Exhibit 10.1

(Multicurrency -- Cross Border)

                                     ISDA(R)


                  International Swap Dealers Association, Inc.



                                MASTER AGREEMENT


                          dated as of 19 January, 2005
                                     -----------------



Northern Rock PLC                          Granite Finance Funding 2 Limited
("Party A")                                ("Party B")
...............................and ..............................................


have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows: --

1.    Interpretation

(a)   Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.

(b)   Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.

(c)   Single Agreement.  All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.

2.    Obligations

(a)   General Conditions.

      (i) Each party will make each payment or delivery specified in each
      Confirmation to be made by it, subject to the other provisions of this
      Agreement.

      (ii) Payments under this Agreement will be made on the due date for value
      on that date in the place of the account specified in the relevant
      Confirmation or otherwise pursuant to this Agreement, in freely
      transferable funds and in the manner customary for payments in the
      required currency. Where settlement is by delivery (that is, other than by
      payment), such delivery will be made for receipt on the due date in the
      manner customary for the relevant obligation unless otherwise specified in
      the relevant Confirmation or elsewhere in this Agreement.

      (iii) Each obligation of each party under Section 2(a)(i) is subject to
      (1) the condition precedent that no Event of Default or Potential Event of
      Default with respect to the other party has occurred and is continuing,
      (2) the condition precedent that no Early Termination Date in respect of
      the relevant Transaction has occurred or been effectively designated and
      (3) each other applicable condition precedent specified in this Agreement.


       Copyright (C) 1992 by International Swap Dealers Association, Inc.


<PAGE>

(b)   Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.

(c)   Netting. If on any date amounts would otherwise be payable:

      (i)   in the same currency; and

      (ii)  in respect of the same Transaction,

by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)   Deduction or Withholding for Tax.

      (i) Gross-Up. All payments under this Agreement will be made without any
      deduction or withholding for or on account of any Tax unless such
      deduction or withholding is required by any applicable law, as modified by
      the practice of any relevant governmental revenue authority, then in
      effect. If a party is so required to deduct or withhold, then that party
      ("X") will:

            (1) promptly notify the other party ("Y") of such requirement;

            (2) pay to the relevant authorities the full amount required to be
            deducted or withheld (including the full amount required to be
            deducted or withheld from any additional amount paid by X to Y under
            this Section 2(d)) promptly upon the earlier of determining that
            such deduction or withholding is required or receiving notice that
            such amount has been assessed against Y;

            (3) promptly forward to Y an official receipt (or a certified copy),
            or other documentation reasonably acceptable to Y, evidencing such
            payment to such authorities; and

            (4) if such Tax is an lndemnifiable Tax, pay to Y, in addition to
            the payment to which Y is otherwise entitled under this Agreement,
            such additional amount as is necessary to ensure that the net amount
            actually received by Y (free and clear of Indemnifiable Taxes,
            whether assessed against X or Y) will equal the full amount Y would
            have received had no such deduction or withholding been required.
            However, X will not be required to pay any additional amount to Y to
            the extent that it would not be required to be paid but for:

                  (A) the failure by Y to comply with or perform any agreement
                  contained in Section 4(a)(i), 4(a)(iii) or 4(d); or

                  (B) the failure of a representation made by Y pursuant to
                  Section 3(f) to be accurate and true unless such failure would
                  not have occurred but for (I) any action taken by a taxing
                  authority, or brought in a court of competent jurisdiction, on
                  or after the date on which a Transaction is entered into
                  (regardless of whether such action is taken or brought with
                  respect to a party to this Agreement) or (II) a Change in Tax
                  Law.

                                                                   ISDA(R) 1992

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      (ii)  Liability. If: --

            (1) X is required by any applicable law, as modified by the practice
            of any relevant governmental revenue authority, to make any
            deduction or withholding in respect of which X would not be required
            to pay an additional amount to Y under Section 2(d)(i)(4);

            (2) X does not so deduct or withhold; and

            (3) a liability resulting from such Tax is assessed directly against
            X,

      then, except to the extent Y has satisfied or then satisfies the liability
      resulting from such Tax, Y will promptly pay to X the amount of such
      liability (including any related liability for interest, but including any
      related liability for penalties only if Y has failed to comply with or
      perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)   Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.

3.    Representations

Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:

(a)   Basic Representations.

      (i) Status. It is duly organised and validly existing under the laws of
      the jurisdiction of its organisation or incorporation and, if relevant
      under such laws, in good standing;

      (ii) Powers. It has the power to execute this Agreement and any other
      documentation relating to this Agreement to which it is a party, to
      deliver this Agreement and any other documentation relating to this
      Agreement that it is required by this Agreement to deliver and to perform
      its obligations under this Agreement and any obligations it has under any
      Credit Support Document to which it is a party and has taken all necessary
      action to authorise such execution, delivery and performance;

      (iii) No Violation or Conflict. Such execution, delivery and performance
      do not violate or conflict with any law applicable to it, any provision of
      its constitutional documents, any order or judgment of any court or other
      agency of government applicable to it or any of its assets or any
      contractual restriction binding on or affecting it or any of its assets;

      (iv) Consents. All governmental and other consents that are required to
      have been obtained by it with respect to this Agreement or any Credit
      Support Document to which it is a party have been obtained and are in full
      force and effect and all conditions of any such consents have been
      complied with; and

      (v) Obligations Binding. Its obligations under this Agreement and any
      Credit Support Document to which it is a party constitute its legal, valid
      and binding obligations, enforceable in accordance with their respective
      terms (subject to applicable bankruptcy, reorganisation, insolvency,
      moratorium or similar laws affecting creditors' rights generally and
      subject, as to enforceability, to equitable principles of general
      application (regardless of whether enforcement is sought in a proceeding
      in equity or at law)).

                                                                   ISDA(R) 1992

                                       3
<PAGE>

(b)   Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.

(c)   Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.

(d)   Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)   Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.

(f)   Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.

4.    Agreements

Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:

(a)   Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:

      (i) any forms, documents or certificates relating to taxation specified in
      the Schedule or any Confirmation;

      (ii) any other documents specified in the Schedule or any Confirmation;
      and

      (iii) upon reasonable demand by such other party, any form or document
      that may be required or reasonably requested in writing in order to allow
      such other party or its Credit Support Provider to make a payment under
      this Agreement or any applicable Credit Support Document without any
      deduction or withholding for or on account of any Tax or with such
      deduction or withholding at a reduced rate (so long as the completion,
      execution or submission of such form or document would not materially
      prejudice the legal or commercial position of the party in receipt of such
      demand), with any such form or document to be accurate and completed in a
      manner reasonably satisfactory to such other party and to be executed and
      to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.

(b)   Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.

(c)   Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

(d)   Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.

(e)   Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,

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<PAGE>

organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.

5.    Events of Default and Termination Events

(a)   Events of Default. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:

      (i) Failure to Pay or Deliver. Failure by the party to make, when due, any
      payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
      required to be made by it if such failure is not remedied on or before the
      third Local Business Day after notice of such failure is given to the
      party;

      (ii) Breach of Agreement. Failure by the party to comply with or perform
      any agreement or obligation (other than an obligation to make any payment
      under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
      notice of a Termination Event or any agreement or obligation under Section
      4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
      in accordance with this Agreement if such failure is not remedied on or
      before the thirtieth day after notice of such failure is given to the
      party;

      (iii) Credit Support Default.

            (1) Failure by the party or any Credit Support Provider of such
            party to comply with or perform any agreement or obligation to be
            complied with or performed by it in accordance with any Credit
            Support Document if such failure is continuing after any applicable
            grace period has elapsed;

            (2) the expiration or termination of such Credit Support Document or
            the failing or ceasing of such Credit Support Document to be in full
            force and effect for the purpose of this Agreement (in either case
            other than in accordance with its terms) prior to the satisfaction
            of all obligations of such party under each Transaction to which
            such Credit Support Document relates without the written consent of
            the other party; or

            (3) the party or such Credit Support Provider disaffirms, disclaims,
            repudiates or rejects, in whole or in part, or challenges the
            validity of, such Credit Support Document;

      (iv) Misrepresentation. A representation (other than a representation
      under Section 3(e) or (f)) made or repeated or deemed to have been made or
      repeated by the party or any Credit Support Provider of such party in this
      Agreement or any Credit Support Document proves to have been incorrect or
      misleading in any material respect when made or repeated or deemed to have
      been made or repeated;

      (v) Default under Specified Transaction. The party, any Credit Support
      Provider of such party or any applicable Specified Entity of such party
      (1) defaults under a Specified Transaction and, after giving effect to any
      applicable notice requirement or grace period, there occurs a liquidation
      of, an acceleration of obligations under, or an early termination of, that
      Specified Transaction, (2) defaults, after giving effect to any applicable
      notice requirement or grace period, in making any payment or delivery due
      on the last payment, delivery or exchange date of, or any payment on early
      termination of, a Specified Transaction (or such default continues for at
      least three Local Business Days if there is no applicable notice
      requirement or grace period) or (3) disaffirms, disclaims, repudiates or
      rejects, in whole or in part, a Specified Transaction (or such action is
      taken by any person or entity appointed or empowered to operate it or act
      on its behalf);

      (vi) Cross Default. If "Cross Default" is specified in the Schedule as
      applying to the party, the occurrence or existence of (1) a default, event
      of default or other similar condition or event (however

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      described) in respect of such party, any Credit Support Provider of such
      party or any applicable Specified Entity of such party under one or more
      agreements or instruments relating to Specified Indebtedness of any of
      them (individually or collectively) in an aggregate amount of not less
      than the applicable Threshold Amount (as specified in the Schedule) which
      has resulted in such Specified Indebtedness becoming, or becoming capable
      at such time of being declared, due and payable under such agreements or
      instruments, before it would otherwise have been due and payable or (2) a
      default by such party, such Credit Support Provider or such Specified
      Entity (individually or collectively) in making one or more payments on
      the due date thereof in an aggregate amount of not less than the
      applicable Threshold Amount under such agreements or instruments (after
      giving effect to any applicable notice requirement or grace period);

      (vii) Bankruptcy. The party, any Credit Support Provider of such party or
      any applicable Specified Entity of such party: --

            (1) is dissolved (other than pursuant to a consolidation,
            amalgamation or merger); (2) becomes insolvent or is unable to pay
            its debts or fails or admits in writing its inability generally to
            pay its debts as they become due; (3) makes a general assignment,
            arrangement or composition with or for the benefit of its creditors;
            (4) institutes or has instituted against it a proceeding seeking a
            judgment of insolvency or bankruptcy or any other relief under any
            bankruptcy or insolvency law or other similar law affecting
            creditors' rights, or a petition is presented for its winding-up or
            liquidation, and, in the case of any such proceeding or petition
            instituted or presented against it, such proceeding or petition (A)
            results in a judgment of insolvency or bankruptcy or the entry of an
            order for relief or the making of an order for its winding-up or
            liquidation or (B) is not dismissed, discharged, stayed or
            restrained in each case within 30 days of the institution or
            presentation thereof; (5) has a resolution passed for its
            winding-up, official management or liquidation (other than pursuant
            to a consolidation, amalgamation or merger); (6) seeks or becomes
            subject to the appointment of an administrator, provisional
            liquidator, conservator, receiver, trustee, custodian or other
            similar official for it or for all or substantially all its assets;
            (7) has a secured party take possession of all or substantially all
            its assets or has a distress, execution, attachment, sequestration
            or other legal process levied, enforced or sued on or against all or
            substantially all its assets and such secured party maintains
            possession, or any such process is not dismissed, discharged, stayed
            or restrained, in each case within 30 days thereafter; (8) causes or
            is subject to any event with respect to it which, under the
            applicable laws of any jurisdiction, has an analogous effect to any
            of the events specified in clauses (1) to (7) (inclusive); or (9)
            takes any action in furtherance of, or indicating its consent to,
            approval of, or acquiescence in, any of the foregoing acts; or

      (viii) Merger Without Assumption. The party or any Credit Support Provider
      of such party consolidates or amalgamates with, or merges with or into, or
      transfers all or substantially all its assets to, another entity and, at
      the time of such consolidation, amalgamation, merger or transfer: --

            (1) the resulting, surviving or transferee entity fails to assume
            all the obligations of such party or such Credit Support Provider
            under this Agreement or any Credit Support Document to which it or
            its predecessor was a party by operation of law or pursuant to an
            agreement reasonably satisfactory to the other party to this
            Agreement; or

            (2) the benefits of any Credit Support Document fail to extend
            (without the consent of the other party) to the performance by such
            resulting, surviving or transferee entity of its obligations under
            this Agreement.

(b)   Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event

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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:

      (i) Illegality. Due to the adoption of, or any change in, any applicable
      law after the date on which a Transaction is entered into, or due to the
      promulgation of, or any change in, the interpretation by any court,
      tribunal or regulatory authority with competent jurisdiction of any
      applicable law after such date, it becomes unlawful (other than as a
      result of a breach by the party of Section 4(b)) for such party (which
      will be the Affected Party): --

            (1) to perform any absolute or contingent obligation to make a
            payment or delivery or to receive a payment or delivery in respect
            of such Transaction or to comply with any other material provision
            of this Agreement relating to such Transaction; or

            (2) to perform, or for any Credit Support Provider of such party to
            perform, any contingent or other obligation which the party (or such
            Credit Support Provider) has under any Credit Support Document
            relating to such Transaction;

      (ii) Tax Event. Due to (x) any action taken by a taxing authority, or
      brought in a court of competent jurisdiction, on or after the date on
      which a Transaction is entered into (regardless of whether such action is
      taken or brought with respect to a party to this Agreement) or (y) a
      Change in Tax Law, the party (which will be the Affected Party) will, or
      there is a substantial likelihood that it will, on the next succeeding
      Scheduled Payment Date (1) be required to pay to the other party an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
      6(e)) or (2) receive a payment from which an amount is required to be
      deducted or withheld for or on account of a Tax (except in respect of
      interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
      required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
      than by reason of Section 2(d)(i)(4)(A) or (B));

      (iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
      succeeding Scheduled Payment Date will either (1) be required to pay an
      additional amount in respect of an Indemnifiable Tax under Section
      2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
      6(e)) or (2) receive a payment from which an amount has been deducted or
      withheld for or on account of any Indemnifiable Tax in respect of which
      the other party is not required to pay an additional amount (other than by
      reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
      party consolidating or amalgamating with, or merging with or into, or
      transferring all or substantially all its assets to, another entity (which
      will be the Affected Party) where such action does not constitute an event
      described in Section 5(a)(viii);

      (iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
      in the Schedule as applying to the party, such party ("X"), any Credit
      Support Provider of X or any applicable Specified Entity of X consolidates
      or amalgamates with, or merges with or into, or transfers all or
      substantially all its assets to, another entity and such action does not
      constitute an event described in Section 5(a)(viii) but the
      creditworthiness of the resulting, surviving or transferee entity is
      materially weaker than that of X, such Credit Support Provider or such
      Specified Entity, as the case may be, immediately prior to such action
      (and, in such event, X or its successor or transferee, as appropriate,
      will be the Affected Party); or

      (v) Additional Termination Event. If any "Additional Termination Event" is
      specified in the Schedule or any Confirmation as applying, the occurrence
      of such event (and, in such event, the Affected Party or Affected Parties
      shall be as specified for such Additional Termination Event in the
      Schedule or such Confirmation).

(c)   Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.

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6.    Early Termination

(a)   Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)   Right to Terminate Following Termination Event.

      (i) Notice. If a Termination Event occurs, an Affected Party will,
      promptly upon becoming aware of it, notify the other party, specifying the
      nature of that Termination Event and each Affected Transaction and will
      also give such other information about that Termination Event as the other
      party may reasonably require.

      (ii) Transfer to Avoid Termination Event. If either an Illegality under
      Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
      Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
      Affected Party, the Affected Party will, as a condition to its right to
      designate an Early Termination Date under Section 6(b)(iv), use all
      reasonable efforts (which will not require such party to incur a loss,
      excluding immaterial, incidental expenses) to transfer within 20 days
      after it gives notice under Section 6(b)(i) all its rights and obligations
      under this Agreement in respect of the Affected Transactions to another of
      its Offices or Affiliates so that such Termination Event ceases to exist.

      If the Affected Party is not able to make such a transfer it will give
      notice to the other party to that effect within such 20 day period,
      whereupon the other party may effect such a transfer within 30 days after
      the notice is given under Section 6(b)(i).

      Any such transfer by a party under this Section 6(b)(ii) will be subject
      to and conditional upon the prior written consent of the other party,
      which consent will not be withheld if such other party's policies in
      effect at such time would permit it to enter into transactions with the
      transferee on the terms proposed.

      (iii)Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
      Tax Event occurs and there are two Affected Parties, each party will use
      all reasonable efforts to reach agreement within 30 days after notice
      thereof is given under Section 6(b)(i) on action to avoid that Termination
      Event.

      (iv) Right to Terminate. If: --

            (1)a transfer under Section 6(b)(ii) or an agreement under Section
            6(b)(iii), as the case may be, has not been effected with respect to
            all Affected Transactions within 30 days after an Affected Party
            gives notice under Section 6(b)(i); or

            (2)an Illegality under Section 5(b)(i)(2), a Credit Event Upon
            Merger or an Additional Termination Event occurs, or a Tax Event
            Upon Merger occurs and the Burdened Party is not the Affected Party,

      either party in the case of an Illegality, the Burdened Party in the case
      of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
      or an Additional Termination Event if there is more than one Affected
      Party, or the party which is not the Affected Party in the case of a
      Credit Event Upon Merger or an Additional Termination Event if there is
      only one Affected Party may, by not more than 20 days notice to the other
      party and provided that the relevant Termination Event is then

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      continuing, designate a day not earlier than the day such notice is
      effective as an Early Termination Date in respect of all Affected
      Transactions.

(c)   Effect of Designation.

      (i) If notice designating an Early Termination Date is given under Section
      6(a) or (b), the Early Termination Date will occur on the date so
      designated, whether or not the relevant Event of Default or Termination
      Event is then continuing.

      (ii) Upon the occurrence or effective designation of an Early Termination
      Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
      respect of the Terminated Transactions will be required to be made, but
      without prejudice to the other provisions of this Agreement. The amount,
      if any, payable in respect of an Early Termination Date shall be
      determined pursuant to Section 6(e).

(d)   Calculations.

      (i) Statement. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date, each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (I) showing, in reasonable detail,
      such calculations (including all relevant quotations and specifying any
      amount payable under Section 6(e)) and (2) giving details of the relevant
      account to which any amount payable to it is to be paid. In the absence of
      written confirmation from the source of a quotation obtained in
      determining a Market Quotation, the records of the party obtaining such
      quotation will be conclusive evidence of the existence and accuracy of
      such quotation.

      (ii) Payment Date. An amount calculated as being due in respect of any
      Early Termination Date under Section 6(e) will be payable on the day that
      notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated or occurs as a result of an Event of
      Default) and on the day which is two Local Business Days after the day on
      which notice of the amount payable is effective (in the case of an Early
      Termination Date which is designated as a result of a Termination Event).
      Such amount will be paid together with (to the extent permitted under
      applicable law) interest thereon (before as well as after judgment) in the
      Termination Currency, from (and including) the relevant Early Termination
      Date to (but excluding) the date such amount is paid, at the Applicable
      Rate. Such interest will be calculated on the basis of daily compounding
      and the actual number of days elapsed.

(e)   Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.

      (i) Events of Default. If the Early Termination Date results from an Event
      of Default: --

            (1) First Method and Market Quotation. If the First Method and
            Market Quotation apply, the Defaulting Party will pay to the
            Non-defaulting Party the excess, if a positive number, of (A) the
            sum of the Settlement Amount (determined by the Non-defaulting
            Party) in respect of the Terminated Transactions and the Termination
            Currency Equivalent of the Unpaid Amounts owing to the
            Non-defaulting Party over (B) the Termination Currency Equivalent of
            the Unpaid Amounts owing to the Defaulting Party.

            (2)First Method and Loss. If the First Method and Loss apply, the
            Defaulting Party will pay to the Non-defaulting Party, if a positive
            number, the Non-defaulting Party's Loss in respect of this
            Agreement.

            (3)Second Method and Market Quotation. If the Second Method and
            Market Quotation apply, an amount will be payable equal to (A) the
            sum of the Settlement Amount (determined by the

                                                                   ISDA(R) 1992

                                       9
<PAGE>

            Non-defaulting Party) in respect of the Terminated Transactions and
            the Termination Currency Equivalent of the Unpaid Amounts owing to
            the Non-defaulting Party less (B) the Termination Currency
            Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
            that amount is a positive number, the Defaulting Party will pay it
            to the Non-defaulting Party; if it is a negative number, the
            Non-defaulting Party will pay the absolute value of that amount to
            the Defaulting Party.

            (4) Second Method and Loss. If the Second Method and Loss apply, an
            amount will be payable equal to the Non-defaulting Party's Loss in
            respect of this Agreement. If that amount is a positive number, the
            Defaulting Party will pay it to the Non-defaulting Party; if it is a
            negative number, the Non-defaulting Party will pay the absolute
            value of that amount to the Defaulting Party.

(ii)  Termination Events. If the Early Termination Date results from a
Termination Event: --

      (1) One Affected Party. If there is one Affected Party, the amount payable
      will be determined in accordance with Section 6(e)(i)(3), if Market
      Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in
      either case, references to the Defaulting Party and to the Non-defaulting
      Party will be deemed to be references to the Affected Party and the party
      which is not the Affected Party, respectively, and, if Loss applies and
      fewer than all the Transactions are being terminated, Loss shall be
      calculated in respect of all Terminated Transactions.

      (2) Two Affected Parties. If there are two Affected Parties: --

            (A) if Market Quotation applies, each party will determine a
            Settlement Amount in respect of the Terminated Transactions, and an
            amount will be payable equal to (1) the sum of (a) one-half of the
            difference between the Settlement Amount of the party with the
            higher Settlement Amount ("X") and the Settlement Amount of the
            party with the lower Settlement Amount ("Y") and (b) the Termination
            Currency Equivalent of the Unpaid Amounts owing to X less (II) the
            Termination Currency Equivalent of the Unpaid Amounts owing to Y;
            and

            (B) if Loss applies, each party will determine its Loss in respect
            of this Agreement (or, if fewer than all the Transactions are being
            terminated, in respect of all Terminated Transactions) and an amount
            will be payable equal to one-half of the difference between the Loss
            of the party with the higher Loss ("X") and the Loss of the party
            with the lower Loss ("Y").

      If the amount payable is a positive number, Y will pay it to X; if it is a
      negative number, X will pay the absolute value of that amount to Y.

(iii) Adjustment for Bankruptcy. In circumstances where an Early Termination
Date occurs because "Automatic Early Termination" applies in respect of a party,
the amount determined under this Section 6(e) will be subject to such
adjustments as are appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement (and retained by
such other party) during the period from the relevant Early Termination Date to
the date for payment determined under Section 6(d)(ii).

(iv ) Pre-Estimate. The parties agree that if Market Quotation applies an amount
recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not
a penalty. Such amount is payable for the loss of bargain and the loss of
protection against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any additional damages as a
consequence of such losses.

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<PAGE>

7.    Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --

(a)   a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b)   a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.    Contractual Currency

(a)   Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b)   Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.

(c)   Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.

(d)   Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.

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<PAGE>

9.    Miscellaneous

(a)   Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.

(b)   Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c)   Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)   Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)   Counterparts and Confirmations.

      (i) This Agreement (and each amendment, modification and waiver in respect
      of it) may be executed and delivered in counterparts (including by
      facsimile transmission), each of which will be deemed an original.

      (ii) The parties intend that they are legally bound by the terms of each
      Transaction from the moment they agree to those terms (whether orally or
      otherwise). A Confirmation shall he entered into as soon as practicable
      and may he executed and delivered in counterparts (including by facsimile
      transmission) or be created by an exchange of telexes or by an exchange of
      electronic messages on an electronic messaging system, which in each case
      will be sufficient for all purposes to evidence a binding supplement to
      this Agreement. The parties will specify therein or through another
      effective means that any such counterpart, telex or electronic message
      constitutes a Confirmation.

(f)   No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)   Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.

10.   Offices; Multibranch Parties

(a)   If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.

(b)   Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.

(c)   If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11.   Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document

                                                                   ISDA(R) 1992

                                       12
<PAGE>

to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.

12.   Notices

(a)   Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:

      (i) if in writing and delivered in person or by courier, on the date it is
      delivered;

      (ii) if sent by telex, on the date the recipient's answerback is received;

      (iii) if sent by facsimile transmission, on the date that transmission is
      received by a responsible employee of the recipient in legible form (it
      being agreed that the burden of proving receipt will be on the sender and
      will not be met by a transmission report generated by the sender's
      facsimile machine);

      (iv) if sent by certified or registered mail (airmail, if overseas) or the
      equivalent (return receipt requested), on the date that mail is delivered
      or its delivery is attempted; or

      (v) if sent by electronic messaging system, on the date that electronic
      message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.

(b)   Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.

13.   Governing Law and Jurisdiction

(a)   Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.

(b)   Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:

      (1) submits to the jurisdiction of the English courts, if this Agreement
      is expressed to be governed by English law, or to the non-exclusive
      jurisdiction of the courts of the State of New York and the United States
      District Court located in the Borough of Manhattan in New York City, if
      this Agreement is expressed to be governed by the laws of the State of New
      York; and

      (ii) waives any objection which it may have at any time to the laying of
      venue of any Proceedings brought in any such court, waives any claim that
      such Proceedings have been brought in an inconvenient forum and further
      waives the right to object, with respect to such Proceedings, that such
      court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.

(c)   Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any

                                                                   ISDA(R) 1992

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<PAGE>

reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.

(d)   Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.   Definitions

As used in this Agreement:

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.

"Applicable Rate" means:

(a)   in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)   in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;

(c)   in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and

(d)   in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.

"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.

                                                                   ISDA(R) 1992

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<PAGE>

"Defaulting Party" has the meaning specified in Section 6(a).

"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).

"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.

"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have

                                                                   ISDA(R) 1992

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<PAGE>

been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.

"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a).

"Office" means a branch or office of a party, which may be such party's head or
home office.

"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.

"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --

(a)   the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)   such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.

"Specified Entity" has the meanings specified in the Schedule.

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<PAGE>

"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.

"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market

                                                                   ISDA(R) 1992

                                       17
<PAGE>

value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.


IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.


Northern Rock PLC                          Granite Finance Funding 2 Limited
-----------------------------------        -------------------------------------
          (Name of Party)                              (Name of Party)


By:                                        By:
   --------------------------------           ----------------------------------
   Name:                                      Name:
   Title:                                     Title:
   Date:                                      Date:

                                                                   ISDA(R) 1992

                                       18
<PAGE>

                                                                  Execution Copy


                                                               (Basis Rate Swap)


(Multicurrency - Cross Border)





                                    SCHEDULE

                                     to the

                                   1992 ISDA

                                MASTER AGREEMENT


                           dated as of 19 January 2005


between

(1)   NORTHERN ROCK PLC ("Party A"); and

(2)   GRANITE FINANCE FUNDING 2 LIMITED ("Party B").

Part 1. Termination Provisions.

(a)   "Specified Entity" means in relation to Party A for the purpose of:-

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(iv), none

and   in relation to Party B for the purpose of:-

Section 5(a)(v), none

Section 5(a)(vi), none

Section 5(a)(vii), none

Section 5(b)(iv), none

(b)   "Specified Transaction" will have the meaning specified in Section 14.

                                       19
<PAGE>

(c)   The "Cross Default" provisions of Section 5(a)(vi) will apply to Party A
      and will not apply to Party B.

      "Specified Indebtedness" will have the meaning specified in Section 14 of
      this Agreement, other than any obligations in respect of deposits received
      at any time in the ordinary course of Party A's banking business.

      "Threshold Amount" means, with respect to Party A and any guarantor of
      Party A's obligations under this Agreement, 3 per cent. of the
      shareholders' equity of Party A.

      For the purposes of the above, shareholders' equity shall be determined by
      reference to Party A's most recent consolidated balance sheet. Such
      balance sheet shall be prepared in accordance with accounting principles
      that are generally accepted in the United Kingdom.

(d)   The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply
      to Party A and will not apply to Party B.

(e)   The "Automatic Early Termination" provision of Section 6(a) will not apply
      to Party A and will not apply to Party B.

(f)   Payments on Early Termination. For the purpose of Section 6(e) of this
      Agreement:-

      (i)   Market Quotation will apply.

      (ii)  The Second Method will apply.

(g)   "Termination Currency" means Sterling.

(h)   Additional Termination Event will apply. The events which constitute
      Additional Termination Events are set forth in Part 5(f), Part 5(j)(iii),
      Part 5(k)(iii) and Part 5(l)(v) of this Agreement.

                                       20
<PAGE>

Part 2. Tax Representations

(a)   Payer Representations. For the purpose of Section 3(e) of this Agreement,
      Party A and Party B will each make the following representation:

      It is not required by any applicable law, as modified by the practice of
      any relevant governmental revenue authority, of any Relevant Jurisdiction
      to make any deduction or withholding for or on account of any Tax from any
      payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
      Agreement) to be made by it to the other party under this Agreement. In
      making this representation, it may rely on (i) the accuracy of any
      representations made by the other party pursuant to Section 3(f) of this
      Agreement, (ii) the satisfaction of the agreement of the other party
      contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
      accuracy and effectiveness of any document provided by the other party
      pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
      satisfaction of the agreement of the other party contained in Section 4(d)
      of this Agreement, provided that it shall not be a breach of this
      representation where reliance is placed on clause (ii) and the other party
      does not deliver a form or document under Section 4(a)(iii) by reason of
      material prejudice to its legal or commercial position.

(b)   Payee Representations. For the purposes of Section 3(f) of the Agreement,
      the representation will not apply to Party A and will not apply to Party
      B.

                                       21
<PAGE>

Part 3. Agreement to Deliver Documents

      For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
      agrees to deliver the following documents, as applicable:-

(a)   Tax forms, documents or certificates to be delivered are:-

<TABLE>
<CAPTION>
      Party required to          Form/Document/                      Date by which to be
      deliver document           Certificate                         delivered
<S>   <C>                       <C>                            <C>                     <C>

      None                       None                                None

(b)   Other documents to be delivered are:-

      Party required            Form/Document/                  Date by which           Covered by
      to deliver                Certificate                     to be delivered         Section 3(d)
      document                                                                          Representation

      Party A and               Appropriate evidence of         On signing of this      Yes
      Party B                   its signatory's authority       Agreement

      Party B                   Certified copy of               On signing of this      Yes
                                board resolution                Agreement

      Party A                   Legal opinion of counsel        On signing of this      No
                                                                Agreement


      Party B                   Legal opinion of counsel        On signing of this      No
                                                                Agreement

      Party A                   An executed copy of the         On signing of this      Yes
                                Credit Support                  Agreement
                                Document listed in
                                Part 4(f) below
</TABLE>

                                       22
<PAGE>

Part 4. Miscellaneous

(a)   Addresses for Notices. For the purpose of Section 12(a) of this
      Agreement:-

      Address for notices or communications to Party A:-

      Address:          Northern Rock House
                        Gosforth
                        Newcastle upon Tyne
                        NE3 4PL

      Attention:        Senior Manager, Treasury Settlement

      Facsimile No.:    +44 (0)191 279 4694

      Address for notices or communications to Party B:-

      Address:          Granite Finance Funding 2 Limited
                        Fifth Floor
                        100 Wood Street
                        London EC2V 7EX

      With a copy to:   Northern Rock plc
                        Northern Rock House
                        Gosforth
                        Newcastle upon Tyne
                        NE3 4PL

      Attention:        Andy McClean

      Facsimile No.:    +44 (0)191 279 4929

      With a copy to the Funding 2 Security Trustee:-

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

      Attention:        Corporate Trust (Global Structured Finance)

      Facsimile No.:    +44 (0)20 7964 6061

(b)   Process Agent. For the purpose of Section 13(c) of this Agreement:-

                                       23
<PAGE>

      Party A appoints as its Process Agent: None.

      Party B appoints as its Process Agent: None.

(c)   Offices. The provisions of Section 10(a) will apply to this Agreement.

(d)   Multibranch Party. For the purpose of Section 10(c) of this Agreement:-

      Party A is not a Multibranch Party. Party B is not a Multibranch Party.

(e)   Calculation Agent. The Calculation Agent shall be as specified in each
      Confirmation.

(f)   Credit Support Document. Details of any Credit Support Document:-

      In respect of Party A: the 1995 Credit Support Annex (Bilateral Form -
      Transfer) between Party A and Party B dated as of the date hereof (the
      "Credit Support Annex") and any Eligible Guarantee.

