accordingly in a schedule to that Deed
         of Accession. The new Funding 2 Priority of Payments so amended shall
         supersede those set out in Schedule 3 (Funding 2 Priority of
         Payments) to this Deed.

5.6      No Enforcement against Issuers: Each party to this Deed undertakes to
         each Funding 2 Issuer and each of the Funding 2 Secured Creditors
         (including the Funding 2 Security Trustee in its capacity as such
         under this Deed) that it shall not:

         (a)      take any steps or pursue any action whatsoever for the
                  purpose of recovering any debts or amounts due or owing to
                  it by any Funding 2 Issuer; or

         (b)      take any steps or legal proceedings for the winding-up,
                  dissolution or reorganisation of, or the institution of
                  insolvency proceedings against, any Funding 2 Issuer or for
                  the appointment of a receiver, administrator, liquidator or
                  similar officer of any Funding 2 Issuer in respect of any or
                  all of its revenues and assets.

5.7      No Enforcement by Funding 2 Secured Creditors and Limited Recourse:
         Each of the Funding 2 Secured Creditors (other than the Funding 2
         Security Trustee and any Receiver) hereby agrees with Funding 2 and
         the Funding 2 Security Trustee that:


                                      10
<PAGE>

         (a)      only the Funding 2 Security Trustee may enforce the Funding
                  2 Security in accordance with the provisions hereof;

         (b)      notwithstanding any other provision of this Deed or any
                  other Funding 2 Transaction Document (other than Clause 5.2
                  (Shortfall on Final Repayment Date) of the Global
                  Intercompany Loan Agreement, no sum due or owing to any
                  Funding 2 Secured Creditor or to the Funding 2 Security
                  Trustee (whether for itself or on behalf of the Funding 2
                  Secured Creditors) from or by Funding 2 under this Deed or
                  any other Funding 2 Transaction Document shall be payable by
                  Funding 2 except to the extent that Funding 2 has sufficient
                  funds available or (following enforcement of the Funding 2
                  Security) the Funding 2 Security Trustee has realised
                  sufficient funds from the Funding 2 Security to pay such sum
                  subject to and in accordance with the relevant Funding 2
                  Priority of Payments and provided that all liabilities of
                  Funding 2 required to be paid in priority thereto or pari
                  passu therewith pursuant to such Funding 2 Priority of
                  Payments have been paid, discharged and/or otherwise
                  provided for in full; and

         (c)      it shall not take any steps for the purpose of recovering
                  any of the Funding 2 Secured Obligations (including, without
                  limitation, by exercising any rights of set-off) or
                  enforcing any rights arising out of the Funding 2
                  Transaction Documents against Funding 2 and it shall not
                  take any steps or legal proceedings for the winding-up,
                  dissolution or reorganisation of, or the institution of
                  insolvency proceedings against, Funding 2 or for the
                  appointment of a receiver, administrator, administrative
                  receiver, liquidator or similar officer of Funding 2 in
                  respect of any or all of its revenues and assets,

         PROVIDED THAT if the Funding 2 Security Trustee having become bound
         to do so subject to and in accordance with the terms of this Deed and
         the other Funding 2 Transaction Documents, fails to serve a Funding 2
         Intercompany Loan Enforcement Notice and/or, to take any steps or
         proceedings to enforce the Funding 2 Security within 30 days of
         becoming so bound and such failure is continuing, then (for so long
         as any Funding 2 Intercompany Loan is outstanding) the applicable
         Issuer Security Trustee(s) or, in the event of the failure of the
         applicable Issuer Security Trustee(s) (or if there are no Funding 2
         Intercompany Loans outstanding), any other Funding 2 Secured Creditor
         shall be entitled to take such steps and proceedings to enforce the
         Funding 2 Security as it shall deem necessary other than the
         presentation of a petition for or making an application for the
         winding up, dissolution or reorganisation of, or the institution of
         insolvency proceedings against, Funding 2 or the appointment of a
         receiver, administrator, administrative receiver, liquidator or
         similar officer of Funding 2.

5.8      Acknowledgement of Funding 2 Security Trustee: The Funding 2 Security
         Trustee hereby acknowledges and agrees that notwithstanding any other
         provision of this Deed or any other Funding 2 Transaction Document,
         no sum due or owing to any Funding 2 Secured Creditor or to the
         Funding 2 Security Trustee (whether for itself or on behalf of the
         Funding 2 Secured Creditors) from or by Funding 2 under this Deed or
         any other Funding 2 Transaction Document shall be payable by Funding
         2 except to the extent that Funding 2 has sufficient funds available
         or (following enforcement of the Funding 2 Security) the Funding 2
         Security Trustee has realised sufficient funds from the Funding 2
         Security to pay such sum subject to and in accordance with


                                      11
<PAGE>

         the relevant Funding 2 Priority of Payments and provided that all
         liabilities of Funding 2 required to be paid in priority thereto or
         pari passu therewith pursuant to such Funding 2 Priority of Payments
         have been paid, discharged and/or otherwise provided for in full.

5.9      Utilisation of Funding 2 Reserves: Funding 2 and the Cash Manager
         shall procure that, subject to and in accordance with the Funding 2
         Priority of Payments, amounts standing to the credit of the Funding 2
         Reserve Ledger or the Funding 2 Liquidity Reserve Ledger (if any)
         shall only be debited for the purposes as specified in Schedule 5
         (Utilisation of Funding 2 Reserves).

5.10     Adjustment of Funding 2 Reserves:  The Funding 2 Reserve  Amount and
         the Target Reserve Required Amount may be as specified in paragraph 3
         of Schedule 5 (Utilisation of Funding 2 Reserves).

6.       Enforcement

6.1      Notification: The Funding 2 Security Trustee shall, if reasonably
         practicable, give prior notification to the Seller, the Cash Manager
         and each Funding 2 Secured Creditor of the Funding 2 Security
         Trustee's intention to enforce the Funding 2 Security. However, the
         failure of the Funding 2 Security Trustee to provide such
         notification shall not in any way prejudice the ability of the
         Funding 2 Security Trustee to enforce the Funding 2 Security.

6.2      Enforceable:

         Without prejudice to the provisions of Clause 8 (Receiver) the
         Funding 2 Security shall become immediately enforceable and the power
         of sale and other powers conferred by Section 101 of the 1925 Act, as
         varied or amended by this Deed, shall be exercisable by the Funding 2
         Security Trustee, in each case at any time:

         (a)      upon the service on Funding 2 by the Funding 2 Security
                  Trustee of a Funding 2 Intercompany Loan Enforcement Notice;
                  or

         (b)      if there are no Funding 2 Intercompany Loans outstanding,
                  following a default in payment of any other Funding 2
                  Secured Obligation on its due date or within any applicable
                  grace period following such due date stated in the relevant
                  Funding 2 Transaction Document but subject always to any
                  limited recourse provisions stated therein and to Clause 5.7
                  (No Enforcement by Funding 2 Secured Creditors and Limited
                  Recourse) hereof.

6.3      Power of Sale:

         (a)      Notwithstanding any other provision of this Deed, the
                  Funding 2 Secured Obligations shall be deemed to have become
                  due and payable for the purposes of Section 101 of the 1925
                  Act, and (to the extent applicable) the statutory power of
                  sale and of appointing a receiver and other powers which are
                  conferred on mortgagees under the 1925 Act as varied or
                  extended by this Deed shall be deemed to arise immediately
                  after execution of this Deed.

         (b)      Section 103 of the 1925 Act shall not apply to this Deed and
                  forthwith after the Funding 2 Security has become
                  enforceable in accordance with Clause 6.2


                                      12
<PAGE>

                  (Enforceable) the statutory power of sale, as extended by
                  this Deed, and all other powers shall become immediately
                  exercisable without notice to Funding 2 and the provisions
                  of the 1925 Act regulating the power of sale shall, so far
                  as they relate to the Funding 2 Charged Property, be varied
                  and extended accordingly.

6.4      Discretionary Enforcement: Subject to the provisions of this Deed,
         the Funding 2 Security Trustee may at any time, at its discretion and
         without notice, take such proceedings and/or other action as it may
         think fit against, or in relation to, Funding 2 or any other party to
         any of the Funding 2 Transaction Documents to enforce their
         obligations under any of the Funding 2 Transaction Documents. Subject
         to the provisions of this Deed, at any time after the Funding 2
         Security has become enforceable in accordance with Clause 6.2
         (Enforceable), the Funding 2 Security Trustee may, at its discretion
         and without notice, take such steps as it may think fit to enforce
         the Funding 2 Security.

6.5      Mandatory Enforcement: The Funding 2 Security Trustee shall not, and
         shall not be bound to, take any proceedings, actions or steps under
         or in connection with any of the Funding 2 Transaction Documents
         (including, without limitation, any steps to enforce the Funding 2
         Security) unless:

         (a)      it shall have been directed to do so by the Issuer Security
                  Trustee(s) acting in accordance with the provisions of this
                  Deed; or

         (b)      if there are no Funding 2 Intercompany Loans outstanding, it
                  shall have been directed to do so by the Funding 2 Secured
                  Creditor which ranks highest in the Funding 2
                  Post-Enforcement Priority of Payments; and

         (c)      in either case, it shall have been indemnified and/or
                  secured to its satisfaction against all liabilities,
                  actions, proceedings, claims, costs, charges, damages and
                  expenses to which it may become liable or which may be
                  incurred by it in connection therewith.

6.6      Law of Property Act 1925: The provisions of the 1925 Act relating to
         the power of sale and the other powers conferred by Section 101(1)
         and (2) are hereby extended in relation to Funding 2 as if such
         extensions were contained in the 1925 Act such that at any time after
         the Funding 2 Security has become enforceable in accordance with
         Clause 6.2 (Enforceable) above, the Funding 2 Security Trustee may in
         its absolute discretion:

         (a)      make demand in the name of the Funding 2 Secured Creditors
                  or in its own right for any monies and liabilities in
                  respect of the Funding 2 Charged Property;

         (b)      enforce any rights it may have in respect of the whole or
                  any part of the Funding 2 Charged Property in such manner
                  and upon such terms as the Funding 2 Security Trustee shall
                  think fit;

         (c)      take possession of, get in and collect the Funding 2 Charged
                  Property and perfect the interests comprised therein;


                                      13
<PAGE>

         (d)      subject as expressly provided in Clause 6.7 (Restriction on
                  Disposal of Charged Property), sell, transfer, convey,
                  dispose of vary or otherwise deal with, and also to grant
                  any option to purchase, and to effect exchanges of, the
                  whole or any part of the Funding 2 Charged Property or any
                  interest therein in such manner, for such consideration (if
                  any) and generally upon such terms (including by deferred
                  payment or payment by instalments) as it may think fit
                  and/or to concur in any of the foregoing (and nothing shall
                  preclude any such disposal being made to a Funding 2 Secured
                  Creditor);

         (e)      carry out any transaction, scheme or arrangement which the
                  Funding 2 Security Trustee may, in its absolute discretion,
                  consider appropriate with a view to or in connection with
                  the sale of the Funding 2 Charged Property;

         (f)      do all or any of the things or exercise all or any of the
                  powers, authorities and discretions conferred expressly or
                  by implication on any Receiver under Clause 8.6 (Powers of
                  the Receiver) or otherwise under this Deed; and

         (g)      exercise all or any of the powers conferred on mortgagees by
                  the 1925 Act as varied or extended by this Deed and any
                  other rights and remedies that may be conferred by statute
                  or common law or in equity on mortgagees or receivers.

6.7      Restriction on Disposal of Charged Property: Notwithstanding the
         foregoing provisions of this Clause 6 (Enforcement), if the Funding 2
         Security has become enforceable otherwise than by reason of a default
         in payment of any amount due in respect of any AAA Loan Tranche, the
         Funding 2 Security Trustee will not be entitled to dispose of all or
         part of the Funding 2 Charged Property unless either:

         (a)      a sufficient amount would be realised to allow a full and
                  immediate discharge of all amounts owing under all AAA Loan
                  Tranches of each Funding 2 Issuer and all prior ranking
                  amounts due by Funding 2 in accordance with the relevant
                  Funding 2 Priority of Payments; or

         (b)      the Funding 2 Security Trustee is of the opinion, which
                  shall be binding on the Funding 2 Secured Creditors, reached
                  after considering at any time and from time to time the
                  advice of any financial or such other professional advisers
                  selected by the Funding 2 Security Trustee (with the fees
                  and expenses of any such adviser selected by the Funding 2
                  Security Trustee being paid by Funding 2) for the purpose of
                  giving such advice that the cashflow expected to be received
                  by Funding 2 will not, or that there is a significant risk
                  that it will not, be sufficient (as certified to it by
                  Funding 2), having regard to any other relevant actual,
                  contingent or prospective liabilities of Funding 2 to
                  discharge in full in due course all amounts owing in respect
                  of each AAA Loan Tranche and all prior ranking amounts due
                  by Funding 2,

         PROVIDED THAT if the Funding 2 Security Trustee is unable to obtain
         the advice referred to in paragraph (b) above having made reasonable
         efforts to do so, this Clause 6.7 (Restriction on Disposal of Funding
         2 Charged Property) shall not apply.

         The Funding 2 Security Trustee shall not be bound to make the
         determination set out above unless it shall have been indemnified
         and/or secured to its satisfaction against all liabilities to which
         it may thereby become liable or which it may incur by so doing,


                                      14
<PAGE>

6.8      Authorised Investments: Any monies which under the trusts of this
         Deed ought to or may be invested by the Funding 2 Security Trustee
         (or the Cash Manager on its behalf) after the Funding 2 Security has
         become enforceable in accordance with Clause 6.2 (Enforceable) may be
         invested in the name or under the control of the Funding 2 Security
         Trustee in any Authorised Investments and the Funding 2 Security
         Trustee may at any time vary or transfer (or direct the Cash Manager
         to vary or transfer) any of such Authorised Investments for or into
         other such Authorised Investments as the Funding 2 Security Trustee
         in its absolute discretion may determine, and shall not be
         responsible for any loss occasioned by reason of any such investments
         whether by depreciation in value or otherwise, provided that such
         Authorised Investments were made in accordance with the foregoing
         provisions. If a bank or institution with which any monies placed on
         deposit in accordance with this clause is the Funding 2 Security
         Trustee or a subsidiary, holding or associated company of the Funding
         2 Security Trustee, it need only account for an amount of interest
         equal to the amount of interest which would, at then current rates,
         be payable by it on such a deposit to an independent customer.

6.9      Scottish Trust Property: Funding 2 and the Mortgages Trustee hereby
         covenant and agree with and undertake to the Funding 2 Security
         Trustee that if at any time after the Funding 2 Security has become
         enforceable in accordance with Clause 6.2 (Enforceable), the Funding
         2 Security Trustee or any Receiver shall so require and subject to
         the terms of this Clause 6 (Enforcement), they will join together in
         directing the Seller to sell or dispose of all or any part of the
         Scottish Trust Property on terms previously approved by the Funding 2
         Security Trustee and/or in causing the trusts constituted by all and
         any Scottish Trust Deeds to be wound up or performed and they will
         take all such actions and execute all such documents as may be
         necessary to effect such sale or disposal or winding up or
         performance and the distribution or transfer of the Scottish Trust
         Property or any part thereof in accordance with the terms of each
         Scottish Trust Deed, the Mortgages Trust Deed and this Deed. The
         Seller and the Mortgages Trustee hereby acknowledge and consent to
         the foregoing as trustee and beneficiary respectively in terms of
         each Scottish Trust Deed.

7.       Upon Enforcement

7.1      Service of Intercompany Loan Enforcement Notice: Subject to the
         provisions of the Funding 2 Transaction Documents, in the event that
         a Funding 2 Intercompany Loan Enforcement Notice has been served (and
         not withdrawn) by the Funding 2 Security Trustee on Funding 2, the
         Funding 2 Security Trustee shall as soon as practicable serve a copy
         of that Funding 2 Intercompany Loan Enforcement Notice on the Funding
         2 Secured Creditors.

7.2      Crystallisation:  From and including the date when the Funding 2
         Security Trustee serves a Funding 2 Intercompany Loan Enforcement
         Notice (which has not been withdrawn) on Funding 2:

         (a)      notwithstanding any other provision hereof or of any other
                  Funding 2 Transaction Document, no amount may be withdrawn
                  from the Funding 2 Bank Accounts except with the prior
                  written consent of the Funding 2 Security Trustee; and


                                      15
<PAGE>

         (b)      (provided that the Mortgages Trustee and the Cash Manager
                  have been notified of the service of a Funding 2
                  Intercompany Loan Enforcement Notice) no action whatsoever
                  may be taken by the Mortgages Trustee and the Cash Manager
                  in relation to or in respect of the Funding 2 Charged
                  Property without the prior written consent of the Funding 2
                  Security Trustee save for any action required to preserve or
                  protect the Mortgages Trustee's or Cash Manager's right,
                  title or interest therein; and

         (c)      if not already crystallised, but subject to any prohibition
                  or restriction imposed by applicable law, any charge created
                  by this Deed which is a floating charge shall crystallise
                  provided that the floating charge created by this Deed shall
                  not be crystallised solely as a result of obtaining a
                  moratorium (or anything done with a view to obtaining a
                  moratorium) under the Insolvency Act 2000 except with leave
                  of the court.

7.3      Funding 2 Post-Enforcement Priority of Payments: At any time after
         the Funding 2 Security has become enforceable in accordance with
         Clause 6.2 (Enforceable) and provided that a Funding 2 Intercompany
         Loan Enforcement Notice has not been withdrawn, all Funding 2
         Available Revenue Receipts, Funding 2 Available Principal Receipts
         and all other monies (excluding Swap Collateral standing to the
         credit of the Funding 2 Swap Collateral Accounts) paid to or received
         or recovered by or on behalf of Funding 2 or the Funding 2 Security
         Trustee or any Receiver appointed on its behalf, including all
         proceeds following any sale or realisation of the Funding 2 Charged
         Property or enforcement of the Funding 2 Security and all amounts
         (excluding Swap Collateral standing to the credit of the Funding 2
         Swap Collateral Accounts) not previously distributed and/or standing
         to the credit of any Funding 2 Bank Account and all monies standing
         to the credit of the Funding 2 Reserve Ledger (if any) shall (if not
         already received by the Funding 2 Security Trustee) be paid to and
         held by the Funding 2 Security Trustee on trust to allocate and apply
         the same on each Monthly Payment Date falling in a Monthly Payment
         Period (save to the extent required otherwise by applicable law) in
         accordance with the rules and the order of priority of the Funding 2
         Post-Enforcement Priority of Payments.

7.4      Certification of Amounts:

         (a)      The Funding 2 Security Trustee shall be entitled to rely on
                  (and to accept as conclusive evidence save in the case of
                  manifest error) a certificate from each Funding 2 Secured
                  Creditor as to the amounts owed to such Funding 2 Secured
                  Creditor under the Funding 2 Transaction Documents. The
                  Funding 2 Security Trustee shall not take into account for
                  the purpose of the application of moneys in accordance with
                  the Funding 2 Post-Enforcement Priority of Payments any
                  amounts of which it has not been notified by the intended
                  recipient on or prior to the date in question.

         (b)      Each Funding 2 Secured Creditor will, at all times, promptly
                  provide the Funding 2 Security Trustee and/or any Receiver
                  on request with a certificate setting out detailed
                  information as to the amount of the Funding 2 Secured
                  Obligations to which such Funding 2 Secured Creditor is
                  entitled and such other information as the Funding 2
                  Security Trustee and/or any Receiver may require to enable
                  or facilitate the Funding 2 Security Trustee and/or any
                  Receiver to perform its functions hereunder or under any of
                  the Funding 2


                                      16
<PAGE>

                  Transaction Documents, such certificate to be in a form
                  required by the Funding 2 Security Trustee and/or any
                  Receiver. In determining the respective entitlements of the
                  Funding 2 Secured Creditors hereunder, such certificates
                  shall be binding on all of the Funding 2 Secured Creditors.

7.5      Retention Account: If the Funding 2 Security Trustee enforces the
         Funding 2 Security at a time when either no amounts or not all
         amounts owing in respect of the Funding 2 Secured Obligations have
         become due and payable or any of the Funding 2 Secured Obligations
         are at such time contingent or future obligations the Funding 2
         Security Trustee or a Receiver may, for so long as no such amounts or
         not all such amounts have become due and payable or any of the
         Funding 2 Secured Obligations are at such time contingent or future
         obligations pay any monies referred to in Clause 7.3 (Funding 2
         Post-Enforcement Priority of Payments), as the case may be, into, and
         retain such monies in, an interest-bearing account (a "retention
         account") to be held by it as security and applied by it in
         accordance with Clause 7.3 (Funding 2 Post-Enforcement Priority of
         Payments) as and when any of the amounts referred to therein become
         due and payable.

7.6      Funding 2 Security Trustee Rights upon Enforcement: In addition to
         any other rights expressly provided herein, for the period commencing
         upon the service of a Funding 2 Intercompany Loan Enforcement Notice
         and terminating upon the notification to the Funding 2 Secured
         Creditors by the Funding 2 Security Trustee that all Funding 2
         Secured Obligations have been satisfied in full:

         (a)      (provided such Funding 2 Secured Creditor has received a
                  copy of, or other notice of the service on Funding 2 of, any
                  such Funding 2 Intercompany Loan Enforcement Notice) each
                  Funding 2 Secured Creditor agrees that it will pay to the
                  Funding 2 Security Trustee or the Receiver, as the case may
                  be, all monies received or recovered by such Funding 2
                  Secured Creditor otherwise than in accordance with Clause
                  7.3 (Funding 2 Post-Enforcement Priority of Payments
                  (whether by way of set-off or otherwise) in order that such
                  amounts may be applied by the Funding 2 Security Trustee in
                  accordance with Clause 7.3 (Funding 2 Post-Enforcement
                  Priority of Payments);

         (b)      save as otherwise expressly provided in this Deed or as
                  required by the Funding 2 Security Trustee, all payments
                  under or arising from this Deed and all amounts payable to
                  Funding 2 by any Funding 2 Secured Creditor under any
                  Funding 2 Transaction Document shall be paid to the Funding
                  2 Security Trustee or to its order;

         (c)      save as otherwise expressly provided in this Deed, all
                  rights or remedies provided for by this Deed or available at
                  law or in equity to the Funding 2 Secured Creditors are
                  exercisable by the Funding 2 Security Trustee;

         (d)      save as otherwise expressly provided in this Deed, all
                  rights to compel performance of the Funding 2 Transaction
                  Documents are exercisable by the Funding 2 Security Trustee;
                  and

         (e)      all payments in respect of the Funding 2 Secured Obligations
                  shall operate in satisfaction pro tanto of Funding 2's
                  covenants to the Funding 2 Secured Creditors.


                                      17
<PAGE>

7.7      Swap Collateral: Notwithstanding the foregoing provisions of Clause 6
         (Enforcement) and this Clause 7 (Upon Enforcement), at any time after
         the Funding 2 Security has become enforceable in accordance with
         Clause 6.2 (Enforceable) and provided that a Funding 2 Intercompany
         Loan Enforcement Notice has not been withdrawn:

         (a)      all Swap Collateral delivered to or received or recovered by
                  or on behalf of Funding 2 or the Funding 2 Security Trustee
                  or any Receiver appointed on its behalf pursuant to the
                  Funding 2 Basis Rate Swap Agreement will be deposited into a
                  Funding 2 Swap Collateral Account; and

         (b)      Swap Collateral may only be withdrawn from the relevant
                  Funding 2 Swap Collateral Account for the purpose of (i)
                  returning Swap Collateral to the Funding 2 Basis Rate Swap
                  Provider pursuant to the terms of the Funding 2 Basis Rate
                  Swap Agreement or (ii) applying Swap Collateral in or
                  towards satisfaction of the Funding 2 Basis Rate Swap
                  Provider's obligations under the Funding 2 Basis Rate Swap
                  Agreement.

         If, in relation to Swap Collateral, there is any conflict between the
         terms of the Funding 2 Basis Rate Swap Agreement, the Cash Management
         Agreement and/or this Deed, the terms of the Funding 2 Basis Rate
         Swap Agreement shall apply.

7.8      Swap Replacement Premium: Notwithstanding the foregoing provisions of
         Clause 6 (Enforcement) and this Clause 7 (Upon Enforcement), any Swap
         Replacement Premium received by Funding 2 from a replacement swap
         provider upon entry into a swap agreement replacing the Funding 2
         Basis Rate Swap Agreement shall firstly be applied in payment of any
         termination payment due and payable to the Funding 2 Basis Rate Swap
         Provider following the termination of the Funding 2 Basis Rate Swap
         Agreement. Any amount of such Swap Replacement Premium not applied in
         or towards payment of such termination payment will form part of
         Funding 2 Available Revenue Receipts.

