Document:

Exhibit 4.6

 

THIS FIRST ISSUER TRUST DEED is made on 14th June, 2002

 

BETWEEN:

 

(1)                                  PERMANENT
FINANCING (NO. 1) PLC (registered number 4416192)
whose registered office is at Blackwell House, Guildhall Yard, London EC2V 5AE
(the “First
Issuer”); and

 

(2)                                  STATE
STREET BANK AND TRUST COMPANY,  a Massachusetts trust
company organised under the Commonwealth of Massachusetts of the United State
of Americawith a branch office at 1 Canada Square, London E14 5AF (acting in
its capacity as Note Trustee) as trustee for the Noteholders.

 

WHEREAS:

 

(1)                                  By a resolution of a duly authorised Board of Directors of the First
Issuer passed on 12th June, 2002 the First Issuer has resolved to issue the
First Issuer Notes  which are
constituted by this Deed and secured by the First Issuer Deed of Charge.

 

(2)                                  The Note Trustee has agreed to act as trustee of these presents for
the benefit of the Noteholders upon and subject to the terms and conditions of
these presents.

 

NOW THIS FIRST ISSUER TRUST DEED WITNESSES AND IT IS
AGREED AND DECLARED:

 

1.                                      DEFINITIONS

 

(A)                              The Master Definitions and Construction Schedule and the First
Issuer Master Definitions and Construction Schedule, both signed for the
purposes of identification by Allen & Overy and Sidley Austin Brown &
Wood on 13th June, 2002 (as the same may be amended, varied or supplemented
from time to time with the consent of the parties hereto) are expressly and
specifically incorporated into this Deed and, accordingly, the expressions
defined in the  Master Definitions and
Construction Schedule and the First Issuer Master Definitions and
Construction Schedule (as so amended, varied or supplemented) shall,
except where the context otherwise requires and save where otherwise defined
herein, have the same meanings in this Deed. 
In the event of a conflict between the Master Definitions and
Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, the First Issuer Master Definitions Schedule shall
prevail.

 

(B)                                (i)                                     All references in these presents to principal and/or premium and/or
interest in respect of the First Issuer Notes or to any monies payable by the
First Issuer under these presents shall be deemed to include a reference to any
additional amounts which may be payable under Condition 4(B) or, if applicable,
under any undertaking or covenant given pursuant to Clause 2(B).

 

(ii)                                  All references in these presents to “£”, “sterling” or “pounds
sterling”
shall be construed as references to the lawful currency or currency unit for
the time being of the United Kingdom. 
All references to “€”, “EUR”, “euro” or “Euro” shall be construed as
references to the single currency introduced at the third stage of European
Economic and Monetary Union pursuant to the Treaty establishing the European
Communities as amended from time to time. All references to “$”,
“US$”
or “US
dollars” shall be construed as references to the lawful currency or
currency unit for the time being of the United States of America.

 

 

(iii)                               All references in this Deed to “these presents” means this Deed, the
schedules hereto, the First Issuer Notes, the Conditions, any deed expressed to
be supplemental hereto or thereto and the First Issuer Deed of Charge and the
schedules thereto, all as from time to time supplemented or modified in
accordance with the provisions contained in this Deed and/or where applicable,
therein contained.

 

(iv)                              All references in these presents to guarantees or to an obligation
being guaranteed shall be deemed to include respectively references to
indemnities or to an indemnity being given in respect thereof.

 

(v)                                 All references in these presents to any action, remedy or method of
proceeding for the enforcement of the rights of creditors shall be deemed to
include, in respect of any jurisdiction other than England, references to such
action, remedy or method of proceeding for the enforcement of the rights of
creditors available or appropriate in such jurisdiction as shall most nearly
approximate to such action, remedy or method of proceeding described or
referred to in these presents.

 

(vi)                              All references in these presents to taking proceedings against the
First Issuer shall be deemed to include references to proving in the winding up
of the First Issuer.

 

(vii)                           All references in these presents to DTC, Euroclear and Clearstream,
Luxembourg, shall be deemed to include references to any other or additional
clearing system as may be approved in writing by the Note Trustee.

 

(viii)                        Unless the context otherwise requires words or expressions used in
these presents shall bear the same meanings as in the Companies Act 1985
of England.

 

(ix)                                Whenever this Deed refers to a provision of the Trust Indenture Act,
the provision is incorporated by reference in and made part of this Deed.  All other Trust Indenture Act terms used in
this Deed that are defined by the Trust Indenture Act, defined in the Trust
Indenture Act by reference to another statute or defined by SEC rule have the
meanings assigned to them in the Trust Indenture Act.

 

2.                                      COVENANT TO REPAY AND TO PAY
INTEREST ON FIRST ISSUER NOTES

 

(A)                              The aggregate principal amount of:

 

(i)                                     the Series 1 Class A First Issuer Notes is limited to
US$750,000,000;

 

(ii)                                  the Series 1 Class B First Issuer Notes is limited to US$26,000,000;

 

(iii)                               the Series 1 Class C First Issuer Notes is limited to US$26,000,000;

 

(iv)                              the Series 2 Class A First Issuer Notes is limited to
US$750,000,000;

 

(v)                                 the Series 2 Class B First Issuer Notes is limited to US$26,000,000;

 

(vi)                              the Series 2 Class C First Issuer Notes is limited to US$26,000,000;

 

(vii)                           the Series 3 Class A First Issuer Notes is limited to
US$1,100,000,000;

 

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(viii)                        the Series 3 Class B First Issuer Notes is limited to US$38,500,000;

 

(ix)                                the Series 3 Class C First Issuer Notes is limited to US$38,500,000;

 

(x)                                   the Series 4 Class A1 First Issuer Notes is limited to €750,000,000;

 

(xi)                                the Series 4 Class A2 First Issuer Notes is limited to
£1,000,000,000;

 

(xii)                             the Series 4 Class B First Issuer Notes is limited to £52,000,000;
and

 

(xiii)                          the Series 4 Class C First Issuer Notes is limited to £52,000,000.

 

(B)                                The First Issuer covenants with the Note Trustee that it will, in
accordance with these presents, on the due date for the final maturity of the
First Issuer Notes provided for in the Conditions, or on such earlier date as
the same or any part thereof may become due and repayable thereunder, pay or
procure to be paid unconditionally to or to the order of the Note Trustee in
euro, US dollars or sterling as applicable, in London or New York City, as
applicable, in immediately available funds the principal amount of the First
Issuer Notes repayable on that date and shall in the meantime and until the due
date for the final maturity of the First Issuer Notes (both before and after
any judgment or other order of a court of competent jurisdiction) pay or
procure to be paid unconditionally to or to the order of the Note Trustee as
aforesaid interest (which shall accrue from day to day) on the Principal Amount
Outstanding of the First Issuer Notes at the rates set out in or (as the case
may be) calculated from time to time in accordance with Condition 4 and on the
dates provided for in the Conditions PROVIDED THAT:

 

(i)                                     every payment of principal or interest in respect of the First
Issuer Notes to or to the account of the Principal Paying Agent, in the manner
provided in the First Issuer Paying Agent and Agent Bank Agreement, shall
operate in satisfaction pro tanto of the relative covenant by the
First Issuer in this Clause except to the extent that there is default in the
subsequent payment thereof in accordance with the Conditions to the
Noteholders;

 

(ii)                                  in any case where payment of principal is not made to the Note
Trustee or the Principal Paying Agent on or before the due date, interest shall
continue to accrue on the principal amount of the First Issuer Notes and shall
accrue on such premium (both before and after any judgment or other order of a
court of competent jurisdiction) at the rates aforesaid (or, if higher, the
rate of interest on judgment debts for the time being provided by English law)
up to and including the date which the Note Trustee determines to be the date
on and after which payment is to be made to the Noteholders in respect thereof
as stated in a notice given to the Noteholders in accordance with Condition 14
(such date to be not later than 30 days after the day on which the whole
of such principal amount and premium (if any), together with an amount equal to
the interest which has accrued and is to accrue pursuant to this proviso up to
and including that date, has been received by the Note Trustee or the Principal
Paying Agent;

 

(iii)                               in any case where payment of the whole or any part of the principal
amount of any First Issuer Note is improperly withheld or refused upon due presentation
thereof (other than in circumstances contemplated by
proviso (ii) above) interest shall accrue

 

3

 

on that
principal amount or premium payment of which has been so withheld or refused
(both before and after any judgment or other order of a court of competent
jurisdiction) at the rates aforesaid (or, if higher, the rate of interest on
judgment debts for the time being provided by English law) from and including
the date of such withholding or refusal up to and including the date on which,
upon further presentation of the relevant First Issuer Note, payment of the
full amount (including interest as aforesaid) in euro, US dollars or sterling,
as applicable, payable in respect of such First Issuer Note is made or (if
earlier) the seventh day after notice is given to the relevant Noteholder
(either individually or in accordance with Condition 14) that the full amount
(including interest as aforesaid) in euro, US dollars or sterling, as
applicable, payable in respect of such First Issuer Note is available for
payment, provided that, upon further presentation thereof being duly made, such
payment is made; and

 

(iv)                              notwithstanding any other provision of this Deed, the right of any
Noteholder to receive payment of principal and interest on the First Issuer
Notes, on or after the respective due dates expressed in the First Issuer
Notes, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
the Noteholder.

 

The First Issuer shall pay Additional Interest in accordance with Condition
4(B).

 

The Note
Trustee will hold the benefit of the covenants contained in this Clause on
trust for the Noteholders and itself in accordance with this Deed.

 

(C)                                At any time after a Note Event of Default shall have occurred or the
First Issuer Notes shall otherwise have become due and repayable or the
Definitive First Issuer Notes have not been issued when so required in
accordance with this Deed and the relative Global First Issuer Notes, the Note
Trustee may and shall, if directed by an Extraordinary Resolution of the
Noteholders and subject to it being indemnified and/or secured to its
satisfaction:

 

(i)                                     by notice in writing to the First Issuer, the Principal Paying
Agent, the US Paying Agent, the Transfer Agent and the Registrar require the
Principal Paying Agent, the US Paying Agent, the Transfer Agent and the
Registrar pursuant to the First Issuer Paying Agent and Agent Bank Agreement and
by notice in writing to the First Issuer:

 

(a)                                  act thereafter as Principal Paying Agent, US Paying Agent, Transfer
Agent and Registrar of the Note Trustee in relation to payments to be made by
or on behalf of the Note Trustee under the provisions of this Deed mutatis
mutandis on the terms provided in the First Issuer Paying Agent and
Agent Bank Agreement (save that the Note Trustee’s liability under any
provisions thereof for the indemnification, remuneration and payment of
out-of-pocket expenses of the Paying Agents, the Transfer Agent and the
Registrar shall be limited to the amounts for the time being held by the Note
Trustee on the trusts of these presents relating to the relevant First Issuer
Notes and available for such purpose) and thereafter to hold all First Issuer
Notes and all sums, documents and records held by them in respect of First
Issuer Notes on behalf of the Note Trustee; or

 

(b)                                 deliver up all First Issuer Notes and all sums, documents and
records held by them in respect of the First Issuer Notes to the Note Trustee
or as the Note

 

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Trustee shall
direct in such notice provided that such notice shall be deemed not to apply to
any documents or records which the relevant Paying Agent or the Registrar, as
the case may be, is obliged not to release by any law or regulation; and/or

 

(ii)                                  by notice in writing to the First Issuer require it to make all
subsequent payments in respect of the First Issuer Notes to or to the order of
the Note Trustee and not to the Principal Paying Agent, with effect from the
issue of any such notice to the First Issuer and until such notice is withdrawn
Clause 2(B)(i)
relating to the First Issuer Notes shall cease to have effect.

 

(D)                              The First Issuer shall require each paying agent not a party to the
First Issuer Paying Agent and Agent Bank Agreement to agree in writing to hold
in trust to the extent required by the Trust Indenture Act for the benefit of
the Noteholders or the Note Trustee all money held by such paying agent for the
payment of principal of or interest on the First Issuer Notes (whether such
money has been paid to it by the First Issuer or any other obligor of the First
Issuer Notes), and the First Issuer and such paying agent shall each notify the
Note Trustee of any default by the First Issuer (or any other obligor of the
First Issuer Notes) in making any such payment.

 

3.                                      FORM AND ISSUE OF FIRST ISSUER
NOTES

 

(A)                              (i)                                     The Series 1 First Issuer Notes, the Series 2 First Issuer Notes and
the Series 3 First Issuer Notes will be initially offered and sold pursuant to
a Registration Statement filed with the United States Securities and Exchange
Commission.  Each class of the Series 1
First Issuer Notes, the Series 2 First Issuer Notes and the Series 3 First Issuer
Notes will initially be represented by a separate global note in registered
form (the “Series 1 Class A Global First Issuer Note”, the “Series 1
Class B Global First Issuer Note”, the “Series 1 Class C Global First Issuer
Note”, the “Series 2 Class A Global First Issuer Note”,
the “Series
2 Class B Global First Issuer Note”, the “Series 2 Class C Global First Issuer
Note”, the “Series 3 Class A Global First Issuer Note”,
the “Series
3 Class B Global First Issuer Note” and the “Series 3 Class C Global First Issuer
Note” respectively, and together the “Dollar Global First Issuer Notes”),
in each case without coupons or talons attached and which, in aggregate, will
represent the aggregate principal amount outstanding of the Series 1 First
Issuer Notes, the Series 2 First Issuer Notes and the Series 3 First Issuer
Notes.

 

(ii)                                  The Series 4 First Issuer Notes will be initially offered and sold
outside the United States to non-US persons pursuant to Regulation S (“Reg S”)
under the United States Securities Act of 1933, as amended (the “Securities
Act”).  Each class of the
Series 4 First Issuer Notes will initially be represented by a global note in
registered form (the “Series 4 Class A1 Global First Issuer Note”,
the “Series
4 Class A2 Global First Issuer Note”, the “Series 4 Class B Global First Issuer
Note” and the “Series 4 Class C Global First Issuer Note”
and together, the “Reg S Global First Issuer Notes” and,
together with the Dollar Global First Issuer Notes, the “Global First Issuer Notes”),
in each case without coupons or talons attached and which, in aggregate, will
represent the aggregate principal amount outstanding of the Series 4 First
Issuer Notes.

 

5

 

(B)                                The Global First Issuer Notes shall be printed or typed in, or
substantially in, the respective forms set out in Schedule 1 and may be
executed in facsimile.  Each Global
First Issuer Note shall represent such of the outstanding First Issuer Notes of
the relevant class as shall be specified therein and each shall provide that it
shall represent the aggregate Principal Amount Outstanding of the relevant
class of First Issuer Notes from time to time endorsed thereon and that the
aggregate Principal Amount Outstanding of the First Issuer Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions, purchases and transfers of interests therein in
accordance with the terms of this Deed and the First Issuer Paying Agent and
Agent Bank Agreement.  Any endorsement
of a Global First Issuer Note to reflect the amount of any increase or decrease
in the Principal Amount Outstanding of the First Issuer Notes represented
thereby shall be made by the Registrar in accordance with Clause 5.  Title to the Global First Issuer Notes shall
pass by and upon the registration in the Register in respect thereof in
accordance with the provisions of these presents.  The Global First Issuer Notes shall be issuable only in registered
form without coupons or talons attached and signed manually by a person duly
authorised by the First Issuer on behalf of the First Issuer and shall be
authenticated by or on behalf of the Registrar.  The Global First Issuer Notes so executed and authenticated shall
be binding and valid obligations of the First Issuer, notwithstanding that such
duly authorised person no longer holds that office at the time the Registrar
authenticates the relevant Global First Issuer Note.

 

(C)                                The Global First Issuer Notes shall be issued by the First Issuer to
Cede & Co., as nominee for DTC, in respect of each Dollar Global First
Issuer Note and to Citivic Nominees Limited, as nominee for the Common
Depositary, in respect of each Reg S Global First Issuer Note, on terms
that Cede & Co. and Citivic Nominees Limited shall, respectively, hold the
same for the account of the persons who would otherwise be entitled to receive
the  Definitive First Issuer Notes and
the successors in title to such persons appearing in the records of DTC,
Euroclear and Clearstream, Luxembourg for the time being.  Upon the issuance of each such Global First
Issuer Notes, DTC, Euroclear and Clearstream, Luxembourg shall credit, on their
respective internal book-entry registration and transfer systems, the accounts
of holders of Book-Entry Interests with the respective interests owned by such
Noteholders.

 

(D)                               The provisions of the “Operating Procedures of the Euroclear System”
and “Terms and Conditions Governing Use of Euroclear” and the “General Terms
and Conditions of Clearstream, Luxembourg” and “Customer Handbook” of
Clearstream, Luxembourg shall be applicable to interests in the Global First
Issuer Notes that are held through Euroclear and Clearstream, Luxembourg.

 

(E)                                 The First Issuer shall issue Definitive First Issuer Notes only if
any of the following applies while any of the First Issuer Notes of any class
are represented by a Global First Issuer Note of the relevant class at any time
after the fortieth day following the later of the Initial Closing Date and the
date of the issue of such Global First Issuer Note:

 

(i)                                     (in the case of Dollar Global First Issuer Notes) DTC has notified
the First Issuer that it is at any time unwilling or unable to continue as the
registered holder of such Dollar Global First Issuer Notes or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency
registered under the Exchange Act, and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (in the case of the Reg S Global
First Issuer Notes) both Euroclear and Clearstream, Luxembourg are closed for
business for a continuous period of 14 days (other than by reason of

 

6

 

holiday,
statutory or otherwise) or announce an intention permanently to cease business
and do so cease to do business and no alternative clearing system satisfactory
to the Note Trustee is available; and

 

(ii)                                  as a result of any amendment to, or change in, the laws or
regulations of the United Kingdom (or of any political sub-division thereof) or
of any authority therein or thereof having power to tax or in the
interpretation or administration by a revenue authority or a court or
administration of such laws or regulations which becomes effective on or after
the Initial Closing Date, the First Issuer or any Paying Agent is or will be
required to make any deduction or withholding from any payment in respect of
the First Issuer Notes which would not be required were the First Issuer Notes
in definitive form.

 

If required by this Clause 3, the First Issuer shall, at its
sole cost and expense within 30 days of the occurrence of the relevant event,
issue Definitive First Issuer Notes of the same class as the class of First
Issuer Notes represented by the relevant Global First Issuer Note in exchange
for the whole (or the remaining part(s) outstanding) of the relevant Global
First Issuer Note.  If Definitive First
Issuer Notes are issued, the beneficial interests represented by the Reg S
Global First Issuer Notes of each class shall be exchanged by the First Issuer
for Definitive First Issuer Notes of that class (“Reg S Definitive First Issuer Notes”)
and the beneficial interests represented by the Dollar Global First Issuer Note
of each class shall be exchanged by the First Issuer for Definitive First
Issuer Notes of that class (“Dollar Definitive First Issuer Notes”).

 

(F)                                The Definitive First Issuer Notes shall be printed or typed in, or
substantially in, the form set out in Schedule 2 in the denomination and
transferable in units of (i) US$1,000 and US$10,000 (in the case of the Series
1 First Issuer Notes, the Series 2 First Issuer Notes and the Series 3 First
Issuer Notes), (ii) €1,000 or €10,000 (in the case of the Series 4 Class A1
First Issuer Notes) and (iii) £1,000 or £10,000 (in the case of the Series 4
Class A2 First Issuer Notes, the Series 4 Class B First Issuer Notes and the
Series 4 Class C First Issuer Notes) each or, in each case, integral multiples thereof
or in such other denominations as the Note Trustee shall determine and notify
to the relevant Noteholders, shall be serially numbered and shall be endorsed
with a form of transfer in the form or substantially in the form also set out
in Schedule 2.  Title to the Definitive First Issuer Notes
shall pass by and upon the registration in the Register in respect thereof in
accordance with the provisions of these presents.  The Definitive First Issuer Notes shall be issuable only in
registered form without coupons or talons attached and signed manually or in
facsimile by a person duly authorised by or on behalf of the First Issuer and
shall be authenticated by or on behalf of the Registrar.  Each First Issuer Note so executed and
authenticated shall be a binding and valid obligation of the First Issuer
notwithstanding that such duly authorised person (for whatever reason) no
longer holds that office at the time the Registrar authenticates the First
Issuer Note.

 

(G)                                If the First Issuer is obliged to issue or procure the issue of any
Definitive First Issuer Notes pursuant to Clause 3(E) but fails to do so within 30
days of the occurrence of the relevant event described in Clause 3(E), then the First
Issuer shall indemnify the Note Trustee, the registered holder of the relevant
Global First Issuer Note(s) and the relevant Noteholders and keep them
indemnified against any and all loss or damage incurred by any of them if the
amount received by the Note Trustee, the registered holder of such Global First
Issuer Note(s) or the relevant Noteholders in respect of the First Issuer Notes
is less than the amount that would have been received had Definitive First
Issuer Notes been issued in accordance

 

7

 

with Clause 3(E).  If and for so long as the First Issuer
discharges its obligations under this indemnity, the breach by the First Issuer
of the provisions of Clause 3(E) shall be deemed to be cured ab initio.

 

4.                                      REPLACEMENT OF FIRST ISSUER NOTES

 

If a mutilated
or defaced Global First Issuer Note or Definitive First Issuer Note is
surrendered to the Registrar or Transfer Agent or if a Noteholder claims that a
Global First Issuer Note or Definitive First Issuer Note has been lost, stolen
or destroyed, the First Issuer shall issue, and the Registrar shall
authenticate, a replacement Global First Issuer Note or Definitive First Issuer
Note, respectively, on receipt of satisfactory evidence in accordance with Condition 13.  An indemnity for an amount sufficient in the
judgement of the First Issuer and the Registrar to protect the First Issuer and
the Registrar from any loss which any of them may suffer if a Global First
Issuer Note or a Definitive First Issuer Note is replaced may be required by
the First Issuer and the Registrar.  The
First Issuer may charge such Noteholder for its costs in replacing such First
Issuer Note.

 

5.                                      REGISTER, TRANSFER AND EXCHANGE OF
FIRST ISSUER NOTES

 

(A)                              TRANSFER AND EXCHANGE OF GLOBAL FIRST ISSUER NOTES

 

A Global First
Issuer Note will be exchanged by the First Issuer for another Global First
Issuer Note or Definitive First Issuer Note(s) only in the circumstances set
forth in Clause 3(E),
the Conditions, the First Issuer Paying Agent and Agent Bank Agreement and the
relevant Global First Issuer Note.  Upon
the occurrence of any of the events specified therein concerning their exchange
for Definitive First Issuer Notes, Definitive First Issuer Notes of the
relevant class shall be issued in such names as the First Issuer shall instruct
the Registrar (based on the instructions of DTC and Euroclear and Clearstream,
Luxembourg) and the Registrar shall cause the Principal Amount Outstanding of
the applicable Global First Issuer Note to be reduced accordingly, cancel such
Global First Issuer Note (if applicable) and direct DTC and Euroclear and
Clearstream, Luxembourg to make corresponding reductions in their book-entry
systems, and the First Issuer shall execute and the Registrar shall
authenticate such Definitive First Issuer Notes of the relevant class in the
appropriate principal amounts and the Registrar will register them.  The Registrar shall deliver such Definitive
First Issuer Notes to the persons in whose names such First Issuer Notes are so
registered.  Reg S Definitive First
Issuer Notes issued in exchange for a Book-Entry Interest pursuant to this Clause 5(A)
shall bear the legend set forth in Clause 5(D), and shall be subject to all
restrictions on transfer contained therein to the same extent as the Global
First Issuer Note so exchanged.  Global
First Issuer Notes may also be exchanged or replaced, in whole or in part, as
provided in Clause 4.  Every First
Issuer Note authenticated and delivered in exchange for, or in lieu of, a
Global First Issuer Note or any portion thereof, pursuant to Clause 4
hereof, shall be authenticated and delivered in the form of, and shall be, a
Global First Issuer Note.  A Global
First Issuer Note may not be exchanged for another First Issuer Note other than
as provided in this Clause 5(A).

 

(B)                                TRANSFER AND EXCHANGE OF BOOK-ENTRY INTERESTS

 

The transfer
and exchange of Book-Entry Interests shall be effected through DTC, Euroclear
and/or Clearstream, Luxembourg, as the case may be, in accordance with these
presents, the First Issuer Paying Agent and Agent Bank Agreement and the
procedures therefor of DTC, Euroclear and/or Clearstream, Luxembourg, as the
case may be.  Book-Entry Interests shall

 

8

 

be subject to
restrictions on transfer comparable to those set forth herein and in the First
Issuer Paying Agent and Agent Bank Agreement to the extent required by the
Securities Act.  The Note Trustee shall
have no obligation to ascertain or to monitor DTC’s, Euroclear’s or
Clearstream, Luxembourg’s compliance with any such restrictions on transfer.

 

(C)                                TRANSFER OF DEFINITIVE FIRST ISSUER NOTES

 

Definitive
First Issuer Notes may be transferred in whole or in part (provided that any
partial transfer relates to a Definitive First Issuer Note) in the principal
amount of, in the case of the Series 1 First Issuer Notes, the Series 2 First
Issuer Notes and the Series 3 First Issuer Notes, US$1,000 or US$10,000; in the
case of the Series 4 Class A1 First Issuer Notes, €1,000 or €10,000; and in the
case of the Series 4 Class A2 First Issuer Notes, the Series 4 Class B First
Issuer Notes and the Series 4 Class C First Issuer Notes, £1,000 or £10,000 or,
in each case, any integral multiple thereof or in such other denominations as
the Note Trustee shall determine and notify to the relevant Noteholders.  When Definitive First Issuer Notes are
presented by a Noteholder to the Registrar with a request to register the
transfer of such Definitive First Issuer Notes, the Registrar shall register
the transfer as requested only if such Definitive First Issuer Notes are
presented or surrendered for registration of transfer and are endorsed or
accompanied by a written instrument of transfer in form satisfactory to the
Registrar duly executed by such Noteholder or by his attorney duly authorised
in writing and upon receipt of such certificates and other documents as shall
be necessary to evidence compliance with the restrictions on transfer contained
in this Agreement and in the First Issuer Paying Agent and Agent Bank
Agreement.  Thereupon, the Registrar
shall request the First Issuer to issue and the shall itself authenticate new
Definitive First Issuer Notes required to be issued in connection with such
transfer.  In the case of a transfer of
part only of such Definitive First Issuer Note, a new Definitive First Issuer
Note in respect of the balance not transferred will be issued to the
transferor.  All transfers of Definitive
First Issuer Notes are subject to any restrictions on transfer set forth on
such Definitive First Issuer Notes and the detailed regulations concerning
transfers in the First Issuer Paying Agent and Agent Bank Agreement.

 

(D)                               REGULATION S LEGEND

 

Each Reg S
Global First Issuer Note and each Reg S Definitive First Issuer Note issued in
exchange therefor shall bear a legend in substantially the following form:

 

“THIS FIRST
ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO
THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.”

 

9

 

(E)                                 CANCELLATION AND/OR ADJUSTMENT OF GLOBAL FIRST ISSUER NOTES

 

At such time
as all Book-Entry Interests in respect of a Global First Issuer Note have been
exchanged for Definitive First Issuer Notes, such Global First Issuer Note
shall be returned to or retained and cancelled by the Registrar as set out in
the First Issuer Paying Agent and Agent Bank Agreement.  At any time prior to such cancellation, if
any Book-Entry Interest is exchanged for an interest in another Global First
Issuer Note, the principal amount of First Issuer Notes represented by such
Global First Issuer Note shall be reduced accordingly and an endorsement shall
be made on such Global First Issuer Note by the Registrar to reflect such
reduction.

 

(F)                                 GENERAL
PROVISIONS RELATING TO ALL TRANSFERS AND EXCHANGES

 

(i)                                     To permit registrations of transfers and exchanges of First Issuer
Notes, the First Issuer shall execute and the Registrar shall authenticate
Global First Issuer Notes and Definitive First Issuer Notes upon a written order
signed by an officer of the First Issuer.

 

(ii)                                  No service fee shall be charged to a Noteholder for any registration
of a Definitive First Issuer Note on transfer or exchange but the First Issuer
may require payment of a sum sufficient to cover any stamp or transfer tax or
similar governmental charge payable in connection therewith (other than any
such stamp or transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Condition 13) and the Registrar may require
an indemnity in respect of such tax or charge.

 

(iii)                               All Global First Issuer Notes and Definitive First Issuer Notes
issued upon any registration of transfer or exchange of Global First Issuer
Notes or Definitive First Issuer Notes shall be the valid obligations of the
First Issuer, evidencing the same debt and entitled to the same benefits under
this Deed, as the Global First Issuer Notes or Definitive First Issuer Notes
surrendered upon such registration of transfer or exchange.

 

(G)                                REGISTER OF FIRST ISSUER NOTES

 

The First
Issuer shall at all times ensure that the Registrar maintains in London, or at
such other place as the Note Trustee may agree in writing, a register (the “Register”)
in respect of the First Issuer Notes showing the amount of the Global First
Issuer Notes or Definitive First Issuer Notes, as the case may be, from time to
time outstanding and the dates of issue and all subsequent transfers and
changes of ownership thereof and the names and addresses of the holders of the
Global First Issuer Notes or the Definitive First Issuer Notes.  So long as DTC or its nominee, or the Common
Depositary or its nominee, is the registered holder of a Global First Issuer
Note, DTC or the Common Depositary, as the case may be, will be considered the
sole registered holder of such Global First Issuer Note for all purposes under
this First Issuer Trust Deed.  Each
First Issuer Note, whether in global or definitive form, shall have an
identifying serial number which shall be entered on the Register. The Note
Trustee and the holders of such First Issuer Notes or any of them and any
person authorised by it or any of them may at all reasonable times during
office hours inspect the Register and take copies of or extracts from it.

 

10

 

6.                                      FEES, DUTIES AND TAXES

 

The First
Issuer will pay any stamp duty, issue, registration, documentary or other taxes
of a similar nature and duties payable in the United Kingdom, Belgium,
Luxembourg or the United States, including interest and penalties, on or in
connection with (i) the execution and delivery of these presents and the
Transaction Documents to which it is a party and any documents executed
pursuant thereto, (ii) the constitution and original issue of the First
Issuer Notes, and (iii) any action in any jurisdiction taken by or on behalf of
the Note Trustee or (where permitted under these presents so to do) any
Noteholder to enforce the First Issuer Notes.

 

7.                                      COVENANT OF COMPLIANCE

 

The First
Issuer covenants with the Note Trustee that it will comply with and perform and
observe all the provisions of these presents, the First Issuer Notes, the First
Issuer Deed of Charge, the First Issuer Paying Agent and Agent Bank Agreement
and the documents executed pursuant thereto and the other Transaction Documents
which are expressed to be binding on it. 
The Conditions shall be binding on the First Issuer, the Noteholders,
the Note Trustee and all persons claiming through or under any of them.  The Note Trustee shall be entitled to
enforce the obligations of the First Issuer under the First Issuer Notes and
the Conditions and to exercise any other rights, powers, authorities and
discretions conferred upon the Note Trustee in the Conditions as if the same
were set out and contained in this Deed, which shall be read and construed as
one document with the First Issuer Notes. 
The Note Trustee shall hold the benefit of this covenant upon trust for
itself and the Noteholders according to its and their respective
interests.  The provisions of Schedule 4
shall have effect in the same manner as if herein set forth.

 

8.                                      CANCELLATION OF FIRST ISSUER NOTES
AND RECORDS

 

(A)                              The First Issuer shall procure that all First Issuer Notes (i)
redeemed, (ii) being mutilated or defaced, surrendered and replaced pursuant to
Condition 13
or (iii) exchanged as provided in these presents shall forthwith be
cancelled by or on behalf of the First Issuer and a certificate stating:

 

(i)                                     the aggregate principal amount of First Issuer Notes which have been
redeemed;

 

(ii)                                  the serial numbers of First Issuer Notes of each class so redeemed;

 

(iii)                               the aggregate amount of interest paid (and the due dates of such
payments) on First Issuer Notes of each class; and

 

(iv)                              the aggregate principal amounts of First Issuer Notes of each class
which have been so exchanged and replaced and the serial numbers of such First
Issuer Notes in definitive form,

 

shall be given
to the Note Trustee by or on behalf of the First Issuer as soon as possible and
in any event within four months after the date of such redemption, purchase,
cancellation, exchange or replacement, as the case may be.  The Note Trustee may accept without further
investigation or inquiry such certificate as conclusive evidence of such redemption,
purchase, exchange or replacement pro tanto of the First Issuer Notes or
payment of interest thereon and of cancellation of the relative First Issuer
Notes.

 

11

 

(B)                                The First Issuer shall procure that the Registrar shall keep a full
and complete record of all First Issuer Notes and of their redemption,
cancellation, payment or exchange (as the case may be) and of all replacement
First Issuer Notes issued in substitution for lost, stolen, mutilated, defaced
or destroyed First Issuer Notes.  The
First Issuer shall procure that the Registrar shall at all reasonable times
make such record available to the First Issuer and the Note Trustee.

 

(C)                                All records and certificates maintained pursuant to this Clause
shall make a distinction between Definitive First Issuer Notes and Global First
Issuer Notes.

 

9.                                      ENFORCEMENT

 

(A)                              The Note Trustee may at any time, at its discretion and without
notice, take such proceedings and/or other action as it may think fit against
or in relation to the First Issuer or any other person as it may think fit to
enforce its obligations under these presents, the First Issuer Notes or any of
the other Transaction Documents.

 

(B)                                Unless the contrary be proved to the satisfaction of the Note
Trustee, proof that as regards any specified First Issuer Note the First Issuer
has made default in paying any amount due in respect of such First Issuer Note
shall be sufficient evidence that the same default has been made as regards all
other First Issuer Notes in respect of which the relevant amount is due and
payable.

 

(C)                                References in Clauses 2(B)(ii) and 2(B)(iii)
or the provisions of any trust deed supplemental to this Deed corresponding to Clauses 2(B)(ii)
and 2(B)(iii) to “the rates aforesaid” shall, in the event of
such First Issuer Notes having become due and repayable, with effect from the
expiry of the Interest Period during which such First Issuer Notes become due
and repayable, be construed as references to rates of interest calculated mutatis
mutandis in accordance with the Conditions except that no notices
need be published in respect thereof.

 

10.                               PROCEEDINGS, ACTIONS AND
INDEMNIFICATION

 

(A)                             The Note Trustee shall not be bound to take any proceedings
mentioned in Clause 9(A) or any other action in relation to these
presents, the First Issuer Notes or any documents executed pursuant thereto or
any of the other Transaction Documents to which the Note Trustee is a party
unless (i) respectively directed or requested to do so by an Extraordinary
Resolution of the Class A First Issuer Noteholders, the Class B First Issuer
Noteholders or the Class C First Issuer Noteholders, as the case may be, or in
writing by the holders of at least one-quarter in aggregate Principal Amount
Outstanding of the Class A First Issuer Notes, the Class B First Issuer Notes
or the Class C First Issuer Notes, as the case may be, and (ii) it shall be
indemnified and/or secured to its satisfaction against all liabilities,
actions, proceedings, claims and demands to which it may be or become liable
and all costs, charges, damages and expenses which may be incurred by it in
connection therewith, and the terms of such indemnity may include the
provisions of a fighting fund, non-recourse loan or other similar arrangement
PROVIDED THAT:

 

(i)                                    the Note Trustee shall not be obliged to act at the direction or
request of the Class B First Issuer Noteholders as aforesaid unless either the
Note Trustee is of the sole opinion that to do so would not be materially
prejudicial to the interests of the Class

 

12

 

A First Issuer
Noteholders or such action is sanctioned by an Extraordinary Resolution of the
Class A First Issuer Noteholders; and

 

(ii)                                 the Note Trustee shall not be obliged to act at the direction or
request of the Class C First Issuer Noteholders as aforesaid unless (x) either
the Note Trustee is of the sole  opinion
that to do so would not be materially prejudicial to the interests of the Class
A First Issuer Noteholders or such action is sanctioned by an Extraordinary
Resolution of the Class A First Issuer Noteholders and (y) either the Note
Trustee is of the sole opinion that to do so would not be materially
prejudicial to the interests of the Class B First Issuer Noteholders or such
action is sanctioned by an Extraordinary Resolution of the Class B First Issuer
Noteholders;

 

(B)                                Save as provided below, only the Note Trustee may enforce the
provisions of these presents, the Conditions or the First Issuer Notes.  No Noteholder shall be entitled to proceed
directly against the First Issuer or any other party to any of the Transaction
Documents unless the Note Trustee having become bound as aforesaid to take
proceedings fails to do so within a reasonable period and such failure is
continuing provided that no Class C First Issuer Noteholder and no Class B
First Issuer Noteholder shall be entitled to take proceedings for the winding
up or administration of the First Issuer for so long as there are any Class A
First Issuer Notes outstanding and no Class C First Issuer Noteholder shall be
entitled to take proceedings for the winding up or administration of the First
Issuer for so long as there are any Class B First Issuer Notes
outstanding.  Consistent with
Section 316 of the Trust Indenture Act, each Noteholder shall have the
right to institute proceedings for the enforcement of payment of principal and
interest on the First Issuer Notes held by it, on or after the maturity date of
the relevant First Issuer Notes set out on the face of such First Issuer Notes.

 

11.                               DISCHARGE OF PAYMENT

 

Any payment to
be made in respect of the First Issuer Notes by the First Issuer or the Note
Trustee may be made in accordance with the Conditions and any payment so made
shall be a good discharge of the relevant payment obligation of the First Issuer
or, as the case may be, the Note Trustee.

 

12.                               PARTIAL PAYMENTS

 

Upon
presentation and surrender to the Registrar or of a Definitive First Issuer
Note that is redeemed in part, the Registrar shall authenticate for the holder
a new Definitive First Issuer Note equal in principal amount to the principal
amount of the unredeemed portion of the Definitive First Issuer Note
surrendered.  Upon presentation of a
Global First Issuer Note that is redeemed in part, the Registrar shall make a
notation on Part I of the Schedule thereto to reduce the aggregate
principal amount of such Global First Issuer Note to an amount equal to the
aggregate principal amount of the unredeemed portion of the Global First Issuer
Note presented.

 

13.                               COVENANTS BY THE FIRST ISSUER

 

So long as any
of the First Issuer Notes remains outstanding (or, in the case of paragraphs (H),
(I), (J), (N) and (O), so long as any of the First Issuer
Notes remains liable to prescription or, in the case of paragraph (Q), until the
expiry of a period of 30 days after the “relevant  date” (as defined in Condition
7)
in respect of the payment of principal in

 

13

 

respect of all
such First Issuer Notes remaining outstanding at such time) the First Issuer
covenants with the Note Trustee that it shall:

 

(A)                              Conduct:
at all times carry on and conduct its affairs in a
proper and efficient manner and in accordance with its constitutive documents
and all laws and regulations applicable to it;

 

(B)                                Information:
give or procure to be given to the Note Trustee
such opinions, certificates, information and evidence as the Note Trustee shall
require and in such form as it shall require, including without limitation the
procurement by the First Issuer of all such certificates called for by the Note
Trustee pursuant to this Deed for the purpose of the discharge or exercise of
the duties, trusts, powers, authorities and discretions vested in it under
these presents or by operation of law;

 

(C)                                Accounts
for Stock Exchange: cause to be prepared and
certified by the Auditors of the First Issuer in respect of each Financial
Period, accounts in such form as will comply with all relevant legal and
accounting requirements and all requirements for the time being of any stock
exchange, competent listing authority and/or quotation system on or by which
the First Issuer Notes are listed, quoted and/or traded;

 

(D)                               Books
and Records: at all times keep proper books of
account and allow the Note Trustee and any person appointed by the Note Trustee
free access to such books of account at all reasonable times during normal
business hours;

 

(E)                                 Noteholder  Information: send to the Note Trustee (in addition to any
copies to which it may be entitled as a holder of any securities of the First
Issuer) two copies in English of every balance sheet, profit and loss account,
report, circular and notice of general meeting and every other document issued
or sent to its shareholders as a class together with any of the foregoing, and
every document issued or sent to holders of securities other than its
shareholders (including the Noteholders) as soon as practicable after the issue
or publication thereof;

 

(F)                                 Notice
of Note Event of Default: give notice in writing to
the Note Trustee of the occurrence of any Note Event of Default or any matter
it concludes, acting reasonably, to be likely to give rise to a Note Event of
Default immediately upon becoming aware thereof, including the status of any
such default or matter and what action the First Issuer is taking or proposes
to take with respect thereto, and without waiting for the Note Trustee to take
any action;

 

(G)                                Notice
of Deferral of Payments: as soon as practicable
after becoming aware that any part of a payment of interest on the First Issuer
Notes will be deferred or that a payment previously deferred will be made in
accordance with Condition  4, give notice thereof to the Noteholders
in accordance with Condition  14 and, for so long as the
First Issuer Notes are listed on the official list of the United Kingdom
Listing Authority and admitted to trading on the London Stock Exchange, in
accordance with the listing rules of the United Kingdom Listing Authority and
the rules of the London Stock Exchange;

 

(H)                               Certificates Relating to Financial Information: give to the Note Trustee (a) within 14 days after demand by the
Note Trustee therefor and (b) (without the necessity for any such demand)
promptly after the publication of its audited accounts in respect of

 

14

 

each Financial
Period commencing with the financial period first ending after the date hereof
and in any event not later than 120 days after the end of each such
financial period a certificate signed by two directors of the First Issuer to
the effect that as at a date not more than seven days before delivering such
certificate (the “certification date”) there did not exist
and had not existed since the certification date of the previous certificate
(or in the case of the first such certificate the date hereof) any Note Event
of Default (or if such exists or existed, specifying the same) and that during
the period from and including the certification date of the last such
certificate (or in the case of the first such certificate the date hereof) to
and including the certification date of such certificate the First Issuer has
complied, to the best of such directors’ knowledge and belief, with all its
obligations contained in these presents and each of the Transaction Documents
to which it is a party or (if such is not the case) specifying the respects in
which it has not so complied;

 

(I)                                    Further
Assurances: at all times execute and do all such
further documents, acts and things as may be necessary at any time or times in
the opinion of the Note Trustee to give effect to these presents and the other
Transaction Documents only in so far as permitted by law;

 

(J)                                   Agent
Bank, Reference Banks etc.: at all times maintain
an Agent Bank, four Reference Banks, a Paying Agent, a Transfer Agent and a
Registrar in accordance with the Conditions;

 

(K)                               Notification
of Non-Payment: procure the Principal Paying Agent
(or any other relevant Paying Agent) to notify the Note Trustee forthwith in
the event that (i) the Principal Paying Agent (or other relevant Paying Agent)
does not, on or before the due date for any payment in respect of any of the
First Issuer Notes, receive unconditionally pursuant to the First Issuer Paying
Agent and Agent Bank Agreement, as applicable, payment of the full amount in
the requisite currency of the monies payable on such due date on all such First
Issuer Notes, or (ii) there are insufficient funds in euro, US dollars, or
sterling, as the case may be, available to the Principal Paying Agent to
discharge the amount of the monies payable on such due date;

 

(L)                                 Notification
of Late Unconditional Payment: in the event of any
unconditional payment to the Principal Paying Agent any other relevant Paying
Agent) or the Note Trustee of any sum due in respect of any of the First Issuer
Notes being made after the due date for payment thereof forthwith give or
procure to be given notice to the relevant Noteholders in accordance with Condition 14
that such payment has been made;

 

(M)                            Listing:
use reasonable endeavours to maintain the listing
of the First Issuer Notes on the official list of the United Kingdom Listing
Authority and to maintain the admission to trading of the First Issuer Notes on
the London Stock Exchange or, if it is unable to do so having used reasonable
endeavours, use reasonable endeavours to obtain and maintain a quotation,
listing and admission to trading of the First Issuer Notes on or by such other
stock exchanges, competent listing authorities and/or quotation systems as the
First Issuer may decide (with the prior written approval of the Note Trustee)
and shall also upon obtaining a quotation, listing and admission to trading of
such First Issuer Notes on or by such other stock exchanges, competent listing
authorities and/or quotation systems enter into a trust deed supplemental to

 

15

 

this Deed to
effect such consequential amendments to this Deed as the Note Trustee may
require or as shall be requisite to comply with the requirements of any such
stock exchange, competent listing authority and/or quotation system;

 

(N)                               Change
of Agent Bank, Reference Banks, etc.: give notice
to the Noteholders in accordance with Condition 14 of any appointment,
resignation or removal of any Agent Bank, Reference Banks, Paying Agent,
Transfer Agent or Registrar (other than the appointment of the initial Agent
Bank, Reference Banks, Paying Agents, Transfer Agent and Registrar) after,
except in the case of resignation, having obtained the prior written approval
of the Note Trustee (such approval not to be unreasonably withheld or delayed)
thereto or any change of any Paying Agent’s, Agent Bank’s, Transfer Agent’s or
Registrar’s specified office and (except as provided by the First Issuer Paying
Agent and Agent Bank Agreement or the Conditions) at least 30 days prior
to such event taking effect PROVIDED ALWAYS THAT so long as any of the First
Issuer Notes remains outstanding in the case of the termination of the
appointment of the Agent Bank, Transfer Agent or the Registrar or so long as
any of the First Issuer Notes remains liable to prescription in the case of the
termination of the appointment of the Principal Paying Agent no such
termination shall take effect until a new Agent Bank, Transfer Agent, Registrar
or Principal Paying Agent has been appointed on terms previously approved in
writing by the Note Trustee;

 

(O)                               Pre-Approval
of Notices: obtain the prior written approval of
the Note Trustee to, and promptly give to the Note Trustee and the Rating
Agencies two copies of, the form of every notice given to the Noteholders in
accordance with Condition 14 (such approval, unless so expressed, not to
constitute an invitation or inducement to engage in investment activities
within the meaning of Section 21 of the Financial Services and Markets Act
2000);

 

(P)                                 Availability
of  Meeting Materials: from time to time as
required or contemplated by this Deed or as reasonably requested by the Note
Trustee, make available through the Paying Agents, or otherwise such documents
as may be required by the Noteholders in connection with meetings of
Noteholders;

 

(Q)                               Compliance
with First Issuer Paying Agent and Agent Bank Agreement and Other Transaction
Documents: use its best endeavours to procure that
the Agent Bank, the Paying Agents, the Transfer Agent and the Registrar comply
with and perform all their respective obligations under the First Issuer Paying
Agent and Agent Bank Agreement and the other Transaction Documents and (in the
case of the Paying Agents, the Transfer Agent and the Registrar) any notice
given by the Note Trustee pursuant to Clause 2(C)(i) and not make any
amendment or modification to the First Issuer Paying Agent and Agent Bank
Agreement  or any other Transaction
Documents or agree to waive or authorise any breach thereof without the prior
written approval of the Note Trustee;

 

(R)                                Exercise
of Redemption Rights: in the event that Funding 1
elects to prepay any Term Advance in whole or in part under Clause 8
of the Intercompany Loan Terms and Conditions, the First Issuer shall exercise
its right to redeem the corresponding class or classes of First Issuer Notes in
the same respective aggregate principal amounts as such Term Advance on the
same Interest Payment Date under Condition 5(B);

 

16

 

(S)                                 Redemption
Requirements: not give notice of its election to
redeem all or any part of a class or classes of First Issuer Notes pursuant to Condition
5(D) or (E) unless it shall first have:

 

(i)                                     given prior written notice to the Note Trustee of its intention so
to do in accordance with the First Issuer Paying Agent and Agent Bank
Agreement;

 

(ii)                                  delivered to the Note Trustee a certificate signed by two directors
of the First Issuer certifying that the First Issuer will have the necessary
funds on the Interest Payment Date on which redemption is to occur (the “redemption
date”) to discharge all amounts required under the First Issuer Deed
of Charge to be paid in priority to such class or classes of First Issuer Notes
on the redemption date, and to redeem such class or classes of First Issuer
Notes in whole or, as the case may be, in part; and that all such funds will on
such redemption date be subject to the security constituted by the First Issuer
Deed of Charge and not subject to the interest of any other person; and

 

(iii)                               provided evidence acceptable to the Note Trustee of the matters
certified by it in paragraph (ii) above,

 

provided
always that the provisions of this subclause are subject to and without
prejudice to the provisions of Clause 13(O);

 

(T)                               United
States Reporting Requirements: file with the Note
Trustee copies of the annual reports and of the information, documents, and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the First Issuer is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act
within 15 days after it files them with the SEC and comply with the other
provisions of section 314(a) of the Trust Indenture Act;

 

(U)                               Interest
in First Issuer Charged Property: ensure that, save
as permitted in these presents, the First Issuer Deed of Charge, the Conditions
and the other Transaction Documents, no person other than the First Issuer and
the Security Trustee shall have any equitable interest in the First Issuer
Charged Property;

 

(V)                                Maintenance
of First Issuer Cash Manager: ensure that there is
at all times a cash manager appointed in accordance with the provisions of the
First Issuer Cash Management Agreement;

 

(W)                           Tax
Deduction: take reasonable steps to ensure that it
does not engage in any course of conduct that would lead to a deduction, for
United Kingdom corporation tax purposes, in respect of accrued interest or
discount on the First Issuer Notes by the First Issuer being denied, postponed
or restricted (whether such denial, postponement or restriction results from
the application of paragraph 2 or 13 of Schedule 9 of the Finance Act 1996
or otherwise);

 

(X)                               United
Kingdom and United States Tax Status: ensure that
it is at all times solely resident in the United Kingdom for United Kingdom tax
purposes and has no branch, business establishment or other fixed establishment
outside the United Kingdom; and
furthermore, ensure that it will not engage in any activities in the United
States (directly or through agents), will not derive any income from United
States sources

 

17

 

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;

 

(Y)                                Pre-Enforcement
Payments: ensure that amounts standing to the
credit of the First Issuer Transaction Account will be applied by the First
Issuer in or towards satisfaction of such of the obligations set out in the
First Issuer Cash Management Agreement as may be, at any given time, then due
and payable (in each case only if and to the extent that payments or provisions
of a higher order of priority which are also due and payable or are likely to
fall due at that time or prior to the next succeeding Interest Payment Date
have been made or provided for in full);

 

(Z)                                Availability
of Information: make available for inspection by
Noteholders at the specified office of the Registrar during normal business
hours on any Business Day copies of each balance sheet and profit and loss
account sent to the Note Trustee pursuant to Clause 13(E), this Deed, and
the other Transaction Documents and promptly provide the Registrar with the
information specified in Condition 5(C);

 

(AA)                    Ratings: furnish, or procure that there is furnished, from time to time, any
and all documents, instruments, information and undertakings that may be
reasonably necessary in order to maintain the current ratings of the First
Issuer Notes by the Rating Agencies (save that when any such document,
instrument, information and/or undertaking is not within the possession or
control of the First Issuer, the First Issuer agrees only to use its best
efforts to furnish, or procure that there is furnished, from time to time any
such documents, instruments, information and undertakings as may be reasonably
necessary in order to maintain the current ratings of the First Issuer Notes by
the Rating Agencies);

 

(BB)                        Calculations:
do, or procure that there are done on its behalf,
all calculations required pursuant to the Conditions;

 

(CC)                        DTC, Euroclear and Clearstream, Luxembourg: use its reasonable endeavours to procure that DTC, Euroclear and/or
Clearstream, Luxembourg (as the case may be) issue(s) any certificate or other
document requested by the Note Trustee acting reasonably pursuant to these
presents as soon as practicable after such request;

 

(DD)                      Information
Regarding Noteholders: furnish or cause to be
furnished to the Note Trustee on 30th June and 31st December of each
year, commencing 31st December 2002 and at such other times as the Note
Trustee may request in writing, all information in the possession or control of
the First Issuer, or of the Registrar as to the names and addresses of the
Noteholders, and requiring the Note Trustee to preserve, in as current a form
as is reasonably practicable, all such information so furnished to it;

 

(EE)                          Officers’
Certificates and Opinions of Counsel; Statements to be Contained Therein: upon any application, demand or request by the First Issuer to the
Note Trustee to take any action under any of the provisions of this Deed (other
than the issuance of First Issuer Notes) and upon request of the Note Trustee, furnish
to the Note Trustee an officers’ certificate and opinion of counsel complying
with the

 

18

 

provisions of
Section 314 of the Trust Indenture Act (an “Officers’ Certificate” and “Opinion of
Counsel”, respectively);

 

(FF)                          Authorised
Signatories: upon the execution of this Deed and
thereafter forthwith upon any change of the same, deliver to the Note Trustee
(with a copy to the Principal Paying Agent and the Registrar) a list of the
Authorised Signatories of the First Issuer, together with certified specimen
signatures of the same; and

 

(GG)                        New
Notes: procure that notice of any New Notes to be
issued by any New Issuer is given to the Noteholders in accordance with Condition 14.

