Document:

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                                                                    EXHIBIT 10.1

Draft: 25/02/03

THIS AMENDED AND RESTATED FUNDING 1 LIQUIDITY FACILITY AGREEMENT is dated [6th
March], 2003 between:

(1)      PERMANENT FUNDING (NO. 1) LIMITED, (registered number 4267660) whose
         registered office is Blackwell House, Guildhall Yard, London EC2V 5AE
         ("FUNDING 1");

(2)      JPMORGAN CHASE BANK, acting through its offices at 125 London Wall,
         London EC2Y 5AJ acting in its capacity as the Funding 1 Liquidity
         Facility Provider;

(3)      HALIFAX PLC, a public limited company incorporated under the laws of
         England and Wales whose registered office is at Trinity Road, Halifax,
         West Yorkshire HX1 2RG acting in its capacity as Cash Manager;

(4)      STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company
         organised under the laws of the Commonwealth of Massachusetts, United
         States of America, acting through its office at 225 Franklin Street,
         Boston, Massachusetts 02110 acting as a co-trustee in its capacity as
         Security Trustee; and

(5)      U.S. BANK NATIONAL ASSOCIATION, a national banking association formed
         under the laws of the United States of America, acting through its
         office at 1 Federal Street, 3rd Floor, Boston, Massachusetts 02110,
         acting as a co-trustee in its capacity as Security Trustee.

WHEREAS:

(A)      The parties hereto entered into the Funding 1 Liquidity Facility
         Agreement (as amended and restated on the Second Issuer Closing Date
         and as further amended and/or restated from time to time, the "FUNDING
         1 LIQUIDITY FACILITY AGREEMENT") to assist Funding 1 in, among other
         things, (i) making Eligible Liquidity Facility Principal Repayments and
         (ii) meeting its interest payment liabilities in respect of any Term
         Advance from time to time.

(B)      Upon the terms and subject to the conditions set out in the Funding 1
         Liquidity Facility Agreement, the Funding 1 Liquidity Facility Provider
         agreed to make a Funding 1 Liquidity Facility and a Funding 1 Liquidity
         Stand-by Facility available to Funding 1 on and subject to the terms
         set out in the Funding 1 Liquidity Facility Agreement.

(C)      The parties to the Funding 1 Liquidity Facility Agreement have agreed
         to amend and restate the terms of that Agreement as set out herein.

IT IS AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      DEFINITIONS

         The Amended and Restated Master Definitions and Construction Schedule
         signed for the purposes of identification by Allen & Overy and Sidley
         Austin Brown & Wood on [5th March], 2003 (as the same may be amended,
         varied or supplemented from time to time with the consent of the
         parties hereto) is expressly and specifically incorporated into this
         Agreement and, accordingly, the expressions defined in the Amended and
         Restated Master Definitions and Construction Schedule (as so amended,
         varied or supplemented) shall, except

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                                       2

         where the context otherwise requires and save where otherwise defined
         in this Agreement, have the same meanings in this Agreement.

1.2      This Agreement amends and restates the Funding 1 Liquidity Facility
         Agreement made on 14th June, 2002 between the parties hereto (the
         "PRINCIPAL AGREEMENT"). As of the date of this Agreement, any future
         rights or obligations (excluding such obligations accrued to the date
         of this Agreement) of a party under the Principal Agreement shall be
         extinguished and shall instead be governed by this Agreement.

1.3      CONSTRUCTION

(a)      Unless the contrary intention appears, a term used in any other Funding
         1 Liquidity Document or in any notice given under or in connection with
         any Funding 1 Liquidity Document has the same meaning in that Funding 1
         Liquidity Document or notice as in this Agreement.

(b)      The Security Trustee has agreed to become a party to this Agreement
         only for the purpose of taking the benefit of CLAUSES 2.3 (Extension),
         5.1(b) (Funding 1 Liquidity Drawings), 5.2(a), (b) and (d) (Stand-by
         Drawings), 6(b) and (c) (Repayment), 14.1 (Representations and
         warranties by Funding 1), 7.2 (Voluntary Cancellation), 7.3 (Additional
         right of prepayment and cancellation), 14 (Representations warranties).
         15.2 (Financial information), 18 (Enforcement and Subordination), 24
         (Changes to the Parties) and 29 (Notices) and for agreeing amendments
         to this Agreement pursuant to CLAUSE 23 (Amendments and waivers) and
         for the better preservation and enforcement of its rights under the
         Funding 1 Deed of Charge and (without prejudice to the terms of the
         Funding 1 Deed of Charge), other than as specified above, the Security
         Trustee shall assume no obligations or liabilities whatsoever to the
         Funding 1 Liquidity Facility Provider or Funding 1 by virtue of the
         provisions of this Agreement.

2.       THE FUNDING 1 LIQUIDITY FACILITY

2.1      FACILITIES

         Subject to the terms of this Agreement, the Funding 1 Liquidity
         Facility Provider grants to Funding 1 the following facilities:

         (a)      the Initial Funding 1 Liquidity Facility;

         (b)      the Further Funding 1 Liquidity Facility;

                  (together, the "FUNDING 1 LIQUIDITY FACILITY"),

         (c)      the Initial Funding 1 Stand-by Facility; and

         (d)      the Further Funding 1 Stand-by Facility,

                  (together, the "FUNDING 1 LIQUIDITY STAND-BY FACILITY").

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                                       3

2.2      FACILITY LIMITS

         The aggregate principal amount of each Funding 1 Liquidity Facility
         Loan shall not at any time exceed the relevant Funding 1 Liquidity
         Facility Commitment. The Funding 1 Liquidity Facility Provider is not
         obliged to lend more than the relevant Funding 1 Liquidity Facility
         Commitment.

2.3      EXTENSION

(a)      Save as otherwise provided in this Agreement, Funding 1 (or the
         Security Trustee or the Cash Manager on its behalf) may by not more
         than 60 days and not later than 30 days before the end of the Funding 1
         Liquidity Facility Commitment Period deliver to the Funding 1 Liquidity
         Facility Provider an irrevocable request in writing that the Funding 1
         Liquidity Facility Commitment Period should be extended (an "EXTENSION
         REQUEST") to a date that is not more than 364 days from the last day of
         the then current Funding 1 Liquidity Facility Commitment Period.

(b)      The Funding 1 Liquidity Facility Provider shall promptly send the
         Security Trustee a copy of any Extension Request received by it.

(c)      If the Funding 1 Liquidity Facility Provider wishes to accept an
         Extension Request then the Funding 1 Liquidity Facility Provider shall,
         not more than 15 days after receipt of the Extension Request, deliver
         to Funding 1 (with a copy to the Security Trustee) an irrevocable
         notice (a "NOTICE OF EXTENSION") that the Funding 1 Liquidity Facility
         Provider has consented to the Extension Request.

(d)      The Funding 1 Liquidity Facility Provider is not obliged to agree to
         extend the Funding 1 Liquidity Facility Commitment Period and in no
         event may it be extended beyond the Repayment Date.

2.4      CHANGE OF CURRENCY

(a)      If more than one currency or currency unit are at the same time
         recognised by the central bank of any country as the lawful currency of
         that country, then:

         (i)      any reference in the Funding 1 Liquidity Documents to, and any
                  obligations arising under the Funding 1 Liquidity Documents
                  in, the currency of that country shall be translated into, or
                  paid in, the currency or currency unit of that country
                  designated by the Funding 1 Liquidity Facility Provider; and

         (ii)     any translation from one currency or currency unit to another
                  shall be at the official rate of exchange recognised by the
                  central bank for the conversion of that currency or currency
                  unit into the other, rounded up or down by the Funding 1
                  Liquidity Facility Provider acting reasonably.

(b)      If a change in any currency of a country occurs, this Agreement will be
         amended to the extent the Funding 1 Liquidity Facility Provider
         specifies to be necessary to reflect the change in currency and to put
         the Funding 1 Liquidity Facility Provider in the same position, so far
         as possible, that it would have been in if no change in currency had
         occurred.

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3.       PURPOSE

(a)      Funding 1 (or the Cash Manager on behalf of Funding 1) shall apply a
         Funding 1 Liquidity Drawing to meet a corresponding Funding 1 Liquidity
         Shortfall existing at that time. For the avoidance of doubt, an Initial
         Funding 1 Liquidity Facility Drawing may only be applied to meet an
         Initial Funding 1 Liquidity Shortfall and a Further Funding 1 Liquidity
         Facility Drawing may only be applied to meet a Further Funding 1
         Liquidity Shortfall.

(b)      Funding 1 (or the Cash Manager on behalf of Funding 1) shall apply a
         Funding 1 Liquidity Facility Stand-by Drawing for the purposes set out
         in CLAUSE 5.2 (Stand-by Drawings).

(c)      Without affecting the obligations of Funding 1 in any way, the Funding
         1 Liquidity Facility Provider is not bound to monitor or verify the
         application of any Funding 1 Liquidity Facility Drawing.

4.       CONDITIONS PRECEDENT

4.1      DOCUMENTARY CONDITIONS PRECEDENT

         The obligations of the Funding 1 Liquidity Facility Provider to Funding
         1 under this Agreement are subject to the condition precedent that the
         Funding 1 Liquidity Facility Provider has notified Funding 1 that it
         has received all of the documents set out in SCHEDULE 1 and that each
         is in form and substance satisfactory to it.

4.2      FURTHER CONDITIONS PRECEDENT

(a)      The obligation of the Funding 1 Liquidity Facility Provider to make a
         Funding 1 Liquidity Facility Drawing is subject to the further
         conditions precedent that on both the date of the Funding 1 Liquidity
         Facility Request and the Funding 1 Liquidity Facility Drawdown Date for
         that Funding 1 Liquidity Facility Drawing:

         (i)      no Asset Trigger Event has occurred;

         (ii)     no Funding 1 Liquidity Facility Default is outstanding or
                  would result from the making of the Funding 1 Liquidity
                  Facility Drawing; and

         (iii)    no or insufficient amounts are available for drawing from the
                  Reserve Fund in order to pay the liabilities in respect of
                  which the relevant Funding 1 Liquidity Facility Drawing is to
                  be applied.

(b)      The obligation of the Funding 1 Liquidity Facility Provider to make a
         Funding 1 Liquidity Facility Drawing available for the purpose of a
         relevant Funding 1 Liquidity Revenue Shortfall is subject to the
         further conditions precedent that, on the Funding 1 Liquidity Facility
         Drawdown Date for that Funding 1 Liquidity Facility Drawing, Funding 1
         (or the Cash Manager on its behalf) provides confirmation to the
         Funding 1 Liquidity Facility Provider that:

         (i)      in respect of any Initial Funding 1 Liquidity Facility Drawing
                  to assist the payment of interest on the relevant Term AAA
                  Advances, the debit balance on the relevant AAA Principal
                  Deficiency Sub Ledger is in an amount equal to or in excess of
                  50 per cent. of the principal amount outstanding of the
                  relevant Term AAA Advances;

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         (ii)     in respect of any Further Funding 1 Liquidity Facility Drawing
                  to assist the payment of interest on the relevant Term AAA
                  Advances, the debit balance on the relevant AAA Principal
                  Deficiency Sub Ledger is in an amount equal to or in excess of
                  50 per cent. of the principal amount outstanding of the
                  relevant Term AAA Advances;

         (iii)    in respect of any Initial Funding 1 Liquidity Facility Drawing
                  to assist the payment of interest on the relevant Term AA
                  Advances, the debit balance on the relevant AA Principal
                  Deficiency Sub Ledger is in an amount equal to or in excess of
                  50 per cent. of the principal amount outstanding of the
                  relevant Term AA Advances;

         (iv)     in respect of any Further Funding 1 Liquidity Facility Drawing
                  to assist the payment of interest on the relevant Term AA
                  Advances, the debit balance on the relevant AA Principal
                  Deficiency Sub Ledger is in an amount equal to or in excess of
                  50 per cent. of the principal amount outstanding of the
                  relevant Term AA Advances;

         (v)      in respect of any Initial Funding 1 Liquidity Facility Drawing
                  to assist the payment of interest on the relevant Term BBB
                  Advances, the debit balance on the relevant BBB Principal
                  Deficiency Sub Ledger is in an amount equal to or in excess of
                  50 per cent. of the principal amount outstanding of the
                  relevant Term BBB Advances; and

         (vi)     in respect of any Further Funding 1 Liquidity Facility Drawing
                  to assist the payment of interest on the relevant Term BBB
                  Advances, the debit balance on the BBB Principal Deficiency
                  Sub Ledger is in an amount equal to or in excess of 50 per
                  cent. of the principal amount outstanding of the relevant Term
                  BBB Advances.

(c)      The obligation of the Funding 1 Liquidity Facility Provider to make a
         Funding 1 Liquidity Facility Drawing available for the purpose of a
         relevant Funding 1 Liquidity Principal Shortfall is subject to the
         further conditions precedent that, on the Funding 1 Liquidity Facility
         Drawdown Date for that Funding 1 Liquidity Facility Drawing, Funding 1
         (or the Cash Manager on its behalf) provides confirmation to the
         Funding 1 Liquidity Facility Provider that:

         (i)      if a Non Asset Trigger Event has occurred, then a Funding 1
                  Liquidity Facility Drawing may be made only to make Eligible
                  Liquidity Facility Principal Repayments on the respective
                  Final Repayment Date of each relevant Term Advance; and

         (ii)     if an Asset Trigger Event has occurred, then a Funding 1
                  Liquidity Facility Drawing will not be available to make
                  Eligible Liquidity Facility Principal Repayments.

5.       DRAWDOWN

5.1      FUNDING 1 LIQUIDITY DRAWINGS

(a)      If, on the Intercompany Loan Determination Date immediately preceding a
         relevant Funding 1 Interest Payment Date, the Cash Manager determines
         that, on the relevant Funding 1 Interest Payment Date, a Funding 1
         Liquidity Shortfall will arise, the Cash Manager will direct Funding 1
         to make a Funding 1 Liquidity Drawing on the Business Day immediately
         preceding that Funding 1 Interest Payment Date, subject to the terms of
         this Agreement, for all or any of the purposes set out in CLAUSE 3
         (Purpose) (as appropriate) and, subject to the limits set out in CLAUSE
         2.2 (Facility limits), in an amount equal to the Funding 1 Liquidity
         Shortfall.

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                                       6

(b)      Funding 1 (or Cash Manager on behalf of Funding 1) will serve on the
         Funding 1 Liquidity Facility Provider a Funding 1 Liquidity Facility
         Request (substantially in the form set out in SCHEDULE 3 to this
         Agreement) for each Funding 1 Liquidity Drawing, such request to be
         given by facsimile in accordance with CLAUSE 29 (Notices) of this
         Agreement to be received by the Funding 1 Liquidity Facility Provider
         not later than 10.00 a.m. on the Business Day immediately preceding the
         proposed Funding 1 Liquidity Facility Drawdown Date.

(c)      No Funding 1 Liquidity Drawing may be made, or requested to be made, on
         or after the last day of the then current Funding 1 Liquidity Facility
         Commitment Period.

5.2      STAND-BY DRAWINGS

(a)      The Funding 1 Liquidity Provider shall, upon becoming aware of a
         Relevant Event, promptly notify Funding 1, the Security Trustee and the
         Cash Manager in writing of that fact.

(b)      If a Relevant Event occurs, Funding 1 (or the Security Trustee or the
         Cash Manager on behalf of Funding 1) may, subject to the terms of this
         Agreement, and after serving a Funding 1 Liquidity Facility Request on
         the Funding 1 Liquidity Facility Provider, make a Funding 1 Liquidity
         Facility Stand-by Drawing equal to the undrawn portion of the Funding 1
         Liquidity Facility Commitment at that time provided that such Funding 1
         Liquidity Facility Stand-by Drawing shall be used only in accordance
         with PARAGRAPH (e) below. No Funding 1 Liquidity Facility Stand-by
         Drawing may be made or requested to be made after the end of the
         Funding 1 Liquidity Facility Commitment Period.