8.       Receiver

8.1      Appointment: At any time after the Funding 2 Security becomes
         enforceable, and whether or not the Funding 2 Security Trustee has
         taken possession of the Funding 2 Charged Property, the Funding 2
         Security Trustee may appoint, in addition to all statutory and other
         powers of appointment, by writing or by deed, such person or persons
         (including an officer or officers of the Funding 2 Security Trustee)
         as the Funding 2 Security Trustee thinks fit to be a receiver, a
         receiver and manager or an administrative receiver of the Funding 2
         Charged Property or any part thereof (each a "Receiver") and, in the
         case of an appointment of more than one person, to act together or
         independently of the other or others.

8.2      Removal and Replacement: Except as otherwise required by statute, the
         Funding 2 Security Trustee may by writing or by deed remove a
         Receiver appointed by it whether or not appointing another in its
         place and may also appoint another Receiver to act with any other
         Receiver or to replace any Receiver who resigns, retires or otherwise
         ceases to hold office.


                                      18
<PAGE>

8.3      Extension of Appointment: The exclusion of any part of the Funding 2
         Charged Property from the appointment of the Receiver shall not
         preclude the Funding 2 Security Trustee from subsequently extending
         its appointment (or that of the Receiver replacing it) to that part
         of the Funding 2 Charged Property or appointing another Receiver over
         any other part of the Funding 2 Charged Property.

8.4      Agent of Funding 2: The Receiver shall, so far as the law permits, be
         the agent of Funding 2 and (subject to any restriction or limitation
         imposed by law) Funding 2 alone shall be responsible for the
         Receiver's contracts, engagements, acts, omissions, misconduct,
         negligence or default and for liabilities incurred by it; and in no
         circumstances whatsoever shall the Funding 2 Security Trustee or any
         Funding 2 Secured Creditor be in any way responsible for or incur any
         liability in connection with its contracts, engagements, acts,
         omissions, misconduct, negligence or default, and if a liquidator of
         Funding 2 shall be appointed, the Receiver shall act as principal and
         not as agent for the Funding 2 Security Trustee.

8.5      Remuneration: Subject as provided otherwise by applicable law, the
         remuneration of the Receiver shall be fixed by the Funding 2 Security
         Trustee and may be or include a commission calculated by reference to
         the gross amount of all monies received or otherwise. Such
         remuneration (and such commission (if any)) shall be payable
         hereunder by Funding 2 alone subject always to Clause 7.3 (Funding 2
         Post-Enforcement Priority of Payments) and the amount of such
         remuneration shall form part of the Funding 2 Secured Obligations and
         shall accordingly be secured by the Funding 2 Security.

8.6      Powers of the Receiver: The Receiver of Funding 2, in addition to any
         powers conferred on an administrative receiver, receiver, manager or
         receiver and manager by statute or common law, shall have the power
         to:

         (a)      take possession of, get in and collect the Funding 2 Charged
                  Property;

         (b)      subject as expressly provided in Clause 6.7 (Restriction on
                  Disposal of Funding 2 Charged Property), sell, transfer,
                  convey, license, release or otherwise dispose of vary or
                  deal with, and also to grant any option to purchase, and to
                  effect exchanges of, the whole or any part of Funding 2
                  Charged Property or any interest therein and to grant or
                  accept surrenders, disclaimers and variations in relation to
                  or otherwise affecting the Funding 2 Charged Property in
                  each case in such manner, for such consideration (if any)
                  and generally upon such terms (including by deferred payment
                  or payment by instalments) as it may think fit and/or to
                  concur in any of the foregoing (and nothing shall preclude
                  any such disposal being made to a Funding 2 Secured
                  Creditor);

         (c)      carry out any transaction, scheme or arrangement which the
                  Funding 2 Security Trustee may, in its absolute discretion,
                  consider appropriate with a view to or in connection with
                  the sale of the Funding 2 Charged Property;

         (d)      insure the Funding 2 Charged Property against such risks and
                  for such amounts as the Funding 2 Security Trustee may
                  consider prudent and to obtain bonds and performance
                  guarantees;


                                      19
<PAGE>

         (e)      otherwise protect, maintain or improve, the Funding 2
                  Charged Property or any part thereof in any manner and for
                  any purpose whatsoever as it shall think fit;

         (f)      transfer all or any of the Funding 2 Charged Property and/or
                  any of the liabilities to any other company or body
                  corporate, whether or not formed or acquired for the purpose
                  (and whether or not a subsidiary or associated company of
                  the Funding 2 Security Trustee or any other party to the
                  Funding 2 Transaction Documents) and to form a subsidiary or
                  subsidiaries of Funding 2;

         (g)      carry on and manage or concur in managing or appoint a
                  manager of, the whole or any part of the business of Funding
                  2 in such manner as it shall in its absolute discretion
                  think fit including the power to enter into any contract and
                  to perform, repudiate, rescind or vary any contract to which
                  Funding 2 is a party;

         (h)      sell or concur in selling the whole or any part of Funding
                  2's business whether as a going concern or otherwise;

         (i)      appoint, dismiss, engage or vary the terms of employment of
                  any employees, managers, agents or advisers of Funding 2
                  upon such terms as to remuneration and otherwise for such
                  periods as it may in its absolute discretion think fit;

         (j)      in connection with the exercise or proposed exercise of any
                  of its powers or in order to obtain payment of its
                  remuneration or reimbursement of its expenses (in each case,
                  whether or not already due), to borrow or raise money from
                  any person, without security or on the security of the
                  Funding 2 Charged Property (either in priority to the
                  Funding 2 Security or otherwise) and generally in such
                  manner and on such terms as it may think fit;

         (k)      bring, defend, submit to arbitration, negotiate, compromise,
                  enforce, abandon and settle actions, suits, claims and
                  proceedings concerning or affecting the Funding 2 Charged
                  Property or the Funding 2 Security;

         (l)      exercise any powers, discretions, voting, conversion or
                  other rights or entitlements in relation to any of the
                  Funding 2 Charged Property or incidental to the ownership of
                  or rights in or to any of the Funding 2 Charged Property and
                  to complete or effect any transaction entered into by
                  Funding 2 or disclaim, abandon or modify all or any of the
                  outstanding contracts or arrangements of Funding 2 relating
                  to or affecting the Funding 2 Charged Property;

         (m)      generally carry out, or cause to be carried out any
                  transaction or scheme or arrangement whatsoever, whether
                  similar or not to any of the foregoing, in relation to the
                  Funding 2 Charged Property which it may consider expedient
                  as effectual as if it were solely and absolutely entitled to
                  the Funding 2 Charged Property;

         (n)      in connection with the exercise of any of its powers,
                  execute or do, or cause or authorise to be executed or done,
                  on behalf of or in the name of Funding 2 or


                                      20
<PAGE>

                  otherwise, as it may think fit, all documents, acts or
                  things, acts or things which it may consider appropriate;

         (o)      redeem, discharge or compromise any security whether or not
                  having priority to the security created hereunder;

         (p)      enter into covenants, guarantees, commitments, indemnities
                  and other obligations or liabilities as it shall think fit;

         (q)      pay and discharge out of the profits and income of the
                  Funding 2 Charged Property and the monies to be made by it
                  carrying on any such business as aforesaid the expenses in
                  and about the carrying on and management of such business or
                  in the exercise of any of the powers conferred by this
                  Clause 8 (Receiver) or otherwise in respect of the Funding 2
                  Charged Property and all outgoings which it shall think fit
                  to pay and to apply the residue of the said profits, income
                  or monies in the manner provided by Clause 7.3 (Funding 2
                  Post-Enforcement Priority of Payments); and

         (r)      exercise any other powers, rights and/or remedies that may
                  be available at law or in equity including the powers
                  referred to in Schedule 1 (and where applicable, Schedule 2)
                  of the Insolvency Act 1986.

8.7      Security: The Funding 2 Security Trustee may from time to time and at
         any time require any such Receiver to give security for the due
         performance of its duties and may fix the nature and amount of the
         security to be so given but the Funding 2 Security Trustee shall not
         be bound in any such case to require any such security.

8.8      Application by Receiver: Save so far as otherwise directed by the
         Funding 2 Security Trustee, all monies from time to time received by
         such Receiver shall be paid over to the Funding 2 Security Trustee to
         be held by it on the trusts declared under this Deed and to be
         distributed in accordance with Clause 7.3 (Funding 2 Post-Enforcement
         Priority of Payments) and Schedule 3 (Funding 2 Priority of
         Payments).

8.9      Payment to Receiver: The Funding 2 Security Trustee may pay over to
         such Receiver any monies constituting part of the Funding 2 Charged
         Property to the intent that the same may be applied for the purposes
         of this Deed by such Receiver and the Funding 2 Security Trustee may
         from time to time determine what funds the Receiver shall be at
         liberty to keep in hand with a view to the performance of its duties
         as such Receiver.

8.10     No Restrictions: None of the restrictions imposed by the 1925 Act in
         relation to the appointment of receivers or the giving of notice or
         otherwise shall apply in relation to the Receiver.

8.11     Appointment of Administrator:

         (a)      Subject to any relevant provisions of the Insolvency Act
                  1986, the Funding 2 Security Trustee may, by any instrument
                  or deed of appointment, appoint one or more persons to be
                  the administrator of Funding 2 at any time after:

                  (i)   the service of a Funding 2 Intercompany Loan
                        Enforcement Notice; or


                                      21
<PAGE>

                  (ii)  being requested to do so by Funding 2; or

                  (iii) any application having been made to the court for an
                        administration order under the Insolvency Act 1986; or

                  (iv)  any person having ceased to be an administrator as a
                        result of any event specified in paragraph 90 of
                        Schedule B1 to the Insolvency Act 1986; or

                  (v)   any notice of intention to appoint an administrator
                        having been given by any person or persons entitled to
                        make such appointment under the Insolvency Act 1986.

         (b)      Where any such appointment is made at a time when an
                  administrator continues in office, the administrator shall
                  act either jointly or concurrently with the administrator
                  previously appointed hereunder, as the appointment
                  specifies.

         (c)      Subject to any applicable order of the Court, the Funding 2
                  Security Trustee may replace any administrator, or seek an
                  order replacing the administrator, in any manner allowed by
                  the Insolvency Act 1986.

         (d)      Where the administrator was appointed by the Funding 2
                  Security Trustee under paragraph 14 of Schedule B1 to the
                  Insolvency Act 1986, the Funding 2 Security Trustee may, by
                  notice in writing to Funding 2, replace the administrator in
                  accordance with paragraph 92 of Schedule B1 to the
                  Insolvency Act 1986.

         (e)      Every such appointment shall take effect at the time and in
                  the manner specified by the Insolvency Act 1986.

         (f)      If at any time and by virtue of any such appointment(s) any
                  two or more persons shall hold office as administrators of
                  the same assets or income, such administrators may act
                  jointly or concurrently as the appointment specifies so
                  that, if appointed to act concurrently, each one of such
                  administrators shall be entitled (unless the contrary shall
                  be stated in any of the deed(s) or other instrument(s)
                  appointing them) to exercise all the functions conferred on
                  an administrator by the Insolvency Act 1986.

         (g)      Every administrator shall have all the powers of an
                  administrator under the Insolvency Act 1986.

         (h)      In exercising his functions hereunder and under the
                  Insolvency Act 1986, the administrator acts as agent of
                  Funding 2 and does not act as agent of the Funding 2
                  Security Trustee.

         (i)      Every administrator shall be entitled to remuneration for
                  his services in the manner fixed by or pursuant to the
                  Insolvency Act 1986 or the Insolvency Rules 1986.

8.12     Administration: Upon application being made to a court of competent
         jurisdiction for an administration order or the service of a notice
         of intention to appoint an


                                      22
<PAGE>

         administrator or the filing of documents with the court for the
         appointment of an administrator in relation to Funding 2 or
         other order having substantially the same effect to be
         made on application by a creditor or creditors of Funding 2, the
         Funding 2 Security Trustee shall (except in the circumstances where
         the Funding 2 Security Trustee has taken steps to appoint an
         administrator in accordance with Clause 8.11 (Appointment of
         Administrator)), subject to it being indemnified and/or secured to
         its satisfaction, as soon as practicable appoint a Receiver in
         accordance with this Deed (who shall, to the extent permitted by law,
         be an "administrative receiver" under Section 29 (2) of the
         Insolvency Act 1986) of the whole of the Funding 2 Charged Property
         and, in the case of any application to the court or petition, the
         Funding 2 Security Trustee shall instruct the Receiver to attend at
         the hearing of the application or the petition and take such steps as
         are necessary to prevent the appointment of an administrator. The
         Funding 2 Secured Creditors shall co-operate and do all acts and
         enter into such further documents, deeds or agreements as the Funding
         2 Security Trustee may deem necessary or desirable to ensure that an
         administration order is not made or that an administrator is not
         otherwise appointed and that an administrative receiver is appointed.
         Paragraph 14 of Schedule B1 to the Insolvency Act 1986 applies to the
         floating charge created hereunder.

9.       Further Assurance and Power of Attorney

9.1      Further Assurance: Funding 2 covenants with and undertakes to the
         Funding 2 Security Trustee from time to time (notwithstanding that
         the security may not have become enforceable and the Funding 2
         Security Trustee may not have served a Funding 2 Intercompany Loan
         Enforcement Notice) upon demand:

         (a)      to execute, at Funding 2's cost, any document or do any act
                  or thing which the Funding 2 Security Trustee or any
                  Receiver may specify (including executing such Security
                  Interests over its rights in and over the Funding 2 Charged
                  Property and any other assets of Funding 2 in such form as
                  the Funding 2 Security Trustee and/or any Receiver may
                  require) with a view to:

                  (i)   registering, perfecting, protecting or improving any
                        charge or security or Security Interest created or
                        intended to be created by or pursuant to this Deed
                        (including any act or document which may be required
                        or desirable under the laws of any jurisdiction in
                        which any property or assets may be located in order
                        to confer on the Funding 2 Security Trustee security
                        over such property and assets equivalent or similar to
                        the security intended to be conferred by or pursuant
                        to this Deed) and in such form as the Funding 2
                        Security Trustee or the Receiver may specify; and/or

                  (ii)  facilitating the realisation of or enforcement of
                        rights of, all or any part of the Funding 2 Charged
                        Property or the exercise, or proposed exercise, of any
                        of the powers, duties or discretions vested or
                        intended to be vested in the Funding 2 Security
                        Trustee or such Receiver by or pursuant to this Deed
                        or doing any act or thing deemed necessary by the
                        Funding 2 Security Trustee or the Receiver,

         (b)      to give or join in giving or procuring the giving of any
                  notices to any persons and obtain or procure that there is
                  obtained any necessary acknowledgements

                                      23
<PAGE>

                  in relation to such notices, all in such form as the Funding
                  2 Security Trustee or the Receiver may require and at the
                  cost of Funding 2,

         and for the purpose of this Clause 9.1 (Further Assurance) a
         certificate in writing signed by the Funding 2 Security Trustee to
         the effect that any particular assurance or thing is required by it
         shall be conclusive evidence of that fact.

9.2      Execution of Power of Attorney: Immediately upon execution of this
         Deed, Funding 2 shall execute and deliver to the Funding 2 Security
         Trustee the Power of Attorney in or substantially in the form set out
         in Schedule 1.

9.3      Charged Property on Trust: To the extent permitted to do so under the
         Funding 2 Transaction Documents, for the purpose of giving effect to
         this Deed, Funding 2 hereby declares that, after service of a Funding
         2 Intercompany Loan Enforcement Notice, it will hold all the Funding
         2 Charged Property (subject to the right of redemption) upon trust to
         convey, assign or otherwise deal with such Funding 2 Charged Property
         in such manner and to such person as the Funding 2 Security Trustee
         shall direct pursuant to this Deed, and declares that it shall be
         lawful for the Funding 2 Security Trustee to appoint a new trustee or
         trustees of the Funding 2 Charged Property in place of Funding 2.

10.      Crystallisation

10.1     Notice: In addition and without prejudice to any other event
         resulting in a crystallisation of the floating charge created by this
         Deed or any other right the Funding 2 Security Trustee may have, but
         subject to any prohibition or restriction imposed by applicable law,
         the Funding 2 Security Trustee may, by notice in writing to Funding
         2, declare that the floating charge hereby created shall be converted
         into first specific fixed charges over such of the undertaking,
         property and assets of Funding 2 as the Funding 2 Security Trustee
         may specify in such notice at any time if:

         (a)      a Potential Funding 2 Intercompany Loan Event of Default has
                  occurred; or

         (b)      it believes that the Funding 2 Charged Property or any part
                  thereof is in danger of being seized or sold under any form
                  of distress, execution or diligence levied or is otherwise
                  in jeopardy; or

         (c)      it considers that it is desirable in order to protect the
                  priority of the Funding 2 Security,

         provided that the floating charge created under this Deed may not be
         converted into a fixed charge or charges solely as a result of
         obtaining a moratorium (or anything done with a view to obtaining a
         moratorium) under the Insolvency Act 2000 except with leave of the
         court.

10.2     Automatic Crystallisation: In addition and without prejudice to any
         other event resulting in a crystallisation of the floating charge
         contained herein and without prejudice to any rule of law which may
         have a similar effect, but subject to any prohibition or restriction
         imposed by applicable law, the floating charge created under this
         Deed shall automatically and without notice be converted with
         immediate effect into a fixed charge as regards:


                                      24
<PAGE>

         (a)      all property, assets or undertaking of Funding 2, subject to
                  the floating charge, upon:

                  (i)   Funding 2 ceasing to carry on its business or a
                        material part thereof as a going concern;

                  (ii)  the presentation of a petition for the compulsory
                        winding-up of Funding 2;

                  (iii) the convening of a meeting for the passing of a
                        resolution for the voluntary winding-up of Funding 2;

                  (iv)  the making of an application for an administration
                        order or the filing of documents with the court for
                        the appointment of an administrator or the service of
                        a notice of intention to appoint an administrator in
                        relation to Funding 2;

                  (v)   the presentation or making of an application for a
                        warrant of execution, writ of fieri facias, garnishee
                        order or charging order in respect of any of the
                        assets of Funding 2 subject to the floating charge;

                  (vi)  the occurrence of a Funding 2 Intercompany Loan Event
                        of Default or if there are no Funding 2 Intercompany
                        Loans outstanding, following a default in payment of
                        any other Funding 2 Secured Obligation on its due date
                        or within any applicable grace period following such
                        due date stated in the relevant Funding 2 Transaction
                        Document; and/or

         (b)      any property, assets or undertaking of Funding 2, which
                  become subject to an Encumbrance in favour of any person
                  other than the Funding 2 Security Trustee or which is/are
                  the subject of a sale, transfer or other disposition, in
                  either case, contrary to the covenants and undertakings
                  contained in the Funding 2 Transaction Documents,
                  immediately prior to such Encumbrance arising or such sale,
                  transfer or other disposition being made,

         provided that the floating charge created under this Deed may not be
         converted into a fixed charge or charges solely as a result of
         obtaining a moratorium (or anything done with a view to obtaining a
         moratorium) under the Insolvency Act 2000 except with leave of the
         court.

11.      Provisions relating to the Security

11.1     Continuing Security:  The Funding 2 Security shall be:

         (a)      in addition to and independent of and shall not operate so
                  as to prejudice or affect or merge in any other security,
                  right of recourse or other right whatsoever which may be
                  held by any of the Funding 2 Secured Creditors or the
                  Funding 2 Security Trustee on their behalf in respect of the
                  whole or any part of the Funding 2 Secured Obligations and
                  shall not be affected by any release, reassignment,
                  retrocession or discharge of such other security; and

         (b)      a continuing security for the Funding 2 Secured Obligations
                  and shall remain in force as continuing security for the
                  Funding 2 Secured Creditors and shall


                                      25
<PAGE>

                  not be considered as satisfied or discharged by any
                  intermediate payment or settlement of the whole or any part
                  of the Funding 2 Secured Obligations or the existence at any
                  time of a credit balance on any current or other account or
                  any other matter or thing whatsoever.

11.2     Consolidation:  Section 93 of the 1925 Act shall not apply in relation
         to the Funding 2 Security.

11.3     Ruling Off: If the Funding 2 Security Trustee receives notice of any
         Encumbrance affecting the whole or any part of the Funding 2 Charged
         Property or any security granted hereunder in contravention of the
         provisions hereof:

         (a)      the Funding 2 Security Trustee may open a new account in the
                  name of Funding 2 and, if it does not, it shall nevertheless
                  be deemed to have done so at the time it received such
                  notice; and

         (b)      all payments made by Funding 2 to the Funding 2 Security
                  Trustee after the Funding 2 Security Trustee receives such
                  notice shall be credited or deemed to have been credited to
                  the new account, and in no circumstances whatsoever shall
                  operate to reduce the Funding 2 Secured Obligations as at
                  the time the Funding 2 Security Trustee received such
                  notice.

11.4     Avoidance of Payments: Any settlement, discharge or release between
         (a) Funding 2 and (b) the Funding 2 Security Trustee or any Receiver
         (the "Relevant Person(s)") shall be conditional upon no security or
         payment granted or made to the Relevant Person(s) by Funding 2 or any
         other person being avoided or reduced by virtue of any provisions or
         enactments relating to bankruptcy, insolvency or liquidation for the
         time being in force and, in the event of such security or payment
         being so avoided or reduced, the Relevant Person(s) shall be entitled
         to recover the value or amount of such security or payment from
         Funding 2 and from the security subsequently as if such settlement,
         discharge or release had not occurred.

11.5     Retention of Charges: If the Funding 2 Security Trustee shall have
         reasonable grounds for believing that Funding 2 may be insolvent or
         deemed to be insolvent pursuant to the provisions of the Insolvency
         Act 1986 (and production of a solvency certificate of a duly
         authorised officer of Funding 2 shall be prima facie evidence of the
         solvency of Funding 2) as at the date of any payment made by Funding
         2 to the Funding 2 Security Trustee or otherwise in respect of the
         Funding 2 Secured Obligations and that as a result, such payment may
         be capable of being avoided or clawed back, the Funding 2 Security
         Trustee shall be at liberty to retain the charges contained in or
         created pursuant to this Deed until the expiry of a period of one
         month plus such statutory period within which any assurance,
         security, guarantee or payment can be avoided or invalidated after
         the payment and discharge in full of all Funding 2 Secured
         Obligations notwithstanding any release, settlement, discharge or
         arrangement which may be given or made by the Funding 2 Security
         Trustee on, or as a consequence of, such payment or discharge of
         liability provided that, if at any time within such period, a
         petition or an application shall be presented to a competent court
         for an order for the winding up or the making of an administration
         order in respect of Funding 2, or if Funding 2 shall commence to be
         wound up or to go into administration or any analogous proceedings
         shall be commenced by or against Funding 2, as the case may be, the
         Funding 2 Security Trustee shall be at liberty to



                                      26
<PAGE>

         continue to retain such security for such further period as the
         Funding 2 Security Trustee may determine and such security shall be
         deemed to continue to have been held as security for the payment and
         discharge to the Funding 2 Security Trustee of all Funding 2 Secured
         Obligations.

11.6     Possession: Entry into possession of the Funding 2 Charged Property
         or any part thereof shall not render the Funding 2 Security Trustee
         or any Receiver of Funding 2 liable to account as mortgagee or
         creditor in possession for anything except actual receipts. If and
         whenever the Funding 2 Security Trustee or the Receiver enters into
         possession of the Funding 2 Charged Property, it shall be entitled at
         any time to go out of such possession.

11.7     Change of Name, etc.: This Deed shall remain valid and enforceable
         notwithstanding any change in the name, composition or constitution
         of the Funding 2 Security Trustee or Funding 2 or any amalgamation,
         merger or consolidation by the Funding 2 Security Trustee or Funding
         2, with any other corporation (whether, in the case of Funding 2,
         permitted under the Funding 2 Transaction Documents or not).

12.      Protection of Third Parties

12.1     No Enquiry: No purchaser from, or other person dealing with, the
         Funding 2 Security Trustee or a Receiver shall be concerned to
         enquire whether any of the powers exercised or purported to be
         exercised under this Deed has arisen or become exercisable, whether
         the Funding 2 Secured Obligations remain outstanding or have become
         payable, whether the Funding 2 Security Trustee or the Receiver is
         authorised to act or as to the propriety or validity of the exercise
         or purported exercise of any power; and the title and the position of
         such a purchaser or other person shall not be impeachable by
         reference to any of those matters and all the protection to
         purchasers contained in Sections 104 and 107 of the 1925 Act shall
         apply to any person purchasing from or dealing with the Funding 2
         Security Trustee or any such Receiver.

12.2     Receipts to Third Parties: Upon any sale, calling in, collection,
         enforcement or other realisation of the Funding 2 Charged Property in
         accordance with the terms hereof and upon any other dealing or
         transaction under or pursuant to this Deed, the receipt of the
         Funding 2 Security Trustee or any Receiver shall be an absolute and a
         conclusive discharge to a purchaser or other person dealing with the
         Funding 2 Security Trustee or such Receiver and shall relieve it of
         any obligation to see to the application of any monies paid to or by
         the direction of the Funding 2 Security Trustee or such Receiver.