 

14.                               REMUNERATION AND INDEMNIFICATION
OF THE NOTE TRUSTEE

 

(A)                              The First Issuer shall pay to the Note Trustee remuneration for its
services as trustee as from the date of this Deed, such remuneration to be at
such rate and to be paid on such dates as may from time to time be agreed in
writing between the First Issuer and the Note Trustee.  The rate of remuneration in force from time
to time may upon the final redemption of the whole of the First Issuer Notes of
any series be reduced by such amount as shall be agreed in writing between the
First Issuer and the Note Trustee, such reduced remuneration to be calculated
from such date as shall be agreed as aforesaid.  Such remuneration shall accrue from day to day and be payable (in
priority to payments to the Noteholders) up to and including the date when, all
the First Issuer Notes having become due for redemption, the redemption monies
and interest thereon to the date of redemption have been paid to the Principal
Paying Agent or, as the case may be, the Note Trustee PROVIDED THAT if upon due
presentation of any First Issuer Note or any cheque payment of the monies due
in respect thereof is improperly withheld or refused, remuneration will
commence again to accrue until payment to Noteholders is made.

 

(B)                                In the event of the occurrence of a Note Event of Default or the
Note Trustee in its absolute discretion considering it necessary, or being
requested by the First Issuer to undertake duties which the Note Trustee and
the First Issuer agree to be of an exceptional nature or otherwise outside the
scope of the normal duties of the Note Trustee under this Deed, the First
Issuer shall pay to the Note Trustee such additional remuneration as shall be
agreed between them.

 

(C)                                The First Issuer shall pay to the Note Trustee in addition an amount
equal to the amount of any value added tax or similar tax chargeable in respect
of its remuneration under this Deed against production of a valid tax invoice.

 

(D)                               In the event of the Note Trustee and the First Issuer failing to
agree:

 

(i)                                     (in a case to which subclause (A) above applies) upon the
amount of the remuneration; or

 

(ii)                                  (in a case to which subclause (B) above applies) upon whether
such duties shall be of an exceptional nature or otherwise outside the scope of
the normal duties of the Note Trustee under this Deed, or upon such additional
remuneration,

 

such matters
shall be determined by a merchant or investment bank (acting as an expert and
not as an arbitrator) selected by the Note Trustee and approved by the First
Issuer or, failing such approval, nominated (on the application of the Note
Trustee) by the President for the time being of The Law Society of England and
Wales (the expenses involved in such 

 

19

 

nomination and
the fees of such merchant or investment bank being payable by the First Issuer)
and the determination of any such merchant or investment bank shall be final
and binding upon the Note Trustee and the First Issuer.

 

(E)                                 In addition to remuneration hereunder, the First Issuer shall on
written request pay (on an indemnity basis) all other costs, charges and
expenses which the Note Trustee may properly incur in relation to the
negotiation, preparation and execution of, the exercise of its powers and the
performance of its duties under, and in any other manner in relation to, this
Deed and any other Transaction Document to which the Note Trustee is a party,
including but not limited to travelling and legal expenses properly incurred
and any stamp, issue, registration, documentary and other similar taxes or
duties paid or payable by the Note Trustee in connection with any action taken
or contemplated by or on behalf of the Note Trustee for enforcing, or for any
other purpose in relation to, this Deed or any of the other Transaction Documents.

 

(F)                                 All amounts payable pursuant to subclause (E) above and/or Clause 15(L)
shall be payable by the First Issuer on the date specified in a written demand
by the Note Trustee and in the case of payments actually made by the Note
Trustee prior to such demand shall (if not paid within three days after such
demand and the Note Trustee so requires) carry interest at the rate of three
per cent. per annum above the mean base rate from time to time of the Reference
Banks from the date specified in such demand, and in all other cases shall (if
not paid on the date specified in such demand or, if later, within three days
after such demand and, in either case, the Note Trustee so requires) carry
interest at such rate from the date specified in such demand.  All remuneration payable to the Note Trustee
shall carry interest at such rate from the due date therefor.

 

(G)                                Unless otherwise specifically stated in any discharge of this Deed
the provisions of this Clause and Clause 15(L) shall continue in full
force and effect notwithstanding such discharge.

 

(H)                               The Note Trustee shall be entitled in its absolute discretion to
determine in respect of which series of First Issuer Notes any liabilities
incurred under this Deed have been incurred.

 

15.                               SUPPLEMENT TO TRUSTEE ACTS

 

Section 1
of the Trustee Act 2000 shall not apply to the duties of the Trustee in
relation to the trusts constituted by these presents.  Where there are any in consistencies between the Trustee Acts and
the provisions of these presents, the provisions of these presents shall, to
the extent allowed by law, prevail and, in the case of any such inconsistency
with the Trustee Act 2000, the provisions of these presents shall constitute a
restriction or exclusion for the purposes of that Act.

 

The Note Trustee
shall have all the powers conferred upon trustees by the Trustee Act 1925 of
England and Wales and by way of supplement thereto it is expressly declared as
follows (which provisions, except as expressly provided in this Clause 15,
shall be in lieu of the provisions contained in section 315(a) of the
Trust Indenture Act):

 

(A)                              Expert
Advice or Opinion: the Note Trustee may in relation
to these presents or the other Transaction Documents act on the advice or
opinion of or any information obtained from any lawyer, valuer, accountant,
surveyor, banker, broker, auctioneer or other expert whether obtained by the
First Issuer, the Note Trustee, the Principal

 

20

 

Paying Agent,
the Registrar or otherwise and shall not be responsible for any liability
occasioned by so acting in good faith; any such advice, opinion or information
may be sent or obtained by letter, telex, telegram, facsimile transmission,
e-mail or cable and the Note Trustee shall not be liable for acting on any
advice, opinion or information purporting to be conveyed by any such letter,
telex, telegram, facsimile transmission or cable although the same shall
contain some error or shall not be authentic;

 

(B)                                Certificate
as Sufficient Evidence: the Note Trustee may call
for and shall be at liberty to accept as sufficient evidence of any fact or
matter or the expediency of any transaction or thing a certificate signed by
any two directors of the First Issuer and the Note Trustee shall not be bound
in any such case to call for further evidence or be responsible for any
liability that may be occasioned by it or any other person acting on such
certificate;

 

(C)                                Custody
of Documents: the Note Trustee shall be at liberty
to hold these presents and any other documents relating thereto or any other
Transaction Documents or to deposit them in any part of the world with any
banker or banking company or company whose business includes undertaking the
safe custody of documents or lawyer or firm of lawyers considered by the Note
Trustee to be of good repute and the Note Trustee shall not be responsible for
or required to insure against any liability incurred in connection with any
such holding or deposit and may pay all sums required to be paid on account of
or in respect of any such deposit;

 

(D)                               Application
of Proceeds: the Note Trustee shall not be
responsible for the receipt or application of the proceeds of the issue of any
of the First Issuer Notes by the First Issuer, the exchange of any Global First
Issuer Note for another Global First Issuer Note or Definitive First Issuer
Notes or the exchange of any Definitive First Issuer Note for another
Definitive First Issuer Note or the delivery of any Global First Issuer Note or
Definitive First Issuer Notes to the person(s) entitled to it or them;

 

(E)                                 Assumption
of No Default: except to the extent required
pursuant to section 315(b) of the Trust Indenture Act, the Note Trustee
shall not be bound to give notice to any person of the execution of any
documents comprised or referred to in these presents or to take any steps to
ascertain whether any Note Event of Default has happened and, until it shall
have actual written notice pursuant to these presents to the contrary, the Note
Trustee shall be entitled to assume that no Note Event of Default has occurred
and that the First Issuer is observing and performing all of its obligations
under these presents;

 

(F)                                 Absolute
Discretion: save as expressly otherwise provided in
this Deed, the Note Trustee shall have absolute and uncontrolled discretion as
to the exercise or non-exercise of its trusts, powers, authorities and
discretions under these presents (the exercise or non-exercise of which as
between the Note Trustee and the Noteholders shall be conclusive and binding on
the Noteholders) and provided it shall not have acted fraudulently or
negligently or in breach of the terms of this Deed, shall not be responsible
for any liability which may result from their exercise or non-exercise;

 

(G)                                Reliance
on Extraordinary Resolution: the Note Trustee shall
not be liable to any person by reason of having acted upon any Extraordinary
Resolution in writing or any Extraordinary Resolution or other resolution
purporting to have been passed at

 

21

 

any meeting of
the Noteholders of all or any class or classes in respect whereof minutes have
been made and signed even though subsequent to its acting it may be found that
there was some defect in the constitution of the meeting or the passing of the resolution
or (in the case of an Extraordinary Resolution in writing) that not all
Noteholders had signed the Extraordinary Resolution or that for any reason the
resolution was not valid or binding upon such Noteholders;

 

(H)                               Reliance
on Notice of  Prepayment: without prejudice to the right
of the Note Trustee to require and/or accept any other evidence, the Note
Trustee may accept as conclusive evidence of the matters certified therein a
certificate signed by two directors of the First Issuer under Clause 13(S)(ii).  The Note Trustee shall have no
responsibility to the Noteholders or any other person for guaranteeing or
ensuring that the First Issuer’s liabilities in respect of the First Issuer
Notes and any other amounts are in fact discharged on the due date and shall
have no liability to the Noteholders or any other person for any failure by the
First Issuer to discharge or pay such liabilities and other amounts;

 

(I)                                    First
Issuer Charged Property: the Note Trustee may
accept without enquiry, requisition or objection such title as the First Issuer
may have to the First Issuer Charged Property or any part thereof from time to
time and shall not be bound to investigate or make any enquiry into the title
of the First Issuer to the First Issuer Charged Property or any part thereof
from time to time whether or not any default or failure is or was known to the
Note Trustee or might be, or might have been, discovered upon examination,
inquiry or investigation and whether or not capable of remedy.  Notwithstanding the generality of the
foregoing, each Noteholder shall be solely responsible for making its own
independent appraisal of and investigation into the financial condition,
creditworthiness, condition, affairs, status and nature of the First Issuer,
and the Note Trustee shall not at any time have any responsibility for the same
and each Noteholder shall not rely on the Note Trustee in respect thereof;

 

(J)                                   Reliance
on Certificates or Confirmations: except in the
event of wilful default or manifest error, the Note Trustee shall be entitled
to rely without investigation or enquiry on a certificate or confirmation of
the Agent Bank, any Paying Agent, any Rating Agency or any Reference Bank in
respect of every matter and circumstance for which a certificate or confirmation
of the Agent Bank, any Paying Agent, any Rating Agency or any Reference Bank is
expressly provided for under these presents, the Conditions or any other
Transaction Document and to call for and rely upon a certificate or
confirmation of the Agent Bank, any Paying Agent, any Rating Agency or any
Reference Bank or any other person as to any other fact or matter prima facie
within the knowledge of the Agent Bank, any Paying Agent, any Rating Agency or
any Reference Bank or such other person, as sufficient evidence thereof and the
Note Trustee shall not be bound in any such case to call for further evidence
or be responsible for any loss, liability, costs, damages, expenses or
inconvenience that may be occasioned by its failing so to do or the exercise or
non-exercise by the Note Trustee of any of its powers, duties and discretions
hereunder;

 

(K)                               First
Issuer Notes Not Authentic: the Note Trustee shall
not be liable to any person by reason of having accepted as valid or not having
rejected any First Issuer Note purporting to be such and subsequently found to
be forged or not authentic;

 

22

 

(L)                                 Indemnity:
without prejudice to the right of indemnity by law
given to trustees, the First Issuer shall indemnify the Note Trustee (except
where the Note Trustee is indemnified by the Noteholders)  and keep it or him indemnified against all
liabilities to which it or he may be or become subject or which may be incurred
by it or him in the proper execution or purported proper execution of any of
its or his trusts, powers, authorities and discretions under these presents or
any other Transaction Document or its or his functions under any such
appointment or in respect of any other matter or thing done or omitted in any way
relating to these presents or any other Transaction Document or any such
appointment save to the extent that the same arises as a result of wilful
default, wilful misconduct, fraud or breach of trust on the part of the Note
Trustee.  The Note Trustee shall keep
the First Issuer informed of the progress of any claims against the Note
Trustee;

 

(M)                            Consent
or Approval: any consent or approval given by the
Note Trustee for the purposes of these presents or the First Issuer Notes may
be given on such terms and subject to such conditions (if any) as the Note
Trustee thinks fit (acting reasonably) and, notwithstanding anything to the
contrary in these presents or the First Issuer Notes, may be given
retrospectively;

 

(N)                               No
Disclosure Obligation: unless and to the extent
ordered so to do by a court of competent jurisdiction, the Note Trustee shall
not be required to disclose to any Noteholder any information (including,
without limitation, information of a confidential, financial or price sensitive
nature) made available to the Note Trustee by the First Issuer or any other
person in connection with these presents or any other Transaction Document and
no Noteholder shall be entitled to take any action to obtain from the Note
Trustee any such information;

 

(O)                               Currency
Conversion: where it is necessary or desirable for
any purpose in connection with these presents to convert any sum from one
currency to another it shall be converted (unless otherwise provided by these
presents or required by law) at such rate or rates, in accordance with such
method and as at such date for the determination of such rate of exchange, as
may be agreed by the Note Trustee in consultation with the First Issuer and any
rate, method and date so agreed shall be binding on the First Issuer and the
Noteholders;

 

(P)                                 Certificate
in respect of Material Prejudice: the Note Trustee
may certify whether or not any of the conditions, events and acts set out in Condition 9
(each of which conditions, events and acts shall, unless the Note Trustee in
its absolute discretion shall otherwise determine, for all the purposes of
these presents be deemed to include the circumstances resulting therein and the
consequences resulting therefrom) is in its opinion materially prejudicial to
the interests of the Noteholders of the relevant class or classes and any such
certificate shall be conclusive and binding upon the First Issuer and the
Noteholders;

 

(Q)                               Determination
by Note Trustee: the Note Trustee as between itself
and the Noteholders may determine all questions and doubts arising in relation
to any of the provisions of this Deed. 
Every such determination, whether or not relating in whole or in part to
the acts or proceedings of the Note Trustee, shall be conclusive and shall bind
the Note Trustee and the Noteholders;

 

23

 

(R)                                Interests
of Noteholders: in connection with the exercise by
the Note Trustee of any of its trusts, duties, rights, powers, authorities and
discretions under these presents and the other Transaction Documents:

 

(i)                                     where it is required to have regard to the interests of the
Noteholders of any class, it shall have regard to the interests of such
Noteholders as a class and, in particular but without prejudice to the
generality of the foregoing, shall not have regard to, or be in any way liable
for, the consequences of any exercise thereof for individual Noteholders
resulting from their being for any purpose domiciled or resident in, or
otherwise connected with, or subject to the jurisdiction of, any particular
territory, and the Note Trustee shall not be entitled to require, nor shall any
Noteholder be entitled to claim, from the First Issuer or any other person, any
indemnification or payment in respect of any tax consequence of any such exercise
upon individual Noteholders;

 

(ii)                                  except where expressly provided otherwise, it shall have regard to
the interests of the Class A First Issuer Noteholders, the Class B First Issuer
Noteholders and the Class C First Issuer Noteholders equally PROVIDED THAT (a)
if in the opinion of the Note Trustee there is a conflict between the interests
of the Class A First Issuer Noteholders, on the one hand and the interests of
the Class B First Issuer Noteholders and/or the Class C First Issuer
Noteholders on the other hand, the Note Trustee shall have regard only to the
interests of the Class A First Issuer Noteholders and subject to (b), if in the
opinion of the Note Trustee there is a conflict between the interests of the
Class B First Issuer Noteholders on one hand and the interests of the Class C
First Issuer Noteholders on the other hand, the Note Trustee shall have regard
only to the interests of the Class B First Issuer Noteholders; but so that this
proviso shall not apply in the case of powers, authorities or discretions in
relation to which it is expressly stated that they may be exercised by the Note
Trustee only if in its opinion the interests of all the Noteholders would not
be materially prejudiced thereby; and

 

(iii)                               it shall not have regard to, or be in any way liable for, the
consequences of any exercise thereof for any other First Issuer Secured
Creditor or any other person,

 

the Note
Trustee shall be entitled to assume, for the purposes of exercising any power,
right, trust, authority, duty or discretion under or in relation to the First
Issuer Notes, these presents or any of the other Transaction Documents, that
such exercise will not be materially prejudicial to the interests of the Class
A First Issuer Noteholders if each of the Rating Agencies has confirmed that
the then current rating by it of the Class A First Issuer Notes would not be
adversely affected by such exercise, that such exercise will not be materially
prejudicial to the interests of the Class B First Issuer Noteholders if each of
the Rating Agencies has confirmed that the then current rating by it of the
Class B First Issuer Notes would not be adversely affected by such exercise and
that such exercise will not be materially prejudicial to the interests of the
Class C First Issuer Noteholders if each of the Rating Agencies has
confirmed that the then current rating by it of the Class C First Issuer
Notes will not be adversely affected by such exercise;

 

24

 

(S)                                 Certificate
of Principal Amount Outstanding: the Note Trustee
may call for any certificate or other document to be issued by DTC, Euroclear
or Clearstream, Luxembourg as to the Principal Amount Outstanding of First
Issuer Notes represented by a Global First Issuer Note standing to the account
of any person.  Any such certificate or
other document shall (in the absence of manifest error) be conclusive and
binding for all purposes.  The Note
Trustee shall not be liable to any person by reason of having accepted as valid
or not having rejected any certificate or other document to such effect
purporting to be issued by DTC, Euroclear or Clearstream, Luxembourg and
subsequently found to be forged or not authentic;

 

(T)                                Professional
Charges: any trustee of these presents being a
lawyer, accountant, broker or other person engaged in any profession or
business shall be entitled to charge and be paid all usual professional and
other charges for business transacted and acts done by him or his firm in
connection with the trusts of these presents and also his reasonable charges in
addition to disbursements for all other work and business done and all time
spent by him or his firm in connection with matters arising in connection with
these presents;

 

(U)                               Power
of Attorney: the Note Trustee may whenever it
thinks fit (acting reasonably) delegate by power of attorney or otherwise to
any person or persons or fluctuating body of persons (whether being a joint
trustee of these presents or not) all or any of its trusts, powers, authorities
and discretions under these presents. 
Such delegation may be made upon such terms (including power to
sub-delegate) and subject to such conditions and regulations as the Note
Trustee may in the interests of the Noteholders think fit.  The Note Trustee shall not be under any
obligation to supervise the proceedings or acts of any such delegate or
sub-delegate or be in any way responsible for any liability incurred by reason
of any misconduct or default on the part of any such delegate or sub-delegate
(except where such delegate or sub-delegate is an affiliate, associate or
otherwise connected with the Note Trustee). 
The Note Trustee shall within a reasonable time after any such
delegation or any renewal, extension or termination thereof give notice thereof
to the First Issuer;

 

(V)                                Delegation:
the Note Trustee may in the conduct of the trusts
of these presents instead of acting personally employ and pay an agent (whether
being a lawyer or other professional person) to transact or conduct, or concur
in transacting or conducting, any business and to do, or concur in doing, all
acts required to be done in connection with these presents.  The Note Trustee shall not be in any way
responsible for any liability incurred by reason of any misconduct or default
on the part of any such agent or be bound to supervise the proceedings or acts
of any such agent;

 

(W)                           Ratings:
the Note Trustee shall have no responsibility for
the maintenance of any rating of any of the First Issuer Notes by the Rating
Agencies or any other person;

 

(X)                               No
Requirement to Perform Illegal Acts, etc.: no
provision of these presents shall require the Note Trustee to do anything which
may be illegal or contrary to applicable law or regulation or expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties, or in the exercise of any of its rights or powers or
otherwise in connection with these presents, any other Transaction Document or
the First Issuer Notes (including, without limitation, forming any opinion or
employing any legal, financial or other adviser), if it shall 

 

25

 

believe that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it;

 

(Y)                                Reports
by Note Trustee to Noteholders: if required by
Section 313(a) of the Trust Indenture Act, within 60 days after 31st
December of any year, commencing 31st December 2002, the Note Trustee
shall deliver to each Noteholder a brief report dated as of such 31st
December that complies with Section 313(a) of the Trust Indenture
Act.  The Note Trustee also shall comply
with Section 313(b), (c) and (d) of the Trust Indenture Act.  Reports delivered pursuant to this Clause 15
(Z) shall be sent as provided in Clause 24;

 

(Z)                                Preferential
Collection of Claims Against the First Issuer: the
Note Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship listed in Section 311(b) of the Trust
Indenture Act.  A Note Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust
Indenture Act to the extent indicated therein. 
The provisions of Section 311 of the Trust Indenture Act shall
apply to the First Issuer as the obligor of the First Issuer Notes;

 

(AA)                    Responsibility
for Reports etc: the Note Trustee has no
responsibility to verify or monitor the contents of, or (if applicable) to
check any calculations contained in, any reports, information, documents,
Officers’ Certificate and Opinions of Counsel delivered to the Note Trustee in
accordance with Clause 13(T), (EE) or (FF) or Clause 27, and is under no
obligation to inform Noteholders of the contents of any such reports,
information, documents, Officers’ Certificate and Opinions of Counsel, other
than allowing Noteholders upon reasonable notice, to inspect such reports,
information, documents, Officers’ Certificate and Opinions of Counsel;

 

(BB)                        Auditors
Reports and Certificates: any certificate or report
of the Auditors called for by or provided to the Note Trustee in accordance
with or for the purposes of these presents may be relied on upon by the Note
Trustee without further investigation or enquiry as sufficient evidence of the
facts stated therein notwithstanding that such certificate or report and/or any
engagement letter or other document entered into by the Note Trustee in
connection therewith contains a monetary or other limit on the liability of the
Auditors in respect thereof; and

 

(CC)                        Limitation
of Liability: subject to Clause 16 and save as
required for the purposes of the Trust Indenture Act, the Note Trustee shall
not be responsible for the genuineness, validity, effectiveness or suitability
of any of the Transaction Documents or any other documents entered into in
connection therewith or any other document or any obligation or rights created
or purported to be created thereby or pursuant thereto or any security or the
priority thereof constituted or purported to be constituted thereby or pursuant
thereto, nor shall it be responsible or liable to any person because of any
invalidity of any provision of such documents or the unenforceability thereof,
whether arising from statute, law or decisions of any court and (without
prejudice to the generality of the foregoing) the Note Trustee shall not have
any responsibility for or have any duty to make any investigation in respect of
or in any way be liable whatsoever for:

 

(i)                                     the nature, status, creditworthiness or solvency of the First Issuer
or Funding 1 or any other person or entity who has at any time provided any
security or

 

26

 

support
whether by way of guarantee, charge or otherwise in respect of any advance made
to the First Issuer;

 

(ii)                                  the execution, delivery, legality, validity, adequacy, admissibility
in evidence or enforceability of any Transaction Document or any other document
entered into in connection therewith;

 

(iii)                               the title, ownership, value, sufficiency, enforceability or
existence of any First Issuer Charged Property or any security (howsoever described)
relating thereto;

 

(iv)                              the registration, filing, protection or perfection of any security
(howsoever described) relating to the First Issuer Charged Property or the
priority of the security (howsoever described) thereby created whether in
respect of any initial advance or any subsequent advance or any other sums or
liabilities;

 

(v)                                 the scope or accuracy of any representations, warranties or
statements made by or on behalf of the First Issuer or Funding 1 or any other
person or entity who has at any time provided the same in any Transaction
Document or in any document entered into in connection therewith;

 

(vi)                              the performance or observance by the First Issuer or Funding 1 or
any other person of any provisions of any Transaction Document or any document
entered into in connection therewith or the fulfilment or satisfaction of any
conditions contained therein or relating thereto or as to the existence or
occurrence at any time of any default, event of default or similar event
howsoever described contained therein or any waiver or consent which has at any
time been granted in relation to any of the foregoing;

 

(vii)                           the existence, accuracy or sufficiency of any legal or other
opinions, searches, reports, certificates, valuations or investigations delivered
or obtained or required to be delivered or obtained at any time in connection
with any First Issuer Charged Property or Transaction Document;

 

(viii)                        the title of the First Issuer to any First Issuer Charged Property;

 

(ix)                                the suitability, adequacy or sufficiency of any applicable criteria
for any advances under the First Issuer Intercompany Loan Agreement or the
legality or recoverability or enforceability thereof or the priority of any
security (howsoever described) in relation thereto;

 

(x)                                   the failure by the First Issuer to obtain or comply with any
licence, consent or other authority in connection with the First Issuer Charged
Property or the Transaction Documents or the making of any advances in
connection therewith or the failure to effect or procure registration of or to
give notice to any person in relation to or otherwise protect the security
(howsoever described) created or purported to be created by or pursuant to any
of the First Issuer Charged Property or the Transaction Documents or other
documents entered into in connection therewith;

 

27

 

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

 

(xii)                             any assets comprised in the security (howsoever described) created
by the First Issuer Deed of Charge, or any deeds or documents of title thereto,
being uninsured or inadequately insured or being held by or to the order of
other parties to the Transaction Documents, clearing organisations or their
operators or by intermediaries such as banks, brokers, depositories,
warehousemen or other similar persons whether or not on behalf of the Note
Trustee;

 

(xiii)                          any accounts, books, records or files maintained by the First Issuer
or any other person in respect of any of the First Issuer Charged Property or
Transaction Documents; or

 

(xiv)                         any other matter or thing relating to or in any way connected with
any First Issuer Charged Property or Transaction Document or any document
entered into in connection therewith whether or not similar to the foregoing.

 

16.                               NOTE TRUSTEE’S LIABILITY

 

None of the
provisions of these presents shall, in any case in which the Note Trustee has
failed to show the degree of care and diligence required of it as trustee of
these presents, having regard to the provisions of these presents and any of
the other Transaction Documents to which the Note Trustee is a party conferring
on the Note Trustee any powers, authorities or discretions, relieve or
indemnify the Note Trustee against any liabilities which by virtue of any rule
of law would otherwise attach to it in respect of any wilful default, wilful
misconduct, breach of duty, negligence or breach of trust of which it may be
guilty in relation to its duties under these presents.

 

17.                               NOTE TRUSTEE CONTRACTING WITH THE
FIRST ISSUER

 

Neither the
Note Trustee nor any director or officer or holding company or associated
company of a corporation acting as a trustee under these presents shall by
reason of its or his fiduciary position be in any way precluded from:

 

(i)                                     entering into or being interested in any contract or financial or
other transaction or arrangement with the First Issuer or any other party to
the Transaction Documents or any person or body corporate associated with the
First Issuer or any other party to the Transaction Documents (including without
limitation any contract, transaction or arrangement of a banking or insurance
nature or any contract, transaction or arrangement in relation to the making of
loans or the provision of financial facilities or financial advice to, or the
purchase, placing or underwriting of or the subscribing or procuring
subscriptions for or otherwise acquiring, holding or dealing with, or acting as
paying agent in respect of, the First Issuer Notes or any other notes, bonds,
stocks, shares, debenture stock, debentures or other securities of, the First
Issuer or any other party to the Transaction Documents or any person or body
corporate associated as aforesaid); or

 

28

 

(ii)                                  accepting or holding the trusteeship of any other trust deed
constituting or securing any other notes issued by or relating to the First
Issuer or any other party to the Transaction Documents or any such person or
body corporate so associated or any other office of profit under the First
Issuer or any other party to the Transaction Documents or any such person or
body corporate so associated,

 

and shall be
entitled to exercise and enforce its rights, comply with its obligations and
perform its duties under or in relation to any such contract, transaction or
arrangement as is referred to in (i) above or, as the case may be, any such
trusteeship or office of profit as is referred to in (ii) above without regard
to the interests of the Noteholders and notwithstanding that the same may be
contrary or prejudicial to the interests of the Noteholders and shall not be
responsible for any liability occasioned to the Noteholders thereby and shall
be entitled to retain and shall not be in any way liable to account for any
profit made or share of brokerage or commission or remuneration or other amount
or benefit received thereby or in connection therewith.

 

Where any
holding company, subsidiary or associated company of the Note Trustee or any
director or officer of the Note Trustee acting other than in such capacity as
director or officer has any information, the Note Trustee shall not thereby be
deemed also to have knowledge of such information and, unless it shall have
express notice pursuant to this Deed of such information, shall not be
responsible for any loss suffered by Noteholders resulting from the Note
Trustee’s failing to take such information into account in acting or refraining
from acting under or in relation to these presents.

 

18.                               WAIVER, AUTHORISATION AND DETERMINATION

 

(A)                              The Note Trustee may, without the consent or sanction of the
Noteholders and without prejudice to its rights in respect of any subsequent
breach, from time to time and at any time but only if and in so far as in its
opinion the interests of the Noteholders of each class of First Issuer Notes
shall not be materially prejudiced thereby waive or authorise any breach or
proposed breach by the First Issuer or any other party thereto of any of the
covenants or provisions contained in these presents or any of the other
Transaction Documents or determine that any Note Event of Default shall not be
treated as such for the purposes of these presents PROVIDED ALWAYS THAT the
Note Trustee shall not exercise any powers conferred on it by this Clause in
contravention of any express direction given by Extraordinary Resolution of any
class of First Issuer Notes or by a request under Condition 9 or 10
but so that no such direction or request shall affect any waiver, authorisation
or determination previously given or made. Any such waiver, authorisation or
determination may be given or made on such terms and subject to such conditions
(if any) as the Note Trustee may determine, shall be binding on the Noteholders
and, if, but only if, the Note Trustee shall so require, shall be notified by
the First Issuer to the Noteholders in accordance with Condition 14 as soon as
practicable thereafter.  The provisions
of this Clause
18(A) shall be in lieu of section 316(a)(1)(B) of the Trust
Indenture Act and section 316(a)(1)(B) of the Trust Indenture Act is
hereby expressly excluded from this Deed and the First Issuer Notes, as
permitted by the Trust Indenture Act.

 

(B)                                MODIFICATION

 

(i)                                     The Note Trustee may without the consent or sanction of the
Noteholders at any time and from time to time concur with the First Issuer in
making any modification (except a Basic Terms Modification (as defined in paragraph 5
of Schedule 4

 

29

 

hereto))
(i) to these presents or any of the other Transaction Documents which in
the opinion of the Note Trustee it may be proper to make PROVIDED THAT the Note
Trustee is of the opinion that such modification will not be materially
prejudicial to the interests of the Noteholders of each class of First Issuer
Notes or (ii) to these presents or any of the other Transaction Documents
if in the opinion of the Note Trustee such modification is of a formal, minor
or technical nature or is necessary to correct a manifest error. Any such
modification may be made on such terms and subject to such conditions (if any)
as the Note Trustee may determine, shall be binding upon the Noteholders and,
unless the Note Trustee agrees otherwise, shall be notified by the First Issuer
to the Noteholders and the Rating Agencies in accordance with Condition 14
as soon as practicable thereafter.

 

(ii)                                  So long as any of the First Issuer Notes are rated by the Rating
Agencies, the First Issuer shall notify the Rating Agencies in writing as soon
as reasonably practicable thereafter of any modification to the provisions of
these presents, the First Issuer Notes or any of the other Transaction
Documents. The Note Trustee may also agree, without the consent of the
Noteholders, to a change of the laws governing the First Issuer Notes and/or
the Transaction Documents (and to any consequential amendments deriving therefrom)
PROVIDED THAT such change and consequential amendments would not, in the
opinion of the Note Trustee, be materially prejudicial to the interests of the
Noteholders.

 

(C)                                BREACH

 

Any breach of
or failure to comply with any such terms and conditions as are referred to in subclauses
(A) and (B) of this Clause shall constitute a
default by the First Issuer in the performance or observance of a covenant or
provision binding on it under or pursuant to these presents.

 

19.                               ENTITLEMENT TO TREAT NOTEHOLDER AS
ABSOLUTE OWNER

 

The First
Issuer, the Note Trustee, the Paying Agents, the Transfer Agent and the
Registrar may (to the fullest extent permitted by applicable laws) deem and
treat the registered holder of any First Issuer Note or of a particular principal
amount of the First Issuer Notes as the absolute owner of such First Issuer
Note or principal amount, as the case may be, for all purposes (whether or not
such First Issuer Note or principal amount shall be overdue and notwithstanding
any notice of ownership thereof or of trust or other interest with regard
thereto, any notice of loss or theft thereof or any writing thereon), and the
First Issuer, the Note Trustee, the Paying Agents, the Transfer Agent and the
Registrar shall not be affected by any notice to the contrary.  All payments made to any such registered
holder of a Definitive First Issuer Note or Global First Issuer Note shall be
valid and, to the extent of the sums so paid, effective to satisfy and
discharge the liability for the monies payable in respect of such First Issuer
Note or principal amount, as the case may be.

 

20.                               CURRENCY INDEMNITY

 

The First
Issuer shall indemnify the Note Trustee, every appointee of the Note Trustee
and the Noteholders and keep them indemnified against:

 

(a)                                  any liability incurred by any of them arising from the non-payment
by the First Issuer of any amount due to the Note Trustee or the Noteholders
under these presents by

 

30

 

reason of any
variation in the rates of exchange between those used for the purposes of
calculating the amount due under a judgment or order in respect thereof and
those prevailing at the date of actual payment by the First Issuer; and

 

(b)                                 any deficiency arising or resulting from any variation in rates of
exchange between (i) the date as of which the local currency equivalent of
the amounts due or contingently due under these presents (other than this
Clause) is calculated for the purposes of any bankruptcy, insolvency or
liquidation of the First Issuer and (ii) the final date for ascertaining
the amount of claims in such bankruptcy, insolvency or liquidation. The amount
of such deficiency shall be deemed not to be reduced by any variation in rates
of exchange occurring between the said final date and the date of any
distribution of assets in connection with any such bankruptcy, insolvency or
liquidation.

 

The above
indemnity (and the indemnities given by the First Issuer in Clause 14(E)
and Clause
15(L)) shall constitute obligations of the First Issuer separate and
independent from its obligations under the other provisions of these presents
and the First Issuer Notes and shall apply irrespective of any indulgence
granted by the Note Trustee or the Noteholders from time to time and shall
continue in full force and effect notwithstanding the judgment or filing of any
proof or proofs in any bankruptcy, insolvency or liquidation of the First
Issuer for a liquidated sum or sums in respect of amounts due under these
presents (other than this Clause).  Any
such deficiency as aforesaid shall be deemed to constitute a loss suffered by
the Noteholders and no proof or evidence of any actual loss shall be required
by the First Issuer or its liquidator or liquidators.

 

21.                               ELIGIBILITY AND DISQUALIFICATION;
NEW NOTE TRUSTEE

 

(A)                              ELIGIBILITY AND DISQUALIFICATION

 

This Deed
shall always have a Note Trustee which shall be eligible to act as Note Trustee
under Sections 310(a)(1) and 310(a)(2) of the Trust Indenture Act.  The Note Trustee shall have a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.  If the Note
Trustee has or shall acquire any “conflicting interest” within the meaning of
Section 310(b) of the Trust Indenture Act, the Note Trustee and the First
Issuer shall comply with the provisions of Section 310(b) of the Trust
Indenture Act; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the Trust Indenture Act any deed or
deeds under which other securities or certificates of interest or participation
in other securities of the First Issuer are outstanding if the requirements for
such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act
are met.  If at any time the Note
Trustee shall cease to be eligible in accordance with the provisions of this Clause 21(A),
the Note Trustee shall resign promptly in the manner and with the effect
specified in Clause 22.

 

(B)                                NEW NOTE TRUSTEE

 

(a)                                  Subject to paragraph (b) below the power to appoint a
new trustee of these presents shall be vested in the First Issuer but no person
shall be appointed who shall not previously have been approved by an
Extraordinary Resolution of the Class A First Issuer Noteholders, the Class B
First Issuer Noteholders and the Class C First Issuer Noteholders. One or
more persons may hold office as trustee or trustees of these presents but such
trustee or trustees shall be or include a Trust Corporation.

 

31

 

Whenever there
shall be more than two trustees of these presents the majority of such trustees
shall be competent to execute and exercise all the duties, powers, trusts,
authorities and discretions vested in the Note Trustee by these presents
provided that a Trust Corporation shall be included in such majority. Any
appointment of a new trustee of these presents shall as soon as practicable
thereafter be notified by the First Issuer to the Principal Paying Agent, the
Transfer Agent, the Registrar, the Noteholders and the Rating Agencies.

 

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

 

(C)                                SEPARATE AND CO-TRUSTEES

 

Notwithstanding
the provisions of subclause (B) above, the Note Trustee
may, upon giving prior notice to the First Issuer (but without requiring the
consent of the First Issuer or the Noteholders), appoint any person established
or resident in any jurisdiction (whether a Trust Corporation or not) to act
either as a separate trustee or as a co-trustee jointly with the Note Trustee:

 

(i)                                    if the Note Trustee considers such appointment to be in the
interests of the Noteholders;

 

(ii)                                  for the purposes of conforming to any legal requirements,
restrictions or conditions in any jurisdiction in which any particular act or
acts is or are to be performed; or

 

(iii)                               for the purposes of obtaining a judgment in any jurisdiction or the
enforcement in any jurisdiction of either a judgment already obtained or any of
the provisions of these presents or any of the other Transaction Documents
against the First Issuer or any other party thereto.

 

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

 

22.                               NOTE
TRUSTEE’S RETIREMENT AND REMOVAL

 

A trustee of
this Deed may retire at any time on giving not less than three months’ prior
written notice to the First Issuer without giving any reason and without being
responsible for any costs incurred by reason of such retirement. The
Noteholders may by Extraordinary

 

32

 

Resolution of
each class of Noteholders remove any trustee or trustees for the time being of
these presents. The First Issuer undertakes that in the event of the only
trustee of these presents which is a Trust Corporation giving notice under this
Clause or being removed by Extraordinary Resolution of each class of
Noteholders it will use its best endeavours to procure that a new trustee of
these presents being a Trust Corporation is appointed as soon as reasonably
practicable thereafter. The retirement or removal of any such trustee shall not
become effective until a successor trustee being a Trust Corporation is
appointed.  If a successor trustee being
a trust corporation has not been appointed within two months after the date of
the notice of retirement of the Note Trustee, then the retiring Note Trustee
may appoint its own successor trustee being a trust corporation.

 

23.                               NOTE
TRUSTEE’S POWERS TO BE ADDITIONAL

 

The powers
conferred upon the Note Trustee by these presents shall be in addition to any
powers which may from time to time be vested in the Note Trustee by the general
law or as a holder of any of the First Issuer Notes.

 

24.                               NOTICES

 

(A)                              Any notice or demand to the First Issuer or the Note Trustee to be
given, made or served for any purposes under these presents shall be in writing
and shall be given, made or served by sending the same by pre-paid post (first
class if inland, first class airmail if overseas) or facsimile transmission or
by delivering it by hand to:

 

(i)                                     First
Issuer:

 

Permanent
Financing (No. 1) PLC

Blackwell
House

Guildhall Yard

London EC2V
5AE

 

For the
attention of: the Directors

 

Facsimile: +44 (0) 20 7556 0975

 

With a copy to:

 

HBOS Treasury
Services plc

33 Old Broad
Street

London EC2N
1HZ

 

For the
attention of: Head of Capital Markets and Securitisation

 

Facsimile: +44
(0) 20 7574 8784

 

(ii)                                  Note
Trustee:

 

State Street
Bank and Trust Company

1 Canada
Square

Canary Wharf

London E14 5AF

 

33

 

For the
attention of: Corporate Trust

 

Facsimile: +44
(0) 20 7416 2548

 

or to such other
address or facsimile number as shall have been notified (in accordance with
this Clause) to the other party hereto and any notice or demand sent by post as
aforesaid shall be deemed to have been given, made or served three days in the
case of inland post or seven days in the case of overseas post after despatch
and any notice or demand sent by facsimile transmission as aforesaid shall be
deemed to have been given, made or served on report of successful transmission.

 

(B)                                COMMUNICATIONS
BY NOTEHOLDERS WITH OTHER NOTEHOLDERS

 

Noteholders
may communicate pursuant to Trust Indenture Act Section 312(b) with other
Noteholders with respect to their rights under this Deed or the First Issuer
Notes.  The First Issuer, the Note
Trustee, the Principal Paying Agent, the Registrar and anyone else shall have
the protection of Trust Indenture Act Section 312(c).

 

(C)                                NOTICES
TO NOTEHOLDERS

 

Any notice or
communication mailed to Noteholders hereunder shall be transmitted by mail:

 

(i)                                     to all Noteholders of Definitive First Issuer Notes, as the names
and addresses of such Noteholders appear upon the Register; and

 

(ii)                                  to such other Noteholders as have, within the two years
preceding such transmission, filed their names and addresses with the Note
Trustee for that purpose.

 

25.                               RIGHTS OF THIRD PARTIES

 

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

 

26.                               TRUST INDENTURE ACT PREVAILS

 

If any
provision of this Deed limits, qualifies or conflicts with another provision
which is required to be included in this Deed by, and is not subject to a
contractual waiver under, the Trust Indenture Act, the required provision of
the Trust Indenture Act shall prevail.

 

27.                               CERTIFICATES AND OPINIONS

 

(A)                              CERTIFICATE
AND OPINIONS AS TO CONDITIONS PRECEDENT

 

Upon any
request or application by the First Issuer to the Note Trustee to take any
action under this Deed, the First Issuer shall furnish to the Note Trustee:

 

(i)                                     an Officers’ Certificate (which shall include the statements set
forth in Clause 27(B)
below) stating that, in the opinion of the signers, all conditions precedent,
if any,

 

34

 

provided for
in this Deed or required by the Note Trustee pursuant to the terms of this Deed
relating to the proposed action have been complied with; and

 

(ii)                                  an Opinion of Counsel (which shall include the statements set forth
in Clause 27(B)
below) stating that, in the opinion of such counsel, all such conditions
precedent, if any, provided for in this Deed or required by the Note Trustee
pursuant to the terms of this Deed relating to the proposed action have been
complied with.

 

(B)                                STATEMENTS REQUIRED IN CERTIFICATE AND OPINION

 

Each
certificate and opinion with respect to compliance with a condition or covenant
provided for in this Deed shall include:

 

(i)                                     a statement that the person making such certificate or opinion has
read such covenant or condition and the definitions relating thereto;

 

(ii)                                  a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

 

(iii)                               a statement that, in the opinion of such person, it or he has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and

 

(iv)                              a statement as to whether or not, in the opinion of such person,
such covenant or condition has been complied with.

 

28.                               GOVERNING LAW

 

These presents
and the First Issuer Notes are governed by, and shall be construed in
accordance with, English law.

 

29.                               COUNTERPARTS

 

This Deed and
any trust deed supplemental hereto may be executed and delivered in any number
of counterparts, all of which, taken together, shall constitute one and the
same deed and any party to this Deed or any trust deed supplemental hereto may
enter into the same by executing and delivering a counterpart.

 

30.                               SUBMISSION TO JURISDICTION

 

Each party to
this Deed hereby irrevocably submits to the non-exclusive jurisdiction of the
English courts in any action or proceeding arising out of or relating to this
Deed 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 Deed hereby irrevocably
waives, to the fullest extent it may possibly do so, any defence or claim that
the English courts are inconvenient forum for the maintenance or hearing of
such action or proceeding.

 

IN WITNESS WHEREOF this
Deed has been executed as a deed by the First Issuer and the Note Trustee and
delivered on the date first stated on page 1.

 

35

 

The First Issuer

 

	
  EXECUTED and
  DELIVERED as a DEED by

  	
  )

  	
   

  
	
  PERMANENT FINANCING (NO. 1) PLC

  	
  )

  	
  James McDonald

  
	
  acting by
  two directors/a

  	
  )

  	
   

  
	
  director and
  the secretary

  	
  )

  	
  Kate Hamblin

  

 

Director

 

Director/Secretary

 

 

The Note Trustee

 

	
  EXECUTED and
  DELIVERED as a DEED by

  	
  )

  	
   

  
	
  STATE STREET BANK AND

  	
  )

  	
  David Duclos

  
	
  TRUST COMPANY

  	
  )

  	
   

  
	
  acting by
  its authorised signatory

  	
  )

  	
   

  

 

 

Authorised
Signatory:

 

36

 

SCHEDULE 1

 

FORMS OF GLOBAL FIRST
ISSUER NOTES

 

PART A

(1)

 

SERIES 1 CLASS A GLOBAL
FIRST ISSUER NOTE

 

NOTE NO. 1

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 1 CLASS A GLOBAL
FIRST ISSUER NOTE

representing
up to

 

US$500,000,000 Series 1
Class A Asset Backed Floating Rate First Issuer Notes due 2003

 

(Initial
aggregate principal amount of Series 1 Class A Global Notes: US$750,000,000)

 

This Series 1
Class A Global First Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 1 Class A First Issuer
Notes of Permanent
Financing (No. 1) PLC (the “First Issuer”), designated as specified in
the title hereof (the “First Issuer Notes”), limited to the
aggregate principal amount of up to five hundred million US dollars
(US$500,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company,  as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The
aggregate principal amount from time to time of this Global First Issuer Note
shall be that amount not exceeding US$500,000,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is to
certify that:

 

Cede
& Co. as nominee on behalf of The Depositary Trust Company

 

is/are the
duly registered holder(s) of one of the Series 1 Class A Global First Issuer
Notes. This Global First Issuer Note is evidence of entitlement only.  Title to the Global First Issuer Notes
passes only on due registration in the Register and only the registered holder
is entitled to payment in respect of this Global First Issuer Note.

