Exhibit 10.5.1

                                                       EXECUTION VERSION

                         Dated 19 January 2005



                   GRANITE FINANCE FUNDING 2 LIMITED






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                THIRD AMENDED PROGRAMME MASTER DEFINITIONS
                                 SCHEDULE

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                                 SIDLEY AUSTIN
                                 -------------
                                     SIDLEY

<PAGE>

                                CONTENTS

1.    Definitions..........................................................2
2.    Interpretation and Construction.....................................91
3.    Governing Law.......................................................93


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THIS PROGRAMME MASTER DEFINITIONS SCHEDULE WAS SIGNED FOR THE PURPOSES OF
IDENTIFICATION ON 19 JANUARY 2005 AND AMENDED AND RESTATED PURSUANT TO DEEDS OF
AMENDMENT AND RESTATEMENT DATED 26 AUGUST, 2005, 19 JANUARY, 2007 AND 17 MAY,
2007 BY:

(1)   Sidley Austin Brown & Wood of Woolgate Exchange, 25 Basinghall Street,
      London EC2V 5HA; and

(2)   Allen & Overy LLP of One New Change, London EC4M 9QQ.

1.    Definitions

Words and expressions used in any document which incorporates this clause or to
which this clause applies shall, have the same meanings as are set out in this
Programme Master Definitions Schedule except so far as the context requires
otherwise.

"1925 Act" means The Law of Property Act 1925;

"A Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated A by S&P, A2 by Moody's and A by Fitch
at their date of issue;

"A Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the A Loan Tranches;

"ACA Trigger Event" means, in respect of any Funding Issuer that is an ACA
Issuer, an event which occurs when any Funding Issuer fails to exercise its
option to redeem its Notes on the relevant Step-Up Date pursuant to the terms
and conditions of its Notes;

"ACA Issuer" Granite Mortgages 04-2 plc, Granite Mortgages 04-3 plc and (in
respect of Funding) any new Issuer designated as such;

"ACA Limit Amount" means, in respect of an ACA Issuer, an amount equal to the
greater of:

(A)   the product of:

(i)   the product of (a) the Mortgages Trustee Principal Receipts for that
      Distribution Date, and (b) the Funding Share Percentage or, as applicable,
      the Weighted Average Funding Share Percentage applicable as at the later
      to occur of the immediately preceding Assignment Date, the immediately
      preceding Funding Contribution Date and the immediately preceding
      Distribution Date; and

(ii)  the quotient of (a) the Outstanding Principal Balance of such ACA Issuer's
      Intercompany Loan as at the immediately preceding Payment Date (after
      taking into account principal payments on such Payment Date) less the
      aggregate of amounts recorded on the Principal Deficiency Ledger of such
      ACA Issuer (but only to the extent of Losses on the Mortgage Loans
      allocated to such ACA Issuer and application of Funding Available
      Principal Receipts to fund the Liquidity Reserve Fund of such ACA Issuer),
      divided by (b) the aggregate Outstanding Principal Balance on all Funding
      Intercompany Loans as at the immediately preceding Payment Date (after
      taking into account principal payments on such Payment Date) less the sum
      of (1) the aggregate Outstanding Principal Balance of all Special
      Repayment Notes and (2) the aggregate of amounts recorded on the Principal
      Deficiency Ledgers of all Funding Issuers (but only to the extent of
      Losses on the Mortgage Loans allocated to a


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<PAGE>

      Funding Issuer and application of Funding Available Principal Receipts to
      fund the Issuer Liquidity Reserve Fund of that Funding Issuer); and

(B)   in respect of such ACA Issuer's Notes, the Controlled Amortisation Amount
      for each Class of Notes of such ACA Issuer as if an ACA Trigger Event had
      not occurred.

"AA Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated AA by S&P, Aa2 by Moody's and AA by
Fitch at their date of issue;

"AA Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the AA Loan Tranches;

"AAA Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated AAA by S&P, Aaa by Moody's and AAA by
Fitch at their date of issue;

"AAA Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the AAA Loan Tranches;

"Accession Undertaking" means a Deed of Accession;

"Account Bank" means, in relation to the Mortgages Trustee, Funding or Funding
2, the bank at which the Mortgages Trustee Bank Accounts or, in the case of
Funding, the Funding Bank Accounts, or, in the case of Funding 2, the Funding 2
Bank Accounts are maintained from time to time, being :

(a)   in relation to the Mortgages Trustee Transaction Account, the Jersey
      Account Bank;

(b)   in relation to the Funding Transaction Account, the UK Account Bank;

(c)   in relation to the Funding 2 Transaction Account, Northern Rock;

(d)   in relation to the Mortgages Trustee GIC Account, Northern Rock;

(e)   in relation to the Funding GIC Account, Northern Rock; and

(f)   in relation to the Funding 2 GIC Account, Northern Rock; and

(g)   in relation to the Funding Issuer GIC Accounts:

      (i)   in respect of any Funding (Issuer) GIC Account established prior to
            26 May 2004, the UK Account Bank; and

      (ii)  in respect of any Funding (Issuer) GIC Account established on or
            after 26 May 2004, Northern Rock;

or any other Authorised Entity Appointed by the Mortgages Trustee, Funding
and/or Funding 2 in accordance with the Transaction Documents;

"Accrued Interest" means, in respect of any Mortgage Loan as at any date (the
"relevant date"), the aggregate of all interest accrued but not yet due and
payable on such Mortgage Loan from and including the Monthly Payment Date
immediately preceding the relevant date until (but excluding) the relevant date;

"Additional Tax Representation" means, in relation to a Swap Agreement, the
meaning given such term in that Swap Agreement;


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<PAGE>

"Additional Termination Event" means, in relation to a Swap Agreement, the
meaning given such term in that Swap Agreement;

"Additional Trust Property" means all rights, title, interest and benefit of all
property and assets held by the Mortgages Trustee at any time, to the extent
that such rights, title, interest and benefit of such property and assets do
not, at such time, form part of the Initial Trust Property, the Closing Trust
Property, the New Trust Property and/or any Trust Property referred to in Clause
2.4 (Other Trust Property) of the Mortgages Trust Deed;

"Adjusted Funding 2 Reserve Fund Level" means the sum of:

(a)   the amount standing to the credit of the Issuer Reserve Ledger and the
      Funding 2 Reserve Ledger; and

(b)   the amount (if any) then to be credited to the Issuer Reserve Ledger in
      accordance with the Issuer Pre-Enforcement Principal Priority of Payments
      and the amount (if any) then to be credited to the Funding 2 Reserve
      Ledger in accordance with the Funding 2 Pre-Enforcement Principal Priority
      of Payments;

"Administration Agreement" means the agreement entered into on or before the
Initial Closing Date, between the Administrator, the Mortgages Trustee, Funding,
the Seller and the Security Trustee pursuant to which the administrator agrees
to provide administration services to the Mortgages Trustee and the
Beneficiaries in relation to the Mortgage Loans and their Related Security
comprised in the Mortgage Portfolio and shall include any additional and/or
replacement administration agreement entered into by such parties from time to
time;

"Administration Fee Rate" means 0.08% per annum (inclusive of VAT) on the
aggregate amount of the Funding Share of the Trust Property and the Funding 2
Share of the Trust Property as determined on that Distribution Date in respect
of the then current Trust Calculation Period, but only to the extent that the
Mortgages Trustee has sufficient funds available to pay such amount in
accordance with the Mortgages Trustee Revenue Priority of Payments or, at any
time when the Administrator is not Northern Rock, such other amount as set
between such substitute administrator and the Mortgages Trustee from time to
time;

"Administration Fee" has the meaning given to it in Clause 13.1 (Administration
Fee) of the Administration Agreement;

"Administration Procedures" means the administration, arrears and enforcement
policies and procedures forming part of the Seller's Policy from time to time
or, at any time when the Administrator is not also the Seller, the policies and
procedures from time to time which would be adopted by a reasonable, prudent
mortgage lender and, in either case, shall include the services set out in
Schedule 1 to the Administration Agreement;

"Administrator Termination Event" means any of the events specified in Clause 19
(Termination) of the Administration Agreement;

"Agent Bank" means, in respect of any Issuer, the Agent Bank as defined in the
relevant Issuer Master Definitions Schedule;

"Administrator" means Northern Rock or such other person as may from time to
time be appointed as administrator of the Mortgage Portfolio pursuant to the
Administration Agreement;


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<PAGE>

"Alternative Insurance Requirements" means the Seller's standard document
entitled Alternative Insurance Requirements, and any other document containing
similar recommendations or requirements which is sent to Borrowers in accordance
with the Administration Procedures;

"Anticipated Cash Accumulation Period" means, on any Trust Determination Date,
the anticipated number of months required to accumulate sufficient principal
receipts to pay the relevant Bullet Repayment Loan Amount, which will be equal
to:

                               J + K - L
                             -------------
                              M x (N x O)

calculated in months and rounded up to the nearest whole number, where:

      J     =     the relevant Bullet Repayment Loan Amount;

      K     =     the aggregate Principal Amount Outstanding on that Trust
                  Determination Date of:

                  (i)   each other Bullet Repayment Loan Amount that was not
                        fully repaid on its Bullet Repayment Date and is still
                        outstanding; and

                  (ii)  each other Bullet Repayment Loan Amount, the Bullet
                        Repayment Date of which falls in or before the Monthly
                        Payment Period in which the Bullet Repayment Date of the
                        relevant Bullet Repayment Loan Amount falls;

      L     =     the amounts standing to the credit of the Funding 2 Cash
                  Accumulation Ledger at the start of that Trust Determination
                  Date which are available to pay Bullet Loan Repayment Amounts;

      M     =     means the sum of each Monthly CPR on the 12 most recent Trust
                  Determination Dates which have occurred prior to that date
                  divided by 12;

      N     =     0.85; and

      O     =     the aggregate Outstanding Principal Balance of the Mortgage
                  Loans included in the Mortgage Portfolio on the previous Trust
                  Determination Date.

"Arrears of Interest" means as at any date and in relation to any Mortgage Loan,
interest (other than Capitalised Interest or Accrued Interest) on such Mortgage
Loan which is currently due and payable on such date;

"Arrears or Step-Up Trigger Event" means an event which occurs when (i) the
Outstanding Principal Balance of the Mortgage Loans in arrears for more than 90
days divided by the Outstanding Principal Balance of all of the Mortgage Loans
in the Mortgages Trust (expressed as a percentage) exceeds 2% or (ii) if (in
relation to Funding and the Funding Issuers) any Funding Issuer fails to
exercise its option to redeem its Notes on the relevant Step-Up Date pursuant to
the terms and conditions of its Notes or (in relation to Funding 2 and the
Funding 2 Issuers) any Funding 2 Issuer fails to exercise its option to redeem
its Notes on the relevant Step-Up Date pursuant to the terms and conditions of
its Notes;

"Asset Trigger Event" means the event that occurs when an amount is debited to
the Principal Deficiency Sub Ledger in relation to the Class A Notes of any
Funding 2 Issuer or to the AAA Principal Deficiency Sub-Ledger of Funding 2;


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"Assignation of Guarantees" means an assignation to the Mortgages Trustee of the
Seller's right, title, benefit and interest in the Guarantees governed by Scots
law substantially in the form set out in Part 2 of Schedule 5 to the Mortgage
Sale Agreement;

"Assignment Date" means the date of assignment of any New Mortgage Portfolio to
the Mortgages Trustee in accordance with Clause 4 (Sale and Purchase of New
Mortgage Portfolios) of the Mortgage Sale Agreement;

"Assignment of Guarantees" means an assignment to the Mortgages Trustee of the
Seller's right, title, benefit and interest in the Guarantees governed by
English law substantially in the form set out in Part 1 of Schedule 5 to the
Mortgage Sale Agreement;

"Assignment of Insurance Contracts" means an assignment to the Mortgages Trustee
of the Seller's right, title, benefit and interest in the Insurance Contracts
substantially in the form set out in Schedule 3 (Assignment of Insurance
Contracts) to the Mortgage Sale Agreement;

"Auditors" or "auditors" means PricewaterhouseCoopers of 89 Sandyford Road,
Newcastle upon Tyne NE99 1PL or such other internationally recognised
independent firm of auditors selected from time to time by (in the case of the
Mortgages Trustee) the Mortgages Trustee or (in the case of Funding) Funding or
(in the case of Funding 2) Funding 2 or (in the case of any Issuer) the relevant
Issuer and appointed by the Mortgages Trustee, Funding, Funding 2 or, as the
case may be, the relevant Issuer;

"Authorised Entity" means (a) any entity the short term and secured,
unsubordinated, and unguaranteed debt of which is rated at least A-1+ by S&P,
P-1 by Moody's and F1+ by Fitch or (b) any other entity approved in writing by
(in the case of an Authorised Entity to be appointed by the Security Trustee)
the Security Trustee or (in the case of an Authorised Entity to be appointed by
the Funding 2 Security Trustee) the Funding 2 Security Trustee and (in each
case) the Rating Agencies, in each case being an institution authorised to carry
on banking business (including accepting deposits) under the FSMA;

"Authorised Institution" means an institution authorised to accept deposits
under the FSMA;

"Authorised Investments" means:

(a)   sterling gilt-edged securities; and

(b)   sterling demand or time deposits, certificates of deposit and short-term
      debt obligations (including commercial paper) (which may include deposits
      into any account which earns a rate of interest related to LIBOR) provided
      that in all cases such investments have a maturity date of 90 days or less
      and mature on or before the next following Payment Date or, in relation to
      any Mortgages Trustee Bank Account, the next following Distribution Date,
      and the short-term unsecured, unguaranteed and unsubordinated debt
      obligations of the issuing or guaranteeing entity or the entity with which
      the demand or time deposits are made (being an authorised institution
      under the FSMA) are rated at least equal to A-1+ by S&P, P-1 by Moody's
      and F1+ by Fitch or which are otherwise acceptable to the Rating Agencies
      (if they are notified in advance) to maintain the then-current rating of
      the Notes;

"Authorised Signatory" means in relation to:

(a)   any Issuer, any authorised signatory referred to in the relevant Issuer
      Account Mandates;


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<PAGE>

(b)   the Mortgages Trustee, any authorised signatory referred to in the
      Mortgages Trustee Account Mandates;

(c)   Funding, any authorised signatory referred to in the Funding Account
      Mandates; and

(d)   Funding 2, any authorised signatory referred to in the Funding 2 Account
      Mandates;

"Authorised Third Party" means any Person appointed by a Funding Security
Trustee pursuant to the terms of Schedule 4 of the Administration Agreement and
whom the Rating Agencies have previously confirmed in writing to (where the
Funding Security Trustee is the Security Trustee) Funding and the Security
Trustee or (where the Funding Security Trustee is the Funding 2 Security
Trustee) Funding 2 and the Funding 2 Security Trustee will not cause the then
current ratings of the Notes of any Issuer to be downgraded, withdrawn or
qualified provided that if the responsibilities that such appointed Person will
assume include setting the interest rate applicable to any Mortgage Loan, such
Person must be a lender in the UK residential mortgage market;

"Authorised Underpayment" means a Borrower Underpayment in respect of a Flexible
Mortgage Loan which is funded by, and does not exceed the amount of any,
Overpayments previously made by the Borrower in respect of such Flexible
Mortgage Loan or is otherwise permitted by the Seller in accordance with the
relevant Mortgage Conditions;

"Back-up Functions" has the meaning specified in Schedule 4 (Authorised Third
Party) to the Administration Agreement;

"Back-up Trigger Event" means any of the following circumstances:

(i)   failure by the Seller to comply with any of its obligations under the
      Mortgage Sale Agreement;

(ii)  a Completion Event and any circumstances in connection therewith; or

(iii) an Administrator Termination Event and any circumstances in connection
      therewith;

"BACS Amounts" means the amounts to be received by the Collection Banks from
Borrowers whether under the Direct Debiting Scheme or otherwise and to be
credited by the Collection Banks to the Collection Accounts on each Monthly
Payment Date, which each Collection Bank shall credit to the relevant Collection
Account;

"BACS" means the Bankers' Automated Clearing System as amended or supplemented
from time to time or any scheme replacing the same;

"Bank Account Agreement" means the agreement entered into on or about the
Initial Closing Date between the Account Banks, the Mortgages Trustee, Funding
and the Security Trustee which governs the operation of the Mortgages Trustee
Bank Accounts and the Funding Bank Accounts other than the Funding (Issuer) GIC
Accounts and shall include any additional and/or replacement bank account
agreement entered into by such parties from time to time;

"BBB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated BBB by S&P, Baa2 by Moody's and BBB by
Fitch at their date of issue;

"Bank of England Base Rate" means the Bank of England's official dealing rate
(the repo rate) as set by the UK Monetary Policy Committee and in the event that
such rate ceases to exist or becomes


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inappropriate as an index for the Base Rate Pledge such alternative rate or
index, not controlled by the Seller, that the Seller considers to be the most
appropriate in the circumstances;

"Barclays Collection Account" means the account in the name of Northern Rock
(sort code 20/59/42, account number 60655996) held with Barclays Bank PLC and
maintained subject to the Collection Bank Agreement and/or such other accounts
of Northern Rock held with Barclays Bank PLC as may be utilised from time to
time for the purpose of collecting sums due to Northern Rock in respect of the
Mortgage Loans;

"Barclays" means Barclays Bank PLC;

"Base Prospectus" means the base prospectus or preliminary base prospectus
(together with any documents incorporated thereto by reference) prepared in
connection with the Programme and (as revised, supplemented or amended from time
to time by the Master Issuer in accordance with clause 5.2 of the Programme
Agreement) constituting (in the case of Notes to be listed on a Regulated
Market) a "base prospectus" for the purposes of the Prospectus Directive;

"Base Rate Pledge Period" means, in relation to any Mortgage Loan having the
benefit of the Base Rate Pledge, the period if any during which the Borrower may
be subject to an Early Repayment Charge;

"Base Rate Pledge" means the guarantee of the Seller that where Mortgage Loans
are eligible to be charged at or based on the Standard Variable Rate (including
Fixed Rate Mortgage Loans upon conversion from a Fixed Rate to the Standard
Variable Rate) and they are within the Base Rate Pledge Period, the actual
variable gross interest rate charged on such Mortgage Loans will be the lower of
the following two rates:

(a)   the Standard Variable Rate; or

(b)   the Bank of England base rate plus a margin which is determined by the
      Seller;

such variable gross interest rate to be applied as necessary within one month of
a change in the Bank of England base rate;

"Basis Rate Swap Agreement" means, in relation to:

(a)   the First Issuer, the First Issuer Basis Rate Swap Agreement;

(b)   any other Funding Issuer, the ISDA Master Agreement, Schedule,
      Confirmation and any credit support documents thereto entered into among
      such Funding Issuer, the Basis Rate Swap Provider, the Note Trustee and
      any credit support provider as may be amended, restated, novated, varied
      or supplemented from time to time and shall include any additional and/or
      replacement basis rate swap agreement entered into by such Funding Issuer
      from time to time in connection with the Notes issued by such Funding
      Issuer; and

(c)   Funding 2, the Funding 2 Basis Rate Swap Agreement.

"Basis Rate Swap Provider" means Northern Rock and/or, as applicable, any other
basis rate swap provider appointed from time to time in accordance with the
Transaction Documents;

"Basis Rate Swap Provider Default" means the occurrence of an Event of Default
or a Downgrade Termination Event (as defined in the relevant Basis Rate Swap
Agreement) under a Basis Rate Swap Agreement where the Basis Rate Swap Provider
is the Defaulting Party or the Affected Party (as defined in the relevant Basis
Rate Swap Agreement);


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<PAGE>

"Basis Rate Swap" means, in relation to:

(a)   the First Issuer, the First Issuer Basis Rate Swap;

(b)   any other Funding Issuer, the swap transaction documented under the Basis
      Rate Swap Agreement for such Funding Issuer; and

(c)   Funding 2, the Funding 2 Basis Rate Swaps;

"BB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated BB by S&P, Ba2 by Moody's and BB by
Fitch at their date of issue;

"BB Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the BB Loan Tranches;

"BBB Loan Tranche" means, a tranche of any Funding 2 Intercompany Loan which has
been structured so as to reflect the payment obligations on the Notes of the
relevant Funding 2 Issuer which are rated BBB by S&P, Baa2 by Moody's and BBB by
Fitch at their date of issue;

"BBB Principal Deficiency Sub Ledger" means the sub-ledger of the Funding 2
Principal Deficiency Ledger corresponding to the BBB Loan Tranches;

"Beneficiaries" means Funding, Funding 2, the Seller and any other beneficiary
of the Mortgages Trust, as beneficiaries of the Mortgages Trust and
"Beneficiary" means any of them;

"Block Buildings Policy" means the block buildings insurance policies listed in
paragraph 2 of Schedule 4 (Insurance Contracts) to the Mortgage Sale Agreement
and any endorsements or extensions thereto as issued from time to time and any
additional, replacement or substitute block insurance policy which relates to
Mortgage Loans in the Mortgages Trust from time to time;

"Borrower Underpayment" means a situation where a Borrower makes a Monthly
Payment on its Mortgage Loan which is less than the required Monthly Payment for
that month;

"Borrower" means, in relation to each Mortgage Loan, the person or persons who
is or are named and defined as such in the relevant Mortgage Deed or such other
person or persons (other than a guarantor) who shall become legally obligated to
comply with such Borrower's obligations under the related Mortgage Loan;

"Buildings Policies" means

(a)   all buildings insurance policies relating to freehold English Properties
      or any Scottish Properties which have been taken out in the name of the
      relevant Borrower or in the name of the Borrower and the Seller or in the
      name of the Borrower with the Seller's interest noted, in accordance with
      the applicable Mortgage Conditions or the Alternative Insurance
      Requirements, including, without limitation, the Block Buildings Policy;
      and

(b)   all landlord's buildings insurance policies relating to leasehold
      Mortgaged Properties;

"Bullet Loan Tranche" means, in relation to Funding 2, any Loan Tranche which is
scheduled to be repaid in full on one Loan Payment Date. Bullet Loan Tranches
will be deemed to be Pass-Through Loan Tranches if:

(a)   a date specified in relation to the same in the applicable Loan Tranche
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs; or


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(c)   a Step-Up Date (if any) in relation to such Loan Tranche occurs;

"Bullet Redemption Date" means, for any Series and Class of Bullet Redemption
Notes, the Monthly Payment Date specified for such Notes in the applicable Final
Terms;

"Bullet Redemption Notes" means, in relation to a Funding 2 Issuer, any Series
and Class of Notes issued by such Issuer which is scheduled to be repaid in full
on one Note Payment Date. Bullet Redemption Notes will be deemed to be
Pass-Through Notes if:

(a)   a date specified in relation to the same in the applicable Final Terms
      occurs;

(b)   a Pass-Through Trigger Event occurs;

(c)   the Step-Up Date (if any) in relation to such Notes occurs;

"Bullet Repayment Date" means, for any Bullet Loan Tranche, the Monthly Payment
Date specified as such for such Loan Tranche in the applicable Loan Tranche
Supplement;

"Bullet Repayment Loan Amount" means, in relation to Funding 2, the amount
required to be repaid on the Bullet Repayment Date in respect of a Bullet Loan
Tranche in order to pay such Bullet Loan Tranche in full;

"Business Day" means, in relation to the First Issuer Notes and the First Issuer
Intercompany Loan, a day that is a London Business Day and a New York Business
Day;

"Capital Balance" means, in relation to any Mortgage Loan at any date, the
principal balance of that Mortgage Loan to which the Seller applies the relevant
interest rate at which interest on each Mortgage Loan applies;

"Capital Payment" means a Monthly Payment made by a Borrower under a Mortgage
Loan (other than a Flexible Mortgage Loan) that is greater by (GBP)200 or more
than the amount due for that month, and in respect of which the Borrower has
notified the Seller that such overpayment is intended to reduce the Capital
Balance of the related Mortgage Loan;

"Capitalised Arrears" means, in relation to any Mortgage Loan at any date,
interest or other amounts which are overdue in respect of such Mortgage Loan and
which as at such date have been added to the Capital Balance of such Mortgage
Loan either in accordance with the Mortgage Conditions or otherwise by
arrangement with the relevant Borrower;

"Capitalised Interest" means, in relation to any Mortgage Loan at any date,
interest which is overdue in respect of such Mortgage Loan and which as at such
date has been added to the Capital Balance of such Mortgage Loan in accordance
with the Mortgage Conditions or otherwise by arrangement with the relevant
Borrower (excluding for the avoidance of doubt any Arrears of Interest which
have not been so capitalised on such date);

"Cash" means cash and/or amounts standing to the credit of a bank account, as
the context shall require;

"Cash Accumulation Period" means the period beginning on the earlier to occur
of:

(a)   the date determined after counting back in time from the Bullet Repayment
      Date of the relevant Bullet Repayment Loan Amount, the number of months
      calculated in respect of the Anticipated Cash Accumulation Period relating
      to the relevant Bullet Repayment Loan Amount; and


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<PAGE>

(b)   in relation to an Original Bullet Loan Tranche, the date falling six
      months prior to the Bullet Repayment Date of that Original Bullet Loan
      Tranche;

and ending when Funding 2 has fully repaid that Bullet Repayment Loan Amount.

"Cash Accumulation Requirement" means on a Trust Determination Date:

(a)   the Outstanding Principal Balance in relation to each Bullet Repayment
      Loan Amount that is within a Cash Accumulation Period;

(b)   plus the aggregate of the amounts due on any Monthly Payment Date falling
      in the next following Monthly Payment Period under items (A), (B) and (C)
      of the Funding 2 Pre-Enforcement Principal Priority of Payments;

(c)   less the amount standing to the credit of the Funding 2 Cash Accumulation
      Ledger on the last Monthly Payment Date of the immediately preceding
      Monthly Payment Period (which amount was not to be distributed on that
      Monthly Payment Date to fund the Bullet Repayment Loan Amount of any Loan
      Tranche);

"Cash Accumulation Shortfall" means at any time that the Funding 2 Cash
Accumulation Ledger Amount is less than the Cash Accumulation Liability;

"Cashback" means, in relation to any Mortgage Loan, the agreement by the Seller
to pay an amount to the relevant Borrower upon completion of the relevant
Mortgage Loan;

"Cash Management Agreement" means the cash management agreement entered into on
or before the Initial Closing Date between the Cash Manager, the Mortgages
Trustee, Funding and the Security Trustee and shall include any additional
and/or replacement cash management agreement entered into by such parties from
time to time in accordance with the Transaction Documents;

"Cash Management Services" means, in relation to any Issuer, the services to be
provided to such Issuer and the Note Trustee or the Issuer Security Trustee (as
applicable) pursuant to the applicable Issuer Cash Management Agreement and in
relation to the Mortgages Trustee, Funding and Funding 2, the services to be
provided to the Mortgages Trustee, Funding and Funding 2 pursuant to the Cash
Management Agreement;

"Cash Manager Termination Event" has the meaning given in Clause 12.1
(Termination) of the Cash Management Agreement;

"Cash Manager" means Northern Rock or such other person or persons for the time
being acting, pursuant to the Cash Management Agreement, as agent for the
Mortgages Trustee, Funding, Funding 2, (following enforcement of the Funding
Security) the Security Trustee and, (following enforcement of the Funding 2
Security) the Funding 2 Security Trustee for the purposes of, inter alia,
managing all cash transactions and maintaining certain ledgers on behalf of the
Mortgages Trustee, Funding, Funding 2, (following enforcement of the Funding
Security) the Security Trustee and (following enforcement of the Funding 2
Security) the Funding 2 Security Trustee;

"Cash Re-Draw Amount" means, in relation to any Cash Re-Draw, the amount of
monies advanced by the Seller to the relevant Borrower in respect of such Cash
Re-Draw;

"Cash Re-Draw" means a cash payment granted and made by the Seller in accordance
with the Mortgage Conditions at the request of a Borrower after such Borrower
has made an Overpayment in respect of any Flexible Mortgage Loan but only to the
extent of the Overpayment so made;


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<PAGE>

"Cash Re-Draws Sub-Ledger" means the sub-ledger of the Re-Draws Ledger, which
will be established by the Cash Manager on the Initial Closing Date in order to
record any Cash Re-Draws made on Flexible Mortgage Loans in the Trust Property;

"CCA" means the Consumer Credit Act 1974 as amended from time to time.

