Document:

DATED [O] SEPTEMBER 2002

                         GRANITE FINANCE FUNDING LIMITED
                                   as Funding

                                     - AND -

                           GRANITE MORTGAGES 02-2 PLC
                                as Current Issuer

                                     - AND -

                              THE BANK OF NEW YORK
                               as Security Trustee

                                     - AND -

                                 CITIBANK, N.A.
                                  as Agent Bank

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

                                LOAN CONFIRMATION

                           INTERCOMPANY LOAN AGREEMENT

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

                           SIDLEY AUSTIN BROWN & WOOD
                              1 THREADNEEDLE STREET
                                 LONDON EC2R 8AW
                             TELEPHONE 020 7360 3600
                             FACSIMILE 020 7626 7937
                                   REF: 550787

<PAGE>

1.       Interpretation........................................................1

2.       Intercompany Loan Terms and Conditions................................2

3.       The Current Issuer Intercompany Loan..................................2

4.       Interest..............................................................2

5.       Repayment.............................................................3

6.       Certain Fees, etc.....................................................3

7.       Additional Covenants..................................................5

8.       Declaration of Trust..................................................5

9.       Addresses.............................................................5

SCHEDULE 1  CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN........................8

                                       1
<PAGE>

THIS AGREEMENT is dated [O] September 2002 between:

(1)  GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
     limited company incorporated under the laws of Jersey, but acting out of
     its branch office established in England (registered overseas company
     number FC022999 and branch number BR005916) at 4th Floor, 35 New Bridge
     Street, Blackfriars, London EC4V 6BW as Funding;

(2)  GRANITE MORTGAGES 02-2 PLC (registered in England and Wales No. 4482804), a
     public limited company incorporated under the laws of England and Wales
     whose registered office is at Fifth Floor, 100 Wood Street, London EC2V 7EX
     as Current Issuer;

(3)  THE BANK OF NEW YORK, whose offices are at One Canada Square, 48th Floor,
     London E14 5AL in its capacity as Security Trustee; and

(4)  CITIBANK, N.A., acting through its offices at 5 Carmelite Street, London
     EC4Y 0PA in its capacity as Agent Bank.

IT IS AGREED as follows:

1.   INTERPRETATION

1.1  The provisions of:

     (a)  the Master Definitions Schedule as amended and restated by (and
          appearing in Appendix 1 to) the Master Definitions Schedule Third
          Amendment Deed made on [O] September 2002 between, among others, the
          Seller, Funding and the Mortgages Trustee, and

     (b)  the Issuer Master Definitions Schedule signed for the purposes of
          identification by Sidley Austin Brown & Wood and Allen & Overy on [O]
          September 2002,

     (as the same have been and may be amended, varied or supplemented from time
     to time with the consent of the parties hereto) are expressly and
     specifically incorporated into and shall apply to this Agreement. The
     Issuer Master Definitions Schedule specified as above shall prevail to the
     extent that it conflicts with the Master Definitions Schedule.

     1.2  SPECIFIC TERMS: Unless the context otherwise requires, references in
          the Intercompany Loan Terms and Conditions to:

          "CLOSING DATE" shall mean [O] September 2002;

          "INTERCOMPANY LOAN" shall mean the Current Issuer Intercompany Loan;

          "INTERCOMPANY LOAN AGREEMENT" shall mean the Current Issuer
          Intercompany Loan Agreement;

          "INTERCOMPANY LOAN CONFIRMATION" shall mean this Current Issuer
          Intercompany Loan Confirmation;

                                       1
<PAGE>

          "ISSUER" shall mean the Current Issuer;

          "ISSUER TRANSACTION ACCOUNTS" shall mean the Current Issuer
          Transaction Accounts; and

          "NOTES" shall mean the Current Issuer Notes.

2.   INTERCOMPANY LOAN TERMS AND CONDITIONS

     Each of the parties to this Agreement agrees that the Intercompany Loan
     Terms and Conditions signed by Funding, the Security Trustee and the Agent
     Bank for the purposes of identification on 26 March 2001 (as the same has
     been and may be amended, varied, novated or supplemented from time to time
     by the parties thereto) and the provisions set out therein shall form part
     of this Agreement and shall be binding on the parties to this Agreement as
     if they had been expressly set out herein. References in this Agreement to
     "THIS AGREEMENT" shall be construed accordingly.

3.   THE CURRENT ISSUER INTERCOMPANY LOAN

3.1  GRANT OF CURRENT ISSUER INTERCOMPANY LOAN: On and subject to the terms of
     this Agreement, the Current Issuer hereby grants an Intercompany Loan to
     Funding as follows:

     (a)  the maximum amount available for utilisation under that Intercompany
          Loan shall be [O]; and

     (b)  for all purposes the Outstanding Principal Amount of the Intercompany
          Loan and principal amount outstanding and payable and/or repayable in
          respect of that Intercompany Loan shall be:

          (i)  the total amount utilised in respect of that Intercompany Loan
               multiplied by 100%, less

          (ii) the aggregate principal amounts repaid in respect of the
               Intercompany Loan in accordance with the Intercompany Loan
               Agreement.