 

1.                                       Promise
to pay

 

Subject as
provided in this Global First Issuer Note the First Issuer promises to pay to
the registered holder hereof the principal amount of this Global First Issuer
Note (being at the

 

37

 

date hereof
five hundred million US dollars (US$500,000,000)) on the Interest Payment Date
falling in June 2003 (or on such earlier date as the said principal amount
may become repayable in accordance with the Conditions or the First Issuer
Trust Deed) and to pay interest monthly or quarterly, as the case may be, in
arrear on each Interest Payment Date on the principal amount from time to time
of this Global First Issuer Note at the rates determined in accordance with the
Conditions together with such premium and other amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable (free of charge to
the holder) for Definitive First Issuer Notes only if (i) The Depositary Trust
Company (“DTC”)
has notified the First Issuer that it is at any time unwilling or unable to
continue as holder of this Global First Issuer Note or is at any time unwilling
or unable to continue as, or ceases to be, a clearing agency under the United
States Securities Exchange Act of 1934, as amended (the “Exchange Act”), and a
successor to DTC registered as a clearing agency under the Exchange Act is not
able to be appointed by the First Issuer within 90 days of such notification,
or (ii) as a result of any amendment to, or change in, the laws or
regulations of the United Kingdom (or of any political subdivision thereof), or
of any authority therein or thereof having power to tax, or in the
interpretation or administration by a revenue authority or a court or
administration of such laws or regulations which becomes effective on or after
the Initial Closing Date, the First Issuer or any Paying Agent is or will be
required to make any deduction or withholding from any payment in respect of
the First Issuer Notes which would not be required were the relevant First
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global First Issuer Note (acting on the
instructions of (a) holder(s) of (a) Book-Entry Interest(s) (as defined in Section 3
hereof)) may give notice to the First Issuer, and the First Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global First Issuer Note for Definitive First Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after
the Exchange Date, the holder of this Global First Issuer Note shall surrender
this Global First Issuer Note to or to the order of the Registrar.  In exchange for this Global First Issuer
Note the First Issuer will deliver, or procure the delivery of, Definitive
First Issuer Notes in registered form in denominations of US$1,000 or US$10,000
each or any integral multiple thereof, or in such other denominations as the
Note Trustee shall determine and notify to the relevant Noteholders, in
exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the
cancellation of a part of this Global First Issuer Note in accordance with the
First Issuer Trust Deed, the Conditions and the First Issuer Paying Agent and
Agent Bank Agreement, the portion of the principal amount hereof so exchanged
or so purchased and cancelled shall be endorsed by or on behalf of the
Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the

 

38

 

order of the
Registrar and cancelled and, if the holder of this Global First Issuer Note
requests, returned to it together with any relevant Definitive First Issuer
Notes.

 

3.                                       Payments

 

Until the
entire principal amount of this Global First Issuer Note has been extinguished,
this Global First Issuer Note shall be entitled to the benefit of and be bound
by the Conditions, the First Issuer Trust Deed and the First Issuer Deed of
Charge. Payments of principal, premium (if any) and interest in respect of
First Issuer Notes represented by this Global First Issuer Note will be made in
accordance with the Conditions.  Upon
any payment of principal, premium or interest on this Global First Issuer Note
the amount so paid shall be endorsed by or on behalf of the Registrar on behalf
of the First Issuer on Part I of the Schedule hereto.

 

Upon any
payment of principal and endorsement of such payment on Part I of the
Schedule hereto, the principal amount of this Global First Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments
of any amounts payable and paid to the registered holder of this Global First
Issuer Note shall be valid and, to the extent of the sums so paid, effectual to
satisfy and discharge the liability for the monies payable hereon.

 

4.                                       DTC

 

References
herein to DTC shall be deemed to include references to any other clearing
system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global
First Issuer Note shall not be or become valid or obligatory for any purpose
unless and until authenticated by or on behalf of the Registrar.

 

6.                                       Governing
law

 

This Global
First Issuer Note is governed by, and shall be construed in accordance with,
the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  

 

Issued in London, England on 14th June, 2002.

 

39

 

Certificate of
authentication

 

This Global First Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

40

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such 

  payment

  	
   

  	
  Notation
  made 

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

41

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal

  amount 

  purchased and cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on behalf of the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

42

 

PART
A

(2)

 

SERIES
1 CLASS A GLOBAL FIRST ISSUER NOTE

 

NOTE
NO. 2

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
1 CLASS A GLOBAL FIRST ISSUER NOTE

representing up to

 

US$250,000,000
Series 1 Class A Asset Backed Floating Rate First Issuer Notes due 2003

 

(Initial aggregate principal amount of Series
1 Class A Global Notes: US$750,000,000)

 

This Series 1 Class A Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 1
Class A First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to two hundred and fifty million US
dollars (US$250,000,000) and constituted by a First Issuer Trust Deed dated
14th June, 2002 (the “First Issuer Trust Deed”) between the First
Issuer and State Street and Trust Company,  as trustee (the trustee for
the time being thereof being herein called the “Note  Trustee”).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the First Issuer Trust
Deed.  Terms not defined herein have the
meanings ascribed to them in the Master Definitions and Construction
Schedule and the First Issuer Master Definitions and Construction
Schedule, both dated 13th June, 2002 and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood, and the
First Issuer Trust Deed.  The aggregate
principal amount from time to time of this Global First Issuer Note shall be
that amount not exceeding US$250,000,000 as shall be shown by the latest entry
duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 1 Class A
Global First Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof two hundred and fifty
million US dollars (US$250,000,000)) on the Interest Payment Date falling in
June 2003 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the First Issuer Trust Deed) and
to pay interest monthly or quarterly, as the case may be, in arrear on each
Interest Payment Date

 

43

 

on the principal amount from time to time of this Global First Issuer
Note at the rates determined in accordance with the Conditions together with
such premium and other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the First Issuer Trust
Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in accordance
with the First Issuer Trust Deed, the Conditions and the First Issuer Paying
Agent and Agent Bank Agreement, the portion of the principal amount hereof so
exchanged or so purchased and cancelled shall be endorsed by or on behalf of
the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

44

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First Issuer
Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or interest on this Global
First Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the First Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

45

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

46

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

47

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

48

 

PART
B

 

SERIES
1 CLASS B GLOBAL FIRST ISSUER NOTE

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
1 CLASS B GLOBAL FIRST ISSUER NOTE

representing up to

 

US$26,000,000
Series 1 Class B Asset Backed Floating Rate First Issuer Notes due 2042

 

This Series 1 Class B Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 1
Class B First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to twenty-six US dollars
(US$26,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The
aggregate principal amount from time to time of this Global First Issuer Note
shall be that amount not exceeding US$26,000,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 1 Class B
Global First Issuer Notes. This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof twenty-six million US
dollars (US$26,000,000)) on the Interest Payment Date falling in June 2042
(or on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the First Issuer Trust Deed) and to pay
interest quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with the Conditions together with such premium and
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

49

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the Registrar.  In exchange for this Global First Issuer
Note the First Issuer will deliver, or procure the delivery of, Definitive
First Issuer Notes in registered form in denominations of US$1,000 or US$10,000
each or any integral multiple thereof, or in such other denominations as the
Note Trustee shall determine and notify to the relevant Noteholders, in
exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying Agent and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the First Issuer on Part II of
the Schedule hereto, whereupon the principal amount hereof shall be
increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First

 

50

 

Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies payable
hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

51

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

52

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

53

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal amount

  purchased and cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on behalf of the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

54

 

PART
C

 

SERIES
1 CLASS C GLOBAL FIRST ISSUER NOTE

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
1 CLASS C GLOBAL FIRST ISSUER NOTE

representing up to

 

US$26,000,000
Series 1 Class C Asset Backed Floating Rate First Issuer Notes due 2042

 

This Series 1 Class C Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 1
Class C First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to twenty-six million US dollars
(US$26,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The aggregate
principal amount from time to time of this Global First Issuer Note shall be
that amount not exceeding US$26,000,000 as shall be shown by the latest entry
duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 1 Class C
Global First Issuer Notes. This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof twenty-six million US
dollars (US$26,000,000) on the Interest Payment Date falling in June 2042
(or on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the First Issuer Trust Deed) and to pay
interest quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with the Conditions together with such premium and
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

55

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a clearing
agency under the Exchange Act is not able to be appointed by the First Issuer
within 90 days of such notification, or (ii) as a result of any amendment to,
or change in, the laws or regulations of the United Kingdom (or of any
political subdivision thereof), or of any authority therein or thereof having
power to tax, or in the interpretation or administration by a revenue authority
or a court or administration of such laws or regulations which becomes
effective on or after the Initial Closing Date, the First Issuer or any Paying
Agent is or will be required to make any deduction or withholding from any
payment in respect of the First Issuer Notes which would not be required were
the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First

 

56

 

Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

57

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

58

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of 

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

59

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

60

 

PART
D

(1)

 

SERIES
2 CLASS A GLOBAL FIRST ISSUER NOTE

 

NOTE
NO. 1

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
2 CLASS A GLOBAL FIRST ISSUER NOTE

representing up to

 

 US$500,000,000 Series 2 Class A Asset Backed
Fixed-Floating Rate

First
Issuer Notes due 2007

 

(Initial aggregate principal amount of Series
2 Class A Global Notes: US$750,000,000)

 

This Series 2 Class A Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to five hundred million US dollars
(US$500,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated and made on 13th June, 2002 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood, and the First Issuer Trust Deed. 
The aggregate principal amount from time to time of this Global First
Issuer Note shall be that amount not exceeding US$500,000,000 as shall be shown
by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class A
Global First Issuer Notes. This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof five hundred million US
dollars (US$500,000,000) on the Interest Payment Date falling in June 2007
(or on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the First Issuer Trust Deed) and to pay

 

61

 

quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with the Conditions together with such premium and
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

62

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

63

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

64

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of 

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

65

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

66

 

PART
D

(2)

 

SERIES
2 CLASS A GLOBAL FIRST ISSUER NOTE

 

NOTE
NO. 2

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
2 CLASS A GLOBAL FIRST ISSUER NOTE

representing up to

 

US$250,000,000
Series 2 Class A Asset Backed Fixed-Floating Rate

First
Issuer Notes due 2007

 

(Initial aggregate principal amount of Series
2 Class A Global Notes: US$750,000,000)

 

This Series 2 Class A Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to two hundred and fifty million US
dollars (US$250,000,000) and constituted by a First Issuer Trust Deed dated
14th June, 2002 (the “First Issuer Trust Deed”) between the First
Issuer and State Street and Trust Company, as trustee (the trustee for
the time being thereof being herein called the “Note  Trustee”).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the First Issuer Trust
Deed.  Terms not defined herein have the
meanings ascribed to them in the Master Definitions and Construction
Schedule and the First Issuer Master Definitions and Construction
Schedule, both dated and made on 13th June, 2002 and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood, and the
First Issuer Trust Deed.  The aggregate
principal amount from time to time of this Global First Issuer Note shall be
that amount not exceeding US$250,000,000 as shall be shown by the latest entry
duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class A
Global First Issuer Notes. This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof two hundred and fifty
million US dollars (US$250,000,000) on the Interest Payment Date falling in
June 2007 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the First Issuer Trust Deed) and
to

 

67

 

pay quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with the Conditions together with such premium and
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required were
the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

68

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the First
Issuer Deed of Charge. Payments of principal, premium (if any) and interest in
respect of First Issuer Notes represented by this Global First Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal, premium or interest on this Global First
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the First Issuer on Part I of the
Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

69

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

70

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of 

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

71

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

72

 

PART
E

 

SERIES
2 CLASS B GLOBAL FIRST ISSUER NOTE

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
2 CLASS B GLOBAL FIRST ISSUER NOTE

representing up to

 

US$26,000,000
Series 2 Class B Asset Backed Floating Rate First Issuer Notes due 2042

 

This Series 2 Class B Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class B First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to twenty-six million US dollars
(US$26,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated and made on 13th June, 2002 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood, and the First Issuer Trust Deed. 
The aggregate principal amount from time to time of this Global First
Issuer Note shall be that amount not exceeding US$26,000,000 as shall be shown
by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class B
Global First Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof to twenty-six million US
dollars (US$26,000,000) on the Interest Payment Date falling in June 2042
(or on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the First Issuer Trust Deed) and to pay
interest quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with the Conditions together with such premium and
other amounts (if any) as may be payable, all

 

73

 

subject to and in accordance with the Conditions and the provisions of
the First Issuer Trust Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue authority
or a court or administration of such laws or regulations which becomes
effective on or after the Initial Closing Date, the First Issuer or any Paying
Agent is or will be required to make any deduction or withholding from any
payment in respect of the First Issuer Notes which would not be required were
the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the Schedule hereto,
whereupon the principal amount hereof shall be increased or, as the case may
be, reduced for all purposes by the amount so exchanged or so purchased and
cancelled and endorsed.  Upon the exchange
of the whole of this Global First Issuer Note for Definitive First Issuer
Notes, this Global First Issuer Note shall be surrendered to or to the order of
the Registrar and cancelled and, if the holder of this Global First Issuer Note
requests, returned to it together with any relevant Definitive First Issuer
Notes.

 

74

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

75

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

76

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of 

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

77

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

78

 

PART
F

 

SERIES
2 CLASS C GLOBAL FIRST ISSUER NOTE

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
2 CLASS C GLOBAL FIRST ISSUER NOTE

representing up to

 

US$26,000,000
Series 2 Class C Asset Backed Floating Rate First Issuer Notes due 2042

 

This Series 2 Class C Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class C First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to twenty-six million US dollars
(US$26,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
Bank and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated and made on 13th June, 2002 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood, and the First Issuer Trust Deed. 
The aggregate principal amount from time to time of this Global First
Issuer Note shall be that amount not exceeding US$26,000,000 as shall be shown
by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class C
Global First Issuer Notes . This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof to twenty-six million US
dollars (US$26,000,000) on the Interest Payment Date falling in June 2042
(or on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the First Issuer Trust Deed) and to pay
interest quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with the Conditions together with such premium and
other amounts (if any) as may be payable, all

 

79

 

subject to and in accordance with the Conditions and the provisions of
the First Issuer Trust Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other denominations
as the Note Trustee shall determine and notify to the relevant Noteholders, in
exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

80

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

81

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

82

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of 

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

83

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

84

 

PART
G

(1)

 

SERIES
3 CLASS A GLOBAL FIRST ISSUER NOTE

 

NOTE
NO. 1

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
3 CLASS A GLOBAL FIRST ISSUER NOTE

representing up to

 

US$500,000,000
Series 3 Class A Asset Backed Floating Rate First Issuer Notes due 2007

 

(Initial aggregate principal amount of Series
3 Class A Global Notes: US$1,100,000,000)

 

This Series 3 Class A Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class A First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to five hundred million US dollars
(US$500,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The
aggregate principal amount from time to time of this Global First Issuer Note
shall be that amount not exceeding US$500,000,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class A
Global First Issuer Notes. This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof to five hundred million US
dollars (US$500,000,000) on the Interest Payment Date falling in
December 2007 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the First Issuer Trust
Deed) and to

 

85

 

pay interest quarterly in arrear on each Interest Payment Date on the
principal amount from time to time of this Global First Issuer Note at the
rates determined in accordance with the Conditions together with such premium
and other amounts (if any) as may be payable, all subject to and in accordance
with the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

86

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and
interest in respect of First Issuer Notes represented by this Global First
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on Part I
of the Schedule hereto, the principal amount of this Global First Issuer
Note shall be reduced for all purposes by the principal amount so paid and
endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

 

PERMANENT
FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

87

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

88

 

THE
SCHEDULE

 

PART
I

 

PAYMENTS
OF PRINCIPAL, PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of 

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

89

 

PART
II

 

EXCHANGES,

PURCHASES
AND CANCELLATIONS

 

The following exchanges for Definitive First Issuer Notes and purchases
and cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part of
  principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part of
  principal 

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount 

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on 

  behalf of the First 

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

90

 

PART
G

(2)

 

SERIES
3 CLASS A GLOBAL FIRST ISSUER NOTE

 

NOTE
NO. 2

 

PERMANENT
FINANCING (NO. 1) PLC

 

(Incorporated with limited liability in
England with registered number 4416192)

 

SERIES
3 CLASS A GLOBAL FIRST ISSUER NOTE

representing up to

 

US$500,000,000
Series 3 Class A Asset Backed Floating Rate First Issuer Notes due 2007

 

(Initial aggregate principal amount of Series
3 Class A Global Notes: US$1,100,000,000)

 

This Series 3 Class A Global First Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class A First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to five hundred million US dollars
(US$500,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The
aggregate principal amount from time to time of this Global First Issuer Note
shall be that amount not exceeding US$500,000,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class A
Global First Issuer Notes. This Global First Issuer Note is evidence of
entitlement only.  Title to the Global
First Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global First Issuer
Note.

 

1.                                       Promise to
pay

 

Subject as provided in this Global First Issuer Note the First Issuer
promises to pay to the registered holder hereof the principal amount of this
Global First Issuer Note (being at the date hereof to five hundred million US
dollars (US$500,000,000) on the Interest Payment Date falling in
December 2007 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the First Issuer Trust
Deed) and to pay interest quarterly in arrear on each Interest Payment Date on
the principal amount from

 

91

 

time to time of this Global First Issuer Note at the rates determined
in accordance with the Conditions together with such premium and other amounts
(if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange for
Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be
exchangeable (free of charge to the holder) for Definitive First Issuer Notes
only if (i) The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a clearing
agency under the Exchange Act is not able to be appointed by the First Issuer
within 90 days of such notification, or (ii) as a result of any amendment to,
or change in, the laws or regulations of the United Kingdom (or of any
political subdivision thereof), or of any authority therein or thereof having
power to tax, or in the interpretation or administration by a revenue authority
or a court or administration of such laws or regulations which becomes
effective on or after the Initial Closing Date, the First Issuer or any Paying
Agent is or will be required to make any deduction or withholding from any
payment in respect of the First Issuer Notes which would not be required were
the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this Global First Issuer
Note shall surrender this Global First Issuer Note to or to the order of the
Registrar.  In exchange for this Global
First Issuer Note the First Issuer will deliver, or procure the delivery of,
Definitive First Issuer Notes in registered form in denominations of US$1,000
or US$10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange
Date” means a day specified in the notice requiring exchange falling
not more than 60 days after that on which such notice is given and on which
banks are open for business in the city in which the specified office of the
Registrar is located and in the city in which the relevant clearing system is
located.

 

Upon the cancellation of a part of this Global First Issuer Note in
accordance with the First Issuer Trust Deed, the Conditions and the First
Issuer Paying and Agent Bank Agreement, the portion of the principal amount
hereof so exchanged or so purchased and cancelled shall be endorsed by or on
behalf of the Registrar on behalf of the First Issuer on Part II of the
Schedule hereto, whereupon the principal amount hereof shall be increased
or, as the case may be, reduced for all purposes by the amount so exchanged or
so purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global First Issuer Note for
Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

92

 

3.                                       Payments

 

Until the entire principal amount of this Global First Issuer Note has
been extinguished, this Global First Issuer Note shall be entitled to the
benefit of and be bound by the Conditions, the First Issuer Trust Deed and the
First Issuer Deed of Charge. Payments of principal, premium (if any) and interest
in respect of First Issuer Notes represented by this Global First Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal, premium or interest on this Global
First Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the First Issuer on Part I of the
Schedule hereto.

 

Upon any payment of principal and endorsement of such payment on
Part I of the Schedule hereto, the principal amount of this Global
First Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the registered holder
of this Global First Issuer Note shall be valid and, to the extent of the sums
so paid, effectual to satisfy and discharge the liability for the monies
payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become valid or
obligatory for any purpose unless and until authenticated by or on behalf of
the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and shall be construed in
accordance with, the laws of England.

 

IN WITNESS WHEREOF the
First Issuer has caused this Global First Issuer Note to be signed manually or
in facsimile by a person duly authorised on its behalf.

 

 

PERMANENT
FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  

 

Issued in London, England on 14th June, 2002.

 

93

 

Certificate
of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK,
N.A.

as Registrar

 

94

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The
following payments on this Global First Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

95

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The
following exchanges for Definitive First Issuer Notes and purchases and
cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

96

 

PART G

(3)

 

SERIES 3 CLASS A GLOBAL
FIRST ISSUER NOTE

 

NOTE NO. 3

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 3 CLASS A GLOBAL
FIRST ISSUER NOTE

representing
up to

 

US$100,000,000 Series 3
Class A Asset Backed Floating Rate First Issuer Notes due 2007

 

(Initial
aggregate principal amount of Series 3 Class A Global Notes: US$1,100,000,000)

 

This
Series 3 Class A Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 3 Class A
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to one hundred million US dollars
(US$100,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The
aggregate principal amount from time to time of this Global First Issuer Note
shall be that amount not exceeding US$100,000,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is
to certify that:

 

Cede
& Co. as nominee on behalf of The Depositary Trust Company

 

is/are
the duly registered holder(s) of one of the Series 3 Class A Global First
Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof to one
hundred million US dollars (US$100,000,000) on the Interest Payment Date falling
in December 2007 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the First Issuer Trust
Deed) and to

 

97

 

pay interest quarterly in arrear on each Interest
Payment Date on the principal amount from time to time of this Global First
Issuer Note at the rates determined in accordance with the Conditions together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of US$1,000 or US$10,000 each or any integral multiple thereof, or in such
other denominations as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global First Issuer
Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the First Issuer on Part II of
the Schedule hereto, whereupon the principal amount hereof shall be
increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

98

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge. Payments of principal, premium
(if any) and interest in respect of First Issuer Notes represented by this
Global First Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global First Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on 14th June,
2002.

 

99

 

Certificate of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as
Registrar

 

100

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

101

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

The
following exchanges for Definitive First Issuer Notes and purchases and
cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

102

 

PART H

 

SERIES 3 CLASS B GLOBAL
FIRST ISSUER NOTE

 

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 3 CLASS B GLOBAL
FIRST ISSUER NOTE

representing
up to

 

US$38,500,000 Series 3
Class B Asset Backed Floating Rate First Issuer Notes due 2042

 

This
Series 3 Class B Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 3 Class B
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to thirty eight million five hundred
thousand US dollars (US$38,500,000) and constituted by a First Issuer Trust
Deed dated 14th June, 2002 (the “First Issuer Trust Deed”) between the First
Issuer and State Street Bank and Trust Company, as trustee (the trustee
for the time being thereof being herein called the “Note  Trustee”).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the First Issuer Trust
Deed.  Terms not defined herein have the
meanings ascribed to them in the Master Definitions and Construction
Schedule and the First Issuer Master Definitions and Construction
Schedule, both dated 13th June, 2002 and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood, and the
First Issuer Trust Deed.  The aggregate
principal amount from time to time of this Global First Issuer Note shall be
that amount not exceeding US$38,500,000 as shall be shown by the latest entry
duly made in the Schedule hereto.

 

This is
to certify that:

 

Cede
& Co. as nominee on behalf of The Depositary Trust Company

 

is/are
the duly registered holder(s) of one of the Series 3 Class B Global First
Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof to thirty
eight million five hundred thousand US dollars (US$38,500,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
First Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
First Issuer Note at the rates determined in accordance with the Conditions
together with such premium and other amounts (if any) as

 

103

 

may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of US$1,000 or US$10,000 each or any integral multiple thereof, or in such
other denominations as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global First Issuer
Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the First Issuer on Part II of
the Schedule hereto, whereupon the principal amount hereof shall be
increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

104

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge. Payments of principal, premium
(if any) and interest in respect of First Issuer Notes represented by this
Global First Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global First Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on14th, 2002.

 

105

 

Certificate of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as
Registrar

 

106

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

107

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

 

The
following exchanges for Definitive First Issuer Notes and purchases and
cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

108

 

PART I

 

SERIES 3 CLASS C GLOBAL
FIRST ISSUER NOTE

 

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 3 CLASS C GLOBAL
FIRST ISSUER NOTE

representing
up to

 

US$38,500,000 Series 3
Class C Asset Backed Floating Rate First Issuer Notes due 2042

 

This
Series 3 Class C Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 3 Class C
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to thirty eight million five hundred
thousand US dollars (US$38,500,000) and constituted by a First Issuer Trust
Deed dated 14th June, 2002 (the “First Issuer Trust Deed”) between the First
Issuer and State Street Bank and Trust Company, as trustee (the trustee
for the time being thereof being herein called the “Note  Trustee”).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the First Issuer Trust
Deed.  Terms not defined herein have the
meanings ascribed to them in the Master Definitions and Construction
Schedule and the First Issuer Master Definitions and Construction
Schedule, both dated 13th June, 2002 and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood, and the
First Issuer Trust Deed.  The aggregate
principal amount from time to time of this Global First Issuer Note shall be
that amount not exceeding US$38,500,000 as shall be shown by the latest entry
duly made in the Schedule hereto.

 

This is
to certify that:

 

Cede
& Co. as nominee on behalf of The Depositary Trust Company

 

is/are
the duly registered holder(s) of one of the Series 3 Class C Global First
Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof to thirty
eight million five hundred thousand US dollars (US$38,500,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
First Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
First Issuer Note at the rates determined in accordance with the Conditions
together with such premium and other amounts (if any) as

 

109

 

may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
The Depositary Trust Company (“DTC”) has notified the First Issuer that it
is at any time unwilling or unable to continue as holder of this Global First
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and a successor to DTC registered as a
clearing agency under the Exchange Act is not able to be appointed by the First
Issuer within 90 days of such notification, or (ii) as a result of any
amendment to, or change in, the laws or regulations of the United Kingdom (or
of any political subdivision thereof), or of any authority therein or thereof
having power to tax, or in the interpretation or administration by a revenue
authority or a court or administration of such laws or regulations which
becomes effective on or after the Initial Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the relevant First Issuer Notes in definitive registered form.  Thereupon the holder of this Global First
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to
the First Issuer, and the First Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global First Issuer Note for
Definitive First Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of US$1,000 or US$10,000 each or any integral multiple thereof, or in such
other denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the First Issuer on Part II of
the Schedule hereto, whereupon the principal amount hereof shall be
increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes, this Global First Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

110

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge. Payments of principal, premium
(if any) and interest in respect of First Issuer Notes represented by this
Global First Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal, premium or
interest on this Global First Issuer Note the amount so paid shall be endorsed
by or on behalf of the Registrar on behalf of the First Issuer on Part I
of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the registered
holder of this Global First Issuer Note shall be valid and, to the extent of
the sums so paid, effectual to satisfy and discharge the liability for the
monies payable hereon.

 

4.                                       DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on 14th June,
2002.

 

111

 

Certificate of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as
Registrar

 

112

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

113

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

 

The
following exchanges for Definitive First Issuer Notes and purchases and
cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
  US$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

114

 

PART J

 

SERIES 4 CLASS A1 GLOBAL
FIRST ISSUER NOTE

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 4 CLASS A1 GLOBAL
FIRST ISSUER NOTE

representing
up to

 

€750,000,000 Series 4
Class A1 Asset Backed Fixed-Floating Rate First Issuer Notes due 2009

 

This
Series 4 Class A1 Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 4 Class A1
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to seven hundred and fifty million euro
(€750,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
Schedule and the First Issuer Master Definitions Schedule, both dated and
made on 13th June, 2002 and signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood, and the First Issuer Trust
Deed.  The aggregate principal amount
from time to time of this Global First Issuer Note shall be that amount not
exceeding €750,000,000 as shall be shown by the latest entry duly made in the
Schedule hereto.

 

This is
to certify that:

 

Citivic
Nominees Limited as nominee on behalf of the Common Depositary

 

is/are
the duly registered holder(s) of one of the Series 4 Class A1 Global First
Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

115

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof seven hundred
and fifty million euro (€750,000,000)) on the Interest Payment Date falling in
June 2009 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the First Issuer Trust Deed) and
to pay interest annually or quarterly, as the case may be, in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
First Issuer Note at the rates determined in accordance with Conditions
together with such premium and other amounts (if any) as may be payable, all
subject to and in accordance with the Conditions and the provisions of the
First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
both Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”)
and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) are closed for
business for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or announce an intention permanently to cease
business or do so and no alternative clearing system satisfactory to the Note
Trustee is then available, or (ii) as a result of any amendment to, or change
in, the laws or regulations of the United Kingdom (or of any political
subdivision thereof), or of any authority therein or thereof having power to
tax, or in the interpretation or administration by a revenue authority or a
court or administration of such laws or regulations which becomes effective on
or after the Closing Date, the First Issuer or any Paying Agent is or will be
required to make any deduction or withholding from any payment in respect of
the First Issuer Notes which would not be required were the relevant First
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global First Issuer Note (acting on the
instructions of (a) holder(s) of (a) Book-Entry Interest(s) (as defined in Section 3
hereof)) may give notice to the First Issuer, and the First Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global First Issuer Note for Definitive First Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of €1,000 or €10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the First Issuer on
Part II of the Schedule hereto, whereupon the principal amount hereof
shall be increased or,

 

116

 

as the case may be, reduced for all purposes by the
amount so exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this
Global First Issuer Note for Definitive First Issuer Notes this Global First
Issuer Note, shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global First Issuer Note requests,
returned to it together with any relevant Definitive First Issuer Notes.

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge.  Payments of principal, premium (if any) and interest in respect
of First Issuer Notes represented by this Global First Issuer Note will be made
in accordance with the Conditions.  Upon
any payment of principal, premium or interest on this Global First Issuer Note
the amount so paid shall be endorsed by or on behalf of the Registrar on behalf
of the First Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global First Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                       Euroclear
and Clearstream, Luxembourg

 

References herein to Euroclear and/or Clearstream,
Luxembourg shall be deemed to include references to any other clearing system
approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on 14th June,
2002.

 

117

 

Certificate of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

118

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

119

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

The
following exchanges for Definitive First Issuer Notes and purchases and cancellations
of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

120

 

PART K

 

SERIES 4 CLASS A2 GLOBAL
FIRST ISSUER NOTE

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 4 CLASS A2 GLOBAL
FIRST ISSUER NOTE

representing
up to

 

£1,000,000,000 Series 4
Class A2 Asset Backed Floating Rate First Issuer Notes due 2042

 

This
Series 4 Class A2 Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 4 Class A2
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to one billion pounds sterling
(£1,000,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
and Construction Schedule and the First Issuer Master Definitions and
Construction Schedule, both dated 13th June, 2002 and signed for the purposes
of identification by Allen & Overy and Sidley Austin Brown & Wood, and
the First Issuer Trust Deed.  The
aggregate principal amount from time to time of this Global First Issuer Note
shall be that amount not exceeding £1,000,000,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is
to certify that:

 

Citivic
Nominees Limited as nominee on behalf of the Common Depositary

 

is/are
the duly registered holder(s) of one of the Series 4 Class A2 Global First
Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

121

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof one billion
pounds sterling (£1,000,000,000) on the Interest Payment Date falling in June 2042
(or on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the First Issuer Trust Deed) and to pay
interest quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global First Issuer Note at the rates
determined in accordance with Conditions together with such premium and other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
both Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”)
and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) are closed for
business for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or announce an intention permanently to cease
business or do so and no alternative clearing system satisfactory to the Note
Trustee is then available, or (ii) as a result of any amendment to, or change
in, the laws or regulations of the United Kingdom (or of any political
subdivision thereof), or of any authority therein or thereof having power to
tax, or in the interpretation or administration by a revenue authority or a
court or administration of such laws or regulations which becomes effective on
or after the Closing Date, the First Issuer or any Paying Agent is or will be
required to make any deduction or withholding from any payment in respect of
the First Issuer Notes which would not be required were the relevant First
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global First Issuer Note (acting on the
instructions of (a) holder(s) of (a) Book-Entry Interest(s) (as defined in Section 3
hereof)) may give notice to the First Issuer, and the First Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global First Issuer Note for Definitive First Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of £1,000 or £10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the First Issuer on
Part II of the Schedule hereto, whereupon the principal amount hereof
shall be increased or, as the case may be, reduced for all purposes by the
amount so exchanged or so purchased and

 

122

 

cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes this Global First Issuer Note, shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge.  Payments of principal, premium (if any) and interest in respect
of First Issuer Notes represented by this Global First Issuer Note will be made
in accordance with the Conditions.  Upon
any payment of principal, premium or interest on this Global First Issuer Note
the amount so paid shall be endorsed by or on behalf of the Registrar on behalf
of the First Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global First Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                       Euroclear
and Clearstream, Luxembourg

 

References herein to Euroclear and/or Clearstream,
Luxembourg shall be deemed to include references to any other clearing system
approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on 14th June,
2002.

 

123

 

Certificate of
authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

124

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

125

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

The
following exchanges for Definitive First Issuer Notes and purchases and
cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

126

 

PART L

 

SERIES 4 CLASS B GLOBAL
FIRST ISSUER NOTE

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 4 CLASS B GLOBAL
FIRST ISSUER NOTE

representing
up to

 

£52,000,000 Series 4 Class
B Asset Backed Floating Rate First Issuer Notes due 2042

 

This
Series 4 Class B Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 4 Class B
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to fifty two million pounds sterling
(£52,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
Schedule and the First Issuer Master Definitions Schedule, both dated 13th
June, 2002 and signed for the purposes of identification by Allen & Overy
and Sidley Austin Brown & Wood, and the First Issuer Trust Deed.  The aggregate principal amount from time to
time of this Global First Issuer Note shall be that amount not exceeding
£52,000,000 as shall be shown by the latest entry duly made in the
Schedule hereto.

 

This is
to certify that:

 

Citivic
Nominees Limited as nominee on behalf of the Common Depositary

 

is/are
the duly registered holder(s) of one Series 4 Class B Global First Issuer Notes
.. This Global First Issuer Note is evidence of entitlement only.  Title to the Global First Issuer Notes
passes only on due registration in the Register and only the registered holder
is entitled to payment in respect of this Global First Issuer Note.

 

127

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof fifty two
million pounds sterling (£52,000,000)) on the Interest Payment Date falling in
June 2042 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the First Issuer Trust Deed) and
to pay interest quarterly in arrear on each Interest Payment Date on the
principal amount from time to time of this Global First Issuer Note at the
rates determined in accordance with Conditions together with such premium and
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
both Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”)
and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) are closed for
business for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or announce an intention permanently to cease
business or do so and no alternative clearing system satisfactory to the Note
Trustee is then available, or (ii) as a result of any amendment to, or change
in, the laws or regulations of the United Kingdom (or of any political
subdivision thereof), or of any authority therein or thereof having power to
tax, or in the interpretation or administration by a revenue authority or a
court or administration of such laws or regulations which becomes effective on
or after the Closing Date, the First Issuer or any Paying Agent is or will be
required to make any deduction or withholding from any payment in respect of
the First Issuer Notes which would not be required were the relevant First
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global First Issuer Note (acting on the
instructions of (a) holder(s) of (a) Book-Entry Interest(s) (as defined in Section 3
hereof)) may give notice to the First Issuer, and the First Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global First Issuer Note for Definitive First Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of £1,000 or £10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the First Issuer on
Part II of the Schedule hereto, whereupon the principal amount hereof
shall be increased or, as the case may be, reduced for all purposes by the
amount so exchanged or so purchased and

 

128

 

cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes this Global First Issuer Note, shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge.  Payments of principal, premium (if any) and interest in respect
of First Issuer Notes represented by this Global First Issuer Note will be made
in accordance with the Conditions.  Upon
any payment of principal, premium or interest on this Global First Issuer Note
the amount so paid shall be endorsed by or on behalf of the Registrar on behalf
of the First Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global First Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                       Euroclear
and Clearstream, Luxembourg

 

References herein to Euroclear and/or Clearstream,
Luxembourg shall be deemed to include references to any other clearing system
approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on 14th June,
2002.

 

129

 

Certificate of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

130

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

131

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

The following
exchanges for Definitive First Issuer Notes and purchases and cancellations of
a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

132

 

PART M

 

SERIES 4 CLASS C GLOBAL
FIRST ISSUER NOTE

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

SERIES 4 CLASS C GLOBAL
FIRST ISSUER NOTE

representing
up to

 

£52,000,000 Series 4 Class
C Asset Backed Floating Rate First Issuer Notes due 2042

 

This
Series 4 Class C Global First Issuer Note is issued without principal or
interest coupons in respect of a duly authorised issue of Series 4 Class C
First Issuer Notes of Permanent Financing (No. 1) PLC (the “First Issuer”),
designated as specified in the title hereof (the “First Issuer Notes”), limited
to the aggregate principal amount of up to fifty two million pounds sterling
(£52,000,000) and constituted by a First Issuer Trust Deed dated 14th June,
2002 (the “First Issuer Trust Deed”) between the First Issuer and State Street
and Trust Company, as trustee (the trustee for the time being
thereof being herein called the “Note  Trustee”). 
References herein to the Conditions (or to any particular numbered
Condition) shall be to the Conditions (or that particular one of them) set out
in Schedule 3
to the First Issuer Trust Deed.  Terms
not defined herein have the meanings ascribed to them in the Master Definitions
Schedule and the First Issuer Master Definitions Schedule, both dated 13th
June, 2002 and signed for the purposes of identification by Allen & Overy
and Sidley Austin Brown & Wood, and the First Issuer Trust Deed.  The aggregate principal amount from time to
time of this Global First Issuer Note shall be that amount not exceeding
£52,000,000 as shall be shown by the latest entry duly made in the
Schedule hereto.

 

This is
to certify that:

 

Citivic
Nominees Limited as nominee on behalf of the Common Depositary

 

is/are
the duly registered holder(s) of one of the Series 4 Class C Global First
Issuer Notes. This Global First Issuer Note is evidence of entitlement
only.  Title to the Global First Issuer
Notes passes only on due registration in the Register and only the registered
holder is entitled to payment in respect of this Global First Issuer Note.

 

133

 

1.                                       Promise
to pay

 

Subject as provided in this Global First Issuer Note
the First Issuer promises to pay to the registered holder hereof the principal
amount of this Global First Issuer Note (being at the date hereof fifty two
million pounds sterling (£52,000,000)) on the Interest Payment Date falling in
June 2042 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the First Issuer Trust Deed) and
to pay interest quarterly in arrear on each Interest Payment Date on the
principal amount from time to time of this Global First Issuer Note at the
rates determined in accordance with Conditions together with such premium and
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the First Issuer Trust Deed.

 

2.                                       Exchange
for Definitive First Issuer Notes and purchases

 

This Global First Issuer Note will be exchangeable
(free of charge to the holder) for Definitive First Issuer Notes only if (i)
both Euroclear Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”)
and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) are closed for
business for a continuous period of 14 days (other than by reason of
holiday, statutory or otherwise) or announce an intention permanently to cease
business or do so and no alternative clearing system satisfactory to the Note
Trustee is then available, or (ii) as a result of any amendment to, or change
in, the laws or regulations of the United Kingdom (or of any political
subdivision thereof), or of any authority therein or thereof having power to
tax, or in the interpretation or administration by a revenue authority or a
court or administration of such laws or regulations which becomes effective on
or after the Closing Date, the First Issuer or any Paying Agent is or will be
required to make any deduction or withholding from any payment in respect of
the First Issuer Notes which would not be required were the relevant First
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global First Issuer Note (acting on the
instructions of (a) holder(s) of (a) Book-Entry Interest(s) (as defined in Section 3
hereof)) may give notice to the First Issuer, and the First Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global First Issuer Note for Definitive First Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after the Exchange Date, the holder of this
Global First Issuer Note shall surrender this Global First Issuer Note to or to
the order of the Registrar.  In exchange
for this Global First Issuer Note the First Issuer will deliver, or procure the
delivery of, Definitive First Issuer Notes in registered form in denominations
of £1,000 or £10,000 each or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global First Issuer Note.

 

“Exchange Date” means a day specified in the
notice requiring exchange falling not more than 60 days after that on which
such notice is given and on which banks are open for business in the city in
which the specified office of the Registrar is located and in the city in which
the relevant clearing system is located.

 

Upon the cancellation of a part of this Global First
Issuer Note in accordance with the First Issuer Trust Deed, the Conditions and
the First Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the First Issuer on
Part II of the Schedule hereto, whereupon the principal amount hereof
shall be increased or, as the case may be, reduced for all purposes by the
amount so exchanged or so purchased and

 

134

 

cancelled and endorsed.  Upon the exchange of the whole of this Global First Issuer Note
for Definitive First Issuer Notes this Global First Issuer Note, shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global First Issuer Note requests, returned to it together with
any relevant Definitive First Issuer Notes.

 

3.                                       Payments

 

Until the entire principal amount of this Global First
Issuer Note has been extinguished, this Global First Issuer Note shall be
entitled to the benefit of and be bound by the Conditions, the First Issuer
Trust Deed and the First Issuer Deed of Charge.  Payments of principal, premium (if any) and interest in respect
of First Issuer Notes represented by this Global First Issuer Note will be made
in accordance with the Conditions.  Upon
any payment of principal, premium or interest on this Global First Issuer Note
the amount so paid shall be endorsed by or on behalf of the Registrar on behalf
of the First Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of
this Global First Issuer Note shall be reduced for all purposes by the
principal amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global First Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                       Euroclear
and Clearstream, Luxembourg

 

References herein to Euroclear and/or Clearstream,
Luxembourg shall be deemed to include references to any other clearing system
approved by the Note Trustee.

 

5.                                       Authentication

 

This Global First Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

6.                                       Governing
law

 

This Global First Issuer Note is governed by, and
shall be construed in accordance with, the laws of England.

 

 

IN WITNESS WHEREOF the First Issuer has caused this Global First Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly
  authorised)

  	
   

  
				

 

Issued in London, England on 14th June,
2002.

 

135

 

Certificate of authentication

 

This Global First Issuer Note is duly
authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as
Registrar

 

136

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL,
PREMIUM AND INTEREST

 

The following payments on this Global First
Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest
  Paid

  	
   

  	
  Premium
  Paid

  	
   

  	
  Principal
  Paid

  	
   

  	
  Remaining

  principal

  amount of this

  Global First

  Issuer Note

  following such

  payment

  	
   

  	
  Notation
  made

  on behalf of

  the First Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

137

 

PART II

 

EXCHANGES,

PURCHASES AND
CANCELLATIONS

 

The
following exchanges for Definitive First Issuer Notes and purchases and
cancellations of a part of this Global First Issuer Note have been made:

 

	
  Date made

  	
   

  	
  Part
  of principal

  amount

  exchanged for

  Definitive First

  Issuer Notes

  	
   

  	
  Part
  of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange,

  purchase or

  cancellation

  	
   

  	
  Notation
  made on

  behalf of the First

  Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

138

 

SCHEDULE 2

 

FORMS OF DEFINITIVE FIRST
ISSUER NOTES

 

PART A

 

SERIES 1 CLASS A
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AA63]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$750,000,000 Series 1
Class A Asset Backed Floating Rate First Issuer Notes due 2003

(the  “Series 1
Class A First Issuer Notes”)

 

This
Series 1 Class A First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 1 Class A First Issuer Notes (the “Note Trustee”) and issued as registered
Series 1 Class A First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 1
Class A First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 1
Class A First Issuer Notes, such Series 1 Class A First Issuer Notes being in
the denomination of US$
                
 
(                                       US
dollars) and is/are entitled on the Interest Payment Date falling in
June 2003 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 1 Class A First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$
(                                        US
dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 1 Class A First Issuer Note at
rates determined in accordance with the Conditions payable monthly or
quarterly, as the case may be, in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the First Issuer Trust
Deed.

 

139

 

IN WITNESS WHEREOF this registered Series 1 Class A First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 1 Class A First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

140

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

141

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$
                                                    principal amount of this Series 1 Class A
First Issuer Note and all rights hereunder, hereby irrevocably constituting and
appointing                                                   
as attorney to transfer such principal amount of this Series 1 Class A First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 1 Class A First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

142

 

PART B

 

SERIES 1 CLASS B
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AB47]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$26,000,000 Series 1
Class B Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 1
Class B First Issuer Notes”)

 

This
Series 1 Class B First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the Series
1 Class B First Issuer Notes (the “Note Trustee”) and issued as registered
Series 1 Class B First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 1
Class B First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 1
Class B First Issuer Notes, such Series 1 Class B First Issuer Notes being in
the denomination of US$
                
(                                               
US dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 1 Class B First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$(                                       US
dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 1 Class B First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

143

 

IN WITNESS WHEREOF this registered Series 1 Class B First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 1 Class B First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

144

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

145

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$
                                                
principal amount of this Series 1 Class B First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing                                               
as attorney to transfer such principal amount of this Series 1 Class B First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 1 Class B First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

146

 

PART C

 

SERIES 1 CLASS C
DEFINITIVE FIRST ISSUER NOTE

 

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AC20]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$26,000,000 Series 1
Class C Asset Backed Floating Rate First Issuer Notes due 2042

(the  “Series 1
Class C First Issuer Notes”)

 

This
Series 1 Class C First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the Series
1 Class C First Issuer Notes (the “Note Trustee”) and issued as registered
Series 1 Class C First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 1
Class C First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 1
Class C First Issuer Notes, such Series 1 Class C First Issuer Notes being in
the denomination of US$
(                                             
US dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions (the
Series 1 Class C First Issuer Notes (the “Conditions”) endorsed hereon) to the
repayment of such principal sum of:

 

US$
(                                                US
dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 1 Class C First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

147

 

IN WITNESS WHEREOF this registered Series 1 Class C First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 1 Class C First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

148

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

149

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$
                                       
principal amount of this Series 1 Class C First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                          
as attorney to transfer such principal amount of this First Issuer Note in the
register maintained by or on behalf of PERMANENT FINANCING (NO. 1) PLC with
full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the Series 1 Class C
First Issuer Trust Deed and the First Issuer Paying Agent and Agent Bank
Agreement (as defined in the Conditions) and must be executed under the hand of
the transferor or, if the transferor is a corporation, either under its common
seal or under the hand of two of its officers duly authorised in writing and,
in such latter case, the document so authorising such officers must be
delivered with this form of transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 1 Class C First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

150

 

PART D

 

SERIES 2 CLASS A
DEFINITIVE FIRST ISSUER NOTE

 

 

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AD03]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$750,000,000 Series 2
Class A Asset Backed Fixed-Floating Rate First Issuer Notes due 2007

(the “Series 2
Class A First Issuer Notes”)

 

This
Series 2 Class A First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 2 Class A First Issuer Notes (the “Note Trustee”) and issued as registered
Series 2 Class A First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 2
Class A First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 2
Class A First Issuer Notes, such Series 2 Class A First Issuer Notes being in
the denomination of
US$                       
(                                US
dollars) and is/are entitled on the Interest Payment Date falling in
June 2007 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 2 Class A First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$
              
(
                                   
US dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 2 Class A First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

151

 

IN WITNESS WHEREOF this registered Series 2 Class A First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 2 Class A First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

152

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

153

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$
                                        
principal amount of this Series 2 Class A First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                                
as attorney to transfer such principal amount of this Series 2 Class A First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 2 Class A First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

154

 

PART E

 

SERIES 2 CLASS B
DEFINITIVE FIRST ISSUER NOTE

 

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AE85]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$26,000,000 Series 2
Class B Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 2
Class B First Issuer Notes”)

 

This
Series 2 Class B First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 2 Class B First Issuer Notes (the “Note Trustee”) and issued as registered
Series 2 Class B First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 2
Class B First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 2
Class B First Issuer Notes, such Series 2 Class B First Issuer Notes being in
the denomination of
US$               
(                                 US
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 2 Class B First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$
(                                              
US dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 2 Class B First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

155

 

IN WITNESS WHEREOF this registered Series 2 Class B First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 2 Class B First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

156

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

 

[In the
form set out in Schedule 3]

 

157

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address (including
postal code) of transferee)

 

US$
                                 
principal amount of this Series 2 Class B First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                   
as attorney to transfer such principal amount of this Series 2 Class B First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 2 Class B First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

158

 

PART F

 

SERIES 2 CLASS C
DEFINITIVE FIRST ISSUER NOTE

 

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AF50]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$26,000,000 Series 2
Class C Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 2
Class C First Issuer Notes”)

 

This
Series 2 Class C First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 2 Class C First Issuer Notes (the “Note Trustee”) and issued as registered
Series 2 Class C First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 2
Class C First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 2
Class C First Issuer Notes, such Series 2 Class C First Issuer Notes being in
the denomination of
US$                         
(                         US
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of the
Series 2 Class C First Issuer Notes (the “Conditions”) endorsed hereon) to the
repayment of such principal sum of:

 

US$                          (               US
dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 2 Class C First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

159

 

IN WITNESS WHEREOF this registered Series 2 Class C First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 2 Class C First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

160

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

161

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$
                               
principal amount of this Series 2 Class C First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing                                        as attorney to transfer such principal
amount of this Series 2 Class C First Issuer Note in the register maintained by
or on behalf of PERMANENT FINANCING (NO. 1) PLC with full power of
substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 2 Class C First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

162

 

PART G

 

SERIES 3 CLASS A
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AG34]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$1,1000,000,000 Series 3
Class A Asset Backed Floating Rate First Issuer Notes due 2007

(the “Series 3
Class A First Issuer Notes”)

 

This
Series 3 Class A First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 3 Class A First Issuer Notes (the “Note Trustee”) and issued as registered
Series 3 Class A First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 3
Class A First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 3
Class A First Issuer Notes, such Series 3 Class A First Issuer Notes being in
the denomination of
US$                         
(                         US
dollars) and is/are entitled on the Interest Payment Date falling in
December 2007 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 3 Class A First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$
                        
(                        US
dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 3 Class A First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

163

 

IN WITNESS WHEREOF this registered Series 3 Class A First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 3 Class A First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

164

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

165

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$
                                        
principal amount of this Series 3 Class A First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                                as attorney to transfer such principal
amount of this Series 3 Class A First Issuer Note in the register maintained by
or on behalf of PERMANENT FINANCING (NO. 1) PLC with full power of
substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 3 Class A First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

166

 

PART H

 

SERIES 3 CLASS B
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AH17]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$38,500,000 Series 3
Class B Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 3
Class B First Issuer Notes”)

 

This
Series 3 Class B First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 3 Class B First Issuer Notes (the “Note Trustee”) and issued as registered
Series 3 Class B First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 3
Class A First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 3
Class B First Issuer Notes, such Series 3 Class B First Issuer Notes being in
the denomination of
US$                         
(                         US
dollars) and is/are entitled on the Interest Payment Date falling in
December 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 3 Class B First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$
                          
(
                         
US dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the said Conditions and the provisions of the First
Issuer Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 3 Class B First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

167

 

IN WITNESS WHEREOF this registered Series 3 Class B First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 3 Class B First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

168

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

169

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$                                   principal
amount of this Series 3 Class B First Issuer Note and all rights hereunder,
hereby irrevocably constituting and
appointing                                            
as attorney to transfer such principal amount of this Series 3 Class B First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 3 Class B First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

170

 

PART I

 

SERIES 3 CLASS C
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US714198AJ72]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

US$38,500,000 Series 3
Class C Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 3
Class C First Issuer Notes”)

 

This
Series 3 Class C First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street and Trust Property, as trustee for the holders of the Series
3 Class C First Issuer Notes (the “Note Trustee”) and issued as registered
Series 3 Class C First Issuer Notes in denominations of US$1,000 or US$10,000
each or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 3
Class C First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 3
Class C First Issuer Notes, such Series 3 Class C First Issuer Notes being in
the denomination of
US$                         
(                         US
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 3 Class C First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

US$                         (                        US
dollars)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 3 Class C First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

171

 

IN WITNESS WHEREOF this registered Series 3 Class C First Issuer Note has been executed
on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

Certificate of authentication

 

This Series 3 Class C First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

172

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

173

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

US$                                      principal
amount of this Series 3 Class C First Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                     
as attorney to transfer such principal amount of this Series 3 Class C First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the Series 3 Class C
First Issuer Trust Deed and the First Issuer Paying Agent and Agent Bank
Agreement (as defined in the Conditions) and must be executed under the hand of
the transferor or, if the transferor is a corporation, either under its common
seal or under the hand of two of its officers duly authorised in writing and,
in such latter case, the document so authorising such officers must be
delivered with this form of transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this First Issuer Note in every
particular, without alteration or enlargement or any change whatever.