"Certificate of Title" means a solicitor's or licensed or qualified
conveyancer's report or certificate of title obtained by or on behalf of the
Seller in respect of each Mortgaged Property substantially in the form of the
pro-forma set out in the Standard Documentation;

"Class A Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class B Notes of all Series issued by the Master Issuer, the Class M Notes
      of all Series issued by the Master Issuer, the Class C Notes of all Series
      issued by the Master Issuer and the Class D Notes of all Series issued by
      the Master Issuer (after giving effect to payments of principal being made
      on such Notes on such date); and (ii) the aggregate amount of the Funding
      2 Reserve Fund and the Issuer Reserve Fund on such date; and (iii) Excess
      Spread;

less

(b)   the amount standing to the credit of the Funding 2 Principal Ledger
      available on such date for the payment of principal on AA Loan Tranches, A
      Loan Tranches, BB Loan Tranches (after giving effect to any payments of
      principal to be made on the Loan Tranches on such date);

"Class A Noteholders" means the holders of the Class A Notes;

"Class A Notes" means, in relation to (a) the First Issuer, the Series 1 Class A
Notes and the Series 2 Class A Notes or any of them as the context may require;
(b) any other Funding Issuer, the Class A Notes as are defined in the relevant
Issuer Master Definitions Schedule; and (c) the Master Issuer, the Notes of any
Series designated as such in the applicable Final Terms;

"Class A Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class A Notes issued by such Issuer;

"Class A Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                      A x B

where:

A =   the Class A Required Subordinated Percentage as specified in the most
      recent Final Terms for Class A Notes of any Series; and

B =   the Principal Amount Outstanding of all Notes on such date (after giving
      effect to any payments of principal to be made on the Notes on such date)
      less the amounts standing to the credit of the Funding 2 Cash Accumulation
      Ledger and the Funding 2 Principal Ledger available on such date for the
      repayment of principal on the Loan Tranches (after giving effect to any
      repayments of principal to be made on the Loan Tranches on such date);

"Class A Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;


                                       12
<PAGE>

"Class B Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class M Notes of all Series issued by the Master Issuer, the Class C Notes
      of all Series issued by the Master Issuer and the Class D Notes of all
      Series issued by the Master Issuer (after giving effect to payments of
      principal being made on such Notes on such date); and (ii) the aggregate
      amount of the Funding 2 Reserve Fund and the Issuer Reserve Fund on such
      date; and (iii) Excess Spread;

less

(b)   the amounts standing to the credit of Funding 2 Principal Ledger available
      on such date for the payment of principal on the A Loan Tranches, BBB Loan
      Tranches and BB Loan Tranches (after giving effect to any payments of
      principal to be made on the Loan Tranches on such date);

"Class B Noteholders" means, in relation to any Issuer, the holders of the Class
B Notes issued by that Issuer;

"Class B Notes" means, in relation to (a) the First Issuer, the Series 1 Class B
Notes and the Series 2 Class B Notes or any of them as the context may require;
(b) any other Funding Issuer, the Class B Notes as are defined in the relevant
Issuer Master Definitions Schedule; and (c) the Master Issuer, the Notes of any
Series designated as such in the applicable Final Terms;

"Class B Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class B Notes issued by such Issuer;

"Class B Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                      A x B

where:

A =   the Class B Required Subordinated Percentage as specified in the most
      recent Final Terms for Class B Notes of any Series; and

B =   the Principal Amount Outstanding of all Notes on such date (after giving
      effect to any payments of principal to be made on the Notes on such date)
      less the amounts standing to the credit of the Funding 2 Cash Accumulation
      Ledger and the Funding 2 Principal Ledger available on such date for the
      repayment of principal on the Loan Tranches (after giving effect to any
      repayments of principal to be made on the Loan Tranches on such date);

"Class B Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms; "Class C Available
Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class D Notes of all Series issued by the Master Issuer (after giving
      effect to payments of principal being made on such Notes on such date);
      and (ii) the aggregate amount of the Funding 2 Reserve Fund and the Issuer
      Reserve Fund on such date; and (iii) Excess Spread;


                                       13
<PAGE>

less



(b)   the amounts standing to the credit of the Funding 2 Principal Ledger
      available on such date for the payment of principal on the BB Loan
      Tranches (after giving effect to any payments of principal to be made on
      the Loan Tranches on such date);

"Class C Noteholders" means the holders of the Class C Notes;

"Class C Notes" means, in relation to (a) the First Issuer, the Series 1 Class C
Notes and the Series 2 Class C Notes or any of them as the context may require;
(b) any other Funding Issuer, the Class C Notes as are defined in the relevant
Issuer Master Definitions Schedule; and (c) the Master Issuer, the Notes of any
Series designated as such in the applicable Final Terms;

"Class C Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class C Notes issued by such Issuer;

"Class C Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                      A x B

where:

A =   the Class C Required Subordinated Percentage as specified in the most
      recent Final Terms for Class C Notes of any Series; and

B =   the Principal Amount Outstanding of all Notes on such date (after giving
      effect to any payments of principal to be made on the Notes on such date)
      less the amounts standing to the credit of the Funding 2 Cash Accumulation
      Ledger and the Funding 2 Principal Ledger available on such date for the
      payment of principal on the Loan Tranches (after giving effect to any
      payments of principal to be made on the Loan Tranches on such date);

"Class C Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;

"Class D Notes" means, in relation to (a) the Second Issuer, the Series 2 Class
D Notes; (b) any other Funding Issuer, the Class D Notes as are defined in the
relevant Issuer Master Definitions Schedule; and (c) the Master Issuer, the
Notes of any Series designated as such in the applicable Final Terms;

"Class D Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class D Notes issued by such Issuer;

"Class M Available Subordinated Amount" means, on any date:

(a)   the sum of (i) the aggregate of the Principal Amounts Outstanding of the
      Class C Notes of all Series issued by the Master Issuer and the Class D
      Notes of all Series issued by the Master Issuer (after giving effect to
      payments of principal being made on such Notes on such date); and (ii) the
      aggregate amount of the Funding 2 Reserve Fund and the Issuer Reserve Fund
      on such date; and (iii) Excess Spread;

less


                                       14
<PAGE>

(b)   the amounts standing to the credit of the Funding 2 Principal Ledger
      available on such date for the payment of principal on the BBB Loan
      Tranches and the BB Loan Tranches (after giving effect to any payments of
      principal to be made on the Loan Tranches on such date);

"Class M Notes" means, in relation to: (a) Granite Mortgages 03-3 plc, the
Series 1 Class M Notes, the Series 2 Class M Notes and the Series 3 Class M
Notes or any of them as the context may require; (b) any other Funding Issuer,
the Class M Notes as defined in the relevant Issuer Master Definitions Schedule;
and (c) the Master Issuer, the Notes of any Series designated as such in the
applicable Note Supplement;

"Class M Principal Deficiency Sub Ledger" means, in relation to any Funding
Issuer, the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class M Notes issued by such Issuer;

"Class M Required Subordinated Amount" means the amount calculated on any date
as the product of:

                                      A x B

where:

A =   the Class M Required Subordinated Percentage as specified in the most
      recent Final Terms for Class M Notes of any Series; and

B =   the Principal Amount Outstanding of all Notes on such date (after giving
      effect to any payments of principal to be made on the Notes on such date)
      less the amounts standing to the credit of the Funding 2 Cash Accumulation
      Ledger and the Funding 2 Principal Ledger available on such date for the
      payment of principal on the Loan Tranches (after giving effect to any
      payments of principal to be made on the Loan Tranches on such date);

"Class M Required Subordinated Percentage" means, on any date, the percentage
specified as such in the most recent Final Terms;

"Class" means in relation to the Notes or the Noteholders, the Class A Notes,
the Class B Notes, the Class M Notes, the Class C Notes or the Class D Notes, as
the context requires;

"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;

"Closing Date" means:

(a)   in relation to the First Issuer, the Initial Closing Date and, in relation
      to any New Issuer that is a Funding Issuer, the date of any issue of New
      Notes by a New Issuer;

(b)   in relation to a Funding 2 Issuer and a Series and Class of Notes issued
      by such Issuer, the date of issue of such Series and Class of Notes;

"Closing Trust Property" means the Initial Mortgage Portfolio assigned by the
Seller to the Mortgages Trustee on the Initial Closing Date;

"Collection Account" means the Barclays Collection Account, the Lloyds TSB
Collection Account and any other account in the name of Northern Rock which is
from time to time used for the purpose of collecting, directly or indirectly,
monies due in respect of Mortgage Loans and/or the Related Security;


                                       15
<PAGE>

"Collection Bank Agreement" means the collection bank agreement entered into on
or about the Initial Closing Date between the Collection Banks, Mortgages
Trustee, Funding, the Seller and the Administrator and shall include any
additional and/or replacement collection bank agreement entered into by such
parties from time to time in accordance with the Transaction Documents;

"Collection Bank" means any of Barclays, acting through its branch at Percy
Street, Newcastle upon Tyne NE99 1JP and Lloyds TSB acting through its branch at
City Office, Bailey Drive, Gillingham Business Park, Kent ME8 0LS and/or such
other banks as may be appointed from time to time under and in accordance with
the Transaction Documents;

"Combined Credit Balance" means the average monthly cleared credit balance of
certain accounts of the Borrower held with the Seller which, pursuant to the
Together Connection Conditions, are required to be deducted from, among other
things, the balance of the Together Connections Mortgage Loan in calculating the
Together Connections Benefit;

"Combined Debit Balance" means the aggregate of the outstanding balances of:

(a)   a Borrower's Together Connections Mortgage Loan; and

(b)   certain other products held with the Seller,

from which the Combined Credit Balance is deducted in calculating the Together
Connections Benefit;

"Common Depositary" means Citibank, N.A., in its capacity as common depositary
for Euroclear and Clearstream, Luxembourg, in relation to the First Issuer
Notes, the CDIs (as defined in the Issuer Master Definitions Schedule relating
to the First Issuer) and, in relation to any New Notes, the Reg S Global Note
Certificates;

"Completion Event" means a Perfection Event;

"Conditions" or "Terms and Conditions" means, in relation to any Notes issued by
any Issuer, the terms and conditions to be endorsed on (or incorporated by
reference into) such Notes in the form or substantially in the form scheduled to
the Issuer Trust Deed entered into by such Issuer with the applicable Note
Trustee, and any reference to a numbered Condition shall be construed
accordingly as modified and supplemented (in the case of any Notes issued by the
Master Issuer) by the Final Terms applicable to such Series and Class of Notes,
in each case as from time to time modified in accordance with the provisions of
the applicable Issuer Trust Deed;

"Connection Conditions" means the Mortgage Conditions of the Seller identified
as Connection Conditions;

"Connection Interest Rate" means the rate or rates of interest which are
applicable to, amongst other things, a Together Connections Mortgage Loan and a
Connections Mortgage Loan, and is calculated in accordance with the Together
Connection Conditions and the Connection Conditions, respectively;

"Connections Benefit" means the amount by which:

(a)   the interest that would be payable on the Connections Debit Balance at the
      Connection Interest Rate exceeds:

(b)   the interest at the Connection Interest Rate that would be payable on the
      amount by which the Connections Debit Balance exceeds the Connections
      Combined Credit Balance;


                                       16
<PAGE>

"Connections Combined Credit Balance" means the average monthly cleared credit
balance in a Borrower's linked Save Direct deposit account (a deposit account
operated by a dedicated savings division of the Seller) and/or current account
with the Seller;

"Connections Debit Balance" means the outstanding balance on a Connections
Mortgage Loan from which the Connections Combined Credit Balance is deducted in
calculating the Connections Benefit;

"Connections Mortgage Loan" means a type of Flexible Mortgage Loan which has the
same basic features as a Together Connections Mortgage Loan but without the
facility for an unsecured loan or credit card;

"Contingency Insurance Policy" means the contingency insurance policy identified
in paragraph 2(d) of Schedule 4 (Insurance Contracts) to the Mortgage Sale
Agreement and any endorsements or extensions thereto as issued from time to time
and any additional, replacement or substitute contingency insurance policy which
relates to Mortgage Loans in the Mortgages Portfolio from time to time;

"Contributions" means the consideration in the form of cash provided to the
Mortgages Trustee by any Beneficiary in respect of the share of such Beneficiary
in the Trust Property under the Mortgages Trust Deed, being any of an Initial
Contribution, a Further Contribution or a Deferred Contribution;

"Contribution Date" means any date on which Funding or Funding 2 makes a Further
Contribution to the Mortgage Trustee in connection with the purchase of an
increased beneficial interest in the Trust Property, on which date the Mortgages
Trustee will pay to the Seller or to Funding a Special Distribution which is
funded by such Further Contribution;

"Contributions Ledger" means the ledger created to record (i) the making by
Funding and Funding 2 of Contributions to the Mortgages Trustee pursuant to the
Mortgages Trust Deed (ii) the making by the Seller of Contributions to the
Mortgages Trustee pursuant to the Mortgages Trust Deed (iii) the payment by the
Mortgages Trustee to the Seller of either (a) amounts of Initial Purchase Price
for the sale of any New Mortgage Portfolio which is acquired by the Mortgages
Trustee from the Seller under the provisions of Mortgage Sale Agreement (b)
amounts of Deferred Purchase Price in accordance with the Mortgage Sale
Agreement and (iv) the payment by the Mortgages Trustee to the Seller or to
Funding of any Special Distribution in accordance with the Mortgages Trust Deed;

"Contributions" means the consideration in the form of cash provided to the
Mortgages Trustee by any Beneficiary in respect of the share of such Beneficiary
in the Trust Property under the Mortgages Trust Deed, being any of an Initial
Contribution, a Further Contribution or a Deferred Contribution;

"Controlled Amortisation Amount" means on any Payment Date prior to the
occurrence of a Trigger Event or enforcement of the Issuer Security:

(a)   in relation to any Note or class of Notes issued by a Funding Issuer which
      is a Controlled Amortisation Note, the maximum aggregate principal amount
      which may be repaid by such Funding Issuer to the relevant Noteholder or
      Noteholders of such class on such Payment Date in accordance with the
      relevant Conditions and the Issuer Cash Management Agreement of such
      Funding Issuer; or

(b)   in relation to the Intercompany Loan of any Funding Issuer, the maximum
      aggregate principal amount which may be repaid by Funding to such Funding
      Issuer in respect of such Intercompany Loan on such Payment Date (which
      will be equal to the aggregate of the


                                       17
<PAGE>

      Controlled Amortisation Amounts due on such Payment Date under the Notes
      issued by such Issuer);

"Controlled Amortisation Instalment" means, in relation to a Funding 2 Issuer,
for any Series and Class of Notes issued by such Issuer which are Controlled
Amortisation Notes, on any Note Payment Date for such Notes before the
occurrence of a Trigger Event or the enforcement of the Issuer Security (in
respect of such Issuer), the maximum aggregate principal amount which may be
repaid by such Issuer to the relevant Noteholder or Noteholders of such Notes on
that Note Payment Date in accordance with the terms and conditions of such
Notes;

"Controlled Amortisation Notes" means, in relation to: (a) any Funding Issuer,
any Note issued by such Funding Issuer pursuant to which prior to the occurrence
of a Trigger Event or enforcement of the applicable Issuer Security, the
Conditions of such Notes impose a limit on the amount of principal which may be
repaid by such Funding Issuer to the relevant Noteholder in respect of such Note
on any Payment Date; and (b) any Funding 2 Issuer, any Series and Class of Notes
issued by such Funding 2 Issuer, the conditions of which impose a limit on the
amount of principal which may be repaid on such Notes on each Controlled
Redemption Date for such Notes. Controlled Amortisation Notes issued by a
Funding 2 Issuer will be deemed to be Pass-Through Notes if:

(a)   a date specified in relation to the same in the applicable Note Supplement
      occurs;

(b)   a Pass-Through Trigger Event occurs; or

(c)   the Step-Up Date (if any) in relation to such Notes occurs;

"Controlled Redemption Dates" for any Series and Class of Controlled
Amortisation Notes means the Monthly Payment Dates specified as such for such
Series and Class of Notes in the applicable Final Terms;

"Controlled Repayment Date" means, for any Controlled Repayment Loan Tranche the
Monthly Payment Dates specified as such for such Loan Tranche in the applicable
Loan Tranche Supplement;

"Controlled Repayment Loan Amount" means, in relation to Funding 2, for any
Controlled Repayment Loan Tranche, on any Controlled Repayment Date before the
occurrence of a Trigger Event or the enforcement of the Funding 2 Security, the
maximum aggregate principal amount which may be repaid by Funding 2 to the
relevant Funding 2 Issuer on that Controlled Repayment Date;

"Controlled Repayment Loan Tranche" means, in relation to Funding 2, any Loan
Tranche which by its terms imposes a limit on the amount of principal which may
be repaid on such Loan Tranche on any Controlled Repayment Date. Controlled
Repayment Loan Tranches will be deemed to be Pass-Through Loan Tranches if:

(a)   a date specified in relation to the same in the applicable Loan Tranche
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs; or

(c)   the Step-Up Date (if any) in relation to such Loan Tranche occurs;

"Controlled Repayment Requirement" means, in relation to Funding 2, on a Trust
Determination Date, the amount required by Funding 2 to repay each Controlled
Repayment Loan Amount which is scheduled to be repaid or is otherwise due on any
Monthly Payment Date falling in the three Monthly Payment Periods immediately
following such Trust Determination Date (after taking into account amounts
standing to the credit of the Funding 2 Principal Ledger on such Trust
Determination Date which are available therefor);


                                       18
<PAGE>

"Controlling Beneficiary Deed" means the deed entered into on or about the
Funding 2 Programme Date between the Mortgages Trustee, Funding, Funding 2, the
Security Trustee, the Funding 2 Security Trustee, the Issuer Security Trustees,
the Note Trustee and the Seller;

"Controlling Directions" means:

(a)   in respect of the Funding Beneficiaries, in all cases, the Funding
      Beneficiary representing the Issuer(s) with the highest ranking class of
      Notes then outstanding, and if each Funding Beneficiary represents Issuers
      with the same class as their highest ranking class, the Funding
      Beneficiary representing the Issuer(s) with the greatest Principal Amount
      Outstanding of the highest ranking class of Notes.

(b)   in respect of the Funding Security Trustees in all cases, the directions
      of:

      (i)   in relation to the Funding Issuers, the Note Trustee(s) for the
            holders of the highest ranking class of Notes outstanding; and

      (ii)  in relation to the Funding 2 Issuers, the Issuer Security Trustees
            for the holders of the highest ranking class of Notes outstanding,

      and if there is any conflict between the Controlling Directions, due to
      two or more Issuers (for the purposes of this paragraph, being any of the
      Funding Issuers and the Funding 2 Issuers) having Notes of the same class
      as their highest ranking class, the directions from the Note Trustee(s) or
      Issuer Security Trustee(s), as applicable, for the holders of the greatest
      aggregate Principal Amount Outstanding of the highest ranking class of
      Notes will prevail.

For the purposes of (a) and (b):

(1)   a Funding Beneficiary will be treated as "representing" an Issuer in
      circumstances where the Funding Beneficiary is the debtor under the terms
      of an Intercompany Loan Agreement between the Issuer and that Funding
      Beneficiary;

(2)   all denominations of the principal amount outstanding of any Note shall be
      calculated in Sterling and where the principal amount outstanding of any
      Note of any Funding Issuer or any Funding 2 Issuer is not denominated in
      Sterling, it shall be converted into Sterling (in relation to the Funding
      Issuers) at the rate specified in the Currency Swap Agreement applicable
      to such Note and (in relation to the Funding 2 Issuers) at the rate
      specified in the Issuer Swap Agreement applicable to such Note; and

(3)   the highest ranking class of notes outstanding shall mean:

      (A)   in relation to the Funding Issuers, the Class A Notes (for so long
            as there are Class A Notes outstanding), the Class B Notes (so long
            as there are no Class A Notes outstanding), the Class M Notes (so
            long as there are neither Class A Notes nor Class B Notes
            outstanding) or the Class C Notes (so long as there are neither
            Class A Notes, Class B Notes nor Class M Notes outstanding); and

      (B)   in relation to the Funding 2 Issuers, the Class A Notes (for so long
            as there are Class A Notes outstanding), the Class B Notes (so long
            as there are no Class A Notes outstanding), the Class M Notes (so
            long as there are neither Class A Notes nor Class B Notes
            outstanding), the Class C Notes (so long as there are neither Class
            A Notes, Class B Notes nor Class M Notes outstanding) or the Class D
            Notes (so long as there


                                       19
<PAGE>

            are neither Class A Notes, Class B Notes, Class M Notes nor Class C
            Notes outstanding);

"Corporate Services Agreement" means:

(a)   in relation to any Funding Issuer, the corporate services agreement
      entered into on or before the Closing Date of the issue of the relevant
      Notes among, inter alios, the relevant Corporate Services Provider,
      Holdings, the Post-Enforcement Call Option Holder and such Funding Issuer,
      for the provision by the Corporate Services Provider of certain corporate
      services;

(b)   in relation to Funding 2 and the Master Issuer, the corporate services
      agreement entered into on or before the Funding 2 Programme Date among,
      inter alios, the relevant Corporate Services Provider, Holdings, the
      Post-Enforcement Call Option Holder, Funding 2 and the Master Issuer, for
      the provision by the Corporate Services Provider of certain corporate
      services; and

(c)   in relation to Funding and the Mortgages Trustee, the corporate services
      agreement entered into on or before the Initial Closing Date between the
      relevant Corporate Services Provider and the Mortgages Trustee (as the
      case may be) for the provision by the relevant Corporate Services Provider
      of certain corporate services with respect to Funding and Mortgages
      Trustee,

and shall, in each case, include any additional and/or replacement corporate
services agreement entered into by such parties from time to time in accordance
with the Transaction Documents;

"Corporate Services Provider" means in relation to Funding 2 and any Issuer, Law
Debenture Corporate Services Limited, and in relation to Funding and the
Mortgages Trustee, Mourant & Co. Limited, or any other person or persons for the
time being acting as corporate services provider under the relevant Corporate
Services Agreement;

"CPR" means, unless otherwise defined in the text of the relevant Transaction
Document, the constant rate of scheduled and unscheduled repayments on the
Mortgage Loans in the Mortgage Portfolio each month relative to the aggregate
principal amount outstanding of such Mortgage Loans;

"Credit Support Annex" means, in relation to the Funding 2 Basis Rate Swap
Agreement, the 1995 Credit Support Annex (Bilateral Form-Transfer) between
Funding 2 and the Funding Basis Rate Swap Provider and, in relation to an Issuer
Swap Agreement, means the 1995 Credit Support Annex (Bilateral Form-Transfer)
between the Issuer and the applicable Issuer Swap Provider;

"Currency Swap Agreement" means, for any Issuer, the ISDA Master Agreement(s),
Schedule(s), Confirmation(s) and any credit support documents thereto entered
into among such Issuer, the relevant Currency Swap Provider, the Note Trustee
and any credit support provider, as may be amended, restated, novated, varied or
supplemented from time to time and shall include any additional and/or
replacement currency swap agreement entered into by such Issuer from time to
time in connection with the Notes issued by such Issuer;

"Currency Swap Provider" means in relation to any Issuer the swap counterparty
to such Issuer under any relevant Currency Swap Agreement of such Issuer;

"Currency Swap Provider Default" means the occurrence of an Event of Default or
a Downgrade Termination Event (as defined in the relevant Currency Swap
Agreement) under a Currency Swap


                                       20
<PAGE>

Agreement where the Currency Swap Provider is the Defaulting Party or the
Affected Party (each as defined in the relevant Currency Swap Agreement);

"Current Balance" means in relation to any Mortgage Loan as at any given date,
the aggregate (but avoiding double counting) of:

(a)   the original principal amount advanced to the relevant Borrower and any
      Further Advances on or before the given date to the relevant Borrower
      secured or intended to be secured by the related Mortgage;

(b)   the amount of any Re-Draw under any Flexible Mortgage Loan or of any
      Further Draw under a Personal Secured Loan secured or intended to be
      secured by the related Mortgage;

(c)   any interest, disbursement, legal expense, fee, charge, rent, service
      charge, premium or payment which has been properly capitalised in
      accordance with the relevant Mortgage Conditions or with the relevant
      Borrower's consent and added to the amounts secured or intended to be
      secured by such Mortgage Loan (including interest capitalised on any
      Re-Draw under a Flexible Mortgage Loan); and

(d)   any other amount (other than unpaid interest) which is due or accrued
      (whether or not due) and which has not been paid by the relevant Borrower
      and has not been capitalised in accordance with the relevant Mortgage
      Conditions or with the relevant Borrower's consent but which is secured or
      intended to be secured by that Mortgage Loan, as at the end of the London
      Business Day immediately preceding that given date less any repayment or
      payment of any of the foregoing made on or before the end of the London
      Business Day immediately preceding that given date and excluding any
      retentions made but not released and any Further Advances and/or Further
      Draws committed to be made but not made by the end of the London Business
      Day immediately preceding that given date;

"Current Funding Share" means the amount of Trust Property beneficially owned by
Funding from time to time, as determined in accordance with Clause 8 (Adjustment
of Funding Share Percentage, Funding 2 Share Percentage and Seller Share
Percentage) of the Mortgages Trust Deed;

"Current Funding Share Percentage" means the percentage share of Funding in the
Trust Property from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Current Funding 2 Share Percentage" means the percentage share of Funding 2 in
the Trust Property from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Current Funding 2 Share" means the amount of Trust Property beneficially owned
by Funding 2 from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Current Issuer Available Principal Receipts", with respect to any Funding
Issuer (other than the First Issuer, the Second Issuer and the Third Issuer),
has the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding Issuer, and with respect to any Funding 2 Issuer, has
the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding 2 Issuer;


                                       21
<PAGE>

"Current Issuer Available Revenue Receipts", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating to
such Funding Issuer, and with respect to any Funding 2 Issuer, has the meaning
given to such term in the Issuer Master Definitions Schedule relating to such
Funding 2 Issuer;

"Current Issuer Bank Account Agreement", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating to
such Funding Issuer, and with respect to any Funding 2 Issuer, has the meaning
given to such term in the Issuer Master Definitions Schedule relating to such
Funding 2 Issuer;

"Current Issuer Bank Accounts", with respect to any Funding Issuer (other than
the First Issuer, the Second Issuer and the Third Issuer), has the meaning given
to such term in the Issuer Master Definitions Schedule relating to such Funding
Issuer, and with respect to any Funding 2 Issuer, has the meaning given to such
term in the Issuer Master Definitions Schedule relating to such Funding 2
Issuer;

"Current Issuer Cash Management Agreement", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating to
such Funding Issuer, and with respect to any Funding 2 Issuer, has the meaning
given to such term in the Issuer Master Definitions Schedule relating to such
Funding 2 Issuer;

"Current Issuer Liquidity Reserve Fund", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating to
such Funding Issuer;

"Current Issuer Liquidity Reserve Ledger", with respect to any Funding Issuer
(other than the First Issuer, the Second Issuer and the Third Issuer), has the
meaning given to such term in the Issuer Master Definitions Schedule relating to
such Funding Issuer;

"Current Issuer Post-Enforcement Priority of Payments", in respect of any
Funding Issuer (other than the First Issuer, the Second Issuer and the Third
Issuer), has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding Issuer, and in respect of any Funding 2
Issuer, has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;

"Current Issuer Pre-Enforcement Principal Priority of Payments", with respect to
any Funding Issuer (other than the First Issuer, the Second Issuer and the Third
Issuer), has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding Issuer, and in respect of any Funding 2
Issuer, has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;

"Current Issuer Pre-Enforcement Priority of Payments", in respect of any Funding
Issuer (other than the First Issuer, the Second Issuer and the Third Issuer),
has the meaning given to such term in the Issuer Master Definitions Schedule
relating to such Funding Issuer, and in respect of any Funding 2 Issuer, has the
meaning given to such term in the Issuer Master Definitions Schedule relating to
such Funding 2 Issuer;


                                       22
<PAGE>

"Current Issuer Pre-Enforcement Revenue Priority of Payments", in respect of any
Funding Issuer (other than the First Issuer, the Second Issuer and the Third
Issuer), has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding Issuer, and in respect of any Funding 2
Issuer, has the meaning given to such term in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;

"Current Issuer Reserve Fund", in respect of any Funding Issuer (other than the
First Issuer and the Second Issuer), has the meaning given to such term in the
Issuer Master Definitions Schedule relating to such Funding Issuer, and in
respect of any Funding 2 Issuer, has the meaning given to such term in the
Issuer Master Definitions Schedule relating to relating to such Funding 2
Issuer;

"Current Issuer Reserve Fund Ledger", in respect of any Funding Issuer (other
than the First Issuer and the Second Issuer), has the meaning given to such term
in the Issuer Master Definitions Schedule relating to such Funding Issuer, and
in respect of any Funding 2 Issuer, has the meaning given to such term in the
Issuer Master Definitions Schedule relating to relating to such Funding 2
Issuer;

"Current Issuer Reserve Required Amount" in respect of any Funding Issuer (other
than the First Issuer and the Second Issuer), has the meaning given to such term
in the Issuer Master Definitions Schedule relating to such Funding Issuer, and
in respect of any Funding 2 Issuer, has the meaning given to such term in the
Issuer Master Definitions Schedule relating to such Funding Issuer;

"Current Issuer Secured Creditors" in respect of Funding Issuers, in relation to
any New Issuer, has the meaning given to such term in the Issuer Master
Definitions Schedule relating to that New Issuer;

"Current Issuer Transaction Accounts" in respect of any Issuer (other than the
First Issuer, the Second Issuer and the Third Issuer), has the meaning given to
such term in the Issuer Master Definitions Schedule relating to that Issuer;

"Current Issuer Transaction Accounts" in respect of any Funding Issuer (other
than the First Issuer, the Second Issuer and the Third Issuer), has the meaning
given to such term in the Issuer Master Definitions Schedule relating to such
Funding Issuer, and in respect of any Funding 2 Issuer, has the meaning given to
such term in the Issuer Master Definitions Schedule relating to such Funding 2
Issuer;

"Current Seller Share Percentage" means the percentage share of the Seller in
the Trust Property from time to time as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Current Seller Share" means the amount of Trust Property beneficially owned by
the Seller from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage, Funding 2 Share Percentage and Seller
Share Percentage) of the Mortgages Trust Deed;

"Dealers" means Barclays Bank PLC, Citigroup Global Markets Limited and Merrill
Lynch International and any other dealers appointed from time to time in
accordance with the Programme Agreement;

"Deed of Accession" means:

(a)   in relation to Funding and the Funding Deed of Charge, a deed executed by,
      inter alios, Funding, the Security Trustee and the Note Trustee and any
      New Funding Secured Creditor in the form set out in Schedule 2 to the
      Funding Deed of Charge or any other form of deed as agreed between the
      parties;


                                       23
<PAGE>

(b)   in relation to Funding 2 and the Funding 2 Deed of Charge, a deed executed
      by, inter alios, Funding 2, the Funding 2 Security Trustee and the Issuer
      Security Trustee in respect of each Funding 2 Issuer and any New Funding 2
      Secured Creditor in the form set out in Schedule 2 to the Funding 2 Deed
      of Charge or any other form of deed as agreed between the parties;

(c)   in relation to a Funding 2 Issuer and the applicable Issuer Deed of
      Charge, a deed of execution by, inter alios, such Funding 2 Issuer and the
      Issuer Security Trustee and any New Issuer Secured Creditor in respect of
      such Funding 2 Issuer in the form set out in the applicable Issuer Deed of
      Charge or any other form of deed as agreed between the parties;

"Deed of Consent" means a deed whereby a person in or intended to be in
occupation of a Mortgaged Property agrees with the Seller to postpone his or her
interest (if any) in the Mortgaged Property so that it ranks after the interest
of the Seller created by the relevant Mortgage;

"Deed of Postponement" means a deed whereby a Mortgagee of a Mortgaged Property
agrees with the Seller to postpone its Mortgage over the Mortgaged Property so
that the sums secured by it will rank for repayment after the sums secured by
the relevant Mortgage;

"Deferred Contribution" means:

(a)   the consideration in the form of cash payable by Funding to the Mortgages
      Trustee from time to time in respect of the Funding Share of the Trust
      Property pursuant to and in accordance with the Mortgages Trust Deed
      and/or the Funding Deed of Charge including, for the avoidance of doubt,
      the Funding Final Deferred Contribution; and

(b)   the consideration in the form of cash payable by Funding 2 to the
      Mortgages Trustee from time to time in respect of the Funding 2 Share of
      the Trust Property pursuant to and in accordance with the Mortgages Trust
      Deed and/or the Funding 2 Deed of Charge including, for the avoidance of
      doubt, the Funding 2 Final Deferred Contribution,

which Contributions will fund the payment to the Seller by the Mortgages Trustee
of amounts of Deferred Purchase Price payable by the Mortgages Trustee to the
Seller from time to time pursuant to and in accordance with the Mortgage Sale
Agreement;

"Deferred Purchase Price" means that portion of the Purchase Price for the sale
and assignment of the Initial Mortgage Portfolio or of any New Mortgage
Portfolio sold and assigned to the Mortgages Trustee which is not paid to the
Seller, in the case of the Initial Mortgage Portfolio, on the Initial Closing
Date or, in the case of any New Mortgage Portfolio, on the relevant Assignment
Date and which is to be paid by the Mortgages Trustee to the Seller from time to
time from Deferred Contributions received by the Mortgages Trustee from Funding
and from Funding 2 and otherwise in accordance with the Mortgage Sale Agreement;

"Direct Debit" means a payment made pursuant to the Direct Debiting Scheme;

"Direct Debiting Scheme" means the scheme for the manual or automated debiting
of bank accounts operated in accordance with the detailed rules of certain
members of the Association for Payment Clearing Services;

"Distribution Date" means the date on which the Mortgages Trust terminates and
the London Business Day as determined by the Cash Manager falling no later than
6 Business Days after each Trust Determination Date;


                                       24
<PAGE>

"Distribution Period" means the period from, and including, a Distribution Date
to, but excluding, the next following Distribution Date or, in relation to the
first Distribution Period, the period from and including the relevant Closing
Date to, but excluding, the first Distribution Date;

"DTC" means The Depository Trust Company;

"Early Repayment Charge Receipts" means an amount equal to sums received by the
Mortgages Trustee from time to time in respect of Early Repayment Charges;

"Early Repayment Charge" means any charge or fee which the Mortgage Conditions
applicable to a Mortgage Loan require the relevant Borrower to pay in the event
that all or part of that Mortgage Loan is repaid before a certain date,
including without limitation repayment of any "cashback";

"EBRR" has the meaning given to such term in Clause 4.4(c) of the Administration
Agreement;

"Encumbrance" has the same meaning as "Security Interest";

"Enforcement Procedures" means the procedures for the enforcement of Mortgages
undertaken by the Administrator from time to time in accordance with the
Administration Procedures;

"English Mortgage Loan" means a Mortgage Loan secured by an English Mortgage;

"English Mortgage" means, in respect of any Mortgage Loan in the Mortgage
Portfolio, a Mortgage secured over an English Property;

"English Property" means a Mortgaged Property situated in England or Wales;

"EU Regulation" means Council regulation (EC) No. 1346/2000 of 29 May 2000 on
Insolvency Proceedings;

"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear System;

"Event of Default" means, as the context requires, a Funding Event of Default
and/or a Funding 2 Event of Default;

"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended;

"Existing Borrower's Re-Fix Rate" means at any date the fixed rate then being
offered to those of the Seller's existing Borrowers who at that date are seeking
to fix the rate of interest payable under their existing Fixed Rate Mortgage
Loan with the Seller for the applicable period;

"Final Deferred Contribution" means, as applicable, the Funding Final Deferred
Contribution and/or the Funding 2 Final Deferred Contribution;