13.      Set-Off

         The Funding 2 Security Trustee may at any time following the service
         of a Funding 2 Intercompany Loan Enforcement Notice without notice
         and notwithstanding any settlement of account or other matter
         whatsoever combine or consolidate all or any existing accounts of
         Funding 2 whether in its own name or jointly with others and held by
         it or any Funding 2 Secured Creditor and may set-off or transfer all
         or any part of any credit balance or any sum standing to the credit
         of any such account (whether or not the same is due to Funding 2 from
         the Funding 2 Security Trustee or relevant Funding 2 Secured Creditor
         and whether or not the credit balance and the account in debit or the
         Funding 2 Secured Obligations are expressed in the same



                                      27
<PAGE>

         currency in which case the Funding 2 Security Trustee is hereby
         authorised to effect any necessary conversions at its prevailing
         rates of exchange) in or towards satisfaction of any of the Funding
         2 Secured Obligations (and on or at any time after the Funding 2
         Security has become enforceable in accordance with Clause 6.2
         (Enforceable) the Funding 2 Security Trustee may make such application
         notwithstanding any specified maturity of any deposits) but subject
         always to the Funding 2 Priority of Payments and may in its absolute
         discretion estimate the amount of any liability of Funding 2 which is
         contingent or unascertained and thereafter set-off such estimated
         amount and no amount shall be payable by the Funding 2 Security
         Trustee to Funding 2 unless and until all Funding 2 Secured
         Obligations have been ascertained and fully repaid or discharged.

14.      Representations and Covenants

14.1     Representations and Warranties:

         (a)      Funding 2 hereby represents to the Funding 2 Security
                  Trustee that it is, as of the date hereof, the beneficial
                  owner of all of the Funding 2 Charged Property free and
                  clear of all liens, claims, charges or Encumbrances except
                  for the Funding 2 Security, and undertakes that it will
                  retain all rights associated with ownership of the Funding 2
                  Charged Property free and clear of all liens, claims,
                  charges and Encumbrances except for the Funding 2 Security.

         (b)      Funding 2 represents that it has taken all necessary steps
                  to enable it to create the Funding 2 Security in accordance
                  with this Deed and has taken no action or steps which will
                  or may prejudice its right, title and interest in, to and
                  under the Funding 2 Charged Property.

         (c)      Funding 2 represents that its Centre of Main Interests (as
                  defined in the EU Regulation) is in the United Kingdom.

14.2     Negative Covenants: Funding 2 hereby undertakes that, for so long as
         any Funding 2 Secured Obligation remains outstanding, Funding 2 shall
         not, save to the extent contemplated in or provided in the Funding 2
         Transaction Documents or unless it has obtained the prior written
         consent of the Funding 2 Security Trustee:

         (a)      open or maintain any bank account or deposit account with
                  any bank or any other financial institution other than the
                  Funding 2 Bank Accounts or the Funding 2 Swap Collateral
                  Accounts or close the Funding 2 Bank Accounts or the Funding
                  2 Swap Collateral Accounts other than in accordance with the
                  Funding 2 Transaction Documents;

         (b)      either in a single transaction or in a series of
                  transactions, whether related or not and whether voluntarily
                  or involuntarily, sell, transfer, lease or otherwise dispose
                  of or grant any option over all or any part of its assets,
                  properties or undertakings or any interest, estate, right,
                  title or benefit therein or agree or purport to do any of
                  the foregoing, other than as provided for pursuant to the
                  Funding 2 Transaction Documents;

         (c)      create or permit to subsist any Security Interest over or in
                  respect of any of its assets (unless arising by operation of
                  law) other than as provided pursuant to


                                      28
<PAGE>

                  the Funding 2 Transaction Documents provided that upon it
                  making available any Loan Tranche or entering into any new
                  Funding 2 Intercompany Loan Agreement, Funding 2 shall be
                  entitled to create the Security Interests (if any)
                  contemplated under the applicable Deed of Accession;

         (d)      engage in any activities in the United States (directly or
                  through agents), nor derive any income from United States
                  sources as determined under United States income tax
                  principles and will not hold any property if doing so would
                  cause it to be engaged or deemed to be engaged in a trade or
                  business within the United States as determined under United
                  States tax principles; or

         (e)      establish any branches or other establishments (being any
                  place of operations where a company carries on a
                  non-transitory economic activity with human means and goods
                  as defined in Article 2(h) of the EU Insolvency Regulation)
                  in any jurisdiction other than England and shall procure
                  that its management, the place at which the meetings of its
                  directors are held and the place where the interests of
                  Funding 2 are administered on a regular basis, is England;

         (f)      consent to any amendment to, or agree to waive or authorise
                  any breach of, any provision of any of the Funding 2
                  Transaction Documents without the prior written consent of
                  the Funding 2 Security Trustee;

         (g)      do any act or thing the effect of which would be to make
                  Funding 2 resident in any jurisdiction other than the United
                  Kingdom for United Kingdom tax purposes;

         (h)      hold shares or possess voting power in or in relation to any
                  company, or possess any power to secure, by virtue of any
                  powers conferred by the articles of association or other
                  document regulating any company, control over any company,
                  other than in respect of the Master Issuer and any other
                  Funding 2 Issuer that it may create in the future; and

         (i)      have any employees.

14.3     Positive covenants:  Funding 2 covenants and undertakes with the
         Funding 2 Security Trustee for the benefit of the Funding 2 Secured
         Creditors that it shall:

         (a)      file or procure the filing with the Registrar of Companies
                  pursuant to Chapter I of Part XII of the Companies Act 1985
                  of duly completed Forms 395 together with an executed
                  original of this Deed and the required fee within 21 days
                  after the date of this Deed;

         (b)      on the date hereof join with the Funding 2 Security Trustee
                  in giving notice of the assignments by way of security and
                  the security created under or pursuant to this Deed to each
                  of the Seller, the Administrator, Funding, the Security
                  Trustee and each Collection Bank and any other party to any
                  Funding 2 Transaction Document not being a party to this
                  Deed, and on any date hereafter (to the extent only that
                  such notice and acknowledgement is not given under or
                  pursuant to this Deed) join with the Funding 2 Security
                  Trustee in giving notice of the assignments by way of
                  security and the security created under this Deed to any
                  party to a Funding 2 Transaction Document entered


                                      29
<PAGE>

                  into by Funding 2 after the date hereof, in the form (or
                  substantially in the form) set out in Schedule 4 (Form of
                  Notice of Assignment);

         (c)      cause to be prepared and certified by its auditors in
                  respect of each Financial Year accounts in such form as will
                  comply with relevant legal and accounting requirements for
                  the time being and, in particular, cause to be prepared and
                  certified by the auditors in respect of each of its
                  financial years, accounts which are in accordance with a
                  basis of accounting that satisfies the definition of "UK
                  generally accepted accounting practice" contained in
                  sub-section 50(4) of the Finance Act 2004;

         (d)      at all times keep or procure the keeping of such books of
                  account and records as may be necessary to comply with all
                  applicable laws and so as to enable financial statements to
                  be prepared and allow the Funding 2 Security Trustee and any
                  person or persons appointed by the Funding 2 Security
                  Trustee free access to such books of account and records at
                  all reasonable times during normal business hours upon
                  reasonable notice in writing, provided that such inspection
                  shall only be for the purposes of carrying out its duties
                  under this Deed and any information so obtained shall only
                  be used and passed on to any other person for the purpose of
                  the Funding 2 Security Trustee carrying out its duties under
                  this Deed;

         (e)      give notice in writing to the Funding 2 Security Trustee of
                  the occurrence of any Funding 2 Intercompany Loan Event of
                  Default or Potential Funding 2 Intercompany Loan Event of
                  Default immediately upon becoming aware thereof and without
                  waiting for the Funding 2 Security Trustee to take any
                  further action;

         (f)      immediately on receipt or notice of the same, supply to the
                  Funding 2 Security Trustee full details of any application
                  to the court for an administration order under paragraph 10
                  of Schedule B1 of the Insolvency Act 1986 made in respect of
                  Funding 2 and (without prejudice to paragraph 12(2) of
                  Schedule B1 to the Insolvency Act 1986) of any proposed or
                  actual appointment of an administrator by the holder of a
                  qualifying floating charge (within the meaning of paragraph
                  14 of Schedule B1 to the Insolvency Act 1986) or (without
                  prejudice to paragraph 26(1) of Schedule B1 to the
                  Insolvency Act 1986) by Funding 2 or its directors;

         (g)      give to the Funding 2 Security Trustee (i) within seven days
                  after demand by the Funding 2 Security Trustee therefor and
                  (ii) (without the necessity for any such demand) promptly
                  after the publication of its audited accounts in respect of
                  each Financial Year and in any event not later than the date
                  required by statute to file or publish (whichever is
                  earlier) such audited accounts after the end of each such
                  Financial Period a certificate signed by two directors of
                  Funding 2 to the effect that as at a date not more than
                  seven days before delivering such certificate (the
                  "certification date") there did not exist and had not
                  existed since the certification date of the previous
                  certificate (or in the case of the first such certificate
                  the date hereof) any Funding 2 Intercompany Loan Event of
                  Default or any Potential Funding 2 Intercompany Loan Event
                  of Default (or if such then exists or existed specifying the
                  same) and that during the period from and including the
                  certification date of the last such


                                      30
<PAGE>


                  certificate (or in the case of the first such certificate
                  the date hereof) to and including the certification date of
                  such certificate Funding 2 has complied with all its
                  obligations contained in this Deed and each of the other
                  Funding 2 Transaction Documents or (if such is not the case)
                  specifying the respects in which it has not so complied;

         (h)      at all times execute all such further documents and do all
                  such further acts and things as may in the opinion of the
                  Funding 2 Security Trustee be necessary at any time or times
                  to give effect to the terms and conditions of this Deed and
                  the other Funding 2 Transaction Documents;

         (i)      at all times comply with the provisions of this Deed and the
                  other Funding 2 Transaction Document which are expressed to
                  be binding on it and to observe and perform the same;

         (j)      so far as permitted by applicable law, at all times give to
                  the Funding 2 Security Trustee such information as it
                  requires for the performance of its functions;

         (k)      duly and promptly pay and discharge all Taxes imposed upon
                  it or its assets unless such Taxes are, in the opinion of
                  the Funding 2 Security Trustee, being contested in good
                  faith by Funding 2;

         (l)      in the event of termination of the Funding 2 Bank Account
                  Agreement, subject to and in accordance with the provisions
                  of the Funding 2 Bank Account Agreement use its reasonable
                  endeavours to enter into a replacement Funding 2 Bank
                  Account Agreement;

         (m)      in the event of termination of the Cash Management
                  Agreement, subject to and in accordance with the provisions
                  of the Cash Management Agreement, use its reasonable
                  endeavours to enter into a replacement Cash Management
                  Agreement;

         (n)      in the event of the termination of the Funding 2 Basis Rate
                  Swap Agreement, notify the Funding 2 Security Trustee and
                  the Rating Agencies and use reasonable endeavours to enter
                  into a replacement basis rate swap agreement upon terms
                  acceptable to the Rating Agencies and the Funding 2 Security
                  Trustee with a swap provider whom the Rating Agencies have
                  previously confirmed, to Funding 2 and the Funding 2
                  Security Trustee, will not cause the then current ratings of
                  the Notes of any Funding 2 Issuer to be downgraded,
                  withdrawn or qualified;

         (o)      at all times have its Centre of Main Interests (as defined
                  in the EU Regulation) in the United Kingdom; and

         (p)      treat each swap transaction entered into by Funding 2 under
                  the Funding 2 Basis Rate Swap Agreement as a "derivative
                  financial instrument" for the purposes of Financial
                  Reporting Standard 13 (as from time to time amended) and any
                  replacement of it following the convergence of UK GAAP and
                  IFRS.


                                      31
<PAGE>

15.      Terms of Appointment

15.1     Section 1 of the Trustee Act 2000 shall not apply to the duties of
         the Trustee in relation to the trusts constituted by this Deed. Where
         there are any inconsistencies between the Trustee Acts and the
         provisions of this Deed, the provisions of this Deed shall, to the
         extent allowed by law, prevail and, in the case of any such
         inconsistency with the Trustee Act 2000, the provisions of this Deed
         shall constitute a restriction or exclusion for the purposes of that
         Act. The Trustee shall have all the powers conferred upon trustees by
         the Trustee Acts and by way of supplement thereto it is expressly
         declared as set out in the following provisions of this Clause 15
         (Terms of Appointment).

15.2     Reliance on Information:

         (a)      The Funding 2 Security Trustee may in relation to this Deed
                  act on the opinion or advice of, or a certificate or any
                  information (whether addressed to the Funding 2 Security
                  Trustee or not) obtained from, any lawyer, banker, valuer,
                  surveyor, securities company, broker, auctioneer, accountant
                  or other expert in the United Kingdom or elsewhere, whether
                  obtained by Funding 2, the Funding 2 Security Trustee, any
                  Receiver or otherwise, whether or not any of the aforesaid
                  or engagement letter or other document entered into by the
                  Funding 2 Security Trustee and the relevant person in
                  connection therewith contains any monetary or other limit on
                  the liability of the relevant person and the Funding 2
                  Security Trustee shall not be responsible for any loss
                  occasioned by so acting. Any such opinion, advice,
                  certificate or information may be sent or obtained by
                  letter, facsimile reproduction or in any other form and the
                  Funding 2 Security Trustee shall not be liable for acting in
                  good faith on any opinion, advice, certificate or
                  information purporting to be so conveyed although the same
                  shall contain some error or shall not be authentic provided
                  that such error or lack of authenticity is not manifest.

         (b)      The Funding 2 Security Trustee may call for and shall be
                  entitled to rely upon a certificate signed by two directors
                  of Funding 2 or a certificate of any other person in respect
                  of every matter and circumstance for which a certificate is
                  expressly provided for under this Deed or the other Funding
                  2 Transaction Documents and to call for and rely upon a
                  certificate of Funding 2 or any other person as to any other
                  fact or matter prima facie within the knowledge of Funding 2
                  or such person as sufficient evidence thereof and the
                  Funding 2 Security Trustee shall not be bound in any such
                  case to call for further evidence or be responsible for any
                  loss, liability, costs, damages, expenses or inconvenience
                  that may be caused by it failing to do so.

         (c)      The Funding 2 Security Trustee may call for and shall be
                  entitled to rely upon any document provided to it by Funding
                  2, the Mortgages Trustee or the Cash Manager in respect of
                  every matter and circumstance prima facie within the
                  knowledge of Funding 2, the Mortgages Trustee or the Cash
                  Manager and the Funding 2 Security Trustee shall not be
                  bound in any such case to call for further evidence or be
                  responsible for any loss, liability, costs, damages,
                  expenses or inconvenience that may be caused by it failing
                  to do so.


                                      32
<PAGE>

         (d)      The Funding 2 Security Trustee shall be entitled to act on
                  any Principal Directions provided in accordance with Clause
                  15.9 (Funding 2 Security Trustee to act on Issuer Security
                  Trustee direction) without further enquiry and to assume
                  that any such Principal Directions are (a) given in
                  accordance with the provisions of this Deed and (b) given,
                  where appropriate, in accordance with the directions of the
                  Issuer Security Trustee(s), and the Funding 2 Security
                  Trustee shall not be liable to any person for any action
                  taken or omitted under or in connection with this Deed in
                  accordance with any such Principal Directions. The Funding 2
                  Security Trustee shall be entitled to act upon any notice,
                  request or other communication of any party to this Deed for
                  the purposes of this Deed or any of the Transaction
                  Documents if such notice, request or other communication
                  purports to be signed or sent by or on behalf of any
                  authorised signatory of such party.

15.3     Powers and Duties:

         (a)      The Funding 2 Security Trustee shall not have any
                  responsibility for or have any duty to make any
                  investigation in respect of or in any way be liable
                  whatsoever for the nature, status, creditworthiness or
                  solvency of Funding 2. Each Funding 2 Secured Creditor shall
                  be solely responsible for making its own independent
                  appraisal of and investigation into the financial condition,
                  creditworthiness, affairs, status and nature of Funding 2
                  and the Funding 2 Security Trustee shall not at any time
                  have any responsibility for the same and each Funding 2
                  Secured Creditor shall not rely on the Funding 2 Security
                  Trustee in respect thereof.

         (b)      The Funding 2 Security Trustee shall not be responsible for
                  the scope or accuracy of any recitals, statements, warranty,
                  representation or covenant of any party (other than the
                  Funding 2 Security Trustee) contained herein or in any other
                  Funding 2 Transaction Document or any other document entered
                  into in connection therewith and shall assume the accuracy
                  and correctness thereof.

         (c)      The Funding 2 Security Trustee shall (save as expressly
                  otherwise provided herein or in the other Transaction
                  Documents) as regards all trusts, powers, authorities and
                  discretions vested in it by this Deed, the other Transaction
                  Documents or by operation of law, have absolute and
                  uncontrolled discretion as to the exercise or non-exercise
                  thereof and the Funding 2 Security Trustee shall not be
                  responsible for any liability that may result from the
                  exercise or non-exercise thereof but whenever the Funding 2
                  Security Trustee is under the provisions of this Deed bound
                  to act at the request or direction any party, the Funding 2
                  Security Trustee shall nevertheless not be so bound unless
                  first indemnified and/or provided with security to its
                  satisfaction against all actions, proceedings, claims and
                  demands to which it may render itself liable and all costs,
                  charges, damages, expenses and liabilities which it may
                  incur by so doing.

         (d)      The Funding 2 Security Trustee may accept without enquiry,
                  requisition or objection such title as Funding 2 may have to
                  the Funding 2 Charged Property or any part thereof from time
                  to time and shall not be required to investigate or make any
                  enquiry into or be liable for any defect or failure in the
                  right or title


                                      33
<PAGE>

                  of Funding 2 to the Funding 2 Charged Property or any part
                  thereof from time to time whether or not any defect was
                  known to the Funding 2 Security Trustee or might have been
                  discovered upon examination, inquiry or investigation and
                  whether or not capable of remedy.

         (e)      The Funding 2 Security Trustee shall not be responsible for
                  exercising the rights of any of the parties under the
                  Transaction Documents or considering the basis upon which
                  the approvals or consents are granted by any of the parties
                  under the Transaction Documents.

         (f)      The Funding 2 Security Trustee shall not be bound to give
                  notice to any person of the execution of this Deed nor shall
                  it have any duty to make any investigation in respect of or
                  in any way be liable whatsoever for the registration,
                  filing, protection or perfection of the Funding 2 Security
                  or Funding 2 Transaction Documents relating to the Funding 2
                  Charged Property or the priority of the security thereby and
                  shall not be liable for any failure, omission or defect in
                  perfecting, protecting, procuring the registration of or
                  further assuring the security created or purported to be
                  created by or pursuant to this Deed or other documents
                  entered into in connection herewith.

         (g)      The Funding 2 Security Trustee shall not have any duty to
                  make any investigation in respect of or in any way be liable
                  whatsoever for the failure to call for delivery of documents
                  of title to or require any transfers, legal mortgages,
                  charges or other further assurances in relation to any of
                  the Funding 2 Charged Property or any other document.

         (h)      The Funding 2 Security Trustee shall be under no obligation
                  to monitor or supervise and shall not have any duty to make
                  any investigation in respect of or in any way be liable
                  whatsoever for the performance or observance by Funding 2 or
                  any other person of the provisions of this Deed or any other
                  Funding 2 Transaction Document and shall be entitled to
                  assume that each person is properly performing and complying
                  with its obligations thereunder.

         (i)      The Funding 2 Security Trustee shall not have any
                  responsibility for or have any duty to make any
                  investigation in respect of or in any way be liable
                  whatsoever for the existence, accuracy or sufficiency of any
                  legal or other opinions, searches, reports, certificates,
                  valuations or investigations delivered or obtained or
                  required to be delivered or obtained at any time in
                  connection with the Funding 2 Charged Property.

         (j)      The Funding 2 Security Trustee shall not be liable or
                  responsible for any loss, cost, damage, expense or
                  inconvenience which may result from anything done or omitted
                  to be done by it under this Deed or under any of the other
                  Funding 2 Transaction Documents.

         (k)      The Funding 2 Security Trustee shall have no responsibility
                  whatsoever to any Funding 2 Secured Creditor as regards any
                  deficiency which might arise because the Funding 2 Security
                  Trustee is subject to any Tax in respect of the Funding 2
                  Charged Property or any part thereof or any income therefrom
                  or any proceeds thereof or is required by law to make any
                  withholding or deduction from any payment to any Funding 2
                  Secured Creditor.


                                      34
<PAGE>

         (l)      The Funding 2 Security Trustee will not be responsible or
                  liable for any inadequacy or unfitness of any Funding 2
                  Charged Property as security or any decline in value or any
                  loss realised upon any disposition of the Funding 2 Charged
                  Property.

         (m)      The Funding 2 Security Trustee shall not be obliged to
                  perfect the legal title to any Mortgage in its name or any
                  of the Related Security if, in its opinion, such perfection
                  would or might result in the Funding 2 Security Trustee
                  becoming liable to or incurring any obligation to Funding 2
                  under a Mortgage or any of the Related Security and/or in
                  its opinion, there is or would be insufficient cash to
                  discharge, in accordance with the provisions of this Deed
                  such liabilities or obligations as and when they arise.

         (n)      Notwithstanding the generality of the above, the Funding 2
                  Security Trustee shall not be responsible for the execution,
                  legality, effectiveness, adequacy, genuineness, validity,
                  enforceability or suitability of any of the Transaction
                  Documents or any of the documents relating to the Mortgage
                  Loans or Mortgages or other documents entered into in
                  connection therewith or any security or the priority thereof
                  constituted or purported to be constituted thereby or
                  pursuant thereto nor shall it be responsible or liable to
                  any person because of any invalidity of any provisions of
                  such documents or the unenforceability thereof, whether
                  arising from statute, law or decision of any court and
                  (without prejudice to the generality of the foregoing) the
                  Funding 2 Security Trustee shall not have any responsibility
                  for, or have any duty to make any investigation in respect
                  of or in any way be liable whatsoever for:

                  (i)   the nature, status, creditworthiness or solvency of
                        Funding 2 or any other person or entity who has at any
                        time provided any security or support whether by way
                        of guarantee, charge or otherwise in respect of any
                        advance made to Funding 2;

                  (ii)  the title, ownership, value, sufficiency or existence
                        of any Mortgaged Property;

                  (iii) the registration, filing, protection or perfection of
                        any Mortgage Loans or Mortgages or the priority of the
                        security created thereby whether in respect of any
                        initial advance or any subsequent advance or any other
                        sums or liabilities;

                  (iv)  the scope or accuracy of any representation,
                        warranties or statements made by or on behalf of
                        Funding 2 in any application for any advance or in any
                        mortgage or charge or any document entered into in
                        connection therewith;

                  (v)   the performance or observance by Funding 2 or any
                        other person of any provisions of any Mortgage Loans
                        or Mortgages or in any document entered into in
                        connection therewith or the fulfilment or satisfaction
                        of any conditions contained therein or relating
                        thereto or as to the existence or occurrence at any
                        time of any default, event of default or similar event
                        contained therein or waiver or consent which has at
                        any time been granted in relation to any of the
                        foregoing;


                                      35
<PAGE>

                  (vi)  the existence, accuracy or sufficiency of any legal or
                        other opinions, searches, reports, certificates,
                        valuations or investigations delivered or obtained or
                        required to be delivered or obtained at any time in
                        connection with Mortgage Loans or Mortgages;

                  (vii) the title of the Seller or the Mortgages Trustee to
                        Mortgage Loans or Mortgages;

                 (viii) the suitability, adequacy or sufficiency of any
                        Lending Criteria and any arrears and enforcement
                        procedures operated by the Seller or compliance
                        therewith or compliance with any applicable criteria
                        for any Further Advances or the legality or
                        recoverability or enforceability thereof or the
                        priority of the security in relation thereto;

                  (ix)  the compliance of the provisions and contents of and
                        the manner and formalities applicable to the execution
                        of the Mortgage Loans or Mortgages and any documents
                        connected therewith or the making of any advance
                        intended to be secured thereby, with the relevant
                        mortgage indemnity policies and with any applicable
                        laws or regulations (including without prejudice to
                        the generality of the foregoing, the Consumer Credit
                        Act 1974);

                  (x)   the failure by the Seller to obtain or comply with any
                        licence, consent or other authority in connection with
                        the origination, sale or purchase of any of the
                        Mortgage Loans or Mortgages or the making of any
                        advances in connection therewith or the failure to
                        effect or procure registration of or to give notice to
                        any person in relation to or otherwise protect the
                        security created or purported to be created by or
                        pursuant to any of the Mortgage Loans or Mortgages or
                        other documents entered into in connection therewith;

                  (xi)  the failure to call for delivery of documents of title
                        to or require any transfers, legal mortgages, charges
                        or other further assurances in relation to any of the
                        assets the subject matter of any of the Funding 2
                        Transaction Documents or any other document;

                  (xii) any accounts, books, records or files maintained by
                        the Seller, the Administrator or any other person in
                        respect of any of the Mortgage Loans or Mortgages; or

                 (xiii) any other matter or thing relating to or in any way
                        connected with any Mortgage Loans or Mortgages or any
                        document entered into in connection therewith whether
                        or not similar to the foregoing.