3.2  CONDITIONS PRECEDENT: Save as the Current Issuer may otherwise agree, the
     Current Issuer Intercompany Loan will not be available for utilisation
     unless the Current Issuer has confirmed to Funding (with a copy of such
     confirmation to the Security Trustee) that it or its advisers have received
     all the information and documents listed in Schedule 1 in form and
     substance satisfactory to the Current Issuer.

4.   INTEREST

4.1  PAYMENT SUBJECT TO TERMS OF THE CURRENT ISSUER CASH MANAGEMENT AGREEMENT:
     The terms and conditions of this Clause 4 are to be read in conjunction
     with the provisions of Part 3 of Schedule 2 to the Current Issuer Cash
     Management Agreement, as the same may be amended or varied from time to
     time in accordance with the provisions thereof.

4.2  PAYMENT OF INTEREST: Subject to Clause 4 of the Intercompany Loan Terms and
     Conditions, on each Payment Date Funding will pay to the Current Issuer for
     same

                                       2
<PAGE>

     day value to the Current Issuer Sterling Account an amount of interest
     equal to the amount of interest required by the Current Issuer on such
     Payment Date (or such other date on which an amount of interest is payable
     by the Current Issuer) to fund (by payment to any Swap Provider or
     otherwise) the amount payable by the Current Issuer on such Payment Date
     (or such other date on which an amount of interest is payable by the
     Current Issuer) on the Current Issuer Notes and certain other amounts
     (including an amount equal to the Current Issuer's retained profit) as
     specified in and in accordance with the Current Issuer Priority of Payments
     as calculated by the Current Issuer Cash Manager on the Distribution Date
     that immediately precedes such Payment Date and communicated by the Current
     Issuer Cash Manager to the Agent Bank by the close of business on such
     Distribution Date. For the avoidance of doubt, amounts paid by Funding to
     the Current Issuer pursuant to this Clause 4.2 shall constitute payment of
     interest on the Current Issuer Intercompany Loan.

4.3  INTEREST PERIODS: The first Interest Period shall commence on (and include)
     the Closing Date and end on (but exclude) the Payment Date falling in [O].
     Each subsequent Interest Period shall commence on (and include) a Payment
     Date and end on (but exclude) the following Payment Date.

5.   REPAYMENT

5.1  PAYMENT SUBJECT TO TERMS OF THE CURRENT ISSUER CASH MANAGEMENT AGREEMENT:
     The terms and conditions of this Clause 5 are to be read in conjunction
     with the provisions of Part 4 of Schedule 2 to the Current Issuer Cash
     Management Agreement, as the same may be amended or varied from time to
     time in accordance with the provisions thereof.

5.2  REPAYMENT: Subject to Clause 4 of the Intercompany Loan Terms and
     Conditions, on each Payment Date Funding will repay to the Current Issuer
     for same day value to the Current Issuer Sterling Account an amount of
     principal equal to the amount of principal required by the Current Issuer
     on such Payment Date (or such other date on which an amount of principal is
     payable by the Current Issuer) to fund (by payment to any Swap Provider or
     otherwise) the amount payable by the Current Issuer on such Payment Date
     (or such other date on which an amount of principal is payable by the
     Current Issuer on the Current Issuer Notes) on the Current Issuer Notes, as
     determined by the Current Issuer Cash Manager under the terms of the
     Current Issuer Cash Management Agreement on the Distribution Date that
     immediately precedes such Payment Date and communicated by the Current
     Issuer Cash Manager to the Agent Bank by the close of business on such
     Distribution Date.

5.3  ACKNOWLEDGEMENT OF NEW INTERCOMPANY LOANS: The Current Issuer hereby
     acknowledges and agrees that Funding has entered into Previous Issuer
     Intercompany Loan Agreements with Previous Issuers and that from time to
     time Funding may enter into other New Intercompany Loans with New Issuers
     and that the obligation of Funding to repay this Current Issuer
     Intercompany Loan will rank pari passu with the obligations of Funding to
     repay the Previous Issuer Intercompany Loans and any New Intercompany
     Loans.

6.   CERTAIN FEES, ETC.

6.1  FEE FOR PROVISION OF CURRENT ISSUER INTERCOMPANY LOAN: In addition to the
     interest

                                       3
<PAGE>

     and principal payments to be made by Funding under Clauses 4 and 5,
     respectively, on each Payment Date (or, in respect of the payment to be
     made as set forth in (a) below, on the Drawdown Date) or on any other date
     on which the Current Issuer notifies Funding, Funding shall pay to the
     Current Issuer for same day value to the relevant Current Issuer
     Transaction Account a fee for the provision of the Current Issuer
     Intercompany Loan (except that in the case of payments due under paragraphs
     (c), (e), (f) and (j) below, such payments shall be paid when due). Such
     fee shall be an amount or amounts in the aggregate equal to the following:

     (a)  the amount payable on the Drawdown Date as previously communicated to
          Funding by the Current Issuer;

     (b)  the fees, costs, charges, liabilities and expenses and any other
          amounts due and payable to the Note Trustee pursuant to the Current
          Issuer Trust Deed or any other Current Issuer Transaction Document,
          together with interest thereon as provided therein;