      In respect of Party B: none

(g)   Credit Support Provider.

      Credit Support Provider means, in relation to Party A, any guarantor under
      an Eligible Guarantee.

      Credit Support Provider means, in relation to Party B, none.

(h)   Governing Law. This Agreement will be governed by and construed in
      accordance with English law.

(i)   Netting of Payments. Sub-paragraph (ii) of Section 2(c) of this Agreement
      will apply to Transactions entered into under this Agreement unless
      otherwise specified in a Confirmation.

(i)   "Affiliate" will have the meaning specified in Section 14 of this
      Agreement.

                                       24
<PAGE>

Part 5. Other Provisions

(a)   Definitions and Interpretation

      Capitalised terms used in this Agreement shall, except where the context
      otherwise requires and save where otherwise defined in this Agreement,
      bear the meanings given to them in the Programme Master Definitions
      Schedule signed for the purposes of identification by Sidley Austin (UK)
      LLP and Allen and Overy LLP on or about the date hereof as the same may be
      amended, restated, varied and/or supplemented from time to time with the
      consent of the parties hereto.

      As used in this Agreement, the following terms shall mean:

      "Basis Rate Swap Transaction Confirmation No. 1/17" means the Confirmation
      so referenced between Party A and Party B dated on or about the date
      hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/17A" means the
      Confirmation so referenced between Party A and Party B dated on or about
      the date hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/17B" means the
      Confirmation so referenced between Party A and Party B dated on or about
      the date hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/17C" means the
      Confirmation so referenced between Party A and Party B dated on or about
      the date hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/20" means the Confirmation
      so referenced between Party A and Party B dated on or about the date
      hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/20A" means the
      Confirmation so referenced between Party A and Party B dated on or about
      the date hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/20B" means the
      Confirmation so referenced between Party A and Party B dated on or about
      the date hereof;

      "Basis Rate Swap Transaction Confirmation No. 1/20C" means the
      Confirmation so referenced between Party A and Party B dated on or about
      the date hereof;

      "Basis Rate Swap Transaction No. 1/17" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction Confirmation No. 1/17;

      "Basis Rate Swap Transaction No. 1/17A" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction Confirmation No. 1/17A;

      "Basis Rate Swap Transaction No. 1/17B" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction Confirmation No. 1/17B;

                                       25
<PAGE>

      "Basis Rate Swap Transaction No. 1/17C" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction No. 1/17C;

      "Basis Rate Swap Transaction No. 1/20" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction Confirmation No. 1/20;

      "Basis Rate Swap Transaction No. 1/20A" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction Confirmation No. 1/20A;

      "Basis Rate Swap Transaction No. 1/20B" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction Confirmation No. 1/20B;

      "Basis Rate Swap Transaction No. 1/20C" means the Transaction entered into
      between Party A and Party B dated on or about the date hereof and
      confirmed in the Basis Rate Swap Transaction No. 1/20C; and

      "Basis Rate Swap Transactions" means the Basis Rate Swap Transaction No.
      1/17, the Basis Rate Swap Transaction No. 1/17A, the Basis Rate Swap
      Transaction No. 1/17B, the Basis Rate Swap Transaction Confirmation No.
      1/17C, the Basis Rate Swap Transaction No. 1/20, the Basis Rate Swap
      Transaction No. 1/20A, the Basis Rate Swap Transaction No. 1/20B, the
      Basis Rate Swap Transaction Confirmation No. 1/20C, and "Basis Rate Swap
      Transaction" means any of them.

(b)   No Set-Off

      (i) All payments under this Agreement shall be made without set-off or
      counterclaim, except as expressly provided for in Section 6. For the
      avoidance of doubt, Section 2(c) shall not be affected by this provision.

      (ii) Section 6(e) shall be amended by the deletion of the following
      sentence: "The amount, if any, payable in respect of an Early Termination
      Date and determined pursuant to this Section will be subject to any
      Set-off."

(c)   Security Interest

      Notwithstanding Section 7, Party A hereby agrees and consents to the
      assignment by way of security by Party B of its interests under this
      Agreement (without prejudice to, and after giving effect to, any
      contractual netting provision contained in this Agreement) to the Funding
      2 Security Trustee (or any successor thereto) pursuant to and in
      accordance with the terms and conditions of the Funding 2 Deed of Charge
      and acknowledges notice of such assignment.

                                       26
<PAGE>

(d)   Disapplication of certain Events of Default

      Section 5(a)(ii), Section 5(a)(iii), Section 5(a)(iv), Section 5(a)(v),
      Section 5(a)(vi), Section 5(a)(vii)(2),(5),(6),(7) and (9) and Section
      5(a)(viii) will not apply in respect of Party B.

      Section 5(a)(vii)(8) will not apply to Party B to the extent that it
      applies to Section 5(a)(vii)(2),(5),(6) and (7).

(e)   Disapplication of certain Termination Events

      The "Tax Event" and "Tax Event Upon Merger" provisions of Sections
      5(b)(ii) and 5(b)(iii) will not apply to Party A or to Party B.

(f)   Additional Termination Events

      (A) Party B Additional Termination Events:

      The following shall constitute an Additional Termination Event with
      respect to Party B.

      "Funding 2 Intercompany Loan Enforcement Notice. The Note Trustee serves a
      Funding 2 Intercompany Loan Enforcement Notice on Party B in accordance
      with the terms of the Global Intercompany Loan Agreement."

      In the case of the Additional Termination Event above, Party B shall be
      the sole Affected Party.

      (B) Party A Additional Termination Event:

      The following shall constitute an Additional Termination Event with
      respect to Party A:

      Without prejudice to any other remedies available to Party B under this
      Agreement or otherwise, it shall be an Additional Termination Event under
      this Agreement if the Additional Tax Representation in Part 5(m)(iii)
      proves to have been incorrect or misleading in any material respect with
      respect to one or more Transactions when made or repeated or deemed to
      have been made or repeated. The sole Affected Party shall be Party A.

(g)   Northern Rock plc as Party B's Agent

      Party B hereby declares that pursuant to the Cash Management Agreement it
      has appointed Northern Rock plc to act as its agent for the purpose, inter
      alia, of the operation of this Agreement and dealing with payments
      hereunder. Accordingly, unless and until written notice is received by
      Party A from the Note Trustee that such appointment has been terminated,
      Party A shall be entitled to treat all communications and acts relating to
      this Agreement received from or carried out by Northern Rock plc as agent
      for Party B under the Cash Management Agreement as being those of Party B
      and Party B hereby agrees to ratify and confirm the same.

                                       27
<PAGE>

(h)   Security, Enforcement and Limited Recourse

      (i)   Party A confirms to Party B that it is, or will be, by the date
            hereof, bound by the terms of the Funding 2 Deed of Charge and, in
            particular, confirms that: (i) save as otherwise expressly set out
            in the Funding 2 Deed of Charge, no sum shall be payable by or on
            behalf of Party B to it except in accordance with the Funding 2
            Priority of Payments as set out in the Funding 2 Deed of Charge (as
            the same may be amended, restated, supplemented and/or otherwise
            modified from time to time); and (ii) it will not take any steps for
            the winding up, dissolution or reorganization or for the appointment
            of a receiver, administrator, administrative receiver, trustee,
            liquidator, sequestrator or similar officer of Party B or of any or
            all of its revenues and assets nor participate in any ex parte
            proceedings nor seek to enforce any judgment against Party B except
            as provided in the Funding 2 Deed of Charge.

      (ii)  In relation to all sums due and payable by Party B to Party A, Party
            A agrees that it shall have recourse only to sums available to Party
            B for the purpose of making payments to Party A in accordance with
            the relevant Funding 2 Priority of Payments and the Funding 2 Deed
            of Charge.

      (iii) If, on any payment date under a Transaction, an amount is payable by
            Party B to Party A and Party B does not pay such amount in full on
            such date (after the application of Section 2(c) to such
            Transaction) because of the limitation contained in Part 5(h(i)
            above, then: (A) payment by Party B of the shortfall (and the
            corresponding payment obligation of Party A with respect to such
            shortfall (being the full amount Party A would otherwise owe on such
            date less the actual amount payable by Party A determined in
            accordance with Part 5(h)(iii)(C) below)) will not then fall due,
            but will instead be deferred until the first Payment Date (as
            defined in the Relevant Confirmation) thereafter on which sufficient
            funds are available (subject to the limitation in Part 5(h)(i)
            above), (B) failure by Party B to make the full payment under such
            Transaction (after the application of Section 2(c) to such
            Transaction) shall not constitute an Event of Default for the
            purpose of Section 5(a)(i), and (C) the obligation of Party A to
            make payment to Party B, in respect of the same Transaction, on such
            date, will be reduced so that Party A will be obligated to pay the
            Equivalent Percentage of the amount it would otherwise owe under
            that Transaction. "Equivalent Percentage" means the percentage
            obtained by dividing the amount paid by Party B by the amount it
            would have paid on the relevant date absent such limitation
            multiplied by one hundred.

      (iv)  If an Early Termination Date results from an Event of Default or
            Termination Event, any amount payable (the payment of which was
            deferred or not paid in the circumstances described under Part
            5(h)(iii) above by Party A or by Party B, as the case may be, under
            this Agreement) will be deemed to be Unpaid Amounts owing to Party B
            or, as the case may be, owing to Party A on the Early Termination
            Date.

                                       28
<PAGE>

      (v)   Following the calculation thereof, and in any event no later than
            two Local Business Days prior to any relevant Payment Date (as
            defined in the relevant Confirmation), Party B agrees to notify
            Party A of the amount of any shortfall, the payment of which by
            Party B is deferred in accordance with Part 5(h)(iii) above).

(i)   Authorised Person

      For the purposes of Section 3 of this Agreement, Party A represents to
      Party B (which representation will be deemed to be repeated by Party A on
      each date on which a Transaction is entered into and until all outstanding
      payment and delivery obligations of Party A, from time to time, under this
      Agreement have been satisfied in full) that it is an authorised person for
      the purposes of the Financial Services and Markets Act 2000 (or any
      successor to it).

(j)   Ratings Downgrade of Party A - Standard & Poor's Rating Services, a
      division of The McGraw-Hill Companies Inc. ("S&P")

      (i)   Initial S&P Note Downgrade Event

      In the event that an Initial S&P Note Downgrade Event occurs, then Party A
      shall, within 30 days of the occurrence of such Initial S&P Note Downgrade
      Event, at its own cost, either:-

      (A)   provide collateral in the form of cash and/or securities or both in
            support of its obligations under this Agreement in accordance with
            the provisions of the Credit Support Annex provided that such
            posting of collateral shall be subject to (i) if required by S&P at
            the time of such posting, Party A obtaining legal opinions
            satisfactory to S&P in relation to such posting of collateral
            pursuant to the Credit Support Annex and (ii) in the event that the
            short-term, unsecured and unsubordinated debt obligations of Party A
            (or its successor or permitted transferee) or any Credit Support
            Provider from time to time in respect of Party A ceases to be rated
            at least as high as "A-2" or the long term, unsecured and
            unsubordinated debt obligations of Party A (or its successor or
            permitted transferee) or any Credit Support Provider from time to
            time in respect of Party A ceases to be rated at least as high as
            "BBB+" by S&P, the monthly valuation of Party B's Exposure (as
            defined in the Credit Support Annex) by two independent third
            parties that would be eligible and willing to be transferees of
            Party A's benefits and obligations under this Agreement (the
            Independent Valuations). Such Independent Valuations will take place
            on the following basis: (A) without limiting Party A's obligation to
            obtain Independent Valuations, valuations may only be obtained from
            the same entity up to four times in any 12 month period; (B) for the
            purposes of collateral posting in accordance with the Credit Support
            Annex, Party B's Exposure shall be deemed to be equal to the highest
            of the higher of the two Independent Valuations and the amount
            calculated in accordance with the Credit Support Annex; and (C)
            Party A shall provide S&P with the two Independent Valuations and
            its calculations pursuant to the Credit

                                       29
<PAGE>

            Support Annex for the day on which the Independent Valuations are
            obtained following each monthly valuation; or

      (B)   subject to Part 5(t), transfer all of its rights and obligations
            with respect to this Agreement to a replacement third party whose
            short-term, unsecured and unsubordinated debt obligations are rated
            at least as high as "A-1" (or its equivalent) by S&P or such other
            rating as is commensurate with the rating assigned to any Notes
            issued by a Funding 2 Issuer by S&P from time to time; or

      (C)   procure another person to become co-obligor or guarantor in respect
            of the obligations of Party A under this Agreement whose short-term,
            unsecured and unsubordinated debt obligations are rated at least as
            high as "A-1" (or its equivalent) by S&P or such other rating as is
            commensurate with the rating assigned to any Notes issued by a
            Funding 2 Issuer by S&P from time to time; or

      (D)   take such other action as Party A may agree with S&P as will result
            in the rating of any Notes issued by a Funding 2 Issuer then
            outstanding following the taking of such action being rated no lower
            than the rating of any Notes issued by a Funding 2 Issuer
            immediately prior to such downgrade.

      If any of sub-paragraphs (j)(i)(B), (j)(i)(C) or (j)(i)(D) above are
      satisfied at any time, Party A will not be required to transfer any
      additional collateral in respect of such particular Initial S&P Note
      Downgrade Event.

      (ii)  Subsequent S&P Note Downgrade Event

            (A)   Party A shall, within 10 days of the occurrence of a
                  Subsequent S&P Note Downgrade Event, at its own cost and
                  expense, use its best endeavours to take the action set out in
                  sub-paragraph (i)(B) above; and

            (B)   if, at the time a Subsequent S&P Note Downgrade Event occurs,
                  Party A has provided collateral in accordance with the
                  provisions of the Credit Support Annex pursuant to
                  sub-paragraph (i)(A) above following an Initial S&P Note
                  Downgrade Event, it will continue to provide collateral
                  notwithstanding the occurrence of a Subsequent S&P Note
                  Downgrade Event until such time as the action in sub-paragraph
                  (ii)(A) above has been taken.

      If the action set out in sub-paragraph (ii)(A) above is taken at any time,
      Party A will not be required to transfer any additional collateral in
      respect of such Subsequent S&P Note Downgrade Event.

      (iii) Additional Termination Events

            Without prejudice to the consequences of Party A breaching any
            provision of this Agreement (other than sub-paragraphs (j)(i) or
            (j)(ii) above) or failing to post collateral under the Credit
            Support Annex in accordance with the Moody's or Fitch provisions, if
            Party A does not take any of the measures described in sub-

                                       30
<PAGE>

            paragraphs (j)(i) or (j)(ii) above such failure shall not be or give
            rise to an Event of Default but shall constitute an Additional
            Termination Event with respect to Party A and shall be deemed to
            have occurred on the thirtieth day following the Initial S&P Note
            Downgrade Event or on the tenth day following the Subsequent S&P
            Note Downgrade Event, as applicable, with Party A as the sole
            Affected Party.

            However, in the event that Party B were to designate an Early
            Termination Date and there would be a payment due to Party A, Party
            B may only designate such an Early Termination Date in respect of an
            Additional Termination Event under this sub-paragraph (j)(iii) if
            Party B has found a replacement counterparty willing to enter into a
            new transaction with Party B on terms that reflect as closely as
            reasonably possible (as the Note Trustee, on behalf of Party B may,
            in its absolute discretion, determine) the economic, legal and
            credit terms of the Terminated Transactions with Party A.

      (iv)  S&P Definitions

            For the purposes of this Part 5(j):

            an "Initial S&P Note Downgrade Event" will occur where the
            short-term, unsecured and unsubordinated debt obligations of Party A
            (or its successor), or any guarantor of Party A's obligations under
            this Agreement (or its successor), cease to be rated at least as
            high as "A-1" (or its equivalent) by S&P; and

            a "Subsequent Note Downgrade Event" will occur where the long-term,
            unsecured and unsubordinated debt obligations of Party A (or its
            successor), or any guarantor of Party A's obligations under this
            Agreement (or its successor), cease to be rated at least as high as
            "BBB" (or its equivalent) by S&P.

(k)   Ratings Downgrade of Party A - Moody's Investors Service Limited
      ("Moody's")

      (i)   For the purpose of this Agreement,

            "Eligible Guarantee" means an unconditional and irrevocable
            guarantee that is provided by a guarantor as principal debtor rather
            than surety and is directly enforceable by Party B, where (A) a law
            firm has given a legal opinion confirming that none of the
            guarantor's payments to Party B under such guarantee will be subject
            to withholding for Tax and such opinion has been delivered to
            Moody's, (B) such guarantee provides that, in the event that any of
            such guarantor's payments to Party B are subject to withholding for
            Tax, such guarantor is required to pay such additional amount as is
            necessary to ensure that the net amount actually received by Party B
            (free and clear of any withholding tax) will equal the full amount
            Party B would have received had no such withholding been required or
            (C) in the event that any payment under such guarantee is made net
            of deduction or withholding for Tax, Party A is required, under
            Section 2(a)(i), to make such additional payment as is necessary to
            ensure

                                       31
<PAGE>

            that the net amount actually received by Party B from the guarantor
            will equal the full amount Party B would have received had no such
            deduction or withholding been required.

            "Eligible Replacement" means an entity (A) with the Second Trigger
            Required Ratings Required Ratings or (B) whose present and future
            obligations owing to Party B are guaranteed pursuant to an Eligible
            Guarantee provided by a guarantor with the Second Trigger Required
            Ratings.

            "Firm Offer" means an offer which, when made, was capable of
            becoming legally binding upon acceptance.

            "Moody's Short-term Rating" means a rating assigned by Moody's under
            its short-term rating scale in respect of an entity's short-term,
            unsecured and unsubordinated debt obligations.

            "Relevant Entities" means Party A and any guarantor under an
            Eligible Guarantee in respect of all of Party A's present and future
            obligations under this Agreement.

            An entity shall have the "First Trigger Required Ratings" (A) where
            such entity is the subject of a Moody's Short-term Rating, if such
            rating is "Prime-1" and its long-term, unsecured and unsubordinated
            debt or counterparty obligations are rated "A2" or above by Moody's
            and (B) where such entity is not the subject of a Moody's Short-term
            Rating, if its long-term, unsecured and unsubordinated debt or
            counterparty obligations are rated "A1" or above by Moody's.

            the "Second Rating Trigger Requirements" shall apply so long as no
            Relevant Entity has the Second Trigger Required Ratings.

            An entity shall have the "Second Trigger Required Ratings" (A) where
            such entity is the subject of a Moody's Short-term Rating, if such
            rating is "Prime-2" or above and its long-term, unsecured and
            unsubordinated debt or counterparty obligations are rated "A3" or
            above by Moody's and (B) where such entity is not the subject of a
            Moody's Short-term Rating, if its long-term, unsecured and
            unsubordinated debt or counterparty obligations are rated "A3" or
            above by Moody's.

            (ii) So long as the Second Rating Trigger Requirements apply, Party
            A will at its own cost use commercially reasonable efforts to, as
            soon as reasonably practicable, procure either (A) an Eligible
            Guarantee in respect of all of Party A's present and future
            obligations under this Agreement to be provided by a guarantor with
            the First Trigger Required Ratings and/or the Second Trigger
            Required Ratings or (B) a transfer in accordance with Part 5(t)
            below.

            (iii) Additional Termination Events

                                       32
<PAGE>

            Each of the following shall constitute an Additional Termination
            Event with Party A as Affected Party:

            First Rating Trigger Collateral. Party A has failed to comply with
            or perform any obligation to be complied with or performed by Party
            A in accordance with the Credit Support Annex and either (A) the
            Second Rating Trigger Requirements do not apply or (B) less than 30
            Local Business Days have elapsed since the last time the Second
            Rating Trigger Requirements did not apply.

            Second Rating Trigger Replacement. (A) The Second Rating Trigger
            Requirements apply and 30 or more Local Business Days have elapsed
            since the last time the Second Rating Trigger Requirements did not
            apply and (B) at least one Eligible Replacement has made a Firm
            Offer that would, assuming the occurrence of an Early Termination
            Date, qualify as a Market Quotation (on the basis that paragraphs
            (ii) and (iii) in Part 5(w) apply) and which remains capable of
            becoming legally binding upon acceptance.

(l)   Ratings Downgrade of Party A - Fitch Ratings Ltd ("Fitch")

      (i)   Initial Fitch Note Downgrade Event

            Party A will, on a best efforts basis, within 30 days of the
            occurrence of an Initial Fitch Note Downgrade Event, at its own
            cost, either:-

            (A)   provide collateral in the form of cash or securities or both,
                  in support of its obligations under this Agreement, in
                  accordance with the provisions of the Credit Support Annex; or

            (B)   subject to Part 5(t), transfer all of its rights and
                  obligations with respect to this Agreement to a replacement
                  third party whose long-term, unsecured and unsubordinated debt
                  ratings are rated at least as high as "A" (or its equivalent)
                  by Fitch, and whose short-term, unsecured and unsubordinated
                  debt ratings are rated at least as high as "F1" (or its
                  equivalent) by Fitch or such other rating as is commensurate
                  with the rating assigned to any Notes issued by a Funding 2
                  Issuer by Fitch from time to time; or

            (C)   procure another person to become co-obligor or guarantor in
                  respect of the obligations of Party A under this Agreement
                  whose long-term, unsecured and unsubordinated debt ratings are
                  rated at least as high as "A" (or its equivalent) by Fitch,
                  and whose short-term, unsecured and unsubordinated debt
                  ratings are rated at least as high as "F1" (or its equivalent)
                  by Fitch or such other rating as is commensurate with the
                  rating assigned to any Notes issued by a Funding 2 Issuer by
                  Fitch from time to time; or

            (D)   take such other action as Party A may agree with Fitch as will
                  result in the rating of any Notes issued by a Funding 2 Issuer
                  then outstanding being maintained or obtain confirmation from
                  Fitch that there is no adverse


                                       33
<PAGE>

                  effect on the rating of the Issuer Notes as a result of that
                  Initial Fitch Downgrade Event so that none of the courses of
                  action outlined at (m)(i)(A), (m)(i)(B) or (m)(i)(C) above
                  need to be pursued in respect of such Initial Fitch Note
                  Downgrade Event.

            If any of sub-paragraphs (l)(i)(B), (l)(i)(C) or (l)(i)(D) are
            satisfied at any time, Party A will not be required to transfer any
            additional collateral in consequence of the particular Initial Fitch
            Note Downgrade Event.

      (ii)  First Subsequent Fitch Note Downgrade Event

            Party A will,

            (A)   provide, at its own cost, within 30 days of the occurrence of
                  a First Subsequent Fitch Note Downgrade Event provide
                  collateral in the form of cash or securities or both, in
                  support of its obligations under this Agreement in accordance
                  with the provisions of the Credit Support Annex; provided
                  that, if at the time when a First Subsequent Fitch Note
                  Downgrade Event Party A has provided collateral pursuant to
                  the Credit Support Annex pursuant to sub-paragraph (l)(i)(A)
                  above it will continue to provide collateral notwithstanding
                  the occurrence of a First Subsequent Fitch Note Downgrade
                  Event; provided further that in either case, the
                  mark-to-market calculations and the correct and timely
                  provision of collateral thereunder are verified by an
                  independent third party within five Local Business Days of the
                  date on which collateral is provided pursuant to this
                  sub-paragraph (l)(ii)(A) and thereafter, on a periodic basis
                  on every fifth Local Business Day whilst collateral is being
                  provided pursuant to this sub-paragraph (l)(ii)(A) (with the
                  costs of such independent verification being borne by Party
                  A); or

            on a best efforts basis, within 30 days of the occurrence of a First
            Subsequent Fitch Note Downgrade Event, at its own cost, either:

            (B)   subject to Part 5(t), transfer all of its rights and
                  obligations with respect to this Agreement to a replacement
                  third party whose long-term, unsecured and unsubordinated debt
                  ratings are rated at least as high as "A" (or its equivalent)
                  by Fitch, and whose short-term, unsecured and unsubordinated
                  debt ratings are rated at least as high as "F1" (or its
                  equivalent) by Fitch or such other rating as is commensurate
                  with the rating assigned to any Notes issued by a Funding 2
                  Issuer by Fitch from time to time; or

            (C)   procure another person to become co-obligor or guarantor in
                  respect of the obligations of Party A under this Agreement
                  whose long-term, unsecured and unsubordinated debt ratings are
                  rated at least as high as "A" (or its equivalent) by Fitch,
                  and whose short-term, unsecured and unsubordinated debt
                  ratings are rated at least as high as "F1" (or its equivalent)
                  by Fitch or

                                       34
<PAGE>

                  such other rating as is commensurate with the rating assigned
                  to any Notes issued by a Funding 2 Issuer by Fitch from time
                  to time; or

            (D)   take such other action as Party A may agree with Fitch as will
                  result in the rating of any Notes issued by a Funding 2 Issuer
                  then outstanding being maintained, or obtain confirmation from
                  Fitch that there is no adverse effect on the rating of the
                  Issuer Notes as a result of that First Subsequent Fitch
                  Downgrade Event so that none of the courses of action outlined
                  at (l)(ii)(A), (l)(ii)(B) or (l)(ii)(C) above need to be
                  pursued in respect of such First Subsequent Fitch Downgrade
                  Event.

            If any of sub-paragraphs (l)(ii)(B), (l)(ii)(C) or (l)(ii)(D) above
            are satisfied at any time, Party A and Party A will not be required
            to transfer any additional collateral as a consequence of the
            particular First Subsequent Fitch Note Downgrade Event.

      (iii) Second Subsequent Fitch Note Downgrade Event

            Party A will, on a best efforts basis, within 30 days of the
            occurrence of a Second Subsequent Fitch Note Downgrade Event, at its
            own cost, either:

            (A)   subject to Part 5(t), transfer all of its rights and
                  obligations with respect to this Agreement to a replacement
                  third party whose long-term, unsecured and unsubordinated debt
                  ratings are rated at least as high as "A" (or its equivalent)
                  by Fitch, and whose short-term, unsecured and unsubordinated
                  debt ratings are rated at least as high as "F1" (or its
                  equivalent) by Fitch or such other rating as is commensurate
                  with the rating assigned to any Notes issued by a Funding 2
                  Issuer by Fitch from time to time; or

            (B)   procure another person to become co-obligor or guarantor in
                  respect of the obligations of Party A under this Agreement
                  whose long-term, unsecured and unsubordinated debt ratings are
                  rated at least as high as "A" (or its equivalent) by Fitch,
                  and whose short-term, unsecured and unsubordinated debt
                  ratings are rated at least as high as "F1" (or its equivalent)
                  by Fitch or such other rating as is commensurate with the
                  rating assigned to any Notes issued by a Funding 2 Issuer by
                  Fitch from time to time; or

            (C)   take such other action as Party A may agree with Fitch as will
                  result in the rating of any Notes issued by a Funding 2 Issuer
                  then outstanding being maintained or obtain confirmation from
                  Fitch that there is no adverse effect on the rating of the
                  Issuer Notes as a result of that Second Subsequent Fitch
                  Downgrade Event so that none of the courses of action outlined
                  at (l)(iii)(A) or (l)(iii)(B) above need to be pursued in
                  respect of such Second Subsequent Fitch Downgrade Event.

      (iv)  Second Subsequent Fitch Note Downgrade Event - Collateral
            Requirements

            Pending compliance with any of sub-paragraphs (l)(iii)(A),
            (l)(iii)(B) or (l)(iii)(C) above, Party A will provide, at its own
            cost, within 10 days of such Second

                                       35
<PAGE>

            Subsequent Fitch Note Downgrade Event or 30 days of the occurrence
            of First Subsequent Fitch Note Downgrade Event, whichever is the
            earlier, collateral in the form of cash or securities or both, in
            support of its obligations under this Agreement in accordance with
            the provisions of the Credit Support Annex; provided that, if at the
            time when an Initial Fitch Note Downgrade Event or a First
            Subsequent Fitch Note Downgrade Event, as the case may be, occurs
            Party A has provided collateral pursuant to the Credit Support Annex
            pursuant to sub-paragraphs (l)(i)(A) or (l)(ii)(A) above, it will
            continue to provide collateral notwithstanding the occurrence of a
            Second Subsequent Fitch Note Downgrade Event; provided further that
            in either case, the mark-to-market calculations and the correct and
            timely provision of collateral thereunder are verified by an
            independent third party (with the costs of such independent
            verification being borne by Party A).

            If any of sub-paragraphs (l)(iii)(A), (l)(iii)(B) or (l)(iii)(C)
            above are satisfied at any time, Party A will not be required to
            transfer any additional collateral as a consequence of the
            particular Second Subsequent Fitch Note Downgrade Event.

      (v)   Additional Termination Events

            Without prejudice to the consequences of Party A breaching any
            provision of this Agreement (other than sub-paragraphs (l)(i),
            (l)(ii) or (l)(iii) above) or failing to post collateral under the
            Credit Support Deed in accordance with the Moody's or S&P
            provisions, if Party A does not take any of the measures described
            in sub-paragraphs (l)(i), (l)(ii) or (l)(iii) above such failure
            shall not be or give rise to an Event of Default but shall
            constitute an Additional Termination Event with respect to Party A
            and shall be deemed to have occurred on the thirtieth day following
            such Initial Fitch Note Downgrade Event, First Subsequent Fitch Note
            Downgrade Event or Second Subsequent Fitch Note Downgrade Event, as
            the case may be, with Party A as the sole Affected Party.

            However, in the event that Party B were to designate an Early
            Termination Date and there would be a payment due to Party A, Party
            B may only designate such an Early Termination Date in respect of an
            Additional Termination Event under this sub-paragraph (l)(v) if
            Party B has found a replacement counterparty willing to enter a new
            transaction with Party B on terms that reflect as closely as
            reasonably possible (as the Note Trustee, on behalf of Party B, may,
            in its absolute discretion, determine) the economic, legal and
            credit terms of the Terminated Transactions with Party A.

      (vi)  Fitch Definitions

            For the purposes of this Part 5(l):

            an "Initial Fitch Note Downgrade Event" will occur where, the
            long-term, unsecured and unsubordinated debt obligations of Party A
            (or its successor) or, if relevant, any guarantor of Party A's
            obligations under this Agreement (or its


                                       36
<PAGE>

            successor) cease to be rated at least as high as "A" (or its
            equivalent) by Fitch, or the short-term, unsecured and
            unsubordinated debt obligations of Party A (or its successor) or any
            guarantor of Party A's obligations under this Agreement (or its
            successor), cease to be rated at least as high as "F1" (or its
            equivalent) by Fitch;

            a "First Subsequent Fitch Note Downgrade Event" will occur where,
            the long-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) or, if relevant, any guarantor of Party
            A's obligations under this Agreement (or its successor), cease to be
            rated at least as high as "BBB+" (or its equivalent) by Fitch, or
            the short-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) or any guarantor of Party A's obligations
            under this Agreement (or its successor), cease to be rated at least
            as high as "F2" (or its equivalent) by Fitch; and

            a "Second Subsequent Fitch Note Downgrade Event" will occur where,
            the long-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) or, if relevant, any guarantor of Party
            A's obligations under this Agreement (or its successor), cease to be
            rated at least as high as "BBB-" (or its equivalent) by Fitch, or
            the short-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) or any guarantor of Party A's obligations
            under this Agreement (or its successor), cease to be rated at least
            as high as "F3" (or its equivalent) by Fitch.

(m)   Additional Section 3 and Tax Deductibility Representations

      (i)   Section 3 is amended by the addition at the end thereof of the
            following additional representation:-

            "(g) No Agency. It is entering into this Agreement and each
            Transaction as principal and not as agent of any person."

      (ii)  Party A represents to Party B (which representation will be deemed
            to be repeated by Party A on each date on which a Transaction is
            entered into) that its obligations under this Agreement rank pari
            passu with all of its other unsecured, unsubordinated obligations
            except those obligations preferred by operation of law.

      (iii) The following representation (the "Additional Tax Representation")
            will apply to Party A and will not apply to Party B and will be
            deemed to be repeated by Party A at all times until the termination
            of this Agreement. In relation to each Transaction, either:

            (A)   it is resident in the United Kingdom for United Kingdom tax
                  purposes, or

            (B)   the conditions of Paragraph 31(6) or Paragraph 31(7) of
                  Schedule 26 of the Finance Act 2002 (in each case as amended
                  or re-enacted from time to time) are satisfied with respect to
                  the relevant Transaction.