         (o)      The Funding 2 Security Trustee shall not be responsible for,
                  nor shall it have any liability with respect to, any loss or
                  theft of the Funding 2 Charged Property and, without
                  prejudice to any provisions relating to insurance under the
                  Funding 2 Transaction Documents, the Funding 2 Security
                  Trustee shall not be under any obligation to insure any of
                  the Funding 2 Charged Property or any deeds or documents of
                  title or other evidence in respect of the Security or to
                  require any other person to maintain such insurance and the
                  Funding 2


                                      36
<PAGE>

                  Security Trustee shall not be responsible for any
                  loss, expense or liability which may be suffered as a result
                  of the lack of or inadequacy of such insurance.

         (p)      The Funding 2 Security Trustee shall not be responsible for
                  any liability occasioned to the Funding 2 Charged Property
                  however caused, whether by an act or omission of Funding 2
                  or any other party to the Transaction Documents or any other
                  person (including any bank, broker, depositary, warehouseman
                  or other intermediary or any clearing system or operator
                  thereof) or otherwise irrespective of whether the Funding 2
                  Charged Property is held by or to the order of any such
                  persons.

         (q)      The Funding 2 Security Trustee shall not be responsible for
                  the receipt or application by Funding 2 of the proceeds of
                  any Funding 2 Intercompany Loan.

         (r)      The Funding 2 Security Trustee shall have full power to
                  determine all questions and doubts arising in relation to
                  any of the provisions of this Deed and the other Funding 2
                  Transaction Documents and every such determination, whether
                  made upon a question actually raised or implied in the acts
                  or proceedings of the Funding 2 Security Trustee, shall be
                  conclusive and shall bind the Funding 2 Security Trustee and
                  the Funding 2 Secured Creditors.

         (s)      The Funding 2 Security Trustee may determine whether or not
                  a default in the performance by Funding 2 of any obligation
                  under the provisions of this Deed or any other Funding 2
                  Transaction Document is capable of remedy and/or whether the
                  same is materially prejudicial to the interests of the
                  Funding 2 Secured Creditors or any of them and if the
                  Funding 2 Security Trustee shall certify that any such
                  default is, in its opinion, not capable of remedy and/or
                  materially prejudicial to the interests of the Funding 2
                  Secured Creditors or any of them, such certificate shall be
                  conclusive and binding upon the Funding 2 Secured Creditors.

         (t)      Unless provided otherwise in any Transaction Document, where
                  a Funding 2 Intercompany Loan Event of Default or a
                  Completion Event refers to materiality or like terminology,
                  any determination of materiality or like terminology or the
                  absence thereof will be in the opinion of Funding 2 as
                  certified to the Funding 2 Security Trustee, which
                  certificate shall be conclusive evidence of the occurrence
                  of (or absence of) such circumstances.

         (u)      The Funding 2 Security Trustee shall have no liability
                  whatsoever for any loss, cost, damages or expenses directly
                  or indirectly suffered or incurred by any person as a result
                  of the delivery by the Funding 2 Security Trustee to Funding
                  2 or any other party to the Transaction Documents of a
                  certificate as to material prejudice or as to no material
                  prejudice pursuant to the Conditions or any Transaction
                  Document and any such certificate shall be binding on the
                  Funding 2 Secured Creditors.

         (v)      The Funding 2 Security Trustee may, in the conduct of its
                  trust business, instead of acting personally, employ and pay
                  an agent, whether or not a lawyer



                                      37
<PAGE>

                  or other professional person, to transact or conduct, or
                  concur in transacting or conducting, any business and to do
                  or concur in doing all acts required to be done by the
                  Funding 2 Security Trustee (including the receipt and
                  payment of monies). The Funding 2 Security Trustee shall not
                  be responsible for any misconduct or omission on the part of
                  any person appointed by it or be bound to supervise the
                  proceedings or acts of any such persons and shall not be
                  responsible for any loss, costs, liability or expenses
                  incurred by any misconduct or default on the part of any
                  such person, provided that the Funding 2 Security Trustee
                  has exercised reasonable care in selecting any such agent.

         (w)      Any trustee of this Deed being a lawyer, accountant, broker
                  or other person engaged in any profession or business shall
                  be entitled to charge and be paid all usual professional and
                  other charges for business transacted and acts done by him
                  or his firm in connection with the trusts of this deed and
                  the Funding 2 Transaction Documents and also his charges in
                  addition to disbursements for all other work and business
                  done and all time spent by him or his firm in connection
                  with matters arising in connection with this Deed and the
                  other Funding 2 Transaction Documents, including matters
                  which might or should have been attended to in person by a
                  trustee not being a lawyer, accountant, broker or other
                  professional person.

         (x)      The Funding 2 Security Trustee may, in the execution of all
                  or any of the trusts, powers, authorities and discretions
                  vested in it by this Deed or any of the other Funding 2
                  Transaction Documents, act by responsible officers or a
                  responsible officer for the time being of the Funding 2
                  Security Trustee. The Funding 2 Security Trustee may also,
                  whenever it thinks expedient in the interests of the Funding
                  2 Secured Creditors, whether by power of attorney or
                  otherwise, delegate to any person or persons all or any of
                  the trusts, rights, powers, duties, authorities and
                  discretions vested in it by this Deed or any of the other
                  Funding 2 Transaction Documents. Any such delegation may be
                  made upon such terms and conditions and subject to such
                  regulations (including power to sub-delegate) as the Funding
                  2 Security Trustee may think fit in the interests of the
                  Funding 2 Secured Creditors, provided that the Funding 2
                  Security Trustee shall have exercised reasonable care in the
                  selection of such delegate and, where a power to
                  sub-delegate has been given, shall oblige the delegate to
                  exercise reasonable care in the selection of any
                  sub-delegate. The Funding 2 Security Trustee shall not be
                  bound to supervise the proceedings of, or be responsible for
                  any loss, costs, liability or expenses incurred by any
                  misconduct or default on the part of, such delegate or
                  sub-delegate. The Funding 2 Security Trustee shall give
                  prompt notice to Funding 2 of the appointment of any
                  delegate as aforesaid and shall procure that any delegate
                  shall also give prompt notice of the appointment of any
                  sub-delegate to Funding 2.

         (y)      Where it is necessary or desirable for any purpose in
                  connection with this Deed to convert any sum from one
                  currency to another it shall (unless otherwise provided by
                  this Funding 2 Deed of Charge or required by law) be
                  converted at such rate or rates in accordance with such
                  method and as at such date for the determination of such
                  rate of exchange, as may be specified by the


                                      38
<PAGE>

                  Funding 2 Security Trustee in its absolute discretion but
                  having regard to current rates of exchange if available and
                  the Funding 2 Security Trustee shall not be liable for any
                  loss occasioned by the said conversion and any rate, method
                  and date so specified shall be binding on Funding 2 and the
                  Funding 2 Secured Creditors.

         (z)      Any consent given by the Funding 2 Security Trustee for the
                  purposes of this Deed or any of the other Transaction
                  Documents may be given on such terms and subject to such
                  conditions (if any) as the Funding 2 Security Trustee thinks
                  fit and may be given retrospectively. The Funding 2 Security
                  Trustee may (subject to the provisions of Clause 15.9
                  (Funding 2 Security Trustee to act on Issuer Security
                  Trustee direction)) give any consent or approval, exercise
                  any power, authority or discretion or take any similar
                  action (whether or not such consent, approval, power,
                  authority, discretion or action is specifically referred to
                  in this Deed) if it is satisfied that the interests of the
                  Funding 2 Secured Creditors will not be materially
                  prejudiced thereby.

         (aa)     The Funding 2 Security Trustee shall not be liable for any
                  error of judgment made in good faith by any officer or
                  employee of the Funding 2 Security Trustee assigned by the
                  Funding 2 Security Trustee to administer its corporate trust
                  matters.

         (bb)     The Funding 2 Security Trustee shall not (unless required by
                  law or ordered to do so by a court of competent
                  jurisdiction) be required to disclose to any Funding 2
                  Secured Creditor or other person any information made
                  available to the Funding 2 Security Trustee by Funding 2 or
                  any other person in connection with the trusts of this Deed
                  or the Funding 2 Transaction Documents and no Funding 2
                  Secured Creditor or other person shall be entitled to take
                  any action to obtain from the Funding 2 Security Trustee any
                  such information.

         (cc)     Notwithstanding anything else in this Deed or the other
                  Funding 2 Transaction Documents, the Funding 2 Security
                  Trustee may refrain from doing anything which would or might
                  in its opinion be contrary to any law of any jurisdiction or
                  any directive or regulation of any governmental agency or
                  which would or might otherwise render it liable to any
                  person and may do anything which is, in its opinion,
                  necessary to comply with any such law, directive or
                  regulation.

         (dd)     The powers conferred by this Deed upon the Funding 2
                  Security Trustee or any Receiver shall be in addition to and
                  not in substitution for any powers which may from time to
                  time be conferred on the Funding 2 Security Trustee or any
                  such Receiver by statute or under common law.

         (ee)     The Funding 2 Security Trustee has no duties or
                  responsibilities except those expressly set out in this Deed
                  or in the Funding 2 Transaction Documents.

         (ff)     The Funding 2 Security Trustee shall not be responsible for
                  the maintenance of the rating of the Notes.

         (gg)     The Funding 2 Security Trustee may appoint and pay any
                  person to act as a custodian or nominee on any terms in
                  relation to such assets of the trusts


                                      39
<PAGE>

                  constituted by this Deed as the Funding 2 Security Trustee
                  may determine, including for the purpose of depositing with
                  a custodian this Deed or any document relating to the trusts
                  constituted by this Deed and the Funding 2 Security Trustee
                  shall not be responsible for any Liability incurred by
                  reason of the misconduct, omission or default on the part of
                  any person appointed by it hereunder or be bound to
                  supervise the proceedings or acts of such person; the
                  Funding 2 Security Trustee is not obliged to appoint a
                  custodian if the Funding 2 Security Trustee invests in
                  securities payable to bearer.

15.4     No Financial Liability: Notwithstanding anything else herein
         contained, the Funding 2 Security Trustee may refrain from taking any
         action or exercising any right, power, authority or discretion vested
         in it under this Deed, any other Transaction Document, any Funding 2
         Charged Property or any other agreement relating to the transactions
         herein or therein contemplated until it has been indemnified and/or
         secured to its satisfaction against and all liabilities which might
         be brought, made or conferred against or suffered, incurred or
         sustained by it as a result. Notwithstanding any other provision of
         this Deed or of any other Transaction Document, nothing shall require
         the Funding 2 Security Trustee to risk its own funds or otherwise
         incur any financial liability in the performance of any of its duties
         or in the exercise of any of its rights or powers or otherwise in
         connection with this Deed or any other Funding 2 Transaction Document
         (including, without limitation, forming any opinion or employing any
         legal, financial or other adviser), if it shall believe that
         repayment of such funds or adequate indemnity against such risk or
         liability is not assured to it. Further, without prejudice to the
         right of indemnity by law given to trustees, Funding 2 hereby
         covenants further, to reimburse, pay or discharge (on a full
         indemnity basis) on demand the Funding 2 Security Trustee and every
         attorney, receiver, manager, agent, delegate or other person
         appointed by it under this Deed from and against all Liabilities
         incurred by or made against it or him in the execution or purported
         execution of the trusts of this Deed or of its or his powers or in
         respect of any matter or thing done or omitted in any way relating to
         this Deed or any of the other Funding 2 Transaction Documents except
         such as may arise from the negligence or wilful misconduct or fraud
         of any such indemnified person.

15.5     Assumption of No Default:

         (a)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any Funding 2 Intercompany Loan Event of
                  Default or Potential Funding 2 Intercompany Loan Event of
                  Default has happened and, until it shall have actual
                  knowledge or express notice to the contrary, the Funding 2
                  Security Trustee shall be entitled to assume that no such
                  Funding 2 Intercompany Loan Event of Default or Potential
                  Funding 2 Intercompany Loan Event of Default has happened
                  and that Funding 2 is observing and performing all the
                  obligations on its part contained in any Funding 2
                  Intercompany Loan Agreement and no event has happened as a
                  consequence of which a Funding 2 Intercompany Loan may
                  become repayable.

         (b)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any Completion Event or any failure by the
                  Seller to comply with any of its obligations under the
                  Mortgage Sale Agreement or any event which with the giving
                  of notice or expiry of any grace period or certification as
                  specified in respect of such Completion Event or Seller
                  failure of its obligations would


                                      40
<PAGE>

                  constitute the same has happened and, until it shall receive
                  express notice to the contrary from any party to the
                  Transaction Documents, the Funding 2 Security Trustee shall
                  be entitled to assume that no such Completion Event or
                  Seller failure of its obligations or such other event as
                  described above has happened and that Funding 2, the
                  Administrator or the Seller (as the case may be) is
                  observing and performing all of their respective obligations
                  contained in each of the Transaction Documents to which they
                  are a party.

         (c)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any material breach of any of the
                  representations and warranties referred to in Clause 7
                  (Warranties and Repurchase by the Seller) of the Mortgage
                  Sale Agreement or any event which with the giving of notice
                  or expiry of any grace period or certification as specified
                  in such representation and warranties would constitute the
                  same has happened and, until it shall receive express notice
                  to the contrary from any party to the Transaction Documents,
                  the Funding 2 Security Trustee shall be entitled to assume
                  that no such breach or such other event as described above
                  has happened and that the Seller is observing and performing
                  its obligations contained in the Mortgage Sale Agreement.

         (d)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any Administrator Termination Event or any
                  event which with the giving of notice or expiry of any grace
                  period or certification as specified in respect of such
                  Administrator Termination Event would constitute the same
                  has happened and, until it shall receive express notice to
                  the contrary pursuant to Clause 19.5 (Notification of
                  Termination Event) of the Administration Agreement, the
                  Funding 2 Security Trustee shall be entitled to assume that
                  no such Administrator Termination Event under the
                  Administration Agreement or such other event as described
                  above has happened and that the Administrator is observing
                  and performing all of its obligations contained in each of
                  the Transaction Documents to which it is a party.

         (e)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any Cash Manager Termination Event or any
                  event which with the giving of notice or expiry of any grace
                  period or certification as specified in such Cash Manager
                  Termination Event would constitute the same has happened
                  and, until it shall receive express notice to the contrary
                  pursuant to Clause 12.4 (Note of Event of Default) of the
                  Cash Management Agreement, the Funding 2 Security Trustee
                  shall be entitled to assume that no such Cash Manager
                  Termination Event or such other event as described above has
                  happened and that the Cash Manager is observing and
                  performing its obligations contained in the Cash Management
                  Agreement.

         (f)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any Termination Event under the Funding 2
                  Bank Account Agreement or any event which with the giving of
                  notice or expiry of any grace period or certification as
                  specified in the Funding 2 Bank Account Agreement, would
                  constitute the same has happened and, until it shall receive
                  express notice to the contrary pursuant to Clause 8
                  (Termination) of the Funding 2 Bank Account Agreement, the
                  Funding 2 Security Trustee shall be entitled to assume that
                  no such termination event under the Funding 2 Bank Account
                  Agreement or such other event as described above has
                  happened and that the


                                      41
<PAGE>

                  Account Bank is observing and performing its obligations
                  contained in the Funding 2 Bank Account Agreement.

         (g)      The Funding 2 Security Trustee shall not be bound to
                  ascertain whether any Flexible Mortgages Loans or part
                  thereof is unenforceable and/or does not fall within the
                  first ranking charge by way of legal mortgage or standard
                  security over the relevant Mortgaged Property has happened
                  and, until it shall receive express notice to the contrary
                  from any party to the Transaction Documents, the Funding 2
                  Security Trustee shall be entitled to assume that no such
                  event has happened.

15.6     Commercial Transactions: The Funding 2 Security Trustee shall not,
         and no director, officer or employee of any corporation being a
         Funding 2 Security Trustee hereof shall by reason of the fiduciary
         position of the Funding 2 Security Trustee be in any way precluded
         from making any commercial contracts or entering into any commercial
         transactions with any party to the Funding 2 Transaction Documents,
         whether directly or through any subsidiary or associated company, or
         from accepting the trusteeship of any other debenture stock,
         debentures or securities of any party to the Funding 2 Transaction
         Documents, and without prejudice to the generality of these
         provisions, it is expressly declared that such contracts and
         transactions include any contract or transaction in relation to the
         placing, underwriting, purchasing, subscribing for or dealing with or
         lending monies upon or making payments in respect of or any stock,
         shares, debenture stock, debentures or other securities of any party
         to the Funding 2 Transaction Documents or any contract of banking or
         insurance of any party to the Funding 2 Transaction Documents and
         neither the Funding 2 Security Trustee nor any such director, officer
         or employee shall be accountable to any Funding 2 Secured Creditor or
         to any party to the Funding 2 Transaction Documents for any profit,
         fees, commissions, interest, discounts or share of brokerage earned,
         arising or resulting from any such contracts or transactions, and the
         Funding 2 Security Trustee and any such director, officer or employee
         shall also be at liberty to retain the same without accounting
         therefor.

15.7     Trustee Liable for Negligence: None of the provisions of this Deed or
         of any other Transaction Document to which the Funding 2 Security
         Trustee is party shall, in any case in which the Funding 2 Security
         Trustee has failed to show the degree of care and diligence required
         of it as security trustee under this Deed, having regard to the
         provisions of this Deed conferring on the Funding 2 Security Trustee
         any powers, authorities or discretions, relieve or indemnify the
         Funding 2 Security Trustee against any liabilities which by virtue of
         any rule of law would otherwise attach to it in respect of any
         negligence, default, breach of duty or breach of trust of which it
         may be guilty in relation to its duties under this Deed.

15.8     Delegation of Certain Functions to Authorised Third Party: Without
         prejudice to the provisions of this Deed, references to the Funding 2
         Security Trustee taking action in connection with any duty of the
         Seller or Administrator under any Transaction Document shall be read
         subject to Clause 25 (Security Trustee: Authorised Third Party) and
         Schedule 4 (Authorised Third Party) of the Administration Agreement.

15.9     Funding 2 Security Trustee to act on Issuer Security Trustee
         direction: Notwithstanding any other provision in this Deed or any
         other Funding 2 Transaction Document, when exercising its opinion
         and/or when exercising the rights, benefits,



                                      42
<PAGE>

         power, trusts, authorities, discretions and obligations expressed to
         be granted by this Deed, the other Funding Transaction 2 Documents or
         by operation of law, the Funding 2 Security Trustee shall (by virtue
         of the assignment by way of security by each Funding 2 Issuer of its
         right, title, interest and benefit in this Deed to the relevant
         Issuer Security Trustee pursuant to the relevant Issuer Deed of
         Charge), for so long as there are any Funding 2 Intercompany Loans
         outstanding, act only at the request or in accordance with the
         directions of the relevant Issuer Security Trustee(s) and shall not
         be responsible for any Liability that may result from the exercise or
         non-exercise thereof (including any Liability occasioned by any delay
         or failure on the part of the Issuer Security Trustee(s) to make any
         such request or to give any such direction) provided that:

         (a)      if there is a conflict between the interests (as directed by
                  the Issuer Security Trustee(s)) of holders of Notes issues
                  by more than one Funding 2 Issuer or a conflict in
                  directions received from the Issuer Security Trustee(s), the
                  Funding 2 Security Trustee shall have regard only to the
                  interests or directions, as applicable, of the Issuer
                  Security Trustee or Issuer Security Trustee(s) acting as
                  trustees in respect of the Issuer Security granted in
                  relation to the highest ranking class of Notes outstanding
                  (the "Principal Directions"); and

         (b)      if there is any conflict between the Principal Directions,
                  due to more than one Funding 2 Issuer having Notes of the
                  same class as their highest ranking class, the Funding 2
                  Security Trustee shall have regard only to the Principal
                  Directions of the Issuer Security Trustee(s) representing
                  the holders of the greatest aggregate principal amount
                  outstanding of the highest ranking class of Notes, and for
                  this purpose, the principal amount outstanding of any Note
                  not denominated in Sterling shall be converted into Sterling
                  at the rate specified in the relevant swap agreement
                  applicable to such Note or, if at the relevant time there is
                  no such currency swap agreement in effect, at the "spot
                  rate" at which the relevant currency is converted into
                  Sterling on the foreign exchange markets.

         AND PROVIDED FURTHER THAT

                  (i)   the Funding 2 Security Trustee shall not be bound to
                        act unless it is first indemnified and/or secured to
                        its satisfaction against all actions, proceedings,
                        claims and demands to which it may render itself
                        liable and all Liabilities which it may incur by so
                        doing; and

                  (ii)  at any time when all Funding 2 Intercompany Loans have
                        been repaid in full and/or there is no further claim
                        outstanding under any Funding 2 Intercompany Loan
                        Agreement, the foregoing provisions of this Clause
                        15.9 (Funding 2 Security Trustee to act on Issuer
                        Security Trustee direction) shall no longer apply and
                        the Funding 2 Security Trustee shall no longer be
                        required to act at the request or direction of any
                        Issuer Security Trustee but instead shall act at the
                        request or direction (subject to proviso (i) above) of
                        the Funding 2 Secured Creditor which ranks highest in
                        the Funding 2 Post-Enforcement Priority of Payments.

         Any directions given by the Issuer Security Trustee(s) or, if proviso
         (ii) above applies, the Funding 2 Secured Creditor ranking highest in
         the Funding 2 Post-Enforcement



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<PAGE>

         Priority of Payments, in accordance with this Clause 15.9 (Funding 2
         Security Trustee to act on Issuer Security Trustee direction) (and
         the operation of provisos (a) and (b) and further provisos (i) and
         (ii) thereof) shall be binding on all the Funding 2 Secured
         Creditors.

16.      Modification and Waiver

16.1     Modifications to Transaction Documents: Subject as expressly provided
         otherwise in any Transaction Document, the Funding 2 Security Trustee
         (subject to the provisions of Clause 15.9 (Funding 2 Security Trustee
         to act on Issuer Security Trustee direction) may from time to time
         and at any time without any consent or sanction of the Funding 2
         Secured Creditors concur with any person in making or sanctioning any
         modification or amendment to any of the Transaction Documents:

         (a)      provided that the Funding 2 Security Trustee is of the
                  opinion that such modification would not be materially
                  prejudicial to the interests of the Funding 2 Secured
                  Creditors;

         (b)      which in the Funding 2 Security Trustee's opinion is made to
                  correct a manifest error or is of a formal, minor or
                  technical nature or an error established as such to the
                  satisfaction of the Funding Security Trustee ; or

         (c)      which it may be necessary to make or which are required by
                  the Rating Agencies in respect of any person who has
                  executed a Deed of Accession pursuant to Clause 2 (Security)
                  hereto.

         Any such modification or amendment shall be binding on Funding 2 and
         the Funding 2 Secured Creditors and, unless the Funding 2 Security
         Trustee otherwise agrees, notice thereof shall be given by Funding 2
         to the Funding 2 Secured Creditors as soon as practicable thereafter.
         Each of the Funding 2 Secured Creditors agrees from time to time to
         do and perform such other and further acts and execute and deliver
         any and all such other instruments as may be required to carry out
         and effect the intent and purpose of this Clause 16.1 (Modifications
         to Transaction Documents).

16.2     Authorisation or Waiver of Breach: Subject to Clause 15.9 (Funding 2
         Security Trustee to act on Issuer Security Trustee direction), the
         Funding 2 Security Trustee may, without the consent of the Funding 2
         Secured Creditors, without prejudice to its right in respect of any
         further or other breach, from time to time and at any time, but only
         if and in so far as in its opinion the interests of the Funding 2
         Secured Creditors would not be materially prejudiced thereby
         authorise or waive, on such terms and conditions (if any) as shall
         seem expedient to it, any proposed or actual breach of any of the
         covenants or provisions contained in or arising pursuant to any of
         the Transaction Documents. Any such authorisation or waiver shall be
         binding on the Funding 2 Secured Creditors and, unless the Funding 2
         Security Trustee otherwise agrees, notice thereof shall be given by
         Funding 2 to the Funding 2 Secured Creditors as soon as practicable
         thereafter.

16.3     Amendments and Waiver: Except as expressly provided in the preceding
         provisions of this Clause 16 (Modification and Waiver) or any other
         provision of this Deed, no amendment or waiver of any provision of
         this Deed nor consent to any departure by any of the parties
         therefrom shall in any event be effective unless the same shall be in


                                      44
<PAGE>

         writing and signed by each of the parties hereto. In the case of a
         waiver or consent, such waiver or consent shall be effective only in
         the specific instance and as against the party or parties giving it
         for the specific purpose for which it is given.