 

174

 

PART J

 

SERIES 4 CLASS A1
DEFINITIVE FIRST ISSUER NOTE

 

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:XS0148353930]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

€750,000,000 Series 4
Class A1 Asset Backed Fixed-Floating Rate First Issuer Notes due 2009

(the “Series 4
Class A1 First Issuer Notes”)

 

This
Series 4 Class A1 First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 4 Class A1 First Issuer Notes (the “Note Trustee”) and issued as registered
Series 4 Class A1 First Issuer Notes in denominations of €1,000 or €10,000 each
or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 4
Class A1 First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 4
Class A1 First Issuer Notes, such Series 3 Class A1 First Issuer Notes being in
the denomination of
€                         
(                         euro)
and is/are entitled on the Interest Payment Date falling in June 2009 (or
on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 4 Class A1
First Issuer Notes (the “Conditions”) endorsed hereon) to the
repayment of such principal sum of:

 

€                   (                       euro)

 

175

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 4 Class A1 First Issuer Note at
rates determined in accordance with the said Conditions payable annually or
quarterly, as the case may be, in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the said Conditions and the provisions of the First Issuer
Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class A1 First Issuer Note has been
executed on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 4 Class A1 First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

176

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

177

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

€                           principal
amount of this Series 4 Class A1 First Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                           
as attorney to transfer such principal amount of this Series 4 Class A1 First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 4 Class A1 First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

178

 

PART K

 

SERIES 4 CLASS A2
DEFINITIVE FIRST ISSUER NOTE

 

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:XS0148354235]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

£1,000,000,000 Series 4
Class A2 Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 4
Class A2 First Issuer Notes”)

 

This
Series 4 Class A2 First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 4 Class A2 First Issuer Notes (the “Note Trustee”) and issued as registered
Series 4 Class A2 First Issuer Notes in denominations of £1,000 or £10,000 each
or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 4
Class A2 First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 4
Class A2 First Issuer Notes, such Series 4 Class A2 First Issuer Notes being in
the denomination of
£                         
(                         pounds
sterling) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 4 Class A2 First Issuer Notes (the “Conditions” endorsed hereon)
to the repayment of such principal sum of:

 

£                     (                   pounds
sterling)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

 

179

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 4 Class A2 First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class A2 First Issuer Note has been
executed on behalf of the First Issuer.

 

PERMANENT FINANCING (NO.
1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 4 Class A2 First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

180

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

181

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

£                                  
principal amount of this Series 4 Class A2 First Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                      as attorney to transfer such principal
amount of this Series 4 Class A2 First Issuer Note in the register maintained
by or on behalf of PERMANENT FINANCING (NO. 1) PLC with full power of
substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents, evidence
and information as may be required pursuant to the First Issuer Trust Deed and
the First Issuer Paying Agent and Agent Bank Agreement (as defined in the
Conditions) and must be executed under the hand of the transferor or, if the
transferor is a corporation, either under its common seal or under the hand of
two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 4 Class A2 First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

182

 

PART L

 

SERIES 4 CLASS B
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:XS0148361362]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

£52,000,000 Series 4 Class
B Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 4 Class
B First Issuer Notes”)

 

This
Series 4 Class B First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 4 Class B First Issuer Notes (the “Note Trustee”) and issued as registered
Series 4 Class B First Issuer Notes in denominations of £1,000 or £10,000 each
or integral multiples thereof, or in such other denominations as the Note
Trustee shall determine and notify to the holders of the relevant Series 4
Class B First Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 4
Class B First Issuer Notes, such Series 4 Class B First Issuer Notes being in
the denomination of 
£           (             
pounds sterling) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 4 Class B First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

£                        (                      pounds
sterling)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

 

183

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 4 Class B First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class B First Issuer Note has been executed
on behalf of the First Issuer.

 

 

PERMANENT FINANCING (NO. 1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 4 Class B First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

184

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

185

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

 

 

 

(Please print or type name and address
(including postal code) of transferee)

 

£                             principal
amount of this Series 4 Class B First Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                     
as attorney to transfer such principal amount of this Series 4 Class B First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 4 Class B First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

186

 

PART M

 

SERIES 4 CLASS C
DEFINITIVE FIRST ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:XS0148362337]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  	
   

  

 

THIS
FIRST ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FIRST ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES.

 

PERMANENT FINANCING (NO.
1) PLC

 

(Incorporated
with limited liability in England with registered number 4416192)

 

£52,000,000 Series 4 Class
C Asset Backed Floating Rate First Issuer Notes due 2042

(the “Series 4
Class C First Issuer Notes”)

 

This
Series 4 Class C First Issuer Note forms one of a series of notes constituted
by a first issuer trust deed (the “First Issuer Trust Deed”) dated 14th June,
2002 made between Permanent Financing (No. 1) PLC (the “First Issuer”)
and State
Street Bank and Trust Company, as trustee for the holders of the
Series 4 Class C First Issuer Notes (the “Note Trustee”) and issued as registered
Series 4 Class C First Issuer Notes in denominations of  £1,000 or £10,000, each or integral
multiples thereof, or in such other denominations as the Note Trustee shall
determine and notify to the holders of the relevant Series 4 Class C.

 

THIS IS TO CERTIFY that

 

is/are
the registered holder(s) of one of the above-mentioned registered Series 3
Class C First Issuer Notes, such Series 4 Class C First Issuer Notes being in
the denomination of
£            (             pounds
sterling) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 4 Class C First Issuer Notes (the “Conditions”) endorsed hereon)
to the repayment of such principal sum of:

 

£                    (                  pounds
sterling)

 

together
with such premium and other amounts (if any) as may be payable, all subject to
and in accordance with the Conditions and the provisions of the First Issuer
Trust Deed.

 

187

 

Interest
is payable on the Principal Amount Outstanding (as defined in Condition
5(C)) endorsed hereon of this Series 4 Class C First Issuer Note at
rates determined in accordance with the Conditions payable quarterly in arrear
on each Interest Payment Date and together with such other amounts (if any) as
may be payable, all subject to and in accordance with the Conditions and the
provisions of the First Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class C First Issuer Note has been executed
on behalf of the First Issuer.

 

 

PERMANENT FINANCING (NO.
1) PLC

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  

 

Dated

 

 

Certificate of authentication

 

This Series 4 Class C First Issuer Note is
duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  

 

Duly authorised

for and on behalf of

CITIBANK, N.A.

as Registrar

 

188

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the
form set out in Schedule 3]

 

 

189

 

FORM OF TRANSFER OF
DEFINITIVE FIRST ISSUER NOTE

 

 

FOR VALUE RECEIVED the undersigned hereby
transfer(s) to

 

	
   

  
	
   

  
	
   

  

 

(Please print or type name and address
(including postal code) of transferee)

 

£                     principal
amount of this Series 4 Class C First Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                                
as attorney to transfer such principal amount of this Series 4 Class C First
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING
(NO. 1) PLC with full power of substitution.

 

	
  Signature(s)
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  

  	
   

  	
   

  
					

 

NOTES:

 

1.                                       This form of transfer must be accompanied by such documents,
evidence and information as may be required pursuant to the First Issuer Trust
Deed and the First Issuer Paying Agent and Agent Bank Agreement (as defined in
the Conditions) and must be executed under the hand of the transferor or, if
the transferor is a corporation, either under its common seal or under the hand
of two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.                                       The signature(s) on this form of transfer must correspond with the
name(s) as it/they appear(s) on the face of this Series 4 Class C First Issuer
Note in every particular, without alteration or enlargement or any change
whatever.

 

190

SCHEDULE 3

 

TERMS AND CONDITIONS OF THE FIRST ISSUER NOTES

 

 

TERMS AND CONDITIONS OF
THE ISSUER NOTES

 

The following are the Terms and Conditions (the “Conditions”
and any reference to a “Condition” shall be construed accordingly)
of the First Issuer Notes in the form (subject to amendment) in which they will
be set out in the First Issuer Trust Deed.

 

The First Issuer Notes, as more fully
defined in Condition 16 below, of Permanent Financing (No. 1) PLC (the “First Issuer”)
are constituted by a trust deed (the “First Issuer Trust Deed”, which expression
includes such trust deed as from time to time modified in accordance with the
provisions therein contained and any deed or other document expressed to be
supplemental thereto as from time to time so modified) dated on or about 14th
June, 2002 (the “Closing Date”) and made between the First Issuer and State
Street Bank and Trust Company (in such capacity, the “Note Trustee”, which
expression includes its successors or any further or other note trustee under
the First Issuer Trust Deed) as trustee for the First Issuer Noteholders (as
defined in Condition 16).

 

The security for the First Issuer Notes is
created pursuant to, and on the terms set out in, a deed of charge dated on or
about the Closing Date (the “First Issuer Deed of Charge”, which
expression includes such deed of charge as from time to time modified in
accordance with the provisions therein contained and any deed or other document
expressed to be supplemental thereto as from time to time so modified) dated on
or about the Closing Date and made between, inter alios, the First Issuer and State
Street Bank and Trust Company (in this capacity, the “Security Trustee”, which
expression includes its successors or any other security trustee under the
First Issuer Deed of Charge).

 

By a paying agent and agent bank agreement
dated on or about the Closing Date (the “First Issuer Paying Agent and Agent Bank Agreement”,
which expression includes such paying agent and agent bank agreement as from
time to time modified in accordance with the provisions contained therein and
any agreement, deed or other document expressed to be supplemental thereto as
from time to time so modified) and made between the First Issuer, the Note
Trustee, Citibank, N.A., London Branch, as principal paying agent in the United
Kingdom (the “Principal Paying Agent”) and as agent bank (the “Agent Bank”),
Citibank, N.A., acting through its New York office as paying agent in the
United States of America (the “US Paying Agent” together with the Principal
Paying Agent and any further or other paying agents for the time being
appointed under the First Issuer Paying Agent and Agent Bank Agreement, the “Paying
Agents”) and Citibank, N.A., London Branch as registrar (the “Registrar”)
and as transfer agent (the “Transfer Agent”), provision is made for, inter alia, the
payment of principal and interest in respect of the First Issuer Notes. Certain
statements in these Conditions include summaries of, and are subject to, the
detailed provisions of the First Issuer Trust Deed, the First Issuer Deed of
Charge and the First Issuer Paying Agent and Agent Bank Agreement. The First
Issuer Notes are also subject to one or more First Issuer Dollar Currency Swap
Agreements and/or the First Issuer Euro Currency Swap Agreement (each as
defined in Condition 16).

 

Copies of the First Issuer Trust Deed, the
First Issuer Deed of Charge, the First Issuer Paying Agent and Agent Bank
Agreement, the master definitions and construction schedule dated on or
about the Closing Date and the First Issuer master definitions and construction
schedule dated on or about the Closing Date, both signed for
identification purposes by Allen & Overy and Sidley Austin Brown & Wood
(together, the “Master Definitions and Construction Schedules”) and each of
the other First Issuer Transaction Documents are available for inspection at
the head office for the time being of (i) the Principal Paying Agent, being at
the date hereof 5 Carmelite Street, London EC4Y

 

191

 

0PA and (ii) the US Paying Agent, being at the date
hereof 14th Floor, Zone 3, 111 Wall Street, New York, New York 10043. The First
Issuer Noteholders are entitled to the benefit of, are bound by, and are deemed
to have notice of, all the provisions of, and definitions contained in, the
First Issuer Trust Deed, the First Issuer Deed of Charge, the First Issuer
Intercompany Loan Agreement, the Funding 1 Deed of Charge, the First Issuer
Cash Management Agreement, the First Issuer Paying Agent and Agent Bank
Agreement, the First Issuer Swap Agreements and the other First Issuer
Transaction Documents.

 

Capitalised terms used and not otherwise
defined in these Conditions shall bear the meanings given to them in the Master
Definitions and Construction Schedules, which may be obtained and inspected as
described above.

 

The issue of
the First Issuer Notes was authorised by a resolution of the Board of Directors
of the First Issuer passed on 13th June, 2002.

 

1.             Form,
Denomination and Title

 

(A)          Form and
Denomination

 

The Series 1 First Issuer Notes, the Series
2 First Issuer Notes and the Series 3 First Issuer Notes will initially be
offered and sold pursuant to a registration statement filed with the United
States Securities and Exchange Commission. Each class of the Series 1 First
Issuer Notes, the Series 2 First Issuer Notes and the Series 3 First Issuer
Notes will initially be represented by a separate global note in registered
form (the “Series 1 Class A Global First Issuer Note”, the “Series 1 Class
B Global First Issuer Note”, the “Series 1 Class C Global First Issuer
Note”, the “Series 2 Class A Global First Issuer Note”,
the “Series
2 Class B Global First Issuer Note”, the “Series 2 Class C Global First Issuer
Note” the “Series 3 Class A Global First Issuer Note”,
the “Series
3 Class B Global First Issuer Note” and the “Series 3 Class C Global First Issuer
Note” and together the “Dollar Global First Issuer Notes”), in each
case without coupons or talons attached and which, in aggregate, will represent
the aggregate Principal Amount Outstanding from time to time of the Series 1
First Issuer Notes, the Series 2 First Issuer Notes and the Series 3 First
Issuer Notes. The Dollar Global First Issuer Notes will be deposited with
Citibank, N.A., London Branch as custodian for, and registered in the name of a
nominee of, The Depository Trust Company (“DTC”).

 

The Series 4 First Issuer Notes will
initially be offered and sold outside the United States to non-US persons
pursuant to Regulation S (“Reg S”) under the United States Securities
Act of 1933, as amended (the “Securities Act”).

 

Each class of the Series 4 First Issuer
Notes will initially be represented by a separate global note in registered
form (the “Series 4 Class A1 Global First Issuer Note”, the “Series 4
Class A2 Global First Issuer Note”, the Series 4 Class B Global First Issuer
Note” and the “Series 4 Class C Global First Issuer Note”
and together the “Series 4 Global First Issuer Notes”), in
each case without coupons or talons attached and which, in aggregate, will
represent the aggregate Principal Amount Outstanding from time to time of the
Series 4 First Issuer Notes. The Series 4 Global First Issuer Notes will be
deposited with Citibank, N.A., London Branch as common depositary for, and registered
in the name of a nominee of, Citibank, N.A., London Branch as common depositary
for Clearstream Banking, société anonyme (“Clearstream, Luxembourg”) and Euroclear
Bank S.A./N.V., as operator of the Euroclear System (“Euroclear”).

 

The Dollar Global First Issuer Notes and
the Series 4 Global First Issuer Notes are collectively referred to herein as
the “Global
First Issuer Notes”.

 

For so long as any First Issuer Notes are
represented by a Global First Issuer Note, transfers and exchanges of beneficial
interests in such Global First Issuer Notes and entitlement to payments
thereunder will be effected subject to and in accordance with the rules and
procedures from time to time of DTC, in the case of the Dollar Global First
Issuer Notes, and Euroclear and/or Clearstream, Luxembourg in the case of the
Series 4 First Issuer Notes.

 

192

 

A Global First Issuer Note will be
exchanged for First Issuer Notes of the relevant series and class and (in the
case of the Dollar Global First Issuer Notes) type in definitive registered
form (“Definitive
First Issuer Notes”) only if any of the following applies:

 

(i)            (in
the case of Dollar Global First Issuer Notes) DTC has notified the First Issuer
that it is at any time unwilling or unable to continue as holder of such Global
First Issuer Notes or is at any time unwilling or unable to continue as, or has
ceased to be, a clearing agency registered under the Exchange Act, and a
successor to DTC registered as a clearing agency under the Exchange Act is not
able to be appointed by the First Issuer within 90 days of such notification or
(in the case of Series 4 Global First Issuer Notes) both Euroclear and
Clearstream, Luxembourg are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business and do so cease to do business and no
alternative clearing system satisfactory to the Note Trustee is available; or

 

(ii)           as a
result of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political sub-division thereof) or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or in the application of such laws or regulations,
which becomes effective on or after the Closing Date, the First Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the First Issuer Notes which would not be required
were the First Issuer Notes in definitive registered form.

 

If Definitive First Issuer Notes are
issued, the beneficial interests represented by the Dollar Global First Issuer
Notes of each series and class and by the Series 4 Global First Issuer Notes of
each class shall be exchanged by the First Issuer for First Issuer Notes of
such series and classes in definitive form (“Dollar Definitive First Issuer Notes”
and “Series
4 Definitive First Issuer Notes” respectively). The aggregate
principal amount of the Dollar Definitive First Issuer Notes and the Series 4
Definitive First Issuer Notes shall be equal to the Principal Amount
Outstanding at the date on which notice of exchange is given of the
corresponding Dollar Global First Issuer Notes of each series and class and the
corresponding Series 4 Global First Issuer Notes of each class, respectively,
subject to and in accordance with the detailed provisions of these Conditions,
the First Issuer Paying Agent and Agent Bank Agreement, the First Issuer Trust
Deed and the relevant Global First Issuer Note.

 

Definitive First Issuer Notes of each class
(which, if issued, will be in the denominations set out below) will be serially
numbered and will be issued in registered form only.

 

The denominations of any Definitive First
Issuer Notes issued will be as follows:

 

•          Series 1 First Issuer Notes,
Series 2 First Issuer Notes and Series 3 First Issuer Notes: $1,000 and
$10,000;

 

•          Series 4 Class A1 First
Issuer Notes: €1,000 and €10,000; and

 

•          Series 4 First Issuer Notes
(other than Series 4 Class A1 First Issuer Notes): £1,000 and £10,000,

 

and
integral multiples thereof, and in such other denominations as the Note Trustee
shall determine and notify to the relevant First Issuer Noteholders.

 

References to
“First
Issuer Notes” shall include the Global First Issuer Notes and the
Definitive First Issuer Notes.

 

(B)           Title

 

193

 

Title to the Global First Issuer Notes
shall pass by and upon registration in the register (the “Register”) which the First
Issuer shall procure to be kept by the Registrar. The registered holder of any
Global First Issuer Note may (to the fullest extent permitted by applicable
laws) be deemed and treated at all times, by all persons and for all purposes
(including the making of any payments), as the absolute owner of such Global
First Issuer Note regardless of any notice of ownership, theft or loss of any
trust or other interest therein or of any writing thereon (other than the
endorsed form of transfer).

 

Title to a Definitive First Issuer Note
shall only pass by and upon registration in the Register. Such Definitive First
Issuer Notes may be transferred in whole (but not in part) upon the surrender
of the relevant Definitive First Issuer Note, with the form of transfer
endorsed on it duly completed and executed, at the specified office of the
Registrar or the Transfer Agent. All transfers of such Definitive First Issuer
Notes are subject to any restrictions on transfer set forth on such Definitive
First Issuer Notes and the detailed regulations concerning transfers in the
First Issuer Paying Agent and Agent Bank Agreement.

 

Each new Definitive First Issuer Note to be
issued upon transfer of such Definitive First Issuer Note will, within five
Business Days of receipt and surrender of such Definitive First Issuer Note
(duly completed and executed) for transfer, be available for delivery to the
specified office of the Registrar or be mailed at the risk of the transferee entitled
to such Definitive First Issuer Note to such address as may be specified in the
relevant form of transfer.

 

Registration of a Definitive First Issuer
Note on transfer will be effected without charge by the Registrar, but subject
to payment of (or the giving of such indemnity as the Registrar may require
for) any tax or other government charges which may be imposed in relation to
it.

 

The First Issuer Notes are not issuable in
bearer form.

 

2.             Status,
Security and Priority

 

(A)          Status
of the Class A First Issuer Notes

 

The Series 1
Class A First Issuer Notes, the Series 2 Class A First Issuer Notes, the Series
3 Class A First Issuer Notes, the Series 4 Class A1 First Issuer Notes and the
Series 4 Class A2 First Issuer Notes (together the “Class A First Issuer Notes”)
constitute direct, secured and unconditional obligations of the First Issuer
and are secured by the same security that secures the Class B First Issuer
Notes (as defined below) and the Class C First Issuer Notes (as defined below).
Subject to the provisions of Condition 5 below, the Class A First Issuer Notes
rank, irrespective of series, pari passu without preference or priority
amongst themselves. Subject to the provisions of Condition 5 below and subject
to the relevant scheduled and permitted redemption dates or other payment
conditions of the First Issuer Notes set out in the First Issuer Cash
Management Agreement, the First Issuer Deed of Charge, the Funding 1 Deed of
Charge and the other First Issuer Transaction Documents, payments of principal
and interest on the Class A First Issuer Notes will be senior to payments of
principal and interest on the Class B First Issuer Notes and the Class C First
Issuer Notes.

 

(B)           Status
of the Class B First Issuer Notes

 

The Series 1
Class B First Issuer Notes, the Series 2 Class B First Issuer Notes, the Series
3 Class B Issuer Notes and the Series 4 Class B First Issuer Notes (together
the “Class
B First Issuer Notes”) constitute direct, secured and unconditional
obligations of the First Issuer and are secured by the same security that
secures the Class A First Issuer Notes and the Class C First Issuer Notes. The
Class B First Issuer Notes rank, irrespective of series, pari passu without
preference or priority amongst themselves. Subject to the provisions of
Condition 5 below and subject to the relevant scheduled and permitted
redemption dates or other payment conditions of the First Issuer Notes set out
in the, First Issuer Cash Management Agreement, the First Issuer Deed of
Charge, the Funding 1

 

194

 

Deed of
Charge and the other First Issuer Transaction Documents, payments of principal
and interest on the Class B First Issuer Notes are subordinated to payments of
principal and interest on the Class A First Issuer Notes and will be senior to
payments of principal and interest on the Class C First Issuer Notes.

 

(C)           Status
of the Class C First Issuer Notes

 

The Series 1 Class C First Issuer Notes,
the Series 2 Class C First Issuer Notes, the Series 3 Class C First Issuer
Notes and the Series 4 Class C First Issuer Notes (together the “Class C
First Issuer Notes”) constitute direct, secured and unconditional
obligations of the First Issuer and are secured by the same security that
secures the Class A First Issuer Notes and the Class B First Issuer Notes. The
Class C First Issuer Notes rank, irrespective of series, pari passu without
preference or priority amongst themselves. Subject to the provisions of
Condition 5 below and subject to the relevant scheduled and permitted
redemption dates or other payment conditions of the First Issuer Notes set out
in the First Issuer Cash Management Agreement, the First Issuer Deed of Charge,
the Funding 1 Deed of Charge and the other First Issuer Transaction Documents,
payments of principal and interest on the Class C First Issuer Notes are
subordinated to payments of principal and interest on the Class A First Issuer
Notes and the Class B First Issuer Notes.

 

(D)           Conflict
between the classes of First Issuer Notes

 

Each of the First Issuer Trust Deed and the
First Issuer Deed of Charge contains provisions requiring the Note Trustee and
the Security Trustee to have regard to the interests of the Class A First
Issuer Noteholders, the Class B First Issuer Noteholders and the Class C First
Issuer Noteholders equally as regards all powers, trusts, authorities, duties
and discretions of the Note Trustee and the Security Trustee (except where
expressly provided otherwise), but requiring the Note Trustee and the Security
Trustee to have regard (a) (for so long as there are any Class A First Issuer
Notes Outstanding (as that term is defined in the First Issuer Trust Deed))
only to the interests of the Class A First Issuer Noteholders if, in the Note
Trustee’s or the Security Trustee’s sole opinion (as the case may be), there is
or may be a conflict between the interests of the Class A First Issuer
Noteholders and the interests of the Class B First Issuer Noteholders and/or
the interests of the Class C First Issuer Noteholders and (b) (once all the
Class A First Issuer Notes have been redeemed and for so long as there are any
Class B First Issuer Notes Outstanding (as that term is defined in the First
Issuer Trust Deed)) only to the interests of the Class B First Issuer
Noteholders if, in the Note Trustee’s or the Security Trustee’s sole opinion
(as the case may be), there is or may be a conflict between the interests of
the Class B First Issuer Noteholders and the interests of the Class C First
Issuer Noteholders. Except where expressly provided otherwise, so long as any
of the First Issuer Notes remains outstanding, the Security Trustee is not
required to have regard to the interests of any other persons (other than the
class or classes of Noteholder described above) entitled to the benefit of the
First Issuer Security.

 

The First Issuer Trust Deed and the First
Issuer Deed of Charge contain provisions limiting the powers of the Class B
First Issuer Noteholders and the Class C First Issuer Noteholders, inter alia, to
request or direct the Note Trustee or the Security Trustee to take any action
or to pass an effective Extraordinary Resolution (as defined in the First
Issuer Trust Deed) according to the effect thereof on the interests of the
Class A First Issuer Noteholders. Except in certain circumstances set out in
Condition 11, the First Issuer Trust Deed and the First Issuer Deed of Charge
contain no such limitation on the powers of the Class A First Issuer
Noteholders, the exercise of which will be binding on the Class B First Issuer
Noteholders and the Class C First Issuer Noteholders respectively, irrespective
of the effect thereof on their interests.

 

Similarly, the First Issuer Trust Deed and
the First Issuer Deed of Charge contain provisions limiting the powers of the
Class C First Issuer Noteholders, inter alia, to request or direct the Note

 

195

 

Trustee or the Security Trustee to take any action or
to pass an effective Extraordinary Resolution (as defined in the First Issuer
Trust Deed) according to the effect thereof on the interests of the Class B
First Issuer Noteholders. Except in certain circumstances described above and
in Condition 11, the First Issuer Trust Deed and the First Issuer Deed of
Charge contain no such limitation on the powers of the Class B First Issuer
Noteholders, the exercise of which will be binding on the Class C First Issuer
Noteholders, irrespective of the effect thereof on their interests.

 

The First Issuer Trust Deed and Condition
11 below also contain provisions regarding the resolution of disputes between
the holders of the Class A First Issuer Noteholders; between the Class B First
Issuer Noteholders; and between the Class C First Issuer Noteholders.

 

The Note Trustee and the Security Trustee
shall each be entitled to assume, for the purpose of exercising any right,
power, trust, authority, duty or discretion under or in relation to these
Conditions or any of the Transaction Documents, without further investigation
or inquiry, that such exercise will not be materially prejudicial to the
interests of the First Issuer Noteholders (or any series and/or class thereof)
if each of the Rating Agencies has confirmed in writing that the then current
ratings of the applicable series and/or class or classes of First Issuer Notes
would not be adversely affected by such exercise.

 

(E)           Security

 

As security for, inter alia, the payment of
all monies payable in respect of the First Issuer Notes, the First Issuer has
entered into the First Issuer Deed of Charge creating, inter alia, the following
security interests (the “First Issuer Security”) in favour of the
Security Trustee for itself and on trust for the other persons to whom secured
amounts are outstanding (the “First Issuer Secured Creditors”):

 

(i)            an
assignment by way of first fixed security of all of the First Issuer’s right,
benefit and interest under those First Issuer Transaction Documents to which
the First Issuer is a party, including:

 

(a)           a loan
agreement between the First Issuer, the Security Trustee and Permanent Funding
(No. 1) Limited (“Funding 1”) dated on or about the Closing
Date (the “First Issuer Intercompany Loan Agreement”);

 

(b)           a deed
of charge between, inter alios, the Security Trustee, the
First Issuer and Funding 1 dated on or about the Closing Date (the “Funding 1
Deed of Charge”);

 

(c)           the
First Issuer Dollar Currency Swap Agreements (as defined in Condition 16 below)
in relation to each class of, respectively, the Series 1 First Issuer Notes,
the Series 2 First Issuer Notes and the Series 3 First Issuer Notes;

 

(d)           the
First Issuer Euro Currency Swap Agreement (as defined in Condition 16 below) in
relation to the Series 4 Class A1 First Issuer Notes;

 

(e)           the
First Issuer Paying Agent and Agent Bank Agreement;

 

(f)            an
underwriting agreement in relation to the Series 1 First Issuer Notes, the
Series 2 First Issuer Notes and the Series 3 First Issuer Notes, and a
subscription agreement in relation to the Series 4 First Issuer Notes, in each
case dated on or about 13th June, 2002 between, inter alios, the First
Issuer and the Underwriters and the First Issuer and the Managers respectively
(as defined therein);

 

(g)           a
corporate services agreement entered into on or about the Closing Date between,
inter
alios, Structured Finance Management Limited and the First Issuer
(the “First
Issuer Corporate Services Agreement”);

 

196

 

(h)           a bank
account agreement entered into on or about the Closing Date between, inter alios,
the First Issuer, Bank of Scotland (in its capacity as account bank,
the “First
Issuer Account Bank”) and Halifax plc in its capacity as cash
manager, the “First Issuer Cash Manager”) (the “First Issuer Bank Account Agreement”);

 

(i)            an
issuer cash management agreement entered into on or about the Closing Date
between, inter
alios, the First Issuer Cash Manager and the Security Trustee (the “First Issuer
Cash Management Agreement”): and

 

(j)            the
First Issuer Trust Deed,

 

and such other documents as are expressed to be
subject to the security interests created under, the First Issuer Deed of
Charge;

 

(ii)           a
first ranking fixed charge (which may take effect as a floating charge) over
all of the First Issuer’s right, title, interest and benefit, present and
future, in and to the First Issuer Transaction Account and any amounts
deposited from time to time therein (which security interests may take effect
as a floating charge and thus rank behind the claims of certain preferential
and other creditors);

 

(iii)          a first
ranking fixed charge (which may take effect as a floating charge) over all of
the First Issuer’s right, title, interest and benefit in and to all Authorised
Investments (as defined in Condition 16 below) made by or on behalf of the
First Issuer from time to time in accordance with the relevant First Issuer
Transaction Documents, including all monies, income and proceeds payable
thereunder (which security interests may take effect as a floating charge and
thus rank behind the claims of certain preferential and other creditors); and

 

(iv)          a first
floating charge over the whole of the undertakings, property and assets,
present and future of the First Issuer not already subject to any fixed charge
or assignment as described in (i), (ii) and (iii) above,

 

all as more particularly set out in the First
Issuer Deed of Charge.

 

3.             Covenants

 

Save with the prior written consent of the
Security Trustee or as provided in or envisaged by these Conditions or any of
the First Issuer Transaction Documents, the First Issuer shall not, so long as
any First Issuer Note remains outstanding:

 

(A)          Negative
Pledge

 

create or permit to subsist any mortgage,
pledge, lien, charge or other security interest whatsoever (unless arising by
operation of law), upon the whole or any part of its assets (including any
uncalled capital) or its undertakings, present or future;

(B)           Disposal
of Assets

 

transfer, sell, assign, lend, part with or
otherwise dispose of, or deal with, or grant any option or present or future
right to acquire any of its assets or undertakings or any interest, estate,
right, title or benefit therein or thereto or agree or attempt or purport to do
so;

 

197

 

(C)           Equitable
Interest

 

permit any person other than itself and the
Security Trustee to have any equitable interest in any of its assets or
undertakings or any interest, estate, right, title or benefit therein;

(D)          Bank
Accounts

 

have an interest in any bank account, other
than the bank accounts maintained pursuant to the First Issuer Bank Account
Agreement or the First Issuer Cash Management Agreement;

(E)           Restrictions
on Activities

 

carry on any business other than as
described in the Prospectus dated 13th June, 2002 relating to the issue of the
First Issuer Notes and the related activities described therein or as
contemplated in the Transaction Documents relating to the issue of the First
Issuer Notes and the making of the loan under the First Issuer Intercompany
Loan Agreement;

(F)           Borrowings

 

incur any indebtedness in respect of
borrowed money whatsoever or give any guarantee or indemnity in respect of any
indebtedness or obligation of any person;

(G)           Merger

 

consolidate or merge with any other person
or convey or transfer its properties or assets substantially as an entirety to
any other person;

(H)          Other

 

permit the validity or effectiveness of any
of the First Issuer Trust Deed or the First Issuer Deed of Charge or the
priority of the security interests created thereby to be amended, terminated,
postponed or discharged, or permit any other person whose obligations form part
of the First Issuer Security to be released from such obligations;

(I)            Employees
or Premises

 

have any employees or premises or
subsidiaries;

(J)            Dividends
and Distributions

 

pay any dividend or make any other
distribution to its shareholders or issue any further shares or alter any
rights attaching to its shares at the date of the First Issuer Deed of Charge;

(K)          Purchase
First Issuer Notes

 

purchase or otherwise acquire any First
Issuer Notes; or

(L)           US
activities

 

engage in any activities in the United
States (directly or through agents), or derive any income from United States
sources as determined under United States income tax principles, or hold any
property if doing so would cause it to be engaged in a trade or business within
the United States as determined under United States income tax principles.

 

4.             Interest

 

(A)          Period
of Accrual

 

Each First Issuer Note bears interest on
its Principal Amount Outstanding from (and including) the Closing Date. Each
First Issuer Note (or, in the case of redemption in part only of a First Issuer
Note, that part only of such First Issuer Note) shall cease to bear interest
from its due date for redemption unless payment of the relevant amount of
principal or any part thereof is improperly

 

198

 

withheld or refused. In such event, interest will
continue to accrue on such unpaid amount (before as well as after any judgment)
at the rate applicable to such First Issuer Note up to (but excluding) the date
on which payment in full of the relevant amount of principal is made, or (if
earlier) the seventh day after notice is duly given by the Principal Paying
Agent or the US Paying Agent, as the case may be, to the holder thereof (either
in accordance with Condition 14 or individually) that such payment will be
made, provided that, subsequently, payment is in fact made.

 

Whenever it is necessary to compute an
amount of interest in respect of the First Issuer Notes for any period
(including any Interest Period (as defined below)), such interest shall be
calculated:

 

(i)            in
respect of the Series 1 First Issuer Notes, the Series 2 First Issuer Notes
(other than the Series 2 Class A First Issuer Notes) and the Series 3 Class C
First Issuer Notes, on the basis of actual days elapsed in a 360-day year;

 

(ii)           in
respect of the Series 2 Class A First Issuer Notes, on the basis of the number
of days in that Interest Period (such number of days being calculated on the
basis of a year of 360 days with 12 months of 30 days each) divided by 360 up
to and including the Interest Payment Date falling in June 2005 and
thereafter on the basis of actual days elapsed in a 360-day year;

 

(iii)          in
respect of the Series 4 Class A1 First Issuer Notes, up to and including the
Interest Payment Date falling in June 2007 on the basis of Rule 251 of the
statutes, by-laws, rules and recommendations of the International Securities
Market Association (“ISMA”), as published in April 1999
(actual/actual), and thereafter on the basis of actual days elapsed in a
360-day year; and

 

(iv)         in
respect of the Series 4 First Issuer Notes (other than the Series 4 Class A1
First Issuer Notes), on the basis of actual days elapsed in a 365-day year.

 

(B)           Interest
Payment Dates and Interest Periods

 

Interest on the First Issuer Notes (other
than the Series 1 Class A First Issuer Notes, the Series 2 Class A First Issuer
Notes and the Series 4 Class A1 First Issuer Notes) is payable quarterly in
arrear on the 10th day of March, June, September and December in each
year (or, if such day is not a Business Day, the next succeeding Business Day)
(each such day a “Quarterly Interest Payment Date”).

 

Interest on the Series 1 Class A First
Issuer Notes is payable monthly in arrear on the 10th day of each consecutive
month (or, if such day is not a Business Day, the next succeeding Business
Day), until the earliest of (i) the Quarterly Interest Payment Date immediately
following the occurrence of a Trigger Event and (ii) the Quarterly Interest
Payment Date immediately following the enforcement of the First Issuer Security
in accordance with the First Issuer Deed of Charge, and thereafter is payable
quarterly in arrear on the 10th day of September, December, March and
June in each year (or if such day is not a Business Day, the next
succeeding Business Day) (each such day a “Series 1 Class A Interest Payment Date”).

 

Interest on the Series 2 Class A First
Issuer Notes is payable semi-annually in arrear on the 10th day of
December and June in each year (or, if such day is not a Business
Day, the next succeeding Business Day) until the earliest of (i) the Interest
Payment Date falling in June 2005, (ii) the Quarterly Interest Payment
Date immediately following the occurrence of a Trigger Event and (iii) the
Quarterly Interest Payment Date immediately following the enforcement of the
First Issuer Security in accordance with the First Issuer Deed of Charge, and
thereafter is payable quarterly in arrear on the 10th day of September,
December, March and June in each year (or, if such day is not a
Business Day, the next succeeding Business Day) (each such day a “Series 2
Class A Interest Payment Date”).

 

Interest on the Series 4 Class A1 First
Issuer Notes is payable annually in arrear on the 10th day of June in each
year (or, if such day is not a Business Day, the next succeeding Business Day)

 

199

 

until the earliest of (i) the 10th day of June, 2007
(or if such day is not a Business Day, the next succeeding Business Day), (ii)
the Quarterly Interest Payment Date immediately following the occurrence of a
Trigger Event and (iii) the Quarterly Interest Payment Date immediately
following the enforcement of the First Issuer Security in accordance with the
First Issuer Deed of Charge, and thereafter is payable quarterly in arrear on
the 10th day of September, December, March and June in each year (or,
if such day is not a Business Day, the next succeeding Business Day) (each such
day a “Series
4 Class A1 Interest Payment Date”).

 

“Interest Payment Date” means, as
applicable, a Quarterly Interest Payment Date, a Series 1 Class A Interest
Payment Date, a Series 2 Class A Interest Payment Date and/or a Series 4 Class
A1 Interest Payment Date.

 

The first Interest Payment Date will be
(other than in the case of the Series 1 Class A First Issuer Notes, the Series
2 Class A First Issuer Notes and the Series 4 Class A1 First Issuer Notes) the
10th day of September, 2002, (in the case of the Series 1 Class A First Issuer
Notes) the 10th day of July, 2002, (in the case of the Series 2 Class A First
Issuer Notes) the 10th day of December, 2002 and (in the case of the Series 4
Class A1 First Issuer Notes) the 10th day of June, 2003.

 

In these Conditions, “Interest Period” shall mean:

 

(i)            in
respect of interest payments made in respect of the First Issuer Notes (other
than the Series 1 Class A First Issuer Notes, the Series 2 Class A First Issuer
Notes and the Series 4 Class A1 First Issuer Notes), the period from (and
including) a Quarterly Interest Payment Date (or in respect of the first
Interest Period, the Closing Date) to (but excluding) the next following (or
first) Quarterly Interest Payment Date;

 

(ii)           in
respect of the Series 1 Class A First Issuer Notes, the period from (and
including) a Series 1 Class A Interest Payment Date (or in respect of the first
interest period, the Closing Date) to (but excluding) the next following (or
first) Series 1 Class A Interest Payment Date, except that following the
occurrence of a Trigger Event or the enforcement of the First Issuer Security
in accordance with the First Issuer Deed of Charge, the Interest Period for the
Series 1 Class A First Issuer Notes will be the quarterly period from (and
including) the 10th day of the following earliest to occur of September, December,
March and June (or, if such day is not a Business Day, the next
succeeding Business Day) to (but excluding) the 10th day of the then next to
occur of September, December, March and June (or, if such day is not
a Business Day, the next succeeding Business Day) and thereafter will be the
quarterly period from (and including) the 10th day of September, December,
March and June to (but excluding) the next following 10th day of
September, December, March and June;

 

(iii)          in
respect of the Series 2 Class A First Issuer Notes, the period from (and
including) the Closing Date to (but excluding) the 10th day of
December 2002 and thereafter means the period from (and including) the
10th day of December in each year to (but excluding) the 10th day of June in
the following year and the period from (and including) the 10th day of
June in each year to (but excluding) the 10th day of December in each
year, except that:

 

(1)           prior
to the Interest Payment Date falling in June 2005, if a Trigger Event
occurs or the First Issuer Security is enforced in accordance with the First
Issuer Deed of Charge, then the Interest Period for the Series 2 Class A First
Issuer Notes will be the quarterly period from (and including) the 10th day of
the then next to occur of September, December, March and June to (but
excluding) the 10th day of the following earliest to occur of September,
December, March and June, and thereafter will be the quarterly period from
(and including) the 10th day of each of September, December, March and
June to (but excluding) the next following 10th day of September,
December, March and June;

 

200

 

(2)           on and
from the Series 2 Class A Interest Payment Date falling in June 2005, the
Interest Period for the Series 2 Class A First Issuer Notes will be the period
from (and including) the immediately preceding Quarterly Interest Payment Date
(or in respect of the first such Interest Period, such Interest Payment Date
falling in June 2005) to but excluding the next following Quarterly
Interest Payment Date; and

 

(3)           the
Interest Period in respect of the Series 2 Class A First Issuer Notes
commencing immediately prior to June 2005 shall end on and include the
Series 2 Class A Interest Payment Date falling in June 2005;

 

(iv)          in
respect of the Series 4 Class A1 First Issuer Notes, the period from (and
including) the Closing Date to (but excluding) the 10th day of June, 2003 and
thereafter means the period from (and including) the 10th day of June in
each year to (but excluding) the 10th day of June in the following year,
except that:

 

(1)           prior
to the Interest Payment Date falling in June 2007, if a Trigger Event
occurs or the First Issuer Security is enforced in accordance with the First
Issuer Deed of Charge, then the Interest Period for the Series 4 Class A1 First
Issuer Notes will be the quarterly period from (and including) the 10th day of
the then next to occur of September, December, March and June to (but
excluding) the 10th day of the following earliest to occur of September,
December, March and June, and thereafter will be the quarterly period from
(and including) the 10th day of each of September, December, March and
June to (but excluding) the next following 10th day of September,
December, March and June;

 

(2)           on and
from the Series 4 Class A1 Interest Payment Date falling in June 2007, the
Interest Period for the Series 4 Class A1 First Issuer Notes will be the period
from (and including) the immediately preceding Quarterly Interest Payment Date
(or in respect of the first such Interest Period, such Interest Payment Date
falling in June 2007) to but excluding the next following Quarterly
Interest Payment Date; and

 

(3)           the
Interest Period in respect of the Series 4 Class A1 First Issuer Notes
commencing immediately prior to June 2007 shall end on and include the
Series 4 Class A1 Interest Payment Date falling in June 2007.

 

In these Conditions, “Business Day” shall (save in
Conditions 6(E)
and (G)) mean a day which is a New York Business Day, a London
Business Day and a TARGET Business Day. A “New York Business Day” means a day (other
than a Saturday or a Sunday) on which banks are generally open for business in
the city of New York; “London Business Day” means a day (other
than a Saturday or a Sunday) on which banks are generally open for business in
London; and “TARGET Business Day” means a day on which the Trans-European
Automated Real-time Gross settlement Express Transfer (TARGET) system is open.

 

To the extent that the funds available to
the First Issuer, subject to and in accordance with the First Issuer
Pre-Enforcement Priority of Payments, to pay interest on the Class B First
Issuer Notes and the Class C First Issuer Notes on an Interest Payment Date (in
each case, after discharging the First Issuer’s liabilities of a higher
priority) are insufficient to pay the full amount of such interest, payment of
the shortfall attributable to the Class B First Issuer Notes and the Class C
First Issuer Notes (in each case, “Deferred Interest”), which will be borne by
each Class B First Issuer Note and/or Class C First Issuer Note in a proportion
equal to the proportion that the Principal Amount Outstanding of that Class B
First Issuer Note or Class C First Issuer Note, as the case may be, bears to
the aggregate Principal Amount Outstanding of the Class B First Issuer Notes or
the Class C First Issuer Notes, as the case may be (in each case as determined
on the Interest Payment Date on which

 

201

 

such
Deferred Interest arises), will not then fall due but will instead be deferred
until the first Interest Payment Date thereafter on which funds are available
(after allowing for the First Issuer’s liabilities of a higher priority) to the
First Issuer to pay such Deferred Interest to the extent of such available
funds. Such Deferred Interest will accrue interest (“Additional Interest”) at the
rate of interest applicable from time to time to the Class B First Issuer Notes
or the Class C First Issuer Notes, as the case may be, and payment of any
Additional Interest will also be deferred until the first Interest Payment Date
thereafter on which funds are available (after allowing for the First Issuer’s
liabilities of a higher priority) to the First Issuer to pay such Additional
Interest to the extent of such available funds. Amounts of Deferred Interest
and Additional Interest shall not be deferred beyond the Final Maturity Date of
the Class B First Issuer Notes or the Class C First Issuer Notes, as the case
may be, when such amounts will become due and payable. It is possible that all
or any part of any interest due on the Class B First Issuer Notes or the Class
C First Issuer Notes, as the case may be, may never be made good if there are
insufficient funds available to pay such interest after paying amounts of a
higher priority. Payments of interest due on an Interest Payment Date in
respect of the Class A First Issuer Notes will not be deferred. In the event of
the delivery of a Class A First Issuer Note Acceleration Notice (as described in
Condition 9), the amount of interest that was due but not paid on such Interest
Payment Date will itself bear interest at the applicable rate until both the
unpaid interest and the interest on that interest are paid.