(c)      Upon making a Funding 1 Liquidity Facility Stand-by Drawing, Funding 1
         (or the Security Trustee or the Cash Manager on behalf of Funding 1)
         shall forthwith pay the Funding 1 Liquidity Facility Stand-by Drawing
         into the Funding 1 Liquidity Facility Stand-by Account, which shall be
         an account with the Funding 1 Liquidity Facility Provider if the
         Relevant Event leading to the making of the Funding 1 Liquidity
         Facility Stand-by Drawing is of the type described in paragraph (c) of
         the definition of Relevant Event, and, otherwise with the Account Bank,
         or, if the Account Bank ceases to have the Requisite Ratings, shall be
         an account with a bank which has the Requisite Ratings.

(d)      Subject to the Funding 1 Deed of Charge, interest earned on the Funding
         1 Liquidity Facility Stand-by Account shall be for the account of:

         (i)      Funding 1 in so far as it relates to an Initial Funding 1
                  Stand-by Drawing and Funding 1 shall be entitled to withdraw
                  and retain such interest earned; and

         (ii)     the Funding 1 Liquidity Facility Provider in so far as it
                  relates a Further Funding 1 Stand-by Drawing.

(e)      Save as provided for in PARAGRAPH (d)(II) above, amounts from time to
         time standing to the credit of the Funding 1 Liquidity Facility
         Stand-by Account shall belong to Funding 1 and the Funding 1 Liquidity
         Facility Provider shall not have any proprietary interest or Security
         Interest in such amounts save as arises under the Funding 1 Deed of
         Charge. Other than as referred to in PARAGRAPH (d)(i) above, Funding 1
         (or the Security Trustee or the Cash Manager on behalf of Funding 1)
         shall only make withdrawals from the Funding 1 Liquidity Facility
         Stand-by Account:

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                                       7

         (i)      in such circumstances and in such amount as it would otherwise
                  have been able to make a Funding 1 Liquidity Drawing pursuant
                  to CLAUSE 5.1 (Funding 1 Liquidity Drawings), which withdrawal
                  shall be deemed to be a Funding 1 Liquidity Drawing made under
                  CLAUSE 5.1;

         (ii)     in order to make a repayment of a Funding 1 Liquidity Facility
                  Stand-by Drawing in accordance with CLAUSE 6 (Repayment); or

         (iii)    in order to invest funds standing to the credit of the Funding
                  1 Liquidity Facility Stand-by Account in Authorised
                  Investments,

         but not otherwise, and the amounts of the Funding 1 Liquidity Facility
         Stand-by Drawing shall be reduced by the amount of such deemed Funding
         1 Liquidity Drawings or, as the case may be, repayment.

5.3      PAYMENT OF PROCEEDS

         Subject to the terms of this Agreement, the Funding 1 Liquidity
         Facility Provider shall make each Funding 1 Liquidity Facility Loan
         available for Funding 1 on the relevant Funding 1 Liquidity Facility
         Drawdown Date and shall remit each Funding 1 Liquidity Facility Loan to
         Funding 1 by noon on the relevant Funding 1 Liquidity Facility Drawdown
         Date or, if LIBOR is determined otherwise than in accordance with
         paragraph (a) of its definition, by 2.00 p.m. on the relevant Funding 1
         Liquidity Facility Drawdown Date.

6.       REPAYMENT

(a)      Subject as provided below and subject to CLAUSE 7.2 (Voluntary
         Cancellation), CLAUSE 18 (Enforcement and Subordination) and CLAUSE
         21.2 (Other indemnities) on the earlier of:

         (i)      the immediately succeeding Funding 1 Interest Payment Date;
                  and

         (ii)     the Repayment Date,

         Funding 1 shall repay the outstanding balance of the Funding 1
         Liquidity Drawing, if any, from Funding 1 Available Principal Receipts
         (but only to the extent that the Funding 1 Liquidity Drawing has been
         made to meet Funding 1 Liquidity Principal Shortfalls (if any)) and
         from Funding 1 Available Revenue Receipts (but only to the extent that
         the Funding 1 Liquidity Drawing has been made to meet Funding 1
         Liquidity Revenue Shortfalls (if any)) as at the opening of business on
         such date. Other than on the Repayment Date and subject to the terms of
         this Agreement, Funding 1 may draw a new Funding 1 Liquidity Drawing or
         rollover an existing Funding 1 Liquidity Drawing for the purposes of
         this PARAGRAPH (a). Funding 1 Liquidity Drawings so repaid may be
         redrawn in accordance with and subject to the terms of this Agreement.

(b)      While a Funding 1 Liquidity Facility Stand-by Drawing is outstanding,
         any amount that has been withdrawn from the Funding 1 Liquidity
         Facility Stand-by Account shall be repaid by crediting such amount to
         the Funding 1 Liquidity Facility Stand-by Account as if it were a
         Funding 1 Liquidity Drawing repayable in accordance with PARAGRAPH (a)
         above and the Funding 1 Liquidity Facility Stand-by Account shall be
         increased by the amount of the Funding 1 Liquidity Drawing repaid. For
         the avoidance of doubt, any repayment pursuant to

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         this PARAGRAPH (b) shall not be applied to reduce the amount of the
         Funding 1 Liquidity Facility Stand-by Drawing.

(c)      The Funding 1 Liquidity Facility Stand-by Drawing shall, subject to
         CLAUSE 18 (Enforcement and Subordination), be repayable to the Funding
         1 Liquidity Facility Provider, together with accrued interest pursuant
         to CLAUSE 8 (Interest), on the earlier of:

         (i)      (A)      if the Relevant Event resulting in the making of the
                           Funding 1 Liquidity Facility Stand-by Drawing was of
                           the type described in paragraph (a) or (b) of the
                           definition of Relevant Event:

                           (x)      Funding 1 cancelling the Funding 1 Liquidity
                                    Facility Commitment in full (in accordance
                                    with CLAUSE 7.2(b) (Voluntary cancellation))
                                    or the Funding 1 Liquidity Facility Provider
                                    entering into a Novation Certificate with a
                                    Qualifying Lender having the Requisite
                                    Ratings; or

                           (y)      the day which is two London Business Days
                                    after the date on which the Funding 1
                                    Liquidity Facility Provider has given notice
                                    to Funding 1 that it again has the Requisite
                                    Ratings; or

                  (B)      if the Relevant Event resulting in the making of the
                           Funding 1 Liquidity Facility Stand-by Drawing was of
                           the type described in paragraph (c) of the definition
                           of Relevant Event, Funding 1 entering into a
                           replacement liquidity facility on terms acceptable to
                           the Security Trustee and the Rating Agencies;

         (ii)     the Repayment Date; and

         (iii)    Funding 1 electing to repay the Funding 1 Liquidity Facility
                  Stand-by Drawing as a result of Funding 1 not having available
                  to it sufficient funds to pay interest and other amounts due
                  and payable in respect of the Funding 1 Liquidity Facility
                  Stand-by Drawing.

7.       CANCELLATION

7.1      AUTOMATIC CANCELLATION OF THE FUNDING 1 LIQUIDITY FACILITY COMMITMENT

         The Funding 1 Liquidity Facility Commitment shall be automatically
         cancelled at close of business on the last day of the Funding 1
         Liquidity Facility Commitment Period.

7.2      VOLUNTARY CANCELLATION

(a)      Funding 1 may with the prior written consent of the Security Trustee
         and provided that:

         (i)      the Rating Agencies have confirmed that such cancellation will
                  have no material adverse effect on the then current ratings of
                  any of the Notes of any Issuer; or

         (ii)     if the ratings of any of the Notes of any Issuer has
                  previously been downgraded that such cancellation will not
                  prevent the restoration of such rating,

         without premium or penalty, cancel the undrawn and uncancelled part of
         the Funding 1 Liquidity Facility Commitment in whole or in part (but if
         in part, in multiples of not less than

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                                       9

         Pound Sterling 50,000 unless the Funding 1 Liquidity Facility
         Commitment is less than Pound Sterling50,000) at any time provided that
         it has given the Funding 1 Liquidity Facility Provider not less than
         seven London Business Days' prior notice (which notice Funding 1 shall
         copy to the Security Trustee, the Cash Manager and to the Rating
         Agencies) stating the principal amount to be cancelled. During such
         seven Business Day period Funding 1 may not serve a Funding 1 Liquidity
         Facility Request purporting to draw all or any part of the amount the
         subject of such notice of such cancellation.

(b)      If a Relevant Event of the type described in paragraph (a) or (b) of
         the definition of such term occurs, Funding 1 may, without premium or
         penalty, by notice to the Funding 1 Liquidity Facility Provider (which
         notice Funding 1 shall copy to the Security Trustee and the Cash
         Manager):

         (i)      cancel the undrawn and uncancelled part of the Funding 1
                  Liquidity Facility, provided that Funding 1 shall first have
                  made arrangements for a replacement liquidity facility
                  provider which is a Qualifying Lender and has the Requisite
                  Ratings to enter into an agreement on substantially the same
                  terms as this Agreement and provided that the Funding 1
                  Liquidity Facility Provider has been repaid all amounts
                  outstanding to it under this Agreement in full; or

         (ii)     require the Funding 1 Liquidity Facility Provider to enter
                  into a novation agreement (at the cost of Funding 1) in a form
                  reasonably satisfactory to the Funding 1 Liquidity Facility
                  Provider, Funding 1 and the Security Trustee with, or
                  otherwise transfer the Funding 1 Liquidity Facility Provider's
                  rights and obligations under this Agreement in such manner as
                  is required by Funding 1 and the Security Trustee to, a
                  replacement liquidity facility provider which is a Qualifying
                  Lender and has the Requisite Ratings, provided that the
                  Funding 1 Liquidity Facility Provider has been repaid all
                  amounts outstanding to it under this Agreement in full as a
                  result of the novation.

(c)      Without prejudice to Funding 1's rights under PARAGRAPH (b) above, if a
         Relevant Event of the type described in paragraph (a) or (b) of the
         definition of such term occurs, the Funding 1 Liquidity Facility
         Provider may make arrangements either:

         (i)      to replace itself with a replacement liquidity facility
                  provider which is acceptable to Funding 1 which is a
                  Qualifying Lender and has the Requisite Ratings to enter into
                  an agreement on substantially the same terms as this
                  Agreement; or

         (ii)     request Funding 1, the Security Trustee and the Cash Manager
                  to enter into a novation agreement in a form reasonably
                  satisfactory to Funding 1 and the Security Trustee with, or
                  otherwise to transfer the Funding 1 Liquidity Facility
                  Provider's rights and obligations under this Agreement in such
                  manner as is required by Funding 1 and the Security Trustee
                  to, a replacement liquidity facility provider which is a
                  Qualifying Lender and has the Requisite Ratings;

         and in either case, Funding 1 shall take all reasonable steps to effect
         such arrangement

(d)      To the extent that there is any conflict between Funding 1's rights
         under PARAGRAPH (b) above and the Funding 1 Liquidity Facility
         Provider's rights under PARAGRAPH (c) above, the views of Funding 1
         will prevail with the result that if each of Funding 1 and the Funding
         1 Liquidity Facility Provider had selected a replacement liquidity
         facility provider, or wished to

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                                       10

         adopt a different approach under PARAGRAPH (b) above or PARAGRAPH (c)
         above, as appropriate, the selection and/or the approach to be adopted
         will be that selected or adopted (as the case may be) by Funding 1.

(e)      Funding 1 may also, without premium or penalty, by notice to the
         Funding 1 Liquidity Facility Provider, cancel the whole of the Funding
         1 Liquidity Facility Commitment on the Repayment Date.

7.3      ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION

         If:

         (a)      Funding 1 is required to pay to the Funding 1 Liquidity
                  Facility Provider any additional amounts under CLAUSE 10
                  (Taxes); or

         (b)      Funding 1 is required to pay to the Funding 1 Liquidity
                  Facility Provider any amount under CLAUSE 12 (Increased
                  costs),

         then, without prejudice to the obligations of Funding 1 under those
         Clauses, Funding 1 may, whilst the circumstances continue, give a
         notice of prepayment and cancellation to the Funding 1 Liquidity
         Facility Provider with a copy to the Security Trustee. On the date
         falling five London Business Days after the date of giving of the
         notice:

         (i)      Funding 1 shall prepay the Funding 1 Liquidity Facility Loans;
                  and

         (ii)     the Funding 1 Liquidity Facility Commitment shall be
                  cancelled.

7.4      MISCELLANEOUS PROVISIONS

(a)      Any notice of prepayment and/or cancellation under this Agreement is
         irrevocable.

(b)      All prepayments under this Agreement shall be made together with
         accrued interest on the amount prepaid and, subject to CLAUSE 21
         (Indemnities), without premium or penalty.

(c)      No prepayment or cancellation is permitted except in accordance with
         the express terms of this Agreement.

(d)      No amount of the Funding 1 Liquidity Facility Commitment cancelled
         under this Agreement may subsequently be reinstated except with the
         prior written consent of the Funding 1 Liquidity Facility Provider,
         Funding 1 and the Security Trustee.

8.       INTEREST

8.1      INTEREST RATE

         The rate of interest on each Funding 1 Liquidity Facility Loan (other
         than the Further Funding 1 Liquidity Facility Stand-by-Loan) for each
         Funding 1 Liquidity Facility Interest Period is the rate per annum
         determined by the Funding 1 Liquidity Facility Provider to be the
         aggregate of the applicable:

         (a)      Funding 1 Liquidity Facility Margin;

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                                       11

         (b)      LIBOR; and

         (c)      subject to CLAUSE 18 (Enforcement and Subordination),
                  Mandatory Liquid Asset Cost.

         Interest is not payable in respect of the principal amount of any
         Further Funding 1 Liquidity Facility Stand-by Drawing.

8.2      DUE DATES

         Except as otherwise provided in this Agreement (including, without
         limitation, CLAUSE 6 (Repayment)), accrued interest on each Funding 1
         Liquidity Facility Loan is payable by Funding 1 on each Funding 1
         Interest Payment Date.

8.3      DEFAULT INTEREST

(a)      If Funding 1 fails to pay any amount payable by it under this
         Agreement, it shall forthwith on demand by the Funding 1 Liquidity
         Facility Provider pay interest on the overdue amount from the due date
         up to the date of actual payment, as well after as before judgment, at
         a rate (the "DEFAULT RATE") determined by the Funding 1 Liquidity
         Facility Provider to be one per cent. per annum above the higher of:

         (i)      the rate on the overdue amount under CLAUSE 8.1 (Interest
                  rate) immediately before the due date (if of principal); and

         (ii)     the rate which would have been payable if the overdue amount
                  had, during the period of non-payment, constituted a Funding 1
                  Liquidity Facility Drawing in the currency of the overdue
                  amount for such successive Funding 1 Liquidity Facility
                  Interest Periods of such duration as the Funding 1 Liquidity
                  Facility Provider may determine (each a "DESIGNATED INTEREST
                  PERIOD").

(b)      The Default Rate will be determined on each Business Day or the first
         day of the relevant Designated Interest Period, as appropriate.

(c)      If LIBOR is to be determined in accordance with paragraph (b) of its
         definition and the Funding 1 Liquidity Facility Provider determines
         that deposits in the currency of the overdue amount are not at the
         relevant time being made available by the Reference Banks to leading
         banks in the London interbank market, the Default Rate will be
         determined by reference to the cost of funds to the Funding 1 Liquidity
         Facility Provider from whatever sources it reasonably selects.

(d)      Default interest will be compounded at the end of each Designated
         Interest Period.

(e)      This CLAUSE 8.3 shall not apply to amounts deferred as a result of the
         operation of CLAUSE 18 (Enforcement and Subordination).