     (c)  the reasonable fees and expenses of any legal advisers, accountants
          and auditors appointed by the Current Issuer and properly incurred in
          their performance of their functions under the Current Issuer
          Transaction Documents which have fallen due;

     (d)  the fees, costs and expenses due and payable to the Paying Agents and
          the Agent Bank pursuant to the Current Issuer Paying Agent and Agent
          Bank Agreement and the fees, costs and expenses due and payable to the
          Transfer Agent and the Registrar;

     (e)  any amounts due and payable by the Current Issuer to the Inland
          Revenue in respect of the Current Issuer's liability to United Kingdom
          corporation tax (insofar as payment is not satisfied by the surrender
          of group relief or out of the profits, income or gains of the Current
          Issuer and subject to the terms of the Current Issuer Deed of Charge)
          or any other Taxes payable by the Current Issuer;

     (f)  the fees, costs, charges, liabilities and expenses due and payable to
          the Current Issuer Account Bank pursuant to the Current Issuer Bank
          Account Agreement (if any);

     (g)  the fees, costs, charges, liabilities and expenses due and payable to
          the Current Issuer Cash Manager pursuant to the Current Issuer Cash
          Management Agreement;

     (h)  any termination payment due and payable by the Current Issuer to a
          Current Issuer Swap Provider pursuant to a Current Issuer Swap
          Agreement;

     (i)  the fees, costs, charges, liabilities and expenses due and payable to
          the Current Issuer Corporate Services Provider pursuant to the Current
          Issuer Corporate Services Agreement; and

     (j)  any other amounts due or overdue (including amounts due or overdue in
          respect of stamp duty and issuer, registration and documentary taxes
          or other

                                       4
<PAGE>

          taxes of a similar nature) by the Current Issuer to third parties
          including the Rating Agencies and the amounts paid by the Current
          Issuer under the Current Issuer Subscription Agreement and the Current
          Issuer Underwriting Agreement (excluding, for these purposes, the
          Noteholders) other than amounts specified in paragraphs (a) to (i)
          above,

     together with, (i) in respect of taxable supplies made to the Current
     Issuer, any amount in respect of any VAT or similar tax payable in respect
     thereof against production of a valid tax invoice; and (ii) in respect of
     taxable supplies made to a person other than the Current Issuer, any amount
     in respect of any Irrecoverable VAT or similar tax payable in respect
     thereof (against production of a copy of the relevant tax invoice), and to
     be applied subject to and in accordance with the provisions of the Current
     Issuer Pre-Enforcement Revenue Priority of Payments in the Current Issuer
     Cash Management Agreement.

6.2  SET-OFF: Funding and each of the other parties to this Agreement agree that
     the Current Issuer shall be entitled to set-off those amounts due and
     payable by Funding pursuant to this Clause 6 on the Closing Date against
     the amount to be advanced by the Current Issuer to Funding under the
     Current Issuer Intercompany Loan on the Closing Date.

7.   ADDITIONAL COVENANTS

     Funding undertakes to establish the Current Issuer Liquidity Reserve Fund,
     and an appropriate ledger therefor, on behalf of the Current Issuer should
     the long-term, unsecured, unsubordinated and unguaranteed debt obligations
     of the Seller cease to be rated at least A3 by Moody's or A- by Fitch
     (unless Moody's or Fitch, as applicable, confirms the then current ratings
     of the Current Issuer Notes will not be adversely affected by such ratings
     downgrade). Any such Current Issuer Liquidity Reserve Fund and such Current
     Issuer Liquidity Reserve Ledger shall be established and maintained in
     accordance with the provisions of the Cash Management Agreement.

8.   DECLARATION OF TRUST

     The Current Issuer declares the Security Trustee, and the Security Trustee
     hereby declares itself, trustee of all the covenants, undertakings, rights,
     powers, authorities and discretions in, under or in connection with this
     Agreement for the Current Issuer Secured Creditors in respect of the
     Current Issuer Secured Obligations owed to each of them respectively upon
     and subject to the terms and conditions of the Current Issuer Deed of
     Charge.

9.   ADDRESSES

     The addresses referred to in Clause 18.4 (Notices) of the Intercompany Loan
     Terms and Conditions are as follows:

     THE SECURITY TRUSTEE:

     For the attention of: Corporate Trust (Global Structured Finance)

                                       5
<PAGE>

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

     Facsimile:                 +44 207 964 6061 / +44 207 964 6399

     THE CURRENT ISSUER:

     For the attention of:      The Company Secretary

     Address:                   Granite Mortgages 02-2 plc
                                Fifth Floor
                                100 Wood Street
                                London EC2V 7EX

     Telephone:                 +44 207 606 5451

     Facsimile:                 +44 207 606 0643

     FUNDING:

     For the attention of:      The Company Secretary

     Address:                   Granite Finance Funding Limited
                                4th Floor
                                35 New Bridge Street
                                Blackfriars
                                London  EC4V 6BW

     Telephone:                 +44 207 332 6161

     Facsimile:                 +44 207 332 6199

     RATING AGENCIES:

     MOODY'S:                   Moody's Investors Services Limited

                                2 Minster Court, 1st Floor
                                Mincing Lane
                                London  EC3R 7XB

     For the attention of:      Nick Lindstrom

     Telephone:                 +44 207 772 5434

     Facsimile:                 +44 207 772 5400

     S&P:                       Standard and Poor's
                                Garden House
                                18 Finsbury Circus
                                London  EC2M 7NJ

     For the attention of:      Andre Vollmann

                                       6
<PAGE>

     Telephone:                 +44 207 826 3855

     Facsimile:                 +44 207 826 3598

     FITCH:                     Fitch Ratings Ltd.
                                Eldon House
                                2 Eldon Street
                                London  EC2M 7UA

     For the attention of:      European Structured Finance Surveillance

     Telephone:                 +44 207 417 6271

     Facsimile:                 +44 207 417 6262

IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed on
the day and year appearing on page 1.

                                       7
<PAGE>

                                   SCHEDULE 1

                   CONDITIONS PRECEDENT IN RESPECT OF DRAWDOWN

1.   AUTHORISATIONS

     (a)  A copy of the memorandum and articles of association and certificate
          of incorporation of Funding.

     (b)  A copy of a resolution of the board of directors of Funding
          authorising the entry into, and the execution and performance of, each
          of the Current Issuer Transaction Documents to which Funding is a
          party and authorising specified persons to execute those on its
          behalf.

     (c)  A certificate of a director of Funding certifying:

          (i)  that each document delivered under this paragraph 1 of Schedule 1
               is correct, complete and in full force and effect as at a date no
               later than the date of the Current Issuer Intercompany Loan
               Agreement and, if such certificate is dated other than on the
               Drawdown date, undertaking to notify the Current Issuer (with a
               copy of such certification to the Security Trustee) if that
               position should change prior to the Drawdown Date; and

          (ii) as to the identity and specimen signatures of the directors and
               signatories of Funding.

2.   SECURITY

     (a)  The Deed of Accession to the Funding Deed of Charge duly executed by
          the parties thereto.

3.   LEGAL OPINION

     Legal opinions of:

     (a)  Sidley Austin Brown & Wood, English legal advisers to the Seller, the
          Current Issuer and Funding, addressed to the Security Trustee; and

     (b)  Sidley Austin Brown & Wood LLP, U.S. legal advisers to the Seller, the
          Current Issuer and Funding, addressed to the Security Trustee.

4.   TRANSACTION DOCUMENTS

     Duly executed copies of:

     (a)  the Current Issuer Deed of Charge;

     (b)  the Current Issuer Trust Deed;

     (c)  the Cash Management Agreement;

                                       8
<PAGE>

     (d)  the Global Note Certificates;

     (e)  the Current Issuer Corporate Services Agreement;

     (f)  the Current Issuer Currency Swap Agreements;

     (g)  the Current Issuer Basis Rate Swap Agreement;

     (h)  the Bank Account Agreement;

     (i)  the Collection Bank Agreement;

     (j)  the Third Amended and Restated Master Definitions Schedule and the
          Current Issuer Master Definitions Schedule;

     (k)  the Current Issuer Paying Agent and Agent Bank Agreement;

     (l)  the Current Issuer Start-up Loan Agreement;

     (m)  the Mortgage Sale Agreement;

     (n)  the Mortgages Trust Deed;

     (o)  the Administration Agreement;

     (p)  the Mortgages Trustee Guaranteed Investment Contract;

     (q)  the Funding Guaranteed Investment Contract;

     (r)  the Funding (Current Issuer) Guaranteed Investment Contract;

     (s)  the Current Issuer Post-Enforcement Call Option Agreement;

     (t)  the Current Issuer Subscription Agreement;

     (u)  the Current Issuer Underwriting Agreement;

     (v)  the Seller Power of Attorney;

     (w)  the Funding Deed of Charge;

     (x)  the Deed of Accession to the Funding Deed of Charge;

     (y)  the Current Issuer Cash Management Agreement;

     (z)  the Funding (Current Issuer) Bank Account Agreement; and

     (aa) the Current Issuer Bank Account Agreement.

5.   BOND DOCUMENTATION

     (a)  Confirmation that the Current Issuer Notes have been issued and the
          subscription proceeds received by the Current Issuer; and

                                       9
<PAGE>

     (b)  Copy of the Prospectus and the Offering Circular.

6.   MISCELLANEOUS

     A solvency certificate from Funding signed by two directors of Funding in
     or substantially in the form set out in Schedule 2 (Solvency Certificate)
     to the Intercompany Loan Terms and Conditions.