17.      Remuneration of the Funding 2 Security Trustee

17.1     Remuneration: Funding 2 shall (subject as hereinafter provided) pay
         to the Funding 2 Security Trustee an annual fee of such amount and on
         such Monthly Payment Dates as shall, in each case, from time to time
         be agreed by Funding 2 and the Funding 2 Security Trustee. Such
         remuneration shall be payable on the applicable Monthly Payment Dates
         subject to and in accordance with the Funding 2 Pre-Enforcement
         Revenue Priority of Payments or, as the case may be, the Funding 2
         Post-Enforcement Priority of Payments and the provisions of this
         Deed. Such remuneration shall accrue from day to day and be payable
         up to and including the date when all of the Funding 2 Secured
         Obligations have been paid or discharged and the Funding 2 Security
         Trustee has released, reassigned and/or discharged the Funding 2
         Charged Property as provided in Clause 3 (Release of Funding 2
         Charged Property).

17.2     Additional Remuneration: In the event of the occurrence of a Funding
         2 Intercompany Loan Event of Default or a Potential Funding 2
         Intercompany Loan Event of Default or the Funding 2 Security Trustee
         giving a Funding 2 Intercompany Loan Enforcement Notice or the
         Funding 2 Security Trustee considering it expedient or necessary or
         being requested by Funding 2 to undertake duties which the Funding 2
         Security Trustee and Funding 2 agree to be of an exceptional nature
         or otherwise outside the scope of the normal duties of the Funding 2
         Security Trustee under this Deed, Funding 2 shall pay to the Funding
         2 Security Trustee such additional remuneration and on such Monthly
         Payment Dates as shall, in each case, be agreed between them. In the
         event of the Funding 2 Security Trustee failing to agree upon whether
         such duties shall be of an exceptional nature or otherwise outside
         the scope of the normal duties of the Funding 2 Security Trustee
         under this Deed, or upon such additional remuneration, then such
         matter shall be determined by a merchant bank (acting as an expert
         and not as an arbitrator) selected by the Funding 2 Security Trustee
         and approved by Funding 2 or, failing such approval, nominated (on
         the application of the Funding 2 Security Trustee) by the President
         for the time being of the Law Society of England and Wales (the
         expense involved in such nomination and the fees of such merchant
         bank being payable by Funding 2) and the determination of any such
         merchant bank shall be final and binding upon the Funding 2 Security
         Trustee and Funding 2.

17.3     Expenses: Funding 2 shall on written request, pay all other costs,
         charges and expenses (including legal and travelling expenses)
         (against production of invoices) which the Funding 2 Security Trustee
         or any persons appointed by it hereunder may properly incur including
         but not limited to:

         (a)      the negotiation, preparation and execution of and the
                  exercise of its powers and the performance of its duties
                  under, this Deed and any other Funding 2 Transaction
                  Documents to which the Funding 2 Security Trustee is a
                  party;

         (b)      the use of its reasonable endeavours to appoint a substitute
                  Cash Manager pursuant to the Cash Management Agreement;


                                      45
<PAGE>

         (c)      the use of its reasonable endeavours to appoint a substitute
                  Administrator pursuant to the Administration Agreement;

         (d)      the preservation or attempted preservation of the Funding 2
                  Security or any of the Funding 2 Charged Property;

         (e)      any other action taken by or on behalf of the Funding 2
                  Security Trustee with a view to the recovery of the Funding
                  2 Secured Obligations or for enforcing the Funding 2
                  Security; and

         (f)      legal and travelling expenses or documentary expenses paid
                  by the Funding 2 Security Trustee in connection with the
                  Funding 2 Charged Property.

17.4     Indemnity: Funding 2 shall indemnify the Funding 2 Security Trustee
         and any Receiver in respect of all Liabilities to which it (or any
         person appointed by it hereunder may be or become liable or which may
         be properly incurred by it (or any such person as aforesaid) in the
         execution or purported execution of any of its trusts, powers,
         authorities and discretions hereunder or its functions under any such
         appointment or in respect of any other matter or thing done or
         omitted in any way relating to this Deed and any of the other Funding
         2 Transaction Documents to which the Funding 2 Security Trustee is a
         party save where the same arises as a result of the fraud, negligence
         or wilful default by the Funding 2 Security Trustee or, as the case
         may be, such Receiver.

17.5     Stamp Duties: Funding 2 shall, to the extent permitted by applicable
         United Kingdom law, pay all stamp duties and other duties or taxes of
         a similar nature, including for the avoidance of doubt any duty
         levied under the Stamp Act 1891 as amended and supplemented, (if any)
         payable on or arising out of or in consequence of:

         (a)      the creation of the security constituted by or pursuant to
                  this Deed; and

         (b)      the execution and delivery of this Deed and documents
                  executed pursuant hereto and the other Funding 2 Transaction
                  Documents (except where the obligation to pay all stamp
                  duties and other duties or taxes of a similar nature is
                  expressed to be the obligation of a person other than
                  Funding 2).

17.6     VAT: All sums payable by Funding 2 under this Deed are deemed to be
         exclusive of any amount in respect of VAT. If, pursuant to any
         provision of this Deed, the Funding 2 Security Trustee or the
         Receiver of Funding 2 makes any taxable or deemed taxable supply to
         Funding 2, then Funding 2 shall pay to the Funding 2 Security Trustee
         or the Receiver of Funding 2 (as the case may be) (in addition to the
         consideration for the supply) an amount equal to the VAT charged in
         respect of such taxable or deemed taxable supply against production
         of a valid VAT invoice.

17.7     Interest: Subject as provided in Clause 17.8 (Payment), all sums
         payable by Funding 2 under this Clause 17 (Remuneration of the
         Funding 2 Security Trustee) shall be payable on demand or, in the
         case of any remuneration payable under Clause 17.1 (Remuneration) on
         the due date specified therein and shall carry interest at the rate
         per annum, which is one per cent. per annum above the base rate from
         time to time of the National Westminster Bank Plc from the date on
         which they were paid, charged or


                                      46
<PAGE>

         incurred by the Funding 2 Security Trustee or any Receiver or, in the
         case of remuneration, the due date for payment thereof, to the date
         of actual payment, and in all other cases shall (if not paid on the
         date specified in such demand or, if later, within three days after
         such demand and, in either case, the Funding 2 Security Trustee so
         requires) carry interest at such rate from the date specified in such
         demand.

17.8     Payment: Notwithstanding the other provisions of this Deed, any
         amount owing by Funding 2 pursuant to this Clause 17 (Remuneration of
         the Funding 2 Security Trustee) shall only be payable by Funding 2
         subject to and in accordance with the Funding 2 Pre-Enforcement
         Revenue Priority of Payments or, as the case may be, the Funding 2
         Post-Enforcement Priority of Payments.

17.9     Survival: Unless otherwise specifically stated in any discharge of
         this Deed, the provisions of this Clause 17 (Remuneration of the
         Funding 2 Security Trustee) shall continue in full force and effect
         notwithstanding such discharge.

18.      Appointment, Removal and Retirement of Funding 2 Security Trustee

18.1     Power of Funding 2: The power of appointing a new Funding 2 Security
         Trustee and removing the Funding 2 Security Trustee or any new
         Funding 2 Security Trustee shall be vested in Funding 2 but such
         appointment or removal must be approved by the Issuer Security
         Trustee, after consultation with each of the Funding 2 Secured
         Creditors (such approval not to be unreasonably withheld or delayed).
         A trust corporation may be appointed sole trustee hereof but subject
         thereto there shall be at least two trustees hereof, one at least of
         which shall be a trust corporation. Any appointment of a new Funding
         2 Security Trustee and any retirement of an existing Funding 2
         Security Trustee hereof shall as soon as practicable thereafter be
         notified by Funding 2 to the Funding 2 Secured Creditors.

18.2     U.S. Investment Company Act: Any new Funding 2 Security Trustee must
         (i) meet the requirements of section 26(a)(1) of the U.S. Investment
         Company Act of 1940, as amended; (ii) not be an "affiliate" (as
         defined in Rule 405 of the U.S. Securities Act of 1933, as amended)
         of any Funding 2 Issuer or of any person involved in the organisation
         or operation of any Funding 2 Issuer; (iii) not offer or provide
         credit or credit enhancement to any Funding 2 Issuer; and (iv)
         execute an agreement or instrument concerning the Notes containing
         provisions to the effect set forth in section 26(a)(3) of the U.S.
         Investment Company Act of 1940, as amended.

18.3     Powers of Funding 2 Security Trustee to appoint: Notwithstanding the
         provisions of Clause 18.1 (Power of Funding 2), the Funding 2
         Security Trustee may (as attorney for Funding 2) upon giving prior
         notice to Funding 2 but without the consent of Funding 2 or the
         Funding 2 Secured Creditors appoint any person established or
         resident in any jurisdiction (whether a trust corporation or not) to
         act either as a separate trustee or as a co-trustee jointly with the
         Funding 2 Security Trustee:

         (a)      if the Funding 2 Security Trustee considers such appointment
                  to be in the interests of the Funding 2 Secured Creditors;
                  or

         (b)      for the purposes of conforming to any legal requirement,
                  restriction or condition in any jurisdiction in which any
                  particular act or acts are to be performed or any Funding 2
                  Charged Property is or is to be located; or


                                      47
<PAGE>

         (c)      for the purposes of obtaining a judgement in any
                  jurisdiction or the enforcement in any jurisdiction either
                  of a judgement already obtained or of the provisions of this
                  Deed or any of the other Funding 2 Transaction Documents to
                  which the Funding 2 Security Trustee is a party or
                  obligations arising pursuant thereto or of any of the
                  Funding 2 Security.

         Funding 2 hereby irrevocably appoints the Funding 2 Security Trustee
         to be its attorney in its name and on its behalf to execute any such
         instrument of appointment. Such a person shall (subject always to the
         provisions of this Deed and any other Funding 2 Transaction Document
         to which the Funding 2 Security Trustee is a party) have such trusts,
         powers, authorities and discretions (not exceeding those conferred on
         the Funding 2 Security Trustee by this Deed or any of the other
         Funding 2 Transaction Documents to which the Funding 2 Security
         Trustee is a party) and such duties and obligations as shall be
         conferred or imposed on it by the instrument of appointment. The
         Funding 2 Security Trustee shall have power in like manner to remove
         any such person. Such proper remuneration as the Funding 2 Security
         Trustee may pay to any such person, together with any attributable
         costs, charges and expenses incurred by it in performing its function
         as such separate trustee or co-trustee, shall for the purposes of
         this Deed be treated as costs, charges and expenses incurred by the
         Funding 2 Security Trustee.

18.4     Multiple Trustees: Whenever there shall be more than two trustees
         hereof, the majority of such trustees shall (provided such majority
         includes a trust corporation) be competent to execute and exercise
         all the trusts, powers, authorities and discretions vested by this
         Deed and any of the other Funding 2 Transaction Documents in the
         Funding 2 Security Trustee generally.

18.5     Retirement of Funding 2 Security Trustee: Subject as provided in
         Clause 18.6 (Retirement or Removal not Effective), any Funding 2
         Security Trustee for the time being of this Deed may retire at any
         time upon giving not less than three calendar months' prior notice in
         writing to Funding 2 without assigning any reason therefor and
         without being responsible for any costs resulting from such
         retirement.

18.6     Retirement or Removal not Effective: The retirement or removal of any
         Funding 2 Security Trustee shall not become effective unless (1)
         there remains at least one trustee hereof being a trust corporation
         in office upon such retirement or removal and (2) there remains at
         least one trustee of each Issuer Trust Deed and each Issuer Deed of
         Charge being the same trust corporation. Funding 2 covenants that, in
         the event of a trustee (being a sole trustee or the only trust
         corporation) giving notice under Clause 18.5 (Retirement of Funding 2
         Security Trustee) or being removed as referred to in Clause 18.1
         (Power of Funding 2) it shall use its best endeavours to procure a
         new Funding 2 Security Trustee of this Deed (being a trust
         corporation) to be appointed as soon as reasonably practicable
         thereafter (for the avoidance of doubt, in the same terms as this
         Deed). If within 60 days of having given notice of its intention to
         retire, Funding 2 has failed to appoint a replacement Funding 2
         Security Trustee, the outgoing Funding 2 Security Trustee will be
         entitled to appoint its successor (provided that the Rating Agencies
         confirm that the then current ratings of the Notes of any Funding 2
         Issuer shall not be either downgraded, reviewed or withdrawn as a
         result of such appointment).


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<PAGE>

18.7     Funding 2 Security Trustee, Note Trustee and Issuer Security Trustee:
         If the Funding 2 Security Trustee retires or is removed in accordance
         with the provisions of this Clause 18 (Appointment, Removal and
         Retirement of Funding 2 Security Trustee) then each Note Trustee and
         each Issuer Security Trustee shall retire at the same time in
         accordance with the provisions of the applicable Issuer Trust Deed
         and the applicable Issuer Deed of Charge. If a Note Trustee retires
         or is removed in accordance with the provisions of the applicable
         Issuer Trust Deed and/or an Issuer Security Trustee retires or is
         removed in accordance with the provisions of the applicable Issuer
         Deed of Charge, then the Funding 2 Security Trustee shall retire at
         the same time in accordance with the provisions of this Clause 18
         (Appointment, Removal and Retirement of Funding 2 Security Trustee).
         In each case the successor Funding 2 Security Trustee, each successor
         Note Trustee and each successor Issuer Security Trustee shall be the
         same person or persons.

18.8     Merger: Any corporation into which the Funding 2 Security Trustee may
         be merged or converted or with which it may be consolidated, or any
         corporation resulting from any merger, conversion or consolidation to
         which the Funding 2 Security Trustee shall be a party, or any
         corporation succeeding to all or substantially all the corporate
         trust business of the Funding 2 Security Trustee, shall be the
         successor of the Funding 2 Security Trustee hereunder, provided such
         corporation shall be otherwise qualified and eligible under this
         Clause 18 (Appointment, Renewal and Retirement of Funding 2 Security
         Trustee), without the execution or filing of any paper or any further
         act on the part of any of the parties hereto.

19.      Miscellaneous Provisions

19.1     Evidence of Indebtedness: In any action, proceedings or claim
         relating to this Deed or the Funding 2 Security, a statement as to
         any amount due to any Funding 2 Secured Creditor or of the Funding 2
         Secured Obligations or any part thereof or a statement of any amounts
         which have been notified to the Funding 2 Security Trustee as being
         amounts due to any Funding 2 Secured Creditor which is certified as
         being correct by an officer of the Funding 2 Security Trustee or an
         officer of the relevant Funding 2 Secured Creditor shall, save in the
         case of manifest error, be conclusive evidence that such amount is in
         fact due and payable.

19.2     Liability:  All the liabilities and obligations of Funding 2 under or
         by virtue of this Deed shall not be impaired by:

         (a)      any failure of this Deed to be legal, valid, binding and
                  enforceable as regards Funding 2 whether as a result of a
                  lack of corporate powers or of directors' authority,
                  defective execution or for any other reason whatsoever;

         (b)      any giving of time, forbearance, indulgence or waiver as
                  regards Funding 2;

         (c)      a discharge or release of Funding 2; or

         (d)      any other matter or event whatsoever whether similar to the
                  foregoing or not which might have the effect of impairing
                  all or any of its liabilities or obligations except proper
                  and valid payment or discharge of all Funding 2 Secured
                  Obligations and amounts whatsoever which this Deed provides
                  are to


                                      49
<PAGE>

                  be paid by Funding 2 or an absolute discharge or
                  release of Funding 2 signed by the Funding 2 Secured
                  Creditors and the Funding 2 Security Trustee.

19.3     Funding 2 Secured Creditors: Each Funding 2 Secured Creditor shall be
         bound by the provisions of this Deed as if it contained covenants by
         each Funding 2 Secured Creditor in favour of the Funding 2 Security
         Trustee and every other Funding 2 Secured Creditor to observe and be
         bound by all the provisions of this Funding 2 Deed expressed to apply
         to Funding 2 Secured Creditors.

20.      Rights cumulative

         The respective rights of the Funding 2 Security Trustee, each Issuer
         Security Trustee, the Funding 2 Secured Creditors and any Receiver to
         this Deed are cumulative and may be exercised as often as each
         considers appropriate and are in addition to their respective rights
         under the general law. No failure on the part of the Funding 2
         Security Trustee, each Issuer Security Trustee, the Funding 2 Secured
         Creditors or any Receiver to exercise, and no delay in exercising,
         any right hereunder shall operate as a waiver thereof, nor shall any
         single or partial exercise of any such right preclude any other or
         further exercise thereof or the exercise of any other right. The
         remedies in this Deed are cumulative and not exclusive of any
         remedies provided by law.

21.      Assignment

         None of the Funding 2 Secured Creditors may assign, encumber or
         transfer all or any part of its rights or benefits and/or transfer
         its obligations under this Deed without the prior written consent of
         the Funding 2 Security Trustee, save that each Funding 2 Issuer may
         assign its rights under this Deed without such consent to the
         applicable Issuer Security Trustee under the applicable Issuer Deed
         of Charge.

22.      Non Petition Covenant; Corporate Obligations

22.1     Each of the parties hereto hereby agrees that it shall not institute
         against the Mortgages Trustee or any Funding 2 Issuer any winding-up,
         administration, insolvency or similar proceedings in any jurisdiction
         for so long as any sum is outstanding under any Funding 2
         Intercompany Loan Agreement or for two years plus one day since the
         last day on which any such sum was outstanding provided that the
         Funding 2 Security Trustee may prove or lodge a claim in the event of
         a liquidation initiated by any other person.

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



                                      50
<PAGE>

         expressed to be a party hereto as a condition of and consideration for
         the execution of this Deed.

23.      Notices

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

         (a)      in the case of Funding 2, to Granite Finance Funding 2
                  Limited situated at Fifth Floor, 100 Wood Street, London
                  EC2V 7EX (facsimile number 020 7606 0643) for the attention
                  of The Company Secretary with a copy to Northern Rock plc,
                  Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
                  (facsimile number 0191 213 2203) for the attention of the
                  Group Secretary;

         (b)      in the case of the Funding 2 Security Trustee, to The Bank
                  of New York situated at 40th Floor, One Canada Square,
                  London E14 5AL attention Trustee Administration Manager
                  (facsimile number 020 7964 4637);

         (c)      in the case of the Issuer Security Trustee, to The Bank of
                  New York situated at 40th Floor, One Canada Square, London
                  E14 5AL attention Trustee Administration Manager (facsimile
                  number 020 7964 4637);

         (d)      in the case of the Master Issuer, to Granite Master Issuer
                  plc situated at Fifth Floor, 100 Wood Street, London EC2V
                  7EX (facsimile number 020 7606 0643) for the attention of
                  The Company Secretary with a copy to Northern Rock plc,
                  Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
                  (facsimile number 0191 213 2203) for the attention of the
                  Group Secretary;

         (e)      in the case of the Mortgages Trustee, to Granite Finance
                  Trustees Limited situated at 22 Grenville Street, St.
                  Helier, Jersey JE4 8PX, Channel Islands, (facsimile number
                  01534 609333) for the attention of The Company Secretary
                  with a copy to Northern Rock plc, Northern Rock House,
                  Gosforth, Newcastle upon Tyne NE3 4PL (facsimile number 0191
                  213 2203) for the attention of the Group Secretary;

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

         (g)      in the case of the Account Bank, to Lloyds TSB Bank plc
                  situated at City Office, Bailey Drive, Gillingham Business
                  Park, Kent ME8 0LS (facsimile number 020 7775 3642) for the
                  attention of Jason Eperon;


                                      51
<PAGE>

         (h)      in the case of the Corporate Services Provider, to Law
                  Debenture Corporate Services Limited situated at Fifth
                  Floor, 100 Wood Street, London EC2V 7EX (facsimile number
                  020 7606 0643) for the attention of the Company Secretary;

         (i)      in the case of Moody's, to Moody's Investor Services
                  situated at 1st Floor, 2 Minster Court, Mincing Lane, London
                  EC3R 7XB (facsimile number 020 7772 5400) for the attention
                  of RMBS Monitoring;

         (j)      in the case of S&P, to Standard & Poor's situated at Garden
                  House, 18 Finsbury Circus, London EC2M 7NJ (facsimile number
                  020 7826 3598) for the attention of Heather Dyke; and

         (k)      in the case of Fitch, to Fitch Ratings Limited situated at
                  Eldon House, 2 Eldon Street, London EC2M 7UA (facsimile
                  number: 020 7417 6262) for the attention of European
                  Structured Finance Surveillance,

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by
         any party to the others by fifteen days prior written notice in
         accordance with the provisions of this Clause 23 (Notices).

24.      Third Party Rights

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

25.      Execution in Counterparts; Severability

25.1     Counterparts:

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

         (b)      Notwithstanding the provisions of Clause 25.1(a), this Deed
                  shall be fully effective and binding on Funding 2 upon its
                  execution and delivery of at least one copy of this Deed,
                  notwithstanding that this Deed has not then been executed
                  and delivered by any other party thereto or that such other
                  party has executed or executes or has delivered or delivers
                  a counterpart of this Deed.

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

26.      Governing Law and Submission to Jurisdiction

26.1     Governing Law: This Deed is governed by, and shall be construed in
         accordance with, English law provided that any terms hereof which are
         particular to the laws of Scotland shall be construed in accordance
         with Scots law.


                                      52
<PAGE>

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

26.3     Process Agent: The Mortgages Trustee irrevocably and unconditionally
         appoints Mourant & Co. Capital (SPV) Limited at 8th Floor, 68 King
         William Street, London EC4N 7DZ or otherwise at its registered office
         for the time being as its agent for service of process in England in
         respect of any proceedings in respect of this Deed undertakes that in
         the event of Mourant & Co. Capital (SPV) Limited ceasing so to act it
         will appoint another person with a registered office in London as its
         agent for service of process.

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

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

as Cash Manager, Funding 2 Basis Rate Swap Provider and Account Bank
EXECUTED AND DELIVERED AS A DEED                 )
for and on behalf of                             )
NORTHERN ROCK PLC                                )
by its duly authorised attorney                  )


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


Name:

in the presence of:
                                Signature   _________________________
                                            Witness

                                Full name
                                Occupation
                                Address





                                      53
<PAGE>

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

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


Name:




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

Name:

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





                                      54
<PAGE>

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


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

Name:



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

Name:


as Master Issuer
EXECUTED AND DELIVERED AS A DEED                         )
for and on behalf of                                     )
GRANITE MASTER ISSUER PLC                                )
acting by two directors                                  )


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

Name:


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

Name:



                                      55
<PAGE>



as Corporate Services Provider
EXECUTED AND DELIVERED AS A DEED                     )
for and on behalf of                                 )
LAW DEBENTURE CORPORATE                              )
SERVICES LIMITED                                     )
acting by a director and its secretary               )


-------------------------
Director

Name:


-------------------------
Secretary

Name:


as Funding 2 Security Trustee and Issuer Security Trustee
EXECUTED AND DELIVERED AS A DEED                     )
for and on behalf of                                 )
THE BANK OF NEW YORK                                 )
by its duly authorised signatory                     )


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


Name:


                                      56
<PAGE>


                                  SCHEDULE 1


                      FORM OF SECURITY POWER OF ATTORNEY

THIS POWER OF ATTORNEY is made on [o] by Granite Finance Funding 2 Limited.
(registered number 5249387), a private limited liability company incorporated
under the laws of England and Wales whose registered office is at Fifth Floor,
100 Wood Street, London EC2V 7EX (the "Principal").

WHEREAS

(1)      By virtue of a deed of charge dated [o] between Granite Finance
         Funding 2 Limited, and The Bank of New York (in its capacity as
         Funding 2 Security Trustee) (as amended and supplemented from time to
         time, the "Funding 2 Deed of Charge"), provision was made for the
         execution by the Principal of this Power of Attorney.

(2)      Words and phrases in this Power of Attorney shall (save where
         expressed to the contrary) have the same meanings respectively as the
         words and phrases in the Funding 2 Deed of Charge.