8.4      NOTIFICATION OF RATES OF INTEREST

         The Funding 1 Liquidity Facility Provider shall promptly notify each
         relevant Party of the determination of a rate of interest under this
         Agreement.

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                                       12

9.       PAYMENTS

9.1      PLACE

         All payments by Funding 1 under this Agreement shall be made to the
         Funding 1 Liquidity Facility Provider's account at JPMorgan Chase Bank,
         Sort Code: 60-92-42, Account Reference: European Loans or to its
         account at such office or bank as it may notify to Funding 1 for this
         purpose.

9.2      FUNDS

         Payments under this Agreement to the Funding 1 Liquidity Facility
         Provider shall be made for value on the due date at such times and in
         such funds as the Funding 1 Liquidity Facility Provider may specify to
         the Party concerned as being customary at the time for the settlement
         of transactions in Sterling.

9.3      CURRENCY

(a)      Amounts payable in respect of costs, expenses, taxes and the like are
         payable in the currency in which they are incurred.

(b)      Any other amount payable under this Agreement is, except as otherwise
         provided in this Agreement, payable in Sterling.

9.4      SET-OFF AND COUNTERCLAIM

         All payments made by the Funding 1 under this Agreement shall be made
         without set-off or counterclaim.

9.5      NON-BUSINESS DAYS

(a)      If a payment under this Agreement is due on a day which is not a London
         Business Day, the due date for that payment shall instead be the next
         London Business Day in the same calendar month (if there is one) or the
         preceding London Business Day (if there is not).

(b)      During any extension of the due date for payment of any principal under
         this Agreement interest is payable on the principal at the rate payable
         on the original due date.

10.      TAXES

10.1     GROSS-UP

         Subject to CLAUSE 18 (Enforcement and Subordination) and CLAUSE 10.3
         (Qualifying Lender), all payments by Funding 1 under the Funding 1
         Liquidity Documents shall be made free and clear of and without
         deduction or withholding for or on account of any Taxes, except to the
         extent that Funding 1 is required by law to make payment subject to any
         such deduction or withholding for or on account of any Taxes. If any
         Tax or amounts in respect of Tax is required by law to be deducted or
         withheld from any amounts payable or paid by Funding 1 under the
         Funding 1 Liquidity Documents, subject to CLAUSE 18 (Enforcement and
         Subordination) Funding 1 shall pay such additional amounts as may be
         necessary to ensure that (after any deduction or withholding required
         in respect of such additional amounts) the Funding 1 Liquidity Facility
         Provider receives a net amount equal to the full amount which it

<PAGE>
                                       13

         would have received had payment not been made subject to any such
         deduction or withholding for or on account of any Taxes.

10.2     TAX RECEIPTS

         Subject to CLAUSE 18 (Enforcement and Subordination), all Taxes
         required by law to be deducted or withheld by Funding 1 from any
         amounts paid or payable under the Funding 1 Liquidity Documents shall
         be paid by Funding 1 when due and Funding 1 shall, within 30 days of
         the payment being made, deliver to the Funding 1 Liquidity Facility
         Provider evidence satisfactory to the Funding 1 Liquidity Facility
         Provider (acting reasonably) (including all relevant Tax receipts) that
         the payment has been duly remitted to the appropriate authority.

10.3     QUALIFYING LENDER

         Funding 1 shall not be required to pay an additional amount as referred
         to in CLAUSE 10(1) (Gross-up) above in respect of any deduction or
         withholding for or on account of any Taxes levied or imposed by the
         United Kingdom (or any taxing authority of or in the United Kingdom)
         from a payment of interest, if on the date on which the payment falls
         due:

         (a)      the payment could have been made to the Funding 1 Liquidity
                  Facility Provider or replacement liquidity facility provider
                  (as applicable) in the absence of a deduction or withholding
                  for or on account of any Taxes if the Funding 1 Liquidity
                  Facility Provider or replacement liquidity facility provider
                  (as applicable) were a Qualifying Lender, but on that date the
                  Funding 1 Liquidity Facility Provider or replacement liquidity
                  facility provider is not or has ceased to be a Qualifying
                  Lender other than as a result of any change occurring after
                  the date of this Agreement in (or in the interpretation,
                  administration or application of) any law or regulation or
                  applicable Double Taxation Treaty or any published practice or
                  concession of any relevant Tax authority;

         (b)      (i)      the Funding 1 Liquidity Facility Provider or
                           replacement liquidity finance provider (as
                           applicable) is a UK Non-Bank Lender, or would have
                           been a UK Non-Bank Lender were it not for the
                           introduction of, change to or change in the
                           interpretation, administration or application of any
                           law or regulation or any published practice or
                           concession of the United Kingdom Inland Revenue
                           occurring after the date of this Agreement; and

                  (ii)     the Board of the United Kingdom Inland Revenue has
                           given (and not revoked) a direction under Section
                           349C of the Income and Corporation Taxes Act 1998 (as
                           that provision has effect on the date of this
                           Agreement) which relates to such payment and Funding
                           1 has notified the Funding 1 Liquidity Facility
                           Provider or the replacement liquidity facility
                           provider (as applicable) of the precise terms of that
                           notice;

         (c)               the Funding 1 Liquidity Facility Provider or the
                           replacement liquidity facility provider (as
                           applicable) is a Treaty Lender and Funding 1 is able
                           to demonstrate that the additional amounts referred
                           to in CLAUSE 10.1 (Gross-up) above would not have
                           been required if the Funding 1 Liquidity Facility
                           Provider or the replacement liquidity facility
                           provider (as applicable) had complied with its
                           obligations under CLAUSE 10.6 (Treaty Lender) below.

<PAGE>
                                       14

10.4     REFUND OF TAX CREDITS

         If Funding 1 makes a payment under CLAUSE 10.1 (Gross-up) (a "TAX
         PAYMENT") in respect of a payment to the Funding 1 Liquidity Facility
         Provider under this Agreement and the Funding 1 Liquidity Facility
         Provider determines that it has obtained a refund of Tax or obtained
         and used a credit against Tax on its overall net income (a "TAX
         CREDIT") which the Funding 1 Liquidity Facility Provider determines to
         be attributable to that Tax Payment, then the Funding 1 Liquidity
         Facility Provider shall reimburse Funding 1 such amount as the Funding
         1 Liquidity Facility Provider determines to be such proportion of that
         Tax Credit as will leave the Funding 1 Liquidity Facility Provider
         (after that reimbursement) in no better or worse position than it would
         have been in if no Tax Payment had been required. The Funding 1
         Liquidity Facility Provider shall not be obliged to disclose to any
         party to this Agreement or otherwise any information regarding its Tax
         affairs and computations.

10.5     STATUS OF QUALIFYING LENDER

         If the Funding 1 Liquidity Facility Provider or replacement liquidity
         facility provider (as applicable) ceases, for whatever reason, to be a
         Qualifying Lender, it shall promptly notify Funding 1 in writing of
         that change in is status.

10.6     TREATY LENDER

         A Treaty Lender and Funding 1 shall co-operate in completing any
         procedural formalities necessary for Funding 1 to obtain authorisation
         to make payments under the Funding 1 Liquidity Documents free and clear
         of and without deduction or withholding for or on account of any Taxes
         levied or imposed by the United Kingdom or any taxing authority of or
         in the United Kingdom.

10.7     TAX INDEMNITY

(a)      Funding 1 shall (within three Business Days of demand by the Funding 1
         Liquidity Facility Provider or replacement liquidity facility provider
         (as applicable) (the "PROTECTED PARTY")) pay to a Protected Party an
         amount equal to the loss, liability or cost which that Protected Party
         determines will be or has been (directly or indirectly) suffered for on
         and account of Tax by that Protected Party in respect of the Funding 1
         Liquidity Documents.

(b)      Paragraph (a) above shall not apply:

         (i)      to any alternative minimum tax or any state or local tax
                  assessed on a Protected Party by the United States of America
                  or any state or local authority thereof;

         (ii)     with respect to any Tax assessed on a Protected Party:

                  (A)      under the law of the jurisdiction in which that
                           Protected Party is incorporated or, if different, the
                           jurisdiction in which that Protected Party is treated
                           as resident for tax purposes; or

                  (B)      under the law of the jurisdiction in which that
                           Protected Party's Facility Office is located in
                           respect of amounts received or receivable in that
                           jurisdiction,

<PAGE>
                                       15

                  if that Tax is imposed or calculated by reference to the net
                  income received or receivable (but not any sum deemed to be
                  received or receivable) by that Protected Party;

         (iii)    to the extent a loss, liability or cost:

                  (A)      is compensated for by an increased payment under
                           CLAUSE 10.1 (Gross-up); or

                  (B)      would have been compensated for by an increased
                           payment under CLAUSE 10.1 (Gross-up) but was not so
                           compensated solely because one of the exclusions in
                           CLAUSE 10.3 (Qualifying Lender) applied.

11.      MARKET DISRUPTION

(a)      If LIBOR is to be determined in accordance with paragraph (b) of its
         definition and a Reference Bank does not supply an offered rate by 1.00
         p.m. on a Funding 1 Liquidity Facility Drawdown Date, the applicable
         LIBOR shall, subject to PARAGRAPH (b) below, be determined on the basis
         of the quotations of the remaining Reference Bank(s).

(b)      If, in relation to any Funding 1 Liquidity Facility Drawing or proposed
         Funding 1 Liquidity Facility Drawing:

         (i)      LIBOR is to be determined in accordance with paragraph (b) of
                  its definition and no, or only one, Reference Bank supplies a
                  rate for the purposes of determining the applicable LIBOR or
                  the Funding 1 Liquidity Facility Provider otherwise determines
                  that adequate and fair means do not exist for ascertaining the
                  applicable LIBOR; or

         (ii)     in the Funding 1 Liquidity Facility Provider's opinion:

                  (1)      matching deposits may not be available to it in the
                           London interbank market in the ordinary course of
                           business to fund that Funding 1 Liquidity Facility
                           Loan for the relevant Funding 1 Liquidity Facility
                           Interest Period; or

                  (2)      the cost to it of matching deposits in the London
                           interbank market would be in excess of the relevant
                           LIBOR,

         the Funding 1 Liquidity Facility Provider shall promptly notify Funding
         1 of the fact and that this CLAUSE 11 is in operation.

(c)      After any notification under PARAGRAPH (b) above, the Funding 1
         Liquidity Facility Loan shall bear interest at the rate per annum equal
         to the sum of the applicable Funding 1 Liquidity Facility Margin,
         Mandatory Liquid Asset Cost and the cost to the Funding 1 Liquidity
         Facility Provider (expressed as a rate per annum) of funding the
         Funding 1 Liquidity Facility Loan by whatever means it reasonably
         determines to be appropriate.

12.      INCREASED COSTS

12.1     INCREASED COSTS

(a)      Subject to CLAUSE 12.2 (Exceptions) and CLAUSE 18 (Enforcement and
         Subordination), Funding 1 shall forthwith on demand by the Funding 1
         Liquidity Facility Provider pay the

<PAGE>
                                       16

         Funding 1 Liquidity Facility Provider the amount of any increased cost
         incurred by it as a result of:

         (i)      the introduction of, or any change in, or any change in the
                  interpretation by any court or official authority or
                  application of, any law or regulation or in the case of Tax,
                  the introduction of or any change in or any change in the
                  interpretation of any law, regulation or published practice or
                  concession of any relevant tax authority(in each case
                  occurring after the date of this Agreement);

         (ii)     compliance with any regulation made or modified after the date
                  of this Agreement,

         including any law or regulation relating to change in currency of a
         country or reserve asset, special deposit, cash ratio, liquidity or
         capital adequacy requirements or any other form of banking or monetary
         control or in the case of taxation, any law, regulation, published
         practice or concession relating to Tax.

(b)      In this Agreement "INCREASED COST" means:

         (i)      an additional cost incurred by the Funding 1 Liquidity
                  Facility Provider or its holding company as a result of it
                  having entered into, or performing, maintaining or funding its
                  obligations under, the Funding 1 Liquidity Documents; or

         (ii)     that portion of an additional cost incurred by the Funding 1
                  Liquidity Facility Provider or its holding company in making,
                  funding or maintaining all or any advances comprised in a
                  class of advances formed by or including the Funding 1
                  Liquidity Facility Loans made or to be made under the Funding
                  1 Liquidity Documents as is attributable to it making, funding
                  or maintaining those participations; or

         (iii)    a reduction in any amount payable to the Funding 1 Liquidity
                  Facility Provider or its holding company or the effective
                  return to a Funding 1 Liquidity Facility Provider under this
                  Agreement or (to the extent that it is attributable to this
                  Agreement) on its capital, including any reduction in the
                  effective return from the Funding 1 Liquidity Facility Margin
                  or the commitment fee payable under CLAUSE 17 (Fees) of this
                  Agreement; or

         (iv)     the amount of any payment made by the Funding 1 Liquidity
                  Facility Provider or its holding company, or the amount of
                  interest or other return foregone by the Funding 1 Liquidity
                  Facility Provider, calculated by reference to any amount
                  received or receivable by the Funding 1 Liquidity Facility
                  Provider from any other Party under this Agreement.

12.2     EXCEPTIONS

         CLAUSE 12.1 does not apply to any increased cost:

         (a)      compensated for by the payment of the Mandatory Liquid Asset
                  Cost;

         (b)      compensated for by the operation of CLAUSE 10 (Taxes); or

<PAGE>
                                       17

         (c)      to the extent that any such increased cost is attributable to
                  any deduction or withholding for or on account of any taxes
                  required to be made by Funding 1.

13.      ILLEGALITY

         If it is or becomes unlawful in any jurisdiction for the Funding 1
         Liquidity Facility Provider to give effect to any of its obligations as
         contemplated by this Agreement or to fund or maintain any Funding 1
         Liquidity Facility Loan, then:

         (a)      the Funding 1 Liquidity Facility Provider may notify Funding 1
                  accordingly; and

         (b)      (i)      subject to CLAUSE 18 (Enforcement and Subordination),
                           Funding 1 shall forthwith prepay the Funding 1
                           Liquidity Facility Loans together with all interest
                           and all other amounts payable by it to the Funding 1
                           Liquidity Facility Provider under this Agreement; and

                  (ii)     the Funding 1 Liquidity Facility Commitment shall be
                           cancelled.

14.      REPRESENTATIONS AND WARRANTIES

14.1     REPRESENTATIONS AND WARRANTIES BY FUNDING 1

         Funding 1 makes the representations and warranties set out in this
         CLAUSE 14.1 to the Funding 1 Liquidity Facility Provider and the
         Security Trustee:

         (a)      STATUS

                  (i)      It is a limited liability company, duly incorporated
                           and validly existing under the laws of England and
                           Wales; and

                  (ii)     it has the power to own its assets and carry on its
                           business as it is being conducted.

         (b)      POWERS AND AUTHORITY

                  It has the power to enter into and perform, and has taken all
                  necessary action to authorise the entry into, performance and
                  delivery of, the Funding 1 Liquidity Documents to which it is
                  or will be a party and the transactions contemplated by those
                  Funding 1 Liquidity Documents.

         (c)      LEGAL VALIDITY

                  Each Funding 1 Liquidity Document to which it is or will be a
                  party constitutes, or when executed in accordance with its
                  terms will constitute, its legal, valid and binding obligation
                  enforceable in accordance with its terms.

         (d)      NON-CONFLICT

                  The entry into and performance by it of, and the transactions
                  contemplated by, the Funding 1 Liquidity Documents do not and
                  will not:

<PAGE>
                                       18

                  (i)      result in the existence or imposition of nor oblige
                           it to create any Security Interest in favour of any
                           person (other than the Funding 1 Secured Creditors)
                           over all or any of its present or future revenues or
                           assets;

                  (ii)     conflict with any law or regulation or judicial or
                           official order;

                  (iii)    conflict with its constitutional documents; or

                  (iv)     conflict with any document which is binding upon it
                           or any of its assets.