                                       10
<PAGE>

                                 EXECUTION PAGE

EXECUTED for and on behalf of                                 )
GRANITE FINANCE FUNDING LIMITED                               )
by:                                                           )

Name:

Title: DIRECTOR

EXECUTED for and on behalf of                                 )
GRANITE MORTGAGES 02-2 PLC                                    )
by:                                                           )

Name:

Title: DIRECTOR

EXECUTED for and on behalf of                                 )
THE BANK OF NEW YORK                                          )
by:                                                           )

Name:

Title:

                                       11
<PAGE>

EXECUTED for and on behalf of                                 )
CITIBANK, N.A.                                                )
by:                                                           )

Name:

Title:

                                       12DATED [____] SEPTEMBER, 2002

                                NORTHERN ROCK PLC
                    as Seller, Cash Manager and a Beneficiary

                         GRANITE FINANCE FUNDING LIMITED
                          as Funding and a Beneficiary

                                     - and -

                        GRANITE FINANCE TRUSTEES LIMITED
                              as Mortgages Trustee

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

                                 FOURTH AMENDED
                              MORTGAGES TRUST DEED

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

                           SIDLEY AUSTIN BROWN & WOOD
                              1 THREADNEEDLE STREET
                                 LONDON EC2R 8AW
                             TELEPHONE 020 7360 3600
                             FACSIMILE 020 7626 7937
                               REF:30507-13/556632

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                                                     PAGE NO.

<S>      <C>                                                                                                 <C>
1.       Definitions and Construction.........................................................................1

2.       Creation of Mortgages Trust..........................................................................1

3.       Conditions Precedent.................................................................................2

4.       Consideration........................................................................................3

5.       Increasing the Seller Share of the Trust Property....................................................5

6.       Increasing the Funding Share of the Trust Property...................................................6

7.       Initial Funding Share and Initial Seller Share.......................................................8

8.       Adjustment of Funding Share Percentage and Seller Share Percentage...................................8

9.       Minimum Seller Share................................................................................16

10.      Distribution of Revenue Receipts....................................................................17

11.      Distribution of Principal Receipts..................................................................20

12.      Allocation of Losses................................................................................22

13.      Overpayments........................................................................................23

14.      Arrears.............................................................................................23

15.      Ledgers.............................................................................................23

16.      Fees and Expenses of the Mortgages Trustee..........................................................24

17.      Directions from Beneficiaries.......................................................................24

18.      Early Termination of the Mortgages Trust............................................................25

19.      Audit of Mortgage Loans constituting the Trust Property.............................................26

20.      Transfers...........................................................................................26

21.      Representations and Covenants.......................................................................26

22.      Power to Delegate...................................................................................27

23.      Powers of Investment................................................................................28

24.      Other Provisions regarding the Mortgages Trustee....................................................28

25.      No retirement of Mortgages Trustee..................................................................29

</TABLE>

<PAGE>

<TABLE>

<S>      <C>                                                                                                 <C>
26.      Termination.........................................................................................29

27.      Further Assurances..................................................................................29

28.      No Partnership or Agency............................................................................30

29.      Calculations........................................................................................30

30.      Confidentiality.....................................................................................30

31.      Perpetuity Period...................................................................................31

32.      Non Petition Covenant; Limited Recourse.............................................................31

33.      Amendments and Waiver...............................................................................32

34.      Notices.............................................................................................32

35.      Third Party Rights..................................................................................33

36.      Execution in Counterparts; Severability.............................................................33

37.      Governing Law and Submission to Jurisdiction........................................................34

SCHEDULE 1 REPRESENTATIONS AND WARRANTIES....................................................................35
</TABLE>

                                       1
<PAGE>

THIS FOURTH AMENDED MORTGAGES TRUST DEED DATED [___] SEPTEMBER 2002 FURTHER
AMENDS AND RESTATES THE MORTGAGES TRUST DEED DATED 26 MARCH 2001 BETWEEN:

(1)  NORTHERN ROCK PLC (registered number 03273685), a public limited company
     incorporated under the laws of England and Wales whose registered office is
     at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL, in its
     capacity as Seller, and in its capacity as Cash Manager and in its capacity
     as a Beneficiary;

(2)  GRANITE FINANCE FUNDING LIMITED (registered number 79308) a private limited
     company incorporated under the laws of Jersey, but acting out of its office
     established in England (registered overseas company number FC022999 and
     branch number BR005916) at 4th Floor, 35 New Bridge Street, London EC4V 6BW
     in its capacity as a Beneficiary; and

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

WHEREAS:

(A)  The Mortgages Trustee wishes to declare the following trusts in respect of
     the Trust Property (being on the date of this Deed, the sum of (pound)100
     which monies have been received by, are presently held by the Mortgages
     Trustee or to its order).

(B)  The Mortgages Trustee (acting as principal and not as agent of any party)
     has agreed to hold the Trust Property as bare trustee for the Beneficiaries
     upon, with and subject to the trusts, powers and provisions of this Deed.
     The Mortgages Trustee will receive amounts arising from the Trust Property
     and will distribute such amounts for the benefit of the Beneficiaries of
     the Mortgages Trust. It will delegate certain tasks in relation to the
     Mortgages Trust to the Administrator and the Cash Manager.

(C)  The Seller carries on the business of, inter alia, originating residential
     first mortgage loans to individual Borrowers in England and Wales and of
     managing and administering such mortgage loans. The Seller intends to
     assign from time to time portfolios of such mortgage loans to the Mortgages
     Trustee pursuant to the Mortgage Sale Agreement to be entered into on or
     about 26 March 2001, which mortgage loans shall be held by the Mortgages
     Trustee as bare trustee for the Beneficiaries upon, with and subject to the
     trusts, powers and provisions of this Deed.