NOW THIS POWER OF ATTORNEY WITNESSETH

1.       The Principal hereby irrevocably (within the meaning of Section 4 of
         the Powers of Attorney Act 1971) and by way of security for the
         payment and performance of the Funding 2 Secured Obligations and the
         covenants, conditions, obligations and undertakings on the part of
         the Principal contained in the Funding 2 Deed of Charge and the other
         Funding 2 Transaction Documents to which the Principal is a party
         from time to time appoints The Bank of New York and any other person
         or persons for the time being the Funding 2 Security Trustee or
         Funding 2 Security Trustees of and under the Funding 2 Deed of Charge
         (the "Attorney") and each and every person to whom the Funding 2
         Security Trustee shall from time to time have delegated the exercise
         of the power of attorney conferred by this Power of Attorney (each a
         "Delegate") and any receiver including any administrative receiver
         and any manager (the "Receiver") and/or administrator (the
         "Administrator") appointed from time to time by the Attorney or on
         its behalf its true and lawful attorney for and in the Principal's
         name or otherwise jointly and severally to sign, seal, execute,
         deliver, perfect and do any assurance, act, matter or thing which the
         Attorney, Delegate, Receiver or Administrator considers in each case
         to be necessary for the protection or preservation of the Attorney's
         and the Funding 2 Secured Creditors' interests and rights (as
         described in the Funding 2 Deed of Charge) in and to the Funding 2
         Charged Property or which ought to be done by the Principal under the
         covenants, undertakings and provisions contained in the Funding 2
         Deed of Charge and the other Funding 2 Transaction Documents to which
         the Principal is a party from time to time and generally to in its
         name and on its behalf to exercise all or any of the powers,
         authorities or discretions conferred by or pursuant to the Funding 2
         Deed of Charge on the Funding 2 Security Trustee and/or any Receiver
         whether on or at any time after the Funding 2 Security has become
         enforceable in accordance with Clause 6.2 (Enforcement) of the
         Funding 2 Deed of Charge or in any other circumstances where the
         Attorney has become entitled to take any of the steps referred to in
         the Funding 2 Deed of Charge including (without limitation) any or
         all of the following:


                                      57
<PAGE>

         (a)      to do every act or thing which the Attorney, Delegate,
                  Receiver or Administrator may deem to be necessary, proper
                  or expedient for getting in any of the Funding 2 Charged
                  Property and/or fully and effectively vesting, transferring
                  or assigning the Funding 2 Charged Property or any part
                  thereof and/or the Principal's estate, right, title, benefit
                  and/or interest therein or thereto in or to the Attorney and
                  its successors in title or other person or persons entitled
                  to the benefit thereof or for carrying into effect any other
                  dealing with the Funding 2 Charged Property whatsoever
                  permitted under the Funding 2 Deed of Charge in the same
                  manner and as fully and effectively as the Principal could
                  have done;

         (b)      the power by writing under its hand by an officer of the
                  Attorney (including every Receiver appointed under the
                  Funding 2 Deed of Charge) from time to time to appoint a
                  substitute attorney (each a "Substitute") who shall have
                  power to act on behalf of the Principal as if that
                  Substitute shall have been originally appointed Attorney by
                  this Power of Attorney and/or to revoke any such appointment
                  at any time without assigning any reason therefor.

2.       In favour of the Attorney, any Delegate, any Receiver and/or
         Administrator and/or Substitute, or a person dealing with any of them
         and the successors and assigns of such a person, all acts properly
         done and documents executed or signed by the Attorney, a Delegate, a
         Receiver, an Administrator or a Substitute in the purported exercise
         of any power conferred by this Power of Attorney shall for all
         purposes be valid and binding on the Principal and its successors and
         assigns.

3.       The Principal irrevocably and unconditionally undertakes to indemnify
         the Attorney and each Delegate, Receiver and/or Administrator and/or
         Substitute appointed from time to time by the Attorney and their
         respective estates (each an "Indemnified Party") against all actions,
         proceedings, claims, costs, expenses and liabilities of every
         description arising from the exercise, or the purported exercise, of
         any of the powers conferred by this Power of Attorney, save where the
         same arises as the result of the fraud, negligence or wilful default
         of the relevant Indemnified Party or its officers or employees.

4.       The provisions of Clause 3 shall continue in force after the
         revocation or termination, howsoever arising, of this Power of
         Attorney.

5.       The laws of England and Wales shall apply to this Power of Attorney
         and the interpretation thereof and to all acts of the Attorney and
         each Delegate, Receiver and/or Administrator and/or Substitute
         carried out or purported to be carried out under the terms hereof.

6.       The Principal hereby agrees at all times hereafter to ratify and
         confirm whatsoever the said Attorney or its attorney or attorneys or
         any Delegate, Receiver or Administrator or Substitute shall properly
         and lawfully do or cause to be done in and concerning the Funding 2
         Charged Property.

IN WITNESS whereof this Power of Attorney has been executed as a deed by the
Principal the day and year first before written.


                                      58
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                  <C>

Executed by
GRANITE FINANCE FUNDING 2 LIMITED
as its deed as follows:
Signed for and on its behalf by one of its directors
and by another of its directors/its secretary                          By________________________________________
                                                                         Director

                                                                     Name________________________________________



                                                                       By________________________________________
                                                                         Director/Secretary

                                                                     Name________________________________________


</TABLE>



                                      59
<PAGE>


                                  SCHEDULE 2

                           FORM OF DEED OF ACCESSION

THIS DEED OF ACCESSION is made on [           ]

BETWEEN:

(1)      GRANITE FINANCE FUNDING 2 LIMITED (registered number 5249387) a
         private limited liability company incorporated under the laws of
         England and Wales whose London branch is at Fifth Floor, 100 Wood
         Street, London EC2V 7EX;

(2)      THE BANK OF NEW YORK, a New York banking corporation whose London
         branch address is at 40th Floor, One Canada Square, London E14 5AL in
         its separate capacities as (i) Funding 2 Security Trustee and (2)
         Issuer Security Trustee to the Master Issuer;

(3)      GRANITE MASTER ISSUER PLC (registered number 5250668), a public
         limited company incorporated under the laws of England and Wales,
         whose registered office is at Fifth Floor, 100 Wood Street, London
         EC2V 7EX;

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

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

(6)      LAW DEBENTURE CORPORATE SERVICES LIMITED, a private limited company
         incorporated under the laws of England and Wales whose registered
         office is Fifth Floor, 100 Wood Street, London EC2V 7EX in its
         capacity as Corporate Services Provider; and

(7)      [Any other additional secured creditor of Funding 2](the "New Funding
         2 Secured Creditor").

NOW THIS DEED OF ACCESSION WITNESSES AS FOLLOWS

WHEREAS:

(A)      [Pursuant to the terms of a [describe agreement] (the "Agreement")
         dated [ ] made between Funding 2 and the New Funding 2 Secured
         Creditor, Funding 2 has agreed to [describe nature of the obligations
         of Funding 2 under the Agreement].

(B)      This Deed is supplemental to a deed of charge dated [o] between,
         amongst others, Granite Finance Funding 2 Limited and The Bank of New
         York (in its capacity as Funding 2 Security Trustee) (as amended and
         supplemented from time to time the "Funding 2 Deed of Charge"),
         pursuant to which Funding 2 agreed to provide the


                                      60
<PAGE>

         Funding 2 Security Trustee with the benefit of the Funding 2 Security
         to secure Funding 2's obligations to the Funding 2 Secured Creditors
         including the New Funding 2 Secured Creditor.

(C)      The terms of the Funding 2 Deed of Charge permit Funding 2 to secure
         its obligations to a New Funding 2 Secured Creditor thereunder.

(D)      The New Funding 2 Secured Creditor has agreed to enter into this Deed
         of Accession (this "Deed") to accede to the provisions of the Funding
         2 Deed of Charge.

(E)      The Funding 2 Secured Creditors have agreed to enter into this Deed
         [and to agree consequential changes to the Funding 2 Priority of
         Payments set out in Part I, Part II and Part III of Schedule 3 of the
         Funding 2 Deed of Charge as are required and any [other] amendment as
         may be required to give effect to this Deed] [and to acknowledge the
         Security Interests created hereunder].

1.       Interpretation

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

2.       Representations and Warranties

2.1      The New Funding 2 Secured Creditor hereby represents and warrants to
         the Funding 2 Security Trustee and each of the Funding 2 Secured
         Creditors in respect of itself that as of the date of this Deed:

         (a)      pursuant to the terms of the Agreement, Funding 2 has agreed
                  to pay to the New Funding 2 Secured Creditor the amount (if
                  any) [describe in relation to the Agreement]; and

         (b)      the Agreement expressly provides that all amounts due from
                  Funding 2 thereunder are to be secured by or pursuant to the
                  Funding 2 Deed of Charge.

2.2      Funding 2 hereby represents and warrants to the Funding 2 Security
         Trustee and each of the Funding 2 Secured Creditors that as at the
         date of this Deed, the conditions to incurring further secured
         financial indebtedness set out in Clause 2 (Security) of the Funding
         2 Deed of Charge are satisfied.



                                      61
<PAGE>

3.       Accession

         In consideration of the New Funding 2 Secured Creditor being accepted
         as a Funding 2 Secured Creditor for the purposes of the Funding 2
         Deed of Charge by the parties thereto as from [date], the New Funding
         2 Secured Creditor:

         (a)      confirms that as from [date], it intends to be a party to
                  the Funding 2 Deed of Charge as a Funding 2 Secured
                  Creditor;

         (b)      undertakes to comply with and be bound by all of the
                  provisions of the Master Definitions Schedule (as the same
                  may be amended, varied or restated from time to time) and
                  the Funding 2 Deed of Charge in its capacity as a Funding 2
                  Secured Creditor, as if it had been an original party
                  thereto;

         (c)      undertakes to perform comply with and be bound by all of the
                  provisions of the Funding 2 Deed of Charge in its capacity
                  as a Funding 2 Secured Creditor, as if it had been an
                  original party thereto including, without limitation, Clause
                  19.3 (Funding 2 Secured Creditors) (including without
                  limitation Clauses 7.3 (Funding 2 Post-Enforcement Priority
                  of Payments), 7.6 (Funding 2 Security Trustee Rights upon
                  Enforcement) and Clause 5 (Restrictions on Exercise of
                  Certain Rights)); and

         (d)      agrees that the Funding 2 Security Trustee shall be the
                  Funding 2 Security Trustee of the Funding 2 Deed of Charge
                  for all Funding 2 Secured Creditors upon and subject to the
                  terms set out in the Funding 2 Deed of Charge.

4.       [Security(1)

         (a)      Funding 2 by way of first fixed security for the payment or
                  discharge of the Funding 2 Secured Obligations, subject to
                  Clause 3 (Release of Funding 2 Charged Property) of the
                  Funding 2 Deed of Charge, hereby [Insert appropriate
                  security provisions and details of further assets]; and

         (b)      Each of the dispositions of or charges over property
                  effected in or pursuant to this Deed is made with full title
                  guarantee (or, in relation to assets or rights situated in
                  or governed by the laws of Scotland, with absolute
                  warrandice). ]

5.       [Application(2)

         Prior to and following enforcement of the Funding 2 Security all
         amounts at any time held by Funding 2, the Cash Manager or the
         Funding 2 Security Trustee in respect of the security created under
         this Deed shall be held and/or applied by such person subject to and
         in accordance with the relevant provisions of the Funding 2 Deed of
         Charge.]

6.       Scope of the Funding 2 Deed of Charge


--------------------
(1)  Include if necessary.
(2)  Include if necessary.


                                      62
<PAGE>


         Funding 2, the New Funding 2 Secured Creditor and the Funding 2
         Secured Creditors (including the Funding 2 Security Trustee) hereby
         agree that for the relevant purposes under the Funding 2 Deed of
         Charge and the Master Definitions Schedule:

         (a)      the Agreement shall be treated as a Funding 2 Transaction
                  Document; [and]

         (b)      [the property and assets of Funding 2 expressed to be
                  assigned by way of security or charged pursuant to this Deed
                  of Accession shall constitute Funding 2 Charged
                  Property;][and]

         (c)      the New Funding 2 Secured Creditor shall be treated as a
                  Funding 2 Secured Creditor.

7.       Notices and Acknowledgements

         (a)      The execution of this Deed by the New Funding 2 Secured
                  Creditor shall constitute notice to such New Funding 2
                  Secured Creditor of the assignments made by Funding 2
                  pursuant to Clause 2 (Security) of the Funding 2 Deed of
                  Charge. The execution of this Deed by each other Funding 2
                  Secured Creditor shall constitute notice to such Funding 2
                  Secured Creditor of the assignments made by Funding 2
                  pursuant to this Deed.

         (b)      By its execution of this Deed, the New Funding 2 Secured
                  Creditor acknowledges that it has notice of and consents to
                  the assignments, charges and Security Interests made or
                  granted by Funding 2 pursuant to Clause 2 (Security) of the
                  Funding 2 Deed of Charge and also acknowledges that as at
                  the date hereof it has not received from any other person
                  any notice of any assignment or charge of any of the
                  property the subject of such Security Interests. By its
                  execution of this Deed, each other Funding 2 Secured
                  Creditor acknowledges that it has notice of and consents to
                  the assignments, charges and Security Interests made or
                  granted by Funding 2 pursuant to this Deed of Accession and
                  also acknowledges that as at the date hereof it has not
                  received from any other person any notice of any assignment
                  or charge of any of the property the subject of such
                  Security Interests.

         (c)      Notwithstanding the assignments and charges granted pursuant
                  to Clause 2 (Security) of the Funding 2 Deed of Charge or
                  pursuant to this Deed of Accession, the parties hereto
                  acknowledge that, subject as provided otherwise in the
                  Funding 2 Deed of Charge, each Funding 2 Secured Creditor
                  and each other party to any Funding 2 Transaction Document
                  may continue to make all payments becoming due to Funding 2
                  under any Funding 2 Transaction Document in the manner
                  envisaged by such Funding 2 Transaction Document until the
                  receipt of written notice from the Funding 2 Security
                  Trustee or any Receiver requiring payments to be made
                  otherwise.


                                      63
<PAGE>

[8.      Amendment to the Funding 2 Priority of Payments

         The Funding 2 Secured Creditors agree to amend and restate the
         Funding 2 Priority of Payments set out in Part I and Part II of
         Schedule 3 of the Funding 2 Deed of Charge in accordance with
         Appendix 1 hereto.](3)

9.       Notices and Demands

         Any notice or communication under or in connection with this Deed,
         the Funding 2 Deed of Charge shall be given in the manner and at the
         times set out in Clause 23 (Notices) of the Funding 2 Deed of Charge
         to the addresses given in this Clause or at such other address as the
         recipient may have notified to the other parties hereto and/or
         thereto in writing.

         The address referred to in this Clause 9 for the New Funding 2
         Secured Creditor is:

         [                   ]

         For the attention of:      [            ]

         Telephone:                 [            ]

         Facsimile:                 [            ]

         or such other address and/or numbers as the New Funding 2 Secured
         Creditor may notify to the parties to the Funding 2 Deed of Charge in
         accordance with the provisions thereof.

10.      Non Petition Covenant

         Each of the parties hereto hereby agrees that it shall not institute
         against the Mortgages Trustee or any Funding 2 Issuer any winding-up,
         administration, insolvency or similar proceedings in any jurisdiction
         for so long as any sum is outstanding under any Funding 2
         Intercompany Loan Agreement or for two years plus one day since the
         last day on which any such sum was outstanding provided that the
         Funding 2 Security Trustee may prove or lodge a claim in the event of
         a liquidation initiated by any other person.

11.      Third Party Rights

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

12.      Execution in Counterparts

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

-----------------------
(3) Include if necessary.



                                      64
<PAGE>

13.      Choice of Law

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



                                      65
<PAGE>


                                EXECUTION PAGE

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


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


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

Name:



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

Name:





                                      66
<PAGE>



as Funding 2 Security Trustee and Issuer Security Trustee to the Master Issuer
EXECUTED AND DELIVERED AS A DEED                       )
for and on behalf of                                   )
THE BANK OF NEW YORK                                   )
by its duly authorised signatory                       )


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


Name:




as Master Issuer
EXECUTED AND DELIVERED AS A DEED                       )
for and on behalf of                                   )
GRANITE MASTER ISSUER PLC                              )
acting by two directors                                )


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

Name:



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

Name:






                                      67
<PAGE>


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


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

Name:




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

Name:

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







                                      68
<PAGE>


as Account Bank, Cash Manager, Funding 2 Basis Rate Swap Provider and Funding
2 GIC Provider
EXECUTED AND DELIVERED AS A DEED                )
for and on behalf of                            )
NORTHERN ROCK PLC                               )
by its duly authorised attorney                 )


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

Name:

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


as Corporate Services Provider
EXECUTED AND DELIVERED AS A DEED                )
for and on behalf of                            )
LAW DEBENTURE CORPORATE                         )
SERVICES LIMITED                                )
acting by a director and its secretary          )


-------------------------
Director

Name:


-------------------------
Secretary

Name:






                                      69
<PAGE>


                                  Appendix 1

             [Amended and Restated Funding 2 Priority of Payments]



                                      70
<PAGE>

                                  SCHEDULE 3

                        FUNDING 2 PRIORITY OF PAYMENTS


                                    Part I

            Funding 2 Pre-Enforcement Revenue Priority of Payments

Distribution of Funding 2 Available Revenue Receipts prior to Enforcement of
the Funding 2 Security

         The following order of priority of payments is the "Funding 2
Pre-Enforcement Revenue Priority of Payments":

(A)      first, to pay amounts due in the relevant Monthly Payment Period to
         the Funding 2 Security Trustee (together with interest and (to the
         extent not already inclusive) VAT on those amounts) and to provide
         for any amounts due or to become due prior to the next following
         Monthly Payment Period to the Funding 2 Security Trustee under this
         Funding 2 Deed of Charge or any other Transaction Document;

(B)      second, to pay amounts due in the relevant Monthly Payment Period to
         the Master Issuer in respect of the Master Issuer's obligations
         specified in paragraphs (A) through (D) of the Issuer Pre-Enforcement
         Revenue Priority of Payments or, as the case may be, paragraphs (A)
         through (C) of the Issuer Post-Enforcement Priority of Payments;

(C)      third, to pay amounts due to any third party creditors of Funding 2
         (other than those referred to later in this order of priority of
         payments or in the Funding 2 Pre-Enforcement Principal Priority of
         Payments) of which the Cash Manager has notice prior to the relevant
         Monthly Payment Period, which amounts have been incurred without
         breach by Funding 2 of the Transaction Documents to which it is a
         party (and for which payment has not been provided for elsewhere) and
         to provide for any such amounts expected to become due and payable by
         Funding 2 prior to the next following Monthly Payment Period and to
         pay or discharge any liability of Funding 2 for corporation tax on
         any chargeable income or gain of Funding 2;

(D)      fourth, to pay amounts due in the relevant Monthly Payment Period to
         the Funding 2 Liquidity Facility Provider under the Funding 2
         Liquidity Facility Agreement, if any (except for amounts drawn
         thereunder to make Funding 2 Liquidity Facility Principal Payments
         and any Funding 2 Liquidity Facility Subordinated Amounts);

(E)      fifth, towards payment of amounts due in the relevant Monthly Payment
         Period to the Cash Manager under the Cash Management Agreement
         (together with (to the extent not already inclusive) VAT on those
         amounts);

(F)      sixth, in no order of priority among them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts, if any, due to (i) the Account Bank under
         the terms of the Funding 2 Bank Account Agreement and (ii) the
         Corporate Services Provider under the terms of the Corporate Services
         Agreement;


                                      71
<PAGE>

(G)      seventh, in no order of priority among them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of all amounts (including such part of any Swap
         Termination Payment) due under the Funding 2 Basis Rate Swaps to the
         Funding 2 Basis Rate Swap Provider but excluding any Funding 2 Basis
         Rate Swap Excluded Termination Amount;

(H)      eighth, in no order of priority among them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of interest due and payable on the AAA Loan Tranches;

(I)      ninth, towards a credit to the AAA Principal Deficiency Sub-ledger in
         an amount sufficient to eliminate any debit on that sub-ledger (such
         credit to be made on the 20th Monthly Payment Date falling in the
         relevant Monthly Payment Period);

(J)      tenth, in no order of priority among them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of interest due and payable on the AA Loan Tranches;

(K)      eleventh, after taking account of the replenishment of the Funding 2
         Liquidity Reserve Fund in the relevant Monthly Payment Period from
         Funding 2 Available Principal Receipts, replenishing the Funding 2
         Liquidity Reserve Fund, if any, up to the Funding 2 Liquidity Reserve
         Required Amount but only to the extent that there are AAA Loan
         Tranches and AA Loan Tranches outstanding at the end of such Monthly
         Payment Period (such replenishment to be made on the 20th Monthly
         Payment Date falling in the relevant Monthly Payment Period);

(L)      twelfth, towards a credit to the AA Principal Deficiency Sub-ledger
         in an amount sufficient to eliminate any debit on that sub-ledger
         (such credit to be made on the 20th Monthly Payment Date falling in
         the relevant Monthly Payment Period);

(M)      thirteenth, in no order of priority among them but in proportion to
         the respective amounts due in the relevant Monthly Payment Period,
         towards payment of interest due and payable on the A Loan Tranches;

(N)      fourteenth, towards a credit to the A Principal Deficiency Sub-ledger
         in an amount sufficient to eliminate any debit on that sub-ledger
         (such credit to be made on the 20th Monthly Payment Date falling in
         the relevant Monthly Payment Period);

(O)      fifteenth, in no order of priority among them but in proportion to
         the respective amounts due in the relevant Monthly Payment Period,
         towards payment of interest due and payable on the BBB Loan Tranches;

(P)      sixteenth, towards a credit to the BBB Principal Deficiency
         Sub-ledger in an amount sufficient to eliminate any debit on that
         sub-ledger (such credit to be made on the 20th Monthly Payment Date
         falling in the relevant Monthly Payment Period);

(Q)      seventeenth, in no order of priority among them but in proportion to
         the respective amounts due in the relevant Monthly Payment Period,
         towards payment of interest due and payable on the BB Loan Tranches;


                                      72
<PAGE>

(R)      eighteenth, towards a credit to the BB Principal Deficiency
         Sub-ledger in an amount sufficient to eliminate any debit on that
         sub-ledger (such credit to be made on the 20th Monthly Payment Date
         falling in the relevant Monthly Payment Period);

(S)      nineteenth, to pay amounts due in the relevant Monthly Payment Period
         to the Master Issuer in respect of the Master Issuer's obligations to
         make payments under the Start-Up Loan Agreement(s) specified in item
         (J) of the Issuer Pre-Enforcement Revenue Priority of Payments or, as
         the case may be, item (O) of the Issuer Post-Enforcement Priority of
         Payments;

(T)      twentieth, after taking account any replenishment of the Funding 2
         Reserve Fund in the relevant Monthly Payment Period from Funding 2
         Available Principal Receipts, to credit the Funding 2 Reserve Ledger
         up to an amount no less than the Funding 2 Reserve Required Amount or
         if an Arrears or Step-Up Trigger Event has occurred, to credit the
         Funding 2 Reserve Ledger with such additional amount as set out in
         paragraph 1.3 of Schedule 5 (Utilisation of Funding 2 Reserves) of
         this Deed (such credit to be made on the 20th Monthly Payment Date
         falling in the relevant Monthly Payment Period);

(U)      twenty-first, to the Master Issuer in respect of its obligations (if
         any) to make a Swap Termination Payment to any Issuer Swap Provider
         in the relevant Monthly Payment Period (but excluding any Issuer Swap
         Excluded Termination Amount);

(V)      twenty-second, in no order of priority among them but in proportion
         to the respective amounts due in the relevant Monthly Payment Period,
         to pay amounts due (without double counting) to:

         (i)      the Master Issuer in respect of its obligations (if any) to
                  pay any Issuer Swap Excluded Termination Amount;

         (ii)     the Funding 2 Liquidity Facility Provider, if any, any
                  Funding 2 Liquidity Facility Subordinated Amounts due under
                  the Funding 2 Liquidity Facility Agreement; and

         (iii)    the Funding 2 Basis Rate Swap Provider in respect of any
                  Funding 2 Basis Rate Swap Excluded Termination Amount;

(W)      twenty-third, in no order of priority among them but in proportion to
         the relevant amounts, (i) the retention by Funding 2 of an amount
         equal to 0.01% per annum of the Funding 2 Available Revenue Receipts
         (excluding, for this purpose, amounts standing to the credit of the
         Funding 2 Reserve Ledger), which amount will be retained by Funding 2
         as profit, less an amount equal to corporation tax in respect of
         those profits provided for or paid at paragraph (C) above (which
         amounts may be distributed to the shareholders of Funding 2 by way of
         dividend) (such retention to be effective as of the 20th Monthly
         Payment Date of the relevant Monthly Payment Period), and (ii) to pay
         to the Master Issuer the amount to be retained by the Master Issuer
         under item (O) of the Issuer Pre-Enforcement Revenue Priority of
         Payments (such payment to be made on the 20th Monthly Payment Date
         falling in the relevant Monthly Payment Period);


                                      73
<PAGE>

(X)      twenty-fourth, towards payment of any Deferred Contribution due to
         the Mortgages Trustee pursuant to the terms of the Mortgages Trust
         Deed; and

(Y)      last, any excess to Funding 2, which may, subject to applicable laws,
         be distributed by Funding 2 to its shareholders by way of dividend.

Rules for Application of Funding 2 Available Revenue Receipts

(1)      Funding 2 Principal Deficiency Ledger

         If, on any Monthly Payment Date falling in a Monthly Payment Period,
         any Funding 2 Available Revenue Receipts are to be applied by Funding
         2 in reducing any deficiency recorded on the Principal Deficiency
         Sub-Ledger of any Tier of Loan Tranches (but only to the extent of
         any deficiency which has arisen as a result of (i) Losses on the
         Mortgage Loans allocated by Funding 2 to that Principal Deficiency
         Sub-Ledger and/or (ii) the application of Funding 2 Available
         Principal Receipts to fund the Funding 2 Liquidity Reserve Fund but
         not as a result of any other principal deficiency of Funding 2), then
         the Funding 2 Available Revenue Receipts so applied shall constitute
         repayments of principal under the relevant Loan Tranches and shall
         (in no order of priority among them, but in proportion to the
         respective outstanding balances) reduce the Outstanding Principal
         Balance of those Loan Tranches accordingly (and the reduction in the
         Outstanding Principal Balance of a relevant Loan Tranche to take
         effect on the Monthly Payment Date falling in the relevant Monthly
         Payment Period which is a Loan Payment Date for such Loan Tranche).