         (e)      NO DEFAULT

                  No Liquidity Facility Default is outstanding or might result
                  from the making of any Funding 1 Liquidity Facility Loan.

         (f)      AUTHORISATIONS

                  All authorisations required or desirable in connection with
                  the entry into, performance, validity and enforceability of,
                  and the transactions contemplated by, the Funding 1 Liquidity
                  Documents have been obtained or effected (as appropriate) and
                  are in full force and effect.

         (g)      LITIGATION

                  No litigation, arbitration or administrative proceedings
                  involving Funding 1 are current or, to its knowledge, pending
                  or threatened, which might, if adversely determined, have a
                  material adverse effect on the business or financial condition
                  of Funding 1 or the ability of Funding 1 to perform its
                  obligations under this Agreement.

         (h)      SECURITY INTERESTS

                  None of the assets of Funding 1 is affected by any Security
                  Interest, and Funding 1 is not a party to, nor is it or any of
                  its assets bound by, any order, agreement or instrument under
                  which Funding 1 is, or in certain events may be, required to
                  create, assume or permit to arise any Security Interest, other
                  than the Security Interests created by the Funding 1 Deed of
                  Charge.

         (i)      NO OTHER BUSINESS

                  (i)      It has not traded or carried on any business since
                           its date of incorporation or engaged in any activity
                           whatsoever that is not incidental to or necessary in
                           connection with any of the activities in which the
                           Transaction Documents provide or envisage that it
                           will engage; and

                  (ii)     it is not party to any material agreements other than
                           the Transaction Documents.

         (j)      OWNERSHIP

                  (i)      Its entire issued share capital is legally and
                           beneficially owned and controlled by Holdings; and

<PAGE>
                                       19

                  (ii)     its shares are fully paid.

         (k)      GOOD TITLE AS TO ASSETS

                  Funding 1 is and will remain the absolute beneficial owner of
                  the Funding 1 Share and absolute legal and beneficial owner of
                  all other assets charged or assigned by the Funding 1 Deed of
                  Charge to which it is a party.

         (l)      TAX

                  (i)      It is tax resident and legally domiciled in its
                           jurisdiction of incorporation; and

                  (ii)     it has no branch, business establishment or other
                           fixed establishment outside the United Kingdom.

         (m)      FUNDING 1 DEED OF CHARGE

                  The Funding 1 Deed of Charge creates, or will create when the
                  Funding 1 Liquidity Facility Stand-by Account is opened and
                  the Funding 1 Liquidity Facility Stand-By Deposit is credited
                  to such account, a first priority Security Interest of the
                  type described in the Funding 1 Deed of Charge over the
                  Funding 1 Liquidity Facility Stand-by Deposit in favour of the
                  Security Trustee.

         For the avoidance of doubt, a breach by Funding 1 of any representation
         or warranty contained in this CLAUSE 14.1 or otherwise in this
         Agreement shall not entitle the Funding 1 Liquidity Facility Provider
         to terminate this Agreement or declare the Funding 1 Liquidity Drawing
         or the Funding 1 Liquidity Facility Stand-by Drawing or any other
         amounts payable under this Agreement due and payable or to prevent any
         utilisation of the Funding 1 Liquidity Facility or the Standby-by
         Facility or any Funding 1 Liquidity Facility Loan being made.

14.2     REPRESENTATIONS AND WARRANTIES BY THE FUNDING 1 LIQUIDITY FACILITY
         PROVIDER

         The Funding 1 Liquidity Facility Provider makes the representations and
         warranties set out in this CLAUSE 14.2 to Funding 1 and the Security
         Trustee.

         (a)      STATUS

                  It is duly incorporated with limited liability under the laws
                  of the jurisdiction of its incorporation and is an authorised
                  institution under the FSMA 2000.

         (b)      TAX STATUS

                  It is a Qualifying Lender.

         (c)      POWERS AND AUTHORISATIONS

                  The documents which contain or establish its constitution
                  include provisions which give power, and all necessary
                  corporate authority has been obtained and action taken, for it
                  to sign and deliver, and perform the transactions contemplated
                  in this Agreement and the agreements entered into in
                  connection herewith and this

<PAGE>
                                       20

                  Agreement and the agreements entered into in connection
                  herewith constitute its valid, legal and binding obligations.

         (d)      RATING

                  It has the Requisite Ratings (and will promptly notify both
                  Funding 1 and the Security Trustee of the occurrence of any
                  downgrading by the Rating Agencies of any of its rated debt
                  obligations to a level below the Requisite Ratings).

         (e)      NON-VIOLATION

                  Neither the signing and delivery of this Agreement nor the
                  performance of any of the transactions contemplated in it does
                  or will contravene or constitute a default under, or cause to
                  be exceeded any limit on the Funding 1 Liquidity Facility
                  Provider or the powers of its directors imposed by or
                  contained in (i) any law by which it or any of its assets is
                  bound or affected, or (ii) any agreement to which it is a
                  party or by which any of its assets is bound.

14.3     TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES

         The representations and warranties set out in this CLAUSE 14
         (Representations and warranties):

         (a)      are made on the date of this Agreement; and

         (b)      save in respect of the warranty of the Funding 1 Liquidity
                  Facility Provider given under CLAUSE 14.2(b) (Tax Status), are
                  deemed to be repeated by the relevant Party on the date of
                  each Funding 1 Liquidity Facility Request, each Funding 1
                  Liquidity Facility Drawdown Date and each Funding 1 Interest
                  Payment Date with reference to the facts and circumstances
                  then existing.

15.      UNDERTAKINGS

15.1     DURATION

         The undertakings in this CLAUSE 15 remain in force from the date of
         this Agreement for so long as any amount is or may be outstanding under
         this Agreement or any Funding 1 Liquidity Facility Commitment is in
         force.

15.2     FINANCIAL INFORMATION

         Funding 1 shall supply to the Funding 1 Liquidity Facility Provider and
         the Security Trustee:

         (a)      as soon as the same are available (and in any case before the
                  latest date for publication in accordance with the Companies
                  Act 1985, as amended), its audited accounts for that financial
                  year which shall be prepared in accordance with generally
                  accepted accounting principles; and

         (b)      promptly such other information as the Security Trustee may
                  reasonably request.

<PAGE>
                                       21

15.3     INFORMATION - MISCELLANEOUS

         Funding 1 shall supply to the Funding 1 Liquidity Facility Provider
         promptly, such further information in its possession or control
         regarding its financial condition and operations as it supplies to the
         Security Trustee, if the Funding 1 Liquidity Facility Provider so
         requests.

15.4     NOTIFICATION OF DEFAULT

         Funding 1 shall notify the Funding 1 Liquidity Facility Provider of any
         Funding 1 Liquidity Facility Default (and the steps, if any, being
         taken to remedy it) promptly upon its occurrence.

15.5     AUTHORISATIONS

         Funding 1 shall promptly:

         (a)      obtain, maintain and comply with the terms of; and

         (b)      supply certified copies to the Funding 1 Liquidity Facility
                  Provider of,

         any authorisation required under any law or regulation to enable it to
         perform its obligations under, or for the validity or enforceability
         of, any Funding 1 Liquidity Document.

15.6     UNITED STATES ACTIVITIES

         Funding 1 will not engage in any activities in the United States
         (directly or through agents), will not derive any income from United
         States sources as determined under United States income tax principles,
         and will not hold any property if doing so would cause it to be engaged
         or deemed to be engaged in a trade or business within the United States
         as determined under United States income tax principles.

16.      DEFAULT

16.1     FUNDING 1 LIQUIDITY FACILITY DEFAULT

         Each of the events set out in CLAUSES 16.2 (Non-Payment) to 16.4
         (Unlawfulness) (inclusive) is a Funding 1 Liquidity Facility Default
         (whether or not caused by any reason whatsoever outside the control of
         Funding 1 or any other person).

16.2     NON-PAYMENT

(a)      Subject to PARAGRAPH (b) below, Funding 1 does not pay within 3 London
         Business Days of the due date any amount payable by it under the
         Funding 1 Liquidity Documents at the place at and in the currency in
         which it is expressed to be payable.

(b)      The Funding 1 Liquidity Facility Provider agrees that the non-payment
         of any Funding 1 Liquidity Subordinated Amounts shall only constitute a
         Funding 1 Liquidity Facility Default under PARAGRAPH (a) above in
         circumstances where Funding 1 has the requisite funds to pay such
         amounts in accordance with the Funding 1 Deed of Charge on the relevant
         due date and any such Funding 1 Liquidity Subordinated Amounts are not
         then paid.

<PAGE>
                                       22

16.3     INTERCOMPANY LOAN ACCELERATION NOTICE

         An Intercompany Loan Acceleration Notice is served or the Security
         Trustee having become bound to serve an Intercompany Loan Acceleration
         Notice fails to do so within 30 days of becoming so bound.

16.4     UNLAWFULNESS

         It is or becomes unlawful for Funding 1 to perform any of its
         obligations under the Funding 1 Liquidity Documents.

16.5     ACCELERATION

         On and at any time after the occurrence of a Funding 1 Liquidity
         Facility Default and subject to CLAUSE 18 (Enforcement and
         Subordination) and if such Funding 1 Liquidity Facility Default is
         continuing the Funding 1 Liquidity Facility Provider may by notice to
         Funding 1:

         (a)      cancel the Funding 1 Liquidity Facility Commitment; and/or

         (b)      demand that all or part of the Funding 1 Liquidity Facility
                  Loans, together with accrued interest, and all other amounts
                  accrued under this Agreement be immediately due and payable,
                  whereupon they shall become immediately due and payable;
                  and/or

         (c)      demand that all or part of the Funding 1 Liquidity Facility
                  Loans be payable on demand, whereupon they shall immediately
                  become payable on demand.

17.      FEES

17.1     COMMITMENT FEE

(a)      Funding 1 shall (subject to CLAUSE 17.1(b) below and to CLAUSE 18
         (Enforcement and Subordination) pay to the Funding 1 Liquidity Facility
         Provider a commitment fee computed at the rate of 0.08 per cent. per
         annum on the undrawn, uncancelled amount of the Funding 1 Liquidity
         Facility Commitment during the period from the date of this Agreement
         up to and including the last day of the Funding 1 Liquidity Facility
         Commitment Period. Such commitment fee will be inclusive of VAT (if
         any) payable thereon.

(b)      In the event that a Further Funding 1 Liquidity Stand-by Drawing is
         made, the commitment fee referred to in CLAUSE 17.1(a) will not be
         payable in respect of that portion of the Further Funding 1 Liquidity
         Facility Commitment referable to such Further Funding 1 Liquidity
         Stand-by Drawing and Funding 1 will instead (subject to CLAUSE 18
         (Enforcement and Subordination) pay to the Funding 1 Liquidity Facility
         Provider a contingent fee computed at the rate of 0.38 per cent. per
         annum on the Further Funding 1 Liquidity Stand-by Drawing. Such
         contingent fee will be inclusive of VAT (if any) payable thereon.

(c)      Subject to CLAUSE 18 (Enforcement and Subordination), the accrued
         commitment fee is payable quarterly in arrear on each Funding 1
         Interest Payment Date. The accrued commitment fee is also payable to
         the Funding 1 Liquidity Facility Provider on the cancelled amount of
         the Funding 1 Liquidity Facility Commitment at the time the
         cancellation takes effect.

<PAGE>
                                       23

17.2     VAT

         (a)      Subject to CLAUSE 17.1(a) and CLAUSE 17.1(b) (Commitment fee),
                  all payments to be made by Funding 1 under the Funding 1
                  Liquidity Documents are exclusive of VAT chargeable thereon
                  and Funding 1 shall pay to the Funding 1 Liquidity Facility
                  Provider a sum in respect of any VAT chargeable in respect of
                  any supply made by the Funding 1 Liquidity Facility Provider
                  for the purposes of VAT in connection with the Funding 1
                  Liquidity Documents.

         (b)      Where under the Funding 1 Liquidity Documents, Funding 1 is
                  required to reimburse or indemnify the Funding 1 Liquidity
                  Facility Provider against any costs, expenses (including legal
                  fees), loss or liability or otherwise, such obligation to
                  reimburse or indemnify shall extend to any VAT charged to the
                  Funding 1 Liquidity Facility Provider on such costs, expenses
                  (including legal fees) or in respect of such loss, liability
                  or otherwise which is irrecoverable by the Funding 1 Liquidity
                  Facility Provider .

18.      ENFORCEMENT AND SUBORDINATION

(a)      The Funding 1 Liquidity Facility Provider acknowledges to the Security
         Trustee that it is bound by the terms of the Funding 1 Deed of Charge
         and, in particular, confirms that no sum, whether in respect of
         principal or interest or otherwise relating to any Funding 1 Liquidity
         Facility Loan, shall be paid by Funding 1 except in accordance with the
         provisions of the Funding 1 Cash Management Agreement and the Funding 1
         Deed of Charge unless and until all sums required by the Funding 1 Cash
         Management Agreement or the Funding 1 Deed of Charge, as the case may
         be, to be paid or provided for in priority thereto have been paid or
         discharged in full.

(b)      The Funding 1 Liquidity Facility Provider further agrees that only the
         Security Trustee may enforce the security created in favour of, inter
         alia, the Funding 1 Liquidity Facility Provider and the Security
         Trustee by the Funding 1 Deed of Charge and that the Funding 1
         Liquidity Facility Provider shall not take any steps for the purpose
         of:

         (i)      recovering any debts whatsoever owing to it by Funding 1 save
                  as provided for in accordance with the terms of the Funding 1
                  Deed of Charge (including, without limitation, by exercising
                  any right of set-off); or

         (ii)     enforcing any rights arising out of this Agreement against
                  Funding 1; or

         (iii)    procuring the winding-up, administration or liquidation of
                  Funding 1 in respect of any of its liabilities whatsoever,

         unless the Security Trustee, having become bound to serve an
         Intercompany Loan Acceleration Notice, fails to do so within 30 days of
         becoming so bound and that failure is continuing (in which case the
         Funding 1 Liquidity Facility Provider shall be entitled to take any
         such steps and proceedings as it shall deem necessary other than the
         presentation of a petition for the winding-up of, or for an
         administration order in respect of, Funding 1) provided that the
         Funding 1 Liquidity Facility Provider shall not be entitled to take any
         steps or proceedings pursuant to this Agreement which would contravene
         CLAUSES 5 to 9 of the Funding 1 Deed of Charge.

<PAGE>
                                       24

(c)      Subject to PARAGRAPH (b) above, the Funding 1 Liquidity Facility
         Provider agrees to defer taking any action or proceedings against
         Funding 1 to recover any amounts payable by Funding 1 to the Funding 1
         Liquidity Facility Provider under this Agreement except to the extent
         expressly permitted by the provisions of the Funding 1 Deed of Charge
         unless and until (then only to the extent that) Funding 1 has assets
         sufficient to meet such claim in full having taken into account all
         other liabilities (actual, contingent or prospective) of Funding 1
         which under the Funding 1 Deed of Charge rank pari passu with or in
         priority to its liabilities to the Funding 1 Liquidity Facility
         Provider under this Agreement, provided however that nothing in this
         PARAGRAPH (c) shall prevent the Funding 1 Liquidity Facility Provider
         from proving for the full amount owed to it by Funding 1 under this
         Agreement in the liquidation of Funding 1.