<PAGE>

NOW THIS DEED WITNESSES:

1.   DEFINITIONS AND CONSTRUCTION

1.1. The provisions of the Master Definitions Schedule as amended and restated
     by (and appearing in Appendix 1 to) the Master Definitions Schedule [Third]
     Amendment Deed made on [___] September 2002 between, amongst others, the
     Seller, Funding and the Mortgages Trustee (as the same have been and may be
     amended, varied or supplemented from time to time with the consent of the
     parties hereto) are expressly and specifically incorporated into and shall
     apply to this Deed.

2.   CREATION OF MORTGAGES TRUST

2.1  INITIAL TRUST PROPERTY: The Mortgages Trustee hereby declares itself as
     trustee of the Trust Property, being, upon execution of this Deed, the sum
     of (pound)100 (one hundred pounds) (the "INITIAL TRUST PROPERTY") which sum
     shall be held on trust by the Mortgages Trustee absolutely as to both
     capital and income for the benefit, as tenants in common, of the Seller as
     to the Initial Seller Share Percentage and Funding as to the Initial
     Funding Share Percentage. The Initial Trust Property shall be held by the
     Mortgages Trustee on the Mortgages Trust upon due execution of this Deed by
     all parties to it.

2.2  CLOSING TRUST PROPERTY: Pursuant to the provisions of the Mortgage Sale
     Agreement, the Seller intends to assign the Initial Mortgage Portfolio to
     the Mortgages Trustee on the Initial Closing Date, which Initial Mortgage
     Portfolio including all related rights and benefits shall form part of the
     Trust Property (the "CLOSING TRUST PROPERTY").

2.3  NEW TRUST PROPERTY: From time to time and pursuant to the Mortgage Sale
     Agreement, the Seller intends to assign New Mortgage Portfolios to the
     Mortgages Trustee, which New Mortgage Portfolios including all related
     rights and benefits shall form part of the Trust Property (the "NEW TRUST
     PROPERTY").

2.4  OTHER TRUST PROPERTY:

     (a)  In accordance with this Deed, from time to time Funding and the Seller
          shall, subject to and in accordance with Clauses 4 (Consideration),
          Clause 5 (Increasing the Seller Share of the Trust Property) and/or
          Clause 6 (Increasing the Funding Share of the Trust Property) provide
          consideration to the Mortgages Trustee in the form of Contributions to
          be applied by the Mortgages Trustee as set out in this Deed. Any
          Contribution so provided to the Mortgages Trustee shall, on receipt by
          the Mortgages Trustee and until it has been applied by the Mortgages
          Trustee in accordance with the terms of this Deed, form part of the
          Trust Property.

     (b)  Any Re-draws made under a Flexible Mortgage Loan which forms part of
          the Trust Property will form part of the Trust Property.

     (c)  Amounts on deposit (and interest earned on such amounts) from time to
          time in the Mortgages Trustee Bank Accounts will form part of the
          Trust Property.

                                       1
<PAGE>

     (d)  (If the Seller subsequently decides to retain any Mortgage Loan which
          is the subject of a Further Advance within the Trust Property and/or
          to assign the Further Advance to the Mortgages Trustee in accordance
          with the Mortgage Sale Agreement) any Further Advance made in respect
          of a Mortgage Loan in the Trust Property will also form part of the
          Trust Property.

     (e)  Any Permitted Replacement Mortgage Loan and Related Security relating
          to a Permitted Product Switch effected in relation to a Mortgage Loan
          which forms part of the Trust Property will also form part of the
          Trust Property.

     (f)  The proceeds of sale of any Mortgage Loan and its Related Security
          forming part of the Trust Property pursuant to the Mortgage Sale
          Agreement or other proceeds of sale of any Trust Property will form
          part of the Trust Property.

     (g)  Any beneficial interests of the Mortgages Trustee under trusts created
          pursuant to the Mortgage Sale Agreement in any Mortgage Loans and/or
          their Related Security or any part thereof, or any property, interest,
          right or benefit therein and/or the proceeds thereof.

2.5  RE-ASSIGNMENT OF EARLY REPAYMENT CHARGES: Subject to and in accordance with
     the Mortgage Sale Agreement, the Mortgages Trustee will agree to re-assign
     to the Seller the benefit of any Early Repayment Charges in respect of any
     Mortgage Loan included in the Initial Mortgage Portfolio or any New
     Mortgage Portfolio which the Seller assigns to the Mortgages Trustee. Upon
     any such re-assignment to the Seller, the benefit of such Early Repayment
     Charges will no longer form part of the Trust Property.

3.   CONDITIONS PRECEDENT

3.1  TRUST PROPERTY: Subject to this Clause 3 (Conditions Precedent), the
     Mortgages Trustee shall hold the Trust Property as to both capital and
     income on trust absolutely for Funding (as to the Funding Share) and for
     the Seller (as to the Seller Share) as tenants in common upon, with and
     subject to all the trusts, powers and provisions of this Deed (such that
     each Beneficiary shall have an undivided beneficial interest in the Trust
     Property). As used herein, "TRUST PROPERTY" means the Initial Trust
     Property, the Closing Trust Property, any New Trust Property, (but excludes
     any Early Repayment Charges which have been re-assigned to the Seller and
     any Mortgage Loans which have been repurchased by the Seller pursuant to
     the Mortgage Sale Agreement) and all other Trust Property referred to under
     Clause 2 (Creation of Mortgages Trust).