                                       37
<PAGE>

(n)   Recording of Conversations

      Each party (i) consents to the recording of telephone conversations
      between the trading, marketing and other relevant personnel of the parties
      in connection with this Agreement or any potential Transaction, (ii)
      agrees to obtain any necessary consent of, and give any necessary notice
      of such recording to, its relevant personnel, and (iii) agrees, to the
      extent permitted by applicable law, that recordings may be submitted in
      evidence in any Proceedings.

(o)   Relationship between the parties

      The Agreement is amended by the insertion after Section 14 of an
      additional Section 15, reading in its entirety as follows:

      "15. Relationship between the parties

      Each party will be deemed to represent to the other party on the date on
      which it enters into a Transaction that (absent a written agreement
      between the parties that expressly imposes affirmative obligations to the
      contrary for that Transaction):-

      (i)   Non Reliance. It is acting for its own account, and it has made its
            own decisions to enter into that Transaction and as to whether that
            Transaction is appropriate or proper for it based upon its own
            judgment and advice from such advisers as it has deemed necessary.
            It is not relying on any communication (written or oral) of the
            other party as investment advice or as a recommendation to enter
            into that Transaction; it being understood that information and
            explanations related to the terms and conditions of a Transaction
            shall not be considered investment advice or a recommendation to
            enter into that Transaction. It has not received from the other
            party any assurance or guarantee as to the expected results of that
            Transaction.

      (ii)  Assessment and Understanding. It is capable of assessing the merits
            of and understanding (on its own behalf or through independent
            professional advice), and understands and accepts, the terms,
            conditions and risks of that Transaction. It is also capable of
            assuming, and assumes, the financial and other risks of that
            Transaction.

      (iii) Status of Parties. The other party is not acting as a fiduciary for
            or an adviser to it in respect of that Transaction."

(p)   Tax

      The Agreement is amended by deleting Section 2(d) in its entirety and
      replacing it with the following:

      "(d)  Deduction or Withholding for Tax

      (i)   Requirement to Withhold

                                       38
<PAGE>

            All payments under this Agreement will be made without any deduction
            or withholding for or on account of any Tax unless such deduction or
            withholding is required (including, for the avoidance of doubt, if
            such deduction or withholding is required in order for the payer to
            obtain relief from Tax) by any applicable law, as modified by the
            practice of any relevant governmental revenue authority, then in
            effect. If a party ("X") is so required to deduct or withhold, then
            that party (the "Deducting Party"):-

            (A)   will promptly notify the other party ("Y") of such
                  requirement;

            (B)   will pay to the relevant authorities the full amount required
                  to be deducted or withheld (including the full amount required
                  to be deducted or withheld from any Gross Up Amount (as
                  defined below) paid by the Deducting Party to Y under this
                  Section 2(d)) promptly upon the earlier of determining that
                  such deduction or withholding is required or receiving notice
                  that such amount has been assessed against Y;

            (C)   will promptly forward to Y an official receipt (or a certified
                  copy), or other documentation reasonably acceptable to Y,
                  evidencing such payment to such authorities; and

            (D)   if X is Party A, X will promptly pay in addition to the
                  payment to which Party B is otherwise entitled under this
                  Agreement, such additional amount (the "Gross Up Amount") as
                  is necessary to ensure that the net amount actually received
                  by Party B will equal the full amount which Party B would have
                  received had no such deduction or withholding been required.

      (ii)  Liability

            If:

            (A)   X is required by any applicable law, as modified by the
                  practice of any relevant governmental revenue authority, to
                  make any deduction or withholding for or on account of any Tax
                  in respect of payments under this Agreement; and

            (B)   X does not so deduct or withhold; and

            (C)   a liability resulting from such Tax is assessed directly
                  against X,

            then, except to the extent that Y has satisfied or then satisfies
            the liability resulting from such Tax, (A) where X is Party B, Party
            A will promptly pay to Party B the amount of such liability (the
            "Liability Amount") (including any related liability for interest
            and together with an amount equal to the Tax payable by Party B on
            receipt of such amount but including any related liability for
            penalties only if Party A has failed to comply with or perform any
            agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)) and Party
            B will promptly pay to the


                                       39
<PAGE>

            relevant government revenue authority the amount of such liability
            (including any related liability for interest and penalties) and (B)
            where X is Party A and Party A would have been required to pay a
            Gross Up Amount to Party B, Party A will promptly pay to the
            relevant government revenue authority the amount of such liability
            (including any related liability for interest and penalties).

      (iii) Tax Credit etc.

            (a)   Where Party A pays an amount in accordance with Section
                  2(d)(i)(D) or 2(d)(ii)(C) above, Party B undertakes as
                  follows:-

                  (1)   to the extent that Party B obtains any Tax credit,
                        allowance, set-off or repayment from the tax authorities
                        of any jurisdiction relating to any deduction or
                        withholding giving rise to such payment or in the case
                        of Section 2(d)(ii)(B) the amount to be assessed ("Tax
                        Credit"), it shall pay to Party A on the next Note
                        Payment Date (as defined in the Programme Master
                        Definitions Schedule) after receipt of the same so much
                        of the cash benefit (as determined in accordance with
                        subparagraph (iii)(a)(2) below) relating thereto which
                        it has received as will leave Party B in substantially
                        the same (but in any event no worse) position as Party B
                        would have been in if no such deduction or withholding
                        had been required or the amount had not been so
                        assessed;

                  (2)   the "cash benefit" shall, in the case of credit,
                        allowance or set-off, be the additional amount of Tax
                        which would have been payable by Party B in the
                        jurisdiction referred to in sub-paragraph (iii)(a)(1)
                        above but for the obtaining by it of the said Tax
                        credit, allowance or set-off and, in the case of a
                        repayment, shall be the amount of the repayment
                        together, in either case, with any related interest or
                        similar payment obtained by Party B; and

                  (3)   it will use all best endeavours to obtain any Tax Credit
                        as soon as is reasonably practicable provided that it
                        shall be the sole judge of the amount of any such Tax
                        Credit and of the date on which the same is received and
                        shall not be obliged to disclose to Party A any
                        information regarding its tax affairs or tax
                        computations save that Party B shall, upon request by
                        Party A, supply Party A with a reasonably detailed
                        explanation of its calculation of the amount of any such
                        Tax Credit and of the date on which the same is
                        received.

                        The definition of "Indemnifiable Tax" in Section 14
                        shall be deleted and the following shall be substituted
                        therefor:

                        "Indemnifiable Tax" means any Tax."

                                       40
<PAGE>

(q)   Change of Account

      Section 2(b) of this Agreement is hereby amended by the addition of the
      following at the end thereof:

      "; provided that such new account shall be in the same legal and tax
      jurisdiction as the original account and such new account, in the case of
      Party B, is held with a financial institution with a long-term unsecured
      and unsubordinated debt obligation rating of at least "A1" by Moody's and
      a short term unsecured, unsubordinated and unguaranteed debt obligation
      rating of at least "P-1" by Moody's and "A-1+" by "S&P"."

(r)   Condition Precedent

      Section 2(a)(iii) shall be amended by the deletion of the words "or
      Potential Event of Default" in respect of conditions precedent to the
      obligations of Party A only.

(s)   Representations

      (i)   Section 3(a)(v) shall be amended by the addition of the words "(with
            the exception of Section 11 insofar as it relates to any Stamp Tax)"
            after the words "this Agreement".

      (ii)  Section 3(b) shall be amended by the deletion of the words "or
            Potential Event of Default" in respect of the representation given
            by Party B only.

(t)   Transfers

      (i)   Section 7 of this Agreement shall not apply to Party A, who shall be
            required to comply with, and shall be bound by, the following:

            Without prejudice to Section 6(b)(ii), Party A may transfer all its
            interest and obligations in and under this Agreement to any other
            entity (a "Transferee") provided that:

            (a)   it has given five Business Days prior written notice to the
                  Funding 2 Security Trustee;

            (b)   (i) the Transferee's short-term, unsecured and unsubordinated
                  debt obligations are then rated not less than "A-1" by S&P and
                  "F1" by Fitch (or its equivalent by any substitute rating
                  agency) or such Transferee's obligations under this Agreement
                  are guaranteed by an entity whose short-term, unsecured and
                  unsubordinated debt obligations are then rated not less than
                  "A-1" by S&P and "F1"by Fitch (or its equivalent by any
                  substitute rating agency) and (ii) the Transferee is an
                  Eligible Replacement;

                                       41
<PAGE>

            (c)   as of the date of such transfer the Transferee will not, as a
                  result of such transfer, be required to withhold or deduct on
                  account of Tax under this Agreement;

            (d)   a Termination Event or an Event of Default does not occur
                  under this Agreement as a result of such transfer;

            (e)   no additional amount will be payable by Party B to Party A or
                  the Transferee on the next succeeding Scheduled Payment Date
                  as a result of such transfer; and

            (f)   (if the Transferee is domiciled in a different country from
                  both Party A and Party B) S&P, Moody's and Fitch have provided
                  prior written notification that the then current ratings of
                  any Notes issued by a Funding 2 Issuer will not be adversely
                  affected.

                  Following such transfer all references to Party A shall be
                  deemed to be references to the Transferee.

(u)   Scope of Agreement

      It is hereby understood and agreed that the provisions of this Agreement
      shall only apply to the Basis Rate Swap Transactions and that no other
      Transaction may be entered into pursuant hereto except in accordance with
      Parts 5(j)(i)(A), 5(k)(i)(D), 5(k)(iii), 5(l)(i)(A), 5(l)(ii)(A) or
      5(l)(iv) or where the Rating Agencies have confirmed in writing that the
      then current ratings of any Notes issued by a Funding 2 Issuer would not
      be adversely affected by such other Transaction.

(v)   Contracts (Rights of Third Parties) Act 1999

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

(w)   Calculations if an Early Termination Date occurs as a result of an Event
      of Default or Additional Termination Event where Party A is the Defaulting
      Party or the sole Affected Party.

      Subject to compliance with clause 14.3(n) of the Funding 2 Deed of Charge,
      upon the occurrence of an Event of Default or an Additional Termination
      Event where Party A is the Defaulting Party or the sole Affected Party, as
      applicable, Party B will be entitled (but not obliged in the event that it
      does not designate an Early Termination Date) to proceed in accordance
      with Section 6 of the Agreement subject to the following:

            (i)   For the purposes of Section 6(d)(i) of this Agreement, Party
                  B's obligation with respect to the extent of information to be
                  provided with its calculations is limited to information Party
                  B has already received in writing and provided Party B is able
                  to release this information without


                                       42
<PAGE>

                  breaching the provisions of any law applicable to, or any
                  contractual restriction binding upon, Party B.

            (ii)  Notwithstanding Section 6 of this Agreement, so long as Party
                  A is the Affected Party in respect of a Termination Event or
                  the Defaulting Party in respect of an Event of Default,
                  paragraphs (i) to (vi) below shall apply:

                  (a)   The definition of "Market Quotation" shall be deleted in
                        its entirety and replaced with the following:

                        ""Market Quotation" means, with respect to one or more
                        Terminated Transactions, a Firm Offer which is (1) made
                        by a Reference Market-maker that is an Eligible
                        Replacement, (2) for an amount that would be paid to
                        Party B (expressed as a negative number) or by Party B
                        (expressed as a positive number) in consideration of an
                        agreement between Party B and such Reference
                        Market-maker to enter into a transaction (the
                        "Replacement Transaction") that would have the effect of
                        preserving for such party the economic equivalent of any
                        payment or delivery (whether the underlying obligation
                        was absolute or contingent and assuming the satisfaction
                        of each applicable condition precedent) by the parties
                        under Section 2(a)(i) in respect of such Terminated
                        Transactions or group of Terminated Transactions that
                        would, but for the occurrence of the relevant Early
                        Termination Date, have been required after that Date,
                        (3) made on the basis that Unpaid Amounts in respect of
                        the Terminated Transaction or group of Transactions are
                        to be excluded but, without limitation, any payment or
                        delivery that would, but for the relevant Early
                        Termination Date, have been required (assuming
                        satisfaction of each applicable condition precedent)
                        after that Early Termination Date is to be included and
                        (4) made in respect of a Replacement Transaction with
                        terms that are, in all material respects, no less
                        beneficial for Party B than those of this Agreement
                        (save for the exclusion of provisions relating to
                        Transactions that are not Terminated Transactions)."

                  (b)   The definition of "Settlement Amount" shall be deleted
                        in its entirety and replaced with the following:

                        ""Settlement Amount" means, with respect to any Early
                        Termination Date, an amount (as determined by Party B)
                        equal to the Termination Currency Equivalent of the
                        amount (whether positive or negative) of any Market
                        Quotation for the relevant Terminated Transaction or
                        group of Terminated Transactions that is accepted by
                        Party B so as to become legally binding, Provided that:

                                       43
<PAGE>

                        (1)   If, on the Early Termination Date, no Market
                              Quotation for the relevant Terminated Transaction
                              or group of Terminated Transactions has been
                              accepted by Party B so as to become legally
                              binding and one or more Market Quotations have
                              been communicated to Party B and remain capable of
                              becoming legally binding upon acceptance by Party
                              B, the Settlement Amount shall equal the
                              Termination Currency Equivalent of the amount
                              (whether positive or negative) of the lowest of
                              such Market Quotations (for the avoidance of
                              doubt, the lowest of such Market Quotations shall
                              be the lowest Market Quotation of such Market
                              Quotations expressed as a positive number or, if
                              any of such Market Quotations is expressed as a
                              negative number, the Market Quotation expressed as
                              a negative number with the largest absolute
                              value); and

                        (2)   If, on the Early Termination Date, no Market
                              Quotation for the relevant Terminated Transaction
                              or group of Terminated Transactions is accepted by
                              Party B so as to become legally binding and no
                              Market Quotations have been communicated to Party
                              B and remain capable of becoming legally binding
                              upon acceptance by Party B, the Settlement Amount
                              shall equal Party B's Loss (whether positive or
                              negative and without reference to any Unpaid
                              amounts) for the relevant Terminated Transaction
                              or group of Terminated Transactions."

            (iii) For the purpose of paragraph (4) of the definition of Market
                  Quotation, Party B shall determine, acting in a commercially
                  reasonable manner, whether a Firm Offer is made in respect of
                  a Replacement Transaction with terms that are, in all material
                  respects, no less beneficial for Party B than those of this
                  Agreement (save for the exclusion of provisions relating to
                  Transactions that are not Terminated Transactions).

            (iv)  At any time on or before the Early Termination Date at which
                  two or more Market Quotations have been communicated to Party
                  B and remain capable of becoming legally binding upon
                  acceptance by Party B, Party B shall be entitled to accept
                  only the lowest of such Market Quotations (for the avoidance
                  of doubt, the lowest of such Market Quotations shall be the
                  lowest Market Quotation of such Market Quotations expressed as
                  a positive number or, if any of such Market Quotations is
                  expressed as a negative number, the Market Quotation expressed
                  as a negative number with the largest absolute value).

            (v)   if Party B requests Party A in writing to obtain Market
                  Quotations, Party A shall use its reasonable efforts to do so
                  before the Early Termination Date.

                                       44
<PAGE>

            (vi)  If the Settlement Amount is a negative number, Section
                  6(e)(i)(3) of this Agreement shall be deleted in its entirety
                  and replaced with the following:

                  "Second Method and Market Quotation. If Second Method and
                  Market Quotation apply, (1) Party B shall pay to Party A an
                  amount equal to the absolute value of the Settlement Amount in
                  respect of the Terminated Transactions, (2) Party B shall pay
                  to Party A the Termination Currency Equivalent of the Unpaid
                  Amounts owing to Party A and (3) Party A shall pay to Party B
                  the Termination Currency Equivalent of the Unpaid Amounts
                  owing to Party B, Provided that, (i) the amounts payable under
                  (2) and (3) shall be subject to netting in accordance with
                  Section 2(c) of this Agreement and (ii) notwithstanding any
                  other provision of this Agreement, any amount payable by Party
                  A under (3) shall not be netted-off against any amount payable
                  by Party B under (1)."

(x)   Moody's Notifications

      Notwithstanding any other provision of this agreement, this Agreement
      shall not be amended, no Early Termination Date shall be effectively
      designated by Party B, and no transfer of any rights or obligations under
      this agreement shall be made unless Moody's has been given prior written
      notice of such amendment, designation or transfer.

(y)   Amendment

      This Agreement amends and restates in its entirety the ISDA Master
      Agreement dated 19 January 2005 between Party A and Party B .

                                       45
<PAGE>


(Bilateral Form - Transfer)(1)       (ISDA Agreements Subject to English Law)(2)


                                     ISDA(R)

              International Swaps and Derivatives Association, Inc.

                              CREDIT SUPPORT ANNEX

                             to the Schedule to the

                              ISDA Master Agreement

                          dated as of 19 January, 2005
                                     -----------------



Northern Rock PLC           between        Granite Finance Funding 2 Limited
("Party A")                                ("Party B")
...............................and ..............................................



This Annex supplements, forms part of, and is subject to, the ISDA Master
Agreement referred to above and is part of its Schedule. For the purposes of
this Agreement, including, without limitation, Sections 1(c), 2(a), 5 and 6, the
credit support arrangements set out in this Annex constitute a Transaction (for
which this Annex constitutes the Confirmation).


Paragraph 1. Interpretation


Capitalised terms not otherwise defined in this Annex or elsewhere in this
Agreement have the meanings specified pursuant to Paragraph 10, and all
references in this Annex to Paragraphs are to Paragraphs of this Annex. In the
event of any inconsistency between this Annex and the other provisions of this
Schedule, this Annex will prevail, and in the event of any inconsistency between
Paragraph 11 and the other


----------
(1) This document is not intended to create a charge or other security interest
over the assets transferred under its terms. Persons intending to establish a
collateral arrangement based on the creation of a charge or other security
interest should consider using the ISDA Credit Support Deed (English law) or the
ISDA Credit Support Annex (New York law), as appropriate.

(2) This Credit Support Annex has been prepared for use with ISDA Master
Agreements subject to English law. Users should consult their legal advisers as
to the proper use and effect of this form and the arrangements it contemplates.
In particular, users should consult their legal advisers if they wish to have
the Credit Support Annex made subject to a governing law other than English law
or to have the Credit Support Annex subject to a different governing law than
that governing the rest of the ISDA Master Agreement (e.g., English law for the
Credit Support Annex and New York law for the rest of the ISDA Master
Agreement).


   Copyright (C) 1995 by International Swaps and Derivatives Association, Inc.

<PAGE>

provisions of this Annex, Paragraph 11 will prevail. For the avoidance of doubt,
references to "transfer" in this Annex mean, in relation to cash, payment and,
in relation to other assets, delivery.

Paragraph 2. Credit Support Obligations

(a)   Delivery Amount. Subject to Paragraphs 3 and 4, upon a demand made by the
Transferee on or promptly following a Valuation Date, if the Delivery Amount for
that Valuation Date equals or exceeds the Transferor's Minimum Transfer Amount,
then the Transferor will transfer to the Transferee Eligible Credit Support
having a Value as of the date of transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 11(b)(iii)(D)). Unless otherwise
specified in Paragraph 11(b), the "Delivery Amount" applicable to the Transferor
for any Valuation Date will equal the amount by which:

      (i)   the Credit Support Amount

      exceeds

      (ii) the Value as of that Valuation Date of the Transferor's Credit
      Support Balance (adjusted to include any prior Delivery Amount and to
      exclude any prior Return Amount, the transfer of which, in either case,
      has not yet been completed and for which the relevant Settlement Day falls
      on or after such Valuation Date).

(b)   Return Amount. Subject to Paragraphs 3 and 4, upon a demand made by the
Transferor on or promptly following a Valuation Date, if the Return Amount for
that Valuation Date equals or exceeds the Transferee's Minimum Transfer Amount,
then the Transferee will transfer to the Transferor Equivalent Credit Support
specified by the Transferor in that demand having a Value as of the date of
transfer as close as practicable to the applicable Return Amount (rounded
pursuant to Paragraph 11(b)(iii)(D)) and the Credit Support Balance will, upon
such transfer, be reduced accordingly. Unless otherwise specified in Paragraph
11(b), the "Return Amount" applicable to the Transferee for any Valuation Date
will equal the amount by which:

      (i) the Value as of that Valuation Date of the Transferor's Credit Support
      Balance (adjusted to include any prior Delivery Amount and to exclude any
      prior Return Amount, the transfer of which, in either case, has not yet
      been completed and for which the relevant Settlement Day falls on or after
      such Valuation Date)

      exceeds

      (ii) the Credit Support Amount.

Paragraph 3. Transfers, Calculations and Exchanges

(a)   Transfers. All transfers under this Annex of any Eligible Credit Support,
Equivalent Credit Support, Interest Amount or Equivalent Distributions shall be
made in accordance with the instructions of the Transferee or Transferor, as
applicable, and shall be made:

      (i) in the case of cash, by transfer into one or more bank accounts
      specified by the recipient;

                                                                    ISDA(R) 1995

                                       2
<PAGE>

      (ii) in the case of certificated securities which cannot or which the
      parties have agreed will not be delivered by book-entry, by delivery in
      appropriate physical form to the recipient or its account accompanied by
      any duly executed instruments of transfer, transfer tax stamps and any
      other documents necessary to constitute a legally valid transfer of the
      transferring party's legal and beneficial title to the recipient; and

      (iii) in the case of securities which the parties have agreed will be
      delivered by book-entry, by the giving of written instructions (including,
      for the avoidance of doubt, instructions given by telex, facsimile
      transmission or electronic messaging system) to the relevant depository
      institution or other entity specified by the recipient, together with a
      written copy of the instructions to the recipient, sufficient, if complied
      with, to result in a legally effective transfer of the transferring
      party's legal and beneficial title to the recipient.

Subject to Paragraph 4 and unless otherwise specified, if a demand for the
transfer of Eligible Credit Support or Equivalent Credit Support is received by
the Notification Time, then the relevant transfer will be made not later than
the close of business on the Settlement Day relating to the date such demand is
received; if a demand is received after the Notification Time, then the relevant
transfer will be made not later than the close of business on the Settlement Day
relating to the day after the date such demand is received.

(b)   Calculations. All calculations of Value and Exposure for purposes of
Paragraphs 2 and 4(a) will be made by the relevant Valuation Agent as of the
relevant Valuation Time. The Valuation Agent will notify each party (or the
other party, if the Valuation Agent is a party) of its calculations not later
than the Notification Time on the Local Business Day following the applicable
Valuation Date (or, in the case of Paragraph 4(a), following the date of
calculation).

(c)   Exchanges.

      (i) Unless otherwise specified in Paragraph 11, the Transferor may on any
      Local Business Day by notice inform the Transferee that it wishes to
      transfer to the Transferee Eligible Credit Support specified in that
      notice (the "New Credit Support") in exchange for certain Eligible Credit
      Support (the "Original Credit Support") specified in that notice comprised
      in the Transferor's Credit Support Balance.

      (ii) If the Transferee notifies the Transferor that it has consented to
      the proposed exchange, (A) the Transferor will be obliged to transfer the
      New Credit Support to the Transferee on the first Settlement Day following
      the date on which it receives notice (which may be oral telephonic notice)
      from the Transferee of its consent and (B) the Transferee will be obliged
      to transfer to the Transferor Equivalent Credit Support in respect of the
      Original Credit Support not later than the Settlement Day following the
      date on which the Transferee receives the New Credit Support, unless
      otherwise specified in Paragraph 11(d) (the "Exchange Date"); provided
      that the Transferee will only be obliged to transfer Equivalent Credit
      Support with a Value as of the date of transfer as close as practicable
      to, but in any event not more than, the Value of the New Credit Support as
      of that date.

                                                                    ISDA(R) 1995

                                       3
<PAGE>

Paragraph 4. Dispute Resolution

(a)   Disputed Calculations or Valuations. If a party (a "Disputing Party")
reasonably disputes (I) the Valuation Agent's calculation of a Delivery Amount
or a Return Amount or (II) the Value of any transfer of Eligible Credit Support
or Equivalent Credit Support, then:

      (1) the Disputing Party will notify the other party and the Valuation
      Agent (if the Valuation Agent is not the other party) not later than the
      close of business on the Local Business Day following, in the case of (I)
      above, the date that the demand is received under Paragraph 2 or, in the
      case of (II) above, the date of transfer;

      (2) in the case of (I) above, the appropriate party will transfer the
      undisputed amount to the other party not later than the close of business
      on the Settlement Day following the date that the demand is received under
      Paragraph 2;

      (3) the parties will consult with each other in an attempt to resolve the
      dispute; and

      (4) if they fail to resolve the dispute by the Resolution Time, then:

            (i) in the case of a dispute involving a Delivery Amount or Return
            Amount, unless otherwise specified in Paragraph 11(c), the Valuation
            Agent will recalculate the Exposure and the Value as of the
            Recalculation Date by:

                  (A) utilising any calculations of that part of the Exposure
                  attributable to the Transactions that the parties have agreed
                  are not in dispute;

                  (B) calculating that part of the Exposure attributable to the
                  Transactions in dispute by seeking four actual quotations at
                  mid-market from Reference Market-makers for purposes of
                  calculating Market Quotation, and taking the arithmetic
                  average of those obtained; provided that if four quotations
                  are not available for a particular Transaction, then fewer
                  than four quotations may be used for that Transaction, and if
                  no quotations are available for a particular Transaction, then
                  the Valuation Agent's original calculations will be used for
                  the Transaction; and

                  (C) utilising the procedures specified in Paragraph 11(e)(ii)
                  for calculating the Value, if disputed, of the outstanding
                  Credit Support Balance;

            (ii) in the case of a dispute involving the Value of any transfer of
            Eligible Credit Support or Equivalent Credit Support, the Valuation
            Agent will recalculate the Value as of the date of transfer pursuant
            to Paragraph 11(e)(ii).

Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) as
soon as possible but in any event not later than the Notification Time on the
Local Business Day following the Resolution Time. The appropriate party will,
upon demand following such notice given by the Valuation Agent or a resolution
pursuant to (3) above and subject to Paragraph 3(a), make the appropriate
transfer.

                                                                    ISDA(R) 1995

                                       4
<PAGE>

(b)   No Event of Default. The failure by a party to make a transfer of any
amount which is the subject of a dispute to which Paragraph 4(a) applies will
not constitute an Event of Default for as long as the procedures set out in this
Paragraph 4 are being carried out. For the avoidance of doubt, upon completion
of those procedures, Section 5(a)(i) of this Agreement will apply to any failure
by a party to make a transfer required under the final sentence of Paragraph
4(a) on the relevant due date.

Paragraph 5. Transfer of Title, No Security Interest, Distributions and Interest
Amount

(a)   Transfer of Title. Each party agrees that all right, title and interest in
and to any Eligible Credit Support, Equivalent Credit Support, Equivalent
Distributions or Interest Amount which it transfers to the other party under the
terms of this Annex shall vest in the recipient free and clear of any liens,
claims, charges or encumbrances or any other interest of the transferring party
or of any third person (other than a lien routinely imposed on all securities in
a relevant clearance system).

(b)   No Security Interest. Nothing in this Annex is intended to create or does
create in favour of either party any mortgage, charge, lien, pledge, encumbrance
or other security interest in any cash or other property transferred by one
party to the other party under the terms of this Annex.

(c)   Distributions and Interest Amount.

      (i) Distributions. The Transferee will transfer to the Transferor not
      later than the Settlement Day following each Distributions Date cash,
      securities or other property of the same type, nominal value, description
      and amount as the relevant Distributions ("Equivalent Distributions") to
      the extent that a Delivery Amount would not be created or increased by the
      transfer, as calculated by the Valuation Agent (and the date of
      calculation will be deemed a Valuation Date for this purpose).

      (ii) Interest Amount. Unless otherwise specified in Paragraph 11(f)(iii),
      the Transferee will transfer to the Transferor at the times specified in
      Paragraph 11(f)(ii) the relevant Interest Amount to the extent that a
      Delivery Amount would not be created or increased by the transfer, as
      calculated by the Valuation Agent (and the date of calculation will be
      deemed a Valuation Date for this purpose).

Paragraph 6. Default

If an Early Termination Date is designated or deemed to occur as a result of an
Event of Default in relation to a party, an amount equal to the Value of the
Credit Support Balance, determined as though the Early Termination Date were a
Valuation Date, will be deemed to be an Unpaid Amount due to the Transferor
(which may or may not be the Defaulting Party) for purposes of Section 6(e). For
the avoidance of doubt, if Market Quotation is the applicable payment measure
for purposes of Section 6(e), then the Market Quotation determined under Section
6(e) in relation to the Transaction constituted by this Annex will be deemed to
be zero, and, if Loss is the applicable payment measure for purposes of Section
6(e), then the Loss determined under Section 6(e) in relation to the Transaction
will be limited to the Unpaid Amount representing the Value of the Credit
Support Balance.

                                                                    ISDA(R) 1995


                                       5
<PAGE>

Paragraph 7. Representation

Each party represents to the other party (which representation will be deemed to
be repeated as of each date on which it transfers Eligible Credit Support,
Equivalent Credit Support or Equivalent Distributions) that it is the sole owner
of or otherwise has the right to transfer all Eligible Credit Support,
Equivalent Credit Support or Equivalent Distributions it transfers to the other
party under this Annex, free and clear of any security interest, lien,
encumbrance or other restriction (other than a lien routinely imposed on all
securities in a relevant clearance system).

Paragraph 8. Expenses

Each party will pay its own costs and expenses (including any stamp, transfer or
similar transaction tax or duty payable on any transfer it is required to make
under this Annex) in connection with performing its obligations under this
Annex, and neither party will be liable for any such costs and expenses incurred
by the other party.

Paragraph 9. Miscellaneous

(a)   Default Interest. Other than in the case of an amount which is the subject
of a dispute under Paragraph 4(a), if a Transferee fails to make, when due, any
transfer of Equivalent Credit Support, Equivalent Distributions or the Interest
Amount, it will be obliged to pay the Transferor (to the extent permitted under
applicable law) an amount equal to interest at the Default Rate multiplied by
the Value on the relevant Valuation Date of the items of property that were
required to be transferred, from (and including) the date that the Equivalent
Credit Support, Equivalent Distributions or Interest Amount were required to be
transferred to (but excluding) the date of transfer of the Equivalent Credit
Support, Equivalent Distributions or Interest Amount. This interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed.

(b)   Good Faith and Commercially Reasonable Manner. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.

(c)   Demands and Notices. All demands and notices given by a party under this
Annex will be given as specified in Section 12 of this Agreement.

(d)   Specifications of Certain Matters. Anything referred to in this Annex as
being specified in Paragraph 11 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.

Paragraph 10. Definitions

As used in this Annex:

"Base Currency" means the currency specified as such in Paragraph 11(a)(i).

                                                                    ISDA(R) 1995

                                       6
<PAGE>

"Base Currency Equivalent" means, with respect to an amount on a Valuation Date,
in the case of an amount denominated in the Base Currency, such Base Currency
amount and, in the case of an amount denominated in a currency other than the
Base Currency (the "Other Currency"), the amount of Base Currency required to
purchase such amount of the Other Currency at the spot exchange rate determined
by the Valuation Agent for value on such Valuation Date.

"Credit Support Amount" means, with respect to a Transferor on a Valuation Date,
(i) the Transferee's Exposure plus (ii) all Independent Amounts applicable to
the Transferor, if any, minus (iii) all Independent Amounts applicable to the
Transferee, if any, minus (iv) the Transferor's Threshold; provided, however,
that the Credit Support Amount will be deemed to be zero whenever the
calculation of Credit Support Amount yields a number less than zero.

"Credit Support Balance" means, with respect to a Transferor on a Valuation
Date, the aggregate of all Eligible Credit Support that has been transferred to
or received by the Transferee under this Annex, together with any Distributions
and all proceeds of any such Eligible Credit Support or Distributions, as
reduced pursuant to Paragraph 2(b), 3(c)(ii) or 6. Any Equivalent Distributions
or Interest Amount (or portion of either) not transferred pursuant to Paragraph
5(c)(i) or (ii) will form part of the Credit Support Balance.

"Delivery Amount" has the meaning specified in Paragraph 2(a).

"Disputing Party" has the meaning specified in Paragraph 4.

"Distributions" means, with respect to any Eligible Credit Support comprised in
the Credit Support Balance consisting of securities, all principal, interest and
other payments and distributions of cash or other property to which a holder of
securities of the same type, nominal value, description and amount as such
Eligible Credit Support would be entitled from time to time.