(d)      Without prejudice to the other provisions of this CLAUSE 18, the
         Funding 1 Liquidity Facility Provider covenants with the Security
         Trustee that if, whether in the liquidation of Funding 1 or otherwise
         (and notwithstanding the provisions of this CLAUSE 18), any payment
         (whether of principal, interest or otherwise) is received by it in
         respect of a Funding 1 Liquidity Facility Loan other than in accordance
         with CLAUSES 4 and 6 of the Funding 1 Cash Management Agreement and
         CLAUSES 7 and 8 of the Funding 1 Deed of Charge, the amount so paid
         shall be received and held by the Funding 1 Liquidity Facility Provider
         upon trust for the Security Trustee and shall be paid over to the
         Security Trustee forthwith upon receipt provided however that this
         PARAGRAPH (d) shall have effect only to the extent that it does not
         constitute or create and is not deemed to constitute or create any
         mortgage, charge or other Security Interest of any kind.

19.      EXPENSES

19.1     INITIAL AND SPECIAL COSTS

         Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
         forthwith on demand pay the Funding 1 Liquidity Facility Provider the
         amount of all costs and expenses (including reasonable legal fees)
         incurred by it in connection with:

         (a)      the negotiation, preparation, printing and execution of:

                  (i)      this Agreement and any other documents referred to in
                           this Agreement;

                  (ii)     any other Funding 1 Liquidity Document (other than a
                           Novation Certificate) executed after the date of this
                           Agreement;

         (b)      any amendment, waiver, consent or suspension of rights (or any
                  proposal for any of the foregoing) requested by or on behalf
                  of Funding 1 or, in the case of CLAUSE 2.4 (Change of
                  currency), the Funding 1 Liquidity Facility Provider and
                  relating to a Funding 1 Liquidity Document or a document
                  referred to in any Funding 1 Liquidity Document; and

         (c)      any other matter, not of an ordinary administrative nature,
                  arising out of or in connection with a Funding 1 Liquidity
                  Document.

<PAGE>
                                       25

19.2     ENFORCEMENT COSTS

         Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
         forthwith on demand pay to the Funding 1 Liquidity Facility Provider
         the amount of all costs and expenses (including legal fees) incurred by
         it:

         (a)      in connection with the enforcement of, or the preservation of
                  any rights under, any Funding 1 Liquidity Document; or

         (b)      in investigating any possible Funding 1 Liquidity Facility
                  Default.

20.      STAMP DUTIES

         Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
         pay and forthwith on demand indemnify the Funding 1 Liquidity Facility
         Provider against any liability it incurs in respect of any stamp,
         registration and similar tax which is or becomes payable in connection
         with the entry into, performance or enforcement of any Funding 1
         Liquidity Document.

21.      INDEMNITIES

21.1     CURRENCY INDEMNITY

(a)      Subject to CLAUSE 18 (Enforcement and Subordination), if the Funding 1
         Liquidity Facility Provider receives an amount in respect of Funding
         1's liability under the Funding 1 Liquidity Documents or if that
         liability is converted into a claim, proof, judgment or order in a
         currency other than the currency (the "CONTRACTUAL CURRENCY") in which
         the amount is expressed to be payable under the relevant Funding 1
         Liquidity Document:

         (i)      Funding 1 shall indemnify the Funding 1 Liquidity Facility
                  Provider as an independent obligation against any loss or
                  liability arising out of or as a result of the conversion;

         (ii)     if the amount received by the Funding 1 Liquidity Facility
                  Provider, when converted into the contractual currency at a
                  market rate in the usual course of its business, is less than
                  the amount owed in the contractual currency, Funding 1 shall
                  forthwith on demand pay to the Funding 1 Liquidity Facility
                  Provider an amount in the contractual currency equal to the
                  deficit; and

         (iii)    Funding 1 shall forthwith on demand pay to the Funding 1
                  Liquidity Facility Provider on demand any exchange costs and
                  taxes payable in connection with any such conversion.

(b)      Funding 1 waives any right it may have in any jurisdiction to pay any
         amount under the Funding 1 Liquidity Documents in a currency other than
         that in which it is expressed to be payable.

21.2     OTHER INDEMNITIES

         Subject to CLAUSE 18 (Enforcement and Subordination), Funding 1 shall
         forthwith on demand indemnify the Funding 1 Liquidity Facility Provider
         against any loss or liability which that Funding 1 Liquidity Facility
         Provider incurs as a consequence of:

<PAGE>
                                       26

         (a)      the operation of CLAUSE 16.6 (Acceleration) or if the loss or
                  liability is caused by Funding 1 making a payment other than
                  in accordance with CLAUSE 9 (Payments);

         (b)      any payment of principal or an overdue amount being received
                  from any source otherwise than on its Funding 1 Interest
                  Payment Date and, for the purposes of this PARAGRAPH (b), the
                  Funding 1 Interest Payment Date of an overdue amount is the
                  last day of each Designated Interest Period (as defined in
                  CLAUSE 8.3 (Default interest)); or

         (c)      (other than by reason of negligence or default by the Funding
                  1 Liquidity Facility Provider) a Funding 1 Liquidity Facility
                  Loan not being made after Funding 1 has delivered a Funding 1
                  Liquidity Facility Request for that Funding 1 Liquidity
                  Facility Loan; or

         (d)      any reasonable costs, including legal fees, which the Funding
                  1 Liquidity Facility Provider may sustain or incur as a
                  consequence of any default by Funding 1 in the performance of
                  any of the obligations expressed to be assumed by it in this
                  Agreement.

         Funding 1's liability in each case includes any loss of margin or other
         loss or expense on account of funds borrowed, contracted for or
         utilised to fund any amount payable under any Funding 1 Liquidity
         Document, any amount repaid or prepaid or any Funding 1 Liquidity
         Facility Loan.

22.      EVIDENCE AND CALCULATIONS

22.1     ACCOUNTS

         Accounts maintained by the Funding 1 Liquidity Facility Provider in
         connection with this Agreement are prima facie evidence of the matters
         to which they relate.

22.2     CERTIFICATES AND DETERMINATIONS

         Any certification or determination by the Funding 1 Liquidity Facility
         Provider of a rate or amount under this Agreement is, in the absence of
         manifest error, conclusive evidence of the matters to which it relates.

22.3     CALCULATIONS

         Interest (including any applicable Mandatory Liquid Asset Cost) and the
         fee payable under CLAUSE 17.1 (Commitment fee) accrue from day to day
         and are calculated on the basis of the actual number of days elapsed
         and a year of 365 days or, if market practice dictates, 360 days.

23.      AMENDMENTS AND WAIVERS

23.1     PROCEDURE

         Subject to CLAUSE 25 of the Funding 1 Deed of Charge (Supplemental
         Provisions Regarding the Security Trustee), any term of the Funding 1
         Liquidity Documents may be amended or

<PAGE>
                                       27

         waived with the written agreement of Funding 1, the Security Trustee
         and the Funding 1 Liquidity Facility Provider.

23.2     WAIVERS AND REMEDIES CUMULATIVE

         The rights of the Funding 1 Liquidity Facility Provider under the
         Funding 1 Liquidity Documents:

         (a)      may be exercised as often as necessary;

         (b)      are cumulative and not exclusive of its rights under the
                  general law; and

         (c)      may be waived only in writing and specifically.

         Delay in exercising or non-exercise of any such right is not a waiver
         of that right.

24.      CHANGES TO THE PARTIES

24.1     TRANSFERS BY FUNDING 1

         Funding 1 may not assign, transfer, novate or dispose of any of, or any
         interest in, the Funding 1 Liquidity Facility Commitment and/or rights
         and/or obligations under this Agreement except that Funding 1 may
         assign its rights under this Agreement to the Security Trustee pursuant
         to the Funding 1 Deed of Charge.

24.2     TRANSFER BY THE SECURITY TRUSTEE

         The Security Trustee may assign its rights under this Agreement to any
         successor security trustee under the Funding 1 Deed of Charge.

24.3     TRANSFERS BY THE CASH MANAGER

         The Cash Manager may assign its rights under this Agreement to any
         successor Cash Manager under the Cash Management Agreement.

24.4     TRANSFERS BY THE FUNDING 1 LIQUIDITY FACILITY PROVIDER

(a)      The Funding 1 Liquidity Facility Provider (the "EXISTING FUNDING 1
         LIQUIDITY FACILITY PROVIDER") may, subject to PARAGRAPH (b) below, at
         any time assign, transfer or novate any of its rights and/or
         obligations under this Agreement to another Qualifying Lender with the
         Requisite Ratings (the "NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER")
         provided that the then current ratings of the Notes of an Issuer are
         not adversely affected thereby.

(b)      The prior written consent of Funding 1 and the Security Trustee is
         required for any such assignment, transfer or novation, unless a
         Funding 1 Liquidity Facility Default is outstanding in which case no
         consent is required from Funding 1. However, the prior written consent
         of Funding 1 and the Security Trustee must not be unreasonably withheld
         or delayed and will be deemed to have been given if, within 14 days of
         receipt by Funding 1 or the Security Trustee (as applicable) of an
         application for consent, it has not been expressly refused.

<PAGE>
                                       28

(c)      A transfer of obligations will be effective only if either:

         (i)      the obligations are novated in accordance with CLAUSE 24.5
                  (Procedure for novations); or

         (ii)     the New Funding 1 Liquidity Facility Provider confirms to the
                  Security Trustee and Funding 1 in writing that it undertakes
                  to be bound by the terms of this Agreement (including, without
                  limitation, the representations and warranties) to be made by
                  it in accordance with CLAUSE 14.2 (Representations and
                  warranties by the Funding 1 Liquidity Facility Provider) and
                  the Funding 1 Deed of Charge. On the transfer becoming
                  effective in this manner the Existing Funding 1 Liquidity
                  Facility Provider shall be relieved of its obligations under
                  this Agreement to the extent that they are transferred to the
                  New Funding 1 Liquidity Facility Provider.

(d)      Nothing in this Agreement restricts the ability of the Funding 1
         Liquidity Facility Provider to sub-contract an obligation if the
         Funding 1 Liquidity Facility Provider remains primarily liable under
         this Agreement for that obligation.

(e)      The Existing Funding 1 Liquidity Facility Provider is not responsible
         to a New Funding 1 Liquidity Facility Provider for:

         (i)      the execution, genuineness, validity, enforceability or
                  sufficiency of any Funding 1 Liquidity Document or any other
                  document;

         (ii)     the collectability of amounts payable under any Funding 1
                  Liquidity Document; or

         (iii)    the accuracy of any statements (whether written or oral) made
                  in or in connection with any Funding 1 Liquidity Document.

(f)      The New Funding 1 Liquidity Facility Provider confirms to the Existing
         Funding 1 Liquidity Facility Provider and the other Finance Parties
         that it:

         (i)      has made its own independent investigation and assessment of
                  the financial condition and affairs of each of Funding 1 and
                  its related entities in connection with its participation in
                  this Agreement and has not relied exclusively on any
                  information provided to it by the Existing Funding 1 Liquidity
                  Facility Provider in connection with any Funding 1 Liquidity
                  Document; and

         (ii)     will continue to make its own independent appraisal of the
                  creditworthiness of each of Funding 1 and its related entities
                  while any amount is or may be outstanding under this Agreement
                  or any Funding 1 Liquidity Facility Commitment is in force.

(g)      Nothing in any Funding 1 Liquidity Document obliges the Existing
         Funding 1 Liquidity Facility Provider to:

         (i)      accept a re-transfer from a New Funding 1 Liquidity Facility
                  Provider of the Funding 1 Liquidity Facility Commitment and/or
                  rights and/or obligations assigned, transferred or novated
                  under this Clause; or

         (ii)     support any losses incurred by the New Funding 1 Liquidity
                  Facility Provider by reason of the non-performance by Funding
                  1 of its obligations under this Agreement or otherwise.

<PAGE>
                                       29

(h)      Any reference in this Agreement to the Funding 1 Liquidity Facility
         Provider includes a New Funding 1 Liquidity Facility Provider.

24.5     PROCEDURE FOR NOVATIONS

(a)      A novation is effected if:

         (i)      the Existing Funding 1 Liquidity Facility Provider and the New
                  Funding 1 Liquidity Facility Provider deliver to the Security
                  Trustee a duly completed Novation Certificate, substantially
                  in the form of SCHEDULE 4; and

         (ii)     the Security Trustee executes such Novation Certificate.

(b)      To the extent that they are expressed to be the subject of the novation
         in the Novation Certificate:

         (i)      the Existing Funding 1 Liquidity Facility Provider and the
                  other Parties (the "EXISTING PARTIES") will be released from
                  their obligations to each other (the "DISCHARGED
                  OBLIGATIONS");

         (ii)     the New Funding 1 Liquidity Facility Provider and the Existing
                  Parties will assume obligations towards each other which
                  differ from the Discharged Obligations only insofar as they
                  are owed to or assumed by the New Funding 1 Liquidity Facility
                  Provider instead of the Existing Funding 1 Liquidity Facility
                  Provider;

         (iii)    the rights of the Existing Funding 1 Liquidity Facility
                  Provider against the Existing Parties and vice versa (the
                  "DISCHARGED RIGHTS") will be cancelled; and

         (iv)     the New Funding 1 Liquidity Facility Provider and the Existing
                  Parties will acquire rights against each other which differ
                  from the Discharged Rights only insofar as they are
                  exercisable by or against the New Funding 1 Liquidity Facility
                  Provider instead of the Existing Funding 1 Liquidity Facility
                  Provider,

         all on the date of execution of the Novation Certificate by the
         Security Trustee or, if later, the date specified in the Novation
         Certificate.

25.      DISCLOSURE OF INFORMATION

         The Funding 1 Liquidity Facility Provider may disclose to any person
         with whom it is proposing to enter, or has entered into, any kind of
         transfer, participation or other agreement in relation to this
         Agreement:

         (a)      a copy of any Funding 1 Liquidity Document; and

         (b)      any information which the Funding 1 Liquidity Facility
                  Provider has acquired under or in connection with any Funding
                  1 Liquidity Document,

         if that person undertakes to Funding 1 and the Security Trustee to keep
         the information confidential.

<PAGE>
                                       30

26.      SET-OFF

(a)      The Funding 1 Liquidity Facility Provider undertakes with Funding 1 and
         the Security Trustee not to exercise or claim any right of set-off or
         combination or consolidation of accounts in respect of any account of
         Funding 1 with the Funding 1 Liquidity Facility Provider and/or
         interest accruing on amounts in any such account or any part of such
         account in or towards, or conditionally upon satisfaction of any
         liabilities to the Funding 1 Liquidity Facility Provider of Funding 1
         or itself in any other capacity whatsoever or any other person.

(b)      In the event that the Funding 1 Liquidity Facility Provider (in breach
         of its undertaking in PARAGRAPH (a) above) exercises any right of
         set-off or combination or consolidation of accounts, the Funding 1
         Liquidity Facility Provider shall pay to Funding 1 such additional
         amount so that the net amount received by Funding 1 will equal the full
         amount which would have been received by it if the Funding 1 Liquidity
         Facility Provider had not exercised or claimed such right of set-off or
         combination or consolidation of accounts.

27.      SEVERABILITY

         If a provision of any Funding 1 Liquidity Document is or becomes
         illegal, invalid or unenforceable in any jurisdiction, that shall not
         affect:

         (a)      the legality, validity or enforceability in that jurisdiction
                  of any other provision of the Funding 1 Liquidity Documents;
                  or

         (b)      the legality, validity or enforceability in other
                  jurisdictions of that or any other provision of the Funding 1
                  Liquidity Documents.

28.      COUNTERPARTS

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

29.      NOTICES

29.1     GIVING OF NOTICES

         Any notice, communication or demand made under or in connection with
         this Agreement shall be in writing and shall be delivered personally,
         or by post, fax or cable to the addresses given in CLAUSE 29.2
         (Addresses) or at such other address as the recipient may have notified
         to the other party in writing. Proof of posting or despatch of any
         notice or communication shall be deemed to be proof of receipt:

         (a)      in the case of a letter, on the third business day after
                  posting; and

         (b)      in the case of a facsimile on the business day of despatch.