3.2  CLOSING TRUST PROPERTY: The Closing Trust Property shall be held by the
     Mortgages Trustee on the Mortgages Trust subject to satisfaction of the
     following conditions precedent:

     (a)  the due execution and delivery of the Mortgage Sale Agreement by all
          parties to it;

     (b)  the due execution and delivery of this Deed by all parties to it;

                                       2
<PAGE>

     (c)  the satisfaction or waiver in accordance with the terms of the
          Mortgage Sale Agreement of the conditions to the sale and assignment
          of the Initial Mortgage Portfolio as set out in Clause 2 (Sale and
          Purchase of Initial Mortgage Portfolio) and Clause 3 (Initial Closing
          Date) of the Mortgage Sale Agreement;

     (d)  the payment by Funding to the Mortgages Trustee of Funding's Initial
          Contribution for the Initial Funding Share Percentage in accordance
          with Clause 4 (Consideration); and

     (e)  the payment by the Mortgages Trustee to the Seller of the Initial
          Purchase Price for the sale and assignment to the Mortgages Trustee of
          the Initial Mortgage Portfolio.

3.3  NEW TRUST PROPERTY: Any New Trust Property shall be held by the Mortgages
     Trustee on the Mortgages Trust subject to the satisfaction or waiver in
     accordance with the terms of the Mortgage Sale Agreement of the conditions
     referred to in Clause 4 (Sale and Purchase of New Mortgage Loan Portfolios)
     of the Mortgage Sale Agreement for the transfer of New Mortgage Loan
     Portfolios to the Mortgages Trustee.

4.   CONSIDERATION

4.1  CONSIDERATION PROVIDED BY SELLER: The Seller in its capacity as a
     Beneficiary shall provide consideration to the Mortgages Trustee for the
     Seller Share in the Trust Property:

     (a)  on the Initial Closing Date, by assigning to the Mortgages Trustee the
          Initial Mortgage Portfolio upon payment by the Mortgages Trustee to
          the Seller of the Initial Purchase Price for the Initial Mortgage
          Portfolio in accordance with the terms of the Mortgage Sale Agreement;

     (b)  on each date after the Initial Closing Date on which (i) New Mortgage
          Loans are acquired by the Mortgages Trustee from the Seller in
          accordance with the Mortgage Sale Agreement and (ii) the consideration
          provided to the Seller for that sale is or includes the covenant of
          the Mortgages Trustee to hold the Trust Property on trust for Funding
          (as to the Funding Share) and the Seller (as to the Seller Share) in
          accordance with the terms of this Deed, by the sale on such date by
          the Seller of such New Mortgage Loans either for the payment by the
          Mortgages Trustee of the Initial Purchase Price paid on such date or
          (if no Initial Purchase Price is paid) without payment on such date;
          and

     (c)  on each date on which the Seller increases the Seller Share of the
          Trust Property in accordance with Clause 5 (Increasing the Seller
          Share of the Trust Property) below, the Seller will pay the
          consideration to the Mortgages Trustee specified in that Clause.

                                       3
<PAGE>

4.2  CONSIDERATION PROVIDED BY FUNDING: Funding in its capacity as a Beneficiary
     shall provide consideration to the Mortgages Trustee for the Funding Share
     in the Trust Property:

     (a)  on the Initial Closing Date, by paying to the Mortgages Trustee the
          Initial Contribution in respect of the Closing Trust Property which
          shall be equal to (and from which the Mortgages Trustee shall or shall
          procure that the Cash Manager on its behalf shall pay) the Initial
          Purchase Price in respect of the Initial Mortgage Portfolio payable by
          the Mortgages Trustee to the Seller pursuant to the Mortgage Sale
          Agreement on such date;

     (b)  on each Distribution Date, by paying to the Mortgages Trustee a
          Deferred Contribution equal to the amount (if any) of Mortgages
          Trustee Available Revenue Receipts to which Funding is entitled on
          such date in accordance with paragraph (d) of Clause 10.2
          (Distribution of Mortgages Trustee Available Revenue Receipts) (the
          "RELEVANT DISTRIBUTION") which shall be equal to (and from which the
          Mortgages Trustee shall or shall procure that the Cash Manager on its
          behalf shall pay) such amount of Deferred Purchase Price as is payable
          by the Mortgages Trustee to the Seller pursuant to the Mortgage Sale
          Agreement on such date. The parties to this Deed agree that on any
          Distribution Date the Relevant Distribution which would otherwise have
          been payable by the Mortgages Trustee to Funding and the Deferred
          Contribution payable by Funding to the Mortgages Trustee shall be set
          off against each other such that as between the Mortgages Trustee and
          Funding no amount shall be payable in respect of such Relevant
          Distribution or such Deferred Contribution on such date and the Cash
          Manager on behalf of the Mortgages Trustee shall pay to the Seller (in
          satisfaction of the Mortgages Trustee's obligation to pay Deferred
          Purchase Price to the Seller under the Mortgage Sale Agreement) those
          funds which, were it not for such set-off, would have been payable to
          Funding as the Relevant Distribution;