"Distributions Date" means, with respect to any Eligible Credit Support
comprised in the Credit Support Balance other than cash, each date on which a
holder of such Eligible Credit Support is entitled to receive Distributions or,
if that date is not a Local Business Day, the next following Local Business Day.

"Eligible Credit Support" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 11(b)(ii) including, in relation
to any securities, if applicable, the proceeds of any redemption in whole or in
part of such securities by the relevant issuer.

"Eligible Currency" means each currency specified as such in Paragraph
11(a)(ii), if such currency is freely available.

"Equivalent Credit Support" means, in relation to any Eligible Credit Support
comprised in the Credit Support Balance, Eligible Credit Support of the same
type, nominal value, description and amount as that Eligible Credit Support.

"Equivalent Distributions" has the meaning specified in Paragraph 5(c)(i).

"Exchange Date" has the meaning specified in Paragraph 11(d).

                                                                    ISDA(R) 1995

                                       7
<PAGE>

"Exposure" means, with respect to a party on a Valuation Date and subject to
Paragraph 4 in the case of a dispute, the amount, if any, that would be payable
to that party by the other party (expressed as a positive number) or by that
party to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(1) of this Agreement if all Transactions (other than the Transaction
constituted by this Annex) were being terminated as of the relevant Valuation
Time, on the basis that (i) that party is not the Affected Party and (ii) the
Base Currency is the Termination Currency; provided that Market Quotations will
be determined by the Valuation Agent on behalf of that party using its estimates
at mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").

"Independent Amount" means, with respect to a party, the Base Currency
Equivalent of the amount specified as such for that party in Paragraph 11
(b)(iii)(A); if no amount is specified, zero.

"Interest Amount" means, with respect to an Interest Period, the aggregate sum
of the Base Currency Equivalents of the amounts of interest determined for each
relevant currency and calculated for each day in that Interest Period on the
principal amount of the portion of the Credit Support Balance comprised of cash
in such currency, determined by the Valuation Agent for each such day as
follows:

      (x)   the amount of cash in such currency on that day; multiplied by

      (y)   the relevant Interest Rate in effect for that day; divided by

      (z)   360 (or, in the case of pounds sterling, 365).

"Interest Period" means the period from (and including) the last Local Business
Day on which an Interest Amount was transferred (or, if no Interest Amount has
yet been transferred, the Local Business Day on which Eligible Credit Support or
Equivalent Credit Support in the form of cash was transferred to or received by
the Transferee) to (but excluding) the Local Business Day on which the current
Interest Amount is transferred.

"Interest Rate" means, with respect to an Eligible Currency, the rate specified
in Paragraph 11(f)(i) for that currency.

"Local Business Day", unless otherwise specified in Paragraph 1l(h), means:

      (i) in relation to a transfer of cash or other property (other than
      securities) under this Annex, a day on which commercial banks are open for
      business (including dealings in foreign exchange and foreign currency
      deposits) in the place where the relevant account is located and, if
      different, in the principal financial centre, if any, of the currency of
      such payment;

      (ii) in relation to a transfer of securities under this Annex, a day on
      which the clearance system agreed between the parties for delivery of the
      securities is open for the acceptance and execution of settlement
      instructions or, if delivery of the securities is contemplated by other
      means, a day on which commercial banks are open for business (including
      dealings in foreign exchange and foreign currency deposits) in the
      place(s) agreed between the parties for this purpose;

                                                                    ISDA(R) 1995


                                       8
<PAGE>

      (iii) in relation to a valuation under this Annex, a day on which
      commercial banks are open for business (including dealings in foreign
      exchange and foreign currency deposits) in the place of location of the
      Valuation Agent and in the place(s) agreed between the parties for this
      purpose; and

      (iv) in relation to any notice or other communication under this Annex, a
      day on which commercial banks are open for business (including dealings in
      foreign exchange and foreign currency deposits) in the place specified in
      the address for notice most recently provided by the recipient.

"Minimum Transfer Amount" means, with respect to a party, the amount specified
as such for that party in Paragraph 11(b)(iii)(C); if no amount is specified,
zero.

"New Credit Support" has the meaning specified in Paragraph 3(c)(i).

"Notification Time" has the meaning specified in Paragraph 11(c)(iv).

"Recalculation Date" means the Valuation Date that gives rise to the dispute
under Paragraph 4; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 2 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 2.

"Resolution Time" has the meaning specified in Paragraph 11(c)(i).

"Return Amount" has the meaning specified in Paragraph 2(b).

"Settlement Day" means, in relation to a date, (i) with respect to a transfer of
cash or other property (other than securities), the next Local Business Day and
(ii) with respect to a transfer of securities, the first Local Business Day
after such date on which settlement of a trade in the relevant securities, if
effected on such date, would have been settled in accordance with customary
practice when settling through the clearance system agreed between the parties
for delivery of such securities or, otherwise, on the market in which such
securities are principally traded (or, in either case, if there is no such
customary practice, on the first Local Business Day after such date on which it
is reasonably practicable to deliver such securities).

"Threshold" means, with respect to a party, the Base Currency Equivalent of the
amount specified as such for that party in Paragraph 11(b)(iii)(B); if no amount
is specified, zero.

"Transferee" means, in relation to each Valuation Date, the party in respect of
which Exposure is a positive number and, in relation to a Credit Support
Balance, the party which, subject to this Annex, owes such Credit Support
Balance or, as the case may be, the Value of such Credit Support Balance to the
other party.

"Transferor" means, in relation to a Transferee, the other party.

"Valuation Agent" has the meaning specified in Paragraph 11(c)(i).

"Valuation Date" means each date specified in or otherwise determined pursuant
to Paragraph 11(c)(ii).

                                                                    ISDA(R) 1995


                                       9
<PAGE>

"Valuation Percentage" means, for any item of Eligible Credit Support, the
percentage specified in Paragraph 11(b)(ii).

"Valuation Time" has the meaning specified in Paragraph 11(c)(iii).

"Value" means, for any Valuation Date or other date for which Value is
calculated, and subject to Paragraph 4 in the case of a dispute, with respect
to:

      (i) Eligible Credit Support comprised in a Credit Support Balance that is:

            (A) an amount of cash, the Base Currency Equivalent of such amount
            multiplied by the applicable Valuation Percentage, if any; and

            (B) a security, the Base Currency Equivalent of the bid price
            obtained by the Valuation Agent multiplied by the applicable
            Valuation Percentage, if any; and

      (ii) items that are comprised in a Credit Support Balance and are not
      Eligible Credit Support, zero.

                                                                    ISDA(R) 1995


                                       10
<PAGE>

                                                                  Execution Copy

Paragraph 11. Elections and Variables

(a)   Base Currency and Eligible Currency.

      (i)   "Base Currency" means GBP.

      (ii)  "Eligible Currency" means the Base Currency.

(b)   Credit Support Obligations.

      (i)   Delivery Amount, Return Amount and Credit Support Amount.

                  "Delivery Amount" has the meaning specified in Paragraph 2(a),
                  as amended (I) by deleting the words "upon a demand made by
                  the Transferee on or promptly following a Valuation Date" and
                  inserting in lieu thereof the words "not later than the close
                  of business on each Valuation Date" and (II) by deleting in
                  its entirety the sentence beginning "Unless otherwise
                  specified in Paragraph 11(b)" and inserting in lieu thereof
                  the following:

                  "The "Delivery Amount" applicable to the Transferor for any
                  Valuation Date will equal the greatest of:

                  (1)   the amount by which (a) the Credit Support Amount
                        (calculated according to the Fitch Criteria) exceeds (b)
                        the Value (determined using the Fitch Valuation
                        Percentages in Paragraph 11(b)(ii)) as of such Valuation
                        Date of the Transferor's Credit Support Balance
                        (adjusted to include any prior Delivery Amount and to
                        exclude any prior Return Amount, the transfer of which,
                        in each case, has not yet been completed and for which
                        the relevant Settlement Day falls on or after such
                        Valuation Date);

                  (2)   the amount by which (a) the Credit Support Amount
                        (calculated according to the Moody's Criteria) exceeds
                        (b) the Value (determined using the applicable Moody's
                        Valuation Percentages in Paragraph 11(b)(ii)) as of such
                        Valuation Date of the Transferor's Credit Support
                        Balance (adjusted to include any prior Delivery Amount
                        and to exclude any prior Return Amount, the transfer of
                        which, in each case, has not yet been completed and for
                        which the relevant Settlement Day falls on or after such
                        Valuation Date); and

                  (3)   the amount by which (a) the Credit Support Amount
                        (calculated according to the S&P Criteria) exceeds (b)
                        the Value (determined using the S&P's Valuation
                        Percentages in Paragraph 11(b)(ii)) as of such Valuation
                        Date of the Transferor's Credit Support Balance
                        (adjusted to include any prior Delivery Amount and to

                                       11
<PAGE>
                        exclude any prior Return Amount, the transfer of which,
                        in each case, has not yet been completed and for which
                        the relevant Settlement Day falls on or after such
                        Valuation Date)."

                  Provided that, in respect of any Valuation Date, the Value of
                  the Eligible Credit Support to be transferred under Paragraph
                  2(a) shall be calculated using the applicable Valuation
                  Percentages for the rating agency whose criteria have resulted
                  in the greatest amount under (1), (2) and (3) above.

                  Provided further that if , in respect of any Valuation Date,
                  the Delivery Amount is greater than zero, the Transferor will
                  transfer to the Transferee sufficient Eligible Credit Support
                  to ensure that, immediately following such transfer, none of
                  the amounts calculated under (1), (2) and (3) of this
                  Paragraph 11(b)(i)(A) shall be greater than zero.

            (A)   "Return Amount" has the meaning as specified in Paragraph 2(b)
                  as amended by deleting in its entirety the sentence beginning
                  "Unless otherwise specified in Paragraph 11(b)" and inserting
                  in lieu thereof the following:

                  "The "Return Amount" applicable to the Transferee for any
                  Valuation Date will equal the least of:

                  (1)   the amount by which (a) the Value (determined using the
                        Fitch Valuation Percentages in Paragraph 11(b)(ii)) as
                        of such Valuation Date of the Transferor's Credit
                        Support Balance (adjusted to include any prior Delivery
                        Amount and to exclude any prior Return Amount, the
                        transfer of which, in each case, has not yet been
                        completed and for which the relevant Settlement Day
                        falls on or after such Valuation Date) exceeds (b) the
                        Credit Support Amount (calculated according to the Fitch
                        Criteria) for such Valuation Date.

                  (2)   the amount by which (a) the Value (determined using the
                        Moody's Valuation Percentages in Paragraph 11(b)(ii)) as
                        of such Valuation Date of the Transferor's Credit
                        Support Balance (adjusted to include any prior Delivery
                        Amount and to exclude any prior Return Amount, the
                        transfer of which, in each case, has not yet been
                        completed and for which the relevant Settlement Day
                        falls on or after such Valuation Date) exceeds (b) the
                        Credit Support Amount (calculated according to the
                        Moody's Criteria) for such Valuation Date; and

                  (3)   the amount by which (a) the Value (determined using the
                        S&P's Valuation Percentages in Paragraph 11(b)(ii)) as
                        of such Valuation Date of the Transferor's Credit
                        Support Balance (adjusted to include any prior Delivery
                        Amount and to exclude any prior Return Amount, the
                        transfer of which, in each case, has not yet been
                        completed and for which the relevant Settlement Day
                        falls on or after such Valuation Date) exceeds (b) the
                        Credit

                                       12
<PAGE>

                        Support Amount (calculated according to the S&P
                        Criteria) for such Valuation Date, , provided that, if
                        any of Part 5(k)(i)(B), Part 5(k)(i)(C) of the Agreement
                        are satisfied at any time, the Return Amount for the
                        purposes of satisfying the S&P Requirements shall be
                        determined on the basis that the Threshold applicable to
                        Party A is infinity."

                  Provided that, in respect of any Valuation Date, the Value of
                  the Eligible Credit Support to be transferred under Paragraph
                  2(b) shall be calculated using the applicable Valuation
                  Percentages for the rating agency whose criteria have resulted
                  in the lowest amount under (1), (2) and (3) of this Paragraph
                  11(b)(i)(B).

                  Provided further that in no event shall the Transferee be
                  required to transfer any Equivalent Credit Support under
                  Paragraph 2(b) if, immediately following such transfer, any of
                  the amounts calculated under (1), (2) and (3) of Paragraph
                  11(b)(i)(A) (Delivery Amount) would be greater than zero.

            (B)   "Credit Support Amount" has the meaning given to such term in
                  respect of each of the Rating Agencies' criteria set out in
                  Paragraph 11(h)(v) below.

      (ii)  Eligible Credit Support. The following items will qualify as
            "Eligible Credit Support" for Party A:

<TABLE>
<CAPTION>
           Eligible Credit                     Moody's First      Moody's                 Valuation Percentage (S&P
           Support                             Trigger            Second                            and Fitch)
                                               Valuation          Trigger
                                               Percentage         Valuation
                                                                  Percentage

<S>        <C>                                 <C>                <C>                      <C>
(A)        cash in an Eligible                       100%            100%                  100%
           Currency

(B)        Fixed-rate negotiable                                                           For the purposes of S&P 98.5%
           debt obligations                           98%             95%                  and for the purposes of Fitch,
           issued by the                                                                   the Advanced Rate (the
           Government of the                                                               "Advanced Rate") under the
           United Kingdom or                                                               heading "Notes' Rating/AAA" in
           the United States of                                                            the table entitled "Advanced
           America (with local                                                             Rates (%)" in Appendix 3 to
           and foreign currency                                                            Fitch's Structured Finance
           issuer ratings equal                                                            Report entitled "Counterparty
           to or greater than                                                              Risk in Structured Finance
           AA- by S&P, AA-                                                                 Transactions: Swap Criteria"
           by Fitch and Aa3 by                                                             dated 13 September, 2004 (the
           Moody's) having a                                                               "Fitch Report").
           remaining time to

                                       13
<PAGE>


           maturity of not more
           than one year;

(C)        Fixed-rate negotiable                      98%             92%                  For the purposes of S&P, 92 per
           debt obligations                                                                cent., and for the purposes of
           issued by the                                                                   Fitch, the Advanced Rate.
           Government of the
           United Kingdom or
           the United States of
           America (with local
           and foreign currency
           issuer ratings equal
           to or greater than
           AA- by S&P, AA-
           by Fitch and Aa3 by
           Moody's) having a
           remaining time to
           maturity of more
           than one year but not
           more than 5 years;

(D)        Fixed-rate negotiable                      98%             89%                  For the purposes of S&P, 85.4
           debt obligations                                                                per cent., and for the purposes of
           issued by the                                                                   Fitch, the Advanced Rate.
           Government of the
           United Kingdom or
           the United States of
           America (with local
           and foreign currency
           issuer ratings equal
           to or greater than
           AA- by S&P, AA-
           by Fitch and Aa3 by
           Moody's) having a
           remaining time to
           maturity of more
           than 5 years but not
           more than 10 years;

(E)        Fixed-rate                                 98%             86%                  For the purposes of S&P, 76.8
           negotiable debt                                                                 per cent., and for the purposes of
           obligations issued                                                              Fitch, the Advanced Rate.
           by the Government
           of the United
           Kingdom or the
           United States of
           America (with local
           and foreign
           currency issuer
           ratings equal to or

                                       14
<PAGE>

           greater than AA-
           by S&P, AA- by Fitch
           and Aa3 by
           Moody's) having a
           remaining time to
           maturity of more
           than 10 years but
           not more than 15
           years;

(F)        such other items as                 Zero, or such      Zero, or such            Such Valuation Percentage as
           agreed between Party                higher             higher                   agreed between Party A and the
           A and the Rating                    percentage in      percentage in            Rating Agencies from time to
           Agencies, from time                 respect of which   respect of               time in respect of such Eligible
           to time, which Party                Moody's has        which                    Credit Support.
           B can lawfully                      provided a         Moody's has
           receive from, and                   ratings            provided a
           transfer back to,                   affirmation        ratings
           Party A as required,                                   affirmation
           that will qualify as
           Eligible Credit
           Support.
</TABLE>

                 Where negotiable debt obligations are rated by only one of the
                 above relevant rating agencies, the rating applied will be
                 based on the rating of that agency.

                 For the purpose of the above table, (I) "Moody's First Trigger
                 Valuation Percentage" shall apply for so long as (A) the Second
                 Rating Trigger Requirements do not apply or (B) less than 30
                 Local Business Days have elapsed since the last time the Second
                 Rating Trigger Requirements did not apply and (II) "Moody's
                 Second Trigger Valuation Percentage" shall apply for so long as
                 the Second Rating Trigger Requirements do apply and 30 or more
                 Local Business Days have elapsed since the last time the Second
                 Rating Trigger Requirements did not apply.

      (iii) Thresholds.

            (A)   "Independent Amount" means, for Party A and Party B, with
                  respect to each Transaction, zero.

            (B)   "Threshold" means, for Party A,

                  infinity, unless Party A, in the event of: (a) an Initial S&P
                  Note Downgrade Event or a Subsequent S&P Note Downgrade Event
                  (which in each case, is continuing) has not otherwise complied
                  with Part 5(j)(i)(B), Part 5(j)(i)(C) or Part 5(j)(i)(D) or
                  Part 5(j)(ii)(A) of the Agreement, as the case may be, (b) an
                  Initial Fitch Note Downgrade Event or a First Subsequent Fitch
                  Note Downgrade Event or a Second

                                       15
<PAGE>

                  Subsequent Fitch Note Downgrade Event (which in each case, is
                  continuing) has not otherwise complied with Part 5(l)(i)(B),
                  Part 5(l)(i)(C), Part 5(l)(i)(D), Part 5(l)(ii)(B), Part
                  5(l)(ii)(C), Part 5(l)(ii)(D), Part 5(l)(iii)(A), Part
                  5(l)(iii)(B) or Part 5(l)(iii)(C) of the Agreement, as the
                  case may be, then its Threshold shall be zero and in addition
                  provided always that for so long as no Relevant Entity has the
                  First Trigger Required Ratings and either (i) no Relevant
                  Entity has had the First Trigger Required Ratings since this
                  Annex was executed or (ii) at least 30 Local Business Days
                  have elapsed since the last time a Relevant Entity had the
                  First Trigger Required Ratings, the Threshold with respect to
                  Party A shall also be set to zero.

                  "Threshold" means, for Party B: infinity

            (C)   "Minimum Transfer Amount" means, with respect to Party A and
                  Party B, GBP 50,000 provided, that if, (1) an Event of Default
                  has occurred and is continuing in respect of which Party A is
                  the Defaulting Party, or (2) an Additional Termination Event
                  has occurred in respect of which Party A is an Affected Party,
                  the Minimum Transfer Amount with respect to Party A shall be
                  zero.

            (D)   "Rounding". The Delivery Amount and the Return Amount will be
                  rounded up and down to the nearest integral multiple of GBP
                  10,000 respectively, subject to the maximum Return Amount
                  being equal to the Credit Support Balance.

(c)   Valuation and Timing.

      (i)   "Valuation Agent" means, Party A in all circumstances.

      (ii)  "Valuation Date" means the first Local Business Day in each week.

      (iii) "Valuation Time" means the close of business on the Local Business
            Day immediately preceding the Valuation Date or date of calculation,
            as applicable; provided that the calculations of Value and Exposure
            will be made as of approximately the same time on the same date.

      (iv)  "Notification Time" means by 2:00 p.m., London time, on a Local
            Business Day.

(d)   Exchange Date. "Exchange Date" has the meaning specified in Paragraph
      3(c)(ii).

(e)   Dispute Resolution.

      (i)   "Resolution Time" means 2:00 p.m., London time, on the Local
            Business Day following the date on which notice is given that gives
            rise to a dispute under Paragraph 4.

      (ii)  Value. For the purpose of Paragraphs 4(a)(4)(i)(C) and 4(a)(4)(ii),
            the Value of the outstanding Credit Support Balance or of any
            transfer of Eligible Credit

                                       16
<PAGE>

            Support or Equivalent Credit Support, as the case may be, on the
            relevant date will be calculated as follows:

            (A)   with respect to any Eligible Credit Support or Equivalent
                  Credit Support comprising securities ("Securities") the Base
                  Currency Equivalent of the sum of:

                  (a)   (x) the last bid price on such date for such
                        Securities on the principal national securities
                        exchange on which such Securities are listed,
                        multiplied by the applicable Valuation Percentage; or
                        (y) where any Securities are not listed on a national
                        securities exchange, the bid price for such Securities
                        quoted as at the close of business on such date by any
                        principal market maker (which shall not be and shall
                        be independent from the Valuation Agent) for such
                        Securities chosen by the Valuation Agent, multiplied
                        by the applicable Valuation Percentage, or (z) if no
                        such bid price is able to be obtained for such date
                        under sub-paragraphs (x) or (y) above, the last bid
                        price listed determined pursuant to sub-paragraph (x),
                        or failing which sub-paragraph (y), as of the day next
                        preceding such date on which such prices were
                        available, multiplied by the applicable Valuation
                        Percentage; and

                  (b)   the accrued interest where applicable on such
                        Securities (except to the extent that such interest
                        shall have been paid to the Transferor pursuant to
                        Paragraph 5(c)(ii) or included in the applicable price
                        referred to in Paragraph 11(e)(ii)(A)(a) above) as of
                        such date, provided that it is understood that in no
                        circumstances shall the Transferee be required to
                        transfer a Return Amount in excess of the Credit
                        Support Balance;

            (B)   with respect to any Cash, the Base Currency Equivalent of
                  the amount thereof; and

            (C)   with respect to any Eligible Credit Support or Equivalent
                  Credit Support other than Securities and Cash, the Base
                  Currency Equivalent of the fair market value thereof on such
                  date, as determined in any reasonable manner chosen by the
                  Valuation Agent, multiplied by the applicable Valuation
                  Percentage.

      (iii) Alternative. The provisions of Paragraph 4 will apply.

(f)   Distribution and Interest Amount.

      (i)   Interest Rate. The "Interest Rate" in relation to each Eligible
            Currency specified below will be:

            Eligible Currency     Interest Rate


            GBP                   For the relevant determination date,
                                  "SONIA", which means the reference rate

                                      17

<PAGE>

                                  equal to the overnight rate as calculated by
                                  the Wholesale Market Brokers Association which
                                  appears on Telerate Page 3937 under the
                                  heading "Sterling Overnight Index" as of 9.00
                                  a.m., London time, on the first London Banking
                                  Day following that day.

      (ii)  Transfer of Interest Amount. The transfer of the Interest Amount
            will be made on the first Local Business Day following the end of
            each calendar month, provided that: (1) Party B has earned and
            received such amount of interest, and (2) a Delivery Amount would
            not arise as a result of, or if already existing, would not be
            increased by, such transfer on such date or on any other Local
            Business Day on which Equivalent Credit Support is to be
            transferred to the Transferor pursuant to Paragraph 2(b).

      (iii) Alternative to Interest Amount. The provisions of Paragraph
            5(c)(ii) will apply. For the purposes of calculating the Interest
            Amount the amount of interest calculated for each day of the
            Interest Period shall, with respect to any Eligible Currency, be
            compounded daily.

      (iv)  Interest Amount. The definition of "Interest Amount" in Paragraph
            10 shall be deleted and replaced with the following:

            ""Interest Amount" means, with respect to an Interest Period and
            each portion of the Credit Support Balance comprised of cash in an
            Eligible Currency, the sum of the amounts of interest determined
            for each day in that Interest Period by the Valuation Agent as
            follows:

            (x)   the amount of such currency comprised in the Credit Support
                  Balance at the close of business for general dealings in the
                  relevant currency on such day (or, if such day is not a
                  Local Business Day, on the immediately preceding Local
                  Business Day); multiplied by

            (y)   the relevant Interest Rate; divided by

            (z)   360 (or in the case of Pounds Sterling, 365)."

(g)   Addresses for Transfers.

      Party A: To be advised.

      Party B: To be advised.

(h)   Other Provisions.

      (i)   Transfer Timing

            (A)   The final paragraph of Paragraph 3(a) shall be deleted and
                  replaced with the following:

                  "Subject to Paragraph 4, and unless otherwise specified, any
                  transfer of Eligible Credit Support or Equivalent Credit
                  Support (whether by the


                                      18
<PAGE>


                  Transferor pursuant to Paragraph 2(a) or by the Transferee
                  pursuant to Paragraph 2(b)) shall be made not later than the
                  close of business on the Settlement Day."

            (B)   The definition of Settlement Day shall be deleted and
                  replaced with the following:

                  "Settlement Day" means the next Local Business Day after the
                  Demand Date.

            (C)   For the purposes of this Paragraph 11(h)(i):

                  "Demand Date" means, with respect to a transfer by a party:

                  (i)   in the case of a transfer pursuant to Paragraph 2,
                        Paragraph 3 or Paragraph 4(a)(2), the relevant
                        Valuation Date (assuming that, in the case of any
                        transfer to be made by the Transferee, the Transferee
                        has received a demand on such date from the
                        Transferor). For the purposes of Paragraph 2 and
                        Paragraph 4(a)(2), the Transferor will be deemed to
                        receive notice of the demand by the Transferee to make
                        a transfer of Eligible Credit Support; and

                  (ii)  in the case of a transfer pursuant to Paragraph
                        3(c)(ii)(A), the date on which the Transferee has
                        given its consent to the proposed exchange.

                  On each Demand Date the Transferor shall deliver to the
                  Transferee and the Note Trustee a statement showing the
                  amount of Eligible Credit Support to be delivered.

      (ii)  Early Termination

            The heading for Paragraph 6 shall be deleted and replaced with
            "Early Termination" and the following shall be added after the
            word "party" in the second line of Paragraph 6, "or a Termination
            Event where all Transactions are Affected Transactions".

      (iii) Costs of Transfer on Exchange

            Notwithstanding Paragraph 8, the Transferor will be responsible
            for, and will reimburse the Transferee for, all costs and expenses
            (including any stamp, transfer or similar transaction tax or duty
            payable on any transfer that it is required to make under this
            Annex) in connection with performing both its and the Transferee's
            obligations under this Annex, including but not limited to those
            involved in the transfer of Eligible Credit Support or Equivalent
            Credit Support either from the Transferor to the Transferee or
            from the Transferee to the Transferor hereto.

      (iv)  Single Transferor and Single Transferee

                                      19
<PAGE>

            Party A and Party B agree that the definitions of "Transferee" and
            "Transferor" in Paragraph 10 of this Annex shall be deleted in
            their entirety and replaced with the following in lieu thereof:
            ""Transferor" means Party A; and "Transferee" means Party B, and,
            for the avoidance of doubt, only Party A will be required to make
            transfers of Delivery Amounts and Eligible Credit Support
            hereunder.

      (v)   "Ratings Criteria" means, the criteria used by S&P (as set out in
            S&P's Structure Finance report entitled "Global Interest Rate and
            Currency Swaps: Calculating the Collateral Required Amount"
            publication dated 26 February 2004 and S&P's article entitled
            "Standard and Poor's Global Interest Rate and Currency Swap
            Counterparty Rating Criteria Expanded" publication dated 17
            December 2003 (the "S&P Publications")) ("S&P Criteria"), the
            criteria used by Moody's ("Moody's Criteria") and the criteria
            used by Fitch (as set out in the Fitch Report) ("Fitch Criteria")
            for the purposes of determining the amount of Eligible Credit
            Support Party A is required to transfer hereunder following a
            credit ratings downgrade where Party A has opted to or is required
            to transfer Eligible Credit Support in support of its obligations
            under the Agreement pursuant to Part 5(j), Part 5(k) and/or Part
            5(l), as the case may be, of the Schedule to the Agreement, in
            respect of each of which the definition of "Credit Support Amount"
            is set out below.

            Moody's Criteria

            "Credit Support Amount" shall be calculated in accordance with the
            meaning specified in Paragraph 10, provided however that the words
            "Transferee's Exposure" in the second line thereof shall be
            replaced with "Moody's Collateral Amount". For such purposes
            "Moody's Collateral Amount" means:

            (i)   for so long as Party A's Threshold is zero by virtue of the
                  proviso in the definition of "Threshold" in respect of Party
                  A, (A) the Second Rating Trigger Requirements do not apply
                  or (B) less than 30 Local Business Days have elapsed since
                  the last time the Second Rating Trigger Requirements did not
                  apply, the greater of:

                  (I)   zero; and

                  (II)  the sum of (x) the Transferee's Exposure and (y) the
                        aggregate of the Additional First Trigger Collateral
                        Amounts for all Transactions (other than the
                        Transaction constituted by this Annex),

                        (where "Additional First Trigger Collateral Amount"
                        means, for each Transaction, the lesser of:

                        (a)   the Transaction Notional Amount for such
                              Transaction multiplied by 0.025; and

                        (b)   the sum of:

                              (A)   the Transaction Notional Amount for such
                                    Transaction multiplied by 0.01; and

                                      20
<PAGE>

                              (B)   DV01 for such Transaction multiplied by 10;

            (ii)  for so long as the Second Rating Trigger Requirements do
                  apply and 30 or more Local Business Days have elapsed since
                  the last time the Second Rating Trigger Requirements did not
                  apply, the greater of:

                  (I)   zero;

                  (II)  the aggregate amount of the Net Payments for all Next
                        Payment Dates with respect to all Transactions (other
                        than the Transaction constituted by this Annex); and

                  (III) the sum of (x) the Transferee's Exposure and (y) the
                        aggregate of the Additional Second Trigger Collateral
                        Amounts for all Transactions (other than the
                        Transaction constituted by this Annex),

                        where, "Additional Second Trigger Collateral Amount"
                        means, for each Transaction, the lesser of:

                        (a)   the Transaction Notional Amount for such
                              Transaction multiplied by 0.11; and

                        (b)   the sum of::

                              (A)   the Transaction Notional Amount for such
                                    Transaction multiplied by 0.06; and

                              (B)   DV01 for such Transaction multiplied by 30;
                                    and

            (iii) at any other time, zero.


            S&P Criteria

            "Credit Support Amount" shall mean:

            (i)   at any time Party A's Threshold is zero by virtue of
                  paragraph (a) in the definition of "Threshold" in respect of
                  Party A, an amount calculated in accordance with the S&P
                  Criteria as set out in the S&P Publications; except that,
                  references therein to "the notional balance of the swap"
                  shall be read for the purposes of carrying out such
                  calculation, as being to the Basis Rate Transactions
                  Aggregate Notional Amount (as defined herein); and

            (ii)  at all other times, zero.


            Fitch Criteria

            "Credit Support Amount" shall mean:


                                      21
<PAGE>

            (i)   at any time Party A's Threshold is zero by virtue of
                  paragraph (b) in the definition of "Threshold" in respect of
                  Party A, for the purposes of the Fitch Criteria with respect
                  to a Transferor on a Valuation Date the result of the
                  following formula:

            max [MV plus VC multiplied by 105 per cent. multiplied by N;0]

            where:

            "max" means maximum;

            "MV" means the Transferee's Exposure;

            "VC" means the applicable volatility cushion at that time
            determined by reference to the table headed "Volatility Cushion
            (%)" appearing at the end of Appendix 2 to the Fitch Criteria (and
            for such purpose calculating the relevant Weighted Average Life
            assuming a zero prepayment rate and zero default rate in relation
            to the Mortgages beneficially owned by Party B); and

            "N" means the Basis Swap Transactions Aggregate Notional Amount at
            that time; and

            (ii) at all other times, zero.

      (vi)  Calculations

            Paragraph 3(b) of this Annex shall be amended by inserting the
            words "and shall provide each party (or the other party, if the
            Valuation Agent is a party) with a description in reasonable
            detail of how such calculations were made, upon reasonable
            request" after the word "calculations" in the third line thereof.

      (vii) Demands and Notices

            All demands, specifications and notices under this Annex will be
            made pursuant to Section 12 of this Agreement.

      (viii) Exposure

            "Exposure" has the meaning specified in Paragraph 10, except that
            (1) after the word "Agreement" the words "(assuming, for this
            purpose only, that Part 5(w) of the Schedule is deleted)" shall be
            inserted and (2) at the end of the definition of Exposure, the
            words "with terms substantially the same as those of this
            Agreement" shall be added and (3) for the purpose of calculating
            Exposure pursuant to the meaning set out in Paragraph 10 of the
            Annex, the Valuation Agent shall, unless otherwise agreed in
            writing by the Rating Agencies, seek two quotations from Reference
            Market-makers; provided that if two Reference Market-makers are
            not available to provide a quotation, then fewer than two
            Reference Market-makers may be used for such purpose, and if no
            Reference Market-maker is available, then the Valuation Agent's
            estimate at mid-market will be used. Where more than one quotation
            is obtained, the quotation representing the greatest amount of the
            Transferee's Exposure shall be used by the Valuation Agent.