<PAGE>
                                       31

29.2     ADDRESSES FOR NOTICES

         The addresses referred to in this CLAUSE 29 (Notices) are as follows:

         (a)      in the case of Funding 1, to Permanent Funding (No. 1) Limited
                  at Blackwell House, Guildhall Yard, London EC2V 5AE (facsimile
                  number +44 (0) 20 7556 0975) for the attention of the
                  Secretary with a copy to HBOS Treasury Services plc, 33 Old
                  Broad Street, London EC2N 1HZ (facsimile no. +44 (0) 20 7574
                  8784) for the attention of Head of Capital Markets and
                  Securitisation;

         (b)      in the case of the Cash Manager, to Halifax plc at Trinity
                  Road, Halifax, West Yorkshire HX1 2RG (facsimile number +44
                  (0) 1422 391 777) for the attention of Mortgage Securitisation
                  Manager with a copy to HBOS Treasury Services plc, 33 Old
                  Broad Street, London EC2N 1HZ (facsimile no. +44 (0) 20 7574
                  8784) for the attention of Head of Capital Markets and
                  Securitisation;

         (c)      in the case of the Security Trustee, to:

                  (i)      State Street Bank and Trust Company, 225 Franklin
                           Street, Boston, Massachusetts 02110, (facsimile
                           number + 1 (617) 662 2919) for the attention of Mark
                           Nelson; and

                  (ii)     U.S. Bank National Association, 1 Federal Street, 3rd
                           Floor, Boston, Massachusetts 02110, (facsimile number
                           + 1 (617) 603 6638) for the attention of Corporate
                           Trust Services; and

         (d)      in the case of the Funding 1 Liquidity Facility Provider, to
                  JPMorgan Chase Bank, 125 London Wall, London EC2Y 5AJ
                  (facsimile no. +44 20 7777 5305/5311) for the attention of
                  European Loans,

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by any
         party to the others by written notice in accordance with the provisions
         of this CLAUSE 29.

30.      THIRD PARTY RIGHTS

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

31.      GOVERNING LAW

         This Agreement is governed by and construed in accordance with English
         law.

32.      SUBMISSION TO JURISDICTION

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

<PAGE>
                                       32

         courts are an inconvenient forum for the maintenance or hearing of such
         action or proceeding.

This Agreement has been entered into on the date stated at the beginning of this
Agreement.

<PAGE>
                                       33

                                   SCHEDULE 1

                         CONDITIONS PRECEDENT DOCUMENTS

1.       A copy of the memorandum and articles of association and certificate of
         incorporation of Funding 1.

2.       A copy of a resolution of the board of directors of Funding 1:

         (a)      approving the terms of, and the transactions contemplated by,
                  this Agreement and resolving that it execute this Agreement;

         (b)      authorising a specified person or persons to execute this
                  Agreement on its behalf; and

         (c)      authorising a specified person or persons, on its behalf, to
                  sign and/or despatch all other documents and notices to be
                  signed and/or despatched by it under or in connection with
                  this Agreement.

3.       A specimen of the signature of each person authorised by the resolution
         referred to in PARAGRAPH 2 above.

4.       A certificate of an authorised signatory of Funding 1 certifying that
         each copy document specified in this Schedule 1 is correct, complete
         and in full force and effect as at a date no earlier than the date of
         this Agreement.

5.       The  Transaction Documents.

6.       Confirmation from Sidley Austin Brown & Wood as legal counsel to the
         Security Trustee that they have received, on behalf of the Security
         Trustee, a transaction legal opinion from Allen & Overy.

<PAGE>
                                       34

                                   SCHEDULE 2

                 CALCULATION OF THE MANDATORY LIQUID ASSET COST

(a)      For the purposes of PARAGRAPH (a) of the definition of Mandatory Liquid
         Asset Cost, the Mandatory Liquid Asset Cost for a Funding 1 Liquidity
         Facility Loan for its Funding 1 Liquidity Facility Interest Period is
         the rate determined by the Funding 1 Liquidity Facility Provider
         (rounded upward, if necessary, to four decimal places) calculated in
         accordance with the following formulae:

         BY+S(Y-Z)+Fx(0.01)
         ------------------% per annum = Mandatory Liquid Asset Cost
             100-(B+S)

         where on the day of application of the formula:

         B        is the percentage of the Funding 1 Liquidity Facility
                  Provider's eligible liabilities (in excess of any stated
                  minimum) which the Bank of England requires the Funding 1
                  Liquidity Facility Provider to hold on a non-interest-bearing
                  deposit account in accordance with its cash ratio
                  requirements;

         Y        is the applicable LIBOR for that Funding 1 Liquidity Facility
                  Provider;

         S        is the percentage of the Funding 1 Liquidity Facility
                  Provider's eligible liabilities which the Bank of England
                  requires the Funding 1 Liquidity Facility Provider to place as
                  a special deposit;

         Z        is the lower of Y and the interest rate per annum paid by the
                  Bank of England on special deposits; and

         F        is the charge payable by the Funding 1 Liquidity Facility
                  Provider to the Financial Services Authority under the fees
                  rules (but, for this purpose, calculated by the Funding 1
                  Liquidity Facility Provider on a notional basis as being the
                  average of the fee tariffs within fee-block Category A1
                  (Deposit acceptors) of the fees rules, applying any applicable
                  discount and ignoring any minimum fee required under the fees
                  rules) and expressed in pounds per Pound Sterling1 million of
                  the tariff base of the Funding 1 Liquidity Facility Provider.

(b)      For the purposes of this Schedule 2:

         (i)      "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
                  meanings given to them at the time of application of the
                  formula by the Bank of England; and

         (ii)     "FEE BASE" means the then current rules on periodic fees in
                  the Supervision Manuel of the FSA Handbook; and

         (iii)    "TARIFF BASE" has the meaning given to it in the fees rules.

(c)      In the application of the formula, B, Y, S and Z are included in the
         formula as figures and not as percentages, e.g. if B = 0.5% and Y =
         15%, BY is calculated as 0.5 x 15. A negative result obtained by
         subtracting Z from Y is taken as zero.

<PAGE>
                                       35

(d)      (i)      Each formula is applied on the first day of the relevant
                  Funding 1 Liquidity Interest Period.

         (ii)     Each rate calculated in accordance with the formula is, if
                  necessary, rounded upward to four decimal places.

         (iii)    If the formula produces a negative percentage, the percentage
                  shall be taken as zero.

(e)      If the Funding 1 Liquidity Facility Provider determines, after
         consultation with the Issuer that a change in circumstances has
         rendered, or will render, the formula inappropriate, the Funding 1
         Liquidity Facility Provider shall notify the Issuer of the manner in
         which the Mandatory Liquidity Asset Cost will subsequently be
         calculated. The manner of calculation so notified by the Funding 1
         Liquidity Facility Provider shall, in the absence of manifest error, be
         binding on all the parties.

<PAGE>
                                       36

                                   SCHEDULE 3

                  FORM OF FUNDING 1 LIQUIDITY FACILITY REQUEST

To:      JPMorgan Chase Bank as Funding 1 Liquidity Facility Provider

Copy:    State Street Bank and Trust Company and U.S. Bank National Association
         (as Security Trustee)

From:    Permanent Funding (No. 1) Limited
                                                            Date:[             ]

                        PERMANENT FUNDING (NO. 1) LIMITED
        POUND STERLING[[O],000,000] FUNDING 1 LIQUIDITY FACILITY AGREEMENT
                 DATED 14TH JUNE, 2002 (AS AMENDED AND RESTATED)

1.       We wish to borrow [a Further][an Initial] Funding 1 Liquidity [Facility
         Drawing/Facility Stand-by Drawing] as follows:

         (a)      Funding 1 Liquidity Facility Drawdown Date: [           ]

         (b)      [Further/Initial Funding 1 Liquidity Facility/ Further/Initial
                  Funding 1 Liquidity Facility Stand-by Facility]*

         (c)      Amount: Pound Sterling[                          ]

         (d)      Payment Instructions: [                          ]**

         (e)      Term of Funding 1 Liquidity [Facility Drawing/Facility
                  Stand-by Drawing]: [          ]

2.       We confirm that each condition specified in CLAUSE 4.2 (Further
         conditions precedent) is satisfied on the date of this Funding 1
         Liquidity Facility Request.

3.       We confirm that the Funding 1 Liquidity Facility Drawing is to be used
         for one of the purposes specified in CLAUSE 3 (Purpose).

By:

PERMANENT FUNDING (NO. 1) LIMITED
Authorised Signatory

-----------------------------
*        delete as applicable

**       This will be the Funding 1 Liquidity Facility Stand-by Account if this
         is a Funding 1 Liquidity Facility Stand-by Drawing.

<PAGE>
                                       37

                                   SCHEDULE 4

                          FORM OF NOVATION CERTIFICATE

To:      [State Street Bank and Trust Company and U.S Bank National Association]
         (as Security Trustee)

From:    [THE EXISTING FUNDING 1 LIQUIDITY FACILITY PROVIDER] and
         [THE NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]    Date: [         ]

                        PERMANENT FUNDING (NO. 1) LIMITED
                  POUND STERLING[[O],000,000] FUNDING 1 LIQUIDITY
                    FACILITY AGREEMENT DATED 14TH JUNE, 2002

We refer to CLAUSE 24.5 (Procedure for novations).

1.       We JPMorgan Chase Bank (the "EXISTING FUNDING 1 LIQUIDITY FACILITY
         PROVIDER") and [ ] (the "NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER")
         agree to the Existing Funding 1 Liquidity Facility Provider and the New
         Funding 1 Liquidity Facility Provider novating all the Existing Funding
         1 Liquidity Facility Provider's FUNDING 1 LIQUIDITY Facility Commitment
         (or part) and/or rights and obligations referred to in the Schedule in
         accordance with CLAUSE 24.5 (Procedure for novations).

2.       The specified date for the purposes of CLAUSE 24.5(b) (Procedure for
         novations) is [date of novation].

3.       The New Funding 1 Liquidity Facility Provider makes the representations
         and warranties to be made by it in accordance with CLAUSE 14
         (Representations and warranties) as at [date of novation].

4.       The address for notices of the New Funding 1 Liquidity Facility
         Provider for the purposes of CLAUSE 29.2 (Addresses for notices) is set
         out in the Schedule.

5.       This Novation Certificate is governed by English law.

<PAGE>
                                       38

                                  THE SCHEDULE

                     FUNDING 1 LIQUIDITY FACILITY COMMITMENT
                    AND RIGHTS AND OBLIGATIONS TO BE NOVATED

                                                       [insert relevant details]

[NEW FUNDING 1 LIQUIDITY FACILITY PROVIDER]

[Address for notices]

[Existing Funding 1             [New Funding 1 Liquidity    [SECURITY TRUSTEE]
Liquidity Facility Provider]    Facility Provider]
By:                             By:                         By:

Date:                           Date:                       Date:

<PAGE>
                                       39

                                   SIGNATORIES

FUNDING 1

PERMANENT FUNDING (NO. 1) LIMITED

By:

FUNDING 1 LIQUIDITY FACILITY PROVIDER

JPMORGAN CHASE BANK

By:

CASH MANAGER

HALIFAX plc

By:

SECURITY TRUSTEE

STATE STREET BANK AND TRUST COMPANY

By:

U.S. BANK NATIONAL ASSOCIATION

By:

<PAGE>
                                       40

<PAGE>

                             DATED [6TH MARCH], 2003

                        PERMANENT FUNDING (NO. 1) LIMITED
                                  as Funding 1

                                     - and -

                               JPMORGAN CHASE BANK
                    as Funding 1 Liquidity Facility Provider

                                     - and -

                                   HALIFAX plc
                                 as Cash Manager

                                     - and -

                       STATE STREET BANK AND TRUST COMPANY
                                       and
                         U.S. BANK NATIONAL ASSOCIATION
                               as Security Trustee

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

           AMENDED AND RESTATED FUNDING 1 LIQUIDITY FACILITY AGREEMENT

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

                                 ALLEN & OVERY

<PAGE>

                                     London
                                  ICM:655946.3

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                                                     PAGE
------                                                                                                     ----
<S>      <C>                                                                                               <C>
1.       DEFINITIONS AND Interpretation.......................................................................1
2.       The Funding 1 Liquidity Facility.....................................................................2
3.       Purpose..............................................................................................4
4.       Conditions Precedent.................................................................................4
5.       Drawdown.............................................................................................5
6.       Repayment............................................................................................7
7.       Cancellation.........................................................................................8
8.       Interest............................................................................................10
9.       Payments............................................................................................12
10.      Taxes...............................................................................................12
11.      Market Disruption...................................................................................15
12.      Increased Costs.....................................................................................15
13.      Illegality..........................................................................................17
14.      Representations and Warranties......................................................................17
15.      Undertakings........................................................................................20
16.      Default.............................................................................................21
17.      Fees................................................................................................22
18.      Enforcement and subordination.......................................................................23
19.      Expenses............................................................................................24
20.      Stamp Duties........................................................................................25
21.      Indemnities.........................................................................................25
22.      Evidence and Calculations...........................................................................26
23.      Amendments and Waivers..............................................................................26
24.      Changes to the Parties..............................................................................27
25.      Disclosure of Information...........................................................................29
26.      Set-Off.............................................................................................30
27.      Severability........................................................................................30
28.      Counterparts........................................................................................30
29.      Notices.............................................................................................30
30.      third party rights..................................................................................31
31.      Governing Law.......................................................................................31
32.      Submission to Jurisdiction..........................................................................31

SCHEDULES

1.       Conditions Precedent Documents......................................................................33
2.       Calculation of the MLA Cost.........................................................................34
3.       Form of Liquidity Facility Request..................................................................36
4.       Form of Novation Certificate........................................................................37
SIGNATORIES..................................................................................................39
</TABLE><PAGE>
Draft: 25/02/03                                                   Exhibit 10.2.1

                                   FORM OF SERIES [1/2/4] CLASS [A/B/C] SCHEDULE

                                    SCHEDULE
                                     TO THE
                                MASTER AGREEMENT

                                dated as of [o]

between

(1)   [o] ("PARTY A");

(2)   PERMANENT FINANCING (NO. 2) PLC ("PARTY B"); and

(3)   STATE STREET BANK AND TRUST COMPANY (the "SECURITY TRUSTEE", which
      expression shall include its successors and assigns and which has agreed
      to become a party to this Agreement solely for the purpose of taking the
      benefit of Parts 5(b) and (l) and assuming the obligations under the final
      paragraph of Part 5(f) of the Schedule to this Agreement).

Part 1. TERMINATION PROVISIONS

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

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

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

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

(b)   "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.

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

                                       19
<PAGE>

(d)   The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will not
      apply to Party A and will not apply to Party B.

(e)   The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
      to Party A and will not apply to Party B.

(f)   PAYMENTS ON EARLY TERMINATION. For the purposes of Section 6(e) of this
      Agreement:-

      (i)   Market Quotation will apply.

      (ii)  The Second Method will apply.

(g)   "TERMINATION CURRENCY" means Sterling.

                                       20
<PAGE>

Part 2. TAX REPRESENTATIONS

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

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

(b)   PAYEE REPRESENTATIONS. For the purposes of Section 3(f) of the Agreement,
      Party A makes the representation specified below (the "ADDITIONAL TAX
      REPRESENTATION"):

      (i)   it is a party to each Transaction solely for the purposes of a trade
            (or part of a trade) carried on by it in the United Kingdom through
            a branch or agency; or

      (ii)  it is resident in the United Kingdom or in a jurisdiction with which
            the United Kingdom has a double tax treaty which makes provision,
            whether for relief or otherwise, in relation to interest.

(c)   ADDITIONAL TERMINATION EVENT. The Additional Tax Representation proves to
      have been incorrect or misleading in any material respect with respect to
      one or more Transactions (each an "AFFECTED TRANSACTION" for the purposes
      of this Additional Termination Event) when made or repeated or deemed to
      have been made or repeated. The Affected Party shall be Party A only.