(C)           Rates
of Interest

 

The rate of interest payable in respect of
the First Issuer Notes (each a “Rate of Interest” and together the “Rates of
Interest”) and the relevant Interest Amount (as defined below) shall
be determined on the basis of the provisions set out below;

 

(a)           The
Series 1 First Issuer Notes, the Series 2 First Issuer Notes and the Series 3
First Issuer Notes:

 

(i)            the
rate of interest payable in respect of the Series 2 Class A First Issuer Notes
shall be 4.20 per cent. per annum (subject to Condition 4(B)(iii)(1)) up to the Interest
Payment Date falling in June 2005, and thereafter, provided no Trigger
Event or enforcement of the First Issuer Security has occurred in accordance
with the First Issuer Deed of Charge shall be a floating rate of interest
calculated in accordance with paragraphs (ii), (iii) and (iv) below;

 

202

 

(ii)           on the
initial Dollar Interest Determination Date (as defined below), the Agent Bank
will calculate the Initial Relevant Screen Rate (as defined below) in respect
of each class of Series 1 First Issuer Notes, the Series 2 First Issuer Notes
(other than the Series 2 Class A First Issuer Notes except as provided in
paragraph (i) above) and the Series 3 First Issuer Notes as at or about 11.00
a.m. (London time) on that date. If the Initial Relevant Screen Rate is
unavailable, the Agent Bank will request the principal London office of each of
the Reference Banks (as defined below) to provide the Agent Bank with its
offered quotation to leading banks (in the case of the Series 1 Class A First
Issuer Notes) for one-month Dollar deposits and (in all other cases) for
three-month Dollar deposits of $10,000,000 in the London inter-bank market as
at or about 11.00 a.m. (London time) on such Dollar Interest Determination
Date. The Rates of Interest for the first Interest Period shall be the
aggregate of (a) the Relevant Margin (as defined below) and (b) the Initial
Relevant Screen Rate in respect of the Series 1 First Issuer Notes, Series 2
First Issuer Notes and Series 3 First Issuer Notes (other than the Series 2
Class A First Issuer Notes) or, if the Initial Relevant Screen Rate is
unavailable, (in the case of the Series 1 Class A First Issuer Notes) the
linear interpolation of the arithmetic mean of such offered quotations for
one-week and one-month Dollar deposits and (in all other cases) the linear
interpolation of the arithmetic mean of such offered quotations for two-month
and three-month Dollar deposits (rounded upwards, if necessary, to five decimal
places);

 

(iii)          on each
subsequent Dollar Interest Determination Date, the Agent Bank will determine
the Relevant Screen Rate (as defined below) in respect of each class of Series
1 First Issuer Notes, the Series 2 First Issuer Notes (other than the Series 2
Class A First Issuer Notes except as provided in paragraph (i) above) and the
Series 3 First Issuer Notes as at or about 11.00 a.m. (London time) on the
Dollar Interest Determination Date in question. If the Relevant Screen Rate is
unavailable, the Agent Bank will request the principal London office of each of
the Reference Banks to provide the Agent Bank with its offered quotation to
leading banks for, as applicable, one-month or three-month Dollar deposits of
$10,000,000 in the London inter-bank market as at or about 11.00 a.m. (London
time) on the relevant Dollar Interest Determination Date. The Rates of Interest
for the relevant Interest Period shall be the aggregate of (a) the Relevant
Margin and (b) the Relevant Screen Rate or, if the Relevant Screen Rate is unavailable,
the arithmetic mean of such offered quotations for (in the case of the Series 1
Class A First Issuer Notes) one-month Dollar Deposits and (in all other cases)
three-month Dollar deposits (rounded upwards, if necessary, to five decimal
places); and

 

203

 

(iv)          if, on
any Dollar Interest Determination Date, the Relevant Screen Rate is unavailable
and two or three only of the Reference Banks provide offered quotations, the
Rates of Interest for the relevant Interest Period shall be determined in
accordance with the provisions of sub-paragraph (ii) or, as the case may be,
(iii) above on the basis of the offered quotations of those Reference Banks
providing such quotations. If, on any such Dollar Interest Determination Date,
only one or none of the Reference Banks provides the Agent Bank with such an
offered quotation, the Agent Bank shall forthwith consult with the Note Trustee
and the First Issuer for the purposes of agreeing two banks (or, where one only
of the Reference Banks provided such a quotation, one additional bank) to
provide such a quotation or quotations to the Agent Bank (which bank or banks
are in the opinion of the Note Trustee suitable for such purpose) and the Rates
of Interest for the Interest Period in question shall be determined, as
aforesaid, on the basis of the offered quotations of such banks as so agreed
(or, as the case may be, the offered quotations of such bank as so agreed and
the relevant Reference Bank). If no such bank or banks is or are so agreed or
such bank or banks as so agreed does or do not provide such a quotation or
quotations, then the Rates of Interest for the relevant Interest Period shall
be the Rates of Interest in effect for the immediately preceding Interest Period
to which sub-paragraph (i), (ii) or (iii), as the case may be, shall have
applied but taking account of any change in the Relevant Margin;

 

(b)           The
Series 4 Class A1 First Issuer Notes:

 

(i)            the
rate of interest payable in respect of the Series 4 Class A1 First Issuer Notes
shall be 5.10 per cent. per annum up to the Interest Period ending on
June 2007 (subject to Condition 4(B)(iv)(1)) and thereafter shall be a
floating rate of interest calculated in accordance with paragraphs (ii) and
(iii) below;

 

(ii)           on
each Euro Interest Determination Date (as defined below) (commencing the Euro
Interest Determination Date in respect of the earlier of the Interest Payment
Date falling on June 2007, the Euro Interest Payment Date immediately
following the occurrence of a Trigger Event or enforcement of the First Issuer
Security in accordance with the First Issuer Deed of Charge), the Agent Bank
will determine the Relevant Screen Rate in respect of the Series 4 Class A1
First Issuer Notes as at or about 11.00 a.m. (Brussels time) on the Euro
Interest Determination Date in question. If the Relevant Screen Rate is
unavailable, the Agent Bank will request each of the Reference Banks to provide
the Agent Bank with its offered quotation to prime banks for three-month Euro deposits
of €10,000,000 in the Euro-zone inter-bank market as at or about 11.00 a.m.
(Brussels time) on the relevant Euro Interest Determination Date and the Rates
of Interest for the relevant Interest Period shall be the aggregate of (a) the
Relevant Margin and (b) the Relevant Screen Rate or, if the Relevant Screen
Rate is unavailable, the arithmetic mean of such offered quotations for Euro
deposits (rounded upwards, if necessary, to five decimal places); and

 

204

 

(iii)          if, on
any Euro Interest Determination Date, the Relevant Screen Rate is unavailable
and two or three only of the Reference Banks provide offered quotations, the
Rates of Interest for the relevant Interest Period shall be determined in
accordance with the provisions of sub-paragraph (ii) above on the basis of the
offered quotations of those Reference Banks providing such quotations. If, on
any such Euro Interest Determination Date, only one or none of the Reference
Banks provides the Agent Bank with such an offered quotation, the Agent Bank
shall forthwith consult with the Note Trustee and the First Issuer for the
purposes of agreeing two banks (or, where one only of the Reference Banks
provided such a quotation, one additional bank) to provide such a quotation or
quotations to the Agent Bank (which bank or banks are in the opinion of the
Note Trustee suitable for such purpose) and the Rates of Interest for the
Interest Period in question shall be determined, as aforesaid, on the basis of
the offered quotations of such banks as so agreed (or, as the case may be, the
offered quotations of such bank as so agreed and the relevant Reference Bank).
If no such bank or banks is or are so agreed or such bank or banks as so agreed
does or do not provide such a quotation or quotations, then the Rates of
Interest for the relevant Interest Period shall be the Rates of Interest in
effect for the last preceding Interest Period to which sub-paragraph (ii) shall
have applied but, as applicable, taking account of any change in the Relevant
Margin;

 

(c)           The
Series 4 First Issuer Notes (other than the Series 4 Class A1 First Issuer
Notes):

 

(i)            on
the initial Sterling Interest Determination Date (as defined below), the Agent
Bank will determine the Initial Relevant Screen Rate in respect of the Series 4
Class A2 First Issuer Notes, the Series 4 Class B First Issuer Notes and the
Series 4 Class C First Issuer Notes, as at or about 11.00 a.m. (London time) on
that date. If the Initial Relevant Screen Rate is unavailable, the Agent Bank
will request the principal London office of each of the Reference Banks to
provide the Agent Bank with its offered quotation to leading banks for
two-month and three-month Sterling deposits of £10,000,000 in the London
inter-bank market as at or about 11.00 a.m. (London time) on such initial
Sterling Interest Determination Date and the Rates of Interest for the first
Interest Period shall be the aggregate of (a) the Relevant Margin and (b) the
Initial Relevant Screen Rate in respect of the Series 4 Class A2 First Issuer
Notes, the Series 4 Class B First Issuer Notes and the Series 4 Class C First
Issuer Notes, or, if the Initial Relevant Screen Rate is unavailable, the
linear interpolation of the arithmetic mean of such offered quotations for
two-month and three-month Sterling deposits (rounded upwards, if necessary, to
five decimal places);

 

205

 

(ii)           on
each subsequent Sterling Interest Determination Date, the Agent Bank will
determine the Relevant Screen Rate in respect of the Series 4 Class A2 First
Issuer Notes, the Series 4 Class B First Issuer Notes and the Series 4 Class C
First Issuer Notes, as at or about 11.00 a.m. (London time) on the Sterling
Interest Determination Date in question. If the Relevant Screen Rate is
unavailable, the Agent Bank will request the principal London office of each of
the Reference Banks to provide the Agent Bank with its offered quotation to
leading banks for three-month Sterling deposits of £10,000,000 in the London
inter-bank market as at or about 11.00 a.m. (London time) on the relevant
Sterling Interest Determination Date and the Rates of Interest for the relevant
Interest Period shall be the aggregate of (a) the Relevant Margin and (b) the
Relevant Screen Rate or, if the Relevant Screen Rate is unavailable, the
arithmetic mean of such offered quotations for Sterling deposits (rounded
upwards, if necessary, to five decimal places); and

 

(iii)          if, on
any Sterling Interest Determination Date, the Relevant Screen Rate is
unavailable and two or three only of the Reference Banks provide offered
quotations, the Rates of Interest for the relevant Interest Period shall be
determined in accordance with the provisions of sub-paragraph (i) or, as the
case may be, (ii) above on the basis of the offered quotations of those
Reference Banks providing such quotations. If, on any such Sterling Interest
Determination Date, only one or none of the Reference Banks provides the Agent
Bank with such an offered quotation, the Agent Bank shall forthwith consult
with the Note Trustee and the First Issuer for the purposes of agreeing two
banks (or, where one only of the Reference Banks provided such a quotation, one
additional bank) to provide such a quotation or quotations to the Agent Bank
(which bank or banks are in the opinion of the Note Trustee suitable for such
purpose) and the Rates of Interest for the Interest Period in question shall be
determined, as aforesaid, on the basis of the offered quotations of such banks
as so agreed (or, as the case may be, the offered quotations of such bank as so
agreed and the relevant Reference Bank). If no such bank or banks is or are so
agreed or such bank or banks as so agreed does or do not provide such a
quotation or quotations, then the Rates of Interest for the relevant Interest
Period shall be the Rates of Interest in effect for the last preceding Interest
Period to which sub-paragraph (i) or (ii), as the case may be, shall have
applied but taking account of any change in the Relevant Margin.

 

There will be no minimum or maximum Rate of
Interest.

 

For the purposes of these Conditions the
following expressions shall have the following meanings:

 

“Dollar Interest Determination Date” (other
than in respect of the Series 1 Class A First Issuer Notes), means two London
Business Days before the first day of the Interest Period for which the rate
will apply (or if such day is not a Business Day, the next succeeding Business
Day);

 

“Euro Interest Determination Date” means two
TARGET Business Days before the first day of the Interest Period for which the
rate will apply;

 

“Euro-zone” means the region comprised of
member states of the European Union that adopt the single currency in
accordance with the Treaty establishing the European Community (signed in Rome
on 25th March, 1957), as amended by the Treaty on European Union (signed in
Maastricht on 7th February, 1992) and the Treaty of Amsterdam (signed in
Amsterdam on 2nd October, 1997);

 

“Initial Relevant Screen Rate” means:

 

206

 

(i)            in
respect of the Series 1 Class A First Issuer Notes, the linear interpolation of
the arithmetic mean of the offered quotations to leading banks for two-week
Dollar deposits and the arithmetic mean of the offered quotations to leading
banks for one-month Dollar deposits and in respect of the Series 1 Class B
First Issuer Notes, the Series 1 Class C First Issuer Notes, the Series 2 First
Issuer Notes (other than the Series 2 Class A Notes) and the Series 3 First
Issuer Notes, the linear interpolation of the arithmetic mean of the offered
quotations to leading banks for two-month Dollar deposits and the arithmetic
mean of the offered quotations to leading banks for three-month Dollar deposits
(in each case) (rounded upwards, if necessary, to five decimal places),
displayed on the Moneyline Telerate Monitor at Telerate page number 3750 (or
such replacement page on that service which displays the information) or, if
that service ceases to display the information, such other screen service as
may be determined by the First Issuer with the approval of the Note Trustee;

 

(ii)           in
respect of the Series 4 First Issuer Notes (other than Series 4 Class A1 First
Issuer Notes), the linear interpolation of the arithmetic mean of the offered quotations
to leading banks for two-month Sterling deposits and the arithmetic mean of the
offered quotations to leading banks for three-month Sterling deposits (rounded
upwards, if necessary, to five decimal places), displayed on the Moneyline
Telerate monitor at Telerate page number 3750 (or such replacement page on that
service which displays the information) or, if that service ceases to display
the information, such other screen service as may be determined by the First
Issuer with the approval of the Note Trustee; and

 

(iii)          in
respect of the Series 4 Class A1 First Issuer Notes, the linear interpolation
of the arithmetic mean of the offered quotations to prime banks for two-month
Euro deposits and the arithmetic mean of the offered quotations to prime banks
for three-month Euro deposits (rounded upwards, if necessary, to five decimal
places), displayed on the Moneyline Telerate monitor at Telerate page number
248 (or such replacement page on that service which displays the information)
or, if that service ceases to display the information, such other screen
service as may be determined by the First Issuer with the approval of the Note
Trustee;

 

“Reference Banks” means the initial
Reference Banks (as defined in Condition 4(H)) and/or such other bank as may be
appointed pursuant to Condition 4(H):

 

“Relevant Margin” means:

 

(i)            in
respect of the Series 1 Class A First Issuer Notes, -0.02 per cent. per annum;

 

(ii)           in
respect of the Series 1 Class B First Issuer Notes, 0.27 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
0.54 per cent. per annum;

 

(iii)          in
respect of the Series 1 Class C First Issuer Notes, 1.05 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
2.05 per cent. per annum;

 

(iv)          in
respect of the Series 2 Class A First Issuer Notes, 0.16 per cent. per annum
from the Interest Period ending in June 2005;

 

(v)          in
respect of the Series 2 Class B First Issuer Notes, 0.28 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
0.56 per cent. per annum;

 

207

 

(vi)          in
respect of the Series 2 Class C First Issuer Notes, 1.18 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
2.18 per cent. per annum;

 

(vii)         in
respect of the Series 3 Class A First Issuer Notes, 0.125 per cent. per annum
up to and including the Interest Period ending in June 2007 and thereafter
0.125 per cent. per annum;

 

(viii)        in
respect of the Series 3 Class B First Issuer Notes, 0.30 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
0.60 per cent. per annum;

 

(ix)           in
respect of the Series 3 Class C First Issuer Notes, 1.20 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
2.20 per cent. per annum;

 

(x)            in
respect of the Series 4 Class A1 First Issuer Notes, 0.20 per cent. per annum
from (but excluding) the Interest Period ending in June 2007;

 

(xi)           in
respect of the Series 4 Class A2 First Issuer Notes, 0.18 per cent. per annum
up to and including the Interest Period ending in June 2007 and thereafter
0.36 per cent. per annum;

 

(xii)          in
respect of the Series 4 Class B First Issuer Notes, 0.30 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
0.60 per cent. per annum; and

 

(xiii)         in
respect of the Series 4 Class C First Issuer Notes, 1.20 per cent. per annum up
to and including the Interest Period ending in June 2007 and thereafter
2.20 per cent. per annum;

 

“Relevant Screen Rate” means:

 

(i)        in
respect of the first Interest Period, the Initial Relevant Screen Rate, if any;
and

 

(ii)       (1)           in
respect of subsequent Interest Periods of the Series 1 Class A First Issuer
Notes, the arithmetic mean of the offered quotations to leading banks for
one-month Dollar deposits in the London inter-bank market displayed on the
Moneyline Telerate Monitor at Telerate page number 3750;

 

(2)           in
respect of subsequent Interest Periods of the Series 1 Class B First Issuer
Notes, the Series 1 Class C First Issuer Notes, the Series 2 Class A First
Issuer Notes (commencing from (but excluding) the Interest Payment Date falling
in June 2005) the Series 2 Class B First Issuer Notes, the Series 2 Class
C First Issuer Notes and the Series 3 First Issuer Notes, the arithmetic mean
of the offered quotations to leading banks for three-month Dollar deposits in
the London inter-bank market displayed on the Moneyline Telerate Monitor at
Telerate page number 3750;

 

(3)           in
respect of subsequent Interest Periods of the Series 4 First Issuer Notes
(other than the Series 4 Class A1 First Issuer Notes), the arithmetic mean of
offered quotations for three-month Sterling deposits in the London inter-bank
market displayed on the Moneyline Telerate Monitor at Telerate page number
3750; and

 

208

 

(4)           in
respect of subsequent Interest Periods of the Series 4 Class A1 First Issuer
Notes (commencing from (but excluding) the Interest Payment Date falling in
June 2007), the arithmetic mean of offered quotations to prime banks for
three-month Euro deposits in the Euro-zone inter-bank market displayed on the
Moneyline Telerate Monitor at Telerate page number 248;

 

in each case, displayed on the
above-mentioned page of the Moneyline Telerate Monitor (or such replacement
page on that service which displays the information) or, if that service ceases
to display the information, such other screen service as may be determined by
the First Issuer with the approval of the Note Trustee (rounded upwards, if
necessary, to five decimal places); and

 

“Sterling Interest Determination Date” means
the first day of the Interest Period for which the rate will apply.

 

(D)          Determination
of Rates of Interest and Calculation of Interest Amounts

 

(i)            The
Agent Bank shall, as soon as practicable after 11.00 a.m. (London time) on, as
applicable, each Dollar Interest Determination Date, Euro Interest
Determination Date and Sterling Interest Determination Date, determine and
notify the First Issuer, the First Issuer Cash Manager, the Note Trustee, the
Registrar and the Paying Agents of (i) the Rates of Interest applicable to each
class of First Issuer Notes for the relevant Interest Period and (ii) the
Dollar amount (in the case of a Series 1 First Issuer Note, a Series 2 First
Issuer Note and a Series 3 First Issuer Note), the Euro amount (in the case of
a Series 4 Class A1 First Issuer Note) and the Sterling amount (in the case of
a Series 4 Class A2 First Issuer Note, a Series 4 Class B First Issuer Note and
a Series 4 Class C First Issuer Note) (in each case, the “Interest Amount”) payable in
respect of each Interest Period in respect of the Principal Amount Outstanding
of each such First Issuer Note.

 

209

 

(ii)           The
Interest Amount in respect of each class of First Issuer Notes shall be
determined by first applying the relevant Rate of Interest to the Principal
Amount Outstanding of the relevant class of First Issuer Notes, multiplying the
sum by the applicable day count fraction described in Condition 4(A) and
rounding the resultant figure to the nearest cent (in the case of the Series 1
First Issuer Notes, the Series 2 First Issuer Notes and the Series 3 First
Issuer Notes), the nearest Euro 0.01 (in the case of the Series 4 Class A1
First Issuer Notes) and the nearest penny (in the case of the Series 4 Class A2
First Issuer Notes, the Series 4 Class B First Issuer Note and the Series 4
Class C First Issuer Note) (half a cent, half a Euro 0.01 and half a penny
being rounded upwards), and then apportioning the resulting total between the
First Issuer Noteholders of that class of First Issuer Notes, pari passu without
preference or priority amongst themselves. For these purposes, in the case of
the Series 1 Class A First Issuer Notes, following the occurrence of a Trigger
Event or enforcement of the First Issuer Security in accordance with the First
Issuer Deed of Charge, the Principal Amount Outstanding will include any amount
of interest which would otherwise be payable on a monthly Series 1 Class A
Interest Payment Date, which interest will be deferred until the next monthly
Series 1 Class A Interest Payment Date and will itself bear interest at the
rate of interest applicable to subsequent Interest Periods in respect of the
Series 1 Class A First Issuer Notes until the next Quarterly Interest Payment
Date and, in the case of the Series 2 Class A First Issuer Notes, following the
occurrence of a Trigger Event or enforcement of the First Issuer Security in
accordance with the First Issuer Deed of Charge, the Principal Amount
Outstanding will include any amount of interest which would otherwise be
payable on a semi-annual Series 2 Class A Interest Payment Date, which interest
will be deferred until the next semi-annual Series 2 Class A Interest Payment
Date and will itself bear interest at the rate of interest applicable to
subsequent Interest Periods in respect of the Series 2 Class A First Issuer
Notes until the next Quarterly Interest Payment Date.

 

(E)           Publication
of Hates of Interest, Interest Amounts and other Notices

 

As soon as possible, the Agent Bank will
cause the Rate of Interest and the Interest Amount applicable to each class of
First Issuer Notes for each Interest Period and the Interest Payment Date
falling at the end of such Interest Period to be notified to the First Issuer,
the First Issuer Cash Manager, the Note Trustee, the Registrar and the Paying
Agents (as applicable) and to each stock exchange, competent listing authority
and/or quotation system (if any) on which the First Issuer Notes are then
listed, quoted and/or traded and the Agent Bank will cause notice thereof to be
given to the First Issuer Noteholders in accordance with Condition 14. The
Interest Amounts and Interest Payment Dates so notified may subsequently be
amended (or appropriate alternative arrangements made by way of adjustment)
without notice in the event of any extension or shortening of the relevant
Interest Period.

 

(F)           Determination
and/or Calculation by Note Trustee

 

If the Agent Bank does not at any time for
any reason determine the Rate of Interest and/or calculate the Interest Amount
for any class of the First Issuer Notes in accordance with the foregoing
paragraphs, the Note Trustee shall (i) determine the Rate of Interest at such
rate as (having such regard as it shall think fit to the procedure described
above) it shall deem fair and reasonable in all the circumstances and/or (as
the case may be) (ii) calculate the Interest Amount for such class of First
Issuer Notes in the manner specified in paragraph (D) above, and any such
determination and/or calculation shall be deemed to have been made by the Agent
Bank.

 

(G)           Notifications
to be Final

 

210

 

All notifications, opinions,
determinations, certificates, calculations, quotations and decisions given,
expressed, made or obtained for the purposes of this Condition 4, whether by
the Reference Banks (or any of them) or any other bank or the Agent Bank (in
the absence of wilful default, bad faith or manifest error) or the Note Trustee
(in accordance with paragraph (F) above) shall be binding on the First
Issuer, the First Issuer Cash Manager, the Reference Banks, such other bank,
the Agent Bank, the Note Trustee (as the case may be) and all First Issuer
Noteholders and (in such absence as aforesaid) no liability to the First Issuer
Noteholders shall attach to the First Issuer, the Reference Banks, such other
bank, the Agent Bank, the Note Trustee (as the case may be) or the First Issuer
Cash Manager in connection with the exercise or non-exercise by them or any of
them of their powers, duties and discretions hereunder.

 

(H)          Reference
Banks and Agent Bank

 

The Agent Bank shall ensure that, so long
as any of the First Issuer Notes remains outstanding, there shall at all times
be four Reference Banks with offices in London and an Agent Bank. The initial
Reference Banks shall be, in the case of First Issuer Notes, the principal
London offices of each of ABN AMRO Bank N.V., Barclays Bank PLC, Citibank, N.A.
and The Royal Bank of Scotland plc. The initial Agent Bank shall be Citibank,
N.A., London Branch, acting through its London office. In the event of any Reference
Bank being unable or unwilling to continue to act as a Reference Bank, the
First Issuer shall, with the prior written approval of the Note Trustee,
appoint a successor Reference Bank to act as such in its place. In the event of
Citibank, N.A., London Branch being unwilling or unable to act as the Agent
Bank, or resigning pursuant to the First Issuer Paying Agent and Agent Bank
Agreement, the First Issuer shall, with the approval of the Note Trustee,
appoint a successor Agent Bank. If the First Issuer shall fail to appoint a
successor Reference Bank or successor Agent Bank (as the case may be), the
Agent Bank shall appoint such other bank as may be previously approved in
writing by the Note Trustee to act as the Reference Bank or Agent Bank (as the
case may be). The resignation of the Agent Bank will not take effect until a
successor approved in writing by the Note Trustee has been appointed.

 

5.             Redemption,
Purchase and Cancellation

 

(A)          Final
Redemption

 

Unless previously redeemed in full as
provided in this Condition 5, the First Issuer shall, subject to Condition 2,
redeem each class of the First Issuer Notes at their Principal Amount
Outstanding (as defined below) together with accrued interest on the Final
Maturity Date in respect of such class of First Issuer Notes.

 

The First Issuer may not redeem Class A
First Issuer Notes in whole or in part prior to those respective dates except
as provided in paragraph (B), (D) or (E) below, but without
prejudice to Condition 9.

 

(B)           Mandatory
Redemption

 

Subject as provided below, the Class A
First Issuer Notes shall be redeemed on each Interest Payment Date other than
an Interest Payment Date on which the First Issuer Notes are to be redeemed
under Condition 5(A), (D) or (E), in an amount equal to the amount (if
any) repaid on the corresponding Interest Payment Date in respect of, and
pursuant to, the Series 1 First Issuer Term AAA Advance, the Series 2 First
Issuer Term AAA Advance, the Series 3 First Issuer Term AAA Advance, the Series
4A1 First Issuer Term AAA Advance and the Series 4A2 First Issuer Term AAA
Advance, respectively, converted, in the case of the Series 1 Term AAA Advance,
the Series 2 First Issuer Term AAA Advance and the Series 3 Term AAA Advance,
into Dollars at the relevant First Issuer Dollar Currency Exchange Rate (as
defined in Condition 16 below) and converted, in the case

 

211

 

of Series 4A1 First Issuer Term AAA Advance into Euro
at the relevant First Issuer Euro Currency Exchange Rate (as defined in
Condition 16 below).

 

If on an Interest Payment Date, prior to
enforcement of the First Issuer Security in accordance with the First Issuer
Deed of Charge or the occurrence of an Asset Trigger Event, amounts are
outstanding under more than one series of the Class A First Issuer Notes, then
the First Issuer will apply the relevant First Issuer Principal Receipts to
repay, as the case may be, (1) the Series 1 Class A First Issuer Notes,
converted into Dollars at the relevant First Issuer Dollar Currency Exchange
Rate, prior to making payments of principal on the Series 2 Class A First
Issuer Notes, the Series 3 Class A First Issuer Notes and the Series 4 Class A
First Issuer Notes; (2) the Series 2 Class A First Issuer Notes, converted into
Dollars at the relevant First Issuer Dollar Currency Exchange Rate, prior to
making payments of principal on the Series 3 Class A First Issuer Notes and the
Series 4 Class A First Issuer Notes; (3) the Series 3 Class A First Issuer
Notes, converted into Dollars at the relevant First Issuer Dollar Currency
Exchange Rate prior to making payments of principal on the Series 4 Class A
First Issuer Notes; and (4) the Series 4 Class A1 First Issuer Notes, converted
into Euro at the relevant First Issuer Euro Currency Exchange Rate, prior to
making payments of principal on the Series 4 Class A2 First Issuer Notes.

 

The Series 4 Class A2 First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid on the corresponding Interest Payment Date in respect
of, and pursuant to, the Series 4A2 First Issuer Term AAA Advance of the First
Issuer Term AAA Advances.

 

The Series 1 Class B First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the amount
(if any) repaid by Funding 1 on the corresponding Interest Payment Date in
respect, of and pursuant to, the Series 1 First Issuer Term AA Advance of the
First Issuer Term AA Advances converted into Dollars at the relevant First
Issuer Dollar Currency Exchange Rate.

 

The Series 1 Class C First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 1 First Issuer Term BBB Advance of
the First Issuer Term BBB Advances converted into Dollars at the relevant First
Issuer Dollar Currency Exchange Rate.

 

The Series 2 Class B First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 2 First Issuer Term AA Advance of
the First Issuer Term AA Advances converted into Dollars at the relevant First
Issuer Dollar Currency Exchange Rate.

 

The Series 2 Class C First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 2 First Issuer Term BBB Advance of
the First Issuer Term BBB Advances converted into Dollars at the relevant First
Issuer Dollar Currency Exchange Rate.

 

The Series 3 Class B First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 3 First Issuer Term AA Advance of
the First Issuer Term AA Advances converted into Dollars at the relevant First
Issuer Dollar Currency Exchange Rate.

 

The Series 3 Class C First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 3 First Issuer Term BBB Advance of
the First Issuer Term BBB Advances converted into Dollars at the relevant First
Issuer Dollar Currency Exchange Rate.

 

212

 

The Series 4 Class B First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 4 First Issuer Term AA Advance of
the First Issuer Term AA Advances.

 

The Series 4 Class C First Issuer Notes
shall be redeemed on each Interest Payment Date in an amount equal to the
amount (if any) repaid by Funding 1 on the corresponding Interest Payment Date
in respect of, and pursuant to, the Series 4 First Issuer Term BBB Advance of
the First Issuer Term BBB Advances.

 

(C)           Note
Principal Payments, Principal Amount Outstanding and Pool Factor

 

The principal amount redeemable (the “Note
Principal Payment”) in respect of each First Issuer Note of a particular
class on any Interest Payment Date under paragraph (B) above shall be a
proportion of the amount required as at that Interest Payment Date to be
applied in redemption of the relevant class of First Issuer Notes on such date
equal to the proportion that the Principal Amount Outstanding of the relevant
First Issuer Note bears to the aggregate Principal Amount Outstanding of the
relevant class of First Issuer Notes rounded down to the nearest cent in
respect of the Series 1 First Issuer Notes, the Series 2 First Issuer Notes and
the Series 3 First Issuer Notes, rounded down to the nearest Euro 0.01 in
respect of the Series 4 Class A1 First Issuer Notes and rounded down to the
nearest penny in respect of the Series 4 Class A2 First Issuer Notes, the Series
4 Class B First Issuer Notes and the Series 4 Class C First Issuer Notes
provided always that no such Note Principal Payment may exceed the Principal
Amount Outstanding of the relevant First Issuer Note.

 

Two Business Days prior to each Interest
Payment Date (the “Note Determination Date”), the First Issuer
shall determine (or cause the Agent Bank to determine) (i) the amount of any
Note Principal Payment due in respect of each First Issuer Note of the relevant
series on the immediately following Interest Payment Date, (ii) the Principal
Amount Outstanding of each such First Issuer Note (which shall be $1,000 and
$10,000 (in the case of each Series 1 First Issuer Note, each Series 2 First
Issuer Note and each Series 3 First Issuer Note), €1,000 and €10,000 (in the
case of each Series 4 Class A1 First Issuer Note) and £1,000 and £10,000 (in
the case of each Series 4 Class A2 First Issuer Note, each Series 4 Class B
First Issuer Note and each Series 4 Class C First Issuer Note) less (in each
case) the aggregate amount of all Note Principal Payments in respect of such
First Issuer Notes that have been paid since the Closing Date and on or prior
to that Note Determination Date (the “Principal Amount Outstanding”) and (iii)
the fraction expressed as a decimal to the first decimal point (the “Pool Factor”),
of which the numerator is the Principal Amount Outstanding of that First Issuer
Note (as referred to in (ii) above) and the denominator is $1,000 and $10,000
(in the case of each Series 1 First Issuer Note, each Series 2 First Issuer
Note and each Series 3 First Issuer Note), €1,000 and €10,000 (in the case of
each Series 4 Class A1 First Issuer Note) and £1,000 and £10,000 (in the case
of each Series 4 Class A2 First Issuer Note, each Series 4 Class B First Issuer
Note and each Series 4 Class C First Issuer Note). Each determination by or on
behalf of the First Issuer of any Note Principal Payment of a First Issuer
Note, the Principal Amount Outstanding of a First Issuer Note and the Pool
Factor shall in each case (in the absence of wilful default, bad faith or
manifest error) be final and binding on all persons.

 

With respect to the First Issuer Notes of
each class, the First Issuer will cause each determination of the Note
Principal Payment, the Principal Amount Outstanding and the Pool Factor to be
notified forthwith, and in any event not later than 1.00 p.m. (London time) on
the Note Determination Date, to the Note Trustee, the Paying Agents, the
Registrar, the Agent Bank and (for so long as the First Issuer Notes are listed
on one or more stock exchanges or listing authorities) the relevant stock
exchange or listing authority, and will cause notice of each determination of
the Note Principal Payment, the Principal Amount Outstanding and the Pool
Factor to be given to First Issuer Noteholders in accordance with Condition 14
by not later than the Business Day after the relevant Interest Payment Date in
the case of Global Issuer Notes or as soon as reasonably practicable

 

213

 

thereafter in the case of Definitive First Issuer
Notes. If no Note Principal Payment is due to be made on any Interest Payment
Date falling after June 2007, then a notice to this effect will be given
by or on behalf of the First Issuer to the First Issuer Noteholders which have
not been paid in full in accordance with Condition 14.

 

If the First Issuer does not at any time
for any reason determine (or cause the Agent Bank to determine) a Note
Principal Payment, the Principal Amount Outstanding or the Pool Factor in
accordance with the preceding provisions of this paragraph, such Note Principal
Payment, Principal Amount Outstanding and Pool Factor may be determined by the
Note Trustee in accordance with this paragraph (C) and each such
determination or calculation shall be deemed to have been made by the First
Issuer. Any such determination shall (in the absence of wilful default, bad
faith or manifest error) be binding on the First Issuer, the Agent Bank and the
First Issuer Noteholders.

 

(D)          Optional
Redemption in Full

 

Subject to the provisos below and upon
giving not more than 60 nor less than 30 days’ written notice to the Note
Trustee and the First Issuer Noteholders in accordance with Condition 14, the
First Issuer may redeem, unless otherwise provided, all (but not some only) of
the First Issuer Notes outstanding on any Interest Payment Date on which the
aggregate Principal Amount Outstanding of the First Issuer Notes then
outstanding is less than 10 per cent. of the aggregate Principal Amount Outstanding
of the First Issuer Notes on the Closing Date together with any accrued
interest, provided that (a) prior to giving any such notice, the First Issuer
shall have provided to the Note Trustee a certificate signed by two directors
of the First Issuer to the effect that the First Issuer will have the funds,
not subject to any interest of any other person, required to redeem the Issuer
Notes as aforesaid and any amounts required to be paid in priority to or pari passu with
the Issuer Notes outstanding in accordance with the terms and conditions of the
First Issuer Cash Management Agreement and (b) the Note Trustee is satisfied in
accordance with the Transaction Documents that there are sufficient funds to
allow the First Issuer to redeem the First Issuer Notes.

 

(E)           Optional
Redemption for Tax and other Reasons

 

Provided that a First Issuer Note
Acceleration Notice has not been served and if the First Issuer at any time
satisfies the Note Trustee immediately prior to the giving of the notice
referred to below that on the next Interest Payment Date either (i) the First
Issuer would by virtue of a change in the law or regulations of the United
Kingdom or any other jurisdiction (or the application or interpretation
thereof) be required to deduct or withhold from any payment of principal or
interest or any other amount due under any of the Issuer Notes any amount for
or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature (other than where the relevant holder
or beneficial owner has some connection with the relevant jurisdiction other
than the holding of the First Issuer Notes) or (ii) Funding 1 would be required
to deduct or withhold from amounts due under the First Issuer Intercompany Loan
any amount on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature, and (iii) such obligation of the First
Issuer or Funding 1 (as the case may be) cannot be avoided by the First Issuer
or Funding 1 (as the case may be) taking reasonable measures available to it,
then the First Issuer shall use its reasonable endeavours to arrange the
substitution of a company incorporated in another jurisdiction, if it avoids
the relevant event described in (i) or (ii) above, approved in writing by the
Note Trustee as principal debtor under the First Issuer Notes and as lender
under the First Issuer Intercompany Loan Agreement, as the case may be, upon
the Note Trustee being satisfied that (1) such substitution will not be
materially prejudicial to the First issuer Noteholders (and in making such
determination, the Note Trustee may rely, without further investigation or
inquiry, on any confirmation from the Rating Agencies that the then current
ratings of the First Issuer Notes would not be adversely affected by such
substitution); and (2) that the position of the First Issuer Secured

 

214

 

Creditors will not thereby be adversely affected; and
(3) that such substitution would not require registration of any new security
under US securities laws or materially increase the disclosure requirements
under US law. Only if the First Issuer is unable to arrange a substitution will
the First Issuer be entitled to redeem the Issuer Notes as described in this
Condition 5(E).

 

If the First Issuer or Funding 1 (as the
case may be) is unable to arrange a substitution as described above and, as a
result, one or more of the events described in (i) or (ii) above (as the case
may be) is continuing, then the First Issuer may, having given not more than 60
nor less than 30 clays’ written notice to the Note Trustee and the First Issuer
Noteholders in accordance with Condition 14, redeem all (but not some only) of
the Issuer Notes on the next following Interest Payment Date at their aggregate
Principal Amount Outstanding together with any interest accrued thereon
provided that (in either case), prior to giving any such notice, the First
Issuer shall have provided to the Note Trustee (1) a certificate signed by two
directors of the First Issuer stating that the circumstances referred to in (i)
and/or (ii) above prevail and setting out details of such circumstances, and
(2) an opinion in form and substance satisfactory to the Note Trustee of
independent legal advisers of recognised standing to the effect that the First
Issuer has or will become obliged to pay such additional amounts as a result of
such change or amendment. The Note Trustee shall be entitled to accept such
certificate and opinion as sufficient evidence of the satisfaction of the
circumstance set out in (i) and/or (ii) above, in which event they shall be
conclusive and binding on the First Issuer Noteholders. The First Issuer may
only redeem the Issuer Notes as described above if the Note Trustee is, in its
absolute discretion, satisfied that the First Issuer will have the funds, not
subject to the interest of any other person, required to redeem the First
Issuer Notes as aforesaid and any amounts required under the First Issuer
Pre-Enforcement Revenue Priority of Payments currently set out in the First
Issuer Cash Management Agreement to be paid in priority to or pari passu with
the First Issuer Notes outstanding in accordance with the terms and conditions
thereof.

 

If, at any time, the First Issuer has
delivered a certificate to Funding 1, the Note Trustee, the Security Trustee
and the Rating Agencies to the effect that it would be unlawful for the First
Issuer to make, fund or allow to remain outstanding a Term Advance made by it
under the First Intercompany Loan Agreement and stating that the First Issuer
requires Funding 1 to prepay the Term Advance, the First Issuer may, having
given not more than 60 days and not less than 30 days’ (or such shorter period
as may be required by any relevant law) prior written notice to the Note
Trustee and the First Issuer Noteholders in accordance with Condition 14 redeem
all (but not some only) of the First Issuer Notes on any Interest Payment Date
at their aggregate Principal Amount Outstanding together with any interest accrued
thereon provided that, prior to giving any such notice, the First Issuer shall
have provided to the Note Trustee a certificate signed by two directors of the
First Issuer to the effect that it will have the funds, not subject to the
interest of any other person, required to redeem the First Issuer Notes as
aforesaid and any amounts required under the First Issuer Pre-Enforcement
Revenue Priority of Payments currently set out in the First Issuer Cash
Management Agreement to be paid in priority to or pari passu with the First
Issuer Notes outstanding in accordance with the terms and conditions thereof.

 

6.             Payments

 

(A)          Payment
of Interest and Principal

 

Payments of principal and interest shall be
made by US Dollar cheque, in the case of the Dollar Global First Issuer Notes,
or Euro cheque, in the case of the Series 4 Class A1 First Issuer Notes, or
Sterling cheque, in the case of the Series 4 Class A2 First Issuer Notes,
Series 4 Class B First Issuer Notes and Series 4 Class C First Issuer Notes,
drawn on, or upon application by the relevant First Issuer Noteholder to the
specified office of the US Paying Agent (in the case of the Dollar Global First
Issuer Notes) or the Principal Paying Agent (in respect of the Series 4 First
Issuer Notes) not later than the fifteenth day before the due date for any such
payment, or by transfer to a

 

215

 

US Dollar account maintained by the payee with a bank
in New York City or (as the case may be) to a Euro account or to a Sterling
account maintained by the payee with a bank in London, as the case may be, and
(in the case of final redemption) upon surrender (or, in the case of part
payment only, endorsement) of the relevant Global First Issuer Notes or
Definitive First Issuer Notes (as the case may be) at the specified office of
any Paying Agent.

 

(B)           Laws
and Regulations

 

Payments of principal and interest in
respect of the First Issuer Notes are subject, in all cases, to any fiscal or
other laws and regulations applicable thereto. First Issuer Noteholders will
not be charged commissions or expenses on payments.

 

(C)           Payment
of Interest following a Failure to pay Principal

 

If payment of principal is improperly
withheld or refused on or in respect of any First Issuer Note or part thereof,
the interest which continues to accrue in respect of such First Issuer Note in
accordance with Condition 4(A) will be paid, in respect of a Global
First Issuer Note, as described in Condition 6(A) above and, in respect of
any Definitive First Issuer Note, in accordance with this Condition 6.

 

(D)          Change
of Paying Agents

 

The initial Principal Paying Agent, the
initial Registrar, the initial Transfer Agent and the initial US Paying Agent
and their respective initial specified offices are listed at the end of these
Conditions. The First Issuer reserves the right, subject to the prior written
approval of the Note Trustee, at any time to vary or terminate the appointment
of the Principal Paying Agent, the Registrar, the Transfer Agent and the US Paying
Agent and to appoint additional or other Agents. The First Issuer will at all
times maintain a Principal Paying Agent with a specified office in London, and
for so long as amounts are outstanding in respect of the Series 1 First Issuer
Notes and/or the Series 2 First Issuer Notes and/or the Series 3 First Issuer
Notes, a US Paying Agent with a specified office in New York City and a
Registrar. Except where otherwise provided in the First Issuer Trust Deed, the
First Issuer will cause at least 30 clays’ notice of any change in or addition
to the Paying Agents, the Transfer Agent or the Registrar or their specified
offices to be given in accordance with Condition 14 and will notify the Rating
Agencies of such change or addition. For as long as any First Issuer Note is
outstanding, if the proposed European Union Directive on Taxation of Savings
implementing the proposed Directive published by the EU Commission on 18th
July, 2001 or any law implementing or complying with, or introduced in order to
conform to such directive is introduced, the First Issuer will endeavour to
maintain a Paying Agent in a member state of the European Union that will not
be obliged to withhold or deduct tax pursuant to such Directive or any such
law.

 

(E)           No
Payment on non-Business Day

 

If the date for payment of any amount in
respect of a First Issuer Note is not a Business Day, First Issuer Noteholders
shall not be entitled to payment until the next following Business Day in the
relevant place and shall not be entitled to further interest or other payment
in respect of such delay. In this Condition 6(E), the expression “Business Day”
means a day which is (i) a New York Business Day, (ii) a London Business Day,
(iii) a TARGET Business Day and (iv) a day on which banks are generally open
for business in the relevant place.

 

(F)           Partial
Payment

 

If a Paying Agent makes a partial payment
in respect of any First Issuer Note, the Registrar will, in respect of the
relevant First Issuer Note, annotate the register of noteholders, indicating
the amount and date of such payment.

 

216

 

(G)           Payment
of Interest

 

If interest is not paid in respect of a
First Issuer Note of any class on the date when due and payable (other than
because the due date is not a Business Day (as defined in Condition 6(E))
or by reason of non-compliance with Condition 6(A)), then such unpaid
interest shall itself bear interest at the Rate of Interest applicable from
time to time to such First Issuer Note until such interest and interest thereon
are available for payment and notice thereof has been duly given in accordance
with Condition 14.

 

7.             Prescription

 

Claims against the First Issuer for payment
in respect of the First Issuer Notes shall be prescribed and become void unless
made within a period of 10 years from the relevant date in respect thereof.
After the date on which a payment under a First Issuer Note becomes void in its
entirety, no claim may be made in respect thereof. In this Condition 7, the “relevant
date”, in respect of a payment under a First Issuer Note, is the
date on which the payment in respect thereof first becomes due or (if the full
amount of the monies payable in respect of those payments under all the First
Issuer Notes due on or before that date has not been duly received, by the
Principal Paying Agent, the US Paying Agent or the Note Trustee (as the case
may be) on or prior to such date) the date on which the full amount of such
monies having been so received and notice to that effect is duly given to First
Issuer Noteholders in accordance with Condition 14.

 

8.             Taxation

 

All payments in respect of the First Issuer
Notes will be made without withholding or deduction for, or on account of, any
present or future taxes, duties or charges of whatsoever nature unless the
First Issuer or any relevant Paying Agent is required by applicable law to make
any payment in respect of the First Issuer Notes subject to any such
withholding or deduction. In that event, the First Issuer or such Paying Agent
shall make such payment after such withholding or deduction has been made and
shall account to the relevant authorities for the amount so required to be
withheld or deducted. No Paying Agent nor the First Issuer will be obliged to
make any additional payments to First Issuer Noteholders in respect of such
withholding or deduction.

 

9.             Events
of Default

 

(A)          Class A
First Issuer Noteholders

 

The Note Trustee in its absolute discretion
may, and if so requested in writing by the holders of not less than 25 per
cent. in aggregate of the Principal Amount Outstanding of the Class A First
Issuer Notes or if so directed by or pursuant to an Extraordinary Resolution
(as defined in the First Issuer Trust Deed) of the Class A First Issuer
Noteholders shall (subject, in each case, to being indemnified and/or secured
to its satisfaction) give notice (a “Class A First Issuer Note Acceleration Notice”)
to the First Issuer and the Security Trustee declaring the First Issuer Notes
to be due and repayable (and they shall forthwith become due and repayable) at
any time after the happening of any of the following events (each a “First Issuer
Event of Default”) which is continuing or unwaived:

 

(i)            default
being made for a period of three Business Days in the payment of the principal
of or any interest on any Class A First Issuer Note when and as the same ought
to be paid in accordance with these Conditions; or

 

217

 

(ii)           the
First Issuer failing duly to perform or observe any other obligation binding
upon it under the Class A First Issuer Notes, the First Issuer Trust Deed, the
First Issuer Deed of Charge or any other First Issuer Transaction Document and,
in any such case (except where the Note Trustee (or, in the case of the First
Issuer Deed of Charge, the Security Trustee) certifies that, in its sole
opinion, such failure is incapable of remedy when no notice will be required),
such failure is continuing for a period of 20 days following the service by the
Note Trustee (or, in the case of the First Issuer Deed of Charge, the Security
Trustee) on the First Issuer of notice requiring the same to be remedied; and
the Note Trustee has certified in writing that the failure to perform or
observe is, in its sole opinion, materially prejudicial to the interests of the
Class A First Issuer Noteholders; or

 

(iii)          the
First Issuer, otherwise than for the purposes of such amalgamation or
reconstruction as is referred to in sub-paragraph (iv) below, ceases or
threatens to cease to carry on its business or a substantial part of its
business or the First Issuer is deemed unable to pay its debts within the
meaning of Section 123(1)(a), (b), (c) or (d) of the Insolvency Act 1986
(as that section may be amended, modified or re-enacted) or becomes unable
to pay its debts as they fall due or the value of its assets falls to less than
the amount of its liabilities (taking into account for both these purposes its
contingent and prospective liabilities) or otherwise becomes insolvent; or

 

(iv)          an
order being made or an effective resolution being passed for the winding-up of
the First Issuer except a winding-up for the purposes of or pursuant to an
amalgamation or reconstruction the terms of which have previously been approved
by the Note Trustee in writing or by an Extraordinary Resolution of the Class A
First Issuer Noteholders; or

 

(v)           proceedings
being otherwise initiated against the First Issuer under any applicable
liquidation, insolvency, composition, reorganisation or other similar laws
(including, but not limited to, presentation of a petition for an
administration order) and (except in the case of presentation of a petition for
an administration order) such proceedings are not, in the sole opinion of the
Note Trustee, being disputed in good faith with a reasonable prospect of
success, or an administration order being granted or an administrative receiver
or other receiver, liquidator or other similar official being appointed in
relation to the First Issuer or in relation to the whole or any substantial
part of the undertaking or assets of the First Issuer, or an encumbrancer
taking possession of the whole or any substantial part of the undertaking or
assets of the First Issuer, or a distress, execution, diligence or other
process being levied or enforced upon or sued out against the whole or any
substantial part of the undertaking or assets of the First Issuer and such
possession or process (as the case may be) not being discharged or not
otherwise ceasing to apply within 30 days, or the First Issuer initiating or
consenting to judicial proceedings relating to itself under applicable
liquidation, insolvency, composition, reorganisation or other similar laws or
making a conveyance or assignment for the benefit of its creditors generally;
or

 

(vi)          if a
First Issuer Intercompany Loan Acceleration Notice is served under the First
Issuer Intercompany Loan Agreement, while any of the Class A First Issuer Notes
is outstanding.