"Final Maturity Date" means, in respect of any Series and Class of Notes, the
date specified for such Series and Class of Notes in the related Note
Supplement; "Final Repayment Date" means:

(a)   in respect of the First Issuer Intercompany Loan, the Payment Date falling
      in January, 2041 and in relation to any New Intercompany Loan relating to
      a Funding Issuer the date specified under the relevant Issuer Transaction
      Documents and as defined in the relevant Issuer Master Definitions
      Schedule; or

(b)   in relation to any Loan Tranche under a Funding 2 Intercompany Loan
      Agreement between Funding 2 and a Funding 2 Issuer, the date identified as
      such for that Loan Tranche in the related Loan Tranche Supplement;


                                       25
<PAGE>

"Final Terms" means, in relation to any Series and Class of Notes issued by a
Funding 2 Issuer, the final terms issued in relation to such Series and Class of
Notes giving details of, inter alia, the amount and price of such Series of
Notes and which, together with the Base Prospectus, forms part of the Reg S
Prospectus in relation to such Series of Notes;

"Financial Period" means a Financial Year or any other period in respect of
which accounts are required to be prepared and certified by the auditors of the
relevant company to enable it to comply with all relevant legal and accounting
requirements and all requirements of any stock exchange on which any securities
of the company are listed;

"First Issuer" means Granite Mortgages 01-1 plc;

"First Issuer Available Principal Receipts" has the meaning given to such term
in the First Issuer Master Definitions Schedule;

"First Issuer Available Revenue Receipts" has the meaning given to such term in
the First Issuer Master Definitions Schedule;

"First Issuer Bank Account Agreement" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Bank Accounts" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Basis Rate Swap" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Basis Rate Swap Agreement" has the meaning given to such term in
the First Issuer Master Definitions Schedule;

"First Issuer Cash Management Agreement" has the meaning given to such term in
the First Issuer Master Definitions Schedule;

"First Issuer Cash Manager" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Deed of Charge" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Intercompany Loan" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Intercompany Loan Agreement" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Intercompany Loan Event of Default" has the meaning given to such term in
the First Issuer Master Definitions Schedule;

"First Issuer Liquidity Reserve Fund" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Liquidity Reserve Ledger" has the meaning given to such term in
the First Issuer Master Definitions Schedule;

"First Issuer Liquidity Reserve Required Amount" has the meaning given to such
term in the Issuer Master Definitions Schedule relating to the First Issuer;


                                       26
<PAGE>

"First Issuer Master Definitions Schedule" means, in respect of the First
Issuer, the master definitions schedule signed for the purposes of
identification by Sidley Austin Brown & Wood and Clifford Chance LLP on the
Initial Closing Date (as amended, varied or supplemented from time to time);

"First Issuer Note Event of Default" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Notes" has the meaning given to such term in the First Issuer
Master Definitions Schedule;

"First Issuer Paying Agent and Agent Bank Agreement" has the meaning given to
such term in the First Issuer Master Definitions Schedule;

"First Issuer Post-Enforcement Priority of Payments" has the meaning given to
such term in the First Issuer Master Definitions Schedule;

"First Issuer Pre-Enforcement Priority of Payments" has the meaning given to
such term in the First Issuer Master Definitions Schedule;

"First Issuer Pre-Enforcement Principal Priority of Payments" has the meaning
given to such term in the First Issuer Master Definitions Schedule;

"First Issuer Pre-Enforcement Revenue Priority of Payments" has the meaning
given to such term in the First Issuer Master Definitions Schedule;

"First Issuer Reserve Fund" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Reserve Fund Ledger" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Reserve Required Amount" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Secured Creditors" has the meaning given to such term in the First
Issuer Master Definitions Schedule;

"First Issuer Security" has the meaning given to such term in the First Issuer
Master Definitions Schedule;

"First Issuer Transaction Accounts" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Transaction Documents" has the meaning given to such term in the
First Issuer Master Definitions Schedule;

"First Issuer Trust Deed" has the meaning given to such term in the First Issuer
Master Definitions Schedule;

"Fitch" means Fitch Ratings Limited and includes any successor to its ratings
business;

"Fixed Rate Note" means a Note, the interest basis of which is specified in the
applicable Final Terms as being fixed rate;

"Fixed Rate Mortgage Loan" means a Mortgage Loan which is subject to a fixed
rate of interest set by reference to a predetermined rate or series of rates for
a fixed period or periods;


                                       27
<PAGE>

"Fixed Rate Period" means, in relation to any Fixed Rate Mortgage Loan or other
Mortgage Loan offered with a fixed rate, the period agreed between the Borrower
and the Seller or Administrator (as applicable) as set out under the terms and
conditions of such Mortgage Loan during which the interest rate applicable to
such Mortgage Loan will remain fixed;

"Flexible Cash Re-Draw Capacity" has the meaning given to it in Clause 9.2
(Fluctuation of Minimum Seller Share on each Distribution Date) of the Mortgages
Trust Deed;

"Flexible Mortgage Loan" means a type of Mortgage Loan (other than a Personal
Secured Loan) product that typically incorporates 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;

"Flexible Overpayments Sub Ledger" means the sub-ledger of the Overpayments
Ledger which will be established by the Cash Manager on the Initial Closing Date
in order to record any Overpayments made on Flexible Mortgage Loans;

"FSMA" means the Financial Services and Markets Act 2000, as amended;

"Full Repayment Amount" means the proceeds of a Loan Tranche which is to be used
to refinance another Loan Tranche;

"Funding 2" means Granite Finance Funding 2 Limited, a private limited company
incorporated in England and Wales with registered number 05249387;

"Funding 2 Available Principal Receipts" in respect of a Monthly Payment Period
will be calculated by the Cash Manager or otherwise on behalf of Funding 2 (or,
following enforcement of the Funding 2 Security, the Funding 2 Security Trustee)
on the Distribution Date immediately preceding the relevant Monthly Payment
Period and will be an amount equal to the sum of:

(a)   all Funding 2 Principal Receipts standing to the credit of the Funding 2
      Cash Accumulation Ledger which are to be applied on a Monthly Payment Date
      falling in the relevant Monthly Payment Period to repay a Bullet Repayment
      Loan Amount or to make a payment under items (A), (B) or (C) of the
      Funding 2 Pre-enforcement Principal Priority of Payments and, if such
      Monthly Payment Date occurs on or after a Trigger Event or enforcement of
      the Issuer Security, the remainder of such receipts standing to the credit
      of the Funding 2 Cash Accumulation Ledger;

(b)   all other Mortgages Trustee Principal Receipts received by Funding 2 from
      the Mortgages Trustee which are to be applied on a Monthly Payment Date
      falling in the relevant Monthly Payment Period to repay a Scheduled
      Repayment Loan Instalment, a Controlled Repayment Loan Amount or a
      Principal Amount repayable in respect of a Pass-Through Loan Tranche
      standing to the credit of the Funding 2 Principal Ledger;

(c)   the amounts, if any, to be credited to the Principal Deficiency Ledger on
      a Monthly Payment Date falling in the relevant Monthly Payment Period
      pursuant to items (I), (L), (N), (P) and (R) of the Funding 2
      Pre-Enforcement Revenue Priority of Payments;

(d)   in so far as needed to make a Funding 2 Reserve Principal Payment, any
      amount available to be drawn under the Funding 2 Reserve Fund less the
      aggregate of the amounts to be applied on all Monthly Payment Dates
      falling in the relevant Monthly Payment Period in payment of


                                       28
<PAGE>

      interest and expenses under the Funding 2 Pre-Enforcement Revenue Priority
      of Payments, plus the aggregate of any amounts to be credited to the
      Funding 2 Reserve Ledger on any Monthly Payment Date falling in the
      relevant Monthly Payment Period;

(e)   in so far as needed to make a Funding 2 Liquidity Reserve Principal
      Payment, any amount available to be drawn under the Funding 2 Liquidity
      Reserve Fund less the aggregate of the amounts to be applied on all
      Monthly Payment Dates falling in the relevant Monthly Payment Period in
      payment of interest and expenses under the Funding 2 Pre-Enforcement
      Revenue Priority of Payments, plus any amounts to be credited to the
      Funding 2 Liquidity Reserve Ledger on any Monthly Payment Date falling in
      the relevant Monthly Payment Period;

(f)   in so far as needed, any amount available to be drawn under the Funding 2
      Liquidity Facility to make a Funding 2 Liquidity Facility Principal
      Payment on any Monthly Payment Date falling in the relevant Monthly
      Payment Period;

less

(g)   the aggregate of the amounts to be applied on all Monthly Payment Dates
      falling in the relevant Monthly Payment Period to any items (H), (J), (M),
      (O) and (Q) of the Funding 2 Pre-Enforcement Revenue Priority Payments.

"Funding 2 Available Revenue Receipts" in respect of a Monthly Payment Period
will be calculated by the Cash Manager on the Distribution Date immediately
preceding such Monthly Payment Period and will be an amount equal to the sum of:

(a)   all Mortgages Trustee Available Revenue Receipts distributed to Funding 2
      during the period from, but excluding, the first day of the immediately
      preceding Monthly Payment Period and ending on, and including, the first
      day of the relevant Monthly Payment Period;

(b)   other net income of Funding 2 including all amounts of interest received
      on the Funding 2 GIC Account and the Funding 2 Transaction Account, and/or
      all income from Funding 2's Authorised Investments, on the Distribution
      Date during the Interest Period ending on the first day of the relevant
      Monthly Payment Period, in each case to be received on or prior to the
      first day of the relevant Monthly Payment Period; and

(c)   amounts received from the Funding 2 Basis Rate Swap Provider under the
      Funding 2 Basis Rate Swap Agreement (excluding Swap Collateral standing to
      the credit of the Funding 2 Swap Collateral Accounts) including any Swap
      Termination Payments (other than such Swap Termination Payments applied or
      to be applied by Funding 2 in the purchase of one or more replacement
      hedging transactions) recovered by Funding 2 under the Funding 2 Basis
      Rate Swap Agreement;

(d)   (only to the extent required after making the calculation set out in Rule
      2 under the heading "Rules for Application of Funding 2 Principal
      Receipts" in Part II to Schedule 3 of the Funding 2 Deed of Charge the
      aggregate of amounts standing to the credit of the Funding 2 Principal
      Ledger or the Funding 2 Cash Accumulation Ledger (as applicable) which are
      to be applied on any Monthly Payment Date falling in the relevant Monthly
      Payment Period to pay items (H), (J), (M), (O), and (Q) of the Funding 2
      Pre-Enforcement Revenue Priority of Payments;

(e)   the amounts available to be drawn under the Funding 2 Reserve Fund,
      subject to any limits or conditions on the purposes for which the Funding
      2 Reserve Fund may be utilised; and


                                       29
<PAGE>

(f)   the amounts available to be drawn under the Funding 2 Liquidity Reserve
      Fund, if any, subject to any limits or conditions on the purposes for
      which the Funding 2 Liquidity Reserve Fund may be utilised.

(g)   in so far as is needed, any amount available to be drawn under the Funding
      2 Liquidity Facility, if any, for the payment of interest and expenses.

"Funding 2 Bank Account Agreement" means the agreement entered into on or about
the Funding 2 Programme Date between the Account Bank, Funding 2 and the Funding
2 Security Trustee which governs the operation of the Funding 2 Bank Accounts;

"Funding 2 Bank Accounts" means the Funding 2 GIC Account and the Funding
Transaction Account and each such additional or replacement account in the name
of Funding that may be opened with the prior approval of the Funding 2 Security
Trustee after the Funding 2 Programme Date;

"Funding 2 Basis Rate Swap Agreement" means the ISDA Master Agreement, Schedule
and Confirmations thereto each entered into on or about the Funding 2 Programme
Date and any Credit Support Annex or other credit support documents entered into
at any time among Funding 2 and the Funding 2 Basis Rate Swap Provider and/or
any credit support provider and shall include any additional basis rate swap
agreement entered into by Funding 2 from time to time in accordance with the
Transaction Documents;

"Funding 2 Basis Rate Swap Excluded Termination Amount" means, in relation to
the Funding 2 Basis Rate Swap Agreement, following the application of all or
part of any Swap Replacement Premium in accordance with Clause 7.8 of the
Funding 2 Deed of Charge and Clause 4.12 of the Cash Management Agreement,
covering an amount equal to any termination payment due and payable to the
Funding 2 Basis Rate Swap Provider as a result of a Swap Provider Default in
respect of the Funding 2 Basis Rate Swap Provider;

"Funding 2 Basis Rate Swap Provider" means Northern Rock and/or, as applicable,
any other basis rate swap provider appointed from time to time by Funding 2 in
accordance with the Transaction Documents;

"Funding 2 Basis Rate Swaps" means the swap transactions as documented under the
Funding 2 Basis Rate Swap Agreement;

"Funding 2 Cash Accumulation Ledger Amount" means, at any time, the amount
standing to the credit of the Funding 2 Cash Accumulation Ledger at that time
(immediately prior to any drawing to be applied on any Monthly Payment Date
falling in a Monthly Payment Period and prior to any payment under item (I) of
the Funding 2 Pre-Enforcement Principal Priority of Payments on any Monthly
Payment Date falling in such Monthly Payment Period);

"Funding 2 Cash Accumulation Ledger" means the ledger on which the Cash Manager
will record the amounts accumulated by Funding 2 to pay Bullet Repayment Loan
Amounts;

"Funding 2 Charged Property" means the property, assets and undertakings of
Funding 2 which from time to time are or are expressed to be mortgaged, charged,
assigned, pledged or otherwise encumbered to, or in favour of the Funding 2
Security Trustee for itself and for the Funding 2 Secured Creditors under the
Funding 2 Deed of Charge or any other Funding Transaction Document;

"Funding 2 Deed of Charge" means the deed of charge entered into on or about the
Funding 2 Programme Date between Funding 2, the Funding 2 Security Trustee, the
Issuer Security Trustee,


                                       30
<PAGE>

Granite Master Issuer plc, the Funding 2 Basis Rate Swap Provider, the Corporate
Services Provider, the Account Bank, the Funding 2 GIC Provider, the Mortgages
Trustee and the Cash Manager and the Schedules thereto and including each Deed
of Accession or Accession Undertaking entered into in connection therewith;

"Funding 2 Event of Default" means, as the context requires, any of the
following:

(a)   in relation to the Notes issued by any Funding 2 Issuer, the occurrence a
      Note Event of Default pursuant to the terms and conditions of such Notes;

(b)   in relation to any Funding 2 Intercompany Loan Agreement, the occurrence
      of a Funding 2 Intercompany Loan Event of Default;

"Funding 2 Expense Sub-Ledger" means a sub-ledger of the Funding 2 Revenue
Ledger on which receipts and payments of Funding 2 Revenue Receipts allocable to
the payment of expenses will be recorded by the Cash Manager;

"Funding 2 Final Deferred Contribution" has the meaning given such term in
Clause 4.3(D) of the Mortgages Trust Deed;

"Funding 2 GIC Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding 2 GIC Account substantially in the
form set out in Schedule 1 to the Funding 2 Bank Account Agreement;

"Funding 2 GIC Account" means the account in the name of Funding 2 (sort code
30-00-59, account number 152617) held at Northern Rock, and maintained subject
to the Funding 2 Guaranteed Investment Contract and the Funding 2 Bank Account
Agreement and such additional or replacement accounts as may for the time being
be in place with the prior consent of the Funding 2 Security Trustee;

"Funding 2 GIC Provider" means, Northern Rock or such other person or persons as
are for the time being the GIC Provider to Funding under the Funding 2
Guaranteed Investment Contract;

"Funding 2 Guaranteed Investment Contract" means the guaranteed investment
contract entered into on or about the Funding 2 Programme Date between Funding
2, the Funding 2 GIC Provider, the Cash Manager and the Funding 2 Security
Trustee under which the Funding 2 GIC Provider agrees to pay Funding 2 a
guaranteed rate of interest on the balance from time to time of the Funding 2
GIC Account and shall include any additional and/or replacement guaranteed
investment contract entered into by Funding 2 in accordance with the Transaction
Documents;

"Funding 2 Intercompany Loan Agreement" means an intercompany loan agreement
entered into between Funding 2 and a Funding 2 Issuer in relation to a Funding 2
Intercompany Loan;

"Funding 2 Intercompany Loan Enforcement Notice" means an enforcement notice
served by the Funding 2 Security Trustee on Funding 2 in relation to the
enforcement of the Funding 2 Security following the occurrence of a Funding 2
Intercompany Loan Event of Default;

"Funding 2 Intercompany Loan Event of Default" means, in relation to the Global
Intercompany Loan Agreement, the occurrence of an event of default specified as
such in Clause 15 (Default) of the Global Intercompany Loan Agreement, and in
relation to any other Funding 2 Intercompany Loan Agreement, the occurrence of
an event of default specified as such in such Funding 2 Intercompany Loan
Agreement;


                                       31
<PAGE>

"Funding 2 Intercompany Loan Ledger" means the ledger on which the Cash Manager
will record payments of interest and repayments of principal made under any
Funding 2 Intercompany Loan;

"Funding 2 Intercompany Loan" means a loan (or the aggregate of a number of
separate loans) of the net proceeds of any issue (or all issues) of Notes by a
Funding 2 Issuer, such loan(s) being advanced to Funding 2 by such Funding 2
Issuer pursuant to the terms of a Funding 2 Intercompany Loan Agreement;

"Funding 2 Interest Rate Shortfall" has the meaning given in Clause 4.3(A)(2) of
the Administration Agreement;

"Funding 2 Issuer" means Granite Master Issuer plc;

"Funding 2 Ledgers" means the Funding 2 Principal Ledger, the Funding 2 Revenue
Ledger, the Funding 2 Reserve Ledger, the Funding 2 Liquidity Reserve Ledger (if
any), the Funding 2 Liquidity Facility Ledger (if any), the Funding 2 Principal
Deficiency Ledger, the Funding 2 Cash Accumulation Ledger, the Funding 2
Intercompany Loan Ledger and the Funding 2 Swap Collateral Ledger;

"Funding 2 Liquidity Facility Agreement" means any agreement entered into by
Funding 2 relating to the provision of a Funding 2 Liquidity Facility;

"Funding 2 Liquidity Facility Drawings" means any drawing made pursuant to the
terms of the Funding 2 Liquidity Facility Agreement (if any);

"Funding 2 Liquidity Facility Ledger" means the ledger maintained by the Cash
Manager in the name of Funding 2 pursuant to the Cash Management Agreement to
record drawings from and repayment of the Funding 2 Liquidity Facility from time
to time;

"Funding 2 Liquidity Facility Principal Payment means the payments specified as
such in the Funding 2 Liquidity Facility Agreement (if any);

"Funding 2 Liquidity Facility Provider" means such person or persons for the
time being the provider of liquidity under any Funding 2 Liquidity Facility
Agreement;

"Funding 2 Liquidity Facility Repayments" means any payment made by Funding 2 in
accordance with the terms of the Funding 2 Liquidity Facility Agreement (if any)
and the Funding 2 Priority of Payments;

"Funding 2 Liquidity Facility Subordinated Amounts" means the amounts specified
as such in any Funding 2 Liquidity Facility Agreement (if any);

"Funding 2 Liquidity Facility" means a liquidity facility entered into by
Funding 2 at any time after the Funding 2 Programme Date;

"Funding 2 Liquidity Reserve Fund" means the liquidity reserve fund which
Funding 2 will be required to establish if the long term, unsecured,
unsubordinated and unguaranteed debt obligations of the Seller cease to be rated
at least A3 by Moody's or A- by Fitch (unless Moody's or Fitch, as applicable,
confirms that the then-current ratings of the Notes of any Funding 2 Issuer will
not be adversely affected) and will be funded to the relevant Funding 2
Liquidity Reserve Required Amount;

"Funding 2 Liquidity Reserve Ledger" means the ledger maintained by the Cash
Manager in the name of Funding 2 pursuant to the Cash Management Agreement to
record the amount standing to the credit of the Funding 2 Liquidity Reserve Fund
from time to time;


                                       32
<PAGE>

"Funding 2 Liquidity Reserve Principal Payment" means any drawing from the
Funding 2 Liquidity Reserve Fund to help meet any deficit in Funding 2 Available
Principal Receipts available for:

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

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

in each case, prior to the service of a Funding 2 Intercompany Loan Enforcement
Notice;

"Funding 2 Liquidity Reserve Rating Event" means where the long term, unsecured,
unsubordinated and unguaranteed debt obligations of the Seller cease to be rated
at least A3 by Moody's or A- by Fitch (unless Moody's or Fitch, as applicable,
confirms that the then current rating of the Notes issued by a Funding 2 Issuer
will not be reduced, withdrawn or qualified by the ratings downgrade);

"Funding 2 Liquidity Reserve Required Amount" means, for any Monthly Payment
Period, an amount equal to the excess, if any, of 3% of the aggregate
outstanding balance of the Notes at the end of that Monthly Payment Period over
the aggregate of the amounts standing to the credit of the Funding 2 Reserve
Fund and the Issuer Reserve Fund at the end of that Monthly Payment Period;

"Funding 2 Post-Enforcement Priority of Payments" means the rules and the order
of priority in which Funding 2 Available Revenue Receipts, Funding 2 Available
Principal Receipts and all other monies, income, receipts and recoveries of
Funding 2 or the Funding 2 Security Trustee or any Receiver of Funding 2 and the
proceeds of enforcement of the Funding 2 Security are to be allocated and
applied following service of a Funding 2 Intercompany Loan Enforcement Notice or
otherwise following an enforcement of the Funding 2 Security as set out in Part
III of Schedule 3 (Funding 2 Priority of Payments) to the Funding 2 Deed of
Charge, as the same may be amended, varied or superseded from time to time in
accordance with the terms of the Funding 2 Deed of Charge;

"Funding 2 Pre-Enforcement Principal Priority of Payments" means the rules and
the order of priority in which Funding 2 Available Principal Receipts will be
allocated and applied prior to the enforcement of the Funding 2 Security as set
out in Part II of Schedule 3 (Funding 2 Priority of Payments) to the Funding 2
Deed of Charge, as the same may be amended, varied or superseded from time to
time in accordance with the terms of the Funding 2 Deed of Charge;

"Funding 2 Pre-Enforcement Revenue Priority of Payments" means the rules and the
order of priority in which Funding 2 Available Revenue Receipts will be
allocated and applied prior to the enforcement of the Funding 2 Security as set
out in Part I of Schedule 3 (Funding 2 Priority of Payments) to the Funding 2
Deed of Charge, as the same may be amended, varied or superseded from time to
time in accordance with the terms of the Funding 2 Deed of Charge;

"Funding 2 Principal Deficiency Ledger" means the ledger maintained by the Cash
Manager in the name of Funding 2 which will be established on the Funding 2
Programme Date and will be sub-divided into sub ledgers corresponding to the AAA
Loan Tranches, the AA Loan Tranches, the A Loan Tranches, the BBB Loan Tranches
and the BB Loan Tranches in order to record Losses on Mortgage Loans allocated
to Funding 2, the application of Funding 2 Available Principal Receipts in
paying interest on the Funding 2 Intercompany Loans and certain amounts ranking
in priority thereto


                                       33
<PAGE>

in accordance with the Funding 2 Pre-Enforcement Revenue Priority of Payments
and the application of Funding 2 Principal Receipts to fund or replenish the
Funding 2 Liquidity Reserve Fund (if any);

"Funding 2 Principal Ledger" means the ledger maintained by the Cash Manager in
the name of Funding 2 pursuant to the Cash Management Agreement to record
receipts and payments of Funding 2 Principal Receipts (other than any Funding 2
Principal Receipts constituting the Cash Accumulation Requirement) which ledger
will be divided into sub-ledgers for each Loan Tranche which shall record
receipts and payments of Funding 2 Principal Receipts allocable to each Loan
Tranche (other than Funding 2 Principal Receipts allocable to each Loan Tranche
which are credited to the Funding 2 Cash Accumulation Ledger);

"Funding 2 Principal Receipts" means the Principal Receipts received by Funding
2 from the Mortgages Trustee on each Distribution Date;

"Funding 2 Priority of Payments" means, as applicable, any of the Funding 2
Pre-Enforcement Revenue Priority of Payments, the Funding 2 Pre-Enforcement
Principal Priority of Payments or the Funding 2 Post-Enforcement Priority of
Payments;

"Funding 2 Program Date" means 19 January 2005;

"Funding 2 Proportion" means, on a Distribution Date, Assignment Date or
Contribution Date, an amount equal to:

                                       B
                                     -----
                                     A + B

      where:

      A     =     the Funding Share on that date; and

      B     =     the Funding 2 Share on that date;

"Funding 2 Relevant Distribution" has the meaning given such term in Clause
4.3(A)(2) of the Mortgages Trust Deed;

"Funding 2 Reserve Fund" means the reserve fund established in the name of
Funding 2 on the Funding 2 Programme Date in an amount up to the Funding 2
Reserve Required Amount, which, prior to enforcement of the Funding 2 Security,
may be allocated to help meet any deficit in Funding Available Revenue Receipts
and thereby any deficit recorded on the Funding 2 Principal Deficiency Ledgers
and/or utilised to fund expenses in connection with the issuance of Notes by
Funding 2 Issuers and/or any deficit in Funding Available Principal Receipts
available for the repayment of Bullet Loan Tranches;

"Funding 2 Reserve Fund Threshold" means, in any date, the lesser of:

(a)   the Target Reserve Required Amount; and

(b)   the highest amount which the Adjusted Funding 2 Reserve Fund Level has
      been since the first Loan Payment Date upon which interest is due and
      payable in respect of Loan Tranches advanced or the Closing Date relating
      to the then most recent issue of Funding 2 Notes;

"Funding 2 Reserve Required Amount" means, as at any date, the amount (if any)
by which the Target Reserve Required Amount (as at such date) exceeds the Issuer
Reserve Minimum Amount (as at such date);


                                       34
<PAGE>

"Funding 2 Reserve Principal Payment" means any drawing from the Funding 2
Reserve Fund to help meet any deficit in Funding 2 Available Principal Receipts
available for:

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

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

in each case, prior to the service of a Funding 2 Intercompany Loan Enforcement
Notice;

"Funding 2 Revenue Ledger" means the ledger maintained by the Cash Manager in
the name of Funding 2 pursuant to the Cash Management Agreement to record all
monies received by Funding 2 during an Interest Period other than the Funding 2
Principal Receipts and the Swap Collateral Excluded Amounts which ledger will be
sub-divided into sub-ledgers for each Loan Tranche which shall record receipts
and payments of Funding 2 Revenue Receipts allocable to each Loan Tranche;

"Funding 2 Revenue Receipts" means the Mortgages Trustee Available Revenue
Receipts received by Funding 2 from the Mortgages Trustee on each Distribution
Date;

"Funding 2 Secured Creditors" means the Funding 2 Security Trustee (and any
Receiver of Funding 2 appointed pursuant to the Funding 2 Deed of Charge),
Granite Master Issuer plc, the Corporate Services Provider in relation to
Funding 2, the Account Bank, the Mortgages Trustee, the Funding 2 Basis Rate
Swap Provider, the Cash Manager and each New Funding 2 Secured Creditor who
accedes to the Funding 2 Deed of Charge from time to time pursuant to a Deed of
Accession (including, for the avoidance of doubt, any new Funding 2 Issuer);

"Funding 2 Secured Obligations" means any and all of the monies, obligations and
liabilities due, owing, payable or owed by it to any Funding 2 Secured Creditor
under and pursuant to the Funding 2 Transaction Documents;

"Funding 2 Security Trustee" means The Bank of New York, whose principal office
is at 40th Floor, One Canada Square, London E14 5AL, or such other persons and
all other persons for the time being acting as the security trustee or security
trustees pursuant to the Funding 2 Deed of Charge;

"Funding 2 Security" means the security granted by Funding 2 under or pursuant
to the Funding 2 Deed of Charge in favour of the Funding 2 Security Trustee for
the benefit of the Funding 2 Secured Creditors or any of them including the
security granted by Funding 2 under or pursuant to any Deed of Accession;

"Funding 2 Share Percentage" means the Current Funding 2 Share Percentage;

"Funding 2 Share" means the Current Funding 2 Share;

"Funding 2 Swap Collateral Accounts" means the Funding 2 Swap Collateral Cash
Account and the Funding 2 Swap Collateral Securities Account;

"Funding 2 Swap Collateral Ancillary Documents" means any document (including,
without limitation, any custodial agreement or bank account agreement but
excluding the Funding 2 Basis Rate Swap Agreement, the Cash Management Agreement
and the Funding 2 Deed of Charge) as may be entered into by Funding 2 from to
time in connection with Swap Collateral;


                                       35
<PAGE>

"Funding 2 Swap Collateral Cash Account" means an account opened in the name of
Funding 2 for the purpose of holding Swap Collateral in Cash and maintained in
accordance with the terms of the Cash Management Agreement;

"Funding 2 Swap Collateral Ledger" means the ledger maintained by the Cash
Manager in the books of Funding 2 in accordance with Clause 4.4 (Funding 2
Ledgers) of the Cash Management Agreement;

"Funding 2 Swap Collateral Securities Account" means a securities account opened
in the name of the Funding 2 for the purpose of holding Swap Collateral in the
form of securities and maintained in accordance with the terms of the Cash
Management Agreement;

"Funding 2 Transaction Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding 2 Transaction Account
substantially in the form set out in Schedule 1 to the Funding 2 Bank Account
Agreement;

"Funding 2 Transaction Account" means the account in the name of Funding 2
(account no. 000000, reference 150857, sort code 30-00-59) held with the Account
Bank and maintained subject to the terms of the Funding 2 Bank Account Agreement
and the Funding 2 Deed of Charge or any additional or replacement account as may
for the time being be in place with the prior consent of the Funding 2 Security
Trustee;

"Funding 2 Transaction Documents" means each of the following documents:

(a)   the Mortgages Trust Deed;

(b)   the Mortgage Sale Agreement;

(c)   the Administration Agreement;

(d)   the Funding 2 Deed of Charge;

(e)   the Corporate Services Agreement;

(f)   the Bank Account Agreement

(g)   the Funding 2 Bank Account Agreement;

(h)   the Stand-by Bank Account Agreement;

(i)   the Funding 2 Guaranteed Investment Contract;

(j)   the Cash Management Agreement;

(k)   the Collection Bank Agreement;

(l)   the Global Intercompany Loan Agreement;

(m)   each Loan Tranche Supplement entered into pursuant to the Global
      Intercompany Loan Agreement;

(n)   the Controlling Beneficiary Deed;

(o)   the Seller (Mortgages Trust) Assignment Agreement;

(o)   each other Transaction Document to which Funding 2 is a party; and

(n)   each other deed, document, agreement, instrument or certificate entered
      into or to be entered into by Funding 2 (including each document under
      which Funding 2 assumes any obligations


                                       36
<PAGE>

      to any New Funding 2 Secured Creditor) under or in connection with any of
      the documents set out in paragraphs (a) through (n) above or the
      transactions contemplated in them;

"Funding Available Principal Receipts" in respect of any Payment Date will be
calculated by the Cash Manager or otherwise on behalf of Funding (or, following
enforcement of the Funding Security, the Security Trustee) on the Distribution
Date immediately preceding such Payment Date and will be an amount equal to the
sum of all Funding Principal Receipts received by Funding from the Mortgages
Trustee and recorded on the Group 1 Principal Sub-Ledger or Group 2 Principal
Sub-Ledger, as applicable, during the Interest Period ending on the relevant
Payment Date plus amounts transferred from the Funding Principal Ledger to the
Group 1 Principal Sub-ledger or the Group 2 Principal Sub-Ledger during the
Interest Period ending on the relevant Payment Date; provided that, subject as
otherwise provided in the Transaction Documents, for the purpose only of
determining the amount of Funding Available Principal Receipts which may be
allocated to any Funding Issuer (but not to any other Issuer) following an
enforcement of the Issuer Security relating to that Funding Issuer, it may also
include the aggregate of any amounts standing to the credit of the Issuer
Liquidity Reserve Ledger, if any, and the Issuer Reserve Fund Ledger of such
Funding Issuer remaining on that Payment Date after the application of such
reserve funds in accordance with the Funding Pre-Enforcement Revenue Priority of
Payments. Provided, further, that in respect of a Funding Issuer the Notes of
which include a Class or Classes of Money Market Notes having a Final Maturity
Date on such Payment Date, Funding Available Principal Receipts will include the
amount, if any, standing to the credit of the Issuer Liquidity Reserve Ledger in
respect of that Funding Issuer on the Distribution Date immediately preceding
such Payment Date required (after taking into account Funding Available
Principal Receipts otherwise available to such Funding Issuer) to pay such Class
of Money Market Notes on such Payment Date;

"Funding Available Revenue Receipts" in respect of any Payment Date will be
calculated by the Cash Manager on the Distribution Date immediately preceding
such Payment Date and will be an amount equal to the sum of:

(1)   all Mortgages Trustee Available Revenue Receipts distributed to Funding
      during the Interest Period ending on the relevant Payment Date and
      recorded on the Group 1 Revenue Sub-Ledger, the Group 2 Revenue Sub-Ledger
      and the Funding Expense Sub-Ledger;

(2)   other net income of Funding, including all amounts of interest received on
      the Funding GIC Account and the Funding Transaction Account, and/or all
      income from Authorised Investments (in each case to be received on or
      prior to the relevant Payment Date) as allocated by Funding between Group
      1 and Group 2 in proportion to the Group 1 Share Percentage and the Group
      2 Share Percentage and recorded on the Group 1 Revenue Sub-Ledger and
      Group 2 Revenue Sub-Ledger on each Distribution Date during the Interest
      Period ending on the relevant Payment Date; and

(3)   the amount standing to the credit of the Funding Reserve Ledger,

PROVIDED THAT for the purpose only of the payments to be made to any Funding
Issuer on the relevant Payment Date in respect of the Intercompany Loan made by
that Funding Issuer (but not for the purpose of any other payment to be made by
Funding on the relevant Payment Date including any payment in respect of any
other Intercompany Loan made by any other Issuer), Funding Available Revenue
Receipts shall also include the sum of:

(4)   the amount standing to the credit of the Issuer Reserve Fund Ledger in
      respect of such Funding Issuer (but not in respect of any other Issuer),
      subject to any limits or conditions on


                                       37
<PAGE>

      the purposes for which that reserve may be utilised as set out in the
      Funding Deed of Charge; and

(5)   the amount standing to the credit of the Issuer Liquidity Reserve Ledger,
      if any, in respect of such Issuer (but not in respect of any other
      Issuer), subject to any limits or conditions on the purposes for which
      that reserve may be utilised as set out in the Funding Deed of Charge; and

PROVIDED FURTHER THAT, as set forth in Rule (3) of the Rules for application of
Funding Available Revenue Receipts, on the Payment Date following the repayment
in full of the Intercompany Loan of any Issuer and provided that Funding has no
further liability under the relevant Intercompany Loan Agreement, subject to any
limits or conditions on the purposes for which the related Issuer Reserve Fund
or Issuer Liquidity Reserve Fund, if any, may be utilised as set out in the
Funding Deed of Charge, any remaining amounts standing to the credit of the
Issuer Reserve Fund Ledger and the Issuer Liquidity Reserve Ledger, if any, of
that Funding Issuer will constitute additional Funding Available Revenue
Receipts for the purpose of items (N) through (Q) of the Funding Pre-Enforcement
Revenue Priority of Payments and may be utilised by Funding in paying any other
liability of Funding (including, without limitation, payment of interest and
principal amounts due to each Start-up Loan Provider under the relevant Start-up
Loan Agreement and payment of any Deferred Contribution due to the Mortgages
Trustee under the Mortgages Trust Deed), in each case, subject to and in
accordance with the relevant Funding Priority of Payments.