                                       21
<PAGE>

Part 3.  AGREEMENT TO DELIVER DOCUMENTS

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

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

<TABLE>
<CAPTION>

      PARTY REQUIRED TO         FORM/DOCUMENT/         DATE BY WHICH TO BE DELIVERED
      DELIVER DOCUMENT          CERTIFICATE

<S>                             <C>                    <C>
                                None

</TABLE>

(b)   Other documents to be delivered are:

<TABLE>
<CAPTION>
      PARTY REQUIRED                                                          COVERED BY
      TO DELIVER         FORM/DOCUMENT/                 DATE BY WHICH         SECTION 3(D)
      DOCUMENT           CERTIFICATE                    TO BE DELIVERED       REPRESENTATION
<S>                     <C>                            <C>                   <C>
      Party A and        Appropriate                    On signing of         Yes
      Party B            evidence of                    this Agreement
                         its signatory's
                         authority

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

      Party A            Legal opinion[(s)]             On signing of         No
                         in form and substance          this Agreement
                         satisfactory to Party B

      Party B            Legal opinion from Allen &     On signing of         No
                         Overy                          this Agreement

      [Party A           The Credit Support             On signing of         Yes]1
                         Document in respect of Party   this Agreement
                         A
</TABLE>

------------------------------
1 AIG only

                                       22
<PAGE>

Part 4.  MISCELLANEOUS

(a)   ADDRESSES FOR NOTICES.

      Address for notices or communications to Party A:

      Address:       [o]

      Attention:     [o]

      Facsimile No.: [o]

      Address for notices or communications to Party B:

      Address:       Blackwell House
                     Guildhall Yard
                     London
                     EC2V 5AE

      Attention:     The Secretary

      Facsimile No.: 020 7566 0975

      With a copy to: (i) HBOS Treasury Services plc:

      Address:       33 Old Broad Street
                     London
                     EC2N 1HZ

      Attention:     Head of Capital Markets and Securitisation

      Facsimile No.: 020 7574 8784

                     (ii) the Security Trustee:

      Address:       1 Canada Square
                     Canary Wharf
                     London
                     E14 5AF

      Attention:     Corporate Trust

      Facsimile No.: 020 7416 2548

(b)   PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:

      Party A appoints as its Process Agent: [o]2/None

------------------------------
2 For CDC/JPMorgan

                                       23
<PAGE>

      Party B appoints as its Process Agent: None.

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

(d)   MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:

      Party A is not a Multibranch Party.

      Party B is not a Multibranch Party.

(e)   CALCULATION AGENT. The Calculation Agent is Party A.

(f)   CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:

      In respect of Party A: None.

      In respect of Party B: None.

(g)   CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
      Party A, none/[o]3.

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

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

(i)   NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
      will apply to Transactions entered into under this Agreement unless
      otherwise specified in a Confirmation.

(j)   "AFFILIATE" will have the meaning specified in Section 14 of this
      Agreement.

------------------------------
3 AIG only

                                       24
<PAGE>

Part 5.  OTHER PROVISIONS

(a)   NO SET-OFF

(i)   All payments under this Agreement shall be made without set-off or
      counterclaim, except as expressly provided for in Section 6.

(ii)  Section 6(e) shall be amended by the deletion of the following sentence:

      "The amount, if any, payable in respect of an Early Termination Date and
      determined pursuant to this Section will be subject to any Set-off."

(b)   SECURITY INTEREST

Notwithstanding Section 7, Party A hereby agrees and consents to the assignment
by way of security by Party B of its interests under this Agreement (without
prejudice to, and after giving effect to, any contractual netting provision
contained in this Agreement) to the Security Trustee (or any successor thereto)
pursuant to and in accordance with the Second Issuer Deed of Charge and
acknowledges notice of such assignment. Each of the parties hereby confirms and
agrees that the Security Trustee shall not be liable for any of the obligations
of Party B hereunder.

(c)   DISAPPLICATION OF CERTAIN EVENTS OF DEFAULT

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

Section 5(a)(vii)(8) will not apply to Party B to the extent that it applies to
Section 5(a)(vii)(2), (5),(6),(7) and (9).

(d)   DISAPPLICATION OF CERTAIN TERMINATION EVENTS

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

(e)   ADDITIONAL EVENT OF DEFAULT

The following shall constitute an additional Event of Default with respect to
Party B:

"ISSUER NOTE ACCELERATION NOTICE. The Security Trustee serves an Issuer Note
Acceleration Notice, as defined in Condition 9 of the Series [1/2/4] Class
[A/B/C] Second Issuer Notes, on Party B (which shall be the Defaulting Party)."

(f)   RATINGS EVENT

(i)   In the event that the long-term, unsecured and unsubordinated debt
      obligations of Party A (or its successor) [or any credit support provider
      from time to time in respect of Party A / the Credit Support Provider of
      Party A (or its successor)]4 cease to be rated at least as high as ["AA-"]
      by Standard & Poor's Rating Services, a division of The McGraw-Hill
      Companies Inc. ("S&P") and, as a result of such downgrading, the then
      current

------------------------------
4 Option 2 for AIG only

                                       25
<PAGE>

      rating of the Series [1/2/4] Class [A/B/C] Second Issuer Notes is
      downgraded or placed under review for possible downgrade by S&P (an "S&P
      RATING EVENT"), then Party A will, within 30 days of the occurrence of
      such Ratings Event at its own cost either:

      (A)   put in place an appropriate mark-to-market collateral agreement,
            (which may be based on the credit support documentation published by
            ISDA, or otherwise, and relates to collateral in the form of cash or
            securities or both) in support of Party A's obligations under this
            Agreement on terms satisfactory to the Security Trustee (whose
            consent shall be given if S&P confirms that the provision of such
            collateral would maintain the ratings of the Series [1/2/4] Class
            [A/B/C] Second Issuer Notes or restore the rating of the Series
            [1/2/4] Class [A/B/C] Second Issuer Notes by S&P to the level it
            would have been at immediately prior to such S&P Rating Event)
            provided that (x) Party A shall be deemed to have satisfied the
            requirements of S&P if the amount of collateral agreed to be
            provided in the form of cash and/or securities (the "COLLATERAL
            AMOUNT") is determined on a basis which is no more onerous than the
            criteria of S&P as at 30th September, 1999 which enables entities
            rated lower than a specified level to participate in structured
            finance transactions which, through collateralisation are rated at a
            higher level (as referred to, in part, in the article entitled New
            Interest Rate Currency Swap Criteria Broadens Allowable
            Counterparties in the January 1999 issue of S&P's Structured Finance
            Publication) (the "S&P CRITERIA") and (y) the Collateral Amount
            shall not be required to exceed such amount as would be required (in
            accordance with the S&P Criteria) to maintain or restore the rating
            of the Series [1/2/4] Class [A/B/C] Second Issuer Notes at or to the
            level they would have been at immediately prior to such S&P Rating
            Event;

      (B)   transfer all of its rights and obligations with respect of this
            Agreement to a replacement third party satisfactory to the Security
            Trustee (whose consent shall be given if S&P confirms that such
            transfer would maintain the ratings of the Series [1/2/4] Class
            [A/B/C] Second Issuer Notes by S&P at, or restore the rating of the
            Series [1/2/4] Class [A/B/C] Second Issuer Notes by S&P to, the
            level it would have been at immediately prior to such S&P Rating
            Event);

      (C)   obtain a guarantee of its rights and obligations with respect to
            this Agreement from a third party satisfactory to the Security
            Trustee (whose consent shall be given if S&P confirms that such
            guarantee would maintain the rating of the Series [1/2/4] Class
            [A/B/C] Second Issuer Notes at, or restore the rating of the Series
            [1/2/4] Class [A/B/C] Second Issuer Notes to, the level it would
            have been at immediately prior to such S&P Rating Event); or

      (D)   take such other action as Party A may agree with S&P as will result
            in the rating of the Series [1/2/4] Class [A/B/C] Second Issuer
            Notes following the taking of such action being maintained at, or
            restored to, the level it would have been at immediately prior to
            such S&P Rating Event.

      If any of (i)(B), (i)(C) or (i)(D) above are satisfied at any time all
      collateral (or the equivalent thereof, as appropriate) transferred by
      Party A pursuant to (i)(A) will be transferred to Party A and Party A will
      not be required to transfer any additional collateral.

(ii)  In the event that:

                                       26
<PAGE>

      (A)   the long-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) [or any credit support provider in
            respect of Party A / the Credit Support Provider of Party A (or its
            successor)]5, ceases to be rated at least as high as ["A1"] (or its
            equivalent) by Moody's; or

      (B)   [the short-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) or any credit support provider in respect
            of Party A cease to be rated at least as high as ["Prime-1"] (or its
            equivalent) by Moody's,]6

      (such cessation being an "INITIAL MOODY'S RATING EVENT"), then Party A
      will, within 30 days of the occurrence of such Initial Moody's Rating
      Event, at its own cost either:

      (1)   transfer all of its rights and obligations with respect to this
            Agreement to either (x) a replacement third party with the Required
            Ratings (as defined below) domiciled in the same legal jurisdiction
            as Party A or Party B, or (y) a replacement third party as agreed
            with Moody's;

      (2)   procure another person to become co-obligor in respect of the
            obligations of Party A under this Agreement, such co-obligor may be
            either (x) a person with the Required Ratings (as defined below)
            domiciled in the same legal jurisdiction as Party A or Party B, or
            (y) such other person as agreed with Moody's;

      (3)   take such other action as agreed with Moody's; or[/and

      (4)   pending compliance with (ii)(1), (ii)(2) or (ii)(3),]7 put in place
            a mark-to-market collateral agreement in a form and substance
            acceptable to Moody's (which may be based on the credit support
            documentation published by ISDA, or otherwise, and relates to
            collateral in the form of cash or securities or both) in support of
            its obligations under this Agreement which complies with the Moody's
            Criteria (as defined below) or such other amount as may be agreed
            with Moody's.

      If any of (ii)(1), (ii)(2) or (ii)(3) above are satisfied at any time, all
      collateral (or the equivalent thereof, as appropriate) transferred by
      Party A pursuant to (ii)(4) will be transferred to Party A and Party A
      will not be required to transfer any additional collateral.

(iii) In the event that:

      (A)   the long-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) [or any credit support provider in
            respect of Party A / the Credit Support Provider of Party A (or its
            successor)]8 cease to be rated as high as ["A3/Baa2"]9 (or its
            equivalent) by Moody's; or

-----------------------------
5 Option 2 for AIG only
6 Delete if Party A is AIG
7 Delete if use "best efforts" in (f)(iii)(1) and (f)(v)(C) below
8 Option 2 for AIG only
9 Use A3 if use "reasonable efforts" and Baa2 if use "best efforts" in
  (f)(iii)(1) and (f)(v)(C) below

                                       27
<PAGE>

      (B)   [the short-term, unsecured and unsubordinated debt obligations of
            Party A (or its successor) or any credit support provider in respect
            of Party A cease to be rated as high as ["Prime-2"] (or its
            equivalent) by Moody's,]10

      (such cessation being a "SUBSEQUENT MOODY'S RATING EVENT"), then Party A
      will:

      (1)   within 30 days of the occurrence of such Subsequent Moody's Rating
            Event on a [reasonable/best] efforts basis, and at its own cost,
            attempt either to:

            (aa)  transfer all of its rights and obligations with respect to
                  this Agreement to either (x) a replacement third party with
                  the Required Ratings (as defined below) domiciled in the same
                  legal jurisdiction as Party A or Party B, or (y) a replacement
                  third party as agreed with Moody's;

            (bb)  procure another person to become co-obligor in respect of the
                  obligations of Party A under this Agreement, such co-obligor
                  may be either (x) a person with the Required Ratings (as
                  defined below) domiciled in the same legal jurisdiction as
                  Party A or Party B, or (y) such other person as agreed with
                  Moody's; or

            (cc)  take such other action agreed with Moody's; and

      (2)   within 10 days of the occurrence of such Subsequent Moody's Rating
            Event, put in place at its own cost pending compliance with
            (iii)(1)(aa), (iii)(1)(bb) or (iii)(1)(cc) above a mark-to-market
            collateral agreement in a form and substance acceptable to Moody's
            (which may be based on the credit support documentation published by
            ISDA, or otherwise, and relates to collateral in the form of cash or
            securities or both) in support of its obligations under this
            Agreement which complies with the Moody's Criteria (as defined
            below) or such other amount as may be agreed with Moody's.

      If any of (iii)(1)(aa), (bb) or (cc) are satisfied at any time, all
      collateral (or the equivalent thereof, as appropriate) transferred by
      Party A pursuant to (iii)(2) will be transferred to Party A and Party A
      will not be required to transfer any additional collateral.

For the purposes of (ii) and (iii), "REQUIRED RATINGS" means, in respect of the
relevant entity, [its short-term, unsecured and unsubordinated debt obligations
are rated at least as high as "Prime-1" and]11 its long-term, unsecured and
unsubordinated debt obligations are rated at least as high as "A2", or such
other ratings as may be agreed with Moody's from time to time.

"MOODY'S CRITERIA" means that the Collateral Amount shall equal the sum of (a)
the product of A multiplied by the mark-to-market value of the outstanding
Transactions as determined by Party A in good faith on each Local Business Day
and (b) the product of B multiplied by the current aggregate notional amounts of
the outstanding Transactions, where:

(w)   "A" means [102%] and "B" means [0%] if the long-term, unsecured and
      unsubordinated debt obligations [or the short-term, unsecured and
      unsubordinated debt obligations]12 of Party A (or its successor) [or any
      credit support provider of Party A /

-----------------------------
10 Delete if Party A is AIG
11 Delete if Party A is AIG
12 Delete if Party A is AIG

                                       28
<PAGE>

      Party A's Credit Support Provider (or its successor)]13, is downgraded
      below ["A1"] [or ["Prime-1"]]14 by Moody's;

(x)   "A" means [102%] and "B" means [2.0%] if the long-term, unsecured and
      unsubordinated debt obligations of Party A (or its successor) [or any
      credit support provider of Party A / Party A's Credit Support Provider (or
      its successor)]15 is downgraded below ["A2"] by Moody's;

(y)   "A" shall be equal to or greater than [102%] [(as determined by
      Moody's)]16 and "B" shall be equal to or greater than [3%/5% (as
      determined by Moody's)]17 if the long-term unsecured and unsubordinated
      debt obligations [or the short term, unsecured and unsubordinated debt
      obligations]18 of Party A (or its successor) [or any credit support
      provider of Party A / Party A's Credit Support Provider (or its
      successor)]19, is downgraded below ["Baa2"] [or ["Prime-2"]]20 by Moody's;
      and

(z)   "A" means 0% and "B" means 0% in all other cases.

      In relation to paragraphs (ii)(4) and (iii)(2) above, Party A will, upon
      receipt of reasonable notice from Moody's demonstrate to Moody's the
      calculation by Party A of the mark-to-market value of the outstanding
      Transactions. In relation to paragraph (iii)(2) above, Party A will, at
      its own cost, on receipt of reasonable notice from Moody's (which, for the
      avoidance of doubt, will be no less than 30 days) arrange a third party
      valuation of the mark-to-market value of the outstanding Transactions.