 

(B)           Class
B First Issuer Noteholders

 

This Condition 9(B) shall have no effect if,
and for as long as, any Class A First Issuer Notes are outstanding. Subject
thereto, for so long as any Class B First Issuer Notes are outstanding, the
Note Trustee in its absolute discretion may, and if so requested in writing by
the holders of not less

 

218

 

than 25 per cent. in aggregate Principal Amount
Outstanding of the Class B First Issuer Notes or if so directed by or pursuant
to an Extraordinary Resolution of the Class B First Issuer Noteholders shall
(subject, in each case, to being indemnified and/or secured to its
satisfaction) give notice (a “Class B First Issuer Note Acceleration Notice”)
to the First Issuer and the Security Trustee declaring the First Issuer Notes
to be due and repayable (and they shall forthwith become due and repayable) at
any time after the happening of any of the following events:

 

(i)            default
being made for a period of three Business Days in the payment of the principal
of or any interest on any Class B First Issuer Note when and as the same ought
to be paid in accordance with these Conditions; or

 

(ii)           the
occurrence of any of the events in Condition 9(A)(ii), (iii), (iv), (v) or
(vi) above provided that the references in Condition 9(A)(ii), Condition 9(A)(iv)
and Condition 9(A)(vi) to Class A First Issuer Notes and Class A First
Issuer Noteholders shall be read as references to Class B First Issuer Notes
and Class B First Issuer Noteholders respectively.

 

(C)           Class
C First Issuer Noteholders

 

This Condition 9(C) shall have no effect if,
and for as long as, any Class A First Issuer Notes or any Class B First Issuer
Notes are outstanding. Subject thereto, for so long as any Class C First Issuer
Notes are outstanding, the Note Trustee in its absolute discretion may, and if
so requested in writing by the holders of not less than 25 per cent. in
aggregate Principal Amount Outstanding of the Class C First Issuer Notes or if
so directed by or pursuant to an Extraordinary Resolution of the Class C First
issuer Noteholders shall (subject, in each case, to being indemnified and/or
secured to its satisfaction) give notice (a “Class C First Issuer Note Acceleration
Notice”) to the First Issuer and the Security Trustee declaring the
First Issuer Notes to be due and repayable (and they shall forthwith become due
and repayable) at any time after the happening of any of the following events:

 

(i)            default
being made for a period of three Business Days in the payment of the principal
of or any interest on any Class C First Issuer Note when and as the same ought
to be paid in accordance with these Conditions; or

 

(ii)           the
occurrence of any of the events in Condition 9(A)(ii), (iii), (iv), (v) or
(vi) above provided that the references in Condition 9(A)(ii), Condition 9(A)(iv)
and Condition 9(A)(vi) to Class A First Issuer Notes and Class A First
Issuer Noteholders shall be read as references to Class C First Issuer Notes
and Class C First Issuer Noteholders respectively.

 

(D)          Following
Service of a First Issuer Note Acceleration Notice

 

In this Condition 9(D), a “First Issuer Note Acceleration Notice”
means any of the Class A First Issuer Note Acceleration Notice, the Class B
First Issuer Note Acceleration Notice and the Class C First Issuer Note
Acceleration Notice. For the avoidance of doubt, upon any First Issuer Note
Acceleration Notice being given by the Note Trustee in accordance with this
Condition 9, all the First Issuer Notes then outstanding shall immediately
become due and repayable, without further action or formality, at their
Principal Amount Outstanding together with accrued interest as provided in the
First Issuer Trust Deed.

 

10.           Enforcement
of First Issuer Notes

 

Each of the Note Trustee and the Security
Trustee may, at its discretion and without notice at any time and from time to
time, take such steps and institute such proceedings against the First Issuer
or any other person as it may think fit to enforce the provisions of (in the
case of the Note Trustee) the First Issuer Notes or the First Issuer Trust Deed
(including these Conditions) or (in the case of the Security Trustee) the First
Issuer Deed of Charge or (in either case) any of the other First Issuer

 

219

 

 

Transaction Documents. The Security Trustee may, at
its discretion and without notice, at any time after the First Issuer Security
has become enforceable, take such steps as it may think fit to enforce the
First Issuer Security. Neither the Note Trustee nor the Security Trustee shall
be bound to take any such proceedings or steps unless:

 

(i)            (subject
in all cases to restrictions contained in the First Issuer Trust Deed or, as
the case may be, the First Issuer Deed of Charge to protect the interests of
any higher ranking class of First Issuer Noteholders) it shall have been so
directed by an Extraordinary Resolution of the Class A First Issuer
Noteholders, the Class B First Issuer Noteholders and the Class C First Issuer
Noteholders or so requested in writing by the holders of at least 25 per cent.
in Principal Amount Outstanding of the Class A First Issuer Notes, the Class B
First Issuer Notes and the Class C First Issuer Notes or, in the case of the
Security Trustee (subject to restrictions contained in the First Issuer Deed of
Charge to protect the interests of the Class A First Issuer Noteholders, the
Glass B First Issuer Noteholders and the Class C First Issuer Noteholders), it
has been so directed by the Note Trustee acting on the instructions of an
Extraordinary Resolution of Noteholders of the relevant class, or so requested
by any other First Issuer Secured Creditor; and

 

(ii)           it
shall have been indemnified and/or secured to its satisfaction.

 

Amounts available for distribution after
enforcement of the First Issuer Security shall be distributed in accordance
with the terms of the First Issuer Deed of Charge.

 

No First Issuer Noteholder may institute
any proceedings against the First Issuer to enforce its rights under or in
respect of the First Issuer Notes or the First Issuer Trust Deed unless (1) the
Note Trustee or the Security Trustee, as the case may be, has become bound to
institute proceedings and has failed to do so within a reasonable time and (2)
the failure is continuing. Notwithstanding the previous sentence and
notwithstanding any other provision of the First Issuer Trust Deed, the right
of any First Issuer Noteholder to receive payment of principal of and interest
on its First Issuer Notes on or after the due date for the principal or
interest, or to institute suit for the enforcement of payment of that interest
or principal, may not be impaired or affected without the consent of that First
Issuer Noteholder. In addition, no Class B First Issuer Noteholder or Class C
First Issuer Noteholder will be entitled to take proceedings for the winding-up
or administration of the First Issuer unless:

 

•              there are no outstanding
First Issuer Notes of a class with higher priority; or

 

•              if First Issuer Notes of
a class with higher priority are outstanding, there is consent of holders of at
least one quarter of the aggregate principal amount outstanding of the class or
classes of First Issuer Notes with higher priority.

 

If, upon the First Issuer Security having
been enforced and realised to the maximum possible extent as certified by the
Security Trustee to the Note Trustee after payment of all other claims ranking
in priority to the Class B First Issuer Notes and the Class C First Issuer
Notes (as the case may be) under the First Issuer Deed of Charge, the remaining
proceeds of such enforcement are insufficient to pay in full all principal and
interest and other amounts whatsoever due in respect of the Class B First
Issuer Notes and the Class C First Issuer Notes (as the case may be) and all
other claims ranking pari passu therewith, then the Class B
First Issuer Noteholders and/or the Class C First Issuer Noteholders (as the
case may be) shall, be forthwith paid their respective shares of such remaining
proceeds (as determined in accordance with the provisions of the First Issuer
Deed of Charge). On the date of such payment (the “Option Exercise Date”), the
Note Trustee (on behalf of all of the Class B First Issuer Noteholders and/or
the Class C First Issuer Noteholders (as the case may be)) will, at the request
of Permanent PECOH Limited (the “Post Enforcement Call Option Holder”),
transfer without payment all (but not some only) of the Class B First Issuer
Notes and/or the Class C First Issuer Notes (as the case may be) to the Post
Enforcement Call Option Holder pursuant to the option granted to it by the Note
Trustee (as agent for the First Issuer Noteholders) pursuant to a post-

 

220

 

enforcement call option agreement (the “First Issuer
Post-Enforcement Call Option Agreement”) dated on or about the
Closing Date between the First Issuer, the Post-Enforcement Call Option Holder,
the Note Trustee and the Security Trustee. Immediately upon such transfer, no
such former Class B First Issuer Noteholder or Class C First Issuer Noteholder
shall have any further interest in the Class B First Issuer Notes or the Class
C First Issuer Notes (as the case may be). Each of the Class B First Issuer
Noteholders and the Class C First Issuer Noteholders acknowledges that the Note
Trustee has the authority and the power to bind the First Issuer Noteholders in
accordance with the terms and conditions set out in the First Issuer
Post-Enforcement Call Option Agreement and each Class B First Issuer Noteholder
or Class C First Issuer Noteholder (as the case may be), by subscribing for or
purchasing Class B First Issuer Notes or Class C First Issuer Notes (as the
case may be), agrees to be so bound.

 

11.           Meetings
of First Issuer Noteholders, Modifications and Waiver

 

(A)          Quorum

 

The First Issuer Trust Deed contains
provisions for convening meetings of First Issuer Noteholders of any series
and/or class to consider any matter affecting their interests, including the
sanctioning by Extraordinary Resolution of a modification of the First Issuer
Notes (including these Conditions) or a modification to the provisions of any of
the First Issuer Transaction Documents.

 

(1)          Class A
First Issuer Notes

 

The First Issuer Trust Deed provides that:

 

(i)            a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of one series only of the Class A First Issuer Notes
shall be deemed to have been duly passed if passed at a meeting of the holders
of the Class A First Issuer Notes of that series;

 

(ii)           a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of any two or more series classes of the Class A First
Issuer Notes but does not give rise to a conflict of interest between the
holders of such two or more series of the Class A First Issuer Notes, shall be
deemed to have been duly passed if passed at a single meeting of the holders of
such two or more series of the Class A First Issuer Notes; and

 

(iii)          a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of any two or more series of the Class A First Issuer
Notes and gives or may give rise to a conflict of interest between the holders
of such two or more series of the Class A First Issuer Notes, shall be deemed
to have been duly passed only if, in lieu of being passed at a single meeting
of the holders of such two or more series of the Class A First Issuer Notes, it
shall be duly passed at separate meetings of the holders of such two or more
series of the Class A First Issuer Notes.

 

In the case of a single meeting of the
holders of two or more series of the Class A First Issuer Notes which are not
all denominated in the same currency, the Principal Amount Outstanding of any
Class A First Issuer Note denominated in Dollars shall be converted into
Sterling at the relevant First Issuer Dollar Currency Exchange Rate and the
Principal Amount Outstanding of any Class A First Issuer Note denominated in
Euro shall be converted into Sterling at the relevant First Issuer Euro
Currency Exchange Rate.

 

The First Issuer Trust Deed contains
provisions similar to those in the preceding two paragraphs in relation to
requests in writing from Class A First Issuer Noteholders upon which the Note
Trustee is bound to act.

 

(2)          Class B
First Issuer Notes

 

The First Issuer Trust Deed provides that:

 

221

 

(i)            a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of one series only of the Class B First Issuer Notes
shall be deemed to have been duly passed if passed at a meeting of the holders
of the Class B First Issuer Notes of that series;

 

(ii)           a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of any two or more series of the Class B First Issuer
Notes but does not give rise to a conflict of interest between the holders of
such two or more series of the Class B First Issuer Notes, shall be deemed to
have been duly passed if passed at a single meeting of the holders of such two
or more series of the Class B First Issuer Notes; and

 

(iii)          a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of any two or more series of the Class B First Issuer
Notes and gives or may give rise to a conflict of interest between the holders
of such two or more series of the Class B First Issuer Notes, shall be deemed
to have been duly passed only if, in lieu of being passed at a single meeting
of the holders of such two or more series of the Class B First Issuer Notes, it
shall be duly passed at separate meetings of the holders of such two or more
series of the Class B First Issuer Notes.

 

In the case of a single meeting of the
holders of two or more series of the Class B First Issuer Notes which are not
all denominated in the same currency, the Principal Amount Outstanding of any
Class B First Issuer Note denominated in Dollars shall be converted into
Sterling at the relevant First Issuer Dollar Currency Exchange Rate and the
Principal Amount Outstanding of any Class B First Issuer Note denominated in
Euro shall be converted into Sterling at the relevant First Issuer Euro
Currency Exchange Rate.

 

The First Issuer Trust Deed contains
provisions similar to those in the preceding two paragraphs in relation to
requests in writing from Class B First Issuer Noteholders upon which the Note
Trustee is bound to act.

 

(3)          Class C
First Issuer Notes

 

The First Issuer Trust Deed provides that:

 

(i)            a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of one series only of the Class C First Issuer Notes
shall be deemed to have been duly passed if passed at a meeting of the holders
of the Class C First Issuer Notes of that series;

 

(ii)           a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of any two or more series of the Class C First Issuer
Notes but does not give rise to a conflict of interest between the holders of
such two or more series of the Class C First Issuer Notes, shall be deemed to
have been duly passed if passed at a single meeting of the holders of such two
or more series of the Class C First Issuer Notes; and

 

(iii)          a
resolution which, in the sole opinion of the Note Trustee, affects the
interests of the holders of any two or more series of the Class C First Issuer
Notes and gives or may give rise to a conflict of interest between the holders
of such two or more series of the Class C First Issuer Notes, shall be deemed
to have been duly passed only if, in lieu of being passed at a single meeting
of the holders of such two or more series of the Class C First Issuer Notes, it
shall be duly passed at separate meetings of the holders of such two or more
series of the Class C First Issuer Notes.

 

In the case of a single meeting of the
holders of two or more series of the Class C First Issuer Notes which are not
all denominated in the same currency, the Principal Amount Outstanding of any
Class C First Issuer Note denominated in Dollars shall be converted into
Sterling at the relevant First

 

222

 

Issuer Dollar Currency Exchange Rate and the Principal
Amount Outstanding of any Class C First Issuer Note denominated in Euro shall
be converted into Sterling at the relevant First Issuer Euro Currency Exchange
Rate.

 

The First Issuer Trust Deed contains
provisions similar to those in the preceding two paragraphs in relation to
requests in writing from Class C First Issuer Noteholders upon which the Note
Trustee is bound to act.

 

(4)          General

 

In each of the paragraphs (1) to
(3) above,
subject as provided below, the quorum at any -meeting of the First Issuer
Noteholders of any series or class or classes for passing an Extraordinary
Resolution shall be two or more persons holding or representing not less than
50 per cent. of the aggregate Principal Amount Outstanding of the First Issuer
Notes of that series or class or classes or, at any adjourned meeting, two or
more persons being or representing First Issuer Noteholders of that series or
class or classes whatever the aggregate Principal Amount Outstanding of
relevant First Issuer Notes so held or represented.

 

Subject to section 316(b) of the Trust
Indenture Act, the quorum at any meeting of the First Issuer Noteholders of any
series or class or classes for passing an Extraordinary Resolution which
includes the sanctioning of a modification which would have the effect of
altering the amount or timing of payments of principal on the First Issuer
Notes of such series or class or classes or the rate, the day or the tinning of
payments of interest thereon or of the currency of payment of the First Issuer
Notes of such series or class or classes or altering the priority of payments
or altering the quorum or majority required in relation to this exception (a “Basic Terms
Modification”), shall be one or more persons holding or representing
not less than 75 per cent. or, at any adjourned and reconvened meeting, not
less than 25 per cent. in Principal Amount Outstanding of the classes of First
Issuer Notes of each series for the time being outstanding.

 

A resolution signed by or on behalf of all
the First Issuer Noteholders of the relevant series or class shall for all
purposes be as valid and effective as an Extraordinary Resolution passed at a
meeting of such series or class of First Issuer Noteholders.

 

(B)           Limitations
on Class B First Issuer Noteholders

 

No Extraordinary Resolution of the Class B
First Issuer Noteholders (other than any such Extraordinary Resolution referred
to in paragraph (C) or (D) below) shall take effect for any
purpose while any Class A First Issuer Notes remain outstanding unless it shall
have been sanctioned by an Extraordinary Resolution of the Class A First Issuer
Noteholders or the Note Trustee is of the opinion that it would not be
materially prejudicial to the interests of the Class A First Issuer Noteholders.

 

(C)           Limitations
on Class C First Issuer Noteholders

 

No Extraordinary Resolution of the Class C
First Issuer Noteholders (other than any such Extraordinary Resolution referred
to in paragraph (D) below) shall take effect for any purpose while any Class
A First Issuer Notes or any Class B First Issuer Notes remain outstanding
unless it shall have been sanctioned by an Extraordinary Resolution of the
Class A First Issuer Noteholders and/or the Class B First Issuer Noteholders
(as the case may be) or the Note Trustee is of the opinion that it would not be
materially prejudicial to the interests of the Class A First Issuer Noteholders
and/or the Class B First Issuer Noteholders (as the case may be).

 

(D)          Approval
of Modifications and Waivers by Class B First Issuer Noteholders and Class C
First Issuer Noteholders

 

223

 

(i)            No
Extraordinary Resolution of the Class A First Issuer Noteholders to sanction a
modification of, or any waiver or authorisation of any breach or proposed
breach of, any of the provisions of the First Issuer Transaction Documents or
these Conditions shall take effect unless it shall have been sanctioned by an
Extraordinary Resolution of the Class B First Issuer Noteholders and an Extraordinary
Resolution of the Class C First Issuer Noteholders or the Note Trustee is of
the opinion that it would not be materially prejudicial to the interests of the
Class B First Issuer Noteholders and the Class C First Issuer Noteholders.

 

(ii)           After
the Class A First Issuer Notes have been fully redeemed, no Extraordinary
Resolution of the Class B First Issuer Noteholders to sanction a modification
of, or any waiver or authorisation of any breach or proposed breach of, any of
the provisions of the Transaction Documents or these Conditions shall take
effect unless it shall have been sanctioned by an Extraordinary Resolution of
the Class C First Issuer Noteholders or the Note Trustee is of the opinion that
it would not be materially prejudicial to the interests of the Class C First
Issuer Noteholders.

 

(E)           Modifications
and Determinations by Note Trustee

 

The Note Trustee may agree to, or
authorise, without the consent of the First Issuer Noteholders, (i) any
modification of, or to the waiver or authorisation of any breach or proposed
breach of, these Conditions or any of the First Issuer Transaction Documents,
which is not, in the sole opinion of the Note Trustee, materially prejudicial
to the interests of the First Issuer Noteholders or (ii) any modification of
these Conditions or any of the First Issuer Transaction Documents which, in the
sole opinion of the Note Trustee, is to correct a manifest error or is of a
formal, minor or technical nature (and for the avoidance of doubt, the Note
Trustee shall be entitled to assume, without further investigation or inquiry,
that such modification, waiver or authorisation will not be materially
prejudicial to the interests of the First Issuer Noteholders if each of the
Rating Agencies has confirmed in writing that the then current ratings of the
applicable series and/or class or classes of First Issuer Notes would not be
adversely affected by such modification, waiver or authorisation).

 

The Note Trustee may also, without the
consent of the First Issuer Noteholders, determine that any First Issuer Event
of Default shall not, or shall not subject to specified conditions, be treated
as such. Any such modification, waiver, authorisation or determination shall be
binding on the First Issuer Noteholders and, unless the Note Trustee agrees
otherwise, any such modification shall be notified to the First Issuer
Noteholders and the Rating Agencies in accordance with Condition 14 as soon as
practicable thereafter.

 

(F)           Exercise
of Note Trustee’s Functions

 

Where the Note Trustee is required, in
connection with the exercise of its powers, trusts, authorities, duties and
discretions, to have regard to the interests of the First Issuer Noteholders of
any series or class, it shall have regard to the interests of such First Issuer
Noteholders as a class and, in particular but without prejudice to the
generality of the foregoing, the Note Trustee shall not have regard to, or be
in any way liable for, the consequences of such exercise for individual First
Issuer Noteholders resulting from their being for any purpose domiciled or
resident in, or otherwise connected with, or subject to the jurisdiction of,
any particular territory. In connection with any such exercise, the Note
Trustee shall not be entitled to require, and no First Issuer Noteholder shall
be entitled to claim, from the First Issuer or any other person, any
indemnification or payment in respect of any tax consequence of any such
exercise upon individual First Issuer Noteholders.

 

224

 

12.           Indemnification
of the Note Trustee and the Security Trustee

 

The First Issuer Trust Deed and the First
Issuer Deed of Charge contain provisions governing the responsibility (and
relief from responsibility) of the Note Trustee and the Security Trustee,
respectively, and providing for their indemnification in certain circumstances,
including provisions relieving them from taking enforcement proceedings or, in
the case of the Security Trustee, enforcing the First Issuer Security unless
indemnified and/or secured to their satisfaction.

 

The Note Trustee and the Security Trustee
and their related companies are entitled to enter into business transactions
with the First Issuer, the First Issuer Cash Manager and/or the related
companies of any of them and to act as note trustee and security trustee,
respectively, for the holders of any notes issued by a new issuer and/or any
other person who is a party to any First Issuer Transaction Document or whose
obligations are comprised in the First Issuer Security and/or any of their
subsidiary or associated companies without accounting for any profit resulting
therefrom.

 

Neither the Note Trustee nor the Security
Trustee will be responsible for any loss, expense or liability which may be
suffered as a result of any assets comprised in the First Issuer Security, or
any deeds or documents of title thereto, being uninsured or inadequately
insured or being held by clearing organisations or their operators or by
intermediaries such as banks, brokers or other similar persons on behalf of the
Note Trustee and/or the Security Trustee.

 

13.           Replacement
of First Issuer Notes

 

If any First Issuer Note is mutilated,
defaced, lost, stolen or destroyed, it may be replaced at the specified office
of the Registrar. Replacement of any mutilated, defaced, lost, stolen or
destroyed First Issuer Note will only be made on payment of such costs as may
be incurred in connection therewith and on such terms as to evidence and
indemnity as the First Issuer may reasonably require. Mutilated or defaced
First Issuer Notes must be surrendered before new ones will be issued.

 

14.           Notice
to First Issuer Noteholders

 

(A)          Publication
of Notice

 

Any notice to First Issuer Noteholders
shall be validly given if published in:

 

(i)            the Financial
Times; and

 

(ii)           for so
long as amounts are outstanding in respect of the Series 1 First Issuer Notes
and/or the Series 2 First Issuer Notes and/or the Series 3 First Issuer Notes,
the New York Times;

 

or, if any such newspaper shall cease to be published
or, if timely publication therein is not practicable, in such other English
newspaper or newspapers as the Note Trustee shall approve in advance having a
general circulation in the United Kingdom and the United States; provided that
if, at any time, the First Issuer procures that the information concerned in
such notice shall appear on a page of the Reuters screen, or any other medium
for electronic display of data as may be previously approved in writing by the
Note Trustee and notified to First Issuer Noteholders (in each case a “Relevant
Screen”), publication in the newspapers set out above or such other
newspaper or newspapers shall not be required with respect to such information.
Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once or on different dates, on the first
date on which publication shall have been made in the newspaper or newspapers
in which (or on the Relevant Screen on which) publication is required.

 

225

 

In addition,
notices to First Issuer Noteholders will be sent to them by first class post
(or its equivalent) or (if posted to an address outside the United Kingdom) by
airmail at the respective addresses on the Register. Any such notice will be
deemed to have been given on the fourth day after the date of posting.

 

Whilst the
First Issuer Notes are represented by Global First Issuer Notes, notices to
First Issuer Noteholders will be valid if published as described above, or, at
the option of the First Issuer, if delivered to DTC in the case of the Dollar
Global First Issuer Notes, or to Euroclear and/or Clearstream, Luxembourg in
the case of the Series 4 Global First Issuer Notes, for communication by them
to First Issuer Noteholders. Any notice delivered to DTC, Euroclear and/or
Clearstream, Luxembourg, as aforesaid shall be deemed to have been given on the
day of such delivery.

 

(B)           Note
Trustee’s Discretion to Select Alternative Method

 

The Note
Trustee shall be at liberty to sanction some other method of giving notice to
the First Issuer Noteholders or category of them if, in its sole opinion, such
other method is reasonable having regard to market practice then prevailing and
to the requirements of the stock exchanges, competent listing authorities
and/or quotation systems on or by which the First Issuer Notes are then listed,
quoted and/or traded and provided that notice of such other method is given to
the First Issuer Noteholders in such manner as the Note Trustee shall require.

 

15.           Governing
Law and Jurisdiction

 

The First
Issuer Transaction Documents and the First Issuer Notes are governed by, and
shall be construed in accordance with, English law. The courts of England are
to have non-exclusive jurisdiction to settle any disputes which may arise out
of or in connection with the First Issuer Notes and the First Issuer
Transaction Documents. The First Issuer and the other parties to the First
Issuer Transaction Documents irrevocably submit therein to the non-exclusive
jurisdiction of the courts of England.

 

16.           Definitions

 

Unless otherwise defined in these
Conditions or unless the context otherwise requires, in these Conditions the
following words shall have the following meanings and any other capitalised
terms used in these Conditions shall have the meanings ascribed to them in the
Master Definitions Schedules:

 

“Asset Trigger Event” means the event that
occurs when there is a positive balance on the AAA Principal Deficiency
Sub-Ledger. The terms of an Asset Trigger Event may change if Funding 1 enters
into a new intercompany loan agreement;

 

“Authorised Investments” means (i) Sterling
gilt-edged investments and (ii) Sterling demand or time deposits, certificates
of deposit and short-term debt obligations (including commercial paper) (which
may include deposits in any account which earns a rate of interest related to
LIBOR) provided that in all cases such investments have a maturity date of 90
days or less and mature on or before the next Interest Payment Date and the
short-term unsecured, unguaranteed and unsubordinated debt obligations of the
issuing or guaranteeing entity or entity with which the demand or time deposits
are made (being an authorised institution under the Act) are rated A-1+ by
Standard and Poor’s, F1+ by Fitch and P-1 by Moody’s or which are otherwise
acceptable to the Rating Agencies (if they are notified in advance) to maintain
the current ratings of the First Issuer Notes;

 

“Final Maturity Date” means:

 

(i)            in
respect of the Series 1 Class A First Issuer Notes, the Interest Payment Date
falling in June 2003;

 

226

 

(ii)           in
respect of the Series 2 Class A First Issuer Notes, the Interest Payment Date
falling in June 2007;

 

(iii)          in
respect of the Series 3 Class A First Issuer Notes, the Interest Payment Date
falling in December 2007;

 

(iv)          in
respect of the Series 4 Class A1 First Issuer Notes, the Interest Payment Date
falling in June 2009;

 

(v)           in
respect of the Series 4 Class A2 First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(vi)          in
respect of the Series 1 Class B First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(vii)         in
respect of the Series 2 Class B First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(viii)        in respect
of the Series 3 Class B First Issuer Notes, the Interest Payment Date falling
in June 2042;

 

(ix)           in
respect of the Series 4 Class B First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(x)            in
respect of the Series 1 Class C First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xi)           in
respect of the Series 2 Class C First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xii)          in
respect of the Series 3 Class C First Issuer Notes, the Interest Payment Date
falling in June 2042; and

 

(xiii)         in
respect of the Series 4 Class C First Issuer Notes, the Interest Payment Date
falling in June 2042;

 

“First Issuer Dollar Currency Exchange Rate”
means the rate at which Dollars are converted to sterling or, as the case may
be, sterling is converted to Dollars under the relevant First Issuer Dollar
Currency Swap or, if there is no relevant First Issuer Dollar Currency Swap in
effect at such time, the “spot” rate at which Dollars are converted to sterling
or, as the case may be, sterling is converted to Dollars on the foreign
exchange markets;

 

“First Issuer Dollar Currency Swap Agreements”
means collectively the ISDA master agreements, schedules and confirmations (as
amended or supplemented from time to time) relating to the First Issuer Dollar
Currency Swaps to be entered into on or before the Closing Date between the
First Issuer, the relevant First Issuer Dollar Currency Swap Provider and the
Security Trustee;

 

“First Issuer Dollar Currency Swap Providers”
means each of the Series 1 First Issuer Dollar Currency Swap Provider, the
Series 2 First Issuer Dollar Currency Swap Provider and the Series 3 First
Issuer Dollar Currency Swap Provider;

 

“First Issuer Dollar Currency Swaps” means
the sterling-dollar currency swaps which enable the First Issuer to receive and
pay amounts under the First Issuer Intercompany Loan in sterling and to receive
and pay amounts under the Series 1 First Issuer Notes, the Series 2 First
Issuer Notes and the Series 3 First Issuer Notes;

 

“First Issuer Euro Currency Swap Agreement”
means the ISDA master agreement, schedule and confirmation (as amended or
supplemented from time to time) relating to the First Issuer Euro Currency Swap
to be entered into on the Closing Date between the First Issuer, the Series 4
First Issuer Euro Currency Swap Provider and the Security Trustee;

 

227

 

“First Issuer Euro Currency Swap” means the
sterling-euro currency swap which enables the First Issuer to receive and pay
amounts under the First Issuer Intercompany Loan in sterling and to receive and
pay amounts under the Series 4 Class A1 First Issuer Notes;

 

“First Issuer Euro Currency Exchange Rate”
means the rate at which Euro are converted to Sterling or, as the case may be,
Sterling is converted to Euro under the relevant First Issuer Euro Currency
Swap or, if there is no relevant First Issuer Euro Currency Swap Agreement in
effect at such time, the “spot” rate at which Euro are converted to sterling
or, as the case may be, sterling is converted to Euro on the foreign exchange
markets;

 

“First Issuer Intercompany Loan” means the
loan of the Term Advances made by the First Issuer to Funding 1 under the First
Issuer Intercompany Loan Agreement on or about the Closing Date;

 

“First Issuer Intercompany Loan Agreement”
means the First Issuer Intercompany Loan Confirmation and the Intercompany Loan
Terms and Conditions together entered into on or about the Closing Date by the
First Issuer, Funding 1 and the Security Trustee;

 

“First Issuer Intercompany Loan Confirmation”
means the loan confirmation in respect of the First Issuer Intercompany Loan
Agreement entered into on or about the Closing Date and made between the
Funding 1, the First Issuer and the Security Trustee;

 

“First Issuer Noteholders” means the holders
for the time being of the First Issuer Notes;

 

“First Issuer Notes” means the Class A First
Issuer Notes, the Class B First Issuer Notes and the Class C First Issuer
Notes;

 

“First Issuer Swap Agreements” means the First
Issuer Dollar Currency Swap Agreements and the First Issuer Euro Currency Swap
Agreement;

 

“First Issuer Transaction Account” means the
Sterling account in the name of the First Issuer held with Bank of Scotland
situated at 116 Wellington Street, Leeds LS1 4LT (or such other accounts at
such other banks as may from time to time become a First Issuer Transaction
Account in accordance with the First Issuer Transaction Documents);

 

“First Issuer Transaction Documents” means
the Mortgage Sale Agreement, the Servicing Agreement, the Mortgages Trust Deed,
the Cash Management Agreement, the First Issuer Corporate Services Agreement,
the Funding 1 Corporate Services Agreement, the First Issuer Intercompany Loan
Agreement, the Funding 1 Deed of Charge, the Funding 1 Guaranteed Investment
Contract, the Mortgages Trustee Guaranteed Investment Contract, the Funding 1
Liquidity Facility Agreement, the Bank Account Agreement, the First Issuer Bank
Account Agreement, the First Issuer Deed of Charge, the First Issuer Trust
Deed, the First Issuer Paying Agent and Agent Bank Agreement, the First Issuer
Cash Management Agreement, the First Issuer Post Enforcement Call Option
Agreement, the First Start-up Loan Agreement, the First Issuer Swap Agreements,
the First Issuer Underwriting Agreement, the First Issuer Subscription
Agreement and such other related documents which are referred to in the terms
of the above documents or which relate to the issue of the First Issuer Notes;

 

“Intercompany Loan Terms and Conditions”
means the standard terms and conditions incorporated into the First Issuer
Intercompany Loan Agreement and signed for the purposes of identification by
the Security Trustee and Funding 1 on or about the Closing Date;

 

“Non-Asset Trigger Event” means any of the following
events: (a) an Insolvency Event which occurs in relation to the Seller; (b) the
role of the Seller as Servicer under the Servicing Agreement is terminated and
a new Servicer is not appointed within 60 days; (c) the Seller Share is equal
to or less than the Minimum Seller Share; or (d) the Outstanding Principal
Balance of Loans comprising the Trust Property falls below (i) £8,000,000,000
in the period from and including the Closing Date to but excluding the Interest
Payment Date in June 2005 or (ii) £4,000,000,000 in the period from and
including the Interest Payment Date in June 2005 to but excluding the
Interest Payment Date in June 2007. The terms of a Non-Asset Trigger Event
may change if Funding 1 enters into a new intercompany loan agreement;

 

228

 

“Rating Agencies” means Standard &
Poor’s Ratings Services, a division of the McGraw-Hill Companies Inc., Moody’s
Investors Service Limited and Fitch Ratings Ltd or such other internationally
recognised credit rating agencies from time to time rating the First Issuer
Notes;

 

“Registrar” means Citibank, N.A. at 5
Carmelite Street, London EC4Y 0PA;

 

“Series 1 Class A First Issuer Noteholders”
means the holders for the time being of the Series 1 Class A First Issuer
Notes;

 

“Series 1 Class B First Issuer Noteholders”
means the holders for the time being of the Series 1 Class B First Issuer
Notes;

 

“Series 1 Class C First Issuer Noteholders”
means the holders for the time being of the Series 1 Class C First Issuer
Notes;

 

“Series 2 Class A First Issuer Noteholders”
means the holders for the time being of the Series 2 Class A First Issuer
Notes;

 

“Series 2 Class B First Issuer Noteholders”
means the holders for the time being of the Series 2 Class B First Issuer
Notes;

 

“Series 2 Class C First Issuer Noteholders”
means the holders for the time being of the Series 2 Class C First Issuer
Notes;

 

“Series 3 Class A First Issuer Noteholders”
means the holders for the time being of the Series 3 Class A First Issuer Notes;

 

“Series 3 Class B First Issuer Noteholders”
means the holders for the time being of the Series 3 Class B First Issuer
Notes;

 

“Series 3 Class C First Issuer Noteholders”
means the holders for the time being of the Series 3 Class C First Issuer Notes;

 

“Series 4 Class A First Issuer Noteholders”
means the Series 4 Class A1 First Issuer Noteholders and the Series 4 Class A2
First Issuer Noteholders;

 

“Series 4 Class A1 First Issuer Noteholders”
means the holders for the time being of the Series 4 Class A1 First Issuer
Notes;

 

“Series 4 Class A2 First Issuer Noteholders”
means the holders for the time being of the Series 4 Class A2 First Issuer
Notes;

 

“Series 4 Class B First Issuer Noteholders”
means the holders for the time being of the Series 4 Class B First Issuer
Notes;

 

“Series 4 Class C First Issuer Noteholders”
means the holders for the time being of the Series 4 Class C First Issuer
Notes;

 

“Series 1 Class A First Issuer Notes” means
the $750,000,000 series 1 class A asset backed floating rate First Issuer Notes
due June 2003;

 

“Series 1 Class B First Issuer Notes” means
the $26,000,000 series 1 class B asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 1 Class C First Issuer Notes” means
the $26,000,000 series 1 class C asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 2 Class A First Issuer Notes” means
the $750,000,000 series 2 class A asset backed fixed-floating rate First Issuer
Notes due June 2007;

 

“Series 2 Class B First Issuer Notes” means
the $26,000,000 series 2 class B asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 2 Class C First Issuer Notes” means
the $26,000,000 series 2 class C asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 3 Class A First Issuer Notes” means
the $1,100,000,000 series 3 class A asset backed floating rate First Issuer
Notes due December 2007;

 

“Series 3 Class B First Issuer Notes” means
the $38,500,000 series 3 class B asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 3 Class C First Issuer Notes” means
the $38,500,000 series 3 class C asset backed floating rate First Issuer Notes
due June 2042;

 

229

 

“Series 4 Class A First Issuer Notes” means
the Series 4 Class A1 First Issuer Notes and the Series 4 Class A2 First Issuer
Notes;

 

“Series 4 Class A1 First Issuer Notes” means
the €750,000,000 series 4 class A1 asset backed fixed-floating rate First
Issuer Notes due June 2009;

 

“Series 4 Class A2 First Issuer Notes” means
the £1,000,000,000 series 4 class A2 asset backed floating rate First Issuer
Notes due June 2042;

 

“Series 4 Class B First Issuer Notes” means
the £52,000,000 series 4 class B asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 4 Class C First Issuer Notes” means
the £52,000,000 series 4 class C asset backed floating rate First Issuer Notes
due June 2042;

 

“Series 1 First Issuer Dollar Currency Swap Provider”
means JPMorgan Chase Bank or such other swap provider appointed from time to time
in relation to the Series 1 First Issuer Notes;

 

“Series 2 First Issuer Dollar Currency Swap Provider”
means JPMorgan Chase Bank or such other swap provider appointed from time to
time in relation to the Series 2 First Issuer Notes;

 

“Series 3 First Issuer Dollar Currency Swap Provider”
means Banque AIG or such other swap provider appointed from time to time in
relation to the Series 3 First Issuer Notes;

 

“Series 4 First Issuer Euro Currency Swap Provider”
means Credit Suisse First Boston International or such other swap provider
appointed from time to time in relation to the Series 4 Class A1 First Issuer
Notes;

 

“Series 1 First Issuer Notes” means
collectively the Series 1 Class A First Issuer Notes, the Series 1 Class B
First Issuer Notes and the Series 1 Class C First Issuer Notes;

 

“Series 2 First Issuer Notes” means
collectively the Series 2 Class A First Issuer Notes, the Series 2 Class B
First Issuer Notes and the Series 2 Class C First Issuer Notes;

 

“Series 3 First Issuer Notes” means
collectively the Series 3 Class A First Issuer Notes, the Series 3 Class B
First Issuer Notes and the Series 3 Class C First Issuer Notes;

 

“Series 4 First Issuer Notes” means
collectively the Series 4 Class A First Issuer Notes, the Series 4 Class B
First Issuer Notes and the Series 4 Class C First Issuer Notes;

 

“Transaction Documents” means the First
Issuer Transaction Documents and those documents to which any new issuers will
be a party in relation to the notes issued by such new issuers;

 

“Trigger Event” means an Asset Trigger Event
or a Non-Asset Trigger Event, as the case may be; and

 

Any
reference to a “class” of First Issuer Notes or of First Issuer Noteholders
shall be a reference to the class of any of the Series 1 First Issuer Notes,
the Series 2 First Issuer Notes, the Series 3 First Issuer Notes or the Series
4 First Issuer Notes, as the context requires. Any reference to a “series”
of First Issuer Notes shall be a reference, as the context requires, to the
Series 1 First Issuer Notes, the Series 2 First Issuer Notes, the Series 3
First Issuer Notes or the Series 4 First Issuer Notes.

 

230

 

SCHEDULE 4

 

PROVISIONS FOR MEETINGS OF NOTEHOLDERS

 

1.             (A)          As used
in this Schedule the following expressions shall have the following
meanings unless the context otherwise requires:

 

(i)            “voting
certificate” shall mean an English language certificate issued by a
Paying Agent and dated in which it is stated:

 

(a)           that
on the date thereof First Issuer Notes (represented by a Global First Issuer
Note and not being First Issuer Notes in respect of which a block voting
instruction has been issued and is outstanding in respect of the meeting
specified in such voting certificate or any adjourned such meeting) were (to
the satisfaction of such Paying Agent) held to its order or under its control
and that no such First Issuer Notes will cease to be so held until the first to
occur of:

 

(1)           the
conclusion of the meeting specified in such certificate or, if applicable, of
any adjourned such meeting; and

 

(2)           the
surrender of the certificate to the Paying Agent who issued the same; and

 

(b)           that
the bearer thereof is entitled to attend and vote at such meeting and any
adjourned such meeting in respect of the First Issuer Notes represented by such
certificate;

 

(ii)           “block voting
instruction” shall mean an English language document issued by a
Paying Agent and dated in which:

 

(a)           it is
certified that First Issuer Notes (represented by a Global First Issuer Note
and not being First Issuer Notes in respect of which a voting certificate has
been issued and is outstanding in respect of the meeting specified in such
block voting instruction and any adjourned such meeting) were (to the
satisfaction of such Paying Agent) held to its order or under its control and
that no such First Issuer Notes will cease to be so held until the first to
occur of:

 

(1)           the
conclusion of the meeting specified in such document or, if applicable, of any
adjourned such meeting; and

 

(2)           the
surrender to that Paying Agent not less than 48 hours before the time for
which such meeting or any adjourned such meeting is convened of the receipt
issued by such Paying Agent in respect of each such First Issuer Note which is
to be released or (as the case may require) the First Issuer Note or First
Issuer Notes ceasing with the agreement of that Paying Agent to be held to its
order or under its control and the giving of notice by that Paying Agent to the
First Issuer

 

231

 

in accordance with paragraph 17 hereof of
the necessary amendment to the block voting instruction;

 

(b)           it is
certified that each holder of such First Issuer Notes has instructed such
Paying Agent that the vote(s) attributable to the First Issuer Note or First Issuer
Notes so held should be cast in a particular way in relation to the resolution
or resolutions to be put to such meeting or any adjourned such meetingand that
all such instructions are during the period commencing 48 hours prior to
the time for which such meeting or any adjourned such meeting is convened and
ending at the conclusion or adjournment thereof neither revocable nor capable
of amendment;

 

(c)           the
aggregate principal amount of the First Issuer Notes so held are listed
distinguishing with regard to each such resolution between those in respect of
which instructions have been given as aforesaid that the votes attributable
thereto should be cast in favour of the resolution and those in respect of
which instructions have been so given that the votes attributable thereto
should be cast against the resolution; and

 

(d)           one or
more persons named in such document (each hereinafter called a “proxy”)
is or are authorised and instructed by such Paying Agent to cast the votes
attributable to the First Issuer Notes so listed in accordance with the
instructions referred to in (c) above as set out in such document;

 

(iii)          “24 hours”
shall mean a period of 24 hours including all or part of a day upon which banks
are open for business in both the place where the relevant meeting is to be
held and in each of the places where the Paying Agents have their specified
offices (disregarding for this purpose the day upon which such meeting is to be
held) and such period shall be extended by one period or, to the extent necessary,
more periods of 24 hours until there is included as aforesaid all or part of a
day upon which banks are open for business in all of the places as aforesaid;

 

(iv)          “48 hours”
shall mean a period of 48 hours including all or part of two days upon which
banks are open for business both in the place where the relevant meeting is to
be held and in each of the places where the Paying Agents have their specified
offices (disregarding for this purpose the day upon which such meeting is to be
held) and such period shall be extended by one period or, to the extent
necessary, more periods of 24 hours until there is included as aforesaid all or
part of two days upon which banks are open for business in all of the places as
aforesaid; and

 

(v)           “First Issuer
Notes” and “Noteholders” shall mean:

 

(a)           in
connection with a single meeting of Class A First Issuer Noteholders, Class A
First Issuer Notes and Class A First Issuer Noteholders, respectively;

 

232

 

(b)           in
connection with a meeting of Class B First Issuer Noteholders, Class B First
Issuer Notes and Class B First Issuer Noteholders respectively; and

 

(c)           in
connection with a meeting of Class C First Issuer Noteholders, Class C First
Issuer Notes and Class C First Issuer Noteholders respectively.

 

(B)           A
holder of a First Issuer Note represented by a Global First Issuer Note may
obtain a voting certificate in respect of such First Issuer Note from a Paying
Agent or require a Paying Agent to issue a block voting instruction in respect
of such First Issuer Note or by such First Issuer Note (to the satisfaction of
such Paying Agent) being held to its order or under its control, in each case
not less than 48 hours before the time fixed for the relevant meeting and on
the terms set out in subparagraph (A)(i)(a) or (A)(ii)(a) above
(as the case may be), and (in the case of a block voting instruction)
instructing such Paying Agent to the effect set out in subparagraph (A)(ii)(b)
above. The holder of any voting certificate or the proxies named in any block
voting instruction shall for all purposes in connection with the relevant
meeting or adjourned meeting of Noteholders be deemed to be the holder of the
First Issuer Notes to which such voting certificate or block voting instruction
relates and the person holding the same to the order or under the control of
such Paying Agent shall be deemed for such purposes not to be the holder of
those First Issuer Notes.

 

(C)           (i)            A
holder of Definitive First Issuer Notes may, by an instrument in writing in the
English language (a “form of proxy”) signed by the holder or, in
the case of a corporation, executed under its common seal or signed on its
behalf by an attorney or a duly authorised officer of the corporation and
delivered to the specified office of the Registrar not less than 48 hours
before the time fixed for the relevant meeting, appoint any person (a “proxy”)
to act on his or its behalf in connection with any meeting of the Noteholders
and any adjourned such meeting.

 

(ii)           Any
holder of Definitive First Issuer Notes which is a corporation may by
resolution of its directors or other governing body authorise any person to act
as its representative (a “representative”) in connection with any
meeting of the Noteholders and any adjourned such meeting.

 

(iii)          Any
proxy appointed pursuant to subparagraph (i) above or representative
appointed pursuant to subparagraph (ii) above shall so long as such
appointment remains in force be deemed, for all purposes in connection with the
relevant meeting or adjourned meeting of the Noteholders, to be the holder of
the Definitive First Issuer Notes to which such appointment relates and the
holder of the Definitive First Issuer Notes shall be deemed for such purposes
not to be the holder.

 

2.             The First
Issuer or the Note Trustee may at any time and the Note Trustee shall upon a
requisition in writing signed by the holders of not less than one-tenth in
principal amount of the First Issuer Notes for the time being outstanding
convene a meeting of the Noteholders and if the First Issuer makes default for
a period of seven days in convening such a meeting the same may be convened by
the Note Trustee or the requisitionists. 
Every such meeting shall be held at such time and place as the Note
Trustee may appoint or approve.

 

233

 

3.             At
least 21 days’ notice (exclusive of the day on which the notice is given
and the day on which the meeting is to be held) specifying the place, day and
hour of meeting shall be given to the Noteholders prior to any meeting of the
Noteholders.  Such notice, which shall
be in the English language, shall state generally the nature of the business to
be transacted at the meeting thereby convened but (except for an Extraordinary
Resolution) it shall not be necessary to specify in such notice the terms of
any resolution to be proposed. Such notice shall include statements, if
applicable, to the effect that (i) First Issuer Notes represented by a
Global First Issuer Note may, not less than 48 hours before the time fixed for
the meeting, be held to the order or under the control of any Paying Agent (to
its satisfaction) for the purpose of obtaining voting certificates or
appointing proxies and (ii) the holders of Definitive First Issuer Notes
of the relevant class may appoint proxies by executing and delivering a form of
proxy in the English language to the specified office of the Registrar not less
than 48 hours before the time fixed for the meeting or, in the case of
corporations, may appoint representatives by resolution of their directors or
other governing body.  A copy of the
notice shall be sent by post to the Note Trustee (unless the meeting is
convened by the Note Trustee) and, to the First Issuer (unless the meeting is
convened by the First Issuer).

 

4.             A
person (who may but need not be a Noteholder) nominated in writing by the Note
Trustee shall be entitled to take the chair at the relevant meeting or
adjourned meeting but if no such nomination is made or if at any meeting or
adjourned meeting the person nominated shall not be present within 15 minutes
after the time appointed for holding the meeting or adjourned meeting the
Noteholders present shall choose one of their number to be Chairman, failing
which the First Issuer may appoint a Chairman. The Chairman of an adjourned
meeting need not be the same person as was Chairman of the meeting from which
the adjournment took place.

 

5.             Subject
to this paragraph
5 being subject to the provisions of Section 316(b) of the
Trust Indenture Act, at any such meeting one or more persons present holding
First Issuer Notes or voting certificates or being proxies or representatives
and holding or representing in the aggregate not less than one-twentieth of the
principal amount of the First Issuer Notes for the time being outstanding shall
(except for the purpose of passing an Extraordinary Resolution) form a quorum
for the transaction of business and no business (other than the choosing of a
Chairman) shall be transacted at any meeting unless the requisite quorum be
present at the commencement of the relevant business. The quorum at any such
meeting for passing an Extraordinary Resolution shall (subject as provided
below) be two or more persons present holding or representing First Issuer
Notes or voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than 50 per cent. in Principal Amount
Outstanding of the First Issuer Notes (or, at any adjourned meeting, two or
more persons being or representing Noteholders whatever the aggregate Principal
Amount Outstanding of the First Issuer Notes so held or represented) PROVIDED
THAT at any meeting the business of which includes the passing of an
Extraordinary Resolution to sanction any of the following matters (each a “Basic Terms
Modification”) namely:

 

(A)          reduction
or cancellation of the amount payable or, where applicable, modification,
except where such modification is in the opinion of the Note Trustee bound to
result in an increase, of the method of calculating the amount payable or
modification of the date of payment or, where applicable, of the method of
calculating the date of payment in respect of any principal, premium or
interest in respect of the First Issuer Notes;

 

234

 

(B)           alteration
of the currency in which payments under the First Issuer Notes are to be made;

 

(C)           alteration
of the quorum or majority required to pass an Extraordinary Resolution in
respect of any such Basic Terms Modification; and

 

(D)          alteration
of this proviso or the proviso to paragraph 6 below,

 

the quorum for passing the requisite Extraordinary
Resolution shall be two or more persons present holding First Issuer Notes or
voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than three quarters (or, at any
adjourned meeting, not less than one quarter) of the Principal Amount
Outstanding of the First Issuer Notes for the time being outstanding.