"Funding Bank Accounts" means the Funding GIC Account, the Funding Transaction
Account and the Funding (First Issuer) GIC Account and each other Funding
(Issuer) GIC Account established after the Initial Closing Date and each such
additional or replacement account in the name of Funding that may be opened with
the prior approval of the Security Trustee after the Initial Closing Date;

"Funding Beneficiaries" means Funding and Funding 2, as beneficiaries of the
Mortgages Trust and "Funding Beneficiary" means either of them;

"Funding Contribution Date" means any date on which Funding makes a Further
Contribution to the Mortgages Trustee in connection with Funding's purchase of
an increased beneficial interest in the Trust Property, on which date the
Mortgages Trustee will also pay to the Seller an Initial Purchase Price or a
Special Distribution equal to the amount of such Further Contribution;

"Funding Deed of Charge" means the deed of charge entered into on or about the
Initial Closing Date between Funding, the Security Trustee, the First Issuer,
the Corporate Services Provider, the Account Bank, the Funding GIC Provider, the
Mortgages Trustee, the Start-up Loan Provider and the Cash Manager and the
Schedules thereto and including each Deed of Accession or Accession Undertaking
entered into in connection therewith as may be amended, restated, novated,
varied or supplemented from time to time;

"Funding Charged Property" means the property, assets and undertakings of
Funding which from time to time are or are expressed to be mortgaged, charged,
assigned, pledged or otherwise encumbered to, or in favour of the Security
Trustee for itself and for the Funding Secured Creditors under the Funding Deed
of Charge or any other Funding Transaction Document;

"Funding Event of Default" means, as the context requires, any of the following:

(a)   in relation to the Notes issued by any Funding Issuer, the occurrence of a
      Note Event of Default pursuant to the Terms and Conditions of such Notes;


                                       38
<PAGE>

(b)   in relation to any Funding Intercompany Loan Agreement, the occurrence of
      a Funding Intercompany Loan Event of Default;

"Funding Expense Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger on
which receipts and payments of Funding Revenue Receipts allocable to the payment
of expenses will be recorded by the Cash Manager;

"Funding GIC Account Mandate" means the resolutions, instructions and signature
authorities relating to the Funding GIC Account substantially in the form set
out in Schedule 1 to the Bank Account Agreement;

"Funding GIC Account" means the account in the name of Funding (sort code
30-00-59, account number 00000000) held at Northern Rock, and maintained subject
to the Funding Guaranteed Investment Contract and the Bank Account Agreement and
such additional or replacement accounts as may for the time being be in place
with the prior consent of the Security Trustee;

"Funding GIC Provider" means:

(a)   in relation to the Funding GIC Account, Northern Rock;

(b)   in relation to any Funding (Issuer) GIC Account established prior to 26
      May 2004, Lloyds TSB Bank plc Financial Markets Division, 25 Monument
      Street, London EC3R 8BQ; and

(c)   in relation to any Funding (Issuer) GIC Account established on or after 26
      May 2004 (including, for the avoidance of doubt, the Funding (Issuer) GIC
      Account relating to Granite Mortgages 04-2 plc and Granite Mortgages 04-3
      plc), Northern Rock,

or such other person or persons as are for the time being the GIC Provider to
Funding under the Funding Guaranteed Investment Contract and any Funding
(Issuer) Guaranteed Investment Contract;

"Funding Guaranteed Investment Contract" means the guaranteed investment
contract entered into on or about the Initial Closing Date between Funding, the
Funding GIC Provider, the Cash Manager and the Security Trustee under which the
Funding GIC Provider agrees to pay Funding a guaranteed rate of interest on the
balance from time to time of the Funding GIC Account as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement guaranteed investment contract entered into by
Funding in accordance with the Transaction Documents;

"Funding Intercompany Loan" means a loan of the net proceeds of any issue of
Notes by a Funding Issuer, such loan being advanced to Funding by such Funding
Issuer pursuant to the terms of a Funding Intercompany Loan Agreement;

"Funding Intercompany Loan Agreement" means an intercompany loan agreement
entered into between Funding and a Funding Issuer in relation to a Funding
Intercompany Loan;

"Funding Intercompany Loan Enforcement Notice" means an enforcement notice
served by the Security Trustee on Funding in relation to the enforcement of the
Funding Security following the occurrence of an Intercompany Loan Event of
Default;

"Funding Intercompany Loan Event of Default" means the occurrence of an event of
default as specified in Clause 14 (Default) of the Intercompany Loan Terms and
Conditions;

"Funding Intercompany Loan Ledger" means the ledger on which the Cash Manager
will record payments of interest and repayments of principal made under any
Funding Intercompany Loan;


                                       39
<PAGE>

"Funding Interest Rate Shortfall" has the meaning given in Clause 4.3(a)(iii)(A)
of the Administration Agreement;

"Funding Issuer" means a wholly-owned subsidiary of Funding, which is
established to issue Notes and to make a Funding Intercompany Loan to Funding;

"Funding (Issuer) GIC Account" means, in relation to any Funding Issuer, the
account in the name of Funding held at the Account Bank and maintained subject
to the terms of the relevant Funding (Issuer) Guaranteed Investment Contract,
the relevant Funding (Issuer) Bank Account Agreement and the Funding Deed of
Charge or such additional or replacement account as may for the time being be in
place with the prior consent of the Security Trustee;

"Funding Jersey Secured Property" means, at any time, the Funding Charged
Property which is situated in Jersey at such time;

"Funding Ledgers" means the Funding Principal Ledger, the Funding Revenue
Ledger, the Funding Reserve Ledger, the Funding Principal Deficiency Ledger, the
Intercompany Loan Ledger and each Issuer Reserve Fund Ledger and each Issuer
Liquidity Reserve Ledger;

"Funding Post-Enforcement Priority of Payments" means the rules and the order of
priority in which Funding Available Revenue Receipts, Funding Available
Principal Receipts and all other monies, income, receipts and recoveries of
Funding or the Security Trustee or any Receiver of Funding and the proceeds of
enforcement of the Funding Security are to be applied following service of an
Intercompany Loan Enforcement Notice or otherwise following an enforcement of
the Funding Security as set out in Part III of Schedule 3 (Funding Priority of
Payments) to the Funding Deed of Charge, as the same may be amended, varied or
superseded from time to time in accordance with the terms of the Funding Deed of
Charge;

"Funding Pre-Enforcement Principal Priority of Payments" means the rules and the
order of priority in which Funding Available Principal Receipts will be applied
prior to the enforcement of the Funding Security as set out in Part II of
Schedule 3 (Funding Priority of Payments) to the Funding Deed of Charge, as the
same may be amended, varied or superseded from time to time in accordance with
the terms of the Funding Deed of Charge;

"Funding Pre-Enforcement Revenue Priority of Payments" means the rules and the
order of priority in which Funding Available Revenue Receipts will be applied
prior to the enforcement of the Funding Security as set out in Part I of
Schedule 3 (Funding Priority of Payments) to the Funding Deed of Charge, as the
same may be amended, varied or superseded from time to time in accordance with
the terms of the Funding Deed of Charge;

"Funding Principal Deficiency Ledger" means the ledger maintained by the Cash
Manager in the name of Funding pursuant to the Cash Management Agreement to
record the aggregate position of the Principal Deficiency Ledgers of all Funding
Issuers as to Losses on the Mortgage Loans and the application of Funding
Available Principal Receipts to fund the Issuer Liquidity Reserve Funds of the
Funding Issuers;

"Funding Principal Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record receipts
and payments of Funding Principal Receipts which ledger will be divided into two
sub-ledgers: (i) the Group 1 Principal Sub-Ledger and (ii) the Group 2 Principal
Sub-Ledger;


                                       40
<PAGE>

"Funding Principal Receipts" means the Principal Receipts received by Funding
from the Mortgages Trustee on each Distribution Date;

"Funding Priority of Payments" means, as applicable, any of the Funding
Pre-Enforcement Revenue Priority of Payments, the Funding Pre-Enforcement
Principal Priority of Payments or the Funding Post-Enforcement Priority of
Payments;

"Funding Proportion" means, on a Distribution Date, Assignment Date or
Contribution Date, an amount equal to:

                                       A
                                     -----
                                     A + B


      where:

      A     =     the Funding Share on that date; and

      B     =     the Funding 2 Share on that date;

"Funding Relevant Distribution" has the meaning given such term in Clause 4.2(B)
of the Mortgages Trust Deed;

"Funding Reserve Additional Amount" means following the occurrence of a Funding
Step-Up Trigger Event, an amount equal to the sum of the Funding Reserve
Required Amount and (GBP)22,100,000;

"Funding Reserve Adjustment Date" means a Payment Date in respect of which (i) a
Funding Reserve Decrease has occurred on the immediately preceding Payment Date
and (ii) such immediately preceding Payment Date was not also a Funding Reserve
Adjustment Date; provided that a Funding Reserve Adjustment Date shall not occur
on any Payment Date for Group 1 Issuers or Payment Date for Group 2 Issuers if
only Notes of Group 1 Issuers or Group 2 Issuers, respectively, are outstanding;

"Funding Reserve Decrease" means a reduction in the amount standing to the
credit of the Funding Reserve Ledger resulting from the application of such
amount to the payment of items in accordance with the Funding Pre-Enforcement
Revenue Priority of Payments (except items (A)-(D)) or the Funding
Post-Enforcement Priority of Payments (except items (A)-(C));

"Funding Reserve Fund" means the reserve fund established in the name of Funding
on the Initial Closing Date in an amount up to the Funding Reserve Required
Amount, which prior to enforcement may be (a) allocated among Issuers and
between Groups to help meet any deficit in Funding Available Revenue Receipts
and thereby any deficit recorded on the Issuer Principal Deficiency Ledgers
and/or (b) utilised to fund initial reserves and other expenses in connection
with the issuance of Notes by New Issuers;

"Funding Reserve Ledger" means the ledger maintained by the Cash Manager in the
name of Funding pursuant to the Cash Management Agreement to record the amount
standing to the credit of the Funding Reserve Fund from time to time;

"Funding Reserve Required Amount" means the amount from time to time which is
equal to the sum of (1) the product of 1 per cent. and the greater of (a) the
aggregate Principal Amount Outstanding of the Notes outstanding of all Issuers
on the relevant determination date and (b) the aggregate Outstanding Principal
Balance of the Intercompany Loans of all Issuers on the relevant


                                       41
<PAGE>

determination date, or such other amount as may be agreed from time to time with
the Rating Agencies. As at the Initial Closing Date, the Funding Reserve
Required Amount will be zero;

"Funding Revenue Ledger" means the ledger maintained by the Cash Manager in the
name of Funding pursuant to the Cash Management Agreement to record all monies
received by Funding during an Interest Period other than the Funding Principal
Receipts which ledger will be sub-divided into three sub-ledgers: (i) the Group
1 Revenue Sub-Ledger, (ii) the Group 2 Revenue Sub-Ledger and (iii) the Funding
Expense Sub-Ledger;

"Funding Revenue Receipts" means the Mortgages Trustee Available Revenue
Receipts received by Funding from the Mortgages Trustee on each Distribution
Date;

"Funding Secured Creditors" means the Security Trustee (and any Receiver of
Funding appointed pursuant to the Funding Deed of Charge), the First Issuer, the
Corporate Services Provider in relation to Funding, the Account Bank, the
Funding GIC Provider, the Mortgages Trustee, the Start-up Loan Provider, the
Cash Manager and each New Funding Secured Creditor who accedes to the Funding
Deed of Charge from time to time pursuant to a Deed of Accession (including, for
the avoidance of doubt, any New Issuer);

"Funding Secured Obligations" means any and all of the monies, obligations and
liabilities which Funding covenants to pay or discharge under or pursuant to
Clause 2 (Covenant to pay and to Perform) of the Funding Deed of Charge and all
other amounts owed by it to the Funding Secured Creditors pursuant to the
Funding Transaction Documents;

"Funding Security" means the security granted by Funding under or pursuant to
the Funding Deed of Charge in favour of the Security Trustee for the benefit of
the Funding Secured Creditors or any of them including the security granted by
Funding under or pursuant to any Deed of Accession and the security granted by
Funding under or pursuant to the Second Priority Funding Deed of Charge;

"Funding Security Trustees" means the Security Trustee and the Funding 2
Security Trustee and "Funding Security Trustee" means either of them;

"Funding Share" means, prior to the first Distribution Date, the Initial Funding
Share and thereafter means the Current Funding Share;

"Funding Share/Funding 2 Share/Seller Share Ledger" means the ledger to be
maintained by the Cash Manager, on behalf of the Mortgages Trustee and the
Beneficiaries, to record the Current Funding Share, the Current Funding Share
Percentage, the Current Funding 2 Share, the Current Funding 2 Share Percentage,
the Current Seller Share and the Current Seller Share Percentage of the Trust
Property;

"Funding Share Percentage" means, prior to the first Distribution Date, the
Initial Funding Share Percentage and thereafter means the Current Funding Share
Percentage;

"Funding Transaction Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding Transaction Account substantially
in the form set out in Schedule 1 to the Bank Account Agreement;

"Funding Transaction Account" means the account in the name of Funding (account
no. 0625898, sort code 30-00-02) held with the Account Bank and maintained
subject to the terms of the Bank Account Agreement and the Funding Deed of
Charge or any additional or replacement account as may for the time being be in
place with the prior consent of the Security Trustee;


                                       42
<PAGE>

"Funding Transaction Document" means each of the following documents:

(a)   the Mortgages Trust Deed;

(b)   the Mortgage Sale Agreement;

(c)   the Administration Agreement;

(d)   the Funding Deed of Charge;

(e)   the Second Priority Funding Deed of Charge;

(f)   the Corporate Services Agreement;

(g)   the Bank Account Agreement;

(h)   the Stand-by Bank Account Agreement;

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

(j)   the Funding Guaranteed Investment Contract;

(k)   the Stand-by Funding Guaranteed Investment Contract

(l)   the Funding (Issuer) Guaranteed Investment Contract;

(m)   the Cash Management Agreement;

(n)   the Start-up Loan Agreement;

(o)   each New  Start-up  Loan  Agreement  to be entered into by Funding
      after the Initial Closing Date;

(p)   the Collection Bank Agreement;

(q)   the First Issuer Intercompany Loan Agreement;

(r)   each  New  Intercompany  Loan  Agreement  to be  entered  into  by
      Funding after the date hereof;

(s)   the Stand-by Funding (Issuer) Guaranteed Investment Contract; and

(t)   each other deed,  document,  agreement,  instrument or certificate
      entered  into or to be entered  into by Funding  pursuant to or in
      connection  with any of the documents  set out in  paragraphs  (a)
      through (r) above including any agreement  entered into by Funding
      as  a  replacement  of  any  of  the  above  agreements  upon  the
      termination thereof;

"Funding" means Granite Finance Funding Limited, a company incorporated with
limited liability in Jersey, registered number 79308;

"Further Advance" means, in relation to a Mortgage Loan, any advance of further
money to the relevant Borrower following the making of the initial advance of
monies in respect of such Mortgage Loan (the "Initial Advance") which is secured
by the same Mortgage as the Initial Advance but does not include the amount of
any retention advanced to the relevant Borrower as part of the Initial Advance
after completion of the Mortgage and does not include any Re-Draw or Further
Draw. For the avoidance of doubt, an Unregulated Personal Secured Loan is not a
Further Advance in relation to a Mortgage Loan (other than any other Unregulated
Personal Secured Loan) which is secured by the same Mortgage;

"Further Contribution" means the consideration in the form of cash payable to
the Mortgages Trustee by any Beneficiary to increase the Funding Share, the
Funding 2 Share or, as the case may be,


                                       43
<PAGE>

the Seller Share of the Trust Property pursuant to and in accordance with the
Mortgages Trust Deed but excluding any Initial Contribution or Deferred
Contribution paid by Funding or by Funding 2 to the Mortgages Trustee;

"Further Draw" means additional amounts drawn by a Borrower in respect of a
Personal Secured Loan in aggregate up to the fixed amount of credit extended
under the terms of the related Mortgage Conditions at the inception of the
Borrower's Personal Secured Loan;

"Further Draw Capacity" means an amount equal to the difference between (1) the
maximum amount of Further Draws that Borrowers may make under Personal Secured
Loans included in the Trust Property (whether or not drawn) as at the last day
of the immediately preceding Trust Calculation Period and (2) the aggregate
Current Balance of Personal Secured Loans which form part of the Trust Property
as at the last day of the immediately preceding Trust Calculation Period;

"Further Draw Ledger" means the ledger on which Further Draws under Personal
Secured Loans will be recorded by the Cash Manager

"Further Mortgage Loan" means any Mortgage Loan which was assigned by the Seller
to the Mortgages Trustee after March 26, 2001 under the terms of the Mortgage
Sale Agreement and referenced by its mortgage loan identifier number and
comprising the aggregate of all principal sums, interest, costs, charges,
expenses and other monies (including all further advances) due or owing with
respect to that Mortgage Loan under the relevant Mortgage Conditions by a
borrower on the security of a Mortgage from time to time outstanding or, as the
context may require, the Borrower's obligations in respect of the same;

"Further Mortgage Portfolios" means the portfolios of Further Mortgage Loans,
their Related Security, accrued interest and other amounts derived from such
Further Mortgage Loans that the Seller assigned to the Mortgages Trustee after
March 26, 2001;

"GIC Provider" means in relation to any person the provider of guaranteed
investment services to such person pursuant to a guaranteed investment contract;

"Global Intercompany Loan Agreement" means the Funding 2 Intercompany Loan
Agreement entered into on or around the Funding 2 Programme Date between the
Issuer, Funding 2, the Funding 2 Security Trustee and the Agent Bank;

"Global Intercompany Loan" means, at any time, the aggregate of the Outstanding
Principal Balance of the Loan Tranches made by the Master Issuer to Funding 2
under the Global Intercompany Loan Agreement;

"Global Loan Facility" means the facility in an aggregate amount equal to the
Total Credit Commitment made available to Funding 2 by the Issuer pursuant to
the Global Intercompany Loan Agreement;

"Global Note Certificates" means the note certificates representing the Notes in
global form;

"Group" means either of Group 1 or Group 2;

"Group 1" means all Group 1 Issuers;

"Group 1 Available Principal Receipts" means, in respect of a Payment Date for
Group 1 Issuers, an amount (calculated on the immediately preceding Distribution
Date) equal to all Mortgages Trustee Principal Receipts received by Funding from
the Mortgages Trustee plus any amounts transferred


                                       44
<PAGE>



from the Funding Principal Ledger to the Group 1 Principal Sub-Ledger during the
Interest Period ending on the relevant Payment Date;

"Group 1 Available Revenue Receipts" means, in respect of a Payment Date for
Group 1 Issuers, an amount (calculated on the immediately preceding Distribution
Date) equal to the sum of (a) the amount of Mortgages Trustee Available Revenue
Receipts distributed to Funding during the Interest Period ending on the
relevant Payment Date and recorded on the Group 1 Revenue Sub-Ledger (b) other
net income of Funding (including all amounts of interest on the Funding GIC
Account and the Funding Transaction Account, and/or all income from Authorised
Investments, in each case received on or prior to the relevant Payment Date), as
allocated by Funding to Group 1 in proportion to the Group 1 Share Percentage
and recorded on the Group 1 Revenue Sub-Ledger on each Distribution Date during
the related Interest Period ending on the relevant Payment Date, and (c) the
product of the amount standing to the credit of the Funding Reserve Ledger on
such Distribution Date multiplied by the Group 1 Share Percentage, in each case
as on such Distribution Date (unless the related Payment Date for Group 1
Issuers is also a Funding Reserve Adjustment Date, in which case the product of
the amount standing to the credit of the Funding Reserve Ledger multiplied by
the Group 1 Share Percentage, in each case as on the Distribution Date
immediately preceding the immediately preceding Payment Date for Group 2
Issuers);

"Group 1 Issuer" means any Funding Issuer which applies Issuer Available Revenue
Receipts and Issuer Available Principal Receipts in accordance with the relevant
priority of payments on the Payment Date falling in July, October, January and
April of each year;

"Group 1 Principal Sub-Ledger" means a sub-ledger of the Funding Principal
Ledger on which receipts and payments of Funding Principal Receipts allocable to
Group 1 are recorded by the Cash Manager;

"Group 1 Revenue Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger on
which receipts and payments of Funding Revenue Receipts allocable to Group 1 are
recorded by the Cash Manager;

"Group 1 Share Percentage" means

    Aggregate Outstanding Principal Balance of all Group 1 Intercompany Loans
    -------------------------------------------------------------------------
        Aggregate Outstanding Principal Balance of all Intercompany Loans

PROVIDED THAT on any Distribution Date with respect to which Funding has made a
Further Contribution to the Mortgages Trustee in connection with Funding's
purchase of an increased beneficial interest in the Trust Property during the
immediately preceding Trust Calculation Period, the Outstanding Principal
Balance of any Intercompany Loan entered into during such Trust Calculation
Period shall be deemed to be (only for the purposes of the numerator and
denominator of the formula above) the Outstanding Principal Balance of such
Intercompany Loan multiplied by the number of days during which such
Intercompany Loan was outstanding during such Trust Calculation Period divided
by the number of days in such Trust Calculation Period;

"Group 1 Shared Issuer Revenue Receipts" has the meaning given in the rules for
application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;


                                       45
<PAGE>


"Group 1 Shared Principal Receipts" has the meaning given in the rules for
application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 2" means all Group 2 Issuers;

"Group 2 Available Principal Receipts" means, in respect of a Payment Date for
Group 2 Issuers, an amount (calculated on the immediately preceding Distribution
Date) equal to all Mortgages Trustee Principal Receipts received by Funding from
the Mortgages Trustee plus any amounts transferred from the Funding Principal
Ledger to the Group 2 Principal Sub-Ledger during the Interest Period ending on
the relevant Payment Date;

"Group 2 Available Revenue Receipts" means, in respect of a Payment Date for
Group 2 Issuers, an amount (calculated on the immediately preceding Distribution
Date) equal to the sum of (a) the amount of Mortgages Trustee Available Revenue
Receipts distributed to Funding Interest Period ending on the relevant Payment
Date and recorded on the Group 2 Revenue Sub-Ledger (b) other net income of
Funding (including all amounts of interest on the Funding GIC Account and the
Funding Transaction Account, and/or all income from Authorised Investments, in
each case received on or prior to the relevant Payment Date), as allocated by
Funding to Group 2 in proportion to the Group 2 Share Percentage and recorded on
the Group 2 Revenue Sub-Ledger on each Distribution Date during the related
Interest Period ending on the relevant Payment Date, and (c) the product of the
amount standing to the credit of the Funding Reserve Ledger on such Distribution
Date multiplied by the Group 2 Share Percentage, in each case as on such
Distribution Date (unless the related Payment Date for Group 2 Issuers is also a
Funding Reserve Adjustment Date, in which case the product of the amount
standing to the credit of the Funding Reserve Ledger multiplied by the Group 2
Share Percentage, in each case as on the Distribution Date immediately preceding
the immediately preceding Payment Date for Group 1 Issuers);

"Group 2 Issuer" means any Funding Issuer which applies Issuer Available Revenue
Receipts and Issuer Available Principal Receipts in accordance with the relevant
priority of payments on the Payment Date falling in March, June, September and
December of each year;

"Group 2 Principal Sub-Ledger" means a sub-ledger of the Funding Principal
Ledger on which receipts and payments of Funding Principal Receipts allocable to
Group 2 are recorded by the Cash Manager;

"Group 2 Revenue Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger on
which receipts and payments of Funding Revenue Receipts allocable to Group 2 are
recorded by the Cash Manager;

"Group 2 Share Percentage" means

    Aggregate Outstanding Principal Balance of all Group 2 Intercompany Loans
    -------------------------------------------------------------------------
        Aggregate Outstanding Principal Balance of all Intercompany Loans

PROVIDED THAT on any Distribution Date with respect to which Funding has made a
Further Contribution to the Mortgages Trustee in connection with Funding's
purchase of an increased beneficial interest in the Trust Property during the
immediately preceding Trust Calculation Period, the Outstanding Principal
Balance of any Intercompany Loan entered into during such Trust Calculation
Period shall be deemed to be (only for the purposes of the numerator and
denominator of the formula above) the Outstanding Principal Balance of such
Intercompany Loan multiplied by the


                                       46
<PAGE>


number of days during which such Intercompany Loan was outstanding during such
Trust Calculation Period divided by the number of days in such Trust Calculation
Period.