(2)      Funding 2 Principal Ledger and Funding 2 Cash Accumulation Ledger

         On the date of which the Funding 2 Available Revenue Receipts in
         relation to a Monthly Payment Period are allocated to the payments
         and provisions to be made under the Funding 2 Pre-Enforcement Revenue
         Priority of Payments on any Monthly Payment Date falling in such
         Monthly Payment Period, to the extent that it is determined that the
         Funding 2 Available Revenue Receipts so allocated will be
         insufficient to pay or provide for amounts due in such Monthly
         Payment Period under items (H), (J), (M), (O) and (Q) of the Funding
         2 Pre-Enforcement Revenue Priority of Payments, then the Cash Manager
         shall provide for that deficit by:

         (a)      allocating and applying amounts standing to the credit of
                  the Funding 2 Principal Ledger; and

         (b)      if amounts standing to the credit of the Funding 2 Principal
                  Ledger that are allocated in accordance with sub-paragraph
                  (2)(a) above are insufficient to meet such shortfall on such
                  date, allocating and applying any amounts standing to the
                  credit of the Funding 2 Cash Accumulation Ledger.

         Funding 2 Available Principal Receipts may not be used to pay
         interest on any Loan Tranche if such payment would create or increase
         a principal deficiency in respect of a higher ranking Tier of Loan
         Tranches. For the purposes of this rule, the amount of Funding 2
         Available Principal Receipts that may be allocated and applied to any
         deficit of Funding 2 Available Revenue Receipts for any Monthly
         Payment Period will be reduced by the amount that would be available
         to be drawn from the Issuer Reserve Fund in such Monthly Payment
         Period to cover any deficit in Issuer


                                      74
<PAGE>

         Available Revenue Receipts to pay items (A) through (I) of the Issuer
         Pre-Enforcement Revenue Priority of Payments, on the assumption that
         no Funding 2 Available Principal Receipts are to be applied to such
         deficit in Funding 2 Available Revenue Receipts.

(3)      Issuer GIC Account and Authorised Investments

         The amount of Funding 2 Available Revenue Receipts that may be
         allocated to pay items (B), (S), (U) and (V) under the Funding 2
         Pre-Enforcement Revenue Priority of Payments on any Monthly Payment
         Date falling in a Monthly Payment Period (to the extent such amounts
         are to be paid to the Master Issuer) will be reduced by the amount of
         interest earned on the Issuer GIC Account and any and all income from
         Authorised Investments made on behalf of the Master Issuer, to the
         extent that such interest and income is available to the Master
         Issuer (subject to the relevant Issuer Priority of Payments) to be
         allocated and applied in payment of the obligations of the Master
         Issuer referred to in items (B), (S), (U) and (V) (to the extent that
         such amounts are payable by the Master Issuer on any Monthly Payment
         Date falling in the relevant Monthly Payment Period).





                                      75
<PAGE>

                                    Part II

           Funding 2 Pre-Enforcement Principal Priority of Payments

         The following sections (I) through (IV) below set out priorities of
payments for Funding Available Principal Receipts under the following
circumstances and are collectively referred to as the "Funding 2
Pre-Enforcement Principal Priority of Payments":

(I)      Repayment of Loan Tranches of each Tier prior to the occurrence of a
         Trigger Event and prior to the service on Funding 2 of a Funding 2
         Intercompany Loan Enforcement Notice or the service on the Master
         Issuer of an Issuer Enforcement Notice;

(II)     Repayment of Loan Tranches of each Tier following the occurrence of a
         Non-Asset Trigger Event but prior to the service on Funding 2 of a
         Funding 2 Intercompany Loan Enforcement Notice or the service on the
         Master Issuer of an Issuer Enforcement Notice;

(III)    Repayment of Loan Tranches of each Tier following the occurrence of
         an Asset Trigger Event but prior to the service on Funding 2 of a
         Funding Intercompany Loan Enforcement Notice or the service on the
         Master Issuer of an Issuer Enforcement Notice; and

(IV)     Repayment of Loan Tranches of each Tier following the service on the
         Master Issuer of an Issuer Enforcement Notice but prior to the
         service on Funding 2 of a Funding 2 Intercompany Loan Enforcement
         Notice.

I.       Repayment of Loan Tranches of each Tier prior to the occurrence of a
         Trigger Event and prior to the service on Funding 2 of a Funding 2
         Intercompany  Loan  Enforcement  Notice or the  service on the Master
         Issuer of an Issuer Enforcement Notice

Prior to the occurrence of a Trigger Event or the service on Funding 2 of a
Funding 2 Intercompany Loan Enforcement Notice or the service on the Master
Issuer of an Issuer Enforcement Notice (i) on or prior to the first day of
each Monthly Payment Period the Cash Manager shall allocate the Funding 2
Available Principal Receipts towards the payments and provisions in respect of
amounts due on all Monthly Payment Dates falling in such Monthly Payment
Period in the following order of priority (in each case only if and to the
extent that payments or provisions of a higher priority in respect of amounts
due on any Monthly Payment Date falling in such Monthly Payment Period have
been made in full) and (ii) on each Monthly Payment Date falling in the
relevant Monthly Payment Period, the amount of Funding 2 Available Principal
Receipts so allocated towards each payment or provision in respect of amounts
due on the relevant Monthly Payment Date shall be applied in making such
payment or provision:

(A)      first, in accordance with the terms of the Funding 2 Liquidity
         Facility Agreement, towards repayment of the amounts outstanding
         under the Funding 2 Liquidity Facility (if any) that were drawn in
         order to make Funding 2 Liquidity Facility Principal Payments;


                                      76
<PAGE>

(B)      second, to the extent that monies have been drawn from the Funding 2
         Reserve Fund to make Funding 2 Reserve Principal Payments, towards
         the replenishment of the Funding 2 Reserve Fund up to the Funding 2
         Reserve Required Amount (such replenishment to be made on the 20th
         Monthly Payment Date falling in the relevant Monthly Payment Period);

(C)      third, if a Funding 2 Liquidity Reserve Rating Event has occurred and
         is continuing (i) to initially fund the Funding 2 Liquidity Reserve
         Fund up to the Funding 2 Liquidity Reserve Required Amount and (ii)
         once it has been initially funded, to the extent that Funding 2
         Available Revenue Receipts are insufficient to do so, to replenish
         the Funding 2 Liquidity Reserve Fund up to the Funding 2 Liquidity
         Reserve Required Amount (such funding or replenishment to be made on
         the 20th Monthly Payment Date falling in the relevant Monthly Payment
         Period);

(D)      fourth, in order of the Monthly Payment Periods in which their Final
         Repayment Dates fall, beginning with the earliest such Monthly
         Payment Period (and if two or more AAA Loan Tranches have a Final
         Repayment Date falling in the same Monthly Payment Period, in
         proportion to the respective amounts due) to repay the principal
         amounts due in the relevant Monthly Payment Period (if any) on the
         AAA Loan Tranches;

(E)      fifth, in no order of priority among them but in proportion to the
         respective amounts due, to repay the principal amounts due in the
         relevant Monthly Payment Period (if any) on the AA Loan Tranches;

(F)      sixth, in no order of priority among them but in proportion to the
         respective amounts due, to repay the principal amounts due in the
         relevant Monthly Payment Period (if any) on the A Loan Tranches;

(G)      seventh, in no order of priority among them but in proportion to the
         respective amounts due, to repay the principal amounts due in the
         relevant Monthly Payment Period (if any) on the BBB Loan Tranches;

(H)      eighth, in no order of priority among them but in proportion to the
         respective amounts due, to repay the principal amounts due in the
         relevant Monthly Payment Period (if any) on the BB Loan Tranches;

(I)      ninth, on the 20th Monthly Payment Date falling in the relevant
         Monthly Payment Period, towards a credit to the Funding 2 Cash
         Accumulation Ledger until the balance is equal to Funding 2's Cash
         Accumulation Requirement (as calculated after any payments are made
         at paragraph (D) of this priority of payments); and

(J)      tenth, the remainder to be credited to the Funding 2 Principal
         Ledger.

II.      Repayment of Loan Tranches of each Tier following the occurrence of a
         Non-Asset Trigger Event but prior to the  service on Funding 2 of a
         Funding 2 Intercompany Loan Enforcement Notice or the service on the
         Master Issuer of an Issuer Enforcement Notice

         Following the occurrence of a Non-Asset Trigger Event (where no Asset
         Trigger Event has occurred) under the Mortgages Trust Deed but prior
         to the service on


                                      77
<PAGE>

         Funding 2 of a Funding 2 Intercompany Loan Enforcement Notice or the
         service on the Master Issuer of an Issuer Enforcement Notice, the
         Bullet Loan Tranches and the Scheduled Repayment Loan Tranches and
         the Controlled Repayment Loan Tranches in respect of the Global
         Intercompany Loan will be deemed to be Pass-Through Loan Tranches and
         (i) on or prior to the first day of each Monthly Payment Period,
         Funding 2 will be required to allocate the Funding 2 Available
         Principal Receipts towards the payments and provisions in respect of
         amounts due on all Monthly Payment Dates falling in such Monthly
         Payment Period in the following order of priority (in each case only
         if and to the extent that payments or provisions of a higher priority
         in respect of amounts due on any Monthly Payment Date falling in such
         Monthly Payment Period have been made in full) and (ii) on each
         Monthly Payment Date falling in the relevant Monthly Payment Period,
         the amount of Funding 2 Available Principal Receipts so allocated
         towards each payment or provision in respect of amounts due on the
         relevant Monthly Payment Date shall be applied in making such payment
         or provision:

         (A)      first, in accordance with the terms of the Funding 2
                  Liquidity Facility Agreement, towards repayment of the
                  amounts outstanding under the Funding 2 Liquidity Facility
                  (if any) that were drawn in order to make Funding 2
                  Liquidity Facility Principal Payments;

         (B)      second, to the extent that monies have been drawn from the
                  Funding 2 Reserve Fund to make Funding 2 Reserve Principal
                  Payments, towards the replenishment of the Funding 2 Reserve
                  Fund up to the Funding 2 Reserve Required Amount (such
                  replenishment to be made on the 20th Monthly Payment Date
                  falling in the relevant Monthly Payment Period);

         (C)      third, if a Funding 2 Liquidity Reserve Rating Event has
                  occurred and is continuing (i) to initially fund the Funding
                  2 Liquidity Reserve Fund up to the Funding 2 Liquidity
                  Reserve Required Amount and (ii) once it has been initially
                  funded, to the extent that Funding 2 Available Revenue
                  Receipts are insufficient to do so, to replenish the Funding
                  2 Liquidity Reserve Fund up to the Funding 2 Liquidity
                  Reserve Required Amount (such funding or replenishment to be
                  made on the 20th Monthly Payment Date falling in the
                  relevant Monthly Payment Period);

         (D)      fourth, in order of the Monthly Payment Periods in which
                  their Final Repayment Dates fall, beginning with the
                  earliest such Monthly Payment Period (and if two or more AAA
                  Loan Tranches have a Final Repayment Date falling in the
                  same Monthly Payment Period, in proportion to the respective
                  amounts due in that Monthly Payment Period) to repay the AAA
                  Loan Tranches until the AAA Loan Tranches are fully repaid;

         (E)      fifth, in no order of priority among them but in proportion
                  to the respective amounts due in the relevant Monthly
                  Payment Period, to repay the AA Loan Tranches until the AA
                  Loan Tranches are fully repaid;

         (F)      sixth, in no order of priority among each of them but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the A Loan Tranches until
                  the A Loan Tranches are fully repaid;


                                      78
<PAGE>

         (G)      seventh, in no order of priority among them but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the BBB Loan Tranches until
                  the BBB Loan Tranches are fully repaid; and

         (H)      eighth, in no order of priority among them but in proportion
                  to the respective amounts due in the relevant Monthly
                  Payment Period, to repay the BB Loan Tranches until the BB
                  Loan Tranches are fully repaid.

III.     Repayment of Loan Tranches of each Tier following the occurrence of
         an Asset Trigger Event but prior to the service on Funding 2 of a
         Funding 2 Intercompany Loan Enforcement Notice or the service on the
         Master Issuer of an Issuer Enforcement Notice

         Following the occurrence of an Asset Trigger Event (whether or not a
         Non-Asset Trigger Event occurs or has occurred) but prior to the
         service on Funding 2 of a Funding 2 Intercompany Loan Enforcement
         Notice or the service on the Master Issuer of an Issuer Enforcement
         Notice, the Bullet Loan Tranches and the Scheduled Repayment Loan
         Tranches and the Controlled Repayment Loan Tranches in respect of the
         Global Intercompany Loan will be deemed to be Pass-Through Loan
         Tranches and (i) on or prior to the first day of each Monthly Payment
         Period, Funding 2 will be required to allocate the Funding 2
         Available Principal Receipts towards the payments and provisions in
         respect of amounts due on all Monthly Payment Dates falling in such
         Monthly Payment Period in the following order of priority (in each
         case only if and to the extent that payments or provisions of a
         higher priority in respect of amounts due on any Monthly Payment Date
         falling in such Monthly Payment Period have been made in full) and
         (ii) on each Monthly Payment Date falling in the relevant Monthly
         Payment Period, the amount of Funding 2 Available Principal Receipts
         so allocated towards each payment or provision in respect of amounts
         due on the relevant Monthly Payment Date shall be applied in making
         such payment or provision:

         (A)      first, in accordance with the terms of the Funding 2
                  Liquidity Facility Agreement, towards repayment of the
                  amounts outstanding under the Funding 2 Liquidity Facility
                  (if any) that were drawn in order to make Funding 2
                  Liquidity Facility Principal Payments;

         (B)      second, to the extent that monies have been drawn from the
                  Funding 2 Reserve Fund to make Funding 2 Reserve Principal
                  Payments, towards the replenishment of the Funding 2 Reserve
                  Fund up to the Funding 2 Reserve Required Amount (such
                  replenishment to be made on the 20th Monthly Payment Date
                  falling in the relevant Monthly Payment Period);

         (C)      third, if a Funding 2 Liquidity Reserve Rating Event has
                  occurred and is continuing (i) to initially fund the Funding
                  2 Liquidity Reserve Fund up to the Funding 2 Liquidity
                  Reserve Required Amount and (ii) once it has been initially
                  funded, to the extent that Funding 2 Available Revenue
                  Receipts are insufficient to do so, to replenish the Funding
                  2 Liquidity Reserve Fund up to the Funding 2 Liquidity
                  Reserve Required Amount (such funding or replenishment to be
                  made on the 20th Monthly Payment Date falling in the
                  relevant Monthly Payment Period);


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         (D)      fourth, in no order of priority among them, but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the AAA Loan Tranches until
                  the AAA Loan Tranches are fully repaid;

         (E)      fifth, in no order of priority among them, but in proportion
                  to the respective amounts due in the relevant Monthly
                  Payment Period, to repay the AA Loan Tranches until the AA
                  Loan Tranches are fully repaid;

         (F)      sixth, in no order of priority among them, but in proportion
                  to the respective amounts due in the relevant Monthly
                  Payment Period, to repay the A Loan Tranches until the A
                  Loan Tranches are fully repaid;

         (G)      seventh, in no order of priority among them, but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the BBB Loan Tranches until
                  the BBB are fully repaid; and

         (H)      eighth, in no order of priority among them, but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the BB Loan Tranches until
                  the BB Loan Tranches are fully repaid.

IV.      Repayment of Loan Tranches of each Tier following the service on the
         Master Issuer of an Issuer Enforcement Notice but prior to the
         service on Funding 2 of a Funding 2 Intercompany Loan Enforcement
         Notice

         If an Issuer Enforcement Notice is served on the Master Issuer, then
         that will not result in automatic enforcement of the Funding 2
         Security under this Funding 2 Deed of Charge. In those circumstances,
         however, any Bullet Loan Tranches and any Scheduled Repayment Loan
         Tranches and any Controlled Repayment Loan Tranches under the Global
         Intercompany Loan will be deemed to be Pass-Through Loan Tranches and
         (i) on or prior to the first day of each Monthly Payment Period,
         Funding 2 will be required to allocate the Funding 2 Available
         Principal Receipts towards the payments and provisions in respect of
         amounts due on all Monthly Payment Dates falling in such Monthly
         Payment Period in the following order of priority (in each case only
         if and to the extent that payments or provisions of a higher priority
         in respect of amounts due on any Monthly Payment Date falling in such
         Monthly Payment Period have been made in full) and (ii) on each
         Monthly Payment Date falling in the relevant Monthly Payment Period,
         the amount of Funding 2 Available Principal Receipts so allocated
         towards each payment or provision in respect of amounts due on the
         relevant Monthly Payment Date shall be applied in making such payment
         or provision:

         (A)      first, in accordance with the terms of the Funding 2
                  Liquidity Facility Agreement, towards repayment of the
                  amounts outstanding under the Funding 2 Liquidity Facility
                  (if any) that were drawn in order to make Funding 2
                  Liquidity Facility Principal Payments;

         (B)      second, to the extent that monies have been drawn from the
                  Funding 2 Reserve Fund to make Funding 2 Reserve Principal
                  Payments, towards the replenishment of the Funding 2 Reserve
                  Fund up to the Funding 2 Reserve Required Amount (such
                  replenishment to be made on the 20th Monthly Payment Date
                  falling in the relevant Monthly Payment Period);


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         (C)      third, if a Funding 2 Liquidity Reserve Rating Event has
                  occurred and is continuing (i) to initially fund the Funding
                  2 Liquidity Reserve Fund up to the Funding 2 Liquidity
                  Reserve Required Amount and (ii) once it has been initially
                  funded, to the extent that Funding 2 Available Revenue
                  Receipts are insufficient to do so, to replenish the Funding
                  2 Liquidity Reserve Fund up to the Funding 2 Liquidity
                  Reserve Required Amount (such funding or replenishment to be
                  made on the 20th Monthly Payment Date falling in the
                  relevant Monthly Payment Period);

         (D)      fourth, in no order of priority among them, but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the AAA Loan Tranches until
                  the AAA Loan Tranches are fully repaid;

         (E)      fifth, in no order of priority among them, but in proportion
                  to the respective amounts due in the relevant Monthly
                  Payment Period, to repay the AA Loan Tranches until the AA
                  Loan Tranches are fully repaid;

         (F)      sixth, in no order of priority among them, but in proportion
                  to the respective amounts due in the relevant Monthly
                  Payment Period, to repay the A Loan Tranches until the A
                  Loan Tranches are fully repaid; and

         (G)      seventh, in no order of priority among them, but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the BBB Loan Tranches until
                  the BBB Loan Tranches are fully repaid; and

         (H)      eighth, in no order of priority among them, but in
                  proportion to the respective amounts due in the relevant
                  Monthly Payment Period, to repay the BB Loan Tranches until
                  the BB Loan Tranches are fully repaid.

       If Funding 2 receives a Full Repayment Amount under the Global
       Intercompany Loan, then Funding 2 will not apply the Full Repayment
       Amount as described above under Funding 2 Principal Priority of
       Payments. Rather, Funding 2 will apply, on the relevant date, the Full
       Repayment Amount to repay the relevant Loan Tranche. If at any time
       only one Loan Tranche is outstanding, then Funding 2 shall apply the
       Full Repayment Amount first to repay the Funding 2 Liquidity Facility
       Provider any amounts outstanding under the Funding 2 Liquidity
       Facility, if any, to the extent that such funds were drawn in order to
       repay the principal amounts of any previous Loan Tranches and the
       remainder shall be applied to repay the relevant Loan Tranche. Pending
       an application of the Full Repayment Amount, as described above, such
       proceeds shall be credited to the Funding 2 GIC Account and shall not
       be available for any other purpose.

Rules for Application of Funding 2 Available Principal Receipts

In the applicable circumstances, the following rules apply in determining the
amounts to be paid under paragraphs (D), (E), (F), (G) and (H) of the priority
of payments set out in (I) through (IV) above:

Rule (1) Deferral of repayment of Pass-Through Loan Tranches, Scheduled
        Repayment Loan Tranches and/or Controlled Repayment Loan Tranches in
        certain circumstances

         (A) If, for any Monthly Payment Period:

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                  (i)      after giving effect to the application of the
                           Funding 2 Available Revenue Receipts on any Monthly
                           Payment Date falling in that Monthly Payment
                           Period, there will be a debit balance on the BB
                           Principal Deficiency Sub-ledger, the BBB Principal
                           Deficiency Sub-ledger, the A Principal Deficiency
                           Sub-ledger or the AA Principal Deficiency
                           Sub-ledger; or

                  (ii)     the Adjusted Funding 2 Reserve Fund Level will be
                           less than the Funding 2 Reserve Fund Threshold; or

                  (iii)    the aggregate outstanding principal balance of
                           Mortgage Loans in the Mortgage Portfolio, in
                           respect of which the aggregate amount in arrears is
                           more than three times the monthly payment then due,
                           is more than 4 per cent. of the aggregate
                           outstanding principal balance of Mortgage Loans
                           included in the Mortgage Portfolio,

                  then until the relevant circumstances as described in
                  sub-paragraphs (i), (ii) or (iii) above has been cured or
                  otherwise ceases to exist, if:

                  (a)      any AAA Loan Tranche (whether or not such AAA Loan
                           Tranche is then due) will remain outstanding at the
                           end of the Monthly Payment Period, after giving
                           effect to the payments to be made under paragraph
                           (D) of the Funding 2 Pre-Enforcement Principal
                           Priority of Payments on any Monthly Payment Date
                           falling in the relevant Monthly Payment Period, the
                           AA Loan Tranches will not be entitled to principal
                           repayments under paragraph (E) of the Funding 2
                           Pre-Enforcement Principal Priority of Payments;

                  (b)      any AAA Loan Tranche or any AA Loan Tranche
                           (whether or not such AAA Loan Tranche or AA Loan
                           Tranche is then due) will remain outstanding at the
                           end of the Monthly Payment Period, after giving
                           effect to the payments to be made under paragraphs
                           (D) and (E) of the Funding 2 Pre-Enforcement
                           Principal Priority of Payments on any Monthly
                           Payment Date falling in the relevant Monthly
                           Payment Period, then the A Loan Tranches will not
                           be entitled to principal repayments under paragraph
                           (F) of the Funding 2 Pre-Enforcement Principal
                           Priority of Payments;

                  (c)      any AAA Loan Tranche, any AA Loan Tranche, any A
                           Loan Tranche (whether or not such AAA Loan Tranche,
                           AA Loan Tranche or A Loan Tranche is then due) will
                           remain outstanding at the end of the Monthly
                           Payment Period, after giving effect to the payments
                           to be made under paragraphs (D), (E) and (F) of the
                           Funding 2 Pre-Enforcement Principal Priority of
                           Payments on any Monthly Payment Date falling in the
                           relevant Monthly Payment Period, then the BBB Loan
                           Tranches will not be entitled to principal
                           repayments under paragraph (G) of the Funding 2
                           Pre-Enforcement Principal Priority of Payments;
                           and/or

                  (d)      any AAA Loan Tranche, any AA Loan Tranche, any A
                           Loan Tranche or any BBB Loan Tranche (whether or
                           not such AAA Loan Tranche,



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<PAGE>

                           AA Loan Tranche, A Loan Tranche or BBB Loan Tranche
                           is then due) will remain outstanding at the end of
                           the Monthly Payment Period, after giving effect to
                           the payments to be made under paragraphs (D), (E),
                           (F) and (G) of the Funding 2 Pre-Enforcement
                           Principal Priority of Payments on any Monthly
                           Payment Date falling in the relevant Monthly
                           Payment Period, then the BB Loan Tranches will not
                           be entitled to principal repayments under paragraph
                           (H) of the Funding 2 Pre-Enforcement Principal
                           Priority of Payments.