 

6.             If
within 15 minutes (or such longer period not exceeding 30 minutes as the
Chairman may decide) after the time appointed for any such meeting a quorum is
not present for the transaction of any particular business, then, subject and
without prejudice to the transaction of the business (if any) for which a
quorum is present, the meeting shall if convened upon the requisition of
Noteholders be dissolved.  In any other
case it shall stand adjourned to the same day in the next week (or if such day
is a public holiday the next succeeding Business Day) at the same time and
place (except in the case of a meeting at which an Extraordinary Resolution is
to be proposed in which case it shall stand adjourned for such period, being
not less than 13 clear days nor more than 42 clear days, and to such
place as may be appointed by the Chairman either at or subsequent to such
meeting and approved by the Note Trustee). If within 15 minutes (or such longer
period not exceeding 30 minutes as the Chairman may decide) after the time
appointed for any adjourned meeting a quorum is not present for the transaction
of any particular business, then, subject and without prejudice to the
transaction of the business (if any) for which a quorum is present, the
Chairman may either (with the approval of the Note Trustee) dissolve such
meeting or adjourn the same for such period, being not less than 13 clear
days (but without any maximum number of clear days), and to such place as may
be appointed by the Chairman either at or subsequent to such adjourned meeting
and approved by the Note Trustee, and the provisions of this sentence shall
apply to all further adjourned such meetings. At any adjourned meeting one or
more persons present holding Definitive First Issuer Notes or voting
certificates or being proxies or representatives (whatever the principal amount
of the First Issuer Notes so held or represented by them) shall (subject as
provided below) form a quorum and shall (subject as provided below) have power
to pass any Extraordinary Resolution or other resolution and to decide upon all
matters which could properly have been dealt with at the meeting from which the
adjournment took place had the requisite quorum been present PROVIDED THAT at
any adjourned meeting the quorum for the transaction of business comprising any
of the matters specified in the proviso to paragraph 5 above shall be one or more
persons present holding Definitive First Issuer Notes or voting certificates or
being proxies or representatives and holding or representing in the aggregate
not less than one-third of the principal amount of the First Issuer Notes for
the time being outstanding.

 

7.             Notice
of any adjourned meeting at which an Extraordinary Resolution is to be
submitted shall be given in the same manner as notice of an original meeting but
as if 10 were substituted for 21 in paragraph 3 above and
such notice shall state the relevant quorum. Subject as aforesaid it shall not
be necessary to give any notice of an adjourned meeting.

 

235

 

8.             Every
question submitted to a meeting shall be decided in the first instance by a
show of hands and in case of equality of votes the Chairman shall both on a
show of hands and on a poll have a casting vote in addition to the vote or
votes (if any) to which he may be entitled as a Noteholder or as a holder of a
voting certificate or as a proxy or as a representative.

 

9.             At
any meeting unless a poll is (before or on the declaration of the result of the
show of hands) demanded by the Chairman, the First Issuer, the Note Trustee or
any person present holding a Definitive First Issuer Note or a voting
certificate or being a proxy or representative (whatever the principal amount
of the First Issuer Notes so held or represented by him) a declaration by the
Chairman that a resolution has been carried or carried by a particular majority
or lost or not carried by a particular majority shall be conclusive evidence of
the fact without proof of the number or proportion of the votes recorded in
favour of or against such resolution.

 

10.           Subject
to paragraph 12
below, if at any such meeting a poll is so demanded it shall be taken in such
manner and subject as hereinafter provided either at once or after an
adjournment as the Chairman directs and the result of such poll shall be deemed
to be the resolution of the meeting at which the poll was demanded as at the
date of the taking of the poll. The demand for a poll shall not prevent the
continuance of the meeting for the transaction of any business other than the
motion on which the poll has been demanded.

 

11.           The
Chairman may with the consent of (and shall if directed by) any such meeting
adjourn the same from time to time and from place to place but no business
shall be transacted at any adjourned meeting except business which might
lawfully (but for lack of required quorum) have been transacted at the meeting
from which the adjournment took place.

 

12.           Any
poll demanded at any such meeting on the election of a Chairman or on any
question of adjournment shall be taken at the meeting without adjournment.

 

13.           The
Note Trustee and its lawyers and any director, officer or employee of a
corporation being a trustee of the First Issuer Trust Deed and any director or
officer of the First Issuer and its lawyers and any other person authorised so
to do by the Note Trustee may attend and speak at any meeting.  Save as aforesaid, but without prejudice to
the definition of “Principal Amount Outstanding”, no person shall be entitled
to attend and speak nor shall any person be entitled to vote at any meeting of
the Noteholders or join with others in requesting the convening of such a
meeting or to exercise the rights conferred on the Noteholders by Clause 10
of the First Issuer Trust Deed unless he either produces First Issuer Note(s)
or a voting certificate or is a proxy or a representative or is the holder of a
Definitive First Issuer Note or Definitive First Issuer Notes.  No person shall be entitled to vote at any
meeting in respect of First Issuer Notes held by, for the benefit of, or on behalf
of, the First Issuer or the Borrowers. 
Nothing herein shall prevent any of the proxies named in any block
voting instruction or form of proxy or any representative from being a
director, officer or representative of or otherwise connected with the First
Issuer.

 

14.           Subject
as provided in paragraph 13 hereof at any meeting:

 

(A)          on a
show of hands every person who is present in person and produces a voting
certificate or is a holder of First Issuer Notes or is a proxy or
representative shall have one vote; and

 

236

 

(B)           on a
poll every person who is so present shall have one vote in respect of each £1,
US$1 or €1 (or such other amount as the Note Trustee may in its absolute
discretion stipulate) in principal amount of the First Issuer Notes represented
by the voting certificate so produced or in respect of which he is a proxy or
representative or in respect of which he is the holder.

 

Without prejudice to the obligations of the proxies
named in any block voting instruction or form of proxy any person entitled to
more than one vote need not use all his votes or cast all the votes to which he
is entitled in the same way.

 

15.           The
proxies named in any block voting instruction or form of proxy and
representatives need not be Noteholders.

 

16.           Each
block voting instruction together (if so requested by the Note Trustee) with
proof satisfactory to the Note Trustee of its due execution on behalf of the
relevant Paying Agent and each form of proxy shall be deposited by the relevant
Paying Agent or (as the case may be) by the Registrar at such place as the Note
Trustee shall approve not less than 24 hours before the time appointed for
holding the meeting or adjourned meeting at which the proxies named in the
block voting instruction or form of proxy propose to vote and in default the
block voting instruction or form of proxy shall not be treated as valid unless
the Chairman of the meeting decides otherwise before such meeting or adjourned
meeting proceeds to business.  A
notarially certified copy of each block voting instruction and form of proxy
shall be deposited with the Note Trustee before the commencement of the meeting
or adjourned meeting but the Note Trustee shall not thereby be obliged to
investigate or be concerned with the validity of or the authority of the
proxies named in any such block voting instruction or form of proxy.

 

17.           Any
vote given in accordance with the terms of a block voting instruction or form
of proxy shall be valid notwithstanding the previous revocation or amendment of
the block voting instruction or form of proxy or of any of the Noteholders’
instructions pursuant to which it was executed provided that no intimation in
writing of such revocation or amendment shall have been received from the
relevant Paying Agent or in the case of a Definitive First Issuer Note from the
holder thereof by the First Issuer at its registered office (or such other
place as may have been required or approved by the Note Trustee for the
purpose) by the time being 24 hours and 48 hours respectively before
the time appointed for holding the meeting or adjourned meeting at which the
block voting instruction or form of proxy is to be used.

 

18.           Subject
always to the provisions of Clause 18 of the First Issuer Trust Deed
and Section 316(b) of the Trust Indenture Act, a meeting of the
Noteholders shall in addition to the powers hereinbefore given have the
following powers exercisable only by Extraordinary Resolution (subject to the
provisions relating to quorum contained in paragraphs 5 and 6 above) namely:

 

(A)          power
to sanction any compromise or arrangement proposed to be made between the First
Issuer, the Note Trustee, any appointee of the Note Trustee and the Noteholders
or any of them;

 

(B)           power
to sanction any abrogation, modification, compromise or arrangement in respect
of the rights of the Note Trustee, any appointee of the Note Trustee, the
Noteholders or the First Issuer against any other or others of them or against
any other party to any of the Transaction Documents or against any of their
property

 

237

 

whether such rights shall arise under the First Issuer
Trust Deed, any other Transaction Document or otherwise;

 

(C)           power
to assent to any modification of the provisions of the Conditions, the First
Issuer Trust Deed or any other Transaction Document which shall be proposed by
the First Issuer, the Note Trustee, or any Noteholder or any other person;

 

(D)          power
to give any authority or sanction which under the provisions of the Conditions
or the First Issuer Trust Deed is required to be given by Extraordinary Resolution;

 

(E)           power
to appoint any persons (whether Noteholders or not) as a committee or
committees to represent the interests of the Noteholders and to confer upon
such committee or committees any powers or discretions which the Noteholders
could themselves exercise by Extraordinary Resolution;

 

(F)           power
to approve of a person to be appointed a trustee and power to remove any
trustee or trustees for the time being of the First Issuer Trust Deed;

 

(G)           power
to discharge or exonerate the Note Trustee and/or any appointee of the Note
Trustee from all liability in respect of any act or omission for which the Note
Trustee and/or such appointee may have become responsible under the First
Issuer Trust Deed;

 

(H)          power
to authorise the Note Trustee and/or any appointee of the Note Trustee to
concur in and execute and do all such deeds, instruments, acts and things as
may be necessary to carry out and give effect to any Extraordinary Resolution;
and

 

(I)            power
to sanction any scheme or proposal for the exchange or sale of the First Issuer
Notes for or the conversion of the First Issuer Notes into or the cancellation
of the First Issuer Notes in consideration of shares, stock, notes, bonds,
debentures, debenture stock and/or other obligations and/or notes of the First
Issuer or any other company formed or to be formed, or for or into or in
consideration of cash, or partly for or into or in consideration of such
shares, stock, notes, bonds, debentures, debenture stock and/or other
obligations and/or notes as aforesaid and partly for or into or in
consideration of cash and for the appointment of some person with power on
behalf of the Noteholders to execute an instrument of transfer of the
Definitive First Issuer Notes held by them in favour of the persons with or to whom
the First Issuer Notes are to be exchanged or sold respectively,

 

PROVIDED THAT:

 

(i)            no
Extraordinary Resolution of the Class A First Issuer Noteholders or the Class B
First Issuer Noteholders or the Class C First Issuer Noteholders to sanction a
modification of the Conditions, the First Issuer Trust Deed or any of the other
Transaction Documents or a waiver or authorisation of any breach or proposed
breach of any of the provisions of the Conditions, the First Issuer Trust Deed
or any of the other Transaction Documents shall be effective for any purpose
unless either:

 

(a)           the
Note Trustee is of the opinion that it will not be materially prejudicial to
the interests of (in the case of an Extraordinary Resolution of the Class A
First Issuer Noteholders) the Class B First Issuer Noteholders and the Class

 

238

 

C First Issuer Noteholders or (in the case
of an Extraordinary Resolution of the Class B First Issuer Noteholders) the
Class C First Issuer Noteholders; or

 

(b)           it
shall have been sanctioned by an Extraordinary Resolution of (in the case of an
Extraordinary Resolution of the Class A First Issuer Noteholders) the Class B
First Issuer Noteholders and the Class C First Issuer Noteholders or (in the
case of an Extraordinary Resolution of the Class B First Issuer Noteholders)
the Class C First Issuer Noteholders;

 

(ii)           no
Extraordinary Resolution of the Class B First Issuer Noteholders shall be
effective for any purpose while any Class A First Issuer Notes remain
outstanding unless either (aa) the Note Trustee is of the opinion that it will
not be materially prejudicial to the interests of the Class A First Issuer
Noteholders or (bb) it is sanctioned by an Extraordinary Resolution of the
Class A First Issuer Noteholders; and

 

(iii)          no
Extraordinary Resolution of the Class C First Issuer Noteholders shall be
effective for any purpose while any Class A First Issuer Notes or Class B First
Issuer Notes remain outstanding unless either (aa) the Note Trustee is of the
opinion that it will not be materially prejudicial to the interests of the
Class A First Issuer Noteholders and/or the Class B First Issuer Noteholders
(as the case may be) or (bb) it is sanctioned by an Extraordinary Resolution of
the Class A First Issuer Noteholders and/or the Class B First Issuer
Noteholders (as the case may be).

 

19.           Subject
to the provisos to paragraph 18 and to the provisions of
Section 316(b) of the Trust Indenture Act, any resolution passed at a
meeting of the Noteholders duly convened and held in accordance with the First
Issuer Trust Deed shall be binding upon the Noteholders of all classes whether
present or not present at such meeting and whether or not voting and each of
them shall be bound to give effect thereto accordingly and the passing of any
such resolution shall be conclusive evidence that the circumstances justify the
passing thereof. Notice of the result of the voting on any resolution duly
considered by the Noteholders shall be given by the First Issuer to the Noteholders
in accordance with Condition 14 within 14 days of such
result being known PROVIDED THAT the non-publication of such notice shall not
invalidate such result.

 

20.           (A)          A
resolution which in the opinion of the Note Trustee affects the interests of
the holders of one class only of the Class A First Issuer Notes shall be deemed
to have been duly passed if passed at a meeting of the holders of the Class A
First Issuer Notes of that class.

 

(B)           A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of any two or more classes of the Class A First Issuer Notes but
does not give rise to a conflict of interest between the holders of such two or
more classes of the Class A First Issuer Note, shall be deemed to have been
duly passed if passed at a single meeting of the holders of such two or more
classes of the Class A First Issuer Notes.

 

(C)           A
resolution which in the opinion of the Note Trustee affects the interests of
the holders of any two or more of the Class A First Issuer Notes and gives or
may give rise to a conflict of interest between the holders of such two or more
classes of the Class A First Issuer Note shall be deemed to have been duly
passed only if, in lieu of being passed at a single meeting of the holders of
such two or more classes of the

 

239

 

Class A First Issuer Notes, it shall be duly passed at
separate meetings of the holders of such two or more of the Class A First
Issuer Notes.

 

(D)          In the
case of a single meeting of the holders of the two or more classes of the Class
A First Issuer Notes which are not all denominated in the same currency, the
Principal Amount Outstanding of any Class A First Issuer Note denominated in
dollars shall be converted into sterling at the relevant Dollar Currency Swap
Rate and the Principal Amount Outstanding of any Class A First Issuer Note
denominated in euro shall be converted into sterling at the relevant Euro
Currency Swap Rate.

 

21.           (A)          A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of one class only of the Class B First Issuer Notes shall be deemed
to have been duly passed if passed at a meeting of the holders of the Class B
First Issuer Notes of that class.

 

(B)           A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of any two or more classes of the Class B First Issuer Notes but
does not give rise to a conflict of interest between the holders of such two or
more classes of the Class B First Issuer Notes, shall be deemed to have been
duly passed if passed at a single meeting of the holders of such two or more
classes of the Class B First Issuer Notes.

 

(C)           A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of any two or more classes of the Class B First Issuer Notes and
gives or may give rise to a conflict of interest between the holders of such
two or more classes of the Class B First Issuer Notes, shall be deemed to have
been duly passed only if, in lieu of being passed at a single meeting of the
holders of such two or more classes of the Class B First Issuer Notes, it shall
be duly passed at separate meetings of the holders of such two or more classes
of the Class B First Issuer Notes.

 

(D)           In the
case of a single meeting of the holders of the two or more classes of the
Class B First Issuer Notes which are not all denominated in the same
currency, the Principal Amount Outstanding of any Class B First Issuer Note
denominated in dollars shall be converted into sterling at the relevant Dollar
Currency Swap Rate.

 

22.           (A)          A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of one class only of the Class C First Issuer Notes shall be deemed
to have been duly passed if passed at a meeting of the holders of the Class C
First Issuer Notes of that class.

 

(B)           A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of any two or more classes of the Class C First Issuer Notes but
does not give rise to a conflict of interest between the holders of such two or
more classes of the Class C First Issuer Notes, shall be deemed to have been
duly passed if passed at a single meeting of the holders of such two or more
classes of the Class C First Issuer Notes.

 

(C)           A
resolution which, in the opinion of the Note Trustee, affects the interests of
the holders of any two or more classes of the Class C First Issuer Notes and
gives or may give rise to a conflict of interest between the holders of such
two or more classes of the Class C First Issuer Notes, shall be deemed to have
been duly passed only if, in

 

240

 

lieu of being passed at a single meeting of the
holders of such two or more classes of the Class C First Issuer Notes, it shall
be duly passed at separate meetings of the holders of such two or more classes
of the Class C First Issuer Notes.

 

(D)           In the
case of a single meeting of the holders of the two or more classes of the
Class C First Issuer Notes which are not all denominated in the same
currency, the Principal Amount Outstanding of any Class C First Issuer Note
denominated in dollars shall be converted into sterling at the relevant Dollar
Currency Swap Rates.

 

23.           The
expression “Extraordinary Resolution” when used in the First Issuer Trust
Deed means (a) a resolution passed at a meeting of the Noteholders of a
relevant class of First Issuer Notes duly convened and held in accordance with
the provisions of this Schedule 4 by a majority consisting of
not less than three-fourths of the persons voting thereat upon a show of hands
or if a poll is duly demanded by a majority consisting of not less than
three-fourths of the votes cast on such poll or (b) a resolution in writing
signed by or on behalf of all the Noteholders of a relevant class of First
Issuer Notes, which resolution in writing may be contained in one document or
in several documents in like form each signed by or on behalf of one or more of
the Noteholders of a relevant class of First Issuer Notes.

 

24.           Minutes
of all resolutions and proceedings at every meeting of the Noteholders shall be
made and entered in books to be from time to time provided for that purpose by
the First Issuer and any such Minutes as aforesaid if purporting to be signed
by the Chairman of the meeting at which such resolutions were passed or
proceedings transacted shall be conclusive evidence of the matters therein
contained and until the contrary is proved every such meeting in respect of the
proceedings of which Minutes have been made shall be deemed to have been duly
held and convened and all resolutions passed or proceedings transacted thereat
to have been duly passed or transacted.

 

25.           Subject
to all other provisions of the First Issuer Trust Deed the Note Trustee may
without the consent of the First Issuer or the Noteholders prescribe such
further regulations regarding the requisitioning and/or the holding of meetings
of Noteholders and attendance and voting thereat as the Note Trustee may in its
sole discretion think fit.

 

241

 

Conformed Copy

 

DATED 14TH JUNE, 2002

 

PERMANENT FINANCING (NO.
1) PLC

 

and

 

STATE STREET BANK AND
TRUST COMPANY

 

 

FIRST ISSUER TRUST DEED

 

constituting

 

US$750,000,000 Series 1
Class A Asset Backed Floating Rate First Issuer Notes due 2003

 

US$26,000,000 Series 1
Class B Asset Backed Floating Rate First Issuer Notes due 2042

 

US$26,000,000 Series 1
Class C Asset Backed Floating Rate First Issuer Notes due 2042

 

US$750,000,000 Series 2
Class A Asset Backed Fixed-Floating Rate First Issuer Notes due 2007

 

US$26,000,000 Series 2
Class B Asset Backed Floating Rate First Issuer Notes due 2042

 

US$26,000,000 Series 2
Class C Asset Backed Floating Rate First Issuer Notes due 2042

 

US$1,100,000,000 Series 3
Class A Asset Backed Floating Rate First Issuer Notes due 2007

 

US$38,500,000 Series 3
Class B Asset Backed Floating Rate First Issuer Notes due 2042

 

US$38,500,000 Series 3
Class C Asset Backed Floating Rate First Issuer Notes due 2042

 

€750,000,000 Series 4
Class A1 Asset Backed Fixed-Floating Rate First Issuer Notes due 2009

 

£1,000,000,000 Series 4
Class A2 Asset Backed Floating Rate First Issuer Notes due 2042

 

£52,000,000 Series 4 Class
B Asset Backed Floating Rate First Issuer Notes due 2042

 

£52,000,000 Series 4 Class
C Asset Backed Floating Rate First Issuer Notes due 2042

 

 

ALLEN & OVERY

London

ICM:583465.6

 

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  
	
  2.

  	
  Covenant
  to Repay and to pay Interest on First Issuer Notes

  	
   

  
	
  3.

  	
  Form and Issue of
  First Issuer Notes

  	
   

  
	
  4.

  	
  Replacement of First
  Issuer Notes

  	
   

  
	
  5.

  	
  Register,
  Transfer and Exchange of First Issuer Notes

  	
   

  
	
  6.

  	
  Fees,
  Duties and Taxes

  	
   

  
	
  7.

  	
  Covenant
  of Compliance

  	
   

  
	
  8.

  	
  Cancellation
  of First Issuer Notes and Records

  	
   

  
	
  9.

  	
  Enforcement

  	
   

  
	
  10.

  	
  Proceedings,
  Actions and Indemnification

  	
   

  
	
  11.

  	
  Discharge
  of Payment

  	
   

  
	
  12.

  	
  Partial Payments

  	
   

  
	
  13.

  	
  Covenants by the First
  Issuer

  	
   

  
	
  14.

  	
  Remuneration
  and Indemnification of the Note Trustee

  	
   

  
	
  15.

  	
  Supplement to Trustee Acts

  	
   

  
	
  16.

  	
  Note
  Trustee’s Liability

  	
   

  
	
  17.

  	
  Note
  Trustee contracting with the First Issuer

  	
   

  
	
  18.

  	
  Waiver, Authorisation and Determination

  	
   

  
	
  19.

  	
  Entitlement
  to treat Noteholder as Absolute Owner

  	
   

  
	
  20.

  	
  Currency Indemnity

  	
   

  
	
  21.

  	
  Eligibility
  and Disqualification; New Note Trustee

  	
   

  
	
  22.

  	
  Note
  Trustee’s Retirement and Removal

  	
   

  
	
  23.

  	
  Note
  Trustee’s Powers to be Additional

  	
   

  
	
  24.

  	
  Notices

  	
   

  
	
  25.

  	
  Rights
  of Third Parties

  	
   

  
	
  26.

  	
  Trust Indenture Act
  Prevails

  	
   

  
	
  27.

  	
  Certificates and Opinions

  	
   

  
	
  28.

  	
  Governing Law

  	
   

  
	
  29.

  	
  Counterparts

  	
   

  
	
  30.

  	
  Submission to Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Forms of Global First
  Issuer Notes

  	
   

  
	
  2.

  	
  Forms of Definitive First
  Issuer Notes

  	
   

  
	
  3.

  	
  Terms and Conditions of
  the First Issuer Notes

  	
   

  
	
  4.

  	
  Provisions for Meetings of
  NoteholdersExhibit 4.8

 

EXECUTION COPY

 

 

AMENDED AND RESTATED CASH MANAGEMENT

AGREEMENT

 

 

DATED 12th March, 2004

 

HALIFAX plc

 

and

 

PERMANENT MORTGAGES TRUSTEE LIMITED

 

and

 

PERMANENT FUNDING (NO. 1) LIMITED

 

and

 

THE BANK OF NEW YORK

 

 

LONDON

 

 

CONTENTS

 

	
  Clause

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions and
  Interpretation

  	
   

  
	
  2.

  	
  Appointment of Cash Manager

  	
   

  
	
  3.

  	
  The Services

  	
   

  
	
  4.

  	
  Payments, Accounts, Ledgers

  	
   

  
	
  5.

  	
  Early Repayment Fees

  	
   

  
	
  6.

  	
  Swaps

  	
   

  
	
  7.

  	
  No Liability

  	
   

  
	
  8.

  	
  Costs and Expenses

  	
   

  
	
  9.

  	
  Information

  	
   

  
	
  10.

  	
  Remuneration

  	
   

  
	
  11.

  	
  Covenants of Cash Manager

  	
   

  
	
  12.

  	
  Services Non-Exclusive

  	
   

  
	
  13.

  	
  Termination

  	
   

  
	
  14.

  	
  Further Assurance

  	
   

  
	
  15.

  	
  Miscellaneous

  	
   

  
	
  16.

  	
  Confidentiality

  	
   

  
	
  17.

  	
  Notices

  	
   

  
	
  18.

  	
  Variation and Waiver

  	
   

  
	
  19.

  	
  No Partnership

  	
   

  
	
  20.

  	
  Assignment

  	
   

  
	
  21.

  	
  Amendments

  	
   

  
	
  22.

  	
  Exclusion of Third
  Party Rights

  	
   

  
	
  23.

  	
  Counterparts

  	
   

  
	
  24.

  	
  Governing
  Law and Submission to Jurisdiction

  	
   

  

 

Schedule

 

	
  1.

  	
  The Cash Management
  Services

  	
   

  
	
  2.

  	
  Cash
  Management and Maintenance of Ledgers

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Part
  1

  	
  Form of
  Mortgages Trustee Quarterly Report

  	
   

  
	
   

  	
  Part 2

  	
  Form of Funding 1
  Quarterly Report

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  

 

 

THIS CASH MANAGEMENT AGREEMENT is made on 12th March, 2004

 

BETWEEN:

 

(1)                                  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, in its
capacity as Cash Manager;

 

(2)                                  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, in its
capacity as Seller of the Loans and one of the Beneficiaries;

 

(3)                                  PERMANENT
MORTGAGES TRUSTEE LIMITED (registered number 83116), a private company
incorporated under the laws of Jersey, Channel Islands whose registered office
is at 47 Esplanade, St. Helier, Jersey, JE1 0BD, Channel Islands, in its
capacity as the Mortgages Trustee;

 

(4)                                  PERMANENT
FUNDING (NO. 1) LIMITED (registered number 4267660), a private limited
company incorporated under the laws of England and Wales whose registered
office is at Blackwell House, Guildhall Yard, London EC2V 5AE, in its capacity
as Funding 1 and one of the Beneficiaries; and

 

(5)                                  THE
BANK OF NEW YORK, a New York banking corporation acting through its
offices at 48th Floor, One Canada Square, London E14 5AL, acting in its
capacity as Security Trustee, which expression shall include such company and
all other persons or companies for the time being acting as Security Trustee
(or co trustee) pursuant to the terms of the Funding 1 Deed of Charge.

 

WHEREAS:

 

(A)                              On the Initial Closing Date and on several
subsequent dates, the Seller agreed to sell and assign certain mortgage loans
(together with their related security) it had originated to the Mortgages
Trustee. The Mortgage Trustee holds the assigned mortgage loans as bare trustee
for Funding 1 and the Seller pursuant to the terms of the Mortgages Trust Deed.

 

(B)                                On the Initial Closing Date and several
subsequent Closing Dates, Funding 1 has used the proceeds of Intercompany Loans
granted to it by Issuers to pay the Seller for an increased share in the trust.

 

(C)                                The Cash Manager has agreed to provide Cash
Management Services to the Mortgages Trustee, Funding 1 and the Security
Trustee on the terms and subject to the conditions contained in the Cash
Management Agreement dated 14th June, 2002, as amended and restated by this
Agreement and from time to time (the Cash Management Agreement) in relation to, inter alia,
the Trust Property.

 

(D)                               The parties to the Cash Management
Agreement have agreed to amend and restate the terms of that Agreement as set
out herein.

 

IT IS HEREBY AGREED as follows:

 

1

 

1.                                      DEFINITIONS AND INTERPRETATION

 

1.1                                 The master definitions and
construction schedule signed by, amongst others, the parties to this Agreement
and dated 12th March, 2004 (as the same may be amended, varied or supplemented
from time to time with the consent of the parties to this Agreement) (the Master
Definitions and Construction Schedule) is expressly and specifically
incorporated into this Agreement and, accordingly, the expressions defined in
the Master Definitions and Construction Schedule (as so amended, varied or
supplemented from time to time) shall, except where the context otherwise
requires and save where otherwise defined herein, have the same meanings in
this Agreement, including the Recitals hereto and this Agreement shall be
construed in accordance with the interpretation provisions set out in Clause 2
of the Master Definitions and Construction Schedule.

 

1.2                                 This Agreement amends and
restates the Cash Management Agreement made on 14th June, 2002 (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                                 Any reference in this
Agreement to any discretion, power or right on the part of the Mortgages
Trustee shall be exercised by the Mortgages Trustee only as directed by the
Beneficiaries but subject in each case to the provisions of Clause 16.2
of the Mortgages Trust Deed.

 

2.                                      APPOINTMENT OF CASH MANAGER

 

2.1                               Appointment

 

Until
termination pursuant to Clause 13, the Mortgages Trustee, Funding 1
and the Security Trustee (according to their respective estates and interests)
each hereby appoints the Cash Manager as its lawful agent to provide the Cash
Management Services set out in this Agreement, including in relation to:

 

(a)                                  the Mortgages Trust; and

 

(b)                                 Funding 1,

 

and the
Cash Manager in each case hereby accepts such appointment on the terms and
subject to the conditions of this Agreement.

 

2.2                               Duties prescribed by
Transaction Documents

 

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

 

2.3                               Appointment conditional upon
issuance of First Issuer Notes

 

The appointment
pursuant to Clause 2.1 is conditional upon the issue of the First Issuer
Notes and the making of the First Issuer Term Advances under the First Issuer
Intercompany Loan Agreement and shall take effect upon and from the Initial
Closing Date automatically without any further action on the part of any person
PROVIDED
THAT if the issue of the First Issuer Notes by the First Issuer has
not occurred by 14th June, 2002, or such later date as the

 

2

 

First
Issuer and the Lead Manager may agree this Agreement shall cease to be of
further effect.

 

3.                                      THE SERVICES

 

3.1                               General

 

The
Cash Manager shall provide the services set out in this Agreement (including,
without limitation, the Schedules to this Agreement) (the Cash
Management Services).

 

3.2                               Approvals and authorisations

 

The
Cash Manager shall maintain, or procure the maintenance of, the approvals,
authorisations, consents and licences required in connection with the
respective businesses of the Mortgages Trustee and Funding 1 and shall prepare
and submit, or procure the preparation and submission of, on behalf of the
Mortgages Trustee and Funding 1, all necessary applications and requests for
any further approvals, authorisations, consents or licences which may be
required in connection with the respective businesses of the Mortgages Trustee
and Funding 1 and shall, so far as it is reasonably able to do so, perform the
Cash Management Services in such a way as not to prejudice the continuation of
any such approvals, authorisations, consents or licences.

 

3.3                               Compliance with Transaction
Documents, etc.

 

The
Cash Management Services shall include procuring (so far as the Cash Manager,
using its reasonable endeavours, is able so to do) compliance by the Mortgages
Trustee and Funding 1 with all applicable legal requirements and with the terms
of the Transaction Documents to which each of the Mortgages Trustee and/or
Funding 1 is a party, PROVIDED ALWAYS THAT the Cash Manager shall
not lend or provide any sum to the Mortgages Trustee or Funding 1 (other than
as expressly contemplated by the Transaction Documents) and the Cash Manager
shall have no liability whatsoever to the Mortgages Trustee, Funding 1, the
Security Trustee or any other person for any failure by the Mortgages Trustee
or Funding 1 to make any payment due under any of the Transaction Documents
(other than to the extent arising from (i) the Cash Manager failing to make a
payment in its capacity as Servicer or Funding 1 Swap Provider or in any other
capacity under the Transaction Documents, or (ii) the Cash Manager failing to
perform any of its obligations under any of the Transaction Documents).

 

3.4                               Liability of Cash Manager

 

(a)                                  The Cash Manager shall
indemnify each of the Mortgages Trustee, Funding 1 and the Security Trustee on
demand on an after Tax basis for any loss, liability, claim, expense or damage
suffered or incurred by any of them in respect of the negligence, bad faith or
wilful default of the Cash Manager in carrying out its functions as Cash
Manager under this Agreement or under the other Transaction Documents or as a
result of a breach by the Cash Manager of the terms and provisions of this
Agreement or such other Transaction Documents to which the Cash Manager is a
party (in its capacity as Cash Manager) in relation to such functions.

 

(b)                                 For the avoidance of doubt,
the Cash Manager shall not be liable in respect of any loss, liability, claim,
expense or damage suffered or incurred by the Mortgages Trustee, Funding 1, or
the Security Trustee and/or any other person as a result of the proper
performance of the Cash Management Services by the Cash Manager save to the
extent that such loss, liability, claim, expense or damage is suffered or
incurred as a result of any negligence, bad faith or wilful default of the Cash
Manager or as a result of a breach by the Cash Manager of the

 

3

 

terms and provisions of this Agreement or
any of the other Transaction Documents to which the Cash Manager is a party (in
its capacity as Cash Manager) in relation to such functions.

 

4.                                      PAYMENTS, ACCOUNTS, LEDGERS

 

4.1                               Bank Accounts

 

(a)                                  The Cash Manager hereby
confirms that the Mortgages Trustee GIC Account has been established on or
before the date hereof pursuant to the Bank Account Agreement and the Mortgages
Trustee Guaranteed Investment Contract and that the Mortgages Trustee GIC
Account Mandate in the agreed form will apply thereto at the Initial Closing
Date.  The Cash Manager undertakes (to
the extent to which the same is within its control) that at the Initial Closing
Date the Mortgages Trustee GIC Account will be operative and that the Cash
Manager will not create or permit to subsist any Security Interest in relation
to the Mortgages Trustee GIC Account (but without prejudice to the Mortgages
Trust).

 

(b)                                 The Cash Manager hereby
confirms that the Funding 1 GIC Account has been established on or before the
date hereof pursuant to the Bank Account Agreement and the Funding 1 Guaranteed
Investment Contract and that the Funding 1 GIC Account Mandate in the agreed
form will apply thereto at the Initial Closing Date.  The Cash Manager undertakes (to the extent to which the same is
within its control) that at the Initial Closing Date the Funding 1 GIC Account
will be operative and that the Cash Manager will not knowingly create or permit
to subsist any Security Interest in relation to the Funding 1 GIC Account other
than as created under or permitted pursuant to the Funding 1 Deed of Charge.

 

(c)                                  The Cash Manager hereby
confirms that the Funding 1 Transaction Account has been established on or
before the date hereof and that the Funding 1 Transaction Account Mandate in
the agreed form will apply thereto at the Initial Closing Date.  The Cash Manager undertakes (to the extent
to which the same is within its control) that at the Initial Closing Date the
Funding 1 Transaction Account will be operative and that the Cash Manager will
not knowingly create or permit to subsist any Security Interest in relation to
the Funding 1 Transaction Account other than as created under or permitted
pursuant to the Funding 1 Deed of Charge.

 

4.2                               Mortgages Trustee Ledgers

 

(a)                                  The Cash Manager shall open
and maintain in the books of the Mortgages Trustee certain ledgers to be known
as the Revenue Ledger and the Principal Ledger which shall together reflect the
aggregate of all amounts of cash standing to the credit of the Mortgages
Trustee GIC Account from time to time.

 

(b)                                 The Cash Manager shall also
open and maintain in the books of the Mortgages Trustee certain ledgers to be
known as the Losses Ledger and the Funding 1 Share/Seller Share Ledger.

 

(c)                                  The Cash Manager shall make
credits and debits to the Mortgages Trustee Ledgers in the manner described in paragraphs 9,
10, 11, 12 and 13 of Schedule 2.

 

4.3                               Funding 1 Ledgers

 

(a)                                  The Cash Manager shall open
and maintain in the books of Funding 1 certain ledgers to be known as the
Funding 1 Revenue Ledger, the Funding 1 Principal Ledger, the General Reserve
Ledger, the Cash Accumulation Ledger and, if the Liquidity Reserve Fund is
established, the Liquidity Reserve Ledger which shall together reflect the
aggregate of all amounts of cash standing to the credit of the Funding 1 GIC
Account and the Funding 1

 

4

 

Transaction Account and all amounts
invested in Authorised Investments purchased from amounts standing to the
credit of the Funding 1 GIC Account and the Funding 1 Transaction Account from
time to time.

 

(b)                                 The Cash Manager shall also open
and maintain in the books of Funding 1 certain ledgers to be known as (i) the
Principal Deficiency Ledger, which comprised, on the Initial Closing Date,
three sub-ledgers known as the AAA Principal Deficiency Sub Ledger, the AA
Principal Deficiency Sub Ledger and the BBB Principal Deficiency Sub Ledger,
and shall comprise on the Fourth Issuer Closing Date, four sub-ledgers known as
the AAA Principal Deficiency Sub Ledger, the AA Principal Deficiency Sub
Ledger, the A Principal Deficiency Sub Ledger, and the BBB Principal Deficiency
Sub Ledger (ii) the Intercompany Loan Ledger and (iii) the Funding 1 Liquidity
Facility Ledger.  If Funding 1 enters
into New Intercompany Loan Agreements and the New Term Advances advanced
thereunder have different Term Advance Ratings to the Term Advance Ratings
assigned to the existing Term Advances (including the Fourth Issuer Term
Advances), then the Cash Manager shall establish new sub-ledgers in respect of
the Principal Deficiency Ledger, which shall correspond to the Term Advance
Ratings assigned to each such New Term Advance.

 

(c)                                  The Cash Manager shall make
credits and debits to the Funding 1 Ledgers in accordance with the provisions
of paragraphs
9, 10, 14, 15, 16, 17, 18 and 19 of Schedule 2.

 

4.4                               Bank Accounts

 

(a)                                  The Cash Manager shall procure
that so far as it may be able in relation to all Loans comprised in the
Portfolio, the following amounts are paid into the Mortgages Trustee GIC
Account:

 

(i)                                     all Monthly Payments, other
interest received under and in respect of the Loans and any costs or other
amounts received under the Loans (including in any such case amounts recovered
on enforcement of rights against any Borrower or guarantor of the Borrower, any
Property or any of the Borrower’s or guarantor’s other property or assets);

 

(ii)                                  all final releases and all
repayments or prepayments of principal under the Loans;

 

(iii)                               any amount received by or on
behalf of the Mortgages Trustee pursuant to any Halifax Insurance Policy or the
Buildings Policies; and

 

(iv)                              any other amounts whatsoever
received by or on behalf of the Mortgages Trustee after the Initial Closing
Date,

 

and the
Cash Manager shall procure that all interest earned on the Mortgages Trustee
GIC Account is credited to such account.

 

(b)                                 The Cash Manager shall procure
that the following amounts are paid into the Funding 1 GIC Account:

 

(i)                                     all Funding 1 Revenue
Receipts;

 

(ii)                                  all Funding 1 Principal
Receipts;

 

(iii)                               all amounts received by
Funding 1 pursuant to the Funding 1 Swap Agreement; and

 

5

 

(iv)                              any other amounts whatsoever
received by or on behalf of Funding 1 after the Initial Closing Date,

 

and the
Cash Manager shall procure that all interest earned on the Funding 1 Bank
Accounts and all investment proceeds from Authorised Investments purchased from
amounts standing to the credit of the Funding 1 GIC Account are credited to
such account.

 

(c)                                  The Cash Manager shall procure
that all Liquidity Drawings are paid into the Funding 1 Transaction Account.

 

(d)                                 The Cash Manager shall procure
that all transfers and withdrawals of amounts standing to the credit of the
Funding 1 Transaction Account and the Funding 1 GIC Account shall be made in
accordance with the provisions of the Funding 1 Deed of Charge.

 

(e)                                  Each of the payments into the
Mortgages Trustee GIC Account and the Funding 1 GIC Account referred to in Clauses
4.4(a), (b), (c) and (d) shall be made forthwith
upon receipt by the Mortgages Trustee, Funding 1 or the Cash Manager, as the
case may be, of the amount in question.

 

(f)                                    For the avoidance of doubt, as
soon as reasonably practicable after becoming aware of the same, the Cash
Manager may, and shall, withdraw Cash from, as the case may be, the Mortgages
Trustee GIC Account, the Funding 1 Transaction Account or the Funding 1 GIC
Account if, and to the extent that, such Cash was credited thereto in error and
shall use its reasonable endeavours to ensure that such Cash is applied
correctly thereafter.

 

(g)                                 The Cash Manager shall
promptly notify each of the Mortgages Trustee, Funding 1 and the Security
Trustee of any additional account which supplements or replaces any account
specifically referred to in the definitions of the “Mortgages Trustee GIC
Account”, the “Funding 1 Transaction Account” or the “Funding 1 GIC Account” in
the Master Definitions and Construction Schedule.

 

(h)                                 Each of the Cash Manager, the
Mortgages Trustee and Funding 1 undertakes that, so far as it is able to
procure the same, the Mortgages Trustee GIC Account, the Funding 1 Transaction
Account and the Funding 1 GIC Account and all instructions and Mandates in
relation thereto will continue to be operative and will not, save as provided
in Clause
4.6 below or as permitted pursuant to the Bank Account Agreement, be
changed without the prior written consent of the Security Trustee (such consent
not to be unreasonably withheld or delayed). 
For the avoidance of doubt, the Cash Manager may change the Authorised
Signatories in respect of any instructions or Mandates relating to Funding 1
and/or the Mortgages Trustee, without the prior written consent of the Security
Trustee, in accordance with Clause 4.2 of the Bank Account Agreement.

 

(i)                                     The Cash Manager and Funding 1
agree that the Cash Manager shall procure that (i) the tranche of the Advance
being made available to Funding 1 pursuant to paragraph 2(a) of the First
Start-Up Loan Agreement for the purposes of funding the Reserve Fund and (ii)
the tranche (if any) of any New Start-up Loan Agreement for the purposes of
funding further the Reserve Fund (or any other similar reserve fund) shall be
credited to the Funding 1 GIC Account promptly upon receipt of such amounts by
Funding 1, and the Reserve Ledger shall record such credit.

 

(j)                                     The Cash Manager shall give
all notices and make all determinations and withdrawals under the Funding 1
Liquidity Facility Agreement on behalf of Funding 1, as set out therein.

 

6

 

4.5                               Withdrawals

 

The
Cash Manager may make withdrawals:

 

(a)                                  on behalf of the Mortgages
Trustee from the Mortgages Trustee GIC Account; and

 

(b)                                 on behalf of Funding 1 from
the Funding 1 GIC Account, but only until receipt of an Intercompany Loan
Acceleration Notice served by the Security Trustee on Funding 1 (with a copy to
the Cash Manager and the Mortgages Trustee); and

 

(c)                                  on behalf of Funding 1 from
the Funding 1 Transaction Account, but only until receipt of an Intercompany
Loan Acceleration Notice served by the Security Trustee on Funding 1 (with a
copy to the Cash Manager and the Mortgages Trustee),

 

respectively
as permitted by this Agreement, the Mortgages Trust Deed, the Bank Account
Agreement, the Mortgages Trustee Guaranteed Investment Contract, the Funding 1
Guaranteed Investment Contract, the Funding 1 Liquidity Facility Agreement and
the Funding 1 Deed of Charge, but shall not in carrying out its functions as
Cash Manager under this Agreement otherwise make withdrawals from the Mortgages
Trustee GIC Account or the Funding 1 Bank Accounts.

 

4.6                               Cash Management

 

In administering
the Mortgages Trustee GIC Account, the Funding 1 Transaction Account and the
Funding 1 GIC Account on behalf of the Mortgages Trustee, Funding 1 and the
Security Trustee respectively, the Cash Manager shall comply with the
provisions of Schedule 2 prior to receipt by the Cash Manager of a copy of
any Intercompany Loan Acceleration Notice served by the Security Trustee on
Funding 1.

 

5.                                      EARLY REPAYMENT FEES

 

The
Cash Manager shall withdraw any Early Repayment Fees paid into the Mortgages
Trustee GIC Account and pay the same to the Seller, by telegraphic transfer to
such account as may be specified by the Seller from time to time, promptly
following a request for such withdrawal being received from the Seller.  For the avoidance of doubt, the Cash Manager
shall not record the receipt or withdrawal of Early Repayment Fees in any of
the ledgers maintained under this Agreement.

 

6.                                      SWAPS

 

6.1                               Computations under Funding 1
Swap

 

On each
Calculation Date, the Cash Manager shall determine, in accordance with the
terms of the Funding 1 Swap, in respect of the relevant Calculation Period:

 

(a)                                  the Average Fixed Rate Loan
Balance, the Average Variable Rate Loan Balance and the Average Tracker Rate
Loan Balance (each as defined in the Funding 1 Swap Agreement);

 

(b)                                 the weighted average of the
fixed rates of interest charged to borrowers of Fixed Rate Loans;

 

(c)                                  the Tracker Swap Rate; and

 

7

 

(d)                                 the Variable Rate Swap SVR,

 

and
shall notify Funding 1 and the Security Trustee of such amounts, balances and
rates.

 

6.2                               Termination of Funding 1 Swap

 

If on
or prior to the date of the earlier of either (i) the reduction of the
aggregate principal amount outstanding of all Intercompany Loans to zero or
(ii) the service of an Intercompany Loan Acceleration Notice, the Funding 1
Swap is terminated, then the Cash Manager (on behalf of Funding 1 and the
Security Trustee) shall purchase a new hedge against the possible variance
between (1) the Mortgages Trustee Variable Base Rate payable on the Variable
Rate Loans, the fixed rates of interest payable on the Fixed Rate Loans and the
Tracker Swap Rate and (2) a LIBOR-based rate for three-month sterling deposits,
on terms acceptable to Funding 1 and the Rating Agencies with a new Funding 1
swap provider whom the Rating Agencies have previously confirmed in writing
will not cause the then current rating of any Notes to be downgraded.  The Cash Manager may apply any early
termination payment received from the Funding 1 Swap Provider pursuant to the
Funding 1 Swap for such purpose.

 

7.                                      NO LIABILITY

 

Save as
otherwise provided in this Agreement, the Cash Manager shall have no liability
for the obligations of either the Mortgages Trustee, Funding 1 or the Security
Trustee under any of the Transaction Documents or otherwise and nothing herein
shall constitute a guarantee, or similar obligation, by the Cash Manager of
either the Mortgages Trustee, Funding 1 or the Security Trustee in respect of
any of them.

 

8.                                      COSTS AND EXPENSES

 

8.1                                 Subject to and in accordance
with the applicable Funding 1 Priority of Payments set out in the Funding 1
Deed of Charge, Funding 1 will on each Funding 1 Interest Payment Date
reimburse the Cash Manager for all out-of-pocket costs, expenses and charges
(together with any amounts in respect of Irrecoverable VAT due thereon)
properly incurred by the Cash Manager in the performance of the Cash Management
Services including any such costs, expenses or charges not reimbursed to the
Cash Manager on any previous Funding 1 Interest Payment Date and the Cash
Manager shall supply the Mortgages Trustee or Funding 1 with an appropriate VAT
invoice issued by the Cash Manager or, if the Cash Manager has treated the
relevant cost, expense or charge as a disbursement for VAT purposes, by the
person making the supply.

 

8.2                                 Unless and until otherwise
agreed by Funding 1 and the Security Trustee in writing (notified to the Cash
Manager), Funding 1 shall be solely responsible for reimbursing the Cash
Manager for the out-of-pocket costs, expenses and charges (together with any
amounts in respect of Irrecoverable VAT due thereon) referred to in Clause 8.1 above.

 

9.                                      INFORMATION

 

9.1                               Use of I.T. systems

 

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

 

8

 

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

 

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

 

(ii)                                  except in so far as it would
breach any other of its legal obligations, grant to any person to whom it may
sub-contract or delegate the performance of all or any of its powers and
obligations under this Agreement and/or to such person as the Mortgages Trustee
and Funding 1 elect as a substitute cash manager in accordance with the terms
of this Agreement a licence to use any proprietary software together with any
updates which may be made thereto from time to time.

 

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

 

(d)                                 The Cash Manager shall pass to
any person to whom it may sub-contract or delegate the performance of all or
any of its powers and obligations under this Agreement and/or to such person as
the Mortgages Trustee and Funding 1 elect as a substitute cash manager in
accordance with the terms of this Agreement the benefit of any warranties in
relation to the software insofar as the same are capable of assignment.

 

9.2                               Bank Account Statements

 

The
Cash Manager shall take all reasonable steps to ensure that it receives:

 

(a)                                  a monthly bank statement in
relation to the Mortgages Trustee GIC Account (and any additional or supplemental
bank account of the Mortgages Trustee) and that it furnishes a copy of such
statement to the Mortgages Trustee, each of the Beneficiaries and the Security
Trustee; and

 

(b)                                 monthly bank statements in
relation to each of the Funding 1 Transaction Account and the Funding 1 GIC
Account (and any additional or supplemental bank account of the Funding 1
Trustee) and that it furnishes a copy of such statements to Funding 1 and the
Security Trustee.