                                      22
<PAGE>


      (ix)  Paragraph 6

            For the purposes of determining the Credit Support Balance
            pursuant to Paragraph 6, the definition of Value in Paragraph 10
            shall be amended by deleting the words "multiplied by the
            applicable Valuation Percentage, if any" from sub-paragraphs
            (i)(A) and (i)(B).

      (x)   Distributions

            "Distributions" has the meaning specified in Paragraph 10, except
            that the words "to which a holder of securities of the same type,
            nominal value, description and amount as such Eligible Credit
            Support would be entitled from time to time" shall be deleted and
            replaced by the words "received by the Transferee in respect of
            such Eligible Credit Support".

            "Distribution Date" has the meaning specified in Paragraph 10,
            except that the words "a holder of such Eligible Credit Support is
            entitled to receive Distributions" shall be deleted and replaced
            by the words "Distributions are received by the Transferee".

      (xi)  Definitions

            As used in this Annex, the following terms shall mean:

            "Basis Swap Transactions No. 1/17 Aggregate Notional Amounts"
            means in respect of a Valuation Date the aggregate Notional
            Amounts of the Basis Rate Swap Transactions No. 1/17 as at such
            Valuation Date; and, for the avoidance of doubt, such amount shall
            not include the Notional Amount (as defined in the Basis Rate Swap
            Transaction No. 1/17 Confirmation) of the Basis Rate Swap
            Transaction No. 1/17;

            "Basis Swap Transactions No. 1/20 Aggregate Notional Amounts"
            means in respect of a Valuation Date the aggregate Notional
            Amounts of the Basis Rate Swap Transactions No. 1/20 as at such
            Valuation Date; and, for the avoidance of doubt, such amount shall
            not include the Notional Amount (as defined in the Basis Rate Swap
            Transaction No. 1/20 Confirmation) of the Basis Rate Swap
            Transaction No. 1/20;

            "Basis Swap Transactions Aggregate Notional Amounts" means in
            respect of a Valuation Date the aggregate of the Basis Swap
            Transaction No. 1/17 Aggregate Notional Amounts and the Basis Swap
            Transaction No. 1/20 Aggregate Notional Amounts as at such
            Valuation Date;

            "Basis Rate Swap Transaction Confirmation No. 1/17" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction Confirmation No. 1/17A" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;


                                      23
<PAGE>

            "Basis Rate Swap Transaction Confirmation No. 1/17B" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction Confirmation No. 1/17C" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction Confirmation No. 1/20" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction Confirmation No. 1/20A" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction Confirmation No. 1/20B" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction Confirmation No. 1/20C" means the
            Confirmation so referenced between Party A and Party B dated on or
            about the date hereof;

            "Basis Rate Swap Transaction No. 1/17" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/17;

            "Basis Rate Swap Transaction No. 1/17A" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/17A;

            "Basis Rate Swap Transaction No. 1/17B" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/17B;

            "Basis Rate Swap Transaction No. 1/17C" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/17C;

            "Basis Rate Swap Transactions No. 17" means the Basis Rate Swap
            Transaction No. 17A, the Basis Rate Swap Transaction No. 17B
            and the Basis Rate Swap Transaction No. 17C;

            "Basis Rate Swap Transaction No. 1/20" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/20;

            "Basis Rate Swap Transaction No. 1/20A" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/20A;


                                      24
<PAGE>

            "Basis Rate Swap Transaction No. 1/20B" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/20B;

            "Basis Rate Swap Transaction No. 1/20C" means the Transaction
            entered into between Party A and Party B dated on or about the
            date hereof and confirmed in the Basis Rate Swap Transaction
            Confirmation No. 1/20C;

            "Basis Rate Swap Transactions No. 20" means the Basis Rate Swap
            Transaction No. 20A, the Basis Rate Swap Transaction No. 20B and
            the Basis Rate Swap Transaction No. 20C;

            "DV01" means with respect to a Transaction and any date of
            determination, the estimated change in the Transferee's Exposure
            with respect to such Transaction that would result from a one
            basis point change in the relevant swap curve on such date, as
            determined by the Valuation Agent in good faith and in a
            commercially reasonable manner. The Valuation Agent shall, upon
            request of Party B, provide to Party B a statement showing in
            reasonable detail such calculation;

            "Fitch" means Fitch Ratings Ltd and includes any successors
            thereto;

            "Moody's" means Moody's Investors Service Limited and includes any
            successors thereto;

            "Next Payment" means, in respect of each Next Payment Date, the
            greater of (i) the amount of any payments due to be made by Party
            A under Section 2(a) on such Next Payment Date less any payments
            due to be made by Party B under Section 2(a) on such Next Payment
            Date (in each case, after giving effect to any applicable netting
            under Section 2(c)) and (ii) zero;

            "Next Payment Date" means each date on which the next scheduled
            payment under any Transaction is due to be paid;

            "Rating Agencies" means Moody's, S&P and Fitch; and

            "S&P" means Standard & Poor's Rating Services, a division of The
            McGraw-Hill Companies Inc. and includes any successors thereto.

            "Transaction Notional Amount" means in respect of a Valuation
            Date, the Notional Amount of a Transaction as at such Valuation
            Date.


              [The rest of the page is intentionally left blank]



                                      25
<PAGE>

IN WITNESS WHEREOF the parties have executed this Annex on the respective dates
specified below with effect from the date specified on the first page of this
document.

NORTHERN ROCK PLC                       GRANITE FINANCE FUNDING 2
                                        LIMITED
                                        -------------------------------------


By:                                     By:
--------------------------------        -------------------------------------
Name:                                        Name:
Title:                                       Title:
Date:                                        Date:


                                      26
<PAGE>

                                                             Execution Version


                                                        (Basis Rate Swap 1/17)

From:         Northern Rock plc
              Northern Rock House
              Gosforth
              Newcastle Upon Tyne
              NE3 4PL

To:           Granite Finance Funding 2 Limited
              Fifth Floor
              100 Wood Street
              London
              EC2V 7EX

Attention:    Securitisation Team, Risk Operations

                                                                   17 May 2007


Dear Sirs

Basis Rate Swap Transaction No. 1/17 Confirmation

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto) (the Master Definitions Schedule).

<PAGE>

Defined Terms

As used in this Confirmation:

Aggregate Funding 2 Amount means, in respect of a Monthly Date, the sum of the
Funding 2 Amount and any Further Issue Funding 2 Amounts.

Aggregate Swap Provider Amount means, in respect of a Monthly Date, the sum of
the Swap Provider Amount and any Further Issue Swap Provider Amounts.

Assignment Date has the meaning given to such term in the Master Definitions
Schedule.

Average Fixed Rate Mortgage Loan Balance means, (i) in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Fixed Rate Mortgage Loans at the start of
business on the first day of such Swap Determination Period, and (ii) in respect
of a Further Issue Determination Period, an amount equal to the sum of the
aggregate of the outstanding current balances of the Further Issue Fixed Rate
Mortgage Loans at the start of business on the first day of such Further Issue
Determination Period, in the case of both (i) and (ii) above, as notified to the
Calculation Agent by the Cash Manager in accordance with the Cash Management
Agreement.

Average Flexible Mortgage Loan Balance means, (i) in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Flexible Mortgage Loans at the start of
business on the first day of such Swap Determination Period, and (ii) in respect
of a Further Issue Determination Period, an amount equal to the sum of the
aggregate of the outstanding current balances of the Further Issue Flexible
Mortgage Loans at the start of business on the first day of such Further Issue
Determination Period, in the case of both (i) and (ii) above, as notified to the
Calculation Agent by the Cash Manager in accordance with the provisions of the
Cash Management Agreement.

Average Mortgage Loan Balance means, in respect of a Swap Determination Period,
the sum of the Average Fixed Rate Mortgage Loan Balance, the Average Variable
Rate Mortgage Loan Balance and the Average Flexible Mortgage Loan Balance.

Average Variable Rate Mortgage Loan Balance means, (i) in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Variable Rate Mortgage Loans at the start of
business on the first day of such Swap Determination Period, and (ii) in respect
of a Further Issue Determination Period, an amount equal to the sum of the
aggregate of the outstanding current balances of the Further Issue Variable Rate
Mortgage Loans at the start of business on the first day of such Further Issue
Determination Period, in the case of both (i) and (ii) above, as notified to the
Calculation Agent by the Cash Manager in accordance with the provisions of the
Cash Management Agreement.

Blended Rate means, in respect of a Swap Determination Period, a rate of
interest equal to the sum of (i) the Weighted Average Fixed Rate for such Swap
Determination Period

                                      2
<PAGE>

multiplied by the Fixed Rate Ratio for such Swap Determination Period; (ii)
the Variable Rate Swap SVR for such Swap Determination Period multiplied by
the Variable Rate Ratio for such Swap Determination Period, and (iii) the
Flexible Swap Rate for such Swap Determination Period multiplied by the
Flexible Ratio for such Swap Determination Period.

Blended Spread means, in respect of a Swap Determination Period, a percentage
equal to the sum of (i) the Fixed Rate Spread for such Swap Determination Period
multiplied by the Fixed Rate Ratio for such Swap Determination Period; (ii) the
Variable Rate Spread for such Swap Determination Period multiplied by the
Variable Rate Ratio for such Swap Determination Period, and (iii) the Flexible
Spread for such Swap Determination Period multiplied by the Flexible Ratio for
such Swap Determination Period.

Contribution Date has the meaning given to such term in the Master Definitions
Schedule.

Fixed Rate Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to fixed rates of interest set by
reference to a predetermined interest rate or series of interest rates for a
fixed period or periods or are subject to a maximum rate of interest (and charge
interest at the lesser of a variable rate and such maximum rate) for a fixed
period or periods (and shall, for the avoidance of doubt, exclude Variable Rate
Mortgage Loans and Flexible Mortgage Loans save for Flexible Mortgage Loans
which are, at the relevant time, subject to such fixed rates of interest or such
maximum rates of interest arrangements and shall also exclude any Fixed Rate
Mortgage Loans which have become Re-Fixed Mortgage Loans during the immediately
preceding Swap Determination Period).

Fixed Rate Ratio means, (i) in respect of a Swap Determination Period, the
Average Fixed Rate Mortgage Loan Balance divided by the Average Mortgage Loan
Balance, and (ii) in respect of a Further Issue Determination Period, the
Further Issue Average Fixed Rate Mortgage Loan Balance divided by the Further
Issue Average Mortgage Loan Balance.

Fixed Rate Spread means 0.21 per cent. per annum or such other percentage amount
as Party A may notify to Party B and the Funding 2 Security Trustee in writing
from time to time in accordance with paragraph 4 of this Confirmation.

Flexible Mortgage Loans means those Mortgage Loans within the Mortgage Portfolio
that typically incorporate features that give the borrower options (which may be
subject to certain conditions) to, among other things, make further drawings on
the mortgage loan account, and/or to overpay or underpay interest and principal
in a given month and/or to take a payment holiday (and shall, for the avoidance
of doubt, exclude: (i) Flexible Mortgage Loans which are, at the relevant time,
subject to fixed rates of interest set by reference to a pre-determined interest
rate or series of interest rates for a fixed period or periods are subject to a
maximum rate of interest (and charge interest at the lesser of a variable rate
and such maximum rate) for a fixed period or periods (which

                                      3
<PAGE>

shall, for such fixed period, constitute Fixed Mortgage Loans); and (ii)
Variable Rate Mortgage Loans).

Flexible Ratio means, (i) in respect of a Swap Determination Period, the Average
Flexible Mortgage Loan Balance divided by the Average Mortgage Loan Balance, and
(ii) in respect of a Further Issue Determination Period, the Further Issue
Average Flexible Mortgage Loan Balance divided by the Further Issue Average
Mortgage Loan Balance.

Flexible Spread means 1.55 per cent. per annum or such other percentage amount
as Party A may notify to Party B and the Funding 2 Security Trustee in writing
from time to time in accordance with paragraph 4 of this Confirmation.

Flexible Swap Rate means, (i) in respect of a Swap Determination Period, a rate
of interest equal to the Variable Rate Swap SVR for such Swap Determination
Period minus the weighted average of the discounts charged to borrowers of
Flexible Mortgage Loans as at the start of business on the first day of such
Swap Determination Period, and (ii) in respect of a Further Issue Determination
Period, a rate of interest equal to the Variable Rate Swap SVR for such Further
Issue Determination Period minus the weighted average of the discounts charged
to borrowers of Flexible Mortgage Loans in the New Mortgage Portfolio as at the
start of business on the first day of such Further Issue Determination Period,
in the case of both (i) and (ii), the weighted average being calculated by
reference to the then outstanding current balances of such Flexible Mortgage
Loans as at that date, as determined by the Cash Manager in accordance with the
provisions of the Cash Management Agreement.

Funding 2 means Granite Finance Funding 2 Limited.

Funding 2 Amount means, in respect of a Monthly Date, an amount in Sterling
equal to the amount produced by applying the Blended Rate for the Swap
Determination Period ending immediately prior to such Monthly Date to the
Notional Amount in respect of such Swap Determination Period, such amount to be
calculated by the Calculation Agent on the basis of the number of days in such
Swap Determination Period, divided by 360 (the number of days to be calculated
on the basis of a year of 360 days with twelve 30-day months, without regard to
the date of the first day or last day of the Swap Determination Period).

Funding 2 Share has the meaning given to such term in the Master Definitions
Schedule.

Further Issue means an increase in the Funding 2 Share on a Further Issue Date;
the amount of such increase for a particular Further Issue Date being a Further
Issue Amount.

Further Issue Average Fixed Rate Mortgage Loan Balance means, in respect of a
Further Issue Determination Period, an amount equal to the sum of the aggregate
of the outstanding current balances of the Fixed Rate Mortgage Loans in the New
Mortgage Portfolio as at the first day of such Further Issue Determination
Period (after taking account of any transfer of a New Mortgage Portfolio to the
Mortgages Trustee on such

                                      4
<PAGE>

date) as notified to the Calculation Agent by the Cash Manager in accordance
with the Cash Management Agreement.

Further Issue Average Flexible Mortgage Loan Balance means, in respect of a
Further Issue Determination Period, an amount equal to the sum of the aggregate
of the outstanding current balances of the Flexible Mortgage Loans in the New
Mortgage Portfolio as at the first day of such Further Issue Determination
Period (after taking account of any transfer of a New Mortgage Portfolio to the
Mortgages Trustee on such date) as notified to the Calculation Agent by the Cash
Manager in accordance with the provisions of the Cash Management Agreement.

Further Issue Average Mortgage Loan Balance means, in respect of a Further Issue
Determination Period, the sum of the Further Issue Average Fixed Rate Mortgage
Loan Balance, the Further Issue Average Variable Rate Mortgage Loan Balance and
the Further Issue Average Flexible Mortgage Loan Balance.

Further Issue Average Variable Rate Mortgage Loan Balance means, in respect of a
Further Issue Determination Period, an amount equal to the sum of the aggregate
of the outstanding current balances of the Variable Rate Mortgage Loans in the
New Mortgage Loan Portfolio as at the first day of such Further Issue
Determination Period (after taking account of any transfer of a New Mortgage
Portfolio to the Mortgages Trustee on such date) as notified to the Calculation
Agent by the Cash Manager in accordance with the provisions of the Cash
Management Agreement.

Further Issue Blended Rate means, in respect of a Further Issue Determination
Period, a rate of interest equal to the sum of (i) the Weighted Average Fixed
Rate for such Further Issue Determination Period multiplied by the Fixed Rate
Ratio for such Further Issue Determination Period; (ii) the Variable Rate Swap
SVR for such Further Issue Determination Period multiplied by the Variable Rate
Ratio for such Further Issue Determination Period, and (iii) the Flexible Swap
Rate for such Further Issue Determination Period multiplied by the Flexible
Ratio for such Further Issue Determination Period.

Further Issue Blended Spread means in respect of a Further Issue Determination
Period, a percentage equal to the sum of (i) the Fixed Rate Spread for such
Further Issue Determination Period multiplied by the Fixed Rate Ratio for such
Further Issue Determination Period; (ii) the Variable Rate Spread for such
Further Issue Determination Period multiplied by the Variable Rate Ratio for
such Further Issue Determination Period, and (iii) the Flexible Spread for such
Further Issue Determination Period multiplied by the Flexible Ratio for such
Further Issue Determination Period.

Further Issue Date means a Contribution Date or an Assignment Date on which Loan
Tranches with Loan Payment Dates scheduled to fall on the seventeenth day of any
month are advanced to Funding 2 under the Global Intercompany Loan Agreement,
and which, as the case may be and, for the avoidance of doubt, does not include
any Distribution Date regardless of whether or not such date is also a
Contribution Date or an Assignment Date.

                                      5
<PAGE>

Further Issue Determination Period means a period commencing on (and including)
a Further Issue Date and ending on (but excluding) the next occurring Swap
Determination Date.

Further Issue Fixed Rate Mortgage Loans means in respect of a Further Issue,
those Fixed Rate Mortgage Loans comprised in the Further Issue Mortgage
Portfolio relating to such Further Issue.

Further Issue Flexible Mortgage Loans means in respect of a Further Issue, those
Flexible Mortgage Loans comprised in the Further Issue Mortgage Portfolio
relating to such Further Issue.

Further Issue Funding 2 Amount means, in respect of a Further Issue
Determination Period, an amount in Sterling equal to the amount produced by
applying (i) in respect of each Contribution Date which is not also an
Assignment Date, the Blended Rate for the Swap Determination Period in which
such Further Issue Determination Period falls, and (ii) in respect of each
Contribution Date which is also an Assignment Date, the Further Issue Blended
Rate for such Further Issue Determination Period, to the Further Issue Notional
Amount, such amount to be calculated by the Calculation Agent on the basis of
the number of days in such Further Issue Determination Period, divided by 360
(the number of days to be calculated on the basis of a year of 360 days with 12
30-day months, without regard to the date of the first day or last day of the
Further Issue Determination Period). For the avoidance of doubt, there will be a
Further Issue Funding 2 Amount in respect of each Further Issue Date that occurs
during a Swap Determination Date.

Further Issue Mortgage Portfolio means in respect of a Further Issue, the New
Mortgage Portfolio (if any) that is transferred to the Mortgages Trustee on the
relevant Assignment Date.

Further Issue Notional Amount means in respect of a Further Issue, the Further
Issue Amount relating to such Further Issue.

Further Issue Swap Provider Amount means in respect of a Monthly Date and a
Further Issue Determination Period which ends immediately prior to such Monthly
Date, an amount in Sterling, which is equal to the amount produced by applying,
a rate equal to One Month LIBOR applicable to the Monthly Determination Period
in which such Further Issue Determination Period falls, plus (i) in respect of
each Contribution Date which is not also the Assignment Date with respect to
such Contribution Date, the Blended Spread for the Swap Determination Period in
which such Further Issue Determination Period falls, and (ii) in respect of each
Contribution Date which is the Assignment Date with respect to such Contribution
Date, the Further Issue Blended Spread for the Further Issue Determination
Period, to the Further Issue Notional Amount, such amount to be calculated by
the Calculation Agent on the basis of the actual number of days in such Further
Issue Determination Period, divided by 365. For the avoidance of doubt, there
will be a Further Issue Swap Provider Amount in respect of each Further Issue
Date that occurs during a Swap Determination Date.

                                      6
<PAGE>

Further Issuer Variable Rate Mortgage Loans means in respect of a Further Issue,
those Variable Rate Mortgage Loans comprised in the Further Issue Mortgage
Portfolio relating to such Further Issue.

Loan Tranche has the meaning given to such term in the Master Definitions
Schedule.

Monthly Date means the seventeenth day of each calendar month from, and
including 17 June 2007 to, but excluding, the Termination Date, subject to
adjustment in accordance with the Following Business Day Convention. It is
understood that payments to be made on any given payment date referred to under
"Payments" below shall be those payments relating to the Swap Determination
Period and/or Monthly Determination Period and any Further Issue Determination
Period immediately preceding such Monthly Date.

Monthly Determination Period means each period from, and including, one Monthly
Date to, but excluding, the next Monthly Date during the Term of the Transaction
except that (a) the initial Monthly Determination Period will commence on, and
include, the Effective Date and (b) the final Monthly Determination Period will
end on, but exclude, the Termination Date.

Mortgage Conditions has the meaning given to such term in the Master Definitions
Schedule.

Mortgage Portfolio has the meaning given to such term in the Master Definitions
Schedule.

Mortgages Trustee has the meaning given to such term in the Master Definitions
Schedule.

New Mortgage Portfolio has the meaning given to such term in the Master
Definitions Schedule.

Notes has the meaning given to such term in the Master Definitions Schedule.

Notional Amount means, in respect of any Swap Determination Period an amount in
Sterling equal to (a) the Funding 2 Share as determined on the first day of such
Swap Determination Period (multiplied by the Relevant Fraction), minus (b) the
aggregate outstanding principal balance of any Fixed Rate Mortgage Loans which
have become Re-Fixed Mortgage Loans at any time from (and including) the date
notified by the Cash Manager to (but including) the first day of such Swap
Determination Period (multiplied by the Relevant Fraction). For the avoidance of
doubt such amount shall be adjusted for any increase or reduction in the Funding
2 Share on such date (which shall mean that any Further Issue Amounts arising
during a Swap Determination Period shall be added to such amount on the first
day of the next Swap Determination Period). For the purposes of determining the
Swap Provider Amount, the Notional Amount for a Monthly Determination Period
shall be the Notional Amount for the Swap Determination Period in which the
Monthly Determination Period commences.

                                      7
<PAGE>

One Month LIBOR means, in respect of a Monthly Determination Period,
GBP-LIBOR-BBA, where the Reset Date is the first day of the relevant Monthly
Determination Period and the Designated Maturity is one month; except for the
first Monthly Determination Period for which Linear Interpolation is applicable
and in respect of which the Linear Interpolation shall be applied by reference
to the 2 weeks and 1 month rates.

Outstanding Principal Balance has the meaning given to such term in the Master
Definitions Schedule.

Reference Lenders means Abbey National PLC, Alliance & Leicester plc, Bradford
and Bingley plc, HBOS plc, Lloyds TSB Bank plc, National Westminster Bank Plc
and Woolwich plc (or their respective successors) and such additional or
replacement residential mortgage lenders as shall be determined by the
Calculation Agent and Reference Lender means any one of them.

Re-Fixed Mortgage Loans has the meaning given to such term in the Master
Definitions Schedule.

Relevant Fraction means, as at the beginning of a Swap Determination Period, a
fraction, the numerator of which is the aggregate principal amount outstanding
under Notes having a Note Payment Date scheduled to fall on the seventeenth day
of any month (adjusted by the Calculation Agent to reflect the amount of
Principal Deficiency Ledger attributable to such Notes) and the denominator of
which is the aggregate principal amount outstanding under all Notes less the
Principal Deficiency Ledger.

Swap Determination Date means the first Business Day of any calendar month
occurring during the period commencing on the date notified by the Cash Manager
and ending on the Termination Date.

Swap Determination Period means the period from (and including) the date
notified by the Cash Manager to (but excluding) the first Swap Determination
Date and thereafter from (and including) a Swap Determination Date to (but
excluding) the next Swap Determination Date.

Swap Provider Amount means, in respect of a Monthly Date and the Monthly
Determination Period which ends immediately prior to such Monthly Date, an
amount in Sterling which is equal to the amount produced by applying, a rate
equal to One Month LIBOR applicable to such Monthly Determination Period plus
the Blended Spread for the Swap Determination Period ending immediately
preceding the Monthly Date, to the Notional Amount, such amount to be calculated
by the Calculation Agent on the basis of the actual number of days in such
Monthly Determination Period, divided by 365.

Variable Rate Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to a rate of interest which at any
time may be varied in accordance with the relevant Mortgage Conditions (and
shall, for the avoidance of doubt, exclude Fixed Rate Mortgage Loans and
Flexible Mortgage Loans).

                                      8
<PAGE>

Variable Rate Ratio means, in respect of a Swap Determination Period, the
Average Variable Rate Mortgage Loan Balance divided by the Average Mortgage Loan
Balance, and in respect of a Further Issue Determination Period, the Further
Issue Average Variable Rate Mortgage Loan Balance divided by the Further Issue
Average Mortgage Loan Balance.

Variable Rate Spread means 1.75 per cent. per annum or such other percentage
amount as Party A may notify to Party B and the Funding 2 Security Trustee in
writing from time to time in accordance with paragraph 4 of this Confirmation.

Variable Rate Swap SVR means, (i) in respect of a Swap Determination Period, the
rate equal to the average of the standard variable rates or their equivalent
charged to existing borrowers on residential mortgage loans as published from
time to time as at the start of business on the first day of such Swap
Determination Period, and (ii) in respect of a Further Issue Determination
Period, the rate equal to the average of the standard variable rates or their
equivalent charged to existing borrowers on residential mortgage loans as
published from time to time as at the start of business on the first day of such
Further Issue Determination Period, in the case of both (i) and (ii) above,
after excluding the highest and lowest rate, of the Reference Lenders, as
determined by the Cash Manager in good faith and notified to the Calculation
Agent from time to time in accordance with the Cash Management Agreement.

Weighted Average Fixed Rate means, (i) in respect of a Swap Determination
Period, the rate equal to the weighted average of the fixed rates of interest
charged to borrowers of Fixed Rate Mortgage Loans as at the start of business on
the first day of such Swap Determination Period, and (ii) in respect of a
Further Issue Determination Period, the rate equal to the weighted average of
the fixed rates of interest charged to borrowers of Fixed Rate Mortgage Loans in
the New Mortgage Portfolio as at the start of business on the first day of such
Further Issue Determination Period, in the case of both (i) and (ii) above, the
weighted average being calculated by reference to the then outstanding current
balances of such Fixed Rate Mortgage Loans as at that date, as notified by the
Cash Manager to the Calculation Agent in accordance with the provisions of the
Cash Management Agreement.

 1.      The terms of the Transaction to which this Confirmation relates are as
         follows:

         Party A:                   Northern Rock plc.

         Party B:                   Granite Finance Funding 2 Limited.

         Trade Date:                17 May 2007.

         Effective Date:            23 May 2007.

         Termination Date:          One calendar month following the reduction
                                    in the Sterling amount of the Funding 2
                                    Share to zero.

         Business Days:             London.

                                                    9

         Calculation of
         Amounts:

                                    On the Swap Determination Date immediately
                                    preceding each Monthly Date, the Calculation
                                    Agent shall calculate the Aggregate Swap
                                    Provider Amount for such Monthly Date and
                                    the Aggregate Funding 2 Amount for such
                                    Monthly Date, and forthwith notify Party A,
                                    Party B, the Cash Manager and the Issuer
                                    Cash Manager of the amounts so determined
                                    and of the net amount determined as set out
                                    below.

         Payments:                  If in relation to any Monthly Date:

                              (i)   the Aggregate Swap Provider Amount for such
                                    Monthly Date exceeds the Aggregate Funding 2
                                    Amount for such Monthly Date, Party A shall
                                    pay the amount of such excess to Party B on
                                    such Monthly Date;

                              (ii)  the Aggregate Funding 2 Amount for such
                                    Monthly Date exceeds the Aggregate Swap
                                    Provider Amount for such Monthly Date, Party
                                    B shall pay the amount of such excess to
                                    Party A on such Monthly Date;

                             (iii)  the Aggregate Swap Provider Amount for such
                                    Monthly Date is equal to the Aggregate
                                    Funding 2 Amount for such Monthly Date, no
                                    amount shall be due and payable by either
                                    party hereunder in relation to such Monthly
                                    Date with respect to the Aggregate Swap
                                    Provider Amount and the Aggregate Funding 2
                                    Amount.

         Calculation Agent:         Northern Rock plc acting in its capacity as
                                    Administrator pursuant to the Administration
                                    Agreement or as Cash Manager pursuant to the
                                    Cash Management Agreement, as the case may
                                    be.

 2.      Account Details:

         Payments to Party A:       Bank:            Northern Rock plc
                                    Account Name:    Northern Rock Group
                                                     Treasury
                                    Sort Code:       30-00-59
                                    Reference:       Granite Finance Funding 2
                                                     Limited


                                      10
<PAGE>

         Payments to Party B:       Bank:            Northern Rock plc
                                    Account Name:    Granite Finance Funding 2
                                                     Limited
                                    Account Number:  20070228 Sort
                                    Code:            30-00-59
                                    Reference:       10016

3.       Notice Details:

         Party A:                   Northern Rock plc

         Address:                   Northern Rock House
                                    Gosforth
                                    Newcastle upon Tyne
                                    NE3 4PL

         Facsimile Number:          0191-279-4694

         Attention:                 Treasury Settlements Manager

         Party B:                   Granite Finance Funding 2 Limited

         Address:                   Fifth Floor
                                    100 Wood Street
                                    London
                                    EC2V 7EX

         With a copy to:            Northern Rock plc
                                    Northern Rock House
                                    Gosforth
                                    Newcastle upon Tyne
                                    NE3 4PL

         Facsimile Number:          0191 279 4929

         Attention:                 Andy McClean

         With a copy to the
         Funding 2 Security Trustee: The Bank of New York

         Address:                   One Canada Square
                                    48th Floor
                                    London
                                    E14 5AL

         Facsimile Number:          020 7964 6399

         Attention:                 Global Structured Finance
                                    (Corporate Trust)


                                      11
<PAGE>

 4.      Miscellaneous

(a)      Notwithstanding any other provision of this Confirmation, if on any
         date Funding 2 draws down a new Loan Tranche or increases the
         Outstanding Principal Balance under an existing Loan Tranche, then to
         reflect prevailing market conditions, provided, the Rating Agencies
         have confirmed that any adjustments carried out in accordance with
         this provision will not result in a lowering, qualification or
         withdrawal of the Notes issued by any Funding 2 Issuer to lower than
         the rating of such Notes immediately prior to such adjustment, Party
         A may, by giving notice in writing to Party B and to the Funding 2
         Security Trustee on such date, make any adjustments it deems
         appropriate to the Fixed Rate Spread, the Flexible Spread and the
         Variable Rate Spread (or any of them) for the Swap Determination
         Period in which such date occurs and for all Swap Determination
         Periods occurring after such date (subject always to any further
         adjustment pursuant to this paragraph 4).

(b)      If the payment of any Aggregate Swap Provider Amount is deferred in
         accordance with Part 5(h)(iii) of the Schedule to the Agreement, then
         the amount so deferred (the Swap Provider Deferred Amount) shall,
         subject to the terms of this Confirmation, be payable on the next
         date on which a payment is to be made under "Payments" above
         (together with interest thereon (the Swap Provider Deferred Interest)
         at the Blended Spread for the relevant Swap Determination Period) and
         the Swap Provider Amount due on such next date on which a payment is
         to be made under "Payments" above shall be deemed to include the Swap
         Provider Deferred Amount and the Swap Provider Deferred Interest.

         If the payment of any Aggregate Funding 2 Amount is deferred in
         accordance with Part 5(h)(iii) the Agreement, then the amount so
         deferred (the Funding 2 Deferred Amount) shall, subject to the terms of
         this Confirmation, be payable on the next date on which a payment is to
         be made under "Payments" above (together with interest thereon (the
         Funding 2 Deferred Interest) at the Blended Rate for the relevant Swap
         Determination Period) and the Aggregate Funding 2 Amount due on such
         next date on which a payment is to be made under "Payments" above shall
         be deemed to include the Funding 2 Deferred Amount and the Funding 2
         Deferred Interest.

                                      12
<PAGE>

Yours faithfully

NORTHERN ROCK PLC

By:





Name:

Title:







Confirmed as of the date first written:

GRANITE FINANCE FUNDING 2 LIMITED

By:





Name:

Title:

                                      13
<PAGE>

                                                             Execution Version

                                                       (Basis Rate Swap 2/17A)

From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

Attention:       Swaps Administration

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London
                 EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007

Dear Sirs

Re: Basis Rate Swap Transaction No. 2/17A Confirmation relating to the Relevant
Issuer Notes

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto).

As used in this Confirmation:

Note Payment Date means any Note Payment Date (as defined in the Relevant Issuer
Notes) on which interest is payable under the Relevant Issuer Notes.