         (B)      On a Monthly Payment Date falling in a Monthly Payment
                  Period in respect of which principal in respect of any Loan
                  Tranche is scheduled to be paid:

                  (i)      for the AA Loan Tranches, the amount of principal
                           due (or any part thereof) in respect of the AA Loan
                           Tranches may only be paid on the Monthly Payment
                           Dates falling in the relevant Monthly Payment
                           Period if, after giving effect to such payments and
                           the payments to be made on such dates in respect of
                           the related Series and Classes of Notes, the Class
                           A Available Subordinated Amount is at least equal
                           to the Class A Required Subordinated Amount;

                  (ii)     for the A Loan Tranches, the amount of principal
                           due (or any part thereof) in respect of the A Loan
                           Tranches may only be paid on the Monthly Payment
                           Dates falling in the relevant Monthly Payment
                           Period if, after giving effect to such payments and
                           the payments to be made on such dates in respect of
                           the related Series and Classes of Notes, the Class
                           A Available Subordinated Amount is at least equal
                           to the Class A Required Subordinated Amount and the
                           Class B Available Subordinated Amount is at least
                           equal to the Class B Required Subordinated Amount;

                  (iii)    for the BBB Loan Tranches, the amount of principal
                           due (or any part thereof) in respect of the BBB
                           Loan Tranches may only be paid on the Monthly
                           Payment Dates falling in the relevant Monthly
                           Payment Period if, after giving effect to such
                           payments and the payments to be made on such dates
                           in respect of the related Series and Classes of
                           Notes, the Class A Available Subordinated Amount is
                           at least equal to the Class A Required Subordinated
                           Amount, the Class B Available Subordinated Amount
                           is at least equal to the Class B Required
                           Subordinated Amount and the Class M Available
                           Subordinated Amount is at least equal to the Class
                           M Required Subordinated Amount; and

                  (iv)     for the BB Loan Tranches, the amount of principal
                           due (or any part thereof) in respect of the BB Loan
                           Tranches may only be paid on the Monthly Payment
                           Dates falling in the relevant Monthly Payment
                           Period if, after giving effect to such payments and
                           the payments to be made on such dates in respect of
                           the related Series and Classes of Notes, the Class
                           A Available Subordinated Amount is at least equal
                           to the Class A Required Subordinated Amount, the
                           Class B Available Subordinated Amount is at least
                           equal to the Class B Required Subordinated Amount,
                           the Class M Available Subordinated Amount is



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<PAGE>

                           at least equal to the Class M Required Subordinated
                           Amount and the Class C Available Subordinated
                           Amount is at least equal to the Class C Required
                           Subordinated Amount.

                  save that, in calculating the Class A Available Subordinated
                  Amount, the Class B Available Subordinated Amount, the Class
                  M Available Subordinated Amount, and the Class C Available
                  Subordinated Amount for the purposes of paragraphs (i),
                  (ii), (iii) and (iv) above, Excess Spread will be deemed to
                  be zero.

          (C)     If, in respect of any Monthly Payment Period:

                  (i)      one or more Bullet Repayment Loan Amounts are
                           within a Cash Accumulation Period at that time; and

                  (ii)     the quarterly CPR is less than 15 per cent.,

                  then, on or before their Step-Up Dates, the Scheduled
                  Repayment Loan Tranches, the Controlled Repayment Loan
                  Tranches and the Pass-Through Loan Tranches will be entitled
                  to principal repayments under paragraphs (D), (E), (F), (G)
                  and (H) (as applicable) of the Funding 2 Pre-Enforcement
                  Principal Priority of Payments only if there is no Cash
                  Accumulation Shortfall at such time.

Rule (2) Repayment of Pass-Through Loan Tranches after the occurrence of a
Step-Up Date

         Following the occurrence of the Step-Up Date under a Loan Tranche
         ("Loan Tranche A") and provided that the Funding 2 Share of the Trust
         Property is greater than zero, the aggregate amount repayable on a
         Loan Payment Date falling in a Monthly Payment Period in relation to
         Loan Tranche A under paragraphs (D), (E), (F), (G) and (H) of the
         Funding 2 Pre-Enforcement Principal Priority of Payments shall be
         limited to an amount calculated as follows:

                                   A x B x C
                                   ---------
                                       D

         where, in respect of any Distribution Date:

         A =      the aggregate amount of Mortgages Trustee Principal
                  Receipts received by the Mortgages Trustee in the relevant
                  Trust Calculation Period (excluding any Initial Contribution
                  or Further Contribution);

         B =      the Funding 2 Share Percentage calculated as at the start
                  of the relevant Trust Calculation Period or, as applicable
                  the Weighted Average Funding 2 Share Percentage;

         C =      the outstanding principal balance of Loan Tranche A;  and

         D =      the aggregate outstanding principal balance of the Global
                  Intercompany Loan.

         Where Rule (2) applies at a level of any priority of payments, the
         funds available for making payments at that level shall first be
         allocated without reference to Rule (2).


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<PAGE>

         However, if the amount so allocated to one or more Loan Tranches
         exceeds the amount permitted under Rule (2) to be paid in respect of
         those Loan Tranches (the "Capped Loan Tranches"), the excess shall
         then be reallocated among any other relevant Loan Tranches at that
         level using the method of allocation as applies at that level but
         without reference to the Capped Loan Tranches in calculating such
         reallocation. If a further such excess arises as a result of the
         reallocation process, the reallocation process shall be repeated at
         that level in relation to each such further excess that arises until
         no further funds can be allocated at that level following which the
         remaining excess shall then be applied firstly, between the Capped
         Loan Tranches in no order of priority among them but in proportion to
         the amounts due and then at the next level of that priority of
         payments.

Rule (3) Deferral of repayment of subordinated tiers of Loan Tranches in
certain circumstances

         If, on any Monthly Payment Date falling in a Monthly Payment Period,
         neither the Issuer Reserve Requirement and the Issuer Arrears Test
         for such Monthly Payment Period will be satisfied and the Class A
         Notes of any Series and/or the AAA Loan Tranches will not have not
         been repaid in full by the end of such Monthly Payment Period, then:

         (i)      the AA Loan Tranches will not be entitled to principal
                  repayments under item (E) of the Funding 2 Pre-Enforcement
                  Principal Priority of Payments;

         (ii)     the A Loan Tranches will not be entitled to principal
                  repayments under item (F) of the Funding 2 Pre-Enforcement
                  Principal Priority of Payments;

         (iii)    the BBB Loan Tranches will not be entitled to principal
                  repayments under item (G) of the Funding 2 Pre-Enforcement
                  Principal Priority of Payments;

         (iv)     the BB Loan Tranches will not be entitled to principal
                  repayments under item (H) of the Funding 2 Pre-Enforcement
                  Principal Priority of Payments;

         The "Issuer Arrears Test" will be satisfied in respect of a Monthly
         Payment Period if the Master Issuer or the Issuer Cash Manager on its
         behalf calculates on the Distribution Date immediately preceding that
         Monthly Payment Period that, as of the last day of the Trust
         Calculation Period immediately preceding that Distribution Date (i)
         the aggregate Current Balance of the Mortgage Loans in the Mortgage
         Portfolio which are then in arrears for at least 3 months is less
         than 4% of the aggregate Current Balance of all Mortgage Loans in the
         Mortgage Portfolio, unless the Rating Agencies have confirmed that
         the then current ratings of the Notes will not be reduced, withdrawn,
         or qualified if the Issuer Arrears Test is not met at that time; and
         (ii) the aggregate interest arrears in respect of all the Mortgage
         Loans in the Mortgage Portfolio as a percentage of the aggregate
         gross interest due on all Mortgage Loans during the previous 12
         months does not exceed 2%, or such other percentage as is then
         acceptable to the then current Rating Agencies at such time.

         The "Issuer Reserve Requirement" will be satisfied in respect of a
         Monthly Payment Period if, after giving effect to the application of
         any payment of Funding 2 Available Revenue Receipts to the credit of
         the Funding 2 Reserve Ledger and any payment of Issuer Available
         Revenue Receipts to the Issuer Reserve Ledger, the


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<PAGE>

         aggregate amount of funds in the Funding 2 Reserve Fund and in the
         Issuer Reserve Fund at the end of such Monthly Payment Period will be
         equal to the Programme Reserve Required Amount.

Rule (4) Application of Funding 2 Available Principal Receipts

         Funding 2 and the Cash Manager shall comply with the requirements of
         paragraph (8) of Schedule 2 (Cash Management and Maintenance of
         Ledgers) to the Cash Management Agreement.

         Following the occurrence of a Pass-Through Trigger Event during a
         Monthly Payment Period, Funding 2, or the Cash Manager on its behalf,
         or the Funding 2 Security Trustee, as applicable, shall comply with
         the requirements of Part IV of this Schedule.



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                                   Part III

                Funding 2 Post-Enforcement Priority of Payments

At any time after the Funding 2 Security has become enforceable in accordance
with Clause 6.2 (Enforceable) and provided that a Funding 2 Intercompany Loan
Enforcement Notice has not been withdrawn, on or prior to the first day of
each Monthly Payment Period the Funding 2 Security Trustee (or the Cash
Manager on its behalf) will, subject to the Rules for Application of Funding 2
Available Revenue Receipts and Funding 2 Available Principal Receipts
following the occurrence of a Pass-Through Trigger Event during a Monthly
Payment Period set out in Part IV of this Schedule, allocate amounts received
or recovered (excluding Swap Collateral standing to the credit of the Funding
2 Swap Collateral Accounts) following enforcement of the Funding 2 Security
towards the payments and provisions in respect of amounts due on all Monthly
Payment Dates falling in such Monthly Payment Period in the order of priority
set out in the third paragraph below (in each case only if and to the extent
that payments or provisions of a higher priority in respect of amounts due on
any Monthly Payment Date falling in such Monthly Payment Period have been made
in full) (the "Funding 2 Post-Enforcement Priority of Payments"). The amounts
so allocated will not be applied in satisfaction of any payment or provision
until the Monthly Payment Date in such Monthly Payment Period on which such
payment or provision is required to be made.

The allocation of the amounts so received or recovered towards the payments
and provisions in respect of amounts due under any item of the Funding 2
Post-Enforcement Priority of Payments on all Monthly Payment Dates falling in
such Monthly Payment Period shall be made in no order of priority but in
proportion to the respective amounts due under such item (in each case only if
and to the extent that payments or provisions of a higher priority in respect
of amounts due under such item on any Monthly Payment Date falling in such
Monthly Payment Period have been made in full).

On each Monthly Payment Date falling in the relevant Monthly Payment Period,
the amounts so received or recovered and allocated towards each payment and
provision in respect of amounts due on the relevant Monthly Payment Date shall
be applied in making such payment or provision.

The Funding 2 Post-Enforcement Priority of Payments is as follows:

(A)      first, to pay amounts due in the relevant Monthly Payment Period to
         the Funding 2 Security Trustee and any Receiver appointed by the
         Funding 2 Security Trustee, together with interest and (to the extent
         not already inclusive) VAT on those amounts, and to provide for any
         amounts due or to become due to the Funding 2 Security Trustee and
         the Receiver prior to the next following Monthly Payment Period under
         the Funding 2 Deed of Charge or any other Transaction Document;

(B)      second, to pay amounts due in the relevant Monthly Payment Period to
         the Master Issuer in respect of the Master Issuer's obligations
         specified in items (A) through (D) of the Issuer Pre-Enforcement
         Revenue Priority of Payments or, as the case may be, items (A)
         through (C) of the Issuer Post-Enforcement Priority of Payments;

(C)      third, towards payment of amounts due and payable in the relevant
         Monthly Payment Period to the Cash Manager and any costs, charges,
         liabilities and expenses then due



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         or to become due and payable to the Cash Manager under the Cash
         Management Agreement, together with (to the extent not already
         inclusive) VAT on those amounts;

(D)      fourth, in no order of priority among them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts (if any) due to (i) the Account Bank under
         the terms of the Funding 2 Bank Account Agreement and (ii) to the
         Corporate Services Provider under the terms of the Corporate Services
         Agreement;

(E)      fifth, towards payment of amounts (if any) due in the relevant
         Monthly Payment Period to the Funding 2 Liquidity Facility Provider
         under the Funding 2 Liquidity Facility (if any) (except for any
         Funding 2 Liquidity Subordinated Amounts);

(F)      sixth, in no order of priority among them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts due to the Funding 2 Basis Rate Swap
         Provider under the Funding 2 Basis Rate Swaps (including any Swap
         Termination Payment but excluding any Funding 2 Basis Rate Swap
         Excluded Termination Amount);

(G)      seventh, in no order of priority between them but in proportion to
         the respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts of interest, principal and fees due on the
         AAA Loan Tranches;

(H)      eighth, in no order of priority between them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts of interest, principal and fees due on the
         AA Loan Tranches;

(I)      ninth, in no order of priority between them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts of interest, principal and fees due on the
         A Loan Tranches;

(J)      tenth, in no order of priority between them but in proportion to the
         respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts of interest, principal and fees due on the
         BBB Loan Tranches;

(K)      eleventh, in no order of priority between them but in proportion to
         the respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts of interest, principal and fees due on the
         BB Loan Tranches;

(L)      twelfth, to pay amounts due in the relevant Monthly Payment Period to
         the Master Issuer in respect of the Master Issuer's obligations
         specified in item (J) of the Issuer Pre-Enforcement Revenue Priority
         of Payments or, as the case may be, item (O) of the Issuer
         Post-Enforcement Priority of Payments.

(M)      thirteenth, to pay amounts due in the relevant Monthly Payment Period
         to the Master Issuer in respect of its obligations, if any, to make a
         Swap Termination Payment to any Issuer Swap Provider (but excluding
         any Issuer Swap Excluded Termination Amount).

(N)      fourteenth in no order of priority between them but in proportion to
         the respective amounts due in the relevant Monthly Payment Period,
         towards payment of amounts due (without double counting) to:


                                      88
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         (i)      the Master Issuer in respect of its obligations (if any) to
                  pay any Issuer Swap Excluded Termination Amount;

         (ii)     the Funding 2 Liquidity Facility Provider, if any, any
                  Funding 2 Liquidity Facility Subordinated Amounts due under
                  the Funding 2 Liquidity Facility Agreement;

         (iii)    the Funding 2 Basis Rate Swap Provider in respect of any
                  Funding 2 Basis Rate Swap Excluded Termination Amount;

(O)      fifteenth, towards payment of any Deferred Contribution due to the
         Mortgages Trustee under the Mortgages Trust Deed; and

(P)      last, to pay any amount remaining following the application of
         principal and revenue set forth in paragraphs (A) through (O) above,
         to Funding 2.




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                                    Part IV

Rules for application of Funding 2 Available Revenue Receipts and Funding 2
Available Principal Receipts following the occurrence of a Pass-Through
Trigger Event during a Monthly Payment Period

If, at any time during a Monthly Payment Period, a Pass-Through Trigger Event
occurs, then:

(1)      the Funding 2 Available Revenue Receipts and Funding 2 Available
         Principal Receipts previously allocated on the first day of such
         Monthly Payment Period towards the making of interest and principal
         payments on Loan Tranches then due on all Monthly Payment Dates
         falling in such Monthly Payment Period shall, notwithstanding the
         occurrence of the Pass-Through Trigger Event and to the extent not
         already so applied, be applied on such Monthly Payment Dates in
         making such payments and provisions;

(2)      all remaining Funding 2 Available Revenue Receipts and Funding 2
         Available Principal Receipts for such Monthly Payment Period
         (excluding, for the avoidance of doubt, Funding 2 Available Revenue
         Receipts and Funding 2 Available Principal Receipts previously
         applied or allocated on Monthly Payment Dates falling in the relevant
         Monthly Payment Period in making the payments or provisions to which
         they had been allocated) ("Remaining Funding 2 Available Revenue
         Receipts" and "Remaining Funding 2 Available Principal Receipts"
         respectively) will be allocated towards revenue and principal
         payments or provisions, as applicable, that would have been due on
         all Monthly Payment Dates falling in such Monthly Payment Period if
         the Pass-Through Trigger Event had occurred prior to such Monthly
         Payment Period (excluding, for this purpose, any payment or provision
         due in such Monthly Payment Period which has been made or, in
         accordance with paragraph (1) above, will be made) in the order of
         priority set out in the Funding 2 Pre-Enforcement Revenue Priority of
         Payments, the Funding 2 Pre-Enforcement Principal Priority of
         Payments or the Funding 2 Post-Enforcement Priority of Payments, as
         applicable (in each case only if and to the extent that payments or
         provisions of a higher priority in respect of amounts due on any
         Monthly Payment Date falling in such Monthly Payment Period have been
         made in full); and

(3)      on each Monthly Payment Date falling in the relevant Monthly Payment
         Period after the occurrence of the Pass-Through Trigger Event and
         until such time as there are no outstanding Funding 2 Secured
         Obligations, the Remaining Funding 2 Available Revenue Receipts
         and/or Remaining Funding 2 Available Principal Receipts allocated in
         accordance with paragraph (2) above towards a payment or provision
         due on such Monthly Payment Date shall be applied, in accordance with
         the Funding 2 Pre-Enforcement Revenue Priority of Payments, the
         Funding 2 Pre-Enforcement Principal Priority of Payments or the
         Funding 2 Post-Enforcement Priority of Payments, as applicable, in
         making such payments and provisions. Any Remaining Funding 2 Funding
         2 Available Revenue Receipts and/or Remaining Funding 2 Available
         Principal Receipts allocated in accordance with paragraph (2) above
         towards an amount that would have been due on any Monthly Payment
         Date in the relevant Monthly Payment Period falling prior to the
         occurrence of the Pass-Through Trigger Event, shall be applied in
         payment of such amount on the corresponding Monthly Payment Date
         falling in the next following Monthly Payment Period (and shall be
         taken into account in determining the allocation and application of
         other Funding 2


                                      90
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         Available Revenue Receipts and Funding 2 Available Principal
         Receipts in such next following Monthly Payment Period).





                                      91
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                                  SCHEDULE 4

                         FORM OF NOTICE OF ASSIGNMENT

To:      [Addressee(s)]

In respect of the [Description of Funding 2 Transaction Document or Funding 2
Charged Property]

[Date]

Dear Sirs,

Terms and expressions used in this letter are as defined in the deed of charge
(the "Funding 2 Deed of Charge") between Granite Finance Funding 2 Limited
("Funding 2"), The Bank of New York (the "Funding 2 Security Trustee") and
others dated [o].

We hereby give notice to each addressee of this letter that by assignment(s)
under or pursuant to the Funding 2 Deed of Charge, Funding 2 has assigned
absolutely, by way of security for the payment and performance of certain
obligations of Funding 2 described in the Funding 2 Deed of Charge (the
"Funding 2 Secured Obligations"), to the Funding 2 Security Trustee all its
right, title, benefit and interest under the [Agreement(s)] (the "Funding 2
Transaction Documents") [including its right, title interest and benefit in
relation to [describe property] and including, without limitation, all rights
to receive payment of any amounts which may become payable to Funding 2
thereunder, all payments received by Funding 2 thereunder, all rights to serve
notices and/or make demands thereunder and/or to take such steps as are
required to cause payments to become due and payable thereunder and all rights
of action in respect of any breach thereof and all rights to receive damages
or obtain relief in respect thereof and the proceeds of any of the foregoing,
(hereinafter called the "Relevant Funding 2 Property").

By signing the enclosed copy of this notice you acknowledge and consent to the
assignments and agree that:

         (i)      from the date of this notice you are obliged to and you will
                  pay all moneys which are or may become payable to Funding 2
                  under the aforesaid agreements to or to the order of the
                  Funding 2 Security Trustee; and

         (ii)     you have not, at the date of this notice, received notice
                  that any third party has or will have any right of interest
                  whatsoever in the Relevant Funding 2 Property.

Notwithstanding the assignments made by Funding 2 and referred to in this
notice, the Funding 2 Security Trustee hereby confirms and you further
acknowledge that:

         (a)      you may continue to make all payments becoming due to
                  Funding 2 in respect of the Relevant Funding 2 Property in
                  the manner envisaged by the relevant Funding 2 Transaction
                  Document(s); and

         (b)      Funding 2 shall be entitled to exercise its rights, powers
                  and discretions and perform its obligations in relation to
                  the Relevant Funding 2 Property and


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                  under the Funding 2 Transaction Documents in accordance with
                  the provisions of the Funding 2 Transaction Documents,

but only until such time as you receive notice from the Funding 2 Security
Trustee to the contrary or to the effect that the created under the Funding 2
Deed of Charge has become enforceable, in which event from receipt of such
notice you agree that you will pay all monies becoming due and payable to
Funding 2 in respect of the Relevant Funding 2 Property in accordance with any
instructions received from the Funding 2 Security Trustee.

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

Please acknowledge receipt of this notice by executing and returning the copy
of this letter attached hereto.

Yours faithfully,
<TABLE>
<CAPTION>

<S>                                                   <C>
Executed by
GRANITE FINANCE FUNDING 2 LIMITED
as follows:
Signed for and on its behalf by one of its duly
authorised attorneys/signatories                         By____________________________________________
                                                           Duly Authorised Attorney/Signatory


                                                      Name_____________________________________________


Executed by
THE BANK OF NEW YORK
as follows:
Signed for and on its behalf by one of its duly         By___________________________________________
authorised attorneys/signatories                          Duly Authorised Attorney/Signatory

                                                      Name___________________________________________

</TABLE>


We acknowledge receipt of the above notice and the terms of the assignment
created by you in respect of the Relevant Funding 2 Property.

In respect of the [Agreement]:

For and on behalf of:

[Party to Funding 2 Transaction Document]

By:



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                                  SCHEDULE 5

                       UTILISATION OF FUNDING 2 RESERVES

1.       Funding 2 Reserve Fund:

1.1      Prior to the service of a Funding 2 Intercompany Loan Enforcement
         Notice, amounts standing to the credit of the Funding 2 Reserve Fund
         may be utilised:

         (a)      through inclusion in the calculation of Funding 2 Available
                  Reserve Receipts to help meet and thereby to satisfy any
                  deficiency in interest and fees due under the Global
                  Intercompany Loan Agreement and to help meet and thereby to
                  satisfy any deficit on the Funding 2 Principal Deficiency
                  Ledger;

         (b)      through inclusion in the calculation of Funding 2 Available
                  Principal Receipts, to meet, and thereby to satisfy, any
                  deficit:

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

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

1.2      Following the service of a Funding 2 Intercompany Loan Enforcement
         Notice, to the extent not applied on a Monthly Payment Date in
         accordance with 1.1 above, amounts standing to the credit of the
         Funding 2 Reserve Ledger shall only be applied in making payments of
         principal due under the Funding 2 Intercompany Loan Agreements to
         fund payments of principal due on the Notes of any Funding 2 Issuer
         on any Monthly Payment Date.

1.3      Following the occurrence of an Arrears or Step-Up Trigger Event, the
         amount required to be credited to the Funding 2 Reserve Fund will be
         an amount equal to the sum of the Funding 2 Reserve Required Amount
         and:

         (a)      if an Arrears or Step-Up Trigger Event has occurred under
                  item (i) only of the Arrears or Step-Up Trigger Event
                  definition, the amount specified in relation to such event
                  in the most recent Pricing Supplement;

         (b)      if an Arrears or Step-Up Trigger Event has occurred under
                  item (ii) only of the Arrears or Step-Up Trigger Event
                  definition, the amount specified in relation to such event
                  in the most recent Pricing Supplement;

         (c)      if an Arrears or Step-Up Trigger Event has occurred under
                  both (i) and (ii) of the Arrears or Step-Up Trigger Event
                  definition, the amount specified in relation to such event
                  in the most recent Pricing Supplement.

1.4      If an Arrears or Step-Up Trigger Event has occurred under item (i),
         item (ii) or items (i) and (ii) of the Arrears or Step-Up Trigger
         Event definition and such event(s) have been cured, the Funding 2
         Reserve Fund will be reduced by the applicable amount



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         specified in relation to such event(s) in the most recent Pricing
         Supplement and the amount of such reduction will constitute Funding 2
         Available Revenue Receipts.

2.       Funding 2 Liquidity Reserve Fund:

2.1      Prior to the service of a Funding 2 Intercompany Loan Enforcement
         Notice, the Funding 2 Liquidity Reserve Fund (if any is required to
         be established) shall only be applied on any Monthly Payment Date to:

         (a)      to help meet any deficit in Funding 2 Available Revenue
                  Receipts to pay amounts due under the Global Intercompany
                  Loan Agreement, but only to the extent that such amounts are
                  necessary to fund the payment by Funding 2 of interest and
                  fees due on the relevant Monthly Payment Date in respect of
                  the AAA Loan Tranches and/or the AA Loan Tranches and to
                  help meet any deficit recorded on the Funding 2 Principal
                  Deficiency Ledger in respect of the AAA Loan Tranches;

         (b)      (provided that there are no AAA Loan Tranches and AA Loan
                  Tranches outstanding) to help meet any deficit in Funding 2
                  Available Revenue Receipts which are allocated to pay all
                  interest and fees due under the Global Intercompany Loan
                  Agreement; and

         (c)      to help meet any deficit in Funding 2 Available Principal
                  Receipts available for:

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

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

2.2      Following the service of a Funding 2 Intercompany Loan Enforcement
         Notice, to the extent not applied on a Monthly Payment Date in
         accordance with 2.1 above, amounts standing to the credit of the
         Funding 2 Liquidity Reserve Ledger shall only be applied in making
         payments of principal due under the Funding 2 Intercompany Loan
         Agreements in order to fund payments of principal due on the Notes of
         any Funding 2 Issuer on any Monthly Payment Date.

3.       Adjustment of the Funding 2 Reserve

         Funding 2 may, at any time, adjust the Target Reserve Required Amount
         or the Funding 2 Required Amount without the consent of the Funding 2
         Secured Creditors, so long as the Funding 2 Security Trustee and
         Funding 2 obtain confirmation from the Rating Agencies that such
         adjustments will not cause a reduction, qualification or withdrawal
         of the ratings of any outstanding Notes.




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