"Group 2 Shared Issuer Revenue Receipts" has the meaning given in the rules for
application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 2 Shared Principal Receipts" has the meaning given in the rules for
application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Guarantee" means each guarantee in support of the obligations of a Borrower
under a Mortgage Loan;

"Heritable Creditor" means, in relation to Scottish Mortgage Loans, the holder
of a standard security over heritable or long leasehold property in Scotland;

"Holdings" means Granite Finance Holdings Limited, a private limited company
incorporated under the laws of England and Wales, registered number 4127787;

"ICTA" means the Income and Corporation Taxes Act 1988;

"in Arrears" or "in arrears" means, in respect of a Mortgage Account, that
amount equal in the aggregate to one or more Monthly Payments in respect of such
Mortgage Account are overdue and unpaid by a Borrower;

"Independent Certificates" means certificates of independent parties in
accordance with Trust Indenture Act Sections 314(c) and 314(d)(1);

"Individual Note Certificate" means the note certificates representing the Notes
in definitive form;

"Initial Closing Date" means 26 March 2001;

"Initial Contribution" means the consideration in the form of cash payable by
Funding to the Mortgages Trustee in respect of the Funding Share of the Trust
Property or by Funding 2 to the Mortgages Trustee in respect of the Funding 2
Share of the Trust Property (as applicable) pursuant to and in accordance with
the Mortgages Trust Deed, which Contribution is to fund the payment to the
Seller by the Mortgages Trustee of (and is equal to) the Initial Purchase Price
in respect of the Initial Mortgage Portfolio or (if any is payable) any New
Mortgage Portfolio sold and assigned to the Mortgages Trustee and is to be
funded from the proceeds of an Intercompany Loan;

"Initial Funding Share" means the share of Funding in the Trust Property on the
Initial Closing Date, being an amount equal to approximately
(GBP)1,500,000,000;

"Initial Funding Share Percentage" means the percentage share of Funding in the
Trust Property on the Initial Closing Date being approximately 86.61 per cent.;

"Initial Funding 2 Share" means the share of Funding 2 in the Trust Property on
the Funding 2 Programme Date being an amount equal to (GBP)100;

"Initial Mortgage Loans" means the portfolio of residential first Mortgage Loans
and their Related Security to be sold and assigned by the Seller to the
Mortgages Trustee on the Initial Closing Date pursuant to the Mortgage Sale
Agreement;


                                       47
<PAGE>


"Initial Mortgage Portfolio" means the Initial Mortgage Loans and their Related
Security, particulars of which are set out in Appendix A to the Mortgage Sale
Agreement but excluding any such Mortgage Loan and its Related Security which
has been redeemed in full on or before the Initial Closing Date, and (subject
where applicable to the subsisting rights of redemption of the Borrowers) all
right, title, interest and benefit of the Seller in and to:

(a)   all sums of principal, interest (including, for the avoidance of doubt,
      all Accrued Interest, Arrears of Interest and Capitalised Arrears) and any
      other sum due or to become due under or in respect of such Mortgage Loans
      and their Related Security on or after the Initial Closing Date and
      including, without limitation, the right to demand, sue for, recover and
      give receipts for all such principal, interest or other amounts, the right
      to sue on all covenants and undertakings made or expressed to be made in
      favour of the Seller under the applicable Mortgage and all sums due or to
      become due in respect of any Early Repayment Charge;

(b)   the benefit of all securities for such principal, interest and other sums
      payable (including without limitation any interest of the Seller in any
      Life Policy), the benefit of all Deeds of Consent, MHA Documentation and
      Deeds of Postponement, any Guarantee in respect of such Mortgage Loan or
      any other collateral security for the repayment of the relevant Mortgage
      Loans secured by the Mortgages;

(c)   the right to exercise all the powers of the Seller in relation thereto
      subject to and in accordance with the relevant Mortgage Conditions;

(d)   all the estate and interest in the Mortgaged Properties in relation
      thereto vested in the Seller;

(e)   to the extent they are assignable, each Certificate of Title and Valuation
      Report and any right of action of the Seller against any solicitor, valuer
      or other person in connection with any report, valuation, opinion,
      certificate or other statement of fact or opinion given in connection with
      any Mortgage Loan and its Related Security, or any part thereof affecting
      the decision of the Seller to make or offer to make the relevant Mortgage
      Loan or part thereof;

(f)   the Buildings Policies and Insurance Contracts, in each case so far as
      they relate to such Mortgage Loans comprised in that portfolio of Mortgage
      Loans and their Related Security, including the right to receive the
      proceeds of all claims made or to be made by or on behalf of the Seller or
      to which the Seller is or may become entitled;

(g)   the MIG Policies, so far as they relate to such Mortgage Loans comprised
      in that portfolio of Mortgage Loans and their Related Security, including
      the right to receive of all claims made or to be made by or on behalf of
      the Seller or to which the Seller is or may become entitled;

"Initial Purchase Price" means that portion of the purchase price paid by the
Mortgages Trustee to the Seller on the Initial Closing Date in consideration for
the assignment to the Mortgages Trustee of the Initial Mortgage Portfolio or
that portion of the purchase price (if any) payable by the Mortgages Trustee to
the Seller on the relevant Assignment Date in consideration for the assignment
to the Mortgages Trustee of the Further Mortgage Portfolios or any New Mortgage
Portfolio, in each case in accordance with the provisions of the Mortgage Sale
Agreement;

"Initial Relevant Screen Rate" means, in respect of a Loan Tranche, the Initial
Relevant Screen Rate for such Loan Tranche specified as such in the applicable
Loan Tranche Supplement;

"Initial Seller Share Percentage" means the percentage share of the Seller in
the Trust Property on the Initial Closing Date being approximately 13.39 per
cent.;


                                       48
<PAGE>


"Initial Seller Share" means the share of the Seller in the Trust Property on
the Initial Closing Date being an amount equal to approximately
(GBP)232,000,000;

"Initial Trust Property" means the sum of (GBP)100 (one hundred pounds) held
on trust absolutely as to both capital and income by the Mortgages Trustee for
the benefit of the Seller and Funding pursuant to Clause 2.1 (Initial Trust
Property) of the Mortgages Trust Deed;

"Inland Revenue" means H.M. Revenue and Customs;

"Insolvency Act" means the Insolvency Act 1986;

"Insolvency Event" in respect of the Seller, the Administrator, the Cash Manager
or any Issuer Cash Manager (each, for the purposes of this definition, a
"Relevant Entity") means:

(a)   an order is made or an effective resolution passed for the winding-up of
      the Relevant Entity or the appointment of an administrator over the
      Relevant Entity (except, in any such case, a winding-up or dissolution for
      the purpose of a reconstruction or amalgamation the terms of which have
      been previously approved by the Funding 2 Security Trustee);

(b)   the Relevant Entity ceases or threatens to cease to carry on its business
      or stops payment or threatens to stop payment of its debts or is deemed
      unable to pay its debts within the meaning of section 123(a), (b), (c) or
      (d) of the Insolvency Act (as amended, modified or re-enacted) or becomes
      unable to pay its debts as they fall due or the value of its assets falls
      to less than the amounts of its liabilities (taking into account, for both
      these purposes, contingent and prospective liabilities) or otherwise
      becomes insolvent;

(c)   proceedings are initiated against the Relevant Entity under any applicable
      liquidation, insolvency, composition, reorganisation (other than a
      reorganisation where the Relevant Entity is solvent) or other similar laws
      (including, but not limited to, application or pending application for an
      administration order or presentation of a petition for a winding-up order)
      save where such proceedings are being contested in good faith; an
      administration order being granted or an administrative or other receiver,
      administrator, liquidator or other similar official is appointed in
      relation to the whole or any substantial part of the undertaking or assets
      of the Relevant Entity; or a distress, execution, diligence or other
      process is enforced upon the whole or any substantial part of the
      undertaking or assets of the Relevant Entity and in any of the foregoing
      cases it is not discharged within 30 London Business Days; or if the
      Relevant Entity initiates or consents to judicial proceedings relating to
      itself under any applicable liquidation, administration, insolvency,
      reorganisation or other similar laws or makes a conveyance or assignment
      for the benefit of its creditors generally;

"Insurance Contracts" means the insurance contracts or policies described in
Schedule 4 to the Mortgage Sale Agreement and any other additional, substitute
or replacement insurance contract or policy arranged by the Seller from time to
time relating to the Mortgage Loans in the Mortgages Trust;

"Insurance Policies" means:

(a)   the MIG Policies;

(b)   the Properties in Possession Policy;

(c)   the Contingency Insurance Policy; and

(d)   the Buildings Policies;


                                       49
<PAGE>


"Intercompany Loan Agreements" means the Funding Intercompany Loan Agreements
and the Funding 2 Intercompany Loan Agreements and "Intercompany Loan Agreement"
means, as applicable, a Funding Intercompany Loan Agreement or a Funding 2
Intercompany Loan Agreement;

"Intercompany Loan Confirmation" means a document substantially in the form set
out in Schedule 2 (Form of Intercompany Loan Confirmation) to the Intercompany
Loan Terms and Conditions confirming the principal terms of each Intercompany
Loan Agreement between Funding, any Funding Issuer, the Security Trustee and the
Agent Bank;

"Intercompany Loan Enforcement Notice" means, as applicable:

(a)   in respect of Funding, a Funding Intercompany Loan Enforcement Notice;
      and/or

(b)   in respect of Funding 2, a Funding 2 Intercompany Loan Enforcement Notice;

"Intercompany Loan Event of Default" means, as applicable:

(a)   in respect of Funding, a Funding Intercompany Loan Event of Default;
      and/or

(b)   in respect of Funding 2, a Funding 2 Intercompany Loan Event of Default;

"Intercompany Loan Ledger" means:

(a)   in respect of Funding, the Funding Intercompany Loan Ledger;

(b)   in respect of Funding 2, the Funding 2 Intercompany Loan Ledger;

"Intercompany Loan Terms and Conditions" means the general terms and conditions
applicable to each Funding Intercompany Loan Agreement, which have been signed
for the purposes of identification by the Security Trustee, the Agent Bank and
Funding on the Initial Closing Date, as amended, restated, novated, varied or
supplemented from time to time and shall include any additional and/or
replacement intercompany loan terms and conditions entered into from time to
time in accordance with the Transaction Documents;

"Intercompany Loans" means the Funding Intercompany Loans and the Funding 2
Global Intercompany Loan and "Intercompany Loan" means, as applicable, a Funding
Intercompany Loan or a Funding 2 Intercompany Loan;

"Interest Commencement Date" means, in respect of any Series and Class of Notes,
the closing date of such notes or such other date as may be specified as such in
the applicable Prospectus Supplement;

"Interest Determination Date" means in respect of any Series and Class of Notes,
the date(s) specified as such (if any) in the applicable Note Supplement;

"Interest Period" or "Fixed Interest Period" means:

(a)   in respect of any Series and Class of Notes, (i) with respect to the first
      Note Payment Date for such Notes, the period from (and including) the
      applicable Interest Commencement Date to (but excluding) such first Note
      Payment Date, and (ii) thereafter, with respect to each Note Payment Date
      for such Notes, the period from and including the preceding Note Payment
      Date for such Notes to but excluding such current Note Payment Date; and

(b)   in respect of any Loan Tranche, (i) with respect to the first Loan Payment
      Date for such Loan Tranche, the period from (and including) the applicable
      Interest Commencement Date to (but excluding) such first Loan Payment
      Date, and (ii) thereafter, with respect to each Loan


                                       50
<PAGE>


      Payment Date for such Loan Tranche, the period from (and including) the
      preceding Loan Payment Date for such Loan Tranche to (but excluding) such
      current Loan Payment Date;

"Interest Rate Shortfalls" means the Funding Interest Rate Shortfall and the
Funding 2 Interest Rate Shortfall and "Interest Rate Shortfall" means, as
applicable, the Funding Interest Rate Shortfall and/or the Funding 2 Interest
Rate Shortfall;

"Interim Calculation Period" means the portion of a Trust Calculation Period
that is less than a full Trust Calculation Period during which any single
calculation of the Funding Share, Funding Share Percentage, Seller Share,
Funding 2 Share, Funding 2 Share Percentage and Seller Share Percentage applies;

"Irrecoverable VAT" means any amount in respect of VAT incurred by a party to
the Transaction Documents (for the purposes of this definition, a "Relevant
Party") as part of a payment in respect of which it is entitled to be
indemnified under the relevant Transaction Documents to the extent that the
Relevant Party does not or will not receive and retain a credit or repayment of
such VAT as input tax (as that expression is defined in section 24(1) of the
Value Added Tax Act 1994) for the prescribed accounting period (as that
expression is used in section 25(1) of the Value Added Tax Act 1994) to which
such input tax relates;

"Issuer Account Bank" means, in relation to: (a) any Funding Issuer, the bank or
banks at which the Issuer Bank Accounts of such Funding Issuer are maintained
from time to time pursuant to the relevant Issuer Transaction Documents; and (b)
any Funding 2 Issuer, the bank or banks at which the Issuer Bank Accounts of
such Funding 2 Issuer are maintained from time to time pursuant to the relevant
Issuer Transaction Documents;

"Issuer Account Mandates" means, in relation to any Issuer, the resolutions,
instructions, and Authorised Signatories relating to the applicable Issuer Bank
Accounts substantially in the form scheduled to the relevant Issuer Bank Account
Agreement;

"Issuer Allocable Principal Receipts" has the meaning given to it in the rules
for application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Principal Priority of Payments set out in Part II of Schedule 3
to the Funding Deed of Charge;

"Issuer Allocable Revenue Receipts" has the meaning given to it in the rules for
application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Revenue Priority of Payments set out in Part I of Schedule 3 to
the Funding Deed of Charge;

"Issuer Arrears Test":

(a)   in relation to a Funding Issuer, is satisfied on a Payment Date if any
      Issuer Cash Manager or the Cash Manager calculates on the Distribution
      Date immediately preceding such Payment Date that as of the last day of
      the Trust Calculation Period immediately preceding that Payment Date (i)
      the aggregate current balance of the Mortgage Loans which are then in
      arrears for at least 3 months is less than 4% of the aggregate Current
      Balance of all Mortgage Loans, unless the Rating Agencies have confirmed
      that the then-current ratings of the Notes will not be adversely affected
      by such test not having been met; and (ii) the aggregate Interest Arrears
      in respect of all of the Mortgage Loans in the Mortgage Portfolio as a
      percentage of the aggregate gross interest due on all Mortgage Loans
      during the previous 12 months, does not exceed 2%, or such other
      percentage as is then acceptable to the then-current Rating Agencies at
      such time; or


                                       51
<PAGE>


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

"Issuer Available Principal Receipts" means, in relation to: (a) the First
Issuer, the Second Issuer and the Third Issuer, the First Issuer Available
Principal Receipts, the Second Issuer Available Principal Receipts, and the
Third Issuer Available Principal Receipts respectively; (b) any other Funding
Issuer, the Current Issuer Available Principal Receipts; and (c) any Funding 2
Issuer, the Issuer Available Principal Receipts;

"Issuer Available Revenue Receipts" means, in relation to: (a) the First Issuer,
the Second Issuer and the Third Issuer, the First Issuer Available Revenue
Receipts, the Second Issuer Available Revenue Receipts, and the Third Issuer
Available Revenue Receipts respectively; (b) any other Funding Issuer, the
Current Issuer Available Revenue Receipts; and (c) any Funding 2 Issuer, the
Issuer Available Revenue Receipts as defined in the Issuer Master Definitions
Schedule;

"Issuer Bank Account Agreement" means, in relation to: (a) the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Bank Account Agreement, the
Second Issuer Bank Account Agreement and the Third Issuer Bank Account Agreement
respectively; (b) any other Funding Issuer, the Current Issuer Bank Account
Agreement relating to such Funding Issuer; and (c) any Funding 2 Issuer, the
Issuer Bank Account Agreement as defined in the Issuer Master Definitions
Schedule;

"Issuer Bank Accounts" means in relation to: (a) the First Issuer, the Second
Issuer and the Third Issuer, the First Issuer Bank Accounts, the Second Issuer
Bank Accounts and the Third Issuer Bank Accounts respectively; (b) any other
Funding Issuer, the Current Issuer Bank Accounts; and (c) any Funding 2 Issuer,
the Issuer Bank Accounts as defined in the Issuer Master Definitions Schedule
relating to such Funding 2 Issuer;

"Issuer Cash Management Agreement" means, in relation to: (a) the First Issuer,
the Second Issuer and the Third Issuer, the First Issuer Cash Management
Agreement, the Second Issuer Cash Management Agreement and the Third Issuer Cash
Management Agreement respectively; (b) any other Funding Issuer, the Current
Issuer Cash Management Agreement; and (c) any Funding 2 Issuer, the Issuer Cash
Management Agreement as defined in the Issuer Master Definitions Schedule
relating to such Funding 2 Issuer;

"Issuer Cash Manager" means, in relation to: (a) the First Issuer, the First
Issuer Cash Manager; (b) any other Funding Issuer, the person identified as
managing all cash transactions and maintaining certain ledgers on behalf of such
Funding Issuer pursuant to the relevant Issuer Cash Management Agreement or such
other person as may from time to time be appointed as cash manager for such
Funding Issuer pursuant to the relevant Issuer Cash Management Agreement; and
(c) any Funding 2


                                       52
<PAGE>


Issuer, the Issuer Cash Manager as defined in the Issuer Master Definitions
Schedule relating to such Funding 2 Issuer;

"Issuer Deed of Charge" means:

(a)   in respect of the Funding Issuer, in relation to the First Issuer, the
      First Issuer Deed of Charge and in relation to any other Funding Issuer,
      the deed of charge entered into such Issuer with the Note Trustee;

(b)   in respect of any Funding 2 Issuer, the deed of charge entered into such
      Funding 2 Issuer with the Issuer Security Trustee;

"Issuer Enforcement Notice" means, in relation to a Funding 2 Issuer, a notice
issued by the applicable Note Trustee to such Funding 2 Issuer, the applicable
Issuer Security Trustee and the Funding 2 Security Trustee declaring all Notes
issued by such Funding 2 Issuer to be due and payable pursuant to the terms and
conditions of such Notes;

"Issuer Liquidity Reserve Fund" means, in relation to: (a) the First Issuer and
the Second Issuer, the First Issuer Liquidity Reserve Fund and the Second Issuer
Liquidity Reserve Fund, respectively; (b) any other Funding Issuer, the Current
Issuer Liquidity Reserve Fund; which in each case Funding will be required to
establish pursuant to and in the circumstances set out in the Intercompany Loan
of such Funding Issuer;

"Issuer Liquidity Reserve Ledger" means, in relation to: (a) the First Issuer
and the Second Issuer, the First Issuer Liquidity Reserve Ledger and the Second
Issuer Liquidity Reserve Ledger, respectively; any other Funding Issuer, the
Current Issuer Liquidity Reserve Ledger; in each case maintained by the Cash
Manager in the name of Funding to record the balance from time to time of the
Issuer Liquidity Reserve Fund, if any;

"Issuer Liquidity Reserve Required Amount" means, in relation to: (a) the First
Issuer, the First Issuer Liquidity Reserve Required Amount; (b) the Second
Issuer, the Second Issuer Liquidity Reserve Required Amount; (c) any other
Funding Issuer, the Current Issuer Liquidity Reserve Required Amount; in each
case required to be maintained in the Issuer Liquidity Reserve Fund, if any;

"Issuer Master Definitions Schedule" means, in relation to: (a) the First
Issuer, the First Issuer Master Definitions Schedule; (b) any other Funding
Issuer, the relevant master definitions schedule relating to such Funding
Issuer; and (c) any Funding 2 Issuer, the relevant master definitions schedule
relating to such Funding 2 Issuer;

"Issuer Notes" means, in respect of the Master Issuer, the Notes issued by the
Master Issuer;

"Issuer Post-Enforcement Priority of Payments" means, in relation to: (a) the
First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Post-Enforcement Priority of Payments, the Second Issuer Post-Enforcement
Priority of Payments and the Third Issuer Post-Enforcement Priority of Payments,
respectively; (b) any other Funding Issuer, the Current Issuer Post-Enforcement
Priority of Payments; and (c) any Funding 2 Issuer, the Issuer Post-Enforcement
Priority of Payments;

"Issuer Pre-Enforcement Principal Priority of Payments" means, in relation to:
(a) the First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Principal Priority of Payments, the Second Issuer
Pre-Enforcement Principal Priority of Payments and the Third Issuer
Pre-Enforcement Principal Priority of Payments, respectively; (b) any other
Funding Issuer, the


                                       53
<PAGE>


Current Issuer Pre-Enforcement Principal Priority of Payments; and (c) any
Funding 2 Issuer, the Issuer Pre-Enforcement Principal Priority of Payments;

"Issuer Pre-Enforcement Priority of Payments" means, in relation to: (a) the
First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Priority of Payments, the Second Issuer Pre-Enforcement Priority
of Payments and the Third Issuer Pre-Enforcement Priority of Payments,
respectively; (b) any other Funding Issuer, the Current Issuer Pre-Enforcement
Priority of Payments; and (c) any Funding 2 Issuer, the Issuer Pre-Enforcement
Priority of Payments;

"Issuer Pre-Enforcement Revenue Priority of Payments" means:

(a)   in respect of the Funding Issuers, in relation to the First Issuer, the
      Second Issuer and the Third Issuer, the First Issuer Pre-Enforcement
      Revenue Priority of Payments, the Second Issuer Pre-Enforcement Revenue
      Priority of Payments and the Third Issuer Pre-Enforcement Revenue Priority
      of Payments respectively, and in relation to any New Issuer, the Current
      Issuer Pre-Enforcement Revenue Priority of Payments as defined in the
      Issuer Master Definitions Schedule relating to that New Issuer;

(b)   in respect of any Funding 2 Issuers, the Issuer Pre-Enforcement Revenue
      Priority of Payments as defined in the Issuer Master Definitions Schedule
      relating to that Funding 2 Issuer;

"Issuer Principal Deficiency Ledger" means, in relation to the First Issuer, the
First Issuer Principal Deficiency Ledger and in relation to any other Issuer,
the ledger maintained by the Issuer Cash Manager in the name of such Issuer
which will be established on the relevant Closing Date (for any Funding Issuer)
and will be sub-divided into sub ledgers corresponding to the classes of Notes
issued by such Issuer in order to record Losses allocated to the Intercompany
Loan (in respect of any Funding Issuer) of such Issuer which are to be allocated
to such Notes, the application of Issuer Available Principal Receipts of such
Issuer in paying interest on the Notes issued by such Issuer and certain amounts
ranking in priority thereto in accordance with the Issuer Pre-Enforcement
Revenue Priority of Payments of such Issuer and the application by Funding of
Issuer Allocable Principal Receipts of the such Issuer to fund or replenish the
Issuer Liquidity Reserve Fund (if any) of such Issuer;

"Issuer Reserve Fund Ledger" means, in relation to: (a) the First Issuer and the
Second Issuer, the First Issuer Reserve Fund Ledger and the Second Issuer
Reserve Fund Ledger, respectively; (b) any other Funding Issuer, the Current
Issuer Reserve Fund Ledger as defined in the Issuer Master Definitions Schedule
relating to such Funding Issuer; and (c) any Funding 2 Issuer, the Issuer
Reserve Fund Ledger as defined in the Issuer Master Definitions Schedule
relating to such Funding 2 Issuer, in each case maintained by the Cash Manager
in the name of Funding or Funding 2 (as applicable) to record the amount
credited to the Issuer Reserve Fund held by Funding or Funding 2 (as applicable)
in respect of such Issuer on the relevant Closing Date, and subsequent
withdrawals and deposits in respect of the Issuer Reserve Fund;

"Issuer Reserve Fund" means:

(a)   with respect to the Funding Issuers, in relation to the First Issuer, the
      First Issuer Reserve Fund, in relation to the Second Issuer, the Second
      Issuer Reserve Fund and in relation to any other Funding Issuer, the
      Current Issuer Reserve Fund as defined in the Issuer Master Definitions
      Schedule relating to that Funding Issuer, in each case established in the
      name of Funding in respect of such Funding Issuer as required under the
      terms of the relevant


                                       54
<PAGE>


      Intercompany Loan of such Funding Issuer on the relevant Closing Date in
      an amount equal to the Issuer Reserve Required Amount; and

(b)   with respect to the Funding 2 Issuers, the Issuer Reserve Fund as defined
      in the Issuer Master Definitions Schedule relating to that Funding 2
      Issuer, in each case established on the relevant Closing Date in an amount
      equal to the Issuer Reserve Required Amount as defined in the Issuer
      Master Definitions Schedule relating to that Funding 2 Issuer;

"Issuer Reserve Minimum Amount" means, in relation to any Funding 2 Issuer, on
any date and subject to amendment as described in Schedule 4 to the Issuer Deed
of Charge, the amount calculated as the product of (a) one per cent. and (b) the
aggregate Principal Amount Outstanding of the Notes (including the Principal
Amount Outstanding of Notes issued by such Funding 2 Issuer on such date;

"Issuer Reserve Required Amount" means, in relation to: (a) the First Issuer,
the First Issuer Reserve Required Amount (as defined in the Issuer Master
Definitions Schedule relating to the First Issuer); (b) the Second Issuer, the
Second Issuer Reserve Required Amount (as defined in the Issuer Master
Definitions Schedule relating to the Second Issuer); (c) any other Funding
Issuer, the Current Issuer Reserve Required Amount; and (d) any Funding 2
Issuer, the Issuer Reserve Required Amount as defined in the Issuer Master
Definitions Schedule relating to such Funding Issuer, in each case required to
be maintained in the Issuer Reserve Fund of such Issuer;

"Issuer Reserve Requirement" means:

(a)   in relation to Funding and the Funding Issuers, a requirement that will be
      satisfied in respect of any Funding Issuer if, after taking account of the
      application of any Funding Available Revenue Receipts to the credit of the
      Issuer Reserve Fund Ledgers, the amount of funds in the Issuer Reserve
      Fund of such Issuer is equal to the relevant Issuer Reserve Required
      Amount;

(b)   in relation to Funding 2 and the Funding 2 Issuers, a requirement that
      will be satisfied in respect of a Monthly Payment Period if, after giving
      effect to the application of any payment of Funding 2 Available Revenue
      Receipts to the credit of the Funding 2 Reserve Ledger and any payment of
      Issuer Available Revenue Receipts to the Issuer Reserve Ledger, the amount
      of funds in the Funding 2 Reserve Fund and the Issuer Reserve Fund at the
      end of such Monthly Payment Period will be equal to the Programme Reserve
      Required Amount;

"Issuer Secured Creditors" means:

(a)   in respect of the Funding Issuers, in relation to the First Issuer, the
      Second Issuer and the Third Issuer, the First Issuer Secured Creditors,
      the Second Issuer Secured Creditors and the Third Issuer Secured Creditors
      respectively and in relation to any New Issuer, the Current Issuer Secured
      Creditors as defined in the Issuer Master Definitions Schedule relating to
      that New Issuer;

(b)   in respect of any Funding 2 Issuer, the Issuer Secured Creditors as
      defined in the Issuer Master Definitions Schedule relating to that Funding
      2 Issuer;

"Issuer Security" means in relation any Issuer, the security created by such
Issuer pursuant to the relevant Issuer Deed of Charge for the benefit of the
relevant Issuer Secured Creditors;


                                       55
<PAGE>


"Issuer Security Trustee" means The Bank of New York , whose principal office is
at 40th Floor, One Canada Square, London E14 5AL, or such other persons and all
other persons for the time being acting as the security trustee or security
trustees pursuant to the Issuer Deed of Charge;

"Issuer Start-up Loan Agreement" means:

(a)   in relation to any Funding Issuer, the agreement entered into on or about
      the Closing Date in relation to that Issuer between Funding, the relevant
      Start-up Loan Provider and the Security Trustee relating to the provision
      of the Issuer Start-up Loan to Funding and shall include any additional
      and/or replacement start-up loan agreement entered into by such parties in
      accordance with the Transaction Documents;

(b)   in relation to any Funding 2 Issuer, the agreement(s) entered into on or
      after the Funding 2 Programme Date between that Issuer, the relevant
      Start-up Loan Provider and the Funding 2 Security Trustee relating to the
      provision of the Issuer Start-up Loans to that Issuer and shall include
      any additional and/or replacement start-up loan agreement entered into by
      such parties in accordance with the Transaction Documents;

"Issuer Start-Up Loan Provider" means Northern Rock, in its capacity as provider
of an Issuer Start-Up Loan and/or such other person or persons for the time
being the lender under the relevant Issuer Start-Up Loan Agreement;

"Issuer Swap Agreements", in respect of any Funding 2 Issuer, means the ISDA
Master Agreements, Schedules thereto and Confirmations thereunder relating to
the Issuer Swaps to be entered into on or about each Closing Date, and any
Credit Support Annexes or other credit support documents entered into at any
time, as amended from time to time, among the Issuer, the applicable Issuer Swap
Provider and the applicable Issuer Security Trustee and/or any credit support
provider and includes any additional and/or replacement Issuer Swap Agreement
entered into by the Issuer from time to time in connection with the Notes;

"Issuer Swap Excluded Termination Amount" means, in relation to an Issuer Swap
Agreement, following the application of all or any part of any Swap Replacement
Premium in accordance with the applicable Issuer Deed of Charge and the
applicable Issuer Cash Management Agreement, an amount equal to any termination
payment due and payable to the relevant Issuer Swap Provider as a result of a
Swap Provider Default in relation to that Issuer Swap Provider;

"Issuer Swap Provider" means, in respect of any Funding 2 Issuer, the
institutions identified in respect of each Issuer Swap in the Note Supplement
and the Issuer Swap Agreement related to the relevant Series and Class of Notes;

"Issuer Swaps" means the currency and interest rate swaps entered into between a
Funding 2 Issuer and an Issuer Swap Provider which enable such Funding 2 Issuer
to receive and pay amounts under the relevant Funding 2 Intercompany Loan
Agreement in sterling and to receive and pay amounts under the Notes issued by
such Issuer not denominated in sterling in the applicable Specified Currency
and/or which will hedge such Funding 2 Issuer's payment obligations against
movement in interest rates where there is a possible difference between an
interest rate applicable to amounts received by such Issuer under a Loan Tranche
and the interest rate applicable to amounts to be paid by the Issuer in respect
of the related Series and Class of Notes;

"Issuer Transaction Accounts" means, in relation to the First Issuer, the Second
Issuer and the Third Issuer, the First Issuer Transaction Accounts, the Second
Issuer Transaction Accounts and the Third


                                       56
<PAGE>


Issuer Transaction Accounts and in relation to any other Issuer, the Current
Issuer Transaction Accounts or Issuer Transaction Accounts as defined in the
Issuer Master Definitions Schedule relating to that Issuer;

"Issuer Transaction Documents" means, in relation to: (a) the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Transaction Documents, the
Second Issuer Transaction Documents and the Third Issuer Transaction Documents,
respectively; (b) any other Funding Issuer, the Current Issuer Transaction
Documents as defined in the Issuer Master Definitions Schedule relating to such
Funding Issuer; and (c) any Funding 2 Issuer, the Issuer Transaction Documents
as defined in the Issuer Master Definitions Schedule relating to such Funding 2
Issuer;

"Issuer Trust Deed" means, in relation to an Issuer, the Note Trust Deed entered
into by that Issuer;

"Issuer" means, as applicable, a Funding Issuer or a Funding 2 Issuer;

"Jersey Account Bank" means Lloyds TSB Bank plc, Jersey International Branch, 4
Bond Street, St Helier, Jersey JE4 8ZE, Channel Islands;

"Lead Manager" means, in relation to any Series of Notes, the person named as
the Lead Manager in the applicable Subscription Agreement or, when only one
Dealer signs such Subscription Agreement, such Dealer;

"Lending Criteria" means the lending criteria of the Seller in respect of
Mortgage Loans other than Personal Secured Loans which may be amended from time
to time (forming part of the Seller's Policy) which as at 1 January 2004 is set
out in Schedule 12 (Lending Criteria) to the Mortgage Sale Agreement and/or such
other criteria as would be acceptable to a reasonable, prudent mortgage lender.
Lending Criteria for Personal Secured Loans are generally similar though not as
extensive as the Lending Criteria applicable to other Mortgage Loans;

"Liabilities" means all liabilities, losses, damages, costs, expenses, actions,
proceedings, claims and demands (including, without limitation, legal fees and
any applicable value added tax or similar tax;

"LIBOR" means, in relation to Funding and the Funding Issuers, unless stated
otherwise, the London inter-bank offered rate for deposits in the relevant
currency, as determined by the relevant Agent Bank in respect of the related
Notes as specified in the Conditions or otherwise on the following basis:

(a)   on the applicable Interest Determination Date the Agent Bank will
      determine the offered quotation to leading banks for deposits in the
      relevant currency for a period equal to the relevant period, to be
      determined by reference to the display as quoted on the Dow-Jones/Telerate
      Page No. 3750. If the Telerate Page No. 3750 stops providing these
      quotations, the replacement page for the purposes of displaying this
      information will be used. If the replacement page stops displaying the
      information, another service as determined by the relevant Issuer with the
      approval of the Note Trustee will be used. In each of these cases, such
      determination will be made as at or about 11.00 a.m. (London time) on such
      date;

(b)   if, on any such Interest Determination Date, the screen rate is
      unavailable, the Agent Bank will:

      (i)   request the principal London office of each of the Reference Banks
            to provide the Agent Bank with its offered quotation to leading
            banks for deposits in the relevant currency of the equivalent
            amount, and for a time equal to the relevant period, in the London
            inter-bank market as at or about 11.00 a.m. (London time) on such
            date; and


                                       57
<PAGE>


      (ii)  calculate the arithmetic mean, rounded upwards to five decimal
            places, of those quotations;

(c)   if on any such Interest Determination Date, the screen rate is unavailable
      and only two or three of the Reference Banks provide offered quotations,
      the relevant rate for the relevant period will be the arithmetic mean of
      the quotations as calculated in (b); and

(d)   if fewer than two Reference Banks provide quotations, the Agent Bank will
      consult with the Note Trustee and the relevant Issuer for the purpose of
      agreeing a total of two banks to provide such quotations and the relevant
      rate for the relevant period will be the arithmetic mean of the quotations
      as calculated in (b). If no such banks agree then the relevant rate for
      the relevant period will be the rate in effect for the last preceding such
      period for which (a) or (b) was applicable; and

in relation to Funding 2 and the Funding 2 Issuers, the London Interbank Offered
Rate for deposits in the relevant currency;

"Life Policy" means each life insurance and/or assurance policy which serves as
collateral security for the repayment of a Mortgage Loan;

"Lloyds TSB Collection Account" means the account in the name of Northern Rock
as Administrator (sort code 30/00/02, account number 0893639) held with Lloyds
TSB Bank plc and maintained subject to the terms of the Collection Bank
Agreement or such additional or replacement account as may for the time being be
in place;

"Lloyds TSB" means Lloyds TSB Bank plc;

"Loan Payment Date" means, in respect of a Loan Tranche, the Monthly Payment
Date(s) specified as such for such Loan Tranche in the Loan Tranche Supplement
for the payment of interest and/or principal, subject to the terms of the Global
Intercompany Loan Agreement;

"Loan Tranches" means the AAA Loan Tranches, the AA Loan Tranches, the A Loan
Tranches, the BBB Loan Tranches and the BB Loan Tranches, being the advances
made by the Master Issuer to Funding 2 pursuant to the Global Intercompany Loan
Agreement, each being funded from proceeds received by the Master Issuer from
the issue of a Series and Class of Notes;

"Loan Repurchase Notice" means the notice served upon the Seller by the
Mortgages Trustee or upon the Mortgages Trustee by the Seller requiring the
repurchase by or re-transfer to (pursuant to Clause 8.4 (Repurchase) of the
Mortgage Sale Agreement) or purchase by or transfer to (pursuant to Clause 8.5
(Purchase of Product Switches, Further Advances and purchases relating to
Personal Secured Loans) of the Mortgage Sale Agreement) the Seller of specified
Mortgage Loans and their Related Security, as set forth in Schedule 7 to the
Mortgage Sale Agreement;