<PAGE>

Relevant Issuer Notes means the Notes from time to time issued by any Funding 2
Issuer on or after the Effective Date with Note Payment Dates scheduled to fall
(subject to adjustment in accordance with any applicable business day convention
on 17 January, 17 April, 17 July and 17 October of any year (Quarterly Payment
Dates) and any Notes from time to time issued by any Funding 2 Issuer on or
after the Effective Date with monthly Note Payment Dates where the rate of
interest applicable to the Loan Tranche(s) relating to such Notes is scheduled
to be reset (subject to adjustment in accordance with any applicable business
day convention) on 17 January, 17 April, 17 July and 17 October of any year;
except that Relevant Issuer Notes shall not include any Notes in respect of
which a Step-Up Date has occurred on or before the immediately preceding Note
Payment Date or a Pass-Through Trigger Event has occurred.

1        The terms of the particular Swap Transaction to which this
         Confirmation relates are as follows:

Party A:                                        Northern Rock plc.

Party B:                                        Granite Finance Funding 2
                                                Limited.

Trade Date:                                     17 May 2007.

Effective Date:                                 23 May 2007.

Termination Date:                               The Final Maturity Date of the
                                                last remaining Relevant Issuer
                                                Notes outstanding from time to
                                                time.

Period End Dates:                               The seventeenth day of each
                                                calendar month during the Term
                                                from, and including, 17 June
                                                2007 to, but excluding, the
                                                Termination Date, subject to
                                                adjustment with the Following
                                                Business Day Convention, and the
                                                Termination Date (each a Period
                                                End Date).

Notional Amount:                                On any Period End Date which is
                                                also a Quarterly Payment Date,
                                                an amount in GBP equal to the
                                                aggregate Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes on the immediately
                                                preceding Quarterly Payment
                                                Date; plus, the aggregate
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes made
                                                in the period from (and
                                                excluding) the immediately
                                                preceding Quarterly Payment Date
                                                to (and excluding) such Period
                                                End Date (which for the
                                                avoidance of doubt will

                                      2
<PAGE>

                                                be each Increased OPB arising
                                                during such period); less, an
                                                amount equal to "x" multiplied
                                                by the balance of the Principal
                                                Deficiency Ledger on the
                                                immediately preceding Quarterly
                                                Payment Date where "x" is a
                                                percentage (determined by the
                                                Calculation Agent to be the
                                                portion of the Principal
                                                Deficiency Ledger attributable
                                                to the Relevant Issuer Notes).
                                                It is understood that the
                                                Notional Amount on any Quarterly
                                                Payment Date shall be determined
                                                after any reduction of the
                                                Outstanding Principal Balance
                                                of the Loan Tranches relating to
                                                the Relevant Issuer Notes that
                                                may occur on such date.

                                                With respect to any Period End
                                                Date that is not a Quarterly
                                                Payment Date, the Notional
                                                Amount shall be the Notional
                                                Amount for the immediately
                                                preceding Quarterly Payment Date
                                                determined in the manner
                                                described above or where there
                                                has been no Quarterly Payment
                                                Date, the issue date of the
                                                Relevant Issuer Notes.

                                                The Notional Amount in respect
                                                of each Period End Date shall
                                                be notified to the Calculation
                                                Agent by the Cash Manager
                                                pursuant to paragraph 1(a) of
                                                Schedule 2 to the Cash
                                                Management Agreement.

A.       Floating Payments

Floating Amounts I:

         Floating Rate Payer I:                 Party A.

         Floating Rate Payer I                  GBP-LIBOR-BBA.

         Floating Rate Option:

                                      3
<PAGE>

         Floating Rate Payer I                  Three months; except in respect
         Designated Maturity:                   of the initial Calculation
                                                Period for which Linear
                                                Interpolation is applicable and
                                                in respect of which the Linear
                                                Interpolation shall be applied
                                                by reference to the one month
                                                and two month rates.

         Floating Rate Payer I Spread:          Zero per cent. per annum.

         Floating Rate Payer I                  Actual/365 (Fixed).

         Floating Rate Day Count Fraction:

         Floating Rate Payer I                  The first day of each
         Reset Dates:                           Calculation Period; provided
                                                however, that in respect of
                                                every Calculation Period that
                                                does not start on a Quarterly
                                                Payment Date, the Floating Rate
                                                in effect for such Calculation
                                                Period shall be the Floating
                                                Rate for the immediately
                                                preceding Calculation Period.

         Floating Rate Payer I Payment Dates:   With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following Business Day
                                                Convention.

Floating Amounts II:

         Floating Rate Payer II:                Party B.

         Floating Rate Payer II                 GBP-LIBOR-BBA.
         Floating Rate Option:

         Floating Rate Payer II                 One month.
         Designated Maturity:

         Floating Rate Payer II                 Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer II                 The first day of each
         Reset Dates:                           Calculation Period.

         Floating Rate Payer II Payment Dates:  With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following

                                      4
<PAGE>

                                                Business Day Convention.

Calculation Agent:                                          Party A.


B.       Account Details:

Payments to Floating Rate Payer I:

Account for Payments in GBP:                    Northern Rock plc
                                                Northern Rock Group Treasury
                                                30-00-59

                                                Granite Finance Funding 2
                                                Limited
                                                Basis Swap 2/17A

Payments to Floating Rate Payer II:

Account for Payments in GBP:                    Northern Rock plc
                                                Granite Finance Funding 2
                                                Limited
                                                Account Number: 20070228
                                                Sort Code:      30-00-59
                                                Reference:      10016

C.       Notice Details:

Floating Rate Payer I:                          Northern Rock plc

         Address:                               Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      0191 279 4694

         Attention:                             Treasury Settlements Manager

Floating Rate Payer II:                         Granite Finance Funding 2
                                                Limited

         Address:                               Fifth Floor
                                                100 Wood Street
                                                London
                                                EC2V 7EX

With a copy to:                                 Northern Rock plc
                                                Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      +44 191 279 4929


                                      5
<PAGE>

         Attention:                             Andy McClean

And with a copy to the                          The Bank of New York
Funding 2 Security Trustee:

         Address:                               One Canada Square
                                                48th Floor
                                                London
                                                E14 5AL

         Facsimile Number:                      020 7964 6399

         Attention:                             Global Structured Finance
                                                (Corporate Trust)

D.       Offices:                               The Office of Party A for each
                                                of the Transactions evidenced by
                                                this Confirmation is London.

E.       Further Issue Amounts

         If on any date during a Calculation Period (other than a Quarterly
         Payment Date) (an Increased OPB Date), as a consequence of the issue of
         Relevant Issuer Notes during such Calculation Period, the aggregate
         Outstanding Principal Balance of the Loan Tranches relating to the
         Relevant Issuer Notes increases, (the amount of such increase being an
         Increased OPB), a further Transaction (a Further Issue Transaction)
         shall be deemed to have occurred in respect of such Increased OPB on
         terms identical to those set out above in respect of the Swap
         Transaction, except as modified below.

         Notional Amount:                       The Notional Amount of a Further
                                                Issue Transaction shall be an
                                                amount equal to the relevant
                                                Increased OPB (the Further Issue
                                                Notional Amount).

         Effective Date:                        The Effective Date of a Further
                                                Issue Transaction (the Further
                                                Issue Effective Date) shall be
                                                the relevant Increased OPB Date.

         Termination Date:                      The Termination Date of a
                                                Further Issue Transaction shall
                                                be the Quarterly Payment Date
                                                immediately following the
                                                relevant Further Issue Effective
                                                Date (the Further Issue
                                                Termination Date).

         Reset Dates:                           The Reset Dates for a Further
                                                Issue Transaction shall be:

                                                (i) in respect of Party A, the
                                                Floating Rate Payer I Reset
                                                Dates, except in

                                      6
<PAGE>

                                                respect of the first Calculation
                                                Period of the Further Issue
                                                Transaction, the Reset Date for
                                                which will be the Further Issue
                                                Effective Date and, for the
                                                avoidance of doubt, the Floating
                                                Rate I applicable to any
                                                Calculation Period following the
                                                first Calculation Period shall
                                                be the Floating Rate I for such
                                                first Calculation Period; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II Reset
                                                Dates, including for the
                                                avoidance of doubt the first
                                                Calculation Period of the
                                                Further Issue Transaction.

         Floating Amounts I and II:             The Designated Maturity for a
                                                Further Issue Transaction shall
                                                be:

                                                (i) in respect of Party A, the
                                                period from, and including, the
                                                Further Issue Effective Date to,
                                                but excluding, the Further Issue
                                                Termination Date. Linear
                                                Interpolation shall apply; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II
                                                Designated Maturity.

Where any Relevant Issuer Notes are issued on terms where the Loan Tranche(s)
relating to such Notes have an initial interest rate set by reference to a rate
of interest determined by reference to a period in excess of three months (Long
First Interest Period Notes), the Calculation Agent shall, as soon as
practicable following issue, notify the parties of how payments and calculations
under this Confirmation are to be made in order to reflect such Long First
Interest Period Notes. It being understood that with effect from the beginning
of the period under the Loan Tranche(s) when the initial interest rate no longer
applies, the Notional Amount shall be increased by the Outstanding Principal
Balance of the Loan Tranche(s) relating to the Long First Interest Period Notes.

F.       Miscellaneous

                                      7
<PAGE>

         If the payment of any Floating Amount I is deferred in accordance with
         Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
         deferred (the Floating Amount I Deferred Amount) shall, subject to the
         terms of this Confirmation, be payable on the next Payment Date
         (together with interest thereon (the Floating Amount I Deferred
         Interest) at the Floating Rate Payer I Floating Rate for the relevant
         Calculation Period) and the Floating Amount I due on such Payment Date
         shall be deemed to include the Floating Amount I Deferred Amount and
         the Floating Amount I Deferred Interest.

         If the payment of any Floating Amount II is deferred in accordance with
         Part 5(h)(iii) the Agreement, then the amount so deferred (the Floating
         Amount II Deferred Amount) shall, subject to the terms of this
         Confirmation, be payable on the next Payment Date (together with
         interest thereon (the Floating Amount II Deferred Interest) at the
         Floating Rate Payer II Floating Rate for the relevant Calculation
         Period) and the Floating Amount II due on such Payment Date shall be
         deemed to include the Floating Amount II Deferred Amount and the
         Floating Amount II Deferred Interest.

For the purposes of Section 2(c) of the Agreement, any amounts owing by one
party to another party under a Further Issue Transaction on a Swap Payment Date,
shall be deemed to be amounts payable by such party in respect of the Swap
Transaction on such Payment Date and shall be netted in accordance with Section
2(c).

It is understood that on each Further Issue Termination Date the calculation of
the aggregate Outstanding Principal Balance of the Loan Tranches relating to the
Relevant Issuer Notes will include any Further Issue Notional Amount in respect
of any Further Issue Transaction which terminated on such date. In addition, it
is also understood that if on any Quarterly Payment Date the Outstanding
Principal Balance of the Loan Tranches relating to the Relevant Issuer Notes is
increased by an amount, the Notional Amount of the Swap Transaction shall
increase by such amount.

                                      8
<PAGE>

Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.

Yours faithfully


Northern Rock plc

By:


Name:
Title:



Confirmed as of the date first written:

Granite Finance Funding 2 Limited

By:


Name:
Title:



                                      9
<PAGE>

                                                             Execution Version

                                                       (Basis Rate Swap 2/17B)

From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

Attention:       Swaps Administration

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London
                 EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007

Dear Sirs

Re: Basis Rate Swap Transaction No. 2/17B Confirmation relating to the Relevant
Issuer Notes

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto).

As used in this Confirmation:

Note Payment Date means any Note Payment Date (as defined in the Relevant Issuer
Notes) on which interest is payable under the Relevant Issuer Notes.

<PAGE>

Relevant Issuer Notes means the Notes from time to time issued by any Funding 2
Issuer on or after the Effective Date with Note Payment Dates scheduled to fall
(subject to adjustment in accordance with any applicable business day convention
on 17 February, 17 May, 17 August and 17 November of any year (Quarterly Payment
Dates) and any Notes from time to time issued by any Funding 2 Issuer on or
after the Effective Date with monthly Note Payment Dates where the rate of
interest applicable to the Loan Tranche(s) relating to such Notes is scheduled
to be reset (subject to adjustment in accordance with any applicable business
day convention) on 17 February, 17 May, 17 August and 17 November of any year;
except that Relevant Issuer Notes shall not include any Notes in respect of
which a Step-Up Date has occurred on or before the immediately preceding Note
Payment Date or a Pass-Through Trigger Event has occurred.

 1       The terms of the particular Swap Transaction to which this Confirmation
         relates are as follows:

Party A:                                        Northern Rock plc.

Party B:                                        Granite Finance Funding 2
                                                Limited.

Trade Date:                                     17 May 2007.

Effective Date:                                 23 May 2007.

Termination Date:                               The Final Maturity Date of the
                                                last remaining Relevant Issuer
                                                Notes outstanding from time to
                                                time.

Period End Dates:                               The seventeenth day of each
                                                calendar month during the Term
                                                from, and including, 17 June
                                                2007 to, but excluding, the
                                                Termination Date, subject to
                                                adjustment with the Following
                                                Business Day Convention, and the
                                                Termination Date (each a Period
                                                End Date).

Notional Amount:                                On any Period End Date which is
                                                also a Quarterly Payment Date,
                                                an amount in GBP equal to the
                                                aggregate Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes on the immediately
                                                preceding Quarterly Payment
                                                Date; plus, the aggregate
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes made
                                                in the period from (and
                                                excluding) the immediately
                                                preceding Quarterly Payment Date
                                                to (and excluding) such Period
                                                End Date (which for the
                                                avoidance of doubt will

                                      2
<PAGE>

                                                be each Increased OPB arising
                                                during such period); less, an
                                                amount equal to "x" multiplied
                                                by the balance of the Principal
                                                Deficiency Ledger on the
                                                immediately preceding Quarterly
                                                Payment Date where "x" is a
                                                percentage (determined by the
                                                Calculation Agent to be the
                                                portion of the Principal
                                                Deficiency Ledger attributable
                                                to the Relevant Issuer Notes).
                                                It is understood that the
                                                Notional Amount on any Quarterly
                                                Payment Date shall be determined
                                                after any reduction of the
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes that
                                                may occur on such date.

                                                With respect to any Period End
                                                Date that is not a Quarterly
                                                Payment Date, the Notional
                                                Amount shall be the Notional
                                                Amount for the immediately
                                                preceding Quarterly Payment Date
                                                determined in the manner
                                                described above or where there
                                                has been no Quarterly Payment
                                                Date, the issue date of the
                                                Relevant Issuer Notes.

                                                The Notional Amount in respect
                                                of each Period End Date shall be
                                                notified to the Calculation
                                                Agent by the Cash Manager
                                                pursuant to paragraph 1(a) of
                                                Schedule 2 to the Cash
                                                Management Agreement.

A.       Floating Payments

Floating Amounts I:

         Floating Rate Payer I:                 Party A.

         Floating Rate Payer I                  GBP-LIBOR-BBA.

         Floating Rate Option:


                                      3
<PAGE>

         Floating Rate Payer I                  Three months; except in respect
         Designated Maturity:                   of the initial Calculation
                                                Period for which Linear
                                                Interpolation is applicable and
                                                in respect of which the Linear
                                                Interpolation shall be applied
                                                by reference to the one month
                                                and two month rates.

         Floating Rate Payer I Spread:          Zero per cent. per annum.

         Floating Rate Payer I                  Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer I                  The first day of each
         Reset Dates:                           Calculation Period; provided
                                                however, that in respect of
                                                every Calculation Period that
                                                does not start on a Quarterly
                                                Payment Date, the Floating Rate
                                                in effect for such Calculation
                                                Period shall be the Floating
                                                Rate for the immediately
                                                preceding Calculation Period.

         Floating Rate Payer I Payment Dates:   With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following Business Day
                                                Convention.

Floating Amounts II:

         Floating Rate Payer II:                Party B.

         Floating Rate Payer II                 GBP-LIBOR-BBA.
         Floating Rate Option:

         Floating Rate Payer II                 One month.
         Designated Maturity:

         Floating Rate Payer II                 Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer II                 The first day of each
         Reset Dates:                           Calculation Period.

         Floating Rate Payer II Payment Dates:  With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following

                                      4
<PAGE>

                                                Business Day Convention.

Calculation Agent:                              Party A.


B.       Account Details:

Payments to Floating Rate Payer I:

Account for Payments in GBP:                    Northern Rock plc
                                                Northern Rock Group Treasury
                                                30-00-59

                                                Granite Finance Funding 2
                                                Limited
                                                Basis Swap 2/17B

Payments to Floating Rate Payer II:

Account for Payments in GBP:                    Northern Rock plc
                                                Granite Finance Funding 2
                                                Limited
                                                Account Number: 20070228
                                                Sort Code:      30-00-59
                                                Reference:      10016

C.       Notice Details:

Floating Rate Payer I:                          Northern Rock plc

         Address:                               Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      0191 279 4694

         Attention:                             Treasury Settlements Manager

Floating Rate Payer II:                         Granite Finance Funding 2
                                                Limited

         Address:                               Fifth Floor
                                                100 Wood Street
                                                London
                                                EC2V 7EX

With a copy to:                                 Northern Rock plc
                                                Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      +44 191 279 4929


                                      5
<PAGE>

         Attention:                             Andy McClean

And with a copy to the                          The Bank of New York
Funding 2 Security Trustee:

         Address:                               One Canada Square
                                                48th Floor
                                                London
                                                E14 5AL

         Facsimile Number:                      020 7964 6399

         Attention:                             Global Structured Finance
                                                (Corporate Trust)

D.       Offices:                               The Office of Party A for each
                                                of the Transactions evidenced
                                                by this Confirmation is London.

E.       Further Issue Amounts

         If on any date during a Calculation Period (other than a Quarterly
         Payment Date) (an Increased OPB Date), as a consequence of the issue of
         Relevant Issuer Notes during such Calculation Period, the aggregate
         Outstanding Principal Balance of the Loan Tranches relating to the
         Relevant Issuer Notes increases, (the amount of such increase being an
         Increased OPB), a further Transaction (a Further Issue Transaction)
         shall be deemed to have occurred in respect of such Increased OPB on
         terms identical to those set out above in respect of the Swap
         Transaction, except as modified below.

         Notional Amount:                       The Notional Amount of a Further
                                                Issue Transaction shall be an
                                                amount equal to the relevant
                                                Increased OPB (the Further Issue
                                                Notional Amount).

         Effective Date:                        The Effective Date of a
                                                Further Issue Transaction (the
                                                Further Issue Effective Date)
                                                shall be the relevant Increased
                                                OPB Date.

         Termination Date:                      The Termination Date of a
                                                Further Issue Transaction shall
                                                be the Quarterly Payment Date
                                                immediately following the
                                                relevant Further Issue Effective
                                                Date (the Further Issue
                                                Termination Date).

         Reset Dates:                           The Reset Dates for a Further
                                                Issue Transaction shall be:

                                                (i) in respect of Party A, the
                                                Floating Rate Payer I Reset
                                                Dates, except in

                                      6
<PAGE>

                                                respect of the first Calculation
                                                Period of the Further Issue
                                                Transaction, the Reset Date for
                                                which will be the Further Issue
                                                Effective Date and, for the
                                                avoidance of doubt, the Floating
                                                Rate I applicable to any
                                                Calculation Period following the
                                                first Calculation Period shall
                                                be the Floating Rate I for such
                                                first Calculation Period; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II Reset
                                                Dates, including for the
                                                avoidance of doubt the first
                                                Calculation Period of the
                                                Further Issue Transaction.

         Floating Amounts I and II:             The Designated Maturity for a
                                                Further Issue Transaction shall
                                                be:

                                                (i) in respect of Party A, the
                                                period from, and including, the
                                                Further Issue Effective Date to,
                                                but excluding, the Further Issue
                                                Termination Date. Linear
                                                Interpolation shall apply; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II
                                                Designated Maturity.

Where any Relevant Issuer Notes are issued on terms where the Loan Tranche(s)
relating to such Notes have an initial interest rate set by reference to a rate
of interest determined by reference to a period in excess of three months (Long
First Interest Period Notes), the Calculation Agent shall, as soon as
practicable following issue, notify the parties of how payments and calculations
under this Confirmation are to be made in order to reflect such Long First
Interest Period Notes. It being understood that with effect from the beginning
of the period under the Loan Tranche(s) when the initial interest rate no longer
applies, the Notional Amount shall be increased by the Outstanding Principal
Balance of the Loan Tranche(s) relating to the Long First Interest Period Notes.

F.       Miscellaneous

                                      7
<PAGE>

         If the payment of any Floating Amount I is deferred in accordance with
         Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
         deferred (the Floating Amount I Deferred Amount) shall, subject to the
         terms of this Confirmation, be payable on the next Payment Date
         (together with interest thereon (the Floating Amount I Deferred
         Interest) at the Floating Rate Payer I Floating Rate for the relevant
         Calculation Period) and the Floating Amount I due on such Payment Date
         shall be deemed to include the Floating Amount I Deferred Amount and
         the Floating Amount I Deferred Interest.

         If the payment of any Floating Amount II is deferred in accordance with
         Part 5(h)(iii) the Agreement, then the amount so deferred (the Floating
         Amount II Deferred Amount) shall, subject to the terms of this
         Confirmation, be payable on the next Payment Date (together with
         interest thereon (the Floating Amount II Deferred Interest) at the
         Floating Rate Payer II Floating Rate for the relevant Calculation
         Period) and the Floating Amount II due on such Payment Date shall be
         deemed to include the Floating Amount II Deferred Amount and the
         Floating Amount II Deferred Interest.

For the purposes of Section 2(c) of the Agreement, any amounts owing by one
party to another party under a Further Issue Transaction on a Swap Payment Date,
shall be deemed to be amounts payable by such party in respect of the Swap
Transaction on such Payment Date and shall be netted in accordance with Section
2(c).

It is understood that on each Further Issue Termination Date the calculation of
the aggregate Outstanding Principal Balance of the Loan Tranches relating to the
Relevant Issuer Notes will include any Further Issue Notional Amount in respect
of any Further Issue Transaction which terminated on such date. In addition, it
is also understood that if on any Quarterly Payment Date the Outstanding
Principal Balance of the Loan Tranches relating to the Relevant Issuer Notes is
increased by an amount, the Notional Amount of the Swap Transaction shall
increase by such amount.

                                      8
<PAGE>

Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.

Yours faithfully


Northern Rock plc

By:


Name:
Title:



Confirmed as of the date first written:

Granite Finance Funding 2 Limited

By:


Name:
Title:

                                      9
<PAGE>

                                                             Execution Version

                                                       (Basis Rate Swap 2/17C)

From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

Attention:       Swaps Administration

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London
                 EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007

Dear Sirs

Re: Basis Rate Swap Transaction No. 2/17C Confirmation relating to the Relevant
Issuer Notes

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto).

As used in this Confirmation:

Note Payment Date means any Note Payment Date (as defined in the Relevant Issuer
Notes) on which interest is payable under the Relevant Issuer Notes.

<PAGE>

Relevant Issuer Notes means the Notes from time to time issued by any Funding 2
Issuer on or after the Effective Date with Note Payment Dates scheduled to fall
(subject to adjustment in accordance with any applicable business day convention
on 17 March, 17 June, 17 September and 17 December of any year (Quarterly
Payment Dates) and any Notes from time to time issued by any Funding 2 Issuer on
or after the Effective Date with monthly Note Payment Dates where the rate of
interest applicable to the Loan Tranche(s) relating to such Notes is scheduled
to be reset (subject to adjustment in accordance with any applicable business
day convention) on 17 March, 17 June, 17 September and 17 December of any year;
except that Relevant Issuer Notes shall not include any Notes in respect of
which a Step-Up Date has occurred on or before the immediately preceding Note
Payment Date or a Pass-Through Trigger Event has occurred.

1        The terms of the particular Swap Transaction to which this Confirmation
         relates are as follows:

Party A:                                        Northern Rock plc.

Party B:                                        Granite Finance Funding 2
                                                Limited.

Trade Date:                                     17 May 2007.

Effective Date:                                 23 May 2007.

Termination Date:                               The Final Maturity Date of the
                                                last remaining Relevant Issuer
                                                Notes outstanding from time to
                                                time.

Period End Dates:                               The seventeenth day of each
                                                calendar month during the Term
                                                from, and including, 17 June
                                                2007 to, but excluding, the
                                                Termination Date, subject to
                                                adjustment with the Following
                                                Business Day Convention, and the
                                                Termination Date (each a Period
                                                End Date).

Notional Amount:                                On any Period End Date which is
                                                also a Quarterly Payment Date,
                                                an amount in GBP equal to the
                                                aggregate Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes on the immediately
                                                preceding Quarterly Payment
                                                Date; plus, the aggregate
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes made
                                                in the period from (and
                                                excluding) the immediately
                                                preceding Quarterly Payment Date
                                                to (and excluding) such Period
                                                End Date (which for the
                                                avoidance of doubt will

                                      2
<PAGE>

                                                be each Increased OPB arising
                                                during such period); less, an
                                                amount equal to "x" multiplied
                                                by the balance of the Principal
                                                Deficiency Ledger on the
                                                immediately preceding Quarterly
                                                Payment Date where "x" is a
                                                percentage (determined by the
                                                Calculation Agent to be the
                                                portion of the Principal
                                                Deficiency Ledger attributable
                                                to the Relevant Issuer Notes).
                                                It is understood that the
                                                Notional Amount on any Quarterly
                                                Payment Date shall be determined
                                                after any reduction of the
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes that
                                                may occur on such date.

                                                With respect to any Period End
                                                Date that is not a Quarterly
                                                Payment Date, the Notional
                                                Amount shall be the Notional
                                                Amount for the immediately
                                                preceding Quarterly Payment Date
                                                determined in the manner
                                                described above or where there
                                                has been no Quarterly Payment
                                                Date, the issue date of the
                                                Relevant Issuer Notes.

                                                The Notional Amount in respect
                                                of each Period End Date shall be
                                                notified to the Calculation
                                                Agent by the Cash Manager
                                                pursuant to paragraph 1(a) of
                                                Schedule 2 to the Cash
                                                Management Agreement.

A.       Floating Payments

Floating Amounts I:

         Floating Rate Payer I:                 Party A.

         Floating Rate Payer I                  GBP-LIBOR-BBA.
         Floating Rate Option:

                                      3
<PAGE>

         Floating Rate Payer I                  Three months; except in respect
         Designated Maturity:                   of the initial Calculation
                                                Period for which Linear
                                                Interpolation is applicable and
                                                in respect of which the Linear
                                                Interpolation shall be applied
                                                by reference to the one month
                                                and two month rates.

         Floating Rate Payer I Spread:          Zero per cent. per annum.

         Floating Rate Payer I                  Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer I                  The first day of each
         Reset Dates:                           Calculation Period; provided
                                                however, that in respect of
                                                every Calculation Period that
                                                does not start on a Quarterly
                                                Payment Date, the Floating Rate
                                                in effect for such Calculation
                                                Period shall be the Floating
                                                Rate for the immediately
                                                preceding Calculation Period.

         Floating Rate Payer I Payment Dates:   With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following Business Day
                                                Convention.

Floating Amounts II:

         Floating Rate Payer II:                Party B.

         Floating Rate Payer II                 GBP-LIBOR-BBA.
         Floating Rate Option:

         Floating Rate Payer II                 One month.
         Designated Maturity:

         Floating Rate Payer II                 Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer II                 The first day of each
         Reset Dates:                           Calculation Period.

         Floating Rate Payer II Payment Dates:  With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following

                                      4
<PAGE>

                                                      Business Day Convention.

Calculation Agent:                              Party A.


B.       Account Details:

Payments to Floating Rate Payer I:

Account for Payments in GBP:                    Northern Rock plc
                                                Northern Rock Group Treasury
                                                30-00-59

                                                Granite Finance Funding 2
                                                Limited
                                                Basis Swap 2/17C

Payments to Floating Rate Payer II:

Account for Payments in GBP:                    Northern Rock plc
                                                Granite Finance Funding 2
                                                Limited
                                                Account Number: 20070228
                                                Sort Code:      30-00-59
                                                Reference:      10016

C.       Notice Details:

Floating Rate Payer I:                          Northern Rock plc

         Address:                               Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      0191 279 4694

         Attention:                             Treasury Settlements Manager

Floating Rate Payer II:                         Granite Finance Funding 2
                                                Limited

         Address:                               Fifth Floor
                                                100 Wood Street
                                                London
                                                EC2V 7EX

With a copy to:                                 Northern Rock plc
                                                Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      +44 191 279 4929

                                      5
<PAGE>

         Attention:                             Andy McClean

And with a copy to the                          The Bank of New York
Funding 2 Security Trustee:

         Address:                               One Canada Square
                                                48th Floor
                                                London
                                                E14 5AL

         Facsimile Number:                      020 7964 6399

         Attention:                             Global Structured Finance
                                                (Corporate Trust)

D.       Offices:                               The Office of Party A for each
                                                of the Transactions evidenced by
                                                this Confirmation is London.

E.       Further Issue Amounts

         If on any date during a Calculation Period (other than a Quarterly
         Payment Date) (an Increased OPB Date), as a consequence of the issue of
         Relevant Issuer Notes during such Calculation Period, the aggregate
         Outstanding Principal Balance of the Loan Tranches relating to the
         Relevant Issuer Notes increases, (the amount of such increase being an
         Increased OPB), a further Transaction (a Further Issue Transaction)
         shall be deemed to have occurred in respect of such Increased OPB on
         terms identical to those set out above in respect of the Swap
         Transaction, except as modified below.

         Notional Amount:                       The Notional Amount of a Further
                                                Issue Transaction shall be an
                                                amount equal to the relevant
                                                Increased OPB (the Further Issue
                                                Notional Amount).

         Effective Date:                        The Effective Date of a Further
                                                Issue Transaction (the Further
                                                Issue Effective Date) shall be
                                                the relevant Increased OPB Date.

         Termination Date:                      The Termination Date of a
                                                Further Issue Transaction shall
                                                be the Quarterly Payment Date
                                                immediately following the
                                                relevant Further Issue
                                                Effective Date (the Further
                                                Issue Termination Date).

         Reset Dates:                           The Reset Dates for a Further
                                                Issue Transaction shall be:

                                                (i) in respect of Party A, the
                                                Floating Rate Payer I Reset
                                                Dates, except in

                                      6
<PAGE>

                                                respect of the first Calculation
                                                Period of the Further Issue
                                                Transaction, the Reset Date for
                                                which will be the Further Issue
                                                Effective Date and, for the
                                                avoidance of doubt, the Floating
                                                Rate I applicable to any
                                                Calculation Period following the
                                                first Calculation Period shall
                                                be the Floating Rate I for such
                                                first Calculation Period; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II Reset
                                                Dates, including for the
                                                avoidance of doubt the first
                                                Calculation Period of the
                                                Further Issue Transaction.

         Floating Amounts I and II:             The Designated Maturity for a
                                                Further Issue Transaction shall
                                                be:

                                                (i) in respect of Party A, the
                                                period from, and including, the
                                                Further Issue Effective Date to,
                                                but excluding, the Further Issue
                                                Termination Date. Linear
                                                Interpolation shall apply; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II
                                                Designated Maturity.

Where any Relevant Issuer Notes are issued on terms where the Loan Tranche(s)
relating to such Notes have an initial interest rate set by reference to a rate
of interest determined by reference to a period in excess of three months (Long
First Interest Period Notes), the Calculation Agent shall, as soon as
practicable following issue, notify the parties of how payments and calculations
under this Confirmation are to be made in order to reflect such Long First
Interest Period Notes. It being understood that with effect from the beginning
of the period under the Loan Tranche(s) when the initial interest rate no longer
applies, the Notional Amount shall be increased by the Outstanding Principal
Balance of the Loan Tranche(s) relating to the Long First Interest Period Notes.

F.       Miscellaneous

                                      7
<PAGE>

         If the payment of any Floating Amount I is deferred in accordance with
         Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
         deferred (the Floating Amount I Deferred Amount) shall, subject to the
         terms of this Confirmation, be payable on the next Payment Date
         (together with interest thereon (the Floating Amount I Deferred
         Interest) at the Floating Rate Payer I Floating Rate for the relevant
         Calculation Period) and the Floating Amount I due on such Payment Date
         shall be deemed to include the Floating Amount I Deferred Amount and
         the Floating Amount I Deferred Interest.