 

9.3                               Access to Books and Records

 

Subject
to all applicable laws, the Cash Manager shall permit the Auditors of the
Mortgages Trustee and Funding 1 and any other person nominated by the Security
Trustee or the Beneficiaries (to whom the Cash Manager has no reasonable
objection) at any time during normal office hours upon reasonable notice to
have access, or procure that such person or persons are granted access, to all
books of record and account relating to the Cash Management Services provided
by the Cash Manager and related matters in accordance with this Agreement.

 

9.4                               Statutory Obligations

 

The
Cash Manager will use its reasonable endeavours, on behalf of the Mortgages
Trustee and Funding 1, to prepare or procure the preparation of and file all
reports, annual returns, financial statements, statutory forms and other
returns which each of the Mortgages Trustee and Funding 1 is required by law to
prepare and file.  Subject to approval
thereof by the directors of the Mortgages Trustee or Funding 1 (as
appropriate), the Cash Manager shall

 

9

 

cause
such accounts to be audited by the Auditors and shall procure so far as it is
able so to do that the Auditors shall make a report thereon as required by law
and copies of all such documents shall be delivered to the Mortgages Trustee,
the Security Trustee and Funding 1 (as appropriate) and the Rating Agencies as
soon as practicable after the end of each accounting reference period of the
Mortgages Trustee or Funding 1 (as appropriate).

 

9.5                               Information Covenants

 

(a)                                  The Cash Manager shall provide
the Mortgages Trustee, Funding 1, the Security Trustee, the Seller and the
Rating Agencies:

 

(i)                                     quarterly with a report in, or
substantially in, the form set out in Part 1 of Schedule 3 in respect of the
Mortgages Trustee; and

 

(ii)                                  quarterly with a report in, or
substantially in, the form set out in Part 2 of Schedule 3 in respect of
Funding 1.

 

(b)                                 The Cash Manager shall
provide, or procure the provision of, to the Mortgages Trustee, Funding 1, the
Security Trustee and the Rating Agencies copies of any annual returns or
financial statements referred to in Clause 9.4 as soon as reasonably
practicable after the preparation thereof.

 

(c)                                  The Cash Manager shall notify
the Rating Agencies in writing of the details of (i) any material amendment to
the Transaction Documents, (ii) the occurrence of an Intercompany Loan Event of
Default or Potential Intercompany Loan Event of Default and (iii) any other
information relating to the Cash Manager as the Rating Agencies and the
Security Trustee may reasonably request in connection with its obligations
under this Agreement, PROVIDED THAT the Security Trustee shall
not make such a request more than once every three months unless, in the belief
of the Security Trustee, an Intercompany Loan Event of Default, a Note Event of
Default or Cash Manager Termination Event (as defined in Clause 13.1) shall have
occurred and is continuing or a Potential Intercompany Loan Event of Default or
a Potential Note Event of Default shall have accrued and is continuing PROVIDED
FURTHER THAT such request does not adversely interfere with the Cash
Manager’s day to day provision of the Cash Management Services under the other
terms of this Agreement.

 

(d)                                 The Cash Manager shall, at the
request of the Security Trustee, furnish the Security Trustee and the Rating
Agencies with such other information relating to its business and financial
condition as it may be reasonable for the Security Trustee to request in
connection with this Agreement, PROVIDED THAT such request does not
adversely interfere with the Cash Manager’s day to day provision of the Cash
Management Services under the other terms of this Agreement.

 

10.                               REMUNERATION

 

10.1                        Fee payable

 

(a)                                  Subject to paragraph
(b) below, Funding 1 shall pay to the Cash Manager for its Cash
Management Services hereunder a cash management fee which shall be agreed in
writing between Funding 1, the Security Trustee and the Cash Manager from time
to time.

 

(b)                                 Unless and until otherwise
agreed by Funding 1 and the Security Trustee in writing (notified to the Cash
Manager), Funding 1 shall be solely responsible for paying the cash management
fee to the Cash Manager which is referred to in paragraph (a) above.

 

10

 

10.2                        Payment of fee

 

The
cash management fee referred to in Clause 10.1 shall be paid to the Cash
Manager in arrear on each Funding 1 Interest Payment Date in the manner
contemplated by and in accordance with the provisions of the applicable Funding
1 Priority of Payments.

 

11.                               COVENANTS OF CASH MANAGER

 

11.1                        Covenants

 

The
Cash Manager hereby covenants with and undertakes to each of the Mortgages
Trustee, Funding 1 and the Security Trustee that without prejudice to any of
its specific obligations hereunder:

 

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

 

(b)                                 it will comply with any proper
directions, orders and instructions which the Mortgages Trustee, Funding 1 or
the Security Trustee may from time to time give to it in accordance with the
provisions of this Agreement and, in the event of any conflict, those of the
Security Trustee shall prevail;

 

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

 

(d)                                 save as otherwise agreed with
the Mortgages Trustee, Funding 1 and the Security Trustee, it will provide free
of charge to the Mortgages Trustee and Funding 1 during normal office hours
office space, facilities, equipment and staff sufficient to fulfil the
obligations of the Mortgages Trustee and Funding 1 under this Agreement;

 

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

 

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

 

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

 

11.2                        Duration of covenants

 

The
covenants of the Cash Manager in Clause 11.1 shall remain in force until
this Agreement is terminated but without prejudice to any right or remedy of
the Mortgages Trustee and/or Funding 1 and/or the Security Trustee arising from
breach of any such covenant prior to the date of termination of this Agreement.

 

12.                               SERVICES NON-EXCLUSIVE

 

Nothing
in this Agreement shall prevent the Cash Manager from rendering or performing
services similar to those provided for in this Agreement to or for itself or
other persons, firms

 

11

 

or companies
or from carrying on business similar to or in competition with the business of
the Mortgages Trustee, Funding 1 or the Security Trustee.

 

13.                               TERMINATION

 

13.1                        Cash Manager Termination
Events

 

If any
of the following events (Cash Manager Termination Events) shall
occur:

 

(a)                                  default is made by the Cash
Manager in the payment on the due date of any payment due and payable by it
under this Agreement or in the performance of its obligations under Clauses 4.4 and
4.5
and such default continues unremedied for a period of three London Business
Days after the earlier of the Cash Manager becoming aware of such default; or

 

(b)                                 default is made by the Cash
Manager in the performance or observance of any of its other covenants and
obligations under this Agreement, which in the reasonable opinion of Funding 1
and/or the Security Trustee is materially prejudicial to the interests of the
Funding 1 Secured Creditors and such default continues unremedied for a period
of twenty days after the earlier of the Cash Manager becoming aware of such
default and receipt by the Cash Manager of written notice from the Security
Trustee requiring the same to be remedied;

 

(c)                                  an Insolvency Event occurs,

 

then
Funding 1 and/or the Security Trustee may at once or at any time thereafter
while such default continues by notice in writing to the Cash Manager terminate
its appointment as Cash Manager under this Agreement with effect from a date
(not earlier than the date of the notice) specified in the notice.

 

13.2                        Resignation of Cash Manager

 

The
appointment of the Cash Manager under this Agreement may be terminated upon the
expiry of not less than 12 months’ notice of termination given by the Cash
Manager to the Mortgages Trustee, Funding 1 and the Security Trustee PROVIDED
THAT:

 

(a)                                  the Mortgages Trustee, Funding
1 and the Security Trustee consent in writing to such termination;

 

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

 

(c)                                  such substitute cash manager
has cash management experience and is approved by the Mortgages Trustee,
Funding 1 and the Security Trustee;

 

(d)                                 the substitute cash manager
enters into an agreement substantially on the same terms as the relevant
provisions of this Agreement and the Cash Manager shall not be released from
its obligations under the relevant provisions of this Agreement until such
substitute cash manager has entered into such new agreement and the rights of
the Mortgages Trustee and Funding 1 under such agreement are charged in favour
of the Security Trustee on terms satisfactory to the Security Trustee; and

 

12

 

(e)                                  the then current ratings of
the Notes are not adversely affected as a result thereof, unless otherwise
agreed by an Extraordinary Resolution (as defined in the trust deeds of each
Issuer) of the holders of each class of the Notes of each Issuer.

 

13.3                        Effect of Termination

 

(a)                                  On and after termination of
the appointment of the Cash Manager under this Agreement pursuant to this
Clause 13, all authority and power of the Cash Manager under this Agreement
shall be terminated and be of no further effect and the Cash Manager shall not
thereafter hold itself out in any way as the agent of the Mortgages Trustee,
Funding 1 or the Security Trustee pursuant to this Agreement.

 

(b)                                 Upon termination of the
appointment of the Cash Manager under this Agreement pursuant to this Clause 13,
the Cash Manager shall:

 

(i)                                     forthwith deliver (and in the
meantime hold on trust for, and to the order of, the Mortgages Trustee, Funding
1 or the Security Trustee, as the case may be) to the Mortgages Trustee,
Funding 1 or the Security Trustee, as the case may be or as it shall direct,
all books of account, papers, records, registers, correspondence and documents
in its possession or under its control relating to the affairs of or belongings
of the Mortgages Trustee, Funding 1 or the Security Trustee, as the case may be
(if practicable, on the date of receipt), any monies then held by the Cash Manager
on behalf of the Mortgages Trustee, Funding 1 or, the Security Trustee and any
other assets of the Mortgages Trustee, Funding 1 and the Security Trustee;

 

(ii)                                  take such further action as
the Mortgages Trustee, Funding 1 or the Security Trustee, as the case may be,
may reasonably direct at the expense of the Mortgages Trustee, Funding 1 or the
Security Trustee, as the case may be (including in relation to the appointment
of a substitute cash manager), provided that the Mortgages Trustee or the Security
Trustee, as the case may be, shall not be required to take or direct to be
taken such further action unless it has been indemnified to its satisfaction
(and in the event of a conflict between the directors of Funding 1, the
Mortgages Trustee and the Security Trustee, the director of the Security
Trustee shall prevail);

 

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

 

(iv)                              co-operate and consult with
and assist the Mortgages Trustee, Funding 1 or the Security Trustee or its
nominee, as the case may be (which shall, for the avoidance of doubt, include
any Receiver appointed by it), for the purposes of explaining the file layouts
and the format of the magnetic tapes generally containing such computer records
on the computer system of the Mortgages Trustee, Funding 1, or the Security
Trustee or such nominee, as the case may be.

 

13.4                        Notice of event of default

 

The
Cash Manager shall deliver to the Mortgages Trustee, Funding 1 and the Security
Trustee as soon as reasonably practicable but in any event within three London
Business Days of becoming aware thereof a notice of any Cash Manager
Termination Event or any event which with the giving of notice or expiry of any
grace period or certification, as specified in such Cash Manager Termination
Event would constitute the same or any Intercompany Loan Event of Default or
any Potential Intercompany Loan Event of Default.

 

13

 

13.5                        General provisions relating to
termination

 

(a)                                  Termination of this Agreement
or the appointment of the Cash Manager under this Agreement shall be without
prejudice to the liabilities of the Mortgages Trustee, Funding 1 and the
Security Trustee to the Cash Manager or vice versa incurred before the date of
such termination.  The Cash Manager
shall have no right of set-off or any lien in respect of such amounts against amounts
held by it on behalf of the Mortgages Trustee, Funding 1 or the Security
Trustee.

 

(b)                                 This Agreement shall terminate
automatically at such time as Funding 1 has no further interest in the Trust
Property and the Intercompany Loans have been fully repaid or Funding 1’s
obligations under the Intercompany Loans have been otherwise discharged.

 

(c)                                  On termination of the
appointment of the Cash Manager under the provisions of this Clause 13,
the Cash Manager shall be entitled to receive all fees and other monies accrued
up to (but excluding) the date of termination but shall not be entitled to any
other or further compensation.  Such
monies so receivable by the Cash Manager shall be paid by Funding 1, on the
dates on which they would otherwise have fallen due hereunder and under the
terms of the Funding 1 Deed of Charge. 
For the avoidance of doubt, such termination shall not affect the Cash
Manager’s rights to receive payment of all amounts (if any) due to it from
Funding 1 other than under this Agreement.

 

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

 

14.                               FURTHER ASSURANCE

 

14.1                        Co-operation, etc.

 

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

 

14.2                        Powers of attorney

 

Without
prejudice to the generality of Clause 14.1, the Mortgages Trustee, Funding
1 and the Security Trustee shall upon request by the Cash Manager forthwith
give to the Cash Manager such further powers of attorney or other written
authorisations, mandates or instruments as are necessary to enable the Cash
Manager to perform the Cash Management Services.

 

14.3                        Change of Security Trustee

 

In the
event that there is any change in the identity of the Security Trustee or an
additional Security Trustee is appointed in accordance with the Funding 1 Deed
of Charge, as the case may be, the Cash Manager shall execute such documents
with any other parties to this Agreement and take such actions as such new
Security Trustee may reasonably require for the purposes of vesting in such new
Security Trustee the rights of the Security Trustee under this Agreement and
under the Funding 1 Deed of Charge and releasing the retiring Security Trustee
from further obligations thereunder and while any of the Notes of any Issuer
remains outstanding shall give notice thereof to the Rating Agencies.

 

14

 

14.4                        No obligation on Security
Trustee

 

Nothing
herein contained shall impose any obligation or liability on the Security
Trustee to assume or perform any of the obligations of the Mortgages Trustee,
Funding 1 or the Cash Manager hereunder or render it liable for any breach
thereof.

 

15.                               MISCELLANEOUS

 

15.1                        No set-off

 

Each of
the Seller and the Cash Manager agrees that it will not:

 

(a)                                  set off or purport to set off
any amount which either the Mortgages Trustee or Funding 1 is or will become
obliged to pay to it under this Agreement against any amount from time to time
standing to the credit of or to be credited to the Mortgages Trustee GIC
Account, the Funding 1 Transaction Account or the Funding 1 GIC Account or any
replacement or additional bank account of either the Mortgages Trustee or
Funding 1; or

 

(b)                                 make or exercise any claims or
demands, any rights of counterclaim or any other equities against or withhold
payment of any and all sums of money which may at any time and from time to
time be standing to the credit of the Mortgages Trustee GIC Account, the
Funding 1 Transaction Account or the Funding 1 GIC Account or any replacement
of additional bank account of either the Mortgages Trustee or Funding 1.

 

15.2                        No Petition

 

The
Cash Manager agrees that for so long as any Notes of any Issuer are outstanding
it will not petition or commence proceedings for the administration (including,
for the avoidance of doubt, the filing of documents with the court or the service
of a notice of intention to appoint an administrator) or winding up of the
Mortgages Trustee, Funding 1 or any Issuer or participate in any ex parte
proceedings with regard thereto.

 

15.3                        No recourse

 

(a)                                  In relation to all sums due
and payable by the Mortgages Trustee or Funding 1 to the Cash Manager, the Cash
Manager agrees that it shall have recourse only to sums paid to or received by
(or on behalf of) the Mortgages Trustee or Funding 1 pursuant to the provisions
of the Transaction Documents.

 

(b)                                 For the avoidance of doubt,
the Security Trustee shall not be liable to pay any amounts due under Clauses 6 and
8,
and without prejudice to the obligations of the Mortgages Trustee or Funding 1,
as the case may be, or any receiver appointed pursuant to the Funding 1 Deed of
Charge in respect of such amounts.

 

(c)                                  Notwithstanding any other
provisions of this Agreement, all obligations to, and rights of, the Security
Trustee under or in connection with this Agreement (other than its obligations
under Clause
14) shall automatically terminate upon the discharge in full of the
Funding 1 Secured Obligations, PROVIDED THAT this shall be without
prejudice to any claims in respect of such obligations and rights arising on or
prior to such date.

 

15

 

16.                               CONFIDENTIALITY

 

During
the continuance of this Agreement or after its termination, each of the
Mortgages Trustee, the Cash Manager, the Seller, Funding 1 and the Security
Trustee shall use its best endeavours not to disclose to any person, firm or
company whatsoever any information relating to the business, finances or other
matters of a confidential nature of any other party hereto of which it may
exclusively by virtue of being party to the Transaction Documents have become
possessed and shall use all reasonable endeavours to prevent any such
disclosure as aforesaid, PROVIDED HOWEVER that the provisions of
this Clause
16 shall not apply:

 

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

 

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

 

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

 

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

 

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

 

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

 

17.                               NOTICES

 

Any
notices to be given pursuant to this Agreement to any of the parties hereto
shall be sufficiently served if sent by prepaid first class post, by hand or
facsimile transmission and shall be deemed to be given (in the case of
facsimile transmission) when despatched, (where delivered by hand) on the day
of delivery if delivered before 17.00 hours on a London Business Day or on the
next London Business Day if delivered thereafter or on a day which is not a
London Business Day or (in the case of first class post) when it would be
received in the ordinary course of the post and shall be sent:

 

(a)                                  in the case of the Cash
Manager, to Halifax plc, Trinity Road, Halifax, West Yorkshire HX1 2RG
(LP/3/3/SEC) (facsimile number +44 (0) 113 235 7511) for the attention of the
Head of Mortgage Securitisation with a copy to HBOS Treasury Services plc, 33
Old Broad Street, London EC2N 1HZ (facsimile number +44 (0) 20 7574 8784) for
the attention of Head of Capital Markets and Securitisation;

 

16

 

(b)                                 in the case of the Mortgages
Trustee, to Permanent Mortgages Trustee Limited, 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 number +44 (0) 20 7574 8784) for the
attention of Head of Capital Markets and Securitisation;

 

(c)                                  in the case of the Seller, to
Halifax plc, Trinity Road, Halifax, West Yorkshire HX1 2RG (LP/3/3/SEC) (facsimile
number +44 (0) 113 235 7511) for the attention of the Head of Mortgage
Securitisation with a copy to HBOS Treasury Services plc, 33 Old Broad Street,
London EC2N 1HZ (facsimile number +44 (0) 20 7574 8784) for the attention of
Head of Capital Markets and Securitisation;

 

(d)                                 in the case of Funding 1, to
Permanent Funding (No.1) Limited, Blackwell House, Guildhall Yard, London EC2V
5AE (facsimile number +44 (020) 7556 0975) for the attention of the Secretary
with a copy to HBOS Treasury Services plc, 33 Old Broad Street, London EC2N 1HZ
(facsimile number +44 (020) 7574 8784) for the attention of Head of Capital
Markets & Securitisation; and

 

(e)                                  in the case of the Security
Trustee, to The Bank of New York, One Canada Square, London E14 5AL (facsimile
number +44 (0) 20 7964 6061/6399) for the attention of Global Structured
Finance - Corporate Trust,

 

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 17.

 

18.                               VARIATION AND WAIVER

 

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

 

19.                               NO PARTNERSHIP

 

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

 

20.                               ASSIGNMENT

 

20.1                        Assignment by the Mortgages
Trustee and Funding 1

 

Neither
of the Mortgages Trustee nor Funding 1 may assign or transfer any of its
respective rights and obligations under this Agreement without the prior
written consent of:

 

(a)                                  in the case of the Mortgages
Trustee, each of the Beneficiaries and the Security Trustee; and

 

(b)                                 in the case of Funding 1, each
of the Security Trustee and the Cash Manager,

 

except
that Funding 1 may assign its respective rights hereunder without such consent
pursuant to the Funding 1 Deed of Charge.

 

17

 

20.2                        No assignment by Cash Manager

 

The
Cash Manager may not assign or transfer any of its rights and obligations under
this Agreement without the prior written consent of the Mortgages Trustee, each
of the Beneficiaries, Funding 1 and the Security Trustee.

 

21.                               AMENDMENTS

 

Subject
to Clause
25 of the Funding 1 Deed of Charge (Supplemental Provisions
Regarding the Security Trustee), any amendments to this Agreement will be made
only with the prior written consent of each party to this Agreement.

 

22.                               EXCLUSION OF THIRD PARTY RIGHTS

 

The
parties to this Agreement do not intend that any term of this Agreement should
be enforced, by virtue of the Contracts (Rights of Third Parties) Act 1999, by
any person who is not a party to this Agreement.

 

23.                               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.

 

24.                               GOVERNING LAW AND SUBMISSION TO
JURISDICTION

 

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

 

24.2                           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 courts are an inconvenient forum for the maintenance or
hearing of such action or proceeding. 
The Mortgages Trustee irrevocably appoints Structured Finance Management
Limited at Blackwell House, Guildhall Yard, London EC2V 5AE as its agent for
the service of process.

 

IN WITNESS WHEREOF the parties have caused this Agreement to
be executed the day and year first before written.

 

18

 

SCHEDULE 1

 

THE CASH MANAGEMENT SERVICES

 

The Cash
Manager shall:

 

(a)                                  operate the Mortgages Trustee GIC Account,
the Funding 1 GIC Account and the Funding 1 Transaction Account or any other
Bank Account and ensure that payments are made into and from such accounts in
accordance with this Agreement, the Mortgages Trust Deed, the Funding 1 Deed of
Charge, the Bank Account Agreement, the Mortgages Trustee Guaranteed Investment
Contract, the Funding 1 Guaranteed Investment Contract and any other applicable
Transaction Document PROVIDED HOWEVER THAT nothing herein shall
require the Cash Manager to make funds available to the Mortgages Trustee or
Funding 1 to enable such payments to be made other than as expressly required
by the provisions of this Agreement;

 

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

 

(c)                                  assist the auditors of the Mortgages
Trustee and Funding 1 and provide such information to them as they may
reasonably request for the purpose of carrying out their duties as auditors;

 

(d)                                 make all filings, give all notices and make
all registrations and other notifications required in the day-to-day operation
of the respective businesses of the Mortgages Trustee and Funding 1 or required
to be given by the Mortgages Trustee or Funding 1 pursuant to the Transaction
Documents;

 

(e)                                  arrange for all payments due to be made by
the Mortgages Trustee and/or Funding 1 under any of the Transaction Documents, PROVIDED
THAT such monies are at the relevant time available to the Mortgages
Trustee and/or Funding 1 and PROVIDED FURTHER that nothing herein shall
constitute a guarantee by the Cash Manager of all or any of the obligations of
the Mortgages Trustee or Funding 1 under any of the Transaction Documents;

 

(f)                                    without prejudice to the role of and in
conjunction with the relevant Corporate Services Provider under the relevant
Corporate Services Agreement, keep general books of account and records of the
Mortgages Trustee and Funding 1; provide accounting services, including
reviewing receipts and payments, supervising and assisting in the preparation
of interim statements and final accounts and supervising and assisting in the
preparation of Tax returns;

 

(g)                                 without prejudice to the role of and in
conjunction with the relevant Corporate Services Provider under the relevant
Corporate Services Agreement, provide or procure the provision of company
secretarial and administration services to the Mortgages Trustee and Funding 1
including the keeping of all registers and the making of all returns and
filings required by applicable law or by US or UK regulatory authorities
(including the Securities and Exchange Commission), co-operate in the convening
of board and general meetings and provide registered office facilities;

 

(h)                                 itself on behalf of the Mortgages Trustee and
Funding 1, PROVIDED THAT such monies are at the relevant time available
to the Mortgages Trustee and Funding 1, pay all the out-of-pocket expenses of
the Mortgages Trustee and Funding 1, incurred by the Cash Manager on behalf of
the Mortgages Trustee and Funding 1 in the performance of the Cash Manager’s
duties hereunder including without limitation:

 

(i)                                     all Taxes which may be due or payable by
the Mortgages Trustee and Funding 1;

 

19

 

(ii)                                  all registration, transfer, filing and
other fees and other charges payable in respect of the sale by the Seller of
the Portfolio to the Mortgages Trustee;

 

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

 

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

 

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

 

(vi)                              all premiums payable by the Mortgages
Trustee in respect of the Insurance Policies;

 

(i)                                     at the request of Funding 1 (but also with
the prior written consent of the Security Trustee), invest monies standing from
time to time to the credit of the Funding 1 GIC Account and the Funding 1
Liquidity Stand-by Account, if any, in Authorised Investments, subject to the
following provisions:

 

(i)                                     any such Authorised Investment shall be
made in the joint names of Funding 1 and the Security Trustee; and

 

(ii)                                  any costs properly and reasonably incurred
in making and changing Authorised Investments will be reimbursed to the Cash
Manager and the Security Trustee by Funding 1; and

 

(iii)                               all income or other distributions arising
on, or proceeds following the disposal or maturity of, Authorised Investments
shall be credited to the Funding 1 GIC Account;

 

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

 

20

 

SCHEDULE 2

 

CASH MANAGEMENT AND MAINTENANCE OF LEDGERS

 

1.                                      Determination

 

(a)                                  On each Calculation Date based on the
amount of monies standing to the credit of the Mortgages Trustee GIC Account as
at close of business on the London Business Day immediately preceding the
relevant Calculation Date, the Cash Manager shall determine each of the
following:

 

(i)                                     the amount of Principal Receipts and
Revenue Receipts received during the preceding Calculation Period;

 

(ii)                                  the amount of any Mortgages Trust Available
Revenue Receipts received during the preceding Calculation Period; and

 

(iii)                               the amount of Mortgages Trust Available
Revenue Receipts and Principal Receipts to be distributed to Funding 1 and to
the Seller on the Distribution Date immediately following the relevant
Calculation Date.

 

(b)                                 On each Calculation Date, the Cash Manager
shall determine each of the following:

 

(i)                                     the amount of any Losses incurred on the
Loans in the period from the immediately preceding Calculation Date to the
relevant Calculation Date;

 

(ii)                                  the Funding 1 Share, the Seller Share, the
Funding 1 Share Percentage and the Seller Share Percentage in accordance with Clause 8
of the Mortgages Trust Deed; and

 

(iii)                               the Minimum Seller Share in accordance with
Clause
9.2 of the Mortgages Trust Deed.

 

(c)                                  Four Business Days prior to each Funding 1
Interest Payment Date the Cash Manager shall determine each of the following:

 

(i)                                     the amount of any Funding 1 Available
Revenue Receipts to be applied on the following Funding 1 Interest Payment Date
in accordance with the Funding 1 Pre-Enforcement Revenue Priority of Payments;

 

(ii)                                  the amount of any Funding 1 Available
Principal Receipts to be applied on the following Funding 1 Interest Payment
Date in accordance with Funding 1’s Principal Priorities of Payments; and

 

(iii)                               the amount of any Funding 1 Income Deficit.

 

(d)                                 The Cash Manager shall make all the
determinations referred to in paragraphs 1(a) to (c) above on the basis of the
following assumptions:

 

(i)                                     that the amount of any Losses will not
increase;

 

(ii)                                  that any debit balance on the Principal
Deficiency Ledger will not increase; and

 

21

 

(iii)                               such other assumptions (including without
limitation as to the amount of any payments or provisions to be made in accordance
with the applicable Funding 1 Priority of Payments during the period from and
including the Intercompany Loan Determination Date prior to each Funding 1
Interest Payment Date to and excluding such Funding 1 Interest Payment Date) as
the Cash Manager considers appropriate.

 

The
Cash Manager shall on request notify the Mortgages Trustee, Funding 1 and the
Security Trustee in writing of any such other assumptions and shall take
account of any representations made by the Mortgages Trustee, Funding 1 and the
Trustee (as the case may be) in relation thereto.

 

(e)                                  The Cash Manager shall:

 

(i)                                     make or procure to be made all returns and
filings required to be made by Funding 1 and the Mortgages Trustee;

 

(ii)                                  provide or procure the provision of company
secretarial and administration services to Funding 1 and the Mortgages Trustee
including the keeping of all registers and the making of all returns required
by applicable law or by UK regulatory authorities, co-operate in the convening
of board and general meetings and provide registered office facilities;

 

(iii)                               itself on behalf of Funding 1 and the
Mortgages Trustee, provided that such moneys are at the relevant time available
to Funding 1 and the Mortgages Trustee, pay all out-of-pocket expenses of
Funding 1 and the Mortgages Trustee incurred in the performance of the Cash
Manager’s duties hereunder including, without limitation, all fees payable to
the London Stock Exchange Limited.

 

(f)                                    The Cash Manager shall, if necessary,
perform all currency conversions free of charge, cost or expense at the
relevant exchange rate (for the purposes of any calculations referred to above,
(i) all percentages resulting from such calculations will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point (e.g.
9.876541% being rounded down to 9.87654% and (ii) any currency amounts used in
or resulting from such calculations will be rounded in accordance with the
relevant market practice).

 

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

 

2.                                      Notification of Determinations

 

(a)                                  The Cash Manager will cause each
determination of Principal Receipts, Revenue Receipts, Losses, Mortgages Trust
Available Revenue Receipts, the Funding 1 Share and the Seller Share, the
Funding 1 Share Percentage, the Seller Share Percentage and the Minimum Seller
Share to be notified forthwith in writing to the Mortgages Trustee, the
Beneficiaries and the Security Trustee.

 

(b)                                 The Cash Manager will cause each
determination of the Funding 1 Income Deficit (if any), the Funding 1 Liquidity
Shortfall (if any), the Funding 1 Available Principal Receipts and Funding 1
Available Revenue Receipts to be notified forthwith in writing to Funding 1 and
the Security Trustee.

 

22

 

3.                                      Priority of Payments for
Mortgages Trust Available Revenue Receipts

 

The
Cash Manager shall (unless the intended recipient of the relevant payment
agrees otherwise) on each Distribution Date withdraw Cash from the Mortgages
Trustee GIC Account and/or, in the case of sums to be provided for, retain Cash
in the amounts required (to the extent that such withdrawal does not cause the
Mortgages Trustee GIC Account to become overdrawn or, if any amounts are
retained by way of provision for the relevant liability and are thus not
withdrawn, to the extent that withdrawal of those amounts that are withdrawn
would not, if such retained amounts were also to be withdrawn, cause the
balance on the Mortgages Trustee GIC Account to become overdrawn). The
aggregate amount of the withdrawal shall equal the Mortgages Trust Available
Revenue Receipts on each Distribution Date. The withdrawal shall be used to
make the payments and provisions in the order of priority set out in Clause 10.2
of the Mortgages Trust Deed (in each case only if and to the extent that
payments or provisions of a higher priority have been made in full).

 

4.                                      Priority of Payments for Mortgages
Trust Available Principal Receipts

 

The
Cash Manager shall (unless the intended recipient of the relevant payment
agrees otherwise) on each Distribution Date, withdraw Cash from the Mortgages
Trustee GIC Account (to the extent only that such withdrawal does not cause the
Mortgages Trustee GIC Account to become overdrawn) in an aggregate amount equal
to the Mortgages Trust Available Principal Receipts on each Distribution Date
to make the payments in the order of priority set out in Clause 11 of the Mortgages
Trust Deed.

 

5.                                      Priority of Payments for
Funding 1 Available Revenue Receipts

 

Funding
1 Available Revenue Receipts will be applied by the Cash Manager on each
Funding 1 Interest Payment Date until enforcement of the Funding 1 Security
pursuant to the Funding 1 Deed of Charge or until such time as there are no
amounts outstanding under any Intercompany Loan Agreement, in making such
payments and provisions in the order of priority set out in the Funding 1
Pre-Enforcement Revenue Priority of Payments (in each case only if and to the
extent that payments or provisions of a higher priority have been made in full)
as set out in Part 1 of Schedule 3 to the Funding 1 Deed of Charge (as the same
may be amended, varied or restated from time to time).

 

6.                                      Priority of Payments for
Funding 1 Available Principal Receipts

 

Funding
1 Available Principal Receipts will be applied by the Cash Manager on each
Funding 1 Interest Payment Date until enforcement of the Funding 1 Security
pursuant to the Funding 1 Deed of Charge or until such time as there are no
amounts outstanding under any Intercompany Loan Agreement, in making such
payments and provisions in the order of priority (in each case only if and to
the extent that payments or provisions of a higher priority have been made in
full) set out in Part 2 of Schedule 3 to the Funding 1 Deed of Charge.

 

7.                                      Funding 1 Income
Deficit/Funding 1 Liquidity Facility

 

(a)                                  If the Cash Manager determines four
Business Days prior to a Funding 1 Interest Payment Date that there will be a
Funding 1 Income Deficit, then the Cash Manager, on behalf of Funding 1, shall
pay or provide for such Funding 1 Income Deficit by applying Funding 1
Principal Receipts (plus any part of the balance of the Cash Accumulation
Ledger which is not comprised in Funding 1 Available Principal Receipts) to
make good such Funding 1 Income Deficit, and the Cash Manager shall make a
corresponding entry in the relevant Funding 1 Ledgers as described in
paragraphs 11 and 16 below.

 

23

 

(b)                                 If the Cash Manager determines there are no
(or insufficient) amounts standing to the credit of the Funding 1 Principal
Ledger and the Cash Accumulation Ledger to cure the Funding 1 Income Deficit
then on the London Business Day immediately preceding a Funding 1 Interest
Payment Date the Cash Manager will, subject to paragraph (c) below, (i) direct
Funding 1 to request a drawing pursuant to Clause 5.1 of the Funding 1 Liquidity
Facility Agreement to apply towards such Funding 1 Income Deficit.

 

(c)                                  A Funding 1 Liquidity Drawing may not be
used to pay interest or principal (as applicable) on the Term Advances if and
to the extent that there are funds standing to the credit of the Liquidity
Reserve Fund that are available to cure such Funding 1 Income Deficit on such
Funding 1 Interest Payment Date.

 

8.                                      Other Payments

 

Each of
the Beneficiaries and the Cash Manager agrees, and the Mortgages Trustee
concurs, that (save as otherwise specified below) the following payments may be
made from the Mortgages Trustee GIC Account (to the extent that withdrawal of
those amounts would not cause the balance of the Mortgages Trustee GIC Account
to become overdrawn) on any date:

 

(i)                                     if any amount has been received from a
Borrower for the express purpose of payment being made to a third party for the
provision of a service (including giving insurance cover) to either that
Borrower or the Seller or the Mortgages Trustee, to pay such amount when due to
such third party or, in the case of the payment of an insurance premium, where
such third party and the Cash Manager have agreed that payment of commission
should be made by deduction from such insurance premium, to pay such amount
less such commissions when due to such third party and to pay such commission
to the Cash Manager and to pay any premiums in respect of any Insurance Policy
or other insurance policy relating to any Loan comprised in the Portfolio;

 

(ii)                                  to pay to any person (including the Cash
Manager) any amounts due arising from any overpayment by any person or arising
from any reimbursement by any person of any such overpayment (including, for
the avoidance of doubt, where arising from the failure of a direct debit);

 

(iii)                               to pay when due (but subject to any right
to refuse or withhold payment or of set-off that has arisen by reason of the
Borrower’s breach of the terms of the relevant Mortgage or Loan) any amount
payable to a Borrower under the terms of the Mortgage or the Loan to which that
Borrower is a party, and to pay when due any amount payable by the Mortgages
Trustee to the Seller pursuant to Clauses 3.3, 4.4 and 5.2 of the Mortgage Sale
Agreement;

 

(iv)                              to pay to the Seller any amounts
(including, for the avoidance of doubt, any Early Repayment Fees) received and
held by the Mortgages Trustee on trust for the Seller pursuant to Clause 5
of the Mortgage Sale Agreement;

 

(v)                                 to pay when due and payable any amounts due
and payable by the Mortgages Trustee to third parties and incurred without
breach by the Mortgages Trustee of the Mortgages Trust Deed and not provided
for payment elsewhere in this paragraph 8;

 

(vi)                              to refund any amounts due arising from the
rejection of any payments in respect of a Loan and any other amounts which have
not been received by the Mortgages Trustee as cleared funds; and

 

24

 

(vii)                           to refund to the Seller any amounts which
represent amounts received from Borrowers but which do not form part of the
Mortgage Account balance or comprise unpaid interest as at the relevant date
and which are amounts owed by such Borrowers in respect of the period prior to
the date on which the Mortgage Loan (together with its Related Security)
relating to such Mortgage Account was transferred to the Mortgages Trustee as
and when identified by the Cash Manager and if a Borrower fails to pay the full
amount that it owes, the Cash Manager shall be obliged to refund to the Seller
only such portion of the amount which relates to any period prior to such
transfer.

 

9.                                      Use of Ledgers

 

The
Cash Manager shall forthwith record monies received or payments made by it on
behalf of the Mortgages Trustee or Funding 1 in the ledgers in the manner set
out in this Agreement.  If, at any time,
the Cash Manager is in any doubt as to which ledger a particular amount should
be credited or debited, it shall consult with the Security Trustee thereon.

 

Except
in the case of the Principal Deficiency Ledger, a debit item shall only be made
in respect of any of the Mortgages Trustee Ledgers and the Funding 1 Ledgers
and the corresponding payment or transfer (if any) may only be made from the
Mortgages Trustee GIC Account, the Funding 1 GIC Account or the Funding 1
Transaction Account, as the case may be, to the extent that such entry does not
cause the relevant ledger to have a debit balance. In the case of the Principal
Deficiency Ledger and each Principal Deficiency Sub Ledger, a credit item shall
only be made to the extent that such entry does not cause such ledger to have a
credit balance.

 

10.                               Revenue Ledger

 

The
Cash Manager shall ensure that:

 

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

 

(i)                                     all Revenue Receipts; and

 

(ii)                                  all interest received by the Mortgages
Trustee on the Mortgages Trustee GIC Account; and

 

(b)                                 any payment or provision made under
paragraph 3 above shall be debited to the Revenue Ledger.

 

11.                               Principal Ledger

 

The
Cash Manager shall ensure that:

 

(a)                                  all Principal Receipts shall be credited to
the Principal Ledger; and

 

(b)                                 any payment or provision made under
paragraph 4 above shall be debited to the Principal Ledger.

 

12.                               Losses Ledger

 

The
Cash Manager shall ensure that all Losses shall be recorded in the Losses
Ledger.

 

25

 

13.                               Funding 1 Share/Seller Share
Ledger

 

The Cash
Manager shall ensure that the Current Funding 1 Share and the Current Funding 1
Share Percentage of the Trust Property and the Current Seller Share and the
Current Seller Share Percentage of the Trust Property are recorded in the
Funding 1 Share/Seller Share Ledger on the Initial Closing Date and thereafter
on each Distribution Date.

 

14.                               Funding 1 Revenue Ledger

 

The
Cash Manager shall ensure that:

 

(a)                                  the following amounts shall be credited to
the Funding 1 Revenue Ledger:

 

(i)                                     all Funding 1 Revenue Receipts;

 

(ii)                                  all interest received by Funding 1 in
respect of the Funding 1 Bank Accounts;

 

(iii)                               all amounts received by Funding 1
representing income on any Funding 1 Authorised Investments;

 

(iv)                              all amounts (other than any early
termination payment which is to be used to acquire, if necessary, a new swap)
received by Funding 1 under the Funding 1 Swap Agreement; and

 

(v)                                 any amount debited to the Funding 1
Principal Ledger under paragraph 16(b)(ii) below; and

 

(b)                                 any payment or provision made under paragraph
5 above shall be debited to the Funding 1 Revenue Ledger.

 

15.                               Funding 1 Liquidity Facility
Ledger

 

The
Cash Manager shall ensure that:

 

(a)                                  all Funding 1 Liquidity Facility Drawings
shall be credited to the Funding 1 Liquidity Facility Ledger; and

 

(b)                                 all Funding 1 Liquidity Facility Repayments
shall be noted on the Funding 1 Liquidity Facility Ledger.

 

16.                               Funding 1 Principal Ledger

 

Without
prejudice to paragraph 17 below, the Cash Manager shall ensure that:

 

(a)                                  the following amounts shall be credited to
the Funding 1 Principal Ledger:

 

(i)                                     all Funding 1 Principal Receipts; and

 

(ii)                                  amounts credited to the Principal
Deficiency Ledger under paragraph 5 above and paragraph 17 below; and

 

(b)                                 the following amounts shall be debited to
the Funding 1 Principal Ledger:

 

(i)                                     the aggregate amount of principal repaid on
the Intercompany Loan Agreement pursuant to paragraph 6 above; and

 

26

 

(ii)                                  on each Funding 1 Interest Payment Date, an
amount equal to the Funding 1 Income Deficit on such Funding 1 Interest Payment
Date.

 

17.                               Principal Deficiency Ledger

 

(a)                                  Without prejudice to paragraph 5 above, the
Cash Manager shall ensure that there shall be debited to the Principal
Deficiency Ledger:

 

(i)                                     deficiencies arising from Losses which have
been allocated to the Funding 1 Share; and

 

(ii)                                  any amount required to be debited to the
Funding 1 Principal Ledger under paragraph 16(b)(ii) above.

 

(b)                                 The Cash Manager shall ensure that there
shall be credited to the Principal Deficiency Ledger any amount to be credited
in accordance with paragraph 5 above.

 

(c)                                  Amounts to be debited to the Principal
Deficiency Ledger shall be debited in the following order:

 

(i)                                     first, to the Principal Deficiency Sub Ledger
corresponding to the Term Advance with the lowest ranking Term Advance Rating
until the debit balance thereon is equal to the then principal amount
outstanding of the corresponding Term Advance(s); and

 

(ii)                                  secondly, to the Principal Deficiency
Sub Ledger corresponding to the Term Advance with the next lowest Term Advance
Rating until the debit balance thereon is equal to the then principal amount
outstanding of corresponding Term Advance(s),

 

and so
on until amounts are debited to the AAA Principal Deficiency Sub Ledger, at
which point there will be an Asset Trigger Event.

 

Losses
on the Loans and/or the application of Funding 1 Available Principal Receipts
to pay interest on the Term Advances will not be recorded on the Principal
Deficiency Ledger to the extent that the Funding 1 Share of the Trust Property
together with amounts standing to the credit of the Funding 1 Cash Accumulation
Ledger and the Funding 1 Principal Ledger, in aggregate, is greater than or
equal to the aggregate Outstanding Principal Balance of the Intercompany Loans
on the relevant Funding 1 Interest Payment Date, after taking account of such
Losses or the relevant application of Principal Receipts.

 

(d)                                 Amounts to be credited to a Principal
Deficiency Ledger shall be credited in the following order:

 

(i)                                     first, to the Principal Deficiency Sub Ledger
corresponding to the Term Advance with the highest ranking Term Advance Rating
until the debit balance thereon is reduced to zero;

 

(ii)                                  secondly, to the Principal Deficiency
Sub Ledger corresponding to the Term Advance with the next highest ranking Term
Advance Rating until the debit balance thereon is reduced to zero; and

 

(iii)                               thirdly, to the Principal Deficiency
Sub Ledger corresponding to the Term Advance with the next highest ranking Term
Advance Rating until the debit balance thereon is reduced to zero,

 

27

 

and so
on until the balance of the Principal Deficiency Ledger is zero.

 

18.                               General Reserve Ledger

 

(a)                                  A tranche (if any) drawn down on a relevant
Closing Date by Funding 1 pursuant to a Start-Up Loan Agreement for the
purposes of funding the General Reserve Fund (or any other similar reserve
fund) will be credited to the General Reserve Ledger.

 

(b)                                 Amounts shall be credited to the General Reserve
Ledger in accordance with the Funding 1 Priority of Payments above.

 

(c)                                  Amounts shall be debited to the General
Reserve Ledger on each Funding 1 Interest Payment Date in order to be applied
in accordance with the order of priority of payments set out in Schedule 3 to
the Funding 1 Deed of Charge.

 

19.                               Liquidity Reserve Ledger

 

(a)                                  Amounts shall be credited to the Liquidity
Reserve Ledger in accordance with the Funding 1 Priority of Payments above.

 

(b)                                 Amounts shall be debited to the Liquidity
Reserve Ledger to the extent permitted on each 
relevant Funding 1 Interest Payment Date in order to be applied in
accordance with the priority of payments set out in Schedule 3 to the Funding 1
Deed of Charge.

 

20.                               Intercompany Loan Ledger

 

The
Cash Manager shall ensure that all payments of interest and repayments of
principal on each of the Term Advances are recorded in the Intercompany Loan
Ledger.

 

21.                               Cash Accumulation Ledger

 

The
Cash Manager shall ensure that all Funding 1 Principal Receipts reserved by Funding
1 to pay the relevant Bullet Term Advances are recorded on the Cash
Accumulation Ledger.

 

28

 

SCHEDULE 3

 

PART 1

 

FORM OF MORTGAGES TRUSTEE QUARTERLY REPORT

 

 

Permanent Mortgages Trustee Limited

Profit & Loss Account

 

	
  Period
  Ended

  	
   

  	
  This
  Quarter

  	
   

  	
  Prior
  Quarter

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest
  Receivable - Mortgages

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Interest
  Payable - Mortgages

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Net
  Operating Income

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fees
  Receivable

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fees
  Payable

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating
  Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Profit/loss
  on ordinary activities before tax

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Taxation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Profit/loss
  on ordinary activities after tax

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Dividend

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Retained
  profit brought forward

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Retained
  profit for the year

  	
   

  	
  0

  	
   

  	
  0

  	
   

  

 

29

 

	
  Permanent Mortgages Trustee Limited

  Balance Sheet

  	
   

  	
  £

  	
   

  	
  £

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Period Ended

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed Asset Investments

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Current Assets

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New
  Loans

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Interest
  Receivable

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Other
  Debtors

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Cash
  at Bank

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Creditors: Amounts falling due within one year

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accruals

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Interest
  Payable Accrual

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Taxation

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Net
  current assets

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
  Total
  Assets less current liabilities

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
  Share
  Capital

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
  Reserves

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
  Diff

  	
   

  	
  0

  	
   

  

 

30

 

PART 2

 

FORM OF FUNDING 1 QUARTERLY REPORT

 

Permanent Funding (No. 1) Limited

Profit & Loss Account

 

	
  Period
  Ended

  	
   

  	
  This
  Quarter

  	
   

  	
  Prior
  Quarter

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  
	
  Interest
  Receivable - Mortgages

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest
  Receivable - Cash Deposits

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Interest
  Payable - Intercompany Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest
  Payable

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Net
  Operating Income

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Other
  Income

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Insurance
  Commission  Operating Expenses

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deferred
  Consideration

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Profit/loss
  on ordinary activities before tax

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Taxation

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Profit/loss
  on ordinary activities after tax

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Dividend

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Retained
  profit brought forward

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Retained
  profit for the year

  	
   

  	
  0

  	
   

  	
  0

  	
   

  

 

31

 

	
  Permanent
  Funding (No. 1)

  Limited  Balance Sheet

  	
   

  	
  £

  	
   

  	
  £

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Period Ended

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed Asset Investments

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Beneficial
  Interest in Mortgage portfolio

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Current Assets

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Interest
  Receivable

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Deferred
  Expenditure (costs of Securing)

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Other
  debtors

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Cash
  at Bank

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Reserve
  Funding 1

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transaction
  Account

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Funding
  1 GIC Account

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Creditors: Amounts falling due within one year

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accruals

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Deferred
  Consideration Creditor

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Interest
  Payable Accrual

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Taxation

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  0

  	
   

  	
   

  	
   

  
	
  Net
  current assets

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Creditors: Amounts falling due after one year

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Intercompany
  Loan

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
  Start
  Up Loan

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
  Total
  Assets less current liabilities

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Share
  Capital

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
  Reserves

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
  Diff

  	
   

  	
  0

  	
   

  

 

32

 

	
  Permanent Funding (No. 1) Limited

  	
   

  	
   

  	
   

  
	
  Notes to Balance Sheet

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Period Ended

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Balance on Cash Accumulation Ledger

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Available Credit Enhancement

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General
  Reserve Fund at closing

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Last
  Quarter Closing General Reserve Fund

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Drawings
  to make a bullet repayment

  	
   

  	
   

  	
   

  
	
  Other
  drawings

  	
   

  	
   

  	
   

  
	
  Closing
  General Reserve Fund Balance

  	
   

  	
   

  	
   

  
	
  Target
  General Reserve Fund Balance

  	
   

  	
   

  	
   

  

 

	
  Principal
  Deficiency Ledger

  	
   

  	
  AAA

  	
   

  	
  AA

  	
   

  	
  BBB

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Opening
  PDL Balance

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
  Losses
  this Quarter

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PDL
  top up from Revenue Income

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing
  PDL Balance

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Subordinated Loan Outstanding

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial
  Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Last
  Quarter Closing Outstanding

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Accrued
  Interest

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Repayments
  Made

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Closing
  Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

33

 

SIGNATORIES

 

	
  Signed by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  HALIFAX plc

  	
  )

  
	
  as Cash Manager

  	
  )

  
	
   

  	
   

  
	
  Signed by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  HALIFAX plc

  	
  )

  
	
  as Seller

  	
  )

  
	
   

  	
   

  
	
  Signed by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT MORTGAGES TRUSTEE

  	
  )

  
	
  LIMITED

  	
  )

  
	
   

  	
   

  
	
  Signed by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT FUNDING (NO. 1) LIMITED

  	
  )

  
	
   

  	
   

  
	
  Signed by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  BANK OF NEW YORK

  	
  )

  

 

34

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00064-of-00352.parquet"}]]