"Loan Tranche Interest Amount" in respect of a Loan Tranche, has the meaning
given to it in Clause 7.3 (Determination of Loan Tranche Interest Amount) of the
Global Intercompany Loan Agreement;

"Loan Tranche Interest Commencement Date" means, in respect of a Loan Tranche,
the Closing Date for such Loan Tranche specified as such in the applicable Loan
Tranche Supplement;

"Loan Tranche Interest Determination Date" means, in respect of a Loan Tranche,
for any Loan Tranche Interest Period for which the applicable Loan Tranche Rate
of Interest will apply, the first day of such Loan Tranche Interest Period;


                                       58
<PAGE>


"Loan Tranche Interest Period" means, in relation to a Loan Tranche and any Loan
Payment Date, the period from (and including) the immediately preceding Loan
Payment Date for such Loan Tranche (or, in respect of the first Loan Tranche
Interest Period, the Loan Tranche Interest Commencement Date for such Loan
Tranche) to (but excluding) the next following (or first) Loan Payment Date for
such Loan Tranche;

"Loan Tranche Interest Reset Date" means, in respect of a Loan Tranche, the
dates specified for such Loan Tranche in the applicable Loan Tranche Supplement;

"Loan Tranche Notice" means a document substantially in the form set out in
Schedule 1 (Form of Loan Tranche Notice) to the Global Intercompany Loan
Agreement setting out, amongst other things, the principal amount of each Loan
Tranche available for drawing on the next Closing Date;

"Loan Tranche Rate of Interest" in respect of a Loan Tranche, has the meaning
given to it in Clause 7.3 (Determination of Loan Tranche Interest Amount) of the
Global Intercompany Loan Agreement;

"Loan Tranche Rating" means the designated rating assigned to a Loan Tranche
which corresponds to the rating of the series and class of notes when first
issued to provide funds for that loan tranche so that, for example, any AAA loan
tranche has a loan tranche rating of "AAA" to reflect the ratings of AAA/Aaa/AAA
then assigned to the corresponding series and class of notes;

"Loan Tranche Supplement" means, in relation to any Loan Tranche, means the
document between, amongst others, Funding 2 and applicable Funding 2 Issuer
substantially in the form set out in Schedule 2 (Form of Loan Tranche
Supplement) to the Funding 2 Intercompany Loan Agreement entered into between
Funding 2 and such Funding 2 Issuer recording the principal terms of such Loan
Tranche;

"Loan Tranches" means the AAA loan tranches, the AA loan tranches, the A loan
tranches, the BBB loan tranches and the BB loan tranches, being the advances
made by a Funding 2 Issuer to Funding 2, pursuant to the Funding 2 Intercompany
Loan Agreement between such Issuer and Funding 2, each being funded from
proceeds received by such Funding 2 Issuer from the issue of a Series and Class
of Notes;

"London Business Day" means a day (other than a Saturday or Sunday or public
holiday) on which banks are generally open for business in London;

"London Stock Exchange" means at any time the London Stock Exchange plc or any
other Person which at that time administers and manages the relevant primary
market in the United Kingdom upon which the Notes are formally admitted for
public trading;

"Losses Ledger" means the ledger of such name created and maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record the Losses on the Mortgage Portfolio;

"Losses" means the realised losses experienced on the Mortgage Loans which are
in the Mortgages Portfolio;

"LTV ratio" or "loan-to-value ratio" means , in respect of any Mortgage Loan
assigned to the Mortgages Trustee, the ratio of the outstanding balance of such
Mortgage Loan to the value of the Mortgaged Property securing such Mortgage
Loan; and in respect of the Seller's decision as to whether to make a mortgage
loan to a prospective borrower and for purposes of determining whether a MIG
Policy is necessary in connection with a mortgage loan, the ratio of the
outstanding balance of


                                       59
<PAGE>


such mortgage loan to the lower of the purchase price or valuation of the
mortgages property securing such mortgage loan as determined by the relevant
valuation by the Seller;

"LTV tests" mean two tests which assign a credit enhancement value (i) to each
Mortgage Loan in the Mortgage Portfolio based on its current LTV ratio and the
amount of mortgage indemnity cover on that Mortgage Loan, and (ii) calculated to
include any related unsecured portion of a Mortgage Loan in respect of the
Together product based on its current LTV ratio and the amount of mortgage
indemnity cover on that mortgage loan. The weighted average credit enhancement
value of the Mortgage Portfolio is then determined;

"Mandates" means the resolutions, instructions and signature authorities
relating to any of the Barclays Collection Account, the Lloyds TSB Collection
Account, the Mortgages Trustee Bank Accounts, the Funding Bank Accounts, the
Funding 2 Bank Accounts and the Issuer Transaction Accounts in the respective
forms agreed between the relevant parties from time to time in accordance with
the Collection Bank Agreement, the Bank Account Agreement, the Funding 2 Bank
Account Agreement, the relevant Funding (Issuer) Bank Account Agreement and the
relevant Issuer Bank Account Agreement, as applicable;

"Market" means the London Stock Exchange's Gilt Edged and Fixed Interest Market
or such other market of the London Stock Exchange as shall be designated as a
"regulated market" within the meaning of Directive 93/22/EC;

"Master Definitions Schedule" means this Master Definitions Schedule signed for
the purposes of identification by Brown & Wood and Clifford Chance Limited
Liability Partnership on or about the Initial Closing Date, as the same may be
amended, varied or supplemented from time to time, which is a schedule of the
definitions used in the Transaction Documents;

"Master Issuer" means Granite Master Issuer plc;

"MHA Documentation" means an affidavit, declaration, consent or renunciation
granted in terms of the Matrimonial Homes (Family Protection) (Scotland) Act
1981 and/or (if applicable) the Civil Partnership Act 2004 in connection with a
Scottish Mortgage or the Mortgaged Property secured thereby;

"MIG Policies" means the MIG insurance policy identified in paragraph 1 of
Schedule 4 (Insurance Contracts) to the Mortgage Sale Agreement and any
endorsements or extensions thereto as issued from time to time and any
additional, replacement or substitute MIG insurance policy which relates to the
Mortgage Loans in the Mortgages Portfolio from time to time;

"Minimum Seller Share" means an amount included in the Initial Seller Share
which is calculated in accordance with Clause 9.2 (Fluctuation of Minimum Seller
Share on each Distribution Date) of the Mortgages Trust Deed and which, as at
the Initial Closing Date was (GBP)50,000,000. The Minimum Seller Share may be
recalculated in accordance with the Mortgages Trust Deed;

"Money Market Notes" means, in respect of any Issuer, the Money Market Notes as
defined in the relevant Issuer Master Definitions Schedule and eligible for
purchase by money market funds under Rule 2a-7 of the US Investment Company Act
of 1940, as amended;

"Monthly CPR" means, on any Trust Determination Date, the total Mortgages
Trustee Principal Receipts received by the Mortgages Trustee during the
immediately preceding Trust Calculation Period date divided by the aggregate
Outstanding Principal Balance of the Mortgage Loans comprised in the Trust
Property as at the immediately preceding Trust Determination Date.


                                       60
<PAGE>


"Monthly Payment" means, in respect of a Mortgage Loan, the amount which the
applicable Mortgage Conditions require a Borrower to pay on a Monthly Payment
Date in respect of such Mortgage Loan;

"Monthly Payment Date" means:

(a)   in respect of any Mortgage Loan, the date in each month on which the
      relevant Borrower is required to make a payment of interest and, if
      applicable, principal for that Mortgage Loan, as required by the
      applicable Mortgage Conditions; and

(b)   in respect of the Master Issuer (and each Series and Class of Issuer Notes
      issued by the Master Issuer before 17 May, 2007) and Funding 2 (and each
      Loan Tranche made by the Master Issuer to Funding 2 before 17 May, 2007),
      the 20th Monthly Payment Date (as defined in sub-paragraph (c) below) of
      each calendar month subject to the appropriate business day convention (if
      any) specified (in relation to a Series and Class of Issuer Notes) in the
      applicable Note Supplement or (in relation to a Loan Tranche) in the
      applicable Loan Tranche Supplement in each case;

(c)   in respect of the Master Issuer (and each Series and Class of Issuer Notes
      issued by the Master Issuer on or after 17 May, 2007) and Funding 2 (and
      each Loan Tranche made by the Master Issuer to Funding 2 on or after 17
      May, 2007), the day of each calendar month specified as such (in relation
      to a Series and Class of Issuer Notes) in the applicable Note Supplement
      or (in relation to a Loan Tranche) in the applicable Loan Tranche
      Supplement which day shall be either the 17th day of each calendar month
      (the "17th Monthly Payment Date") or the 20th day of each calendar month
      (the "20th Monthly Payment Date"), in each case subject to the appropriate
      business day convention (if any) specified in the applicable Note
      Supplement or in the applicable Loan Tranche Supplement;

"Monthly Payment Period" means, in respect of the Master Issuer and Funding 2
and in relation to a calendar month, subject to any applicable business day
convention in respect of the Issuer Notes or the Loan Tranches, as applicable,
the period beginning on (and including) the 17th Monthly Payment Date of such
calendar month and ending on (and including), the 20th Monthly Payment Date of
such calendar month;

"Moody's" means Moody's Investors Services Inc. and includes any successor to
its rating business;

"Moody's Portfolio Variation Test" means the calculation methodology provided by
Moody's to the Administrator from time to time for the purpose of calculating
the Moody's Portfolio Variation Test Value;

"Moody's Portfolio Variation Test Value" means a certain percentage resulting
from the application of the Moody's Portfolio Variation Test;

"Mortgage" means (i) in respect of any Mortgage Loan in the Mortgage Portfolio
(other than Regulated Personal Secured Loans), the first priority charge by way
of legal mortgage (in relation to English Mortgage Loans) or first priority
standard security (in relation to Scottish Mortgage Loans), in each case which
secures the repayment of that Mortgage Loan including the Mortgage Conditions
applicable to it; and (ii) in respect of any Regulated Personal Secured Loan in
the Mortgage Portfolio, the second priority or lower ranking charge by way of
legal mortgage (in relation to English Mortgage Loans) or the second priority or
lower ranking standard security (in relation to Scottish Mortgage


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<PAGE>


Loans), in each case which secures the repayment of that Regulated Personal
Secured Loan including the Mortgage Conditions applicable to it;

"Mortgage Account" means as the context requires (i) all Mortgage Loans secured
on the same Mortgaged Property and thereby forming a single mortgage account or
(ii) an account maintained by the Administrator in respect of a particular
Mortgage Loan to record all amounts due in respect of that Mortgage Loan
(whether by way of principal, interest or otherwise) and all amounts received in
respect thereof;

"Mortgage Conditions" means, in relation to a Mortgage Loan, the terms and
conditions applicable to that Mortgage Loan and its Related Security as set out
in the relevant Seller's "Mortgage Conditions" booklet and the Seller's relevant
general conditions from time to time as varied by the relevant Mortgage Loan
Agreement and the relevant Mortgage Deed, and any variation or supplement
thereto;

"Mortgage Deed" means, in relation to each Mortgage, the deed creating such
Mortgage including, unless the context otherwise requires, the Mortgage
Conditions applicable thereto;

"Mortgage Loan Agreement" means, in relation to any Mortgage Loan, the
agreement, facility letter or accepted offer of advance pursuant to which the
monies secured by the relevant Mortgage were advanced to the Borrower (as varied
from time to time in accordance with the applicable Mortgage Conditions and
including any modifying agreement within the meaning of Section 82 of the
Consumer Credit Act 1974 insofar as it relates to that Mortgage Loan);

"Mortgage Loan Files" means, in relation to each Mortgage Loan, the file or
files (including files kept in microfiche format or similar electronic data
retrieval system) containing correspondence between the Borrower and the Seller
and including the Standard Mortgage Documentation applicable to that Mortgage
Loan, each letter of offer in respect of such Mortgage Loan and other relevant
documents;

"Mortgage Loan" means unless specified otherwise any mortgage loan (including
for the avoidance of doubt any Personal Secured Loan) and any Permitted
Replacement Mortgage Loan which is sold and assigned by the Seller to the
Mortgages Trustee from time to time pursuant to the terms of the Mortgage Sale
Agreement and referenced by its mortgage loan identifier number and comprising
the aggregate of all principal sums, interest, costs, charges, expenses and
other monies (including all Further Advances) due or owing with respect to that
Mortgage Loan under the relevant Mortgage Conditions by a Borrower on the
security of a Mortgage from time to time outstanding or, as the context may
require, the Borrower's obligations in respect of the same;

"Mortgage Portfolio" means, as of any date of determination, the Initial
Mortgage Portfolio and the Further Mortgage Portfolios assigned to the Mortgages
Trustee prior to such date of determination, taking account of, among other
things, amortisation of Mortgage Loans in that portfolio and the addition and/or
removal of any Mortgage Loans to or from that portfolio since the last such
assignment;

"Mortgage Rate" means the rate at which interest accrues on a Mortgage Loan from
time to time;

"Mortgage Sale Agreement" means the mortgage sale agreement entered into on or
about the Initial Closing Date among the Seller, the Mortgages Trustee, Funding
and the Security Trustee in relation to the assignment from time to time of the
Mortgage Portfolio to the Mortgages Trustee as may be amended, restated,
novated, varied or supplemented from time to time and shall include any
additional


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<PAGE>


and/or replacement mortgage sale agreement entered into by such parties from
time to time in accordance with the Transaction Documents;

"Mortgage Terms" means, in relation to a Mortgage Loan and the relevant
Mortgage, the applicable Mortgage Conditions;

"Mortgaged Property" means, in relation to any Mortgage Loan, the freehold or
leasehold property in England and Wales or (as applicable) the heritable or long
leasehold property in Scotland and, in each case, all rights and security
attached or appurtenant or related thereto and all buildings and fixtures
thereon which are subject to the Mortgage securing repayment of such Mortgage
Loan;

"Mortgagee" means, in relation to any Mortgage Loan, the person for the time
being entitled to exercise the rights of the mortgagee or (in Scotland)
Heritable Creditor under the relevant Mortgage securing repayment of such
Mortgage Loan;

"Mortgages Trust Deed" means the mortgages trust deed entered into among the
Mortgages Trustee, Funding and the Seller on 26 March 2001 and shall include any
additional and/or replacement mortgage trust deed entered into by such parties
from time to time in accordance with the Transaction Documents;

"Mortgages Trust Transaction Documents" means the Mortgages Trust Deed, the
Controlling Beneficiary Deed, the Mortgages Sale Agreement, the Cash Management
Agreement, the Administration Agreement, the Bank Account Agreement, the
Collection Bank Agreement, the Mortgages Trust Guaranteed Investment Contract,
the Stand-by Bank Account Agreement; the Stand-by Mortgages Trustee Guaranteed
Investment Contract, and any other deed, agreement or other document to which
the Mortgages Trustee is a party.

"Mortgages Trust" means the bare trust of the Trust Property as to both capital
and income, held by the Mortgages Trustee on trust absolutely for Funding (as to
the Funding Share), Funding 2 (as to the Funding 2 Share) and the Seller (as to
the Seller Share) pursuant to the Mortgages Trust Deed so that each Beneficiary
has an undivided beneficial interest therein;

"Mortgages Trustee Available Revenue Receipts" means on any Distribution Date an
amount equal to the aggregate of (in each case in the period prior to the end of
the immediately preceding Trust Calculation Period):

(a)   Revenue Receipts received by the Mortgages Trustee (which shall include,
      in respect of any Non-Flexible Mortgage Loan only, the amount of any
      Overpayment made by the Borrower in respect of such Mortgage Loan as is
      equal to the amount of any Underpayment of interest made by such Borrower
      in respect of such Mortgage Loan in the immediately preceding Trust
      Calculation Period provided that such Underpayment of interest is made
      prior to 31 December in the year in which such Overpayment is received
      from the Borrower),

(b)   interest payable to the Mortgages Trustee on the Mortgages Trustee Bank
      Accounts, which will be received on or prior to the relevant Distribution
      Date, and

(c)   any Contribution paid by the Seller to the Mortgages Trustee to fund any
      Non-Cash Re-Draw in respect of any Flexible Mortgage Loan,

      less

(d)   Third Party Amounts, and


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<PAGE>


(e)   amounts distributed on each previous Distribution Date in accordance with
      the Mortgages Trust Distribution of Revenue Receipts

PROVIDED THAT Revenue Receipts in paragraph (a) above shall for this purpose
include such amount of any Overpayment made by a Borrower in respect of a
Non-Flexible Mortgage Loan and standing to the credit of the Overpayments Ledger
as is applied on such date in reduction of any Underpayment of Interest made by
such Borrower in respect of such Mortgage Loan in the immediately preceding
Trust Calculation Period (provided that such Underpayment of Interest is made
prior to 31 December in the year in which such Overpayment is received from the
Borrower) in accordance with Clause 13.1 (Non-Flexible Mortgage Loans) of the
Mortgages Trust Deed;

"Mortgages Trustee Bank Accounts" means the Mortgages Trustee Transaction
Account and the Mortgages Trustee GIC Account;

"Mortgages Trustee Collection Accounts Amounts" means all amounts from time to
time standing to the credit of the Collection Accounts to the extent that such
amounts represent payments into the Collection Accounts of sums derived or
resulting from the Mortgage Loans and their Related Security sold to the
Mortgages Trustee pursuant to the Mortgage Sale Agreement;

"Mortgages Trustee Distribution of Principal Receipts" means the order in which
the Cash Manager will apply the Mortgages Trustee Principal Receipts on each
Distribution Date, as set forth in Clause 11 (Distribution of Principal
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Distribution of Revenue Receipts" means the order in which
the Cash Manager will apply the Mortgages Trustee Available Revenue Receipts on
each Distribution Date, as set forth in Clause 10 (Distribution of Revenue
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee GIC Account Mandate" means the resolutions, instructions and
signature authorities relating to the Mortgages Trustee GIC Account
substantially in the form set out in Schedule 1 to the Bank Account Agreement;

"Mortgages Trustee GIC Account" means the account in the name of the Mortgages
Trustee (sort code 30-00-59, account number 00000000, reference 1322000) held at
Northern Rock and maintained subject to the terms of Mortgages Trustee
Guaranteed Investment Contract and the Bank Account Agreement and such
additional or replacement bank accounts of the Mortgages Trustee as may for the
time being be in place with the prior consent of the Security Trustee;

"Mortgages Trustee GIC Provider" means Northern Rock or such other person or
persons as are for the time being the GIC Provider to the Mortgages Trustee
under the Mortgages Trustee Guaranteed Investment Contract;

"Mortgages Trustee Guaranteed Investment Contract" means the guaranteed
investment contract dated on or about the Initial Closing Date between the
Mortgages Trustee, the Mortgages Trustee GIC Provider, the Security Trustee and
the Cash Manager under which the Mortgages Trustee GIC Provider agrees to pay
the Mortgages Trustee a guaranteed rate of interest on the balance of the
Mortgages Trustee GIC Account from time to time and shall include any additional
and/or replacement guaranteed investment contract entered into by the Mortgages
Trustee from time to time in accordance with the Transaction Documents;

"Mortgages Trustee Ledgers" means all of the ledgers as are required to be
maintained pursuant to Clause 15 (Ledgers) of the Mortgages Trust Deed;


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"Mortgages Trustee Principal Priority of Payments" means the order in which the
Cash Manager will apply the Mortgages Trustee Principal Receipts on each
Distribution Date, as set forth in Clause 11 (Distribution of Principal
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Principal Receipts" means, on any Distribution Date, any
Mortgages Trustee Retained Principal Receipts plus the Principal Receipts
received by the Mortgages Trustee in the immediately preceding Trust Calculation
Period which may be distributed, subject to Clause 13 (Overpayments) of the
Mortgages Trust Deed, in accordance with Clause 11 of the Mortgages Trust Deed;

"Mortgages Trustee Priority of Payments" means, as applicable, the Mortgages
Trustee Revenue Priority of Payments or the Mortgages Trustee Principal Priority
of Payments;

"Mortgages Trustee Retained Principal Receipts" means on a Seller Share Event
Distribution Date, the Mortgages Trustee Principal Receipts which are not
distributed to the Seller by the Cash Manager and which are instead deposited
into the Mortgages Trustee GIC Account pursuant to the Mortgages Trust Deed;

"Mortgages Trustee Revenue Priority of Payments" means the order in which the
Cash Manager will apply the Mortgages Trustee Available Revenue Receipts on each
Distribution Date, as set forth in Clause 10 (Distribution of Revenue Receipts)
of the Mortgages Trust Deed;

"Mortgages Trustee Transaction Account Mandate" means the resolutions,
instructions and signature authorities relating to the Mortgages Trustee
Transaction Account substantially in the form set out in Schedule 1 to the Bank
Account Agreement;

"Mortgages Trustee Transaction Account" means the account in the name of the
Mortgages Trustee (sort code 30/16/63, account number 27033010) held at the
Account Bank and maintained subject to the terms of the Bank Account Agreement,
or such additional or replacement bank account of the Mortgages Trustee as may
for the time being be in place;

"Mortgages Trustee" means Granite Finance Trustees Limited, a company
incorporated with limited liability under the laws of Jersey, registered number
79309;

"New Funding 2 Secured Creditor" means any person identified as such in any Deed
of Accession executed pursuant to the Funding 2 Deed of Charge by such person
and the other parties thereto;

"New Funding Secured Creditor" means any person identified as such in any Deed
of Accession executed pursuant to the Funding Deed of Charge by such person and
the other parties thereto;

"New Intercompany Loan" means a loan of the net proceeds of any issue of New
Notes, such loan being advanced to Funding by a New Issuer pursuant to the terms
of a New Intercompany Loan Agreement;

"New Intercompany Loan Agreement" means a new intercompany loan agreement
entered into between Funding and a New Issuer in relation to a New Intercompany
Loan;

"New Issuer" means, in respect of: (a) Funding, a new wholly-owned subsidiary of
Funding, which is established to issue New Notes and to make a New Intercompany
Loan to Funding; and (b) in respect of Funding 2, a new wholly-owned subsidiary
of Funding 2, which is established to issue New Notes and to make a Funding 2
Intercompany Loan to Funding 2 and may also be referred to as "New Funding 2
Issuer";


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<PAGE>


"New Mortgage Loans" means Mortgage Loans, other than the Initial Mortgage
Loans, which the Seller may sell and assign, from time to time, to the Mortgages
Trustee after the Initial Closing Date pursuant to the Mortgage Sale Agreement;

"New Mortgage Portfolio" means any portfolio of Mortgage Loans and their Related
Security which are sold and assigned to the Mortgages Trustee on or about the
relevant Assignment Date, particulars of which are set out in the Schedule to
each New Mortgage Portfolio Notice delivered pursuant to the Mortgage Sale
Agreement but excluding any such Mortgage Loan and its Related Security which
has been redeemed in full on or before the relevant Assignment Date, and
(subject where applicable to the subsisting rights of redemption of the
Borrowers) all right, title, interest and benefit of the Seller in and to:

(a)   all sums of principal, interest (including, for the avoidance of doubt,
      all Accrued Interest, Arrears of Interest and Capitalised Arrears) and any
      other sum due or to become due under or in respect of such Mortgage Loans
      and their Related Security on or after such Closing Date and all sums of
      interest and other sums payable (but not paid before such Closing Date) in
      respect of any period before such Closing Date and including, without
      limitation, the right to demand, sue for, recover and give receipts for
      all such principal, interest or other amounts, the right to sue on all
      covenants and undertakings made or expressed to be made in favour of the
      Seller under the applicable Mortgage and all sums due or to become due in
      respect of any Early Repayment Charge;

(b)   the benefit of all securities for such principal, interest and other sums
      payable (including without limitation any interest of the Seller in any
      Life Policy), the benefit of all Deeds of Consent, MHA Documentation and
      Deeds of Postponement, any Guarantee in respect of such Mortgage Loan or
      any other collateral security for the repayment of the relevant Mortgage
      Loans secured by the Mortgages;

(c)   the right to exercise all the powers of the Seller in relation thereto
      subject to and in accordance with the relevant Mortgage Conditions;

(d)   all the estate and interest in the Mortgaged Properties in relation
      thereto vested in the Seller;

(e)   to the extent they are assignable, each Certificate of Title and Valuation
      Report and any right of action of the Seller against any solicitor, valuer
      or other person in connection with any report, valuation, opinion,
      certificate or other statement of fact or opinion given in connection with
      any Mortgage Loan and its Related Security in that portfolio of Mortgage
      Loans, or any part thereof or affecting the decision of the Seller to make
      or offer to make the relevant Mortgage Loan or part thereof;

(f)   the Buildings Policies and Insurance Contracts, in each case so far as
      they relate to such Mortgage Loans comprised in that portfolio of Mortgage
      Loans and their Related Security, including the right to receive the
      proceeds of all claims made or to be made by or on behalf of the Seller or
      to which the Seller is or may become entitled;

(g)   the MIG Policies, so far as they relate to such Mortgage Loans comprised
      in that portfolio of Mortgage Loans and their Related Security, including
      the right to receive of all claims made or to be made by or on behalf of
      the Seller or to which the Seller is or may become entitled;

"New Notes" means the notes issued and/or to be issued by the New Issuers to
investors;


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<PAGE>


"New Start-Up Loan Agreement" means, in relation to: (a) Funding, any new
start-up loan agreement entered into from time to time between Funding and a New
Start-Up Loan Provider pursuant to which a New Start-Up Loan is advanced to
Funding; and (b) any Funding 2 Issuer, any new start-up loan agreement entered
into from time to time between such Funding 2 Issuer and a New Start-Up Loan
Provider pursuant to which a New Start-Up Loan is advanced to such Funding 2
Issuer;

"New Start-Up Loan Provider" means the lender under any New Start-Up Loan
Agreement;

"New Start-Up Loan" means, in relation to: (a) Funding, a start-up loan made by
a New Start-Up Loan Provider to Funding under a New Start-Up Loan Agreement; and
(b) any Funding 2 Issuer, a start-up loan made by a New Start-Up Loan Provider
to such Funding 2 Issuer under a New Start-Up Loan Agreement;

"New York Business Day" means a day (other than a Saturday or a Sunday or public
holiday) on which banks are generally open in the city of New York;

"New Trust Property" means as the context requires, each New Mortgage Portfolio
from time to time sold and assigned by the Seller to the Mortgages Trustee or as
of any Closing Date the New Mortgage Portfolio sold and assigned to the
Mortgages Trustee on such date or as of any Distribution Date, any and all New
Mortgage Portfolios assigned by the Seller to the Mortgages Trustee during the
immediately preceding Trust Calculation Period;

"Non-Asset Trigger Event" means the occurrence of any of the following events:

(a)   an Insolvency Event occurs in relation to the Seller;

(b)   the role of the Seller as Administrator under the Administration Agreement
      is terminated and a new Administrator is not appointed within 60 days; or

(c)   on the Distribution Date immediately succeeding a Seller Share Event
      Distribution Date, the Current Seller Share is equal to or less than the
      Minimum Seller Share (determined using the amounts of the Current Seller
      Share and Minimum Seller Share that would exist after making distributions
      of Mortgages Trustee Principal Receipts due on that Distribution Date on
      the basis that the Cash Manager assumes that those Mortgages Trustee
      Principal Receipts are distributed in the manner described under the
      Mortgages Trustee Principal Priority of Payments set forth in Clause 11.1
      of the Mortgages Trust Deed;

"Non-Cash Re-Draw" means an Authorised Underpayment or a Payment Holiday under a
Flexible Mortgage Loan included in the Mortgages Trust, which will result in the
Seller being required to pay to the Mortgages Trustee an amount equal to the
Unpaid Interest associated with that Authorised Underpayment or Payment Holiday;

"Non-Cash Re-Draws Sub Ledger" means the sub-ledger of the Re-Draws Ledger,
which will be established by the Cash Manager on the Initial Closing Date in
order to record any Non-Cash Re-Draws made with respect to Flexible Mortgage
Loans;

"Non-Flexible Mortgage Loan" means a Mortgage Loan other than a Flexible
Mortgage Loan;

"Non-Flexible Overpayments Sub Ledger" means the sub-ledger of the Overpayments
Ledger corresponding to Non-Flexible Mortgage Loans, which was established by
the Cash Manager on the Initial Closing Date in order to record any Overpayments
made with respect to Non-Flexible Mortgage Loans;


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<PAGE>


"Non-Flexible Underpayments Ledger" means the ledger maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record any Underpayments made with respect to Non-Flexible Mortgage
Loans in the Mortgages Trust from time to time;

"Northern Rock Collection Accounts Amounts" means all amounts from time to time
standing to the credit of the Collection Accounts to the extent that such
amounts represent payments into the Collection Accounts of sums derived or
resulting from mortgage loans originated by Northern Rock which have not been
sold to the Mortgages Trustee pursuant to the Mortgage Sale Agreement;

"Northern Rock" means Northern Rock plc (registered number 3273685), a public
limited company incorporated under the laws of England and Wales, whose
registered office is at Northern Rock House, Gosforth, Newcastle upon Tyne NE3
4PL;

"Note Enforcement Notice" means, in relation to any Funding Issuer, a notice
issued by the Notes Trustee to such Funding Issuer and the Security Trustee
declaring the Notes issued by such Funding Issuer or any class of such Notes to
be due and repayable pursuant to the Conditions of such New Notes;

"Note Event of Default" means, in relation to a Funding 2 Issuer, the occurrence
of an event of default by such Issuer as specified in the terms and conditions
of the Notes;

"Note Payment Date" means, in respect of a Series and Class of Notes, the
Monthly Payment Date(s) specified in the applicable Note Supplement for the
payment of interest and/or principal subject to the Terms and Conditions;

"Note Principal Payment" means the principal amount redeemable from time to time
on each Note in accordance with the Conditions;

"Note Supplement" means, as applicable, either (a) a Prospectus Supplement; or
(b) any Final Terms;

"Note Trust Deed" means, in relation to any Issuer, the trust deed entered into
between that Issuer and the Note Trustee in respect of that Issuer (together
with any supplemental deed) that constitutes the Notes of that Issuer;

"Note Trustee" means, in relation to an Issuer, The Bank of New York, or such
person or persons for the time being acting as note trustee or trustees pursuant
to the Note Trust Deed entered into by that Issuer;

"Noteholders" means, in relation to: (a) the First Issuer Notes, the Class A
Noteholders, the Class B Noteholders and the Class C Noteholders or any of them;
and (b) any New Notes, the holders for the time being of such New Notes;

"Notes" means, in relation to the First Issuer, the First Issuer Notes and, in
relation to any other Issuer, the Notes issued by such Issuer;

"Offer Conditions" means the terms and conditions applicable to a specified
Mortgage Loan as set out in the relevant offer letter to the Borrower;

"Official List" means the Official List maintained by the UK Listing Authority;

"Operating Agreements" means the Administration Agreement, the Mortgage Sale
Agreement, the Seller's Power of Attorney and the Mortgages Trust Deed;


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<PAGE>


"Original Bullet Loan Tranche" means a Loan Tranche which has, at any time, been
a Bullet Loan Tranche, even if such Loan Tranche has subsequently become a
Pass-Through Loan Tranche;

"Original Pass-Through Loan Tranche" means a Loan Tranche which, at the time it
was advanced, was a Pass-Through Loan Tranche;

"outstanding" when used in respect of any Notes, has the meaning set out in the
Issuer Trust Deed constituting such Notes;

"Outstanding Principal Balance" means:

(a)   in relation to any Note and as of any date, means the unpaid principal
      balance of that Note at such date; and

(b)   in relation to any Intercompany Loan and as of any date, means the unpaid
      principal balance of that Intercompany Loan at such date; and

(c)   means, in relation to any Loan Tranche and as of any date, means the
      unpaid principal balance of that Loan Tranche at such date;

"Overpayment" means in respect of any Mortgage Loan, any additional amounts of
Principal Receipts received in a month above the regular, scheduled Monthly
Payment, paid by the relevant Borrower which (a) is permitted by the terms of
such Mortgage Loan or by agreement with the Borrower and (b) reduces the Current
Balance of such Mortgage Loan;