         If the payment of any Floating Amount II is deferred in accordance with
         Part 5(h)(iii) the Agreement, then the amount so deferred (the Floating
         Amount II Deferred Amount) shall, subject to the terms of this
         Confirmation, be payable on the next Payment Date (together with
         interest thereon (the Floating Amount II Deferred Interest) at the
         Floating Rate Payer II Floating Rate for the relevant Calculation
         Period) and the Floating Amount II due on such Payment Date shall be
         deemed to include the Floating Amount II Deferred Amount and the
         Floating Amount II Deferred Interest.

For the purposes of Section 2(c) of the Agreement, any amounts owing by one
party to another party under a Further Issue Transaction on a Swap Payment Date,
shall be deemed to be amounts payable by such party in respect of the Swap
Transaction on such Payment Date and shall be netted in accordance with Section
2(c).

It is understood that on each Further Issue Termination Date the calculation of
the aggregate Outstanding Principal Balance of the Loan Tranches relating to the
Relevant Issuer Notes will include any Further Issue Notional Amount in respect
of any Further Issue Transaction which terminated on such date. In addition, it
is also understood that if on any Quarterly Payment Date the Outstanding
Principal Balance of the Loan Tranches relating to the Relevant Issuer Notes is
increased by an amount, the Notional Amount of the Swap Transaction shall
increase by such amount.

                                      8
<PAGE>

Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.

Yours faithfully


Northern Rock plc

By:


Name:
Title:



Confirmed as of the date first written:

Granite Finance Funding 2 Limited

By:


Name:
Title:



                                      9
<PAGE>

                                                             Execution Version


                                                        (Basis Rate Swap 1/20)

From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007


Dear Sirs

Basis Rate Swap Transaction No. 1/20 Confirmation

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

This Confirmation amends and restates in its entirety a letter agreement (Basis
Rate Swap 1) dated 19 January 2005.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto) (the Master Definitions Schedule).

<PAGE>

Defined Terms

As used in this Confirmation:

Aggregate Funding 2 Amount means, in respect of a Monthly Date, the sum of the
Funding 2 Amount and any Further Issue Funding 2 Amounts.

Aggregate Swap Provider Amount means, in respect of a Monthly Date, the sum of
the Swap Provider Amount and any Further Issue Swap Provider Amounts.

Assignment Date has the meaning given to such term in the Master Definitions
Schedule.

Average Fixed Rate Mortgage Loan Balance means, (i) in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Fixed Rate Mortgage Loans at the start of
business on the first day of such Swap Determination Period, and (ii) in respect
of a Further Issue Determination Period, an amount equal to the sum of the
aggregate of the outstanding current balances of the Further Issue Fixed Rate
Mortgage Loans at the start of business on the first day of such Further Issue
Determination Period, in the case of both (i) and (ii) above, as notified to the
Calculation Agent by the Cash Manager in accordance with the Cash Management
Agreement.

Average Flexible Mortgage Loan Balance means, (i) in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Flexible Mortgage Loans at the start of
business on the first day of such Swap Determination Period, and (ii) in respect
of a Further Issue Determination Period, an amount equal to the sum of the
aggregate of the outstanding current balances of the Further Issue Flexible
Mortgage Loans at the start of business on the first day of such Further Issue
Determination Period, in the case of both (i) and (ii) above, as notified to the
Calculation Agent by the Cash Manager in accordance with the provisions of the
Cash Management Agreement.

Average Mortgage Loan Balance means, in respect of a Swap Determination Period,
the sum of the Average Fixed Rate Mortgage Loan Balance, the Average Variable
Rate Mortgage Loan Balance and the Average Flexible Mortgage Loan Balance.

Average Variable Rate Mortgage Loan Balance means, (i) in respect of a Swap
Determination Period, an amount equal to the sum of the aggregate of the
outstanding current balances of the Variable Rate Mortgage Loans at the start of
business on the first day of such Swap Determination Period, and (ii) in respect
of a Further Issue Determination Period, an amount equal to the sum of the
aggregate of the outstanding current balances of the Further Issue Variable Rate
Mortgage Loans at the start of business on the first day of such Further Issue
Determination Period, in the case of both (i) and (ii) above, as notified to the
Calculation Agent by the Cash Manager in accordance with the provisions of the
Cash Management Agreement.

Blended Rate means, in respect of a Swap Determination Period, a rate of
interest equal to the sum of (i) the Weighted Average Fixed Rate for such Swap
Determination Period

                                      2
<PAGE>

multiplied by the Fixed Rate Ratio for such Swap Determination Period; (ii)
the Variable Rate Swap SVR for such Swap Determination Period multiplied by
the Variable Rate Ratio for such Swap Determination Period, and (iii) the
Flexible Swap Rate for such Swap Determination Period multiplied by the
Flexible Ratio for such Swap Determination Period.

Blended Spread means, in respect of a Swap Determination Period, a percentage
equal to the sum of (i) the Fixed Rate Spread for such Swap Determination Period
multiplied by the Fixed Rate Ratio for such Swap Determination Period; (ii) the
Variable Rate Spread for such Swap Determination Period multiplied by the
Variable Rate Ratio for such Swap Determination Period, and (iii) the Flexible
Spread for such Swap Determination Period multiplied by the Flexible Ratio for
such Swap Determination Period.

Contribution Date has the meaning given to such term in the Master Definitions
Schedule.

Fixed Rate Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to fixed rates of interest set by
reference to a predetermined interest rate or series of interest rates for a
fixed period or periods or are subject to a maximum rate of interest (and charge
interest at the lesser of a variable rate and such maximum rate) for a fixed
period or periods (and shall, for the avoidance of doubt, exclude Variable Rate
Mortgage Loans and Flexible Mortgage Loans save for Flexible Mortgage Loans
which are, at the relevant time, subject to such fixed rates of interest or such
maximum rates of interest arrangements and shall also exclude any Fixed Rate
Mortgage Loans which have become Re-Fixed Mortgage Loans during the immediately
preceding Swap Determination Period).

Fixed Rate Ratio means, (i) in respect of a Swap Determination Period, the
Average Fixed Rate Mortgage Loan Balance divided by the Average Mortgage Loan
Balance, and (ii) in respect of a Further Issue Determination Period, the
Further Issue Average Fixed Rate Mortgage Loan Balance divided by the Further
Issue Average Mortgage Loan Balance.

Fixed Rate Spread means 0.21 per cent. per annum or such other percentage amount
as Party A may notify to Party B and the Funding 2 Security Trustee in writing
from time to time in accordance with paragraph 4 of this Confirmation.

Flexible Mortgage Loans means those Mortgage Loans within the Mortgage Portfolio
that typically incorporate features that give the borrower options (which may be
subject to certain conditions) to, among other things, make further drawings on
the mortgage loan account, and/or to overpay or underpay interest and principal
in a given month and/or to take a payment holiday (and shall, for the avoidance
of doubt, exclude: (i) Flexible Mortgage Loans which are, at the relevant time,
subject to fixed rates of interest set by reference to a pre-determined interest
rate or series of interest rates for a fixed period or periods are subject to a
maximum rate of interest (and charge interest at the lesser of a variable rate
and such maximum rate) for a fixed period or periods (which

                                      3
<PAGE>

shall, for such fixed period, constitute Fixed Mortgage Loans); and (ii)
Variable Rate Mortgage Loans).

Flexible Ratio means, (i) in respect of a Swap Determination Period, the Average
Flexible Mortgage Loan Balance divided by the Average Mortgage Loan Balance, and
(ii) in respect of a Further Issue Determination Period, the Further Issue
Average Flexible Mortgage Loan Balance divided by the Further Issue Average
Mortgage Loan Balance.

Flexible Spread means 1.55 per cent. per annum or such other percentage amount
as Party A may notify to Party B and the Funding 2 Security Trustee in writing
from time to time in accordance with paragraph 4 of this Confirmation.

Flexible Swap Rate means, (i) in respect of a Swap Determination Period, a rate
of interest equal to the Variable Rate Swap SVR for such Swap Determination
Period minus the weighted average of the discounts charged to borrowers of
Flexible Mortgage Loans as at the start of business on the first day of such
Swap Determination Period, and (ii) in respect of a Further Issue Determination
Period, a rate of interest equal to the Variable Rate Swap SVR for such Further
Issue Determination Period minus the weighted average of the discounts charged
to borrowers of Flexible Mortgage Loans in the New Mortgage Portfolio as at the
start of business on the first day of such Further Issue Determination Period,
in the case of both (i) and (ii), the weighted average being calculated by
reference to the then outstanding current balances of such Flexible Mortgage
Loans as at that date, as determined by the Cash Manager in accordance with the
provisions of the Cash Management Agreement.

Funding 2 means Granite Finance Funding 2 Limited.

Funding 2 Amount means, in respect of a Monthly Date, an amount in Sterling
equal to the amount produced by applying the Blended Rate for the Swap
Determination Period ending immediately prior to such Monthly Date to the
Notional Amount in respect of such Swap Determination Period, such amount to be
calculated by the Calculation Agent on the basis of the number of days in such
Swap Determination Period, divided by 360 (the number of days to be calculated
on the basis of a year of 360 days with twelve 30-day months, without regard to
the date of the first day or last day of the Swap Determination Period).

Funding 2 Programme Date means 19 January 2005.

Funding 2 Share has the meaning given to such term in the Master Definitions
Schedule.

Further Issue means an increase in the Funding 2 Share on a Further Issue Date;
the amount of such increase for a particular Further Issue Date being a Further
Issue Amount.

Further Issue Average Fixed Rate Mortgage Loan Balance means, in respect of a
Further Issue Determination Period, an amount equal to the sum of the aggregate
of the outstanding current balances of the Fixed Rate Mortgage Loans in the New
Mortgage Portfolio as at the first day of such Further Issue Determination
Period (after taking

                                      4
<PAGE>

account of any transfer of a New Mortgage Portfolio to the Mortgages Trustee
on such date) as notified to the Calculation Agent by the Cash Manager in
accordance with the Cash Management Agreement.

Further Issue Average Flexible Mortgage Loan Balance means, in respect of a
Further Issue Determination Period, an amount equal to the sum of the aggregate
of the outstanding current balances of the Flexible Mortgage Loans in the New
Mortgage Portfolio as at the first day of such Further Issue Determination
Period (after taking account of any transfer of a New Mortgage Portfolio to the
Mortgages Trustee on such date) as notified to the Calculation Agent by the Cash
Manager in accordance with the provisions of the Cash Management Agreement.

Further Issue Average Mortgage Loan Balance means, in respect of a Further Issue
Determination Period, the sum of the Further Issue Average Fixed Rate Mortgage
Loan Balance, the Further Issue Average Variable Rate Mortgage Loan Balance and
the Further Issue Average Flexible Mortgage Loan Balance.

Further Issue Average Variable Rate Mortgage Loan Balance means, in respect of a
Further Issue Determination Period, an amount equal to the sum of the aggregate
of the outstanding current balances of the Variable Rate Mortgage Loans in the
New Mortgage Loan Portfolio as at the first day of such Further Issue
Determination Period (after taking account of any transfer of a New Mortgage
Portfolio to the Mortgages Trustee on such date) as notified to the Calculation
Agent by the Cash Manager in accordance with the provisions of the Cash
Management Agreement.

Further Issue Blended Rate means, in respect of a Further Issue Determination
Period, a rate of interest equal to the sum of (i) the Weighted Average Fixed
Rate for such Further Issue Determination Period multiplied by the Fixed Rate
Ratio for such Further Issue Determination Period; (ii) the Variable Rate Swap
SVR for such Further Issue Determination Period multiplied by the Variable Rate
Ratio for such Further Issue Determination Period, and (iii) the Flexible Swap
Rate for such Further Issue Determination Period multiplied by the Flexible
Ratio for such Further Issue Determination Period.

Further Issue Blended Spread means in respect of a Further Issue Determination
Period, a percentage equal to the sum of (i) the Fixed Rate Spread for such
Further Issue Determination Period multiplied by the Fixed Rate Ratio for such
Further Issue Determination Period; (ii) the Variable Rate Spread for such
Further Issue Determination Period multiplied by the Variable Rate Ratio for
such Further Issue Determination Period, and (iii) the Flexible Spread for such
Further Issue Determination Period multiplied by the Flexible Ratio for such
Further Issue Determination Period.

Further Issue Date means a Contribution Date or an Assignment Date on which Loan
Tranches with Loan Payment Dates scheduled to fall on the twentieth day of any
month are advanced to Funding 2 under the Global Intercompany Loan Agreement,
and which, as the case may be and, for the avoidance of doubt, does not include
any Distribution

                                      5
<PAGE>

Date regardless of whether or not such date is also a Contribution Date or an
Assignment Date.

Further Issue Determination Period means a period commencing on (and including)
a Further Issue Date and ending on (but excluding) the next occurring Swap
Determination Date.

Further Issue Fixed Rate Mortgage Loans means in respect of a Further Issue,
those Fixed Rate Mortgage Loans comprised in the Further Issue Mortgage
Portfolio relating to such Further Issue.

Further Issue Flexible Mortgage Loans means in respect of a Further Issue, those
Flexible Mortgage Loans comprised in the Further Issue Mortgage Portfolio
relating to such Further Issue.

Further Issue Funding 2 Amount means, in respect of a Further Issue
Determination Period, an amount in Sterling equal to the amount produced by
applying (i) in respect of each Contribution Date which is not also an
Assignment Date, the Blended Rate for the Swap Determination Period in which
such Further Issue Determination Period falls, and (ii) in respect of each
Contribution Date which is also an Assignment Date, the Further Issue Blended
Rate for such Further Issue Determination Period, to the Further Issue Notional
Amount, such amount to be calculated by the Calculation Agent on the basis of
the number of days in such Further Issue Determination Period, divided by 360
(the number of days to be calculated on the basis of a year of 360 days with 12
30-day months, without regard to the date of the first day or last day of the
Further Issue Determination Period). For the avoidance of doubt, there will be a
Further Issue Funding 2 Amount in respect of each Further Issue Date that occurs
during a Swap Determination Date.

Further Issue Mortgage Portfolio means in respect of a Further Issue, the New
Mortgage Portfolio (if any) that is transferred to the Mortgages Trustee on the
relevant Assignment Date.

Further Issue Notional Amount means in respect of a Further Issue, the Further
Issue Amount relating to such Further Issue.

Further Issue Swap Provider Amount means in respect of a Monthly Date and a
Further Issue Determination Period which ends immediately prior to such Monthly
Date, an amount in Sterling, which is equal to the amount produced by applying,
a rate equal to One Month LIBOR applicable to the Monthly Determination Period
in which such Further Issue Determination Period falls, plus (i) in respect of
each Contribution Date which is not also the Assignment Date with respect to
such Contribution Date, the Blended Spread for the Swap Determination Period in
which such Further Issue Determination Period falls, and (ii) in respect of each
Contribution Date which is the Assignment Date with respect to such Contribution
Date, the Further Issue Blended Spread for the Further Issue Determination
Period, to the Further Issue Notional Amount, such amount to be calculated by
the Calculation Agent on the basis of the actual number

                                      6
<PAGE>

of days in such Further Issue Determination Period, divided by 365. For the
avoidance of doubt, there will be a Further Issue Swap Provider Amount in
respect of each Further Issue Date that occurs during a Swap Determination
Date.

Further Issuer Variable Rate Mortgage Loans means in respect of a Further Issue,
those Variable Rate Mortgage Loans comprised in the Further Issue Mortgage
Portfolio relating to such Further Issue.

Loan Tranche has the meaning given to such term in the Master Definitions
Schedule.

Monthly Date means the twentieth day of each calendar month from, and including
20 February 2005 to, but excluding, the Termination Date, subject to adjustment
in accordance with the Following Business Day Convention. It is understood that
payments to be made on any given payment date referred to under "Payments" below
shall be those payments relating to the Swap Determination Period and/or Monthly
Determination Period and any Further Issue Determination Period immediately
preceding such Monthly Date.

Monthly Determination Period means each period from, and including, one Monthly
Date to, but excluding, the next Monthly Date during the Term of the Transaction
except that (a) the initial Monthly Determination Period will commence on, and
include, the Effective Date and (b) the final Monthly Determination Period will
end on, but exclude, the Termination Date.

Mortgage Conditions has the meaning given to such term in the Master Definitions
Schedule.

Mortgage Portfolio has the meaning given to such term in the Master Definitions
Schedule.

Mortgages Trustee has the meaning given to such term in the Master Definitions
Schedule.

New Mortgage Portfolio has the meaning given to such term in the Master
Definitions Schedule.

Notes has the meaning given to such term in the Master Definitions Schedule.

Notional Amount means, in respect of any Swap Determination Period an amount in
Sterling equal to (a) the Funding 2 Share as determined on the first day of such
Swap Determination Period (multiplied by the Relevant Fraction), minus (b) the
aggregate outstanding principal balance of any Fixed Rate Mortgage Loans which
have become Re-Fixed Mortgage Loans at any time from (and including) the Funding
2 Programme Date to (but including) the first day of such Swap Determination
Period (multiplied by the Relevant Fraction). For the avoidance of doubt such
amount shall be adjusted for any increase or reduction in the Funding 2 Share on
such date (which shall mean that any Further Issue Amounts arising during a Swap
Determination Period shall be added to such amount on the first day of the next
Swap Determination Period). For the purposes of

                                      7
<PAGE>

determining the Swap Provider Amount, the Notional Amount for a Monthly
Determination Period shall be the Notional Amount for the Swap Determination
Period in which the Monthly Determination Period commences.

One Month LIBOR means, in respect of a Monthly Determination Period,
GBP-LIBOR-BBA, where the Reset Date is the first day of the relevant Monthly
Determination Period and the Designated Maturity is one month; except for the
first Monthly Determination Period for which Linear Interpolation is applicable
and in respect of which the Linear Interpolation shall be applied by reference
to the 2 weeks and 1 month rates.

Outstanding Principal Balance has the meaning given to such term in the Master
Definitions Schedule.

Reference Lenders means Abbey National PLC, Alliance & Leicester plc, Bradford
and Bingley plc, HBOS plc, Lloyds TSB Bank plc, National Westminster Bank Plc
and Woolwich plc (or their respective successors) and such additional or
replacement residential mortgage lenders as shall be determined by the
Calculation Agent and Reference Lender means any one of them.

Re-Fixed Mortgage Loans has the meaning given to such term in the Master
Definitions Schedule.

Relevant Fraction means, as at the beginning of a Swap Determination Period, a
fraction, the numerator of which is the aggregate principal amount outstanding
under Notes having a Note Payment Date scheduled to fall on the twentieth day of
any month (adjusted by the Calculation Agent to reflect the amount of Principal
Deficiency Ledger attributable to such Notes) and the denominator of which is
the aggregate principal amount outstanding under all Notes less the Principal
Deficiency Ledger.

Swap Determination Date means the first Business Day of any calendar month
occurring during the period commencing on the Funding 2 Programme Date and
ending on the Termination Date.

Swap Determination Period means the period from (and including) the Funding 2
Programme Date to (but excluding) the first Swap Determination Date and
thereafter from (and including) a Swap Determination Date to (but excluding) the
next Swap Determination Date.

Swap Provider Amount means, in respect of a Monthly Date and the Monthly
Determination Period which ends immediately prior to such Monthly Date, an
amount in Sterling which is equal to the amount produced by applying, a rate
equal to One Month LIBOR applicable to such Monthly Determination Period plus
the Blended Spread for the Swap Determination Period ending immediately
preceding the Monthly Date, to the Notional Amount, such amount to be calculated
by the Calculation Agent on the basis of the actual number of days in such
Monthly Determination Period, divided by 365.

Variable Rate Mortgage Loans means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to a rate of interest which at any
time may

                                      8
<PAGE>

be varied in accordance with the relevant Mortgage Conditions (and shall, for
the avoidance of doubt, exclude Fixed Rate Mortgage Loans and Flexible
Mortgage Loans).

Variable Rate Ratio means, in respect of a Swap Determination Period, the
Average Variable Rate Mortgage Loan Balance divided by the Average Mortgage Loan
Balance, and in respect of a Further Issue Determination Period, the Further
Issue Average Variable Rate Mortgage Loan Balance divided by the Further Issue
Average Mortgage Loan Balance.

Variable Rate Spread means 1.75 per cent. per annum or such other percentage
amount as Party A may notify to Party B and the Funding 2 Security Trustee in
writing from time to time in accordance with paragraph 4 of this Confirmation.

Variable Rate Swap SVR means, (i) in respect of a Swap Determination Period, the
rate equal to the average of the standard variable rates or their equivalent
charged to existing borrowers on residential mortgage loans as published from
time to time as at the start of business on the first day of such Swap
Determination Period, and (ii) in respect of a Further Issue Determination
Period, the rate equal to the average of the standard variable rates or their
equivalent charged to existing borrowers on residential mortgage loans as
published from time to time as at the start of business on the first day of such
Further Issue Determination Period, in the case of both (i) and (ii) above,
after excluding the highest and lowest rate, of the Reference Lenders, as
determined by the Cash Manager in good faith and notified to the Calculation
Agent from time to time in accordance with the Cash Management Agreement.

Weighted Average Fixed Rate means, (i) in respect of a Swap Determination
Period, the rate equal to the weighted average of the fixed rates of interest
charged to borrowers of Fixed Rate Mortgage Loans as at the start of business on
the first day of such Swap Determination Period, and (ii) in respect of a
Further Issue Determination Period, the rate equal to the weighted average of
the fixed rates of interest charged to borrowers of Fixed Rate Mortgage Loans in
the New Mortgage Portfolio as at the start of business on the first day of such
Further Issue Determination Period, in the case of both (i) and (ii) above, the
weighted average being calculated by reference to the then outstanding current
balances of such Fixed Rate Mortgage Loans as at that date, as notified by the
Cash Manager to the Calculation Agent in accordance with the provisions of the
Cash Management Agreement.

 1.      The terms of the Transaction to which this Confirmation relates are as
         follows:

         Party A:                               Northern Rock plc.

         Party B:                               Granite Finance Funding 2
                                                Limited.

         Trade Date:                            19 January 2005.

         Effective Date:                        The Funding 2 Programme Date.


                                      9
<PAGE>

Termination Date: One calendar month following the reduction in the Sterling
amount of the Funding 2 Share to zero.

         Business Days:             London.

         Calculation of Amounts:    On the Swap Determination Date immediately
                                    preceding each Monthly Date, the
                                    Calculation Agent shall calculate the
                                    Aggregate Swap Provider Amount for such
                                    Monthly Date and the Aggregate Funding 2
                                    Amount for such Monthly Date, and
                                    forthwith notify Party A, Party B, the
                                    Cash Manager and the Issuer Cash Manager
                                    of the amounts so determined and of the
                                    net amount determined as set out below.

         Payments:                  If in relation to any Monthly Date:

                                    (i)      the Aggregate Swap Provider
                                             Amount for such Monthly Date
                                             exceeds the Aggregate Funding 2
                                             Amount for such Monthly Date,
                                             Party A shall pay the amount of
                                             such excess to Party B on the
                                             seventeenth day of the calendar
                                             month (subject to adjustment in
                                             accordance with the Following
                                             Business Day Convention) in which
                                             the Monthly Date falls;

                                    (ii)     the Aggregate Funding 2 Amount
                                             for such Monthly Date exceeds the
                                             Aggregate Swap Provider Amount
                                             for such Monthly Date, Party B
                                             shall pay the amount of such
                                             excess to Party A on the
                                             seventeenth day of the calendar
                                             month (subject to adjustment in
                                             accordance with the Following
                                             Business Day Convention) in which
                                             the Monthly Date falls;

                                    (iii)    the Aggregate Swap Provider
                                             Amount for such Monthly Date is
                                             equal to the Aggregate Funding 2
                                             Amount for such Monthly Date, no
                                             amount shall be due and payable
                                             by either party hereunder in
                                             relation to such Monthly Date
                                             with respect to the Aggregate
                                             Swap Provider Amount and the
                                             Aggregate Funding 2 Amount.

         Calculation Agent:         Northern Rock plc acting in its capacity as
                                    Administrator pursuant to the
                                    Administration Agreement or as Cash Manager
                                    pursuant to the Cash Management Agreement,
                                    as the case may be.

                                      10
<PAGE>

 2.      Account Details:

         Payments to Party A:    Bank:          Northern Rock plc
                                 Account Name:  Northern Rock Group
                                                Treasury
                                 Sort Code:     30-00-59
                                 Reference:     Granite Finance Funding 2
                                                Limited

         Payments to Party B:    Bank:          Northern Rock plc
                                 Account Name:  Granite Finance Funding 2
                                                Limited
                                 Account Number:20070228
                                 Sort Code:     30-00-59
                                 Reference:     10016

3.       Notice Details:

         Party A:                Northern Rock plc

         Address:                Northern Rock House
                                 Gosforth
                                 Newcastle upon Tyne
                                 NE3 4PL

         Facsimile Number:       0191-279-4694

         Attention:              Treasury Settlements Manager

         Party B:                Granite Finance Funding 2 Limited

         Address:                Fifth Floor
                                 100 Wood Street
                                 London
                                 EC2V 7EX

         With a copy to:         Northern Rock plc
                                 Northern Rock House
                                 Gosforth
                                 Newcastle upon Tyne
                                 NE3 4PL

         Facsimile Number:       0191 279 4929

         Attention:              Andy McClean

         With a copy to the
         Funding 2 Security Trustee: The Bank of New York

                                      11
<PAGE>

         Address:                One Canada Square
                                 48th Floor
                                 London
                                 E14 5AL

         Facsimile Number:       020 7964 6399

         Attention:              Global Structured Finance
                                 (Corporate Trust)

 4.      Miscellaneous

(a)      Notwithstanding any other provision of this Confirmation, if on any
         date Funding 2 draws down a new Loan Tranche or increases the
         Outstanding Principal Balance under an existing Loan Tranche, then to
         reflect prevailing market conditions, provided, the Rating Agencies
         have confirmed that any adjustments carried out in accordance with
         this provision will not result in a lowering, qualification or
         withdrawal of the Notes issued by any Funding 2 Issuer to lower than
         the rating of such Notes immediately prior to such adjustment, Party
         A may, by giving notice in writing to Party B and to the Funding 2
         Security Trustee on such date, make any adjustments it deems
         appropriate to the Fixed Rate Spread, the Flexible Spread and the
         Variable Rate Spread (or any of them) for the Swap Determination
         Period in which such date occurs and for all Swap Determination
         Periods occurring after such date (subject always to any further
         adjustment pursuant to this paragraph 4).

(b)      If the payment of any Aggregate Swap Provider Amount is deferred in
         accordance with Part 5(h)(iii) of the Schedule to the Agreement, then
         the amount so deferred (the Swap Provider Deferred Amount) shall,
         subject to the terms of this Confirmation, be payable on the next
         date on which a payment is to be made under "Payments" above
         (together with interest thereon (the Swap Provider Deferred Interest)
         at the Blended Spread for the relevant Swap Determination Period) and
         the Swap Provider Amount due on such next date on which a payment is
         to be made under "Payments" above shall be deemed to include the Swap
         Provider Deferred Amount and the Swap Provider Deferred Interest.

         If the payment of any Aggregate Funding 2 Amount is deferred in
         accordance with Part 5(h)(iii) the Agreement, then the amount so
         deferred (the Funding 2 Deferred Amount) shall, subject to the terms of
         this Confirmation, be payable on the next date on which a payment is to
         be made under "Payments" above (together with interest thereon (the
         Funding 2 Deferred Interest) at the Blended Rate for the relevant Swap
         Determination Period) and the Aggregate Funding 2 Amount due on such
         next date on which a payment is to be made under "Payments" above shall
         be deemed to include the Funding 2 Deferred Amount and the Funding 2
         Deferred Interest.

Yours faithfully

                                      12
<PAGE>


Northern Rock plc

By:


Name:

Title:



Confirmed as of the date first written:

Granite Finance Funding 2 Limited

By:


Name:

Title:





                                      13
<PAGE>

                                                             Execution Version

                                                       (Basis Rate Swap 2/20A)


From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

Attention:       Swaps Administration

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London
                 EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007

Dear Sirs

Re: Basis Rate Swap Transaction No. 2/20A Confirmation relating to the Relevant
Issuer Notes

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

This Confirmation amends and restates in its entirety a letter agreement (Basis
Rate Swap 2A) dated 19 January 2005.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the
meanings given to them in 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 may be amended, restated, varied,
supplemented and/or otherwise modified from time to time with the consent of
the parties hereto).

As used in this Confirmation:

<PAGE>

Note Payment Date means any Note Payment Date (as defined in the Relevant Issuer
Notes) on which interest is payable under the Relevant Issuer Notes.

Relevant Issuer Notes means the Notes from time to time issued by any Funding 2
Issuer on or after the Effective Date with Note Payment Dates scheduled to fall
(subject to adjustment in accordance with any applicable business day convention
on 20 January, 20 April, 20 July and 20 October of any year (Quarterly Payment
Dates) and any Notes from time to time issued by any Funding 2 Issuer on or
after the Effective Date with monthly Note Payment Dates where the rate of
interest applicable to the Loan Tranche(s) relating to such Notes is scheduled
to be reset (subject to adjustment in accordance with any applicable business
day convention) on 20 January, 20 April, 20 July and 20 October of any year;
except that Relevant Issuer Notes shall not include any Notes in respect of
which a Step-Up Date has occurred on or before the immediately preceding Note
Payment Date or a Pass-Through Trigger Event has occurred.

 1       The terms of the particular Swap Transaction to which this Confirmation
         relates are as follows:

Party A:                                        Northern Rock plc.

Party B:                                        Granite Finance Funding 2
                                                Limited.

Trade Date:                                     19 January 2005.

Effective Date:                                 19 January 2005.

Termination Date:                               The Final Maturity Date of the
                                                last remaining Relevant Issuer
                                                Notes outstanding from time to
                                                time.

Period End Dates:                               The twentieth day of each
                                                calendar month during the Term
                                                from, and including, 20 February
                                                2005 to, but excluding, the
                                                Termination Date, subject to
                                                adjustment with the Following
                                                Business Day Convention, and the
                                                Termination Date (each a Period
                                                End Date).

Notional Amount:                                On any Period End Date which is
                                                also a Quarterly Payment Date,
                                                an amount in GBP equal to the
                                                aggregate Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes on the immediately
                                                preceding Quarterly Payment
                                                Date; plus, the aggregate
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes made
                                                in the period from (and
                                                excluding) the immediately

                                      2
<PAGE>

                                                preceding Quarterly Payment Date
                                                to (and excluding) such Period
                                                End Date (which for the
                                                avoidance of doubt will be each
                                                Increased OPB arising during
                                                such period); less, an amount
                                                equal to "x" multiplied by the
                                                balance of the Principal
                                                Deficiency Ledger on the
                                                immediately preceding Quarterly
                                                Payment Date where "x" is a
                                                percentage (determined by the
                                                Calculation Agent to be the
                                                portion of the Principal
                                                Deficiency Ledger attributable
                                                to the Relevant Issuer Notes).
                                                It is understood that the
                                                Notional Amount on any
                                                Quarterly Payment Date shall be
                                                determined after any reduction
                                                of the Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes that may occur on such
                                                date.

                                                With respect to any Period End
                                                Date that is not a Quarterly
                                                Payment Date, the Notional
                                                Amount shall be the Notional
                                                Amount for the immediately
                                                preceding Quarterly Payment
                                                Date determined in the manner
                                                described above or where there
                                                has been no Quarterly Payment
                                                Date, the issue date of the
                                                Relevant Issuer Notes.

                                                The Notional Amount in respect
                                                of each Period End Date shall be
                                                notified to the Calculation
                                                Agent by the Cash Manager
                                                pursuant to paragraph 1(a) of
                                                Schedule 2 to the Cash
                                                Management Agreement.

A.       Floating Payments

Floating Amounts I:

         Floating Rate Payer I:                 Party A.

         Floating Rate Payer I                  GBP-LIBOR-BBA.
         Floating Rate Option:

                                      3
<PAGE>

         Floating Rate Payer I                  Three months; except in respect
         Designated Maturity:                   of the initial Calculation
                                                Period for which Linear
                                                Interpolation is applicable and
                                                in respect of which the Linear
                                                Interpolation shall be applied
                                                by reference to the one month
                                                and two month rates.

         Floating Rate Payer I Spread:          Zero per cent. per annum.

         Floating Rate Payer I                  Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer I                  The first day of each
         Reset Dates:                           Calculation Period; provided
                                                however, that in respect of
                                                every Calculation Period that
                                                does not start on a Quarterly
                                                Payment Date, the Floating Rate
                                                in effect for such Calculation
                                                Period shall be the Floating
                                                Rate for the immediately
                                                preceding Calculation Period.