(iv)  In the event that the long-term, unsecured and unsubordinated debt
      obligations of Party A (or its successor) [or any credit support provider
      from time to time in respect of Party A / the Credit Support Provider of
      Party A (or its successor)]21 cease to be rated at least as high as F1+
      (or its equivalent) by Fitch Ratings Ltd ("Fitch") and as a result of such
      downgrading, the then current rating of the Series [1/2/4] Class [A/B/C]
      Second Issuer Notes is downgraded or placed under review for possible
      downgrade by Fitch (a "Fitch Rating Event") then Party A will, on a
      reasonable efforts basis within 30 days of the occurrence of such Fitch
      Rating Event, at its own cost, either:

      (A)   put in place an appropriate mark-to-market collateral agreement,
            (which may be based on the credit support documentation published by
            ISDA, or otherwise, and relates to collateral in the form of cash or
            securities or both to be posted on a weekly basis) in support of
            Party A's obligations under this Agreement provided that (x) Party A
            shall be deemed to have satisfied the requirements of Fitch if the
            Collateral Amount is determined on a basis which is no more onerous
            than the Fitch Criteria (defined below), and (y) the Collateral
            Amount shall not be required to exceed such amount as would be
            required (in accordance with the Fitch Criteria) to maintain the
            rating of the Series [1/2/4] Class [A/B/C] Second Issuer Notes at
            the level at which they were immediately prior to such Fitch Rating
            Event;

----------------------------------
13 Option 2 for AIG only
14 Delete if Party A is AIG
15 Option 2 for AIG only
16 Moody's discretion to be deleted for Aaa issuer swap providers subject to
   footnote 17
17 Moody's discretion to be deleted for Aaa issuer swap providers, however "B"
   shall equal 5%
18 Delete if Party A is AIG
19 Option 2 for AIG only
20 Delete if Party A is AIG
21 Option 2 for AIG only

                                       29
<PAGE>

      (B)   transfer all of its rights and obligations with respect of this
            Agreement to a replacement third party satisfactory to the Security
            Trustee (whose consent shall be given if Fitch confirms that such
            transfer would maintain the ratings of the Series [1/2/4] Class
            [A/B/C] Second Issuer Notes by Fitch at, or restore the rating of
            the Series [1/2/4] Class [A/B/C] Second Issuer Notes by Fitch to,
            the level it would have been at immediately prior to such Fitch
            Rating Event);

      (C)   obtain a guarantee of its rights and obligations with respect to
            this Agreement from a third party satisfactory to the Security
            Trustee (whose consent shall be given if Fitch confirms that such
            guarantee would maintain the rating of the Series [1/2/4] Class
            [A/B/C] Second Issuer Notes at, or restore the rating of the Series
            [1/2/4] Class [A/B/C] Second Issuer Notes to, the level it would
            have been at immediately prior to such Fitch Rating Event); or

      (D)   take such other action as Party A may agree with Fitch as will
            result in the rating of the Series [1/2/4] Class [A/B/C] Second
            Issuer Notes following the taking of such action being maintained
            at, or restored to, the level it would have been at immediately
            prior to such Fitch Rating Event.

      "FITCH CRITERIA" means that the Collateral Amount shall equal the sum of
      (a) the product of A multiplied by the mark-to-market value of the
      outstanding Transactions as determined by Party A in good faith on a
      weekly basis and (b) the product of B multiplied by the current aggregate
      notional amounts of the outstanding Transactions, where "A" means [100]%
      and "B" means [o]%.

(v)   (A)   If Party A does not take any of the measures described in
            paragraph (i) above, such failure shall not be or give rise to an
            Event of Default but shall constitute an Additional Termination
            Event with respect to Party A which shall be deemed to have occurred
            on the thirtieth day following the S&P Rating Event with Party A as
            the sole Affected Party and all Transactions as Affected
            Transactions.

      (B)   If Party A does not take any of the measures described in (ii)(1),
            (2), (3) or (4) above, such failure shall not be or give rise to an
            Event of Default but shall constitute an Additional Termination
            Event with respect to Party A and shall be deemed to have occurred
            on the thirtieth day following the occurrence of such Initial
            Moody's Rating Event with Party A as the sole Affected Party and all
            Transactions as Affected Transactions.

      (C)   If Party A does not take the measures described in (iii)(2) above,
            such failure shall give rise to an Event of Default with respect to
            Party A and shall be deemed to have occurred on the thirtieth day
            following such Subsequent Moody's Rating Event with Party A as the
            Defaulting Party. Further, notwithstanding, Section 5(a)(ii) of this
            Agreement, if 10 days after receiving notice of failure to use its
            [reasonable/best] efforts either to transfer as described in
            (iii)(1)(aa), find a co-obligator as described in (iii)(1)(bb) or
            take such other action as described in (iii)(1)(cc), Party A still
            has not used [reasonable/best] efforts to take one of the above
            courses of action, this shall not constitute an Event of Default but
            shall be an Additional Termination Event with Party A as the sole
            Affected Party and all Transactions as Affected Transactions.

22   B will be determined according to the maturity of the relevant note. In
relation to the non-bullet notes, B will equal 3.5% (notes mature in over 15
years).
In relation to the bullet notes, the following values will apply:

<Table>
<S>                 <C>
                    Value for B
Series 1 Class A    0.75% (notes mature in under 5 years)
Series 2 Class A    0.75% (notes mature in under 5 years)
Series 4 Class A    1.25% (notes mature in over 5 years but under 10 years)
</Table>

                                       30
<PAGE>

      (D)   If Party A does not take the measures described in paragraph (iv)
            above, such failure shall not be or give rise to an Event of Default
            but shall constitute an Additional Termination Event with respect to
            Party A which shall be deemed to have occurred on the thirtieth day
            following the Fitch Rating Event with Party A as the sole Affected
            Party and all Transactions as Affected Transactions.

      (E)   In the event that Party B were to designate an Early Termination
            Date and there would be a payment due to Party A, Party B may only
            designate such an Early Termination Date in respect of an Additional
            Termination Event under this Part 5(e) if Party B has found a
            replacement counterparty willing to enter into a new transaction on
            terms that reflect as closely as reasonably possible the economic,
            legal and credit terms of the Terminated Transactions with Party A.

Each of Party B and the Security Trustee shall use their reasonable endeavours
to co-operate with Party A in putting in place such credit support
documentation, including agreeing to such arrangements in such documentation as
may satisfy S&P, Moody's and / or Fitch, as applicable, with respect to the
operation and management of the collateral and entering into such documents as
may reasonably be requested by Party A in connection with the provision of such
collateral.

(g)   TRANSFER POLICY

Section 7 shall not apply to Party A, who shall be required to comply with, and
shall be bound by, the following:

Without prejudice to Section 6(b)(ii) as amended in the Schedule, Party A may
transfer all (but not part only) of its interests and obligations in and under
this Agreement to any of its Affiliates (a "Transferee") upon providing five
Business Days' prior written notice to the Note Trustees, provided that:

(i)   the Transferee is rated at least AA- by S&P, Aa3 by Moody's and F1+ by
      Fitch, or its performance under the Agreement and related Transactions
      will be guaranteed in full by Party A;

(ii)  the Ratings Agencies have confirmed that the transfer will not result in
      the then current rating of the Series [1/2/4] Class [A/B/C] Second Issuer
      Notes being downgraded;

(iii) the Transferee will not, as a result of such transfer, be required on the
      next succeeding Scheduled Payment Date to withhold or deduct on account of
      any Tax (except in respect of default interest) amounts in excess of that
      which Party A would, on the next succeeding Scheduled Payment Date have
      been required to so withhold or deduct unless the Transferee would be
      required to make additional payments pursuant to Section 2(d)(i)(4)
      corresponding to such excess;

(iv)  a Termination Event or Event of Default does not occur as a result of such
      transfer;

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

(vi)  the Transferee confirms in writing that it will accept all of the
      interests and obligations in and under this Agreement which are to be
      transferred to it in accordance with the terms of this provision.

                                       31
<PAGE>

With respect to (iii) above, each party agrees to make such Payee Tax
Representations and Payer Tax Representations as may reasonably be requested by
the other party in order to reasonably satisfy such other party that such
withholding or deduction will not occur."

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

(h)   ADDITIONAL REPRESENTATION

Section 3 is amended by the addition at the end thereof of the following
additional representations:

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

(ii)  The following additional representation shall be given by Party A only:

      "(h) PARI PASSU. Its obligations under this Agreement rank pari passu with
      all of its other unsecured, unsubordinated obligations except those
      obligations preferred by operation of law."

(i)   RECORDING OF CONVERSATIONS

Each party to this Agreement acknowledges and agrees to the tape recording of
conversations between the parties to this Agreement whether by one or other or
both of the parties.

(j)   RELATIONSHIP BETWEEN THE PARTIES

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

"15.  RELATIONSHIP BETWEEN THE PARTIES

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

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

(b)   ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of and
      understanding (through independent professional advice), and understands
      and accepts, the terms, conditions and risks of that Transaction. It is
      also capable of assuming, and assumes, the financial and other risks of
      that Transaction.

                                       32
<PAGE>

(c)   STATUS OF PARTIES. The other party is not acting as a fiduciary or an
      adviser for it in respect of that Transaction."

(k)   TAX

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

"(d)  Deduction or Withholding for Tax

(i)   Requirement to Withhold

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

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

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

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

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

(ii)  Liability

      If:

      (1)   X is required by any applicable law, as modified by the practice of
            any relevant governmental revenue authority, to make any deduction
            or withholding for or on account of any Tax; and

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

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

      then, except to the extent that Y has satisfied or then satisfies the
      liability resulting from such Tax, (A) where X is Party B, Party A will
      promptly pay to Party B the amount of such liability (the "Liability
      Amount") (including any related liability for interest and together with
      an amount equal to the Tax payable by Party B on receipt of

                                       33
<PAGE>

      such amount but including any related liability for penalties only if
      Party A has failed to comply with or perform any agreement contained in
      Section 4(a)(i), 4(a)(iii) or 4(d)) and Party B will promptly pay to the
      relevant government revenue authority the amount of such liability
      (including any related liability for interest and penalties) and (B) where
      X is Party A and Party A would have been required to pay a Gross Up Amount
      to Party B, Party A will promptly pay to the relevant government revenue
      authority the amount of such liability (including any related liability
      for interest and penalties).

(iii) Tax Credit etc.

      Where Party A pays an amount in accordance with Section 2(d)(i)(4) above,
      Party B undertakes as follows:

      (1)   to the extent that Party B obtains any Tax credit, allowance,
            set-off or repayment from the tax authorities of any jurisdiction
            relating to any deduction or withholding giving rise to such payment
            (a "Tax Credit"), it shall pay to Party A as soon as practical after
            receipt of the same so much of the cash benefit (as calculated
            below) relating thereto which it has received as will leave Party B
            in substantially the same (but in any event no worse) position as
            Party B would have been in if no such deduction or withholding had
            been required;

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

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

      (4)   it will ensure that any Tax Credit obtained is paid directly to
            Party A, and not applied in whole or part to pay any other Issuer
            Secured Creditor or any other party, both prior to and subsequent to
            any enforcement of the security constituted by the Second Issuer
            Deed of Charge."

(l)   SECURITY, ENFORCEMENT AND LIMITED RECOURSE

(i)   Party A agrees with Party B and the Security Trustee to be bound by the
      terms of the Second Issuer Deed of Charge and, in particular, confirms
      that: (A) no sum shall be payable by or on behalf of Party B to it except
      in accordance with the provisions of the Second Issuer Deed of Charge; and
      (B) it will not take any steps for the winding up, dissolution or
      reorganisation or for the appointment of a receiver, administrator,
      administrative receiver, trustee, liquidator, sequestrator or similar
      officer of Party B or of any or all of its revenues and assets nor
      participate in any ex parte proceedings nor seek to enforce any judgment
      against Party B, subject to the provisions of the Second Issuer Deed of
      Charge.

                                       34
<PAGE>

(ii)  In relation to all sums due and payable by Party B to Party A, Party A
      agrees that it shall have recourse only to Second Issuer Available Funds,
      but always subject to the order of priority of payments set out in the
      Second Issuer Cash Management Agreement and the Second Issuer Deed of
      Charge.

(m)   CONDITION PRECEDENT

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

(n)   REPRESENTATIONS

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

(o)   ADDITIONAL DEFINITIONS

Words and expressions defined in the Amended and Restated Master Definitions and
Construction Schedule (the "MASTER SCHEDULE") and the Second Issuer Master
Definitions and Construction Schedule (the "ISSUER SCHEDULE") (together the
"MASTER DEFINITIONS SCHEDULE") signed for the purposes of identification on [o]
shall, except so far as the context otherwise requires, have the same meaning in
this Agreement. In the event of any inconsistency between the definitions in
this Agreement and in the Master Definitions Schedule the definitions in this
Agreement shall prevail. In the event of any inconsistency between the Master
Schedule and the Issuer Schedule, the Issuer Schedule shall prevail. The rules
of interpretation set out in the Master Definitions Schedule shall apply to this
Agreement.

(p)   CHANGE OF ACCOUNT

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

"; provided that such new account shall be in the same tax jurisdiction as the
original account and such new account, in the case of Party B, is held with a
financial institution with a short term unsecured, unsubordinated and
unguaranteed debt obligation rating of at least P-1 (in the case of Moody's),
A-1+ (in the case of S&P) and F1+ (in the case of Fitch)."

(q)   MODIFICATIONS TO CLOSE OUT PROVISIONS

Upon the occurrence of an Event of Default or an Additional Termination Event
with respect to Party A, Party B will be entitled (but not obliged in the event
that it does not designate an Early Termination Date) to proceed in accordance
with Section 6 of the Agreement subject to the following:

(i)   For the purposes of Section 6(d)(i), Party B's obligation with respect to
      the extent of information to be provided with its calculations is limited
      to information Party B has already received in writing and provided Party
      B is able to release this information without breaching the provisions of
      any law applicable to, or any contractual restriction binding upon, Party
      B.

(ii)  The following amendments shall be deemed to be made to the definition of
      "Market Quotation":

                                       35
<PAGE>

      (A)   the word "firm" shall be added before the word "quotations" in the
            second line; and

      (B)   the words "provided that the documentation relating thereto is
            either the same as this Agreement and the existing confirmations
            hereto (and the long term unsecured and unsubordinated debt
            obligations of the Reference Market-maker is rated not less than
            "AA-" by S&P, "A1" by Moody's and "F1+" by Fitch (or, if such
            Reference Market-maker is not rated by a Rating Agency, at such
            equivalent rating that is acceptable to such Rating Agency) or the
            Rating Agencies have confirmed in writing such proposed
            documentation will not adversely impact the ratings of the Notes"
            shall be added after "agree" in the sixteenth line; and

      (C)   the last sentence shall be deleted and replaced with the following:

            "If, on the last date set for delivery of quotations, exactly two
            quotations are provided, the Market Quotation will be either (a) the
            lower of the two quotations where there would be a sum payable by
            Party A to Party B, or (b) the higher of the two quotations where
            there would be a sum payable by Party B to Party A. If only one
            quotation is provided on such date, Party B must accept such
            quotation as the Market Quotation. If no quotation has been
            provided, it will be deemed that the Market Quotation in respect of
            the Terminated Transaction cannot be determined."

(iii) For the purpose of the definition of "Market Quotation", and without
      limitation of the general rights of Party B under the Agreement:

      (A)   Party B will undertake to use its reasonable efforts to obtain at
            least three firm quotations as soon as reasonably practicable after
            the Early Termination Date and in any event within the time period
            specified pursuant to Part 5(q)(iii)(C) below;

      (B)   Party A shall, for the purposes of Section 6(e), be permitted to
            obtain on behalf of Party B quotations from Reference Market-makers;

      (C)   If no quotations have been obtained within 6 Local Business Days
            after the occurrence of the Early Termination Date or such longer
            period as Party B may specify in writing to Party A, then it will be
            deemed that the Market Quotation in respect of the Terminated
            Transaction cannot be determined;

      (D)   Party B will be deemed to have discharged its obligations under Part
            5(q)(iii)(A) above if it promptly requests, in writing, Party A
            (such request to be made within two Local Business Days after the
            occurrence of the Early Termination Date) to obtain on behalf of
            Party B quotations from Reference Market-makers and Party A agrees
            to act in accordance with such request; and

      (E)   Party B will not be obliged to consult with Party A as to the day
            and time of obtaining any quotations.

                                       36

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