"Overpayments Ledger" means the ledger of such name maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record Overpayments on Mortgage Loans in the Mortgages Trust from
time to time which ledger will be sub-divided into two sub ledgers: (i) the
Non-Flexible Overpayments Sub Ledger corresponding to Overpayments made on
Non-Flexible Mortgage Loans, and (ii) the Flexible Overpayments Sub Ledger
corresponding to Overpayments made on Flexible Mortgage Loans;

"Pass-Through Loan Tranche" means, in relation to Funding 2, a Loan Tranche
which has no specified repayment dates other than the Final Repayment Date. On
the occurrence of a dated specified for a Bullet Loan Tranche, a Scheduled
Repayment Loan Tranche or a Controlled Amortisation Loan Tranches in the
applicable Loan Tranche Supplement occurs or if a Step-Up Date (if any) in
relation to such Loan Tranche occurs or if a Pass-Through Trigger Event occurs,
then that Loan Tranche will be deemed to be a Pass-Through Loan Tranche;

"Pass-Through Notes" means, in relation to a Funding 2 Issuer, any Series and
Class of Notes issued by such Issuer which has no specified redemption date
other than the Final Maturity Date. On the occurrence of a date specified for a
Series and Class of Bullet Redemption Notes, Scheduled Redemption Notes or
Controlled Amortisation Notes in the applicable Final Terms occurs or if a
Step-Up Date in relation to such Series and Class of Notes occurs or if a
Pass-Through Trigger Event occurs, then such Notes will be deemed to be
Pass-Through Notes;

"Pass-Through Requirement" means, in relation to Funding 2, on any Trust
Determination Date, the lesser of:

(a)   the aggregate of the Outstanding Principal Balance of each Pass-Through
      Loan Tranche (excluding any Original Bullet Loan Tranches) which is due on
      any Monthly Payment Date falling in the next following Monthly Payment
      Period; and

(b)   the greater of:


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<PAGE>


      (i)   the product of:

            (A)   the Funding 2 Share Percentage as at the start of the
                  immediately preceding Trust Calculation Period (provided that
                  if an Assignment Date or a Contribution Date has occurred
                  during such Trust Calculation Period then the Weighted Average
                  Funding 2 Share Percentage will be used);

            (B)   the aggregate amount of Principal Receipts received by the
                  Mortgages Trustee during the immediately preceding Trust
                  Calculation Period; and

            (C)   the aggregate Outstanding Principal Balance determined as of
                  the most recent Monthly Payment Date, of the Pass-Through Loan
                  Tranches excluding any original Bullet Loan Tranches which are
                  due (in the case of Rule (2)) on any Monthly Payment Date
                  falling in the next following Monthly Payment Period, divided
                  by the aggregate Outstanding Principal Balance of the Global
                  Intercompany Loan as at the most recent Monthly Payment Date;
                  and

      (ii)  the product of:

            (A)   the Funding 2 Share Percentage as at the start of the
                  immediately preceding Trust Calculation Period (provided that
                  if an Assignment Date or a Contribution Date has occurred
                  during such Trust Calculation Period then the Weighted Average
                  Funding 2 Share Percentage will be used); and

            (B)   the aggregate amount of Principal Receipts received by the
                  Mortgages Trustee during the immediately preceding Trust
                  Calculation Period;

            less

            (C)   the sum of the Cash Accumulation Requirement, the Scheduled
                  Amortisation Requirement and the Controlled Amortisation
                  Requirement as calculated for such Trust Determination Date as
                  described above;

"Pass-Through Trigger Event" means any of the following events:

(a)   a Trigger Event;

(b)   the service of an Issuer Enforcement Notice by the Note Trustee on the
      Master Issuer; or

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

"Paying Agent and Agent Bank Agreement" means, in relation to: (a) the First
Issuer, the First Issuer Paying Agent and Agent Bank Agreement; and (b) any New
Issuer, has the meaning specified under the relevant Issuer Transaction
Documents;

"Paying Agents" means, in relation to:

(a)   the First Issuer, the Principal Paying Agent and the US Paying Agent
      initially appointed as paying agents pursuant to the First Issuer Paying
      and Agent Bank Agreement; and

(b)   any New Issuer, the Principal Paying Agent and US Paying Agent appointed
      pursuant to the Paying Agent and Agent Bank Agreement relating to that New
      Issuer,

or if applicable, any successor paying agents;


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"Payment Date" means: (i) in relation to any Group 1 Issuer, the twentieth day
of July, October, January and April in each year, or if such day is not a
Business Day, the next succeeding Business Day, and (ii) in relation to any
Group 2 Issuer, the twentieth day of March, June, September and December or, if
such day is not a Business Day, the next succeeding Business Day, unless
otherwise indicated in the relevant Issuer Master Definitions Schedule for any
Funding Issuer;

"Payment Holiday" means, in respect of any Flexible Mortgage Loan, a period of
one or more Monthly Payment Dates when the relevant Borrower under such Mortgage
Loan is permitted by the Seller in accordance with the relevant Mortgage
Conditions not to make its regular Monthly Payment;

"Perfection Date" means the date of any Perfection;

"Perfection Event" means any of the events specified in Clause 6.1 (Perfection
Events) of the Mortgage Sale Agreement;

"Perfection" means the perfection of the assignment and assignation of the
Mortgage Portfolio pursuant to and in accordance with Clause 6 (Perfection of
the Assignment) of the Mortgage Sale Agreement;

"Permitted Product Switch" means any variation in the financial terms and
conditions of a Mortgage Loan in which a Borrower exchanges its then-current
Mortgage Loan product for a different mortgage loan product offered by the
Seller or (in limited circumstances) the Administrator from time to time,
provided that such new mortgage loan for which the prior Mortgage Loan is to be
exchanged is a Permitted Replacement Mortgage Loan, and further provided that no
such product switch shall be permitted unless at the date of such product switch
each of the conditions set out in Clause 4.2 (Conditions to Effecting an
Assignment of New Mortgage Loans) of the Mortgage Sale Agreement is satisfied
(save to the extent that conditions (a), (c), (k), (n) and (o) of such Clause
must only be satisfied on the most recent Assignment Date for the assignment of
New Mortgage Loans to the Mortgages Trust);

"Permitted Replacement Mortgage Loan" means a mortgage loan (i) that is subject
to a variable rate of interest, (ii) that has a maturity date prior to January
2052, and (iii) upon which the related Borrower has made at least one Monthly
Payment;

"Person" means a reference to any person, individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organisation, governmental entity or other entity of
similar nature (whether or not having separate legal personality);

"Personal Secured Loan" means a Mortgage Loan for unrestricted purposes offered
to a Borrower who has an existing Mortgage Loan (other than a Personal Secured
Loan) with the Seller, which is secured on the same Mortgaged Property which
secures the Borrower's existing Mortgage Loan. A Personal Secured Loan is
governed by separate terms and conditions from the existing Mortgage Loan and is
documented either as a Regulated Personal Secured Loan or an Unregulated
Personal Secured Loan depending on the purposes for which it is used. Certain
Personal Secured Loans permit the Borrower to make Further Draws up to the fixed
amount of credit extended under the related Mortgage Conditions at the inception
of the Personal Secured Loan;

"Post-Enforcement Call Option Agreement" means, in respect of: (a) a Funding
Issuer, the post-enforcement call option agreement entered into on or about a
Closing Date between the relevant Funding Issuer, the relevant Post-Enforcement
Call Option Holder and the Note Trustee; (b) the


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<PAGE>


Master Issuer, the post-enforcement call option agreement entered into on or
about the Funding 2 Programme Date between the Master Issuer, the relevant
Post-Enforcement Call Option Holder and the Note Trustee; and (c) the Start-Up
Loan Provider, the post-enforcement call option agreement entered into on or
about the Funding 2 Programme Date between the Start-Up Loan Provider, the
relevant Post-Enforcement Call Option Holder and the Master Issuer;

"Post-Enforcement Call Option Holder" means, in respect to the Master Issuer,
GPCH Limited, a company incorporated with limited liability under the laws of
England and Wales, registered number 4128437, or such other person or persons
for the time being acting as post-enforcement call option holder under the
relevant Post-Enforcement Call Option Agreement, and, in relation to any New
Issuer, has the meaning specified under the relevant Issuer Master Definitions
Schedule;

"Potential Intercompany Loan Event of Default" means the occurrence of any event
which with the giving of notice, any relevant certificate, the lapse of time or
fulfilment of any other condition (or any combination of the foregoing) would
become an Intercompany Loan Event of Default;

"Potential Funding 2 Intercompany Loan Event of Default" means the occurrence of
any event which with the giving of notice, any relevant certificate, the lapse
of time or fulfilment of any other condition (or any combination of the
foregoing) would become a Funding 2 Intercompany Loan Event of Default;

"Potential Note Event of Default" means any condition, event or act which with
the lapse of time and/or the giving of any notice and/or determination of
materiality and/or fulfilment of any similar condition would constitute a Note
Event of Default;

"Principal Amount Outstanding" means for each Series and Class of Notes and as
of any date of determination, the Initial Principal Amount of such Series and
Class of Notes less (in each case) the aggregate amount of all principal
payments in respect of such Series and Class of Notes that have been paid since
the Closing Date for such Series, and Notes that have been paid since the
Closing Date for such Series and Class of Notes on or prior to that date of
determination (as set out in Condition 5(c) of the Terms and Conditions);

"Principal Deficiency Ledger" means, in relation to any Issuer, the ledger of
such name maintained by the Issuer Cash Manager pursuant to the Issuer Cash
Management Agreement, comprising such sub-ledgers as relate to the classes of
Notes of differing ratings issued by such Issuer as contemplated in the relevant
Issuer Cash Management Agreement;

"Principal Directions" means with respect to the Security Trustee, the
directions of the Note Trustee(s) for the Holders of the highest ranking class
of Notes outstanding (meaning the Class A Notes for so long as there are Class A
Notes outstanding and thereafter, the Class B Notes so long as there are no
Class A Notes outstanding and thereafter, the Class C Notes so long as there are
neither Class A Notes nor Class B Notes outstanding and thereafter, the Class D
Notes for so long as there are no Class A Notes, Class B Notes nor Class C Notes
outstanding;

"Principal Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record any
Mortgages Trustee Retained Principal Receipts plus the Principal Receipts on the
Mortgage Loans and distributions of such Principal Receipts to the Seller,
Funding and Funding 2 on each Distribution Date;

"Principal Paying Agent" Citibank, N.A., acting through its London Branch at
Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB;


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"Principal Receipts" means, in relation to the Mortgages Trustee, any payment in
respect of principal received in respect of any Mortgage Loan, whether as all or
part of a Monthly Payment in respect of such Mortgage Loan, on redemption
(including partial redemption) of such Mortgage Loan, on enforcement or on the
disposal of such Mortgage Loan or otherwise (including payments pursuant to any
Insurance Policy) (and which may include the amount of any Overpayment in
respect of any Non-Flexible Mortgage Loan, but only to the extent permitted by
Clause 13.1 (Non-Flexible Mortgage Loans) of the Mortgages Trust Deed, and which
also may include the amount of any Further Contribution made by Funding or
(subject to the terms of the making of such Further Contribution), by Funding 2
from time to time) and in relation to any distributions of Principal Receipts
which have been or are to be made on a Distribution Date, Principal Receipts
shall mean Mortgages Trustee Principal Receipts;

"Proceedings" means any suit, action or proceedings arising out of or in
connection with any of the Transaction Documents;

"Product Switch" means a variation to the financial terms and conditions of any
Mortgage Loan but excluding:

(a)   any variation in the financial terms and conditions of a Mortgage Loan
      involving a Permitted Product Switch;

(b)   variation agreed with a Borrower to control or manage arrears on a
      Mortgage Loan;

(c)   variation in the maturity date of a Mortgage Loan unless, while the First
      Issuer Intercompany Loan is outstanding, it is extended beyond January
      2039 and/or while any loan tranche under the global intercompany loan
      agreement is outstanding, it is extended beyond January 2052;

(d)   variation imposed by statute;

(e)   variation of the rate of interest payable in respect of Mortgage Loan
      where that rate is offered to the Borrowers of more than 10 per cent. by
      Current Balance of Mortgage Loans comprised in the Trust Property in any
      Interest Period;

(f)   a change between interest-only and repayment Mortgage Loans;

(g)   a transfer of equity; and/or

(h)   a release of a party to a Mortgage Loan or a release of part of the land
      subject to the Mortgage;

"Programme", in relation to the Master Issuer, means the asset-backed note
programme established by or otherwise contemplated in the Programme Agreement
and the Issuer Trust Deed entered into by the Master Issuer;

"Programme Agreement" means the agreement entered into on or around the Funding
2 Programme Date, as amended from time to time, between amongst others, the
Master Issuer, Funding 2 and the dealers named therein (or deemed named
therein);

"Programme Reserve Required Amount" means, in relation to Funding 2 and the
Funding 2 Issuers, as at any date, the amount calculated as the product of (a)
the Programme Reserve Required Percentage and (b) the aggregate Outstanding
Principal Balance of all Loan Tranches outstanding under the Global Intercompany
Loan Agreement (including the Principal Amount Outstanding of any Loan Tranche
(or the increase in the Principal Amount Outstanding of any existing Loan
Tranche) that is made on such date).


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"Properties in Possession Policy" means the properties in possession insurance
policy identified in paragraph 2(e) of Schedule 4 (Insurance Contracts) to the
Mortgage Sale Agreement and any endorsements or extensions thereto as issued
from time to time and any additional, replacement or substitute properties in
possession insurance policy which relates to Mortgage Loans in the Mortgages
Trust from time to time;

"Prospectus" means the prospectus in relation to the US Notes issued by any
Issuer, the meaning given such term in the Issuer Master Definitions Schedule
relating to that Issuer;

"Prospectus Directive" means Directive 2003/71/EC of the European Parliament and
of the Council of 4 November 2003 on the prospectus to be published when
securities are offered to the public or admitted to trading and amending
Directive 2001/34/EC;

"Prospectus Rules" means the Prospectus Rules of the FSA made pursuant to Part
VI of the FSMA;

"Prospectus Supplement" means each prospectus supplement relating to one or more
Series and Classes of Issuer Notes issued on a single Closing Date;

"PS/FA/PSL Event" means the occurrence of either (i) confirmation from Northern
Rock that it will purchase the relevant Mortgage Loans which are subject to any
Further Advances or Product Switches (other than Re-Fixed Mortgage Loans) in
accordance with Clause 8.5 (Purchase of Product Switches and Further Advances
and purchases related to Personal Secured Loans) under the Mortgage Sale
Agreement, (ii) any Mortgage Loan becoming a Re-Fixed Mortgage Loan, or (iii)
Northern Rock making a Personal Secured Loan to the Borrower of a Mortgage Loan;

"PS/FA/PSL Event" means the occurrence of either (i) confirmation from Northern
Rock that it will purchase the relevant Mortgage Loans which are subject to any
Further Advances or Product Switches (other than Re-Fixed Mortgage Loans) in
accordance with Clause 8.5 (Purchase of Product Switches and Further Advances
and purchases related to Personal Secured Loans) under the Mortgage Sale
Agreement, (ii) any Mortgage Loan becoming a Re-Fixed Mortgage Loan, or (iii)
Northern Rock making a Personal Secured Loan to the Borrower of a Mortgage Loan;

"Purchase Price" means:

(a)   in respect of the Initial Mortgage Portfolio, the amount payable therefor
      by the Mortgages Trustee pursuant to Clause 3.2 (Purchase Price) of the
      Mortgage Sale Agreement; and

(b)   in respect of each New Mortgage Portfolio, the amount payable therefor by
      the Mortgages Trustee pursuant to Clause 4.5 (Purchase Price) of the
      Mortgage Sale Agreement;

"Rating Agencies" means S&P, Moody's and Fitch, and "Rating Agency" means any of
them;

"Receiver" means, in relation to the Funding Deed of Charge or the Funding 2
Deed of Charge, any person or persons appointed (and any additional person or
persons appointed or substituted) as an administrative receiver, receiver,
manager, or receiver and manager of the Funding Charged Property or the Funding
2 Charged Property (as applicable) by the Funding Security Trustee or the
Funding 2 Security Trustee pursuant the Funding Deed of Charge or the Funding 2
Deed of Charge (as applicable) and in relation to any Issuer Deed of Charge, any
person or persons appointed (and any additional person or persons appointed or
substituted) pursuant thereto by the Note Trustee as an administrative receiver,
receiver, manager, or receiver and manager of the property charged or secured
under such Issuer Deed of Charge;

"Re-Draw" means either a Cash Re-Draw or a Non-Cash Re-Draw;


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"Re-Draws Ledger" means the ledger maintained by the Cash Manager in the name of
the Mortgages Trustee pursuant to the Cash Management Agreement to record
Re-Draws on Flexible Mortgage Loans in the Mortgages Trust from time to time
which ledger shall be sub-divided into two sub ledgers: (i) the Non-Cash
Re-Draws Sub Ledger corresponding to Non-Cash Re-Draws and (ii) the Cash
Re-Draws Sub Ledger corresponding to Cash Re-Draws;

"Re-Fixed Mortgage Loan" means, as at any given date, a Mortgage Loan which on
or before such date had been a Fixed Rate Mortgage Loan in respect of which the
fixed period by reference to which the relevant fixed interest was charged had
come to an end, but as at or before that such date, the interest charged under
such Mortgage Loan was again fixed for a further fixed period by the Seller or
the Administrator as the case may be (following an election by the Borrower) in
accordance with the original terms of the Fixed Rate Mortgage Loan;

"Reference Banks" means the principal London offices of Citibank N.A., ABN AMRO
Bank N.V., Barclays Bank plc and JPMorgan Chase Bank, or such other major bank
selected by the Cash Manager from time to time.

"Reg S Global Note Certificates" or "Regulation S Global Note Certificates"
means the Global Note Certificates in registered form representing the Reg S
Notes;

"Reg S Individual Note Certificates" or "Regulation S Individual Note
Certificates" means the Individual Note Certificates in registered form
representing the Reg S Notes;

"Reg S Notes" means generally all Notes which are issued pursuant to Reg S and
in relation to an Issuer means the Notes issued or to be issued by that Issuer
pursuant to Reg S;

"Reg S Prospectus" means, in relation to any Series and Class of Notes, the Base
Prospectus and the Final Terms relating to such Series and Class of Notes;

"Reg S" means Regulation S under the United States Securities Act of 1933, as
amended;

"Registered Land" means land in England or Wales, title to which is registered
at H.M. Land Registry;

"Registered Transfer" means, in relation to Registered Land, a deed of transfer
of a Mortgage or Mortgages over registered land in the form referred to in
paragraph (a) of Clause 6.3 (Transfer Documents) of the Mortgage Sale Agreement
with such modifications as may be permitted from time to time in accordance with
such Clause;

"Registers of Scotland" means the Land Register of Scotland and/or the General
Register of Sasines;

"Regulated Market" means a regulated market as defined in Council Directive
93/22/EEC of 10 May 1993 on investment services in the securities field, as will
be replaced by Directive 2004/39/EC of the European Parliament and of the
Council of 21 April 2004 on markets in financial instruments amending Council
Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European
Parliament and of the Council and repealing Council Directive 93/22/EEC;

"Regulated Personal Secured Loan" means a Personal Secured Loan which is
documented as an agreement regulated by the CCA and which is secured pursuant to
a second priority or lower ranking charge by way of legal mortgage (in relation
to English Mortgage Loans) or second priority or lower ranking standard security
(in relation to Scottish Mortgage Loans) over the same property which secures
the relevant |Borrower's existing Mortgage Loan;


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<PAGE>


"Regulations" means as the context may require either (i) the Unfair Terms in
Consumer Contracts Regulations 1999 and/or, as applicable, the Unfair Terms in
Consumer Contracts Regulations 1994 or (ii) the Regulations set out in Schedule
2 to the First Issuer Paying Agent and Agent Bank Agreement;

"Related Security" means, in relation to a Mortgage Loan, the security for the
repayment of such Mortgage Loan including the relevant Mortgage and all other
documents, matters and things related thereto acquired and referred to as part
of the Initial Mortgage Portfolio or, as the case may be, the New Mortgage
Portfolio, sold to the Mortgages Trustee pursuant to the Mortgage Sale Agreement
and which constitute all or part of the security for the payment of all sums due
in respect of such Mortgage Loan, including for the avoidance of doubt,
guarantees, MIG Policies and assignments and charges over Life Policies;

"Relevant Distribution" has the meaning given to it in Clause 4.2
(Consideration) of the Mortgages Trust Deed;

and in respect of Funding, Funding 2 or any Issuer (each, for the purposes of
this definition, a "Relevant Entity"), "Insolvency Event" means:

(a)   except for the purposes of an amalgamation or restructuring as described
      in sub-clause (b) of this definition, the Relevant Entity ceases or
      threatens to cease to carry on all or a substantial part of its business
      or the Relevant Entity is deemed unable to pay its debts within the
      meaning of section 123(1)(a), (b), (c) or (d) of the Insolvency Act (as
      that section may be amended) or becomes unable to pay its debts within the
      meaning of section 123(2) of the Insolvency Act (as that section may be
      amended, modified or re-enacted); or

(b)   an order is made or an effective resolution is passed for the winding-up
      of the Relevant Entity or the appointment of an administrator over the
      Relevant Entity (except for the purposes of or pursuant to an
      amalgamation, restructuring or merger previously approved by the Note
      Trustee or the Security Trustee, as the case may be, or as approved in
      writing by an Extraordinary Resolution (as defined in the Issuer Trust
      Deed) of the Class A Noteholders);

      or

(c)   proceedings are otherwise initiated against the Relevant Entity under any
      applicable liquidation, insolvency, composition, reorganisation or other
      similar laws (including, but not limited to, application or pending
      application for an administration order or presentation of a petition for
      a winding-up order) and (except in the case of an application or pending
      application for an administration order) such proceedings are not, in the
      opinion of the Note Trustee or the Issuer Security Trustee (as the case
      may be), being disputed in good faith with a reasonable prospect of
      success; or an administration order being granted or an administrative
      receiver or other receiver, administrator, liquidator or other similar
      official being appointed in relation to the Relevant Entity or in relation
      to the whole or any substantial part of the undertaking or assets of the
      Relevant Entity; or an encumbrancer taking possession of the whole or any
      substantial part of the undertaking or assets of the Relevant Entity, or a
      distress, execution, diligence or other process being levied or enforced
      upon or sued out against the whole or any substantial part of the
      undertaking or assets of the Relevant Entity and such possession or
      process (as the case may be) not being discharged or not otherwise ceasing
      to apply within 30 days; or the Relevant Entity initiating or consenting
      to judicial proceedings relating to itself under applicable liquidation,
      administration, insolvency,


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<PAGE>


      composition, reorganisation or other similar laws or making a conveyance
      or assignment for the benefit of its creditors generally;

"Relevant Margin" means, in respect of a Loan Tranche, the Relevant Margin for
such Loan Tranche specified as such in the applicable Loan Tranche Supplement;

"Relevant Screen Rate" means, in respect of a Loan Tranche:

(a)   for the first Loan Tranche Interest Period, the Initial Relevant Screen
      Rate; and

(b)   in  respect of  subsequent  Loan  Tranche  Interest  Periods,  the
Relevant  Screen  Rate for such Loan  Tranche  specified  as such in the
applicable Loan Tranche Supplement;;

"Repayment Mortgage Loan" means a Mortgage Loan in respect of which the Borrower
is under an obligation to the mortgagee to make monthly payments of principal so
that the whole principal (in addition to interest) is repaid by the stated
maturity date for that Mortgage Loan;

"Repayment Requirement" means, in relation to Funding 2, on any Trust
Determination Date, the amount, if any, equal to the sum of:

(a)   the Cash Accumulation Requirement;

(b)   the Controlled Amortisation Requirement;

(c)   the Scheduled Repayment Requirement; and

(d)   the Pass-Through Requirement;

"Representations and Warranties" means the representations and warranties set
out in Schedule 1 (Representations and Warranties) to the Mortgage Sale
Agreement;

"Required Rate and Terms" has the meaning given to such term in Clause 4.4(c) of
the Administration Agreement;

"Revenue Ledger" means the ledger maintained by the Cash Manager in the name of
the Mortgages Trustee pursuant to the Cash Management Agreement to record
Revenue Receipts received by the Mortgages Trustee and the payment of the same
on each Distribution Date in accordance with the terms of the Mortgages Trust
Deed;

"Revenue Receipts" means, in relation to the Mortgages Trustee, any payment
received in respect of any Mortgage Loan, whether as all or part of a Monthly
Payment in respect of such Mortgage Loan, on redemption (including partial
redemption) of such Mortgage Loan, on enforcement of such Mortgage Loan
(including the proceeds of sale thereof), on the disposal of such Mortgage Loan
or otherwise (including payments pursuant to any Insurance Policy) which in any
such case is not a Principal Receipt in respect of such Mortgage Loan;

"Right to Buy Mortgage Loan" means (i) in relation to an English Mortgage Loan,
a Mortgage Loan in respect of which the "right to buy" provisions of the Housing
Act 1985 apply (other than any Mortgage Loan in respect of which the period
during which the statutory charge referred to in section 156 of that Act would
have existed, had the relevant circumstances applied, has expired) and (ii) in
relation to a Scottish Mortgage Loan, a Mortgage Loan in respect of which the
"right to buy" provisions of the Housing (Scotland) Act 1987 apply (other than
any Mortgage Loan in respect of the period during which the seller's standard
security referred to in section 72 of that Act remains in effect has expired);


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"S&P" and "Standard & Poor's" means Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., and includes any successor to its
rating business;

"Scheduled Redemption Notes" means, in relation to a Funding 2 Issuer, any
Series and Class of Notes issued by such Issuer scheduled to be repaid in full
in two or more instalments on Scheduled Redemption Dates. Such Scheduled
Redemption Notes will be deemed to be Pass-Through Notes if:

(a)   a date specified in relation to the same in the applicable Note Supplement
      occurs;

(b)   a Pass-Through Trigger Event occurs; or

(c)   the Step-Up Date (if any) in relation to such Notes occurs;

"Scheduled Repayment Date" means the dates specified as such in the Loan Tranche
Supplement for a Scheduled Repayment Loan Tranche;

"Scheduled Repayment Loan Instalment" means that part of a Scheduled Repayment
Loan Tranche which is due on each of the Scheduled Repayment Dates of that Loan
Tranche;

"Scheduled Repayment Loan Tranches" means, in relation to Funding 2, any Loan
Tranche which is scheduled to be repaid on two or more instalments on Scheduled
Repayment Dates. Scheduled Repayment Loan Tranches will be deemed to be
Pass-Through Loan Tranches if:

(a)   a date specified in relation to the same in the applicable Loan Tranche
      Supplement occurs;

(b)   a Pass-Through Trigger Event occurs;

(c)   a Step-Up Date (if any) in relation to such Loan Tranche occurs.

"Scheduled Repayment Requirement" means, on a Trust Determination Date, the
amount required by Funding 2 to repay:

(a)   each Scheduled Repayment Loan Instalment which is scheduled to be repaid
      on any Monthly Payment Date falling in any of the three Monthly Payment
      Periods immediately following such Trust Determination Date; and

(b)   the aggregate outstanding amount on that Trust Determination Date of each
      Scheduled Repayment Loan Instalment then outstanding that was not fully
      repaid on its Scheduled Repayment Date,

after taking into account amounts standing to the credit of the Funding 2
Principal Ledger on such Trust Determination Date which are available therefor;

"Scottish Mortgage Loan" means each Mortgage Loan secured by a Scottish
Mortgage;

"Scottish Mortgage" means, in respect of any Mortgage Loan in the Mortgage
Portfolio, a Mortgage secured over a Scottish Property;

"Scottish Property" means a Mortgaged Property situated in Scotland;

"Scottish Transfer" means an assignation of a Scottish Mortgage or Mortgages in
the relevant form referred to in paragraphs (c) and (d) of Clause 6.3 (Transfer
Documents) of the Mortgage Sale Agreement with such modifications as may be
permitted from time to time in accordance with such Clause;


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<PAGE>


"Scottish Trust Deed" means a declaration of trust substantially in the form set
out in Schedule 11 to the Mortgage Sale Agreement declared by the Seller in
favour of the Mortgages Trustee over its whole right, title, benefit and
interest in and to the Scottish Trust Property specified therein;

"Scottish Trust Property" has the meaning given to it in each Scottish Trust
Deed and means, collectively, the whole trust property forming the subjects of
each such Scottish Trust Deed;

"Scottish Trust" means, collectively, the trusts declared and created in terms
of each Scottish Trust Deed;

"SEC" means the United States Securities and Exchange Commission;

"Second Issuer" means Granite Mortgages 01-2 plc;

"Second Issuer Available Principal Receipts" has the meaning given to such term
in the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Available Revenue Receipts" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer.

"Second Issuer Bank Account Agreement" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Bank Accounts" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Cash Management Agreement" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Cash Manager" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Liquidity Reserve Fund" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Liquidity Reserve Ledger" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer.