         Floating Rate Payer I Payment Dates:   With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following Business Day
                                                Convention.

Floating Amounts II:

         Floating Rate Payer II:                Party B.

         Floating Rate Payer II                 GBP-LIBOR-BBA.
         Floating Rate Option:

         Floating Rate Payer II                 One month.
         Designated Maturity:

         Floating Rate Payer II                 Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer II                 The first day of each
         Reset Dates:                           Calculation Period.

         Floating Rate Payer II Payment Dates:  With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following

                                      4
<PAGE>

                                                      Business Day Convention.

Calculation Agent:                              Party A.


B.       Account Details:

Payments to Floating Rate Payer I:

Account for Payments in GBP:                    Northern Rock plc
                                                Northern Rock Group Treasury
                                                30-00-59

                                                Granite Finance Funding 2
                                                Limited
                                                Basis Swap 2/20A

Payments to Floating Rate Payer II:

Account for Payments in GBP:                    Northern Rock plc
                                                Granite Finance Funding 2
                                                Limited
                                                Account Number: 20070228
                                                Sort Code:      30-00-59
                                                Reference:      10016

C.       Notice Details:

Floating Rate Payer I:                          Northern Rock plc

         Address:                               Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      0191 279 4694

         Attention:                             Treasury Settlements Manager

Floating Rate Payer II:                         Granite Finance Funding 2
                                                Limited

         Address:                               Fifth Floor
                                                100 Wood Street
                                                London
                                                EC2V 7EX

With a copy to:                                 Northern Rock plc
                                                Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      +44 191 279 4929

                                      5
<PAGE>

         Attention:                             Andy McClean

And with a copy to the                          The Bank of New York
Funding 2 Security Trustee:

         Address:                               One Canada Square
                                                48th Floor
                                                London
                                                E14 5AL

         Facsimile Number:                      020 7964 6399

         Attention:                             Global Structured Finance
                                                (Corporate Trust)

D.       Offices:                               The Office of Party A for each
                                                of the Transactions evidenced by
                                                this Confirmation is London.

E.       Further Issue Amounts

         If on any date during a Calculation Period (other than a Quarterly
         Payment Date) (an Increased OPB Date), as a consequence of the issue of
         Relevant Issuer Notes during such Calculation Period, the aggregate
         Outstanding Principal Balance of the Loan Tranches relating to the
         Relevant Issuer Notes increases, (the amount of such increase being an
         Increased OPB), a further Transaction (a Further Issue Transaction)
         shall be deemed to have occurred in respect of such Increased OPB on
         terms identical to those set out above in respect of the Swap
         Transaction, except as modified below.

         Notional Amount:                       The Notional Amount of a Further
                                                Issue Transaction shall be an
                                                amount equal to the relevant
                                                Increased OPB (the Further Issue
                                                Notional Amount).

         Effective Date:                        The Effective Date of a Further
                                                Issue Transaction (the Further
                                                Issue Effective Date) shall be
                                                the relevant Increased OPB Date.

         Termination Date:                      The Termination Date of a
                                                Further Issue Transaction shall
                                                be the Quarterly Payment Date
                                                immediately following the
                                                relevant Further Issue Effective
                                                Date (the Further Issue
                                                Termination Date).

         Reset Dates:                           The Reset Dates for a Further
                                                Issue Transaction shall be:

                                                (i) in respect of Party A, the
                                                Floating Rate Payer I Reset
                                                Dates, except in

                                      6
<PAGE>

                                                respect of the first Calculation
                                                Period of the Further Issue
                                                Transaction, the Reset Date for
                                                which will be the Further Issue
                                                Effective Date and, for the
                                                avoidance of doubt, the Floating
                                                Rate I applicable to any
                                                Calculation Period following the
                                                first Calculation Period shall
                                                be the Floating Rate I for such
                                                first Calculation Period; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II Reset
                                                Dates, including for the
                                                avoidance of doubt the first
                                                Calculation Period of the
                                                Further Issue Transaction.

         Floating Amounts I and II:             The Designated Maturity for a
                                                Further Issue Transaction shall
                                                be:

                                                (i) in respect of Party A, the
                                                period from, and including, the
                                                Further Issue Effective Date to,
                                                but excluding, the Further Issue
                                                Termination Date. Linear
                                                Interpolation shall apply; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II
                                                Designated Maturity.

Where any Relevant Issuer Notes are issued on terms where the Loan Tranche(s)
relating to such Notes have an initial interest rate set by reference to a rate
of interest determined by reference to a period in excess of three months (Long
First Interest Period Notes), the Calculation Agent shall, as soon as
practicable following issue, notify the parties of how payments and calculations
under this Confirmation are to be made in order to reflect such Long First
Interest Period Notes. It being understood that with effect from the beginning
of the period under the Loan Tranche(s) when the initial interest rate no longer
applies, the Notional Amount shall be increased by the Outstanding Principal
Balance of the Loan Tranche(s) relating to the Long First Interest Period Notes.

F.       Miscellaneous

                                      7
<PAGE>

         If the payment of any Floating Amount I is deferred in accordance with
         Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
         deferred (the Floating Amount I Deferred Amount) shall, subject to the
         terms of this Confirmation, be payable on the next Payment Date
         (together with interest thereon (the Floating Amount I Deferred
         Interest) at the Floating Rate Payer I Floating Rate for the relevant
         Calculation Period) and the Floating Amount I due on such Payment Date
         shall be deemed to include the Floating Amount I Deferred Amount and
         the Floating Amount I Deferred Interest.

         If the payment of any Floating Amount II is deferred in accordance with
         Part 5(h)(iii) the Agreement, then the amount so deferred (the Floating
         Amount II Deferred Amount) shall, subject to the terms of this
         Confirmation, be payable on the next Payment Date (together with
         interest thereon (the Floating Amount II Deferred Interest) at the
         Floating Rate Payer II Floating Rate for the relevant Calculation
         Period) and the Floating Amount II due on such Payment Date shall be
         deemed to include the Floating Amount II Deferred Amount and the
         Floating Amount II Deferred Interest.

For the purposes of Section 2(c) of the Agreement, any amounts owing by one
party to another party under a Further Issue Transaction on a Swap Payment Date,
shall be deemed to be amounts payable by such party in respect of the Swap
Transaction on such Payment Date and shall be netted in accordance with Section
2(c).

It is understood that on each Further Issue Termination Date the calculation of
the aggregate Outstanding Principal Balance of the Loan Tranches relating to the
Relevant Issuer Notes will include any Further Issue Notional Amount in respect
of any Further Issue Transaction which terminated on such date. In addition, it
is also understood that if on any Quarterly Payment Date the Outstanding
Principal Balance of the Loan Tranches relating to the Relevant Issuer Notes is
increased by an amount, the Notional Amount of the Swap Transaction shall
increase by such amount.

In consideration of entering into this letter agreement, the letter agreement
(Basis Rate 2/20B) and the letter agreement (Basis Rate 2/20C) the parties agree
that the letter agreement (Basis Rate Swap 2D) dated 26 January 2005 is hereby
terminated and neither party shall owe the other any obligations thereunder as a
consequence of such termination.

Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.

Yours faithfully


Northern Rock plc

By:


Name:
Title:

                                      8
<PAGE>

Confirmed as of the date first written:

Granite Finance Funding 2 Limited

By:


Name:
Title:

                                      9
<PAGE>

                                                             Execution Version

                                                       (Basis Rate Swap 2/20B)

From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

Attention:       Swaps Administration

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London
                 EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007

Dear Sirs

Re: Basis Rate Swap Transaction No. 2/20B Confirmation relating to the Relevant
Issuer Notes

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

This Confirmation amends and restates in its entirety a letter agreement (Basis
Rate Swap 2B) dated 19 January 2005.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto).

As used in this Confirmation:

<PAGE>

Note Payment Date means any Note Payment Date (as defined in the Relevant Issuer
Notes) on which interest is payable under the Relevant Issuer Notes.

Relevant Issuer Notes means the Notes from time to time issued by any Funding 2
Issuer on or after the Effective Date with Note Payment Dates scheduled to fall
(subject to adjustment in accordance with any applicable business day convention
on 20 February, 20 May, 20 August and 20 November of any year (Quarterly Payment
Dates) and any Notes from time to time issued by any Funding 2 Issuer on or
after the Effective Date with monthly Note Payment Dates where the rate of
interest applicable to the Loan Tranche(s) relating to such Notes is scheduled
to be reset (subject to adjustment in accordance with any applicable business
day convention) on 20 February, 20 May, 20 August and 20 November of any year;
except that Relevant Issuer Notes shall not include any Notes in respect of
which a Step-Up Date has occurred on or before the immediately preceding Note
Payment Date or a Pass-Through Trigger Event has occurred.

 1       The terms of the particular Swap Transaction to which this Confirmation
         relates are as follows:

Party A:                                        Northern Rock plc.

Party B:                                        Granite Finance Funding 2
                                                Limited.

Trade Date:                                     19 January 2005.

Effective Date:                                 19 January 2005.

Termination Date:                               The Final Maturity Date of the
                                                last remaining Relevant Issuer
                                                Notes outstanding from time to
                                                time.

Period End Dates:                               The twentieth day of each
                                                calendar month during the Term
                                                from, and including, 20 February
                                                2005 to, but excluding, the
                                                Termination Date, subject to
                                                adjustment with the Following
                                                Business Day Convention, and the
                                                Termination Date (each a Period
                                                End Date).

Notional Amount:                                On any Period End Date which is
                                                also a Quarterly Payment Date,
                                                an amount in GBP equal to the
                                                aggregate Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes on the immediately
                                                preceding Quarterly Payment
                                                Date; plus, the aggregate
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes made
                                                in the period from (and
                                                excluding) the immediately

                                      2
<PAGE>

                                                preceding Quarterly Payment Date
                                                to (and excluding) such Period
                                                End Date (which for the
                                                avoidance of doubt will be each
                                                Increased OPB arising during
                                                such period); less, an amount
                                                equal to "x" multiplied by the
                                                balance of the Principal
                                                Deficiency Ledger on the
                                                immediately preceding Quarterly
                                                Payment Date where "x" is a
                                                percentage (determined by the
                                                Calculation Agent to be the
                                                portion of the Principal
                                                Deficiency Ledger attributable
                                                to the Relevant Issuer Notes).
                                                It is understood that the
                                                Notional Amount on any
                                                Quarterly Payment Date shall be
                                                determined after any reduction
                                                of the Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes that may occur on such
                                                date.

                                                With respect to any Period End
                                                Date that is not a Quarterly
                                                Payment Date, the Notional
                                                Amount shall be the Notional
                                                Amount for the immediately
                                                preceding Quarterly Payment Date
                                                determined in the manner
                                                described above or where there
                                                has been no Quarterly Payment
                                                Date, the issue date of the
                                                Relevant Issuer Notes.

                                                The Notional Amount in respect
                                                of each Period End Date shall be
                                                notified to the Calculation
                                                Agent by the Cash Manager
                                                pursuant to paragraph 1(a) of
                                                Schedule 2 to the Cash
                                                Management Agreement.

A.       Floating Payments

Floating Amounts I:

         Floating Rate Payer I:                 Party A.

         Floating Rate Payer I                  GBP-LIBOR-BBA.
         Floating Rate Option:

                                      3
<PAGE>

         Floating Rate Payer I                  Three months; except in respect
         Designated Maturity:                   initial Calculation Period for
                                                which Linear Interpolation is
                                                applicable and in respect of
                                                which the Linear Interpolation
                                                shall be applied by reference
                                                to the one month and two month
                                                rates.

         Floating Rate Payer I Spread:          Zero per cent. per annum.

         Floating Rate Payer I                  Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer I                  The first day of each
         Reset Dates:                           Calculation Period; provided
                                                however, that in respect of
                                                every Calculation Period that
                                                does not start on a Quarterly
                                                Payment Date, the Floating Rate
                                                in effect for such Calculation
                                                Period shall be the Floating
                                                Rate for the immediately
                                                preceding Calculation Period.

         Floating Rate Payer I Payment Dates:   With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following Business Day
                                                Convention.

Floating Amounts II:

         Floating Rate Payer II:                Party B.

         Floating Rate Payer II                 GBP-LIBOR-BBA.
         Floating Rate Option:

         Floating Rate Payer II                 One month.
         Designated Maturity:

         Floating Rate Payer II                 Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer II                 The first day of each
         Reset Dates:                           Calculation Period.

         Floating Rate Payer II Payment Dates:  With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following

                                      4
<PAGE>

                                                Business Day Convention.

Calculation Agent:                              Party A.


B.       Account Details:

Payments to Floating Rate Payer I:

Account for Payments in GBP:                    Northern Rock plc
                                                Northern Rock Group Treasury
                                                30-00-59

                                                Granite Finance Funding 2
                                                Limited
                                                Basis Swap 2/20B

Payments to Floating Rate Payer II:

Account for Payments in GBP:                    Northern Rock plc
                                                Granite Finance Funding 2
                                                Limited
                                                Account Number: 20070228
                                                Sort Code:      30-00-59
                                                Reference:      10016

C.       Notice Details:

Floating Rate Payer I:                          Northern Rock plc

         Address:                               Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      0191 279 4694

         Attention:                             Treasury Settlements Manager

Floating Rate Payer II:                         Granite Finance Funding 2
                                                Limited

         Address:                               Fifth Floor
                                                100 Wood Street
                                                London
                                                EC2V 7EX

With a copy to:                                 Northern Rock plc
                                                Northern Rock House Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      +44 191 279 4929


                                      5
<PAGE>

         Attention:                             Andy McClean

And with a copy to the                          The Bank of New York
Funding 2 Security Trustee:

         Address:                               One Canada Square
                                                48th Floor
                                                London
                                                E14 5AL

         Facsimile Number:                      020 7964 6399

         Attention:                             Global Structured Finance
                                                (Corporate Trust)

D.       Offices:                               The Office of Party A for each
                                                of the Transactions evidenced by
                                                this Confirmation is London.

E.       Further Issue Amounts

         If on any date during a Calculation Period (other than a Quarterly
         Payment Date) (an Increased OPB Date), as a consequence of the issue of
         Relevant Issuer Notes during such Calculation Period, the aggregate
         Outstanding Principal Balance of the Loan Tranches relating to the
         Relevant Issuer Notes increases, (the amount of such increase being an
         Increased OPB), a further Transaction (a Further Issue Transaction)
         shall be deemed to have occurred in respect of such Increased OPB on
         terms identical to those set out above in respect of the Swap
         Transaction, except as modified below.

         Notional Amount:                       The Notional Amount of a Further
                                                Issue Transaction shall be an
                                                amount equal to the relevant
                                                Increased OPB (the Further Issue
                                                Notional Amount).

         Effective Date:                        The Effective Date of a Further
                                                Issue Transaction (the Further
                                                Issue Effective Date) shall be
                                                the relevant Increased OPB Date.

         Termination Date:                      The Termination Date of a
                                                Further Issue Transaction shall
                                                be the Quarterly Payment Date
                                                immediately following the
                                                relevant Further Issue Effective
                                                Date (the Further Issue
                                                Termination Date).

         Reset Dates:                           The Reset Dates for a Further
                                                Issue Transaction shall be:

                                                (i) in respect of Party A, the
                                                Floating Rate Payer I Reset
                                                Dates, except in

                                      6
<PAGE>

                                                respect of the first Calculation
                                                Period of the Further Issue
                                                Transaction, the Reset Date for
                                                which will be the Further Issue
                                                Effective Date and, for the
                                                avoidance of doubt, the Floating
                                                Rate I applicable to any
                                                Calculation Period following the
                                                first Calculation Period shall
                                                be the Floating Rate I for such
                                                first Calculation Period; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II Reset
                                                Dates, including for the
                                                avoidance of doubt the first
                                                Calculation Period of the
                                                Further Issue Transaction.

         Floating Amounts I and II:             The Designated Maturity for a
                                                Further Issue Transaction shall
                                                be:

                                                (i) in respect of Party A, the
                                                period from, and including, the
                                                Further Issue Effective Date to,
                                                but excluding, the Further Issue
                                                Termination Date. Linear
                                                Interpolation shall apply; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II
                                                Designated Maturity.

Where any Relevant Issuer Notes are issued on terms where the Loan Tranche(s)
relating to such Notes have an initial interest rate set by reference to a rate
of interest determined by reference to a period in excess of three months (Long
First Interest Period Notes), the Calculation Agent shall, as soon as
practicable following issue, notify the parties of how payments and calculations
under this Confirmation are to be made in order to reflect such Long First
Interest Period Notes. It being understood that with effect from the beginning
of the period under the Loan Tranche(s) when the initial interest rate no longer
applies, the Notional Amount shall be increased by the Outstanding Principal
Balance of the Loan Tranche(s) relating to the Long First Interest Period Notes.

F.       Miscellaneous

                                      7
<PAGE>

         If the payment of any Floating Amount I is deferred in accordance with
         Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
         deferred (the Floating Amount I Deferred Amount) shall, subject to the
         terms of this Confirmation, be payable on the next Payment Date
         (together with interest thereon (the Floating Amount I Deferred
         Interest) at the Floating Rate Payer I Floating Rate for the relevant
         Calculation Period) and the Floating Amount I due on such Payment Date
         shall be deemed to include the Floating Amount I Deferred Amount and
         the Floating Amount I Deferred Interest.

         If the payment of any Floating Amount II is deferred in accordance with
         Part 5(h)(iii) the Agreement, then the amount so deferred (the Floating
         Amount II Deferred Amount) shall, subject to the terms of this
         Confirmation, be payable on the next Payment Date (together with
         interest thereon (the Floating Amount II Deferred Interest) at the
         Floating Rate Payer II Floating Rate for the relevant Calculation
         Period) and the Floating Amount II due on such Payment Date shall be
         deemed to include the Floating Amount II Deferred Amount and the
         Floating Amount II Deferred Interest.

For the purposes of Section 2(c) of the Agreement, any amounts owing by one
party to another party under a Further Issue Transaction on a Swap Payment Date,
shall be deemed to be amounts payable by such party in respect of the Swap
Transaction on such Payment Date and shall be netted in accordance with Section
2(c).

It is understood that on each Further Issue Termination Date the calculation of
the aggregate Outstanding Principal Balance of the Loan Tranches relating to the
Relevant Issuer Notes will include any Further Issue Notional Amount in respect
of any Further Issue Transaction which terminated on such date. In addition, it
is also understood that if on any Quarterly Payment Date the Outstanding
Principal Balance of the Loan Tranches relating to the Relevant Issuer Notes is
increased by an amount, the Notional Amount of the Swap Transaction shall
increase by such amount.

In consideration of entering into this letter agreement, the letter agreement
(Basis Rate 2/20A) and the letter agreement (Basis Rate 2/20C) the parties agree
that the letter agreement (Basis Rate Swap 2D) dated 26 January 2005 is hereby
terminated and neither party shall owe the other any obligations thereunder as a
consequence of such termination.

Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.

Yours faithfully


Northern Rock plc

By:


Name:
Title:



                                      8
<PAGE>

Confirmed as of the date first written:

Granite Finance Funding 2 Limited

By:


Name:  Title:

                                      9
<PAGE>

                                                             Execution Version

                                                       (Basis Rate Swap 2/20C)

From:            Northern Rock plc
                 Northern Rock House
                 Gosforth
                 Newcastle Upon Tyne
                 NE3 4PL

Attention:       Swaps Administration

To:              Granite Finance Funding 2 Limited
                 Fifth Floor
                 100 Wood Street
                 London
                 EC2V 7EX

Attention:       Securitisation Team, Risk Operations

                                                                   17 May 2007

Dear Sirs

Re: Basis Rate Swap Transaction No. 2/20C Confirmation relating to the Relevant
Issuer Notes

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the Swap
Transaction). This letter constitutes a "Confirmation" as referred to in, and
supplements, forms part of and is subject to, the ISDA Master Agreement dated as
of 19 January 2005, as amended and supplemented from time to time (the
Agreement), between us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

This Confirmation amends and restates in its entirety a letter agreement (Basis
Rate Swap 2C) dated 19 January 2005.

The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
Definitions), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern. References herein to a "Transaction" shall be deemed to be
references to a "Swap Transaction" for the purposes of the Definitions. Any
terms not otherwise defined herein or in the Definitions shall have the meanings
given to them in 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 may be amended, restated, varied, supplemented
and/or otherwise modified from time to time with the consent of the parties
hereto).

As used in this Confirmation:

<PAGE>

Note Payment Date means any Note Payment Date (as defined in the Relevant Issuer
Notes) on which interest is payable under the Relevant Issuer Notes.

Relevant Issuer Notes means the Notes from time to time issued by any Funding 2
Issuer on or after the Effective Date with Note Payment Dates scheduled to fall
(subject to adjustment in accordance with any applicable business day convention
on 20 March, 20 June, 20 September and 20 December of any year (Quarterly
Payment Dates) and any Notes from time to time issued by any Funding 2 Issuer on
or after the Effective Date with monthly Note Payment Dates where the rate of
interest applicable to the Loan Tranche(s) relating to such Notes is scheduled
to be reset (subject to adjustment in accordance with any applicable business
day convention) on 20 March, 20 June, 20 September and 20 December of any year;
except that Relevant Issuer Notes shall not include any Notes in respect of
which a Step-Up Date has occurred on or before the immediately preceding Note
Payment Date or a Pass-Through Trigger Event has occurred.

1        The terms of the particular Swap Transaction to which this Confirmation
         relates are as follows:

Party A:                                        Northern Rock plc.

Party B:                                        Granite Finance Funding 2
                                                Limited.

Trade Date:                                     19 January 2005.

Effective Date:                                 19 January 2005.

Termination Date:                               The Final Maturity Date of the
                                                last remaining Relevant Issuer
                                                Notes outstanding from time to
                                                time.

Period End Dates:                               The twentieth day of each
                                                calendar month during the Term
                                                from, and including, 20 February
                                                2005 to, but excluding, the
                                                Termination Date, subject to
                                                adjustment with the Following
                                                Business Day Convention, and the
                                                Termination Date (each a Period
                                                End Date).

Notional Amount:                                On any Period End Date which is
                                                also a Quarterly Payment Date,
                                                an amount in GBP equal to the
                                                aggregate Outstanding Principal
                                                Balance of the Loan Tranches
                                                relating to the Relevant Issuer
                                                Notes on the immediately
                                                preceding Quarterly Payment
                                                Date; plus, the aggregate
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes made
                                                in the period from (and
                                                excluding) the immediately

                                      2
<PAGE>

                                                preceding Quarterly Payment Date
                                                to (and excluding) such Period
                                                End Date (which for the
                                                avoidance of doubt will be each
                                                Increased OPB arising during
                                                such period); less, an amount
                                                equal to "x" multiplied by the
                                                balance of the Principal
                                                Deficiency Ledger on the
                                                immediately preceding Quarterly
                                                Payment Date where "x" is a
                                                percentage (determined by the
                                                Calculation Agent to be the
                                                portion of the Principal
                                                Deficiency Ledger attributable
                                                to the Relevant Issuer Notes).
                                                It is understood that the
                                                Notional Amount on any Quarterly
                                                Payment Date shall be determined
                                                after any reduction of the
                                                Outstanding Principal Balance of
                                                the Loan Tranches relating to
                                                the Relevant Issuer Notes that
                                                may occur on such date.

                                                With respect to any Period End
                                                Date that is not a Quarterly
                                                Payment Date, the Notional
                                                Amount shall be the Notional
                                                Amount for the immediately
                                                preceding Quarterly Payment
                                                Date determined in the manner
                                                described above or where there
                                                has been no Quarterly Payment
                                                Date, the issue date of the
                                                Relevant Issuer Notes.

                                                The Notional Amount in respect
                                                of each Period End Date shall be
                                                notified to the Calculation
                                                Agent by the Cash Manager
                                                pursuant to paragraph 1(a) of
                                                Schedule 2 to the Cash
                                                Management Agreement.

A. Floating Payments
Floating Amounts I:

         Floating Rate Payer I:                 Party A.

         Floating Rate Payer I                  GBP-LIBOR-BBA.
         Floating Rate Option:

                                      3
<PAGE>

         Floating Rate Payer I                  Three months; except in respect
         Designated Maturity:                   of the  initial Calculation
                                                Period for which Linear
                                                Interpolation is applicable and
                                                in respect of which the Linear
                                                Interpolation shall be applied
                                                by reference to the one month
                                                and two month rates.

         Floating Rate Payer I Spread:          Zero per cent. per annum.

         Floating Rate Payer I                  Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer I                  The first day of each
         Reset Dates:                           Calculation Period; provided
                                                however, that in respect of
                                                every Calculation Period that
                                                does not start on a Quarterly
                                                Payment Date, the Floating
                                                Rate in effect for such
                                                Calculation Period shall be
                                                the Floating Rate for the
                                                immediately preceding
                                                Calculation Period.

         Floating Rate Payer I Payment Dates:   With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following Business Day
                                                Convention.

Floating Amounts II:

         Floating Rate Payer II:                Party B.

         Floating Rate Payer II                 GBP-LIBOR-BBA.
         Floating Rate Option:

         Floating Rate Payer II                 One month.
         Designated Maturity:

         Floating Rate Payer II                 Actual/365 (Fixed).
         Floating Rate Day Count Fraction:

         Floating Rate Payer II                 The first day of each
         Reset Dates:                           Calculation Period.

         Floating Rate Payer II Payment Dates:  With respect to a Calculation
                                                Period, the seventeenth day of
                                                the calendar month in which such
                                                Calculation Period ends subject
                                                to adjustment in accordance with
                                                the Following

                                      4
<PAGE>

                                                Business Day Convention.

Calculation Agent:                              Party A.


B.       Account Details:

Payments to Floating Rate Payer I:

Account for Payments in GBP:                    Northern Rock plc
                                                Northern Rock Group Treasury
                                                30-00-59

                                                Granite Finance Funding 2
                                                Limited
                                                Basis Swap 2/20C

Payments to Floating Rate Payer II:

Account for Payments in GBP:                    Northern Rock plc
                                                Granite Finance Funding 2
                                                Limited Account Number: 20070228
                                                Sort Code:              30-00-59
                                                Reference:              10016

C.       Notice Details:

Floating Rate Payer I:                          Northern Rock plc

         Address:                               Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      0191 279 4694

         Attention:                             Treasury Settlements Manager

Floating Rate Payer II:                         Granite Finance Funding 2
                                                Limited

         Address:                               Fifth Floor
                                                100 Wood Street
                                                London
                                                EC2V 7EX

With a copy to:                                 Northern Rock plc
                                                Northern Rock House
                                                Gosforth
                                                Newcastle upon Tyne
                                                NE3 4PL

         Facsimile Number:                      +44 191 279 4929


                                      5
<PAGE>

         Attention:                             Andy McClean

And with a copy to the                          The Bank of New York
Funding 2 Security Trustee:

         Address:                               One Canada Square
                                                48th Floor
                                                London
                                                E14 5AL

         Facsimile Number:                      020 7964 6399

         Attention:                             Global Structured Finance
                                                (Corporate Trust)

D.       Offices:                               The Office of Party A for each
                                                of the Transactions evidenced by
                                                this Confirmation is London.

E.       Further Issue Amounts

         If on any date during a Calculation Period (other than a Quarterly
         Payment Date) (an Increased OPB Date), as a consequence of the issue of
         Relevant Issuer Notes during such Calculation Period, the aggregate
         Outstanding Principal Balance of the Loan Tranches relating to the
         Relevant Issuer Notes increases, (the amount of such increase being an
         Increased OPB), a further Transaction (a Further Issue Transaction)
         shall be deemed to have occurred in respect of such Increased OPB on
         terms identical to those set out above in respect of the Swap
         Transaction, except as modified below.

         Notional Amount:                       The Notional Amount of a Further
                                                Issue Transaction shall be an
                                                amount equal to the relevant
                                                Increased OPB (the Further Issue
                                                Notional Amount).

         Effective Date:                        The Effective Date of a Further
                                                Issue Transaction (the Further
                                                Issue Effective Date) shall be
                                                the relevant Increased OPB Date.

         Termination Date:                      The Termination Date of a
                                                Further Issue Transaction shall
                                                be the Quarterly Payment Date
                                                immediately following the
                                                relevant Further Issue Effective
                                                Date (the Further Issue
                                                Termination Date).

         Reset Dates:                           The Reset Dates for a Further
                                                Issue Transaction shall be:

                                                (i) in respect of Party A, the
                                                Floating Rate Payer I Reset
                                                Dates, except in

                                      6
<PAGE>

                                                respect of the first Calculation
                                                Period of the Further Issue
                                                Transaction, the Reset Date for
                                                which will be the Further Issue
                                                Effective Date and, for the
                                                avoidance of doubt, the Floating
                                                Rate I applicable to any
                                                Calculation Period following the
                                                first Calculation Period shall
                                                be the Floating Rate I for such
                                                first Calculation Period; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II Reset
                                                Dates, including for the
                                                avoidance of doubt the first
                                                Calculation Period of the
                                                Further Issue Transaction.

         Floating Amounts I and II:             The Designated Maturity for a
                                                Further Issue Transaction shall
                                                be:

                                                (i) in respect of Party A, the
                                                period from, and including, the
                                                Further Issue Effective Date to,
                                                but excluding, the Further Issue
                                                Termination Date. Linear
                                                Interpolation shall apply; and

                                                (ii) in respect of Party B, the
                                                Floating Rate Payer II
                                                Designated Maturity.

Where any Relevant Issuer Notes are issued on terms where the Loan Tranche(s)
relating to such Notes have an initial interest rate set by reference to a rate
of interest determined by reference to a period in excess of three months (Long
First Interest Period Notes), the Calculation Agent shall, as soon as
practicable following issue, notify the parties of how payments and calculations
under this Confirmation are to be made in order to reflect such Long First
Interest Period Notes. It being understood that with effect from the beginning
of the period under the Loan Tranche(s) when the initial interest rate no longer
applies, the Notional Amount shall be increased by the Outstanding Principal
Balance of the Loan Tranche(s) relating to the Long First Interest Period Notes.

F.       Miscellaneous

                                      7
<PAGE>

         If the payment of any Floating Amount I is deferred in accordance with
         Part 5(h)(iii) of the Schedule to the Agreement, then the amount so
         deferred (the Floating Amount I Deferred Amount) shall, subject to the
         terms of this Confirmation, be payable on the next Payment Date
         (together with interest thereon (the Floating Amount I Deferred
         Interest) at the Floating Rate Payer I Floating Rate for the relevant
         Calculation Period) and the Floating Amount I due on such Payment Date
         shall be deemed to include the Floating Amount I Deferred Amount and
         the Floating Amount I Deferred Interest.

         If the payment of any Floating Amount II is deferred in accordance with
         Part 5(h)(iii) the Agreement, then the amount so deferred (the Floating
         Amount II Deferred Amount) shall, subject to the terms of this
         Confirmation, be payable on the next Payment Date (together with
         interest thereon (the Floating Amount II Deferred Interest) at the
         Floating Rate Payer II Floating Rate for the relevant Calculation
         Period) and the Floating Amount II due on such Payment Date shall be
         deemed to include the Floating Amount II Deferred Amount and the
         Floating Amount II Deferred Interest.

For the purposes of Section 2(c) of the Agreement, any amounts owing by one
party to another party under a Further Issue Transaction on a Swap Payment Date,
shall be deemed to be amounts payable by such party in respect of the Swap
Transaction on such Payment Date and shall be netted in accordance with Section
2(c).

It is understood that on each Further Issue Termination Date the calculation of
the aggregate Outstanding Principal Balance of the Loan Tranches relating to the
Relevant Issuer Notes will include any Further Issue Notional Amount in respect
of any Further Issue Transaction which terminated on such date. In addition, it
is also understood that if on any Quarterly Payment Date the Outstanding
Principal Balance of the Loan Tranches relating to the Relevant Issuer Notes is
increased by an amount, the Notional Amount of the Swap Transaction shall
increase by such amount.

In consideration of entering into this letter agreement, the letter agreement
(Basis Rate 2/20A) and the letter agreement (Basis Rate 2/20B) the parties agree
that the letter agreement (Basis Rate Swap 2D) dated 26 January 2005 is hereby
terminated and neither party shall owe the other any obligations thereunder as a
consequence of such termination.

Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.

Yours faithfully


Northern Rock plc

By:


Name:
Title:

                                      8
<PAGE>

Confirmed as of the date first written:

Granite Finance Funding 2 Limited


By:


Name:  Title:


                                      9