"Second Issuer Liquidity Reserve Required Amount" has the meaning given to such
term in the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Master Definition Schedule" means, in respect of the Second
Issuer, the master definitions schedule signed for the purposes of
identification by Sidley Austin Brown & Wood and Clifford Chance LLP on 28
September 2001 (as amended, varied or supplemented from time to time);

"Second Issuer Post-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Second
Issuer;

"Second Issuer Pre-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Second
Issuer;

"Second Issuer Pre-Enforcement Principal Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Second Issuer;

"Second Issuer Pre-Enforcement Revenue Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Second Issuer;


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<PAGE>


"Second Issuer Reserve Fund" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Reserve Fund Ledger" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Reserve Required Amount" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Secured Creditors" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Security" has the meaning given to such term in the Issuer Master
Definitions Schedule relating to the Second Issuer;

"Second Issuer Transaction Accounts" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Issuer Transaction Documents" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Second Issuer;

"Second Priority Funding Deed of Charge" means the deed of charge entered into
on or about 28 January 2004 between Funding and the Security Trustee as amended,
restated, novated, varied or supplemented from time to time;

"Securities Act" means the United States Securities Act of 1933, as amended;

"Security Documents" means, in relation to: (a) Funding, any Issuer Deed of
Charge relating to any Funding Issuer, the Funding Deed of Charge, the Second
Priority Funding Deed of Charge and each Deed of Accession entered into pursuant
to the Funding Deed of Charge, the Second Priority Funding Deed of Charge and
any other security document entered into pursuant to any of the foregoing; and
(b) Funding 2, any Issuer Deed of Charge relating to any Funding 2 Issuer, the
Funding 2 Deed of Charge and each Deed of Accession entered into pursuant to the
Funding 2 Deed of Charge and any other security document entered into pursuant
to any of the foregoing;

"Security Interest" or "Encumbrance" means any mortgage or sub mortgage,
standard security, charge or sub charge (whether legal or equitable),
encumbrance, pledge, lien, hypothecation, assignment or assignation by way of
security or other security interest or title retention arrangement and any
agreement, trust or arrangement having substantially the same economic or
financial effect as any of the foregoing (other than a lien arising in the
ordinary course of business or by operation of law);

"Security Power of Attorney for Funding 2" means the power of attorney granted
by Funding 2 in favour of the Security Trustee on the Funding 2 Programme Date
pursuant to the Funding 2 Deed of Charge;

"Security Trustee" means The Bank of New York, whose principal office is at 40th
Floor, One Canada Square, London E14 5AL, or such other persons and all other
persons for the time being acting as the security trustee or security trustees
pursuant to the Funding Deed of Charge;

"Seller Share" means, prior to the first Distribution Date, the Initial Seller
Share and thereafter, shall mean the Current Seller Share;


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"Seller Share Event Distribution Date" means a Distribution date on which a
Seller Share Event occurs;

"Seller Share Event" means the event which will occur if, on a Distribution
Date, (i) the result of the calculation of the Current Seller Share for such
Distribution Date would be equal to or less than the Minimum Seller Share for
such Distribution Date (determined using the amounts of the Current Seller Share
and Minimum Seller Share that would exist after making the distributions of
Mortgages Trustee Principal Receipts due in that Distribution Date on the basis
that the Cash Manager assumes that those Mortgages Trustee Principal Receipts
are distributed in the manner described under the Mortgages Trustee Principal
Priority of Payments set forth in Clause 11.1 of the Mortgages Trust Deed), and
(ii) a Seller Share Event has not occurred on the immediately preceding
Distribution Date;

"Seller Share Ledger" means a ledger which shall record the Seller Share of the
Trust Property and the Seller Share Percentage;

"Seller (Mortgages Trust) Assignment Agreement" means the assignment agreement
entered into on or before the Funding 2 Programme Date between the Seller,
Funding 2, Funding, the Funding Security Trustees, the Mortgages Trustee and the
Note Trustees in respect of the existing Issuers;

"Seller Share Percentage" means, prior to the first Distribution Date, the
Initial Seller Share Percentage and thereafter shall mean the Current Seller
Share Percentage;

"Seller" means Northern Rock plc;

"Seller's Policy" means the originating, lending and underwriting,
administration, arrears and enforcement policies and procedures which are
applied from time to time by the Seller to mortgage loans and the security for
their repayment which are beneficially owned solely by the Seller and which may
be amended by the Seller from time to time;

"Seller's Power of Attorney" means (i) the power of attorney granted by the
Seller in favour of the Funding Beneficiaries, the Mortgages Trustee and the
Security Trustee substantially in the form set out in Part 2 of Schedule 10
(Power of Attorney in favour of the Mortgages Trustee, each Funding Beneficiary
and each Funding Security Trustee) to the Mortgage Sale Agreement;

"Series" in relation to any Notes issued by any Issuer has the meaning given to
it in the relevant Issuer Master Definitions Schedule;

"Services" has the meaning set out in Clause 3.1 (General) of the Administration
Agreement;

"Share Trust Deed" means the share trust deed dated 23 January 2001 between the
Share Trustee and Holdings as has been and may be amended, restated, novated,
varied or supplemented from time to time;

"Share Trustee" means The Law Debenture Intermediary Corporation P.L.C. as share
trustee under the Share Trust Deed;

"Shortfall" or "Interest Rate Shortfall" means, as of any Payment Date and in
respect of Funding, a deficiency of Funding Available Revenue Receipts over the
amounts due by Funding under the Funding Pre-Enforcement Revenue Priority of
Payments on such Payment Date, and, as of any Payment Date and in respect of any
Issuer, the deficiency of Issuer Allocable Revenue Receipts over the amounts due
by such Issuer under the relevant Issuer Pre-Enforcement Revenue Priority of
Payments, as the context requires;

"Special Distribution" means a payment made by the Mortgages Trustee:


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(a)   to the Seller (excluding any payment of Initial Purchase Price) which is
      funded by a Further Contribution made to the Mortgages Trustee by Funding
      or by Funding 2; or

(b)   to Funding, which is funded by a Further Contribution made to the
      Mortgages Trustee by Funding 2;

"Special Repayment Notes" means , in relation to the Second Issuer, the
(GBP)10,000,000 Series 2 Class D Floating Rate Notes issued by the Second
Issuer and, in relation to any other Funding Issuer, means any Series and/or
class of Notes issued by such Funding Issuer that are either:

(a)   interest only Notes; or

(b)   Notes, the Outstanding Principal Balance of which is to be repaid solely
      from the Issuer Available Revenue Receipts,

and that are designated as Special Repayment Notes in the Issuer Master
Definitions Schedule relating to such Funding Issuer;

"Specified Currency Exchange Rate" means, in relation to a Series and Class of
Notes, the exchange rate specified in the Issuer Swap Agreement relating to such
Series and Class of Notes or, if the Issuer Swap Agreement has been terminated,
the applicable spot rate;

"Specified Date" means the date on which the United Kingdom participates in the
third stage of European economic and monetary union pursuant to the Treaty
establishing the European Community or otherwise participates in European
economic and monetary union in a manner with an effect similar to such third
stage;

"Standard Documentation" or "Standard Mortgage Documentation" means:

(a)   in relation to the First Issuer the standard documentation referred to in
      Schedule 12 (Standard Documentation) to the Mortgage Sale Agreement as at
      26 March 2001,

(b)   in relation to the Second Issuer, the standard documentation referred to
      in Schedule 12 (Standard Documentation) to the Mortgage Sale Agreement as
      at 28 September 2001, and

(c)   in relation to any other Issuer, the standard documentation referred to in
      Schedule 1 (Standard Documentation) to the relevant Issuer Master
      Definitions Schedule

or, in each case, any update or replacement therefor as the Seller may from time
to time introduce acting in accordance with the standards of a reasonable,
prudent mortgage lender;

"Standard Variable Rate" or "SVR" means, as applicable, the Northern Rock
standard variable mortgage base rate and/or the standard variable mortgage base
rate applicable to Mortgage Loans within the Mortgages Trust in accordance with
the Mortgage Conditions;

"Stand-by Account Bank Notice" means a written notice served on the Stand-by
Account Bank by the Cash Manager, Funding or the Mortgages Trustee, as
applicable, pursuant to the provisions of the Bank Account Agreement;

"Stand-by Account Bank" means the bank at which the Stand-by Mortgages Trustee
GIC Account, the Stand-by Funding GIC Account and, in relation to any Funding
Issuer the relevant Stand-by Funding (Issuer) GIC Account (if any) for that
Funding Issuer is maintained from time to time being, Lloyds TSB Bank plc,
Financial Markets Division, 25 Monument Street, London EC3R 8BQ;


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"Stand-by Bank Account Agreement" means the agreement entered into on or about
26 May 2004 between the Stand-by Account Bank, the Stand-by Funding GIC
Provider, the Stand-by Mortgages Trustee GIC Provider, the Cash Manager and the
Security Trustee as may be amended, restated, varied or supplemented from time
to time and shall include any additional and/or replacement stand-by bank
account agreement entered into in accordance with the Transaction Documents;

"Stand-by Funding GIC Account" means the account in the name of Funding held
with the Stand-by Bank Account established pursuant to and on the terms of the
Stand-by Funding Guaranteed Investment Contract and the Stand-by Bank Account
Agreement;

"Stand-by Funding Guaranteed Investment Contract" means the guaranteed
investment contract entered into on or about 26 May 2004 between Funding, the
Stand-by Funding GIC Provider, the Cash Manager and the Security Trustee under
which the Stand-by GIC Provider agrees to provide the Stand-by Funding GIC
Account and to pay to Funding a guaranteed rate of interest on the balance from
time to time of such Stand-by Funding GIC Account if the appointment of Northern
Rock as Funding GIC Provider under the Funding Guaranteed Investment Contract is
terminated, as may be amended, restated, varied or supplemented from time to
time and shall include any additional or replacement stand-by guaranteed
investment contract entered into by Funding in accordance with the Transaction
Documents;

"Stand-by Mortgages Trustee GIC Rate" means a rate of interest per amount equal
to LIBOR for three-monthly Sterling deposits minus 0.375 per cent.;

"Stand-by Mortgages Trustee GIC Account" means the account in the name of
Mortgages Trustee held with the Stand-by Bank Account established pursuant to
and on the terms of the Stand-by Mortgages Trustee Guaranteed Investment
Contract and the Stand-by Bank Account Agreement.

"Stand-by Mortgages Trustee GIC Provider" means Lloyds TSB Bank plc, Financial
Markets Division, 25 Monument Street, London EC3R 8BQ or such other person or
persons who are for the time being GIC Provider to the Mortgages Trustee under
the Stand-by Mortgages Trustee Guaranteed Investment Contract;

"Stand-by Mortgages Trustee Guaranteed Investment Contract" means the guaranteed
investment contract entered into on or about 26 May 2004 between Funding, the
Stand-by Mortgages Trustee GIC Provider, the Cash Manager and the Security
Trustee under which the Stand-by GIC Provider agrees to provide the Stand-by
Mortgages Trustee GIC Account and to pay to the Mortgages Trustee a guaranteed
rate of interest on the balance from time to time of such Stand-by Mortgages
Trustee GIC Account if the appointment of Northern Rock as Mortgages Trustee GIC
Provider under the Mortgages Trustee Guaranteed Investment Contract is
terminated, as may be amended, restated, varied or supplemented from time to
time and shall include any additional or replacement stand-by guaranteed
investment contract entered into by the Mortgages Trustee in accordance with the
Transaction Documents;

"Start-up Loan Agreement" means, in respect of the Master Issuer, the agreement
entered into on or about the Funding 2 Programme Date, as amended from time to
time, between the Master Issuer, Northern Rock plc and the Issuer Security
Trustee relating to the provision of the Start-up Loan Tranches to the Master
Issuer;


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"Start-up Loan Provider" means Northern Rock, in its capacity as provider of the
Start-up Loans or such other person who provides a Start-Up Loan Tranche to the
Master Issuer pursuant to a start-up loan agreement;

"Start-Up Loan Tranches" means each loan made by a Start-Up Loan Provider to the
Master Issuer under a Start-Up Loan Agreement and collectively, the "Start-Up
Loans";

"Step-Up Date" means the Payment Date or Note Payment Date, as applicable, or
the Loan Payment Date in respect of a Loan Tranche, as applicable, in respect of
an Issuer on which the interest rate on Notes issued by such Issuer or the
interest rate on a Loan Tranche made by a Funding 2 Issuer to Funding 2
increases by a pre-determined amount following the payment made by such Issuer
on such Payment Date, Note Payment Date or Loan Payment Date, as applicable, or
which date in respect of the First Issuer is the Payment Date occurring in
January 2008, and, in relation to any New Issuer or any Funding 2 Issuer, has
the meaning specified under the relevant Issuer Master Definitions Schedule;

"Stock Exchange" means, the London Stock Exchange or any other stock exchange(s)
on which any Notes may from time to time be listed or admitted to trading and
references to the relevant Stock Exchange shall, in relation to any Notes, be
references to the Stock Exchange on which such Notes are, from time to time, or
are intended to be, listed or admitted to trading;

"Subordinated Principal Test" means:

(a)   in respect of the First Issuer Notes, the test which is satisfied (1) on
      any Payment Date occurring on or after the fourth anniversary of the
      Initial Closing Date; and (2) on any Payment Date on which (a) the
      percentage equal to the aggregate Principal Amount Outstanding of the
      Class B Notes and the Class C Notes as at that Payment Date over the
      aggregate Principal Amount Outstanding of the First Issuer Notes as at
      that Payment Date is greater than (b) the product of (i) 2 and (ii) the
      percentage equal to the aggregate Principal Amount Outstanding of the
      Class B Notes and the Class C Notes as at the Initial Closing Date over
      the aggregate Principal Amount Outstanding of the First Issuer Notes as at
      the Initial Closing Date; or

(b)   in respect of any Notes issued by any other Funding Issuer, has the
      meaning given to it under the relevant Issuer Transaction Documents and as
      defined in the Issuer Master Definitions Schedule relating to such Funding
      Issuer;

"Subscription Agreement" means an agreement supplemental to the Programme
Agreement (by whatever name called) in or substantially in the form set out in
Appendix 5 to the Programme Agreement or in such other form as may be agreed
between the Master Issuer and the Lead Arrangers or one or more Dealers (as the
case may be);

"Swap Agreements" means, in relation to Funding 2 and the Funding 2 Issuers, the
Funding 2 Basis Rate Swap Agreement and each Issuer Swap Agreement

"Swap Collateral" means, in respect of the Funding 2 Basis Rate Swap Agreement,
any asset (including, without limitation, Cash and/or securities) delivered to
Funding 2 by the Funding 2 Basis Rate Swap Provider in accordance with the terms
of the Funding 2 Basis Rate Swap Agreement in respect of the Funding 2 Basis
Rate Swap Provider's obligations under the Funding 2 Basis Rate Swap Agreement;


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"Swap Collateral Ancillary Document" means, in respect of the Funding 2 Basis
Rate Swap Agreement, any document (including , without limitation, any custodial
agreement or bank account agreement but excluding the Swap Agreements, the Cash
Management Agreement and the Funding 2 Deed of Charge) as may be entered into by
Funding 2 from time to time in connection with the Swap Collateral;

"Swap Early Termination Event" means the circumstances in which swap
transactions under a swap agreement can be terminated before their respective
scheduled termination dates;

"Swap Provider Default" means the occurrence of an Event of Default or swap
provider termination event (each as defined in the relevant Swap Agreement)
where the relevant Swap Provider is the Defaulting Party or the Affected Party
(each as defined in the relevant Swap Agreement);

"Swap Provider" means each of the Funding 2 Basis Rate Swap Provider and the
Issuer Swap Providers, or any one of them as the context requires;

"Swap Replacement Premium" means any payment received from a replacement swap
provider upon entry into an agreement with such replacement swap provider
replacing a Swap Agreement;

"Swap Termination Payment" means the amount payable because of a Swap Early
Termination Event;

"TARGET Business Day" means a day on which the Trans-European Automated
Real-time Gross settlement Express (TARGET) system is open;

"Target Reserve Required Amount" means, as at any date, the amount specified as
such in the most recent Final Terms;

"Taxes" means all present and future taxes, levies, imposts, duties (other than
stamp duty), fees, deductions, withholdings or charges of any nature whatsoever
and wheresoever imposed, including, without limitation, value added tax or other
tax in respect of added value and any franchise, transfer, sales, gross
receipts, use, business, occupation, excise, personal property, real property or
other tax imposed by any national, local or supranational taxing or fiscal
authority or agency together with any penalties, fines or interest thereon and
"Tax" and "Taxation" shall be construed accordingly;

"Termination Event" has the meaning given to such term in Clause 19 of the
Administration Agreement;

"Terms and Conditions" has the same meaning as "Conditions";

"Third Issuer" means Granite Mortgages 02-1 plc;

"Third Issuer Available Principal Receipts" has the meaning given to such term
in the Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Available Revenue Receipts" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Third Issuer.

"Third Issuer Bank Account Agreement" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Bank Accounts" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Third Issuer;


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<PAGE>


"Third Issuer Cash Management Agreement" has the meaning given to such term in
the Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Cash Manager" has the meaning given to such term in the Issuer
Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Post-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Third
Issuer;

"Third Issuer Pre-Enforcement Priority of Payments" has the meaning given to
such term in the Issuer Master Definitions Schedule relating to the Third
Issuer;

"Third Issuer Pre-Enforcement Principal Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Third Issuer;

"Third Issuer Pre-Enforcement Revenue Priority of Payments" has the meaning
given to such term in the Issuer Master Definitions Schedule relating to the
Third Issuer;

"Third Issuer Secured Creditors" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Transaction Accounts" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Issuer Transaction Documents" has the meaning given to such term in the
Issuer Master Definitions Schedule relating to the Third Issuer;

"Third Party Amounts" means:

(a)   payments of insurance premiums, if any, due to the Seller in respect of
      any Insurance Policy arranged by the Seller and/or the MIG provider to the
      extent not paid or payable by the Seller (or to the extent such insurance
      premiums have been paid by the Seller in respect of any Further Advance
      which is not repurchased by the Seller to reimburse the Seller);

(b)   amounts under an unpaid Direct Debit which are repaid by the Administrator
      to the bank making such payment if such bank is unable to recoup that
      amount itself from the relevant customer's account;

(c)   other charges the benefit of which have been re-assigned to the Seller
      (excluding Early Repayment Charges); and/or

(d)   recoveries in respect of amounts deducted from Mortgage Loans as described
      in paragraphs (a) through (e) of Clause 8.5 (Adjustments to Trust
      Property) (inclusive) of the Mortgages Trust Deed;

"Tier" means all the Loan Tranches having the same designated credit rating;

"Title Deeds" means, in relation to each Mortgage Loan and its Related Security
and the Mortgaged Property relating thereto, all conveyancing deeds and
documents which make up the title to the Mortgaged Property and the security for
the Mortgage Loan and all searches and enquiries undertaken in connection with
the grant by the Borrower of the related Mortgage including, in the case of
Registered Land, the relevant Charge Certificate;

"Together Connection Conditions" means the Mortgage Conditions of the Seller
identified as Together Connection Conditions;


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<PAGE>


"Together Connections Benefit" means the amount by which:

(a)   the interest that would be payable on the Combined Debit Balance at the
      Connection Interest Rate exceeds:

(b)   the interest at the Connection Interest Rate that would be payable on the
      amount by which the Combined Debit Balance exceeds the Combined Credit
      Balance;

"Together Connections Mortgage Loans" means a type of Flexible Mortgage Loan
which has the same basic features as a Together Mortgage Loan, but also allows
the Borrower to link the Mortgage Loan with certain accounts that are held with
the Seller, the balance amounts of which, pursuant to the Together Connection
Conditions, are required to be included in the calculation of the Combined
Credit Balance;

"Together Mortgage Loan" means a type of Flexible Mortgage Loan which allows a
Borrower to obtain an additional unsecured drawdown loan and, in some cases, a
credit card;

"Total Credit Commitment" means an amount equal to the Programme Limit from time
to time;

"Total Property" means at any time the aggregate amount standing to the credit
of the Collection Accounts and held by Northern Rock on trust for the Mortgages
Trustee and itself, subject to and in accordance with the Collection Bank
Agreement;

"Transaction" means the transaction contemplated by the Transaction Documents;

"Transaction Documents" means any of the following documents:

(a)   the Programme Agreement;

(b)   each Subscription Agreement;

(c)   each Underwriting Agreement;

(d)   each Intercompany Loan Agreement;

(e)   the Mortgages Trust Deed;

(f)   the Mortgage Sale Agreement;

(g)   each Issuer Deed of Charge;

(h)   the Funding Deed of Charge;

(i)   the Funding 2 Deed of Charge;

(j)   the Basis Rate Swap Agreement;

(k)   each Issuer Swap Agreement;

(l)   each Issuer Trust Deed;

(m)   each Issuer Paying Agent and Agent Bank Agreement;

(n)   the Administration Agreement;

(o)   the Cash Management Agreement;

(p)   each Issuer Cash Management Agreement;

(q)   the Issuer Guaranteed Investment Contract;


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<PAGE>


(r)   each Funding 2 Guaranteed Investment Contract;

(s)   the Mortgages Trustee Guaranteed Investment Contract;

(t)   each Post-Enforcement Call Option Agreement;

(u)   the Bank Account Agreement;

(v)   the Funding 2 Bank Account Agreement;

(w)   each Issuer Bank Account Agreement;

(x)   the Collection Bank Agreement;

(y)   each Start-Up Loan Agreement;

(z)   the Corporate Services Agreement;

(aa)  the Stand-by Bank Account Agreement;

(bb)  the Controlling Beneficiary Deed;

(cc)  the Seller (Mortgages Trust) Assignment Agreement;

(dd)  each other document relating to the Transaction expressly designated in
      its terms to be a Transaction Document;

(ee)  each other deed, document, agreement, instrument or certificate entered
      into or to be entered into by Funding 2 under or in connection with any of
      the documents set out in paragraphs (a) through (cc) above or the
      transactions contemplated in them, including each document under which
      Funding 2 assumes any obligations to any New Funding 2 Secured Creditor;

"Trigger Event" means any of an Asset Trigger Event or a Non-Asset Trigger
Event, as the case may be;

"Trust Calculation Period" means the period from (and including) the first date
of each calendar month (or in the case of the first such Trust Calculation
Period, the Initial Closing Date) to (and including) the last day of the same
calendar month;

"Trust Corporation" means a corporation entitled by rules made under the Public
Trustee Act 1906, or entitled pursuant to any comparable legislation applicable
to a trustee in any jurisdiction, to carry out the function of a custodian
trustee;

"Trust Determination Date" means the first day (or, if not a London Business
Day, the next succeeding London Business Day) of each calendar month;

"Trust Indenture Act" means the United States Trust Indenture Act of 1939, as
amended;

"Trust Property" means:

(a)   the Initial Trust Property;

(b)   the Closing Trust Property (excluding any Mortgage Loans that have been
      repurchased by the Seller pursuant to the Mortgage Sale Agreement and any
      Early Repayment Charge Receipts that have been paid to the Seller pursuant
      to the Mortgage Sale Agreement);

(c)   any New Trust Property (excluding any Mortgage Loans that have been
      repurchased by the Seller pursuant to the Mortgage Sale Agreement and any
      Early Repayment Charge Receipts that have been paid to the Seller pursuant
      to the Mortgage Sale Agreement);


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<PAGE>


(d)   any Scottish Trust Property;

(e)   any Contribution made from time to time to the Mortgages Trustee by any
      Beneficiary until it has been applied by the Mortgages Trustee in
      accordance with the Mortgages Trust Deed;

(f)   any Re-Draw made under a Flexible Mortgage Loan which forms part of the
      Trust Property;

(g)   any Further Draw made under a Personal Secured Loan which forms part of
      the Trust Property;

(h)   any Further Advances made by the Seller to existing Borrowers which are
      assigned to the Trust in accordance with the Mortgage Sale Agreement;

(i)   amounts on deposit (and interest earned on such amounts) from time to time
      in the Mortgages Trustee Bank Accounts;

(j)   any Permitted Replacement Mortgage Loan and its Related Security
      (excluding any Early Repayment Charge Receipts that have been paid to the
      Seller pursuant to the Mortgage Sale Agreement) relating to a Permitted
      Product Switch;

(k)   the proceeds of sale of any Mortgage Loan and its Related Security forming
      part of the Trust Property;

(l)   all other property which shall form part of the Trust Property pursuant to
      Clause 2 (Creation of Mortgages Trust) of the Mortgages Trust Deed; and

(m)   any Additional Trust Property;

      less

(1)   any actual Losses in relation to the Mortgage Loans and any actual
      reductions occurring in respect of the Mortgage Loans as described in
      Clause 8.5 (Adjustments to Trust Property) of the Mortgages Trust Deed;
      and

(2)   distributions of principal made from time to time to the Beneficiaries of
      the Mortgages Trust;

"Trust Property Calculation Adjustments" has the meaning set out in the
Mortgages Trust Deed;

"Trustee Acts" means the Trustee Act 1925 and the Trustee Act 2000;

"UK Account Bank" means Lloyds TSB Bank plc, City Office, Bailey Drive,
Gillingham Business Park, Kent ME8 0LS;

"UK Listing Authority" means at any time the Financial Services Authority in its
capacity as competent authority for the purposes of Part VI of the FSMA or such
other Person which at that time performs an analogous role in relation to the
regulation of financial markets and the issue of public debt securities in the
United Kingdom;

"Unauthorised Underpayment" means a Borrower Underpayment in respect of a
Mortgage Loan which is not funded by, or exceeds the amount of any, Overpayments
previously made by the Borrower in respect of such Mortgage Loan or is otherwise
not permitted by the Seller in accordance with the relevant Mortgage Conditions;

"Underpayment" means any Authorised Underpayment or Unauthorised Underpayment;

"Underwriting Agreement" means an underwriting agreement relating to the sale of
a Series or Class of US Notes among the Master Issuer and the underwriters
designated therein;


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"United Kingdom" means the United Kingdom of Great Britain and Northern Ireland;

"United States" means the United States of America;

"Unpaid Interest Amount" means the amount of the Unpaid Interest in relation to
any Non-Cash Re-Draw on any Flexible Mortgage Loan;

"Unpaid Interest" means, in relation to any Non-Cash Re-Draw of any Flexible
Mortgage Loan, the interest which would, but for such Non-Cash Re-Draw, have
been payable in respect of that Mortgage Loan on the relevant Monthly Payment
Date for such Mortgage Loan;

"Unregistered Land" means land in England or Wales, title to which is not
registered at H.M. Land Registry;

"Unregistered Transfer" means, in relation to Unregistered Land, a deed of
transfer of a Mortgage or Mortgages in the form referred to in paragraph (b) of
Clause 6.3 of the Mortgage Sale Agreement with such modifications as may be
permitted from time to time in accordance with such Clause;

"Unregulated Personal Secured Loan" means a Personal Secured Loan which is
documented as an agreement not regulated by the CCA and which is secured
pursuant to the relevant Borrower's existing Mortgage;

"US Global Note Certificates" or "US Global Note Certificate" means the Global
Note Certificates in registered form representing the US Notes;

"US Individual Note Certificates" or "US Individual Note Certificate" means the
Individual Note Certificates in registered form representing the US Notes;

"US Notes" means generally the Notes which are not Reg S Notes and in relation
to an Issuer the Notes issued by that Issuer which are not Reg S Notes;

"US Paying Agent" means Citibank N.A., acting through its office at 14 Floor,
388 Greenwich Street, New York, New York 10013;

"Valuation Report" means the valuation report or reports for mortgage purposes,
in the form of the pro-forma contained in the Standard Documentation, obtained
by the Seller from a Valuer in respect of each Mortgaged Property or a valuation
report in respect of a valuation made using a methodology which would be
acceptable to a reasonable prudent mortgage lender;

"Valuer" means an Associate or Fellow of the Royal Institution of Chartered
Surveyors or the Incorporated Society of Valuers and Auctioneers who was at the
relevant times either a member of a firm which was on the list of Valuers
approved by or on behalf of the Seller from time to time or an Associate or
Fellow of the Royal Institute of Chartered Surveyors or the Incorporated Society
of Valuers and Auctioneers employed in-house by the Seller acting for the Seller
in respect of the valuation of a Mortgaged Property;

"WAFF" means the weighted average repossession frequency in respect of the
Mortgage Portfolio; and

"WALS" means the weighted average loss severity in respect of the Mortgage
Portfolio.

"Weighted Average Funding Share Percentage" means the weighted percentage share
of Funding in the Trust Property from time to time, as determined in accordance
with Clause 8 (Adjustment of Funding Share Percentage, Funding 2 Share
Percentage and Seller Share Percentage) of the Mortgages Trust Deed;


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"Weighted Average Funding 2 Share Percentage" means the weighted percentage
share of Funding 2 in the Trust Property from time to time, as determined in
accordance with Clause 8 (Adjustment of Funding Share Percentage, Funding 2
Share Percentage and Seller Share Percentage) of the Mortgages Trust Deed;

"Weighted Average Seller Share Percentage" means the weighted percentage share
of the Seller in the Trust Property from time to time, as determined in
accordance with Clause 8 (Adjustment of Funding Share Percentage, Funding 2
Share Percentage and Seller Share Percentage) of the Mortgages Trust Deed;

2.    Interpretation and Construction

Any reference in this Programme Master Definitions Schedule or any Transaction
Document to:

      "agreed form" means, in relation to any document, the draft of that
      document the form of which has been agreed between the parties thereto (or
      if such document is delivered pursuant to another Transaction Document,
      between the parties to such Transaction Document) and initialled on their
      behalf for the purpose of identification;

      the "assets" of any person shall be construed as a reference to the whole
      or any part of its business, undertakings, property, intellectual
      property, shares, securities, debts, accounts, revenues (including any
      right to receive revenues), goodwill, shareholdings and uncalled capital
      including premium whether now or hereafter acquired and any other assets
      whatsoever;

      the "assignment" of any Mortgage Loan shall be construed, in relation to
      any Scottish Mortgage Loan and its Related Security, so as to include the
      transfer of the beneficial interest therein and/or the legal title
      thereto, and the terms "assign" and "assigned" shall in that context be
      construed accordingly;

      "disposal" shall be construed as any sale, lease, transfer, conveyance,
      assignment, assignation, licence, sub-licence or other disposal and
      "dispose" shall be construed accordingly;

      a "guarantee" means any guarantee, bond, indemnity, letter of credit,
      third party security or other legally binding assurance against financial
      loss granted by one person in respect of any indebtedness of another
      person, or any agreement to assume any indebtedness of any other person or
      to supply funds or to invest in any manner whatsoever in such other person
      by reason of, or otherwise in relation to, indebtedness of such other
      person;

      "indebtedness" shall be construed so as to include any obligation (whether
      incurred as principal or as surety) for the payment or repayment of money,
      whether present or future, actual or contingent;

      a "month" is a reference to a period starting on one day in a calendar
      month and ending on the numerically corresponding day in the next calendar
      month save that, where any such period would otherwise end on a day which
      is not a business day, it shall end on the next business day, unless that
      day falls in the calendar month succeeding that in which it would
      otherwise have ended, in which case it shall end on the preceding business
      day, provided that, if a period starts on the last business day in a
      calendar month or if there is no numerically corresponding day in the
      month in which that period ends, that period shall end on the last
      business day in that later month (and references to "months" shall be
      construed accordingly);


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      "party" shall be construed as a party to a particular agreement, as the
      case may be;

      "subsidiary" means, (a) a subsidiary within the meaning of Section 736 of
      the Companies Act 1985, and (b) unless the context requires otherwise, a
      subsidiary undertaking within the meaning of Section 258 of the Companies
      Act 1985;

      "VAT" means value added tax imposed by the United Kingdom as referred to
      in the Value Added Tax Act 1994 and legislation (whether delegated or
      otherwise) replacing the same or supplemental thereto or in any primary or
      subordinate legislation promulgated by the European Union or any official
      body or agency thereof, and any similar turnover tax replacing or
      introduced in addition to any of the same;

      a "wholly-owned subsidiary" of a company or corporation shall be construed
      as a reference to any company or corporation which has no other members
      except that other company or corporation and that other company's or
      corporation's wholly-owned subsidiaries or persons acting on behalf of
      that other company or corporation or its wholly-owned subsidiaries; and

      the "winding-up" or "administration" of a company or corporation shall be
      construed so as to include any equivalent or analogous proceedings under
      the law of the jurisdiction in which such company or corporation is
      incorporated or any jurisdiction in which such company or corporation
      carries on business including the seeking of liquidation, winding-up,
      bankruptcy, reorganisation, dissolution, administration, arrangement,
      adjustment, protection or relief of debtors.

2.1   "(pound)", "sterling", "Sterling" or "pounds sterling" denotes the lawful
      currency for the time being of the United Kingdom of Great Britain and
      Northern Ireland; "(euro)", "euro" or "Euro" denotes the lawful currency
      for the time being of the member states of the European Union that adopt
      the single currency introduced at the start of the third stage of European
      Economic Monetary Union pursuant to the Treaty of Rome of 25th March,
      1957, establishing the European Community as amended from time to time and
      as amended by, inter alia, the Treaty of European Union of 7th February,
      1992; "$", "US$", "US dollars", "dollars" or "Dollars" denotes the lawful
      currency for the time being of the United States of America.

2.2   In this Programme Master Definitions Schedule and in any of the
      Transaction Documents in which this Programme Master Definitions Schedule
      is expressed to be incorporated or to which this Programme Master
      Definitions Schedule is expressed to apply:

      (a)   words denoting the singular number only shall include the plural
            number also and vice versa;

      (b)   words denoting one gender only shall include the other genders;

      (c)   words denoting persons only shall include firms and corporations and
            vice versa;

      (d)   references to any statutory provision shall be deemed also to refer
            to any statutory modification or re-enactment thereof or any
            statutory instrument, order or regulation made thereunder or under
            any such re-enactment;

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

      (f)   clause, paragraph and schedule headings are for ease of reference
            only;


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      (g)   reference to a statute shall be construed as a reference to such
            statute as the same may have been, or may from time to time be,
            amended or re-enacted to the extent such amendment or re-enactment
            is substantially to the same effect as such statute on the date
            hereof;

      (h)   unless stated otherwise reference to a time of day shall be
            construed as a reference to London (GMT) time; and

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

2.3   Save as provided otherwise, where any obligation in a Transaction Document
      is owed to more than one party that obligation is owed to each of them
      separately and may be enforced by any of them.

2.4   Any reference in any Mortgages Trust Transaction Document to any
      discretion, power or right on the part of the Mortgages Trustee shall
      (where otherwise expressly provided in such Mortgages Trust Transaction
      Document) be expressed by the Mortgages Trustee only as directed by the
      Beneficiary but subject in each case to the provisions of the Mortgages
      Trust Deed and the Controlling Beneficiary Deed.

3.    Governing Law

This Programme Master Definitions Schedule is governed by, and shall be
construed in accordance with, the laws of England.



SIGNATORIES

SIDLEY AUSTIN BROWN & WOOD



By:



ALLEN & OVERY LLP



By:







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