     (c)  subject to Clause 6 (Increasing the Funding Share of the Trust
          Property) below, on each date after the Initial Closing Date on which
          (i) Funding has given notice of its intention to increase the Funding
          Share of the Trust Property on such date (ii) an amount of Initial
          Purchase Price is payable in respect of New Mortgage Loans which are
          assigned by the Seller to the Mortgages Trustee on such date and (iii)
          Funding receives the net proceeds of a New Intercompany Loan from a
          New Issuer, by paying to the Mortgages Trustee an Initial Contribution
          in respect of such New Trust Property which shall be equal to (and
          from which the Mortgages Trustee shall or shall procure that the Cash
          Manager on its behalf shall pay) the Initial Purchase Price in respect
          of such New Mortgage Loans payable by the Mortgages Trustee to the
          Seller pursuant to the Mortgage Sale Agreement on such date;

     (d)  subject to Clause 6 (Increasing the Funding Share of the Trust
          Property) below, on each other date after the Initial Closing Date on
          which (i) Funding has given notice of its intention to increase the
          Funding Share of the Trust Property on such date and (ii) Funding
          receives the net proceeds of a New Intercompany Loan from a New
          Issuer, by paying to the Mortgages Trustee a Further Contribution in
          respect of the Funding

                                       4
<PAGE>

          Share of the Trust Property which shall be equal to (and from which
          the Mortgages Trustee shall or shall procure that the Cash Manager on
          its behalf shall pay) the Special Distribution payable to the Seller
          in accordance with Clause 6.3 (Special Distribution); and

     (e)  following the Final Repayment Date of the latest maturing Intercompany
          Loan made by any Issuer to Funding and provided that there are no
          further claims outstanding under any Intercompany Loan or on such
          earlier date provided that all Intercompany Loans have either been
          repaid in full or there are no further claims outstanding under any
          Intercompany Loan, Funding will make a final payment of Deferred
          Contribution to the Mortgages Trustee (the "FINAL DEFERRED
          CONTRIBUTION") in an amount equal to the aggregate amount standing to
          the credit of the Funding Bank Accounts (including any account
          established for the purposes of the Issuer Reserve Fund and/or the
          Issuer Liquidity Reserve Fund of any Issuer) after making any payments
          ranking in priority thereto, subject to and in accordance with the
          relevant Funding Priority of Payments. The Final Deferred Contribution
          shall be in an amount equal to (and from that Final Deferred
          Contribution the Mortgages Trustee shall or shall procure that the
          Cash Manager shall on its behalf pay) the final amount of Deferred
          Purchase Price payable by the Mortgages Trustee to the Seller pursuant
          to and in accordance with the Mortgage Sale Agreement.

4.3  APPLICATION BY MORTGAGES TRUSTEE:

     (a)  If the Mortgages Trustee receives any Initial Contribution, Deferred
          Contribution or the Final Deferred Contribution from Funding, the
          parties hereto direct the Mortgages Trustee to, and the Mortgages
          Trustee covenants that it shall, or shall procure that the Cash
          Manager on its behalf shall, pay such funds to the Seller in
          satisfaction of the Mortgages Trustee's obligation to make payment of
          the Initial Purchase Price or, as the case may be, Deferred Purchase
          Price in respect of the Initial Mortgage Portfolio or any New Mortgage
          Loans which are assigned to the Mortgages Trustee by the Seller
          pursuant to the Mortgage Sale Agreement.

     (b)  If the Mortgages Trustee receives a Further Contribution from any
          Beneficiary, the parties hereto direct the Mortgages Trustee to, and
          the Mortgages Trustee covenants that it shall, or shall procure that
          the Cash Manager on its behalf shall, distribute such funds to a
          Beneficiary or the Beneficiaries as required at the time and in the
          manner and otherwise in accordance with the terms of this Deed.

5.   INCREASING THE SELLER SHARE OF THE TRUST PROPERTY

5.1  RE-DRAWS UNDER FLEXIBLE MORTGAGE LOANS:

     (a)  If, in respect of any Flexible Mortgage Loan which is in the Trust
          Property, the relevant Borrower requests a Cash Re-draw and the
          Administrator (on behalf of the Mortgages Trustee) grants such request
          pursuant to and in accordance with the terms of the Administration
          Agreement, the Seller as Beneficiary shall fund that Cash Re-

                                       5
<PAGE>

          draw in the Mortgages Trust by making payment to the Borrower, in
          accordance with the terms and conditions of the relevant Mortgage
          Loan, of the Cash Re-draw Amount. Upon payment by the Seller to the
          relevant Borrower of the Cash Re-draw Amount, the aggregate Current
          Balance of the Mortgage Loans constituting the Trust Property and the
          amount of the Seller Share of the Trust Property shall be increased by
          an amount equal to the Cash Re-draw Amount.

     (b)  If, in respect of any Flexible Mortgage Loan which is in the Trust
          Property, the relevant Borrower requests a Non-Cash Re-draw and the
          Administrator grants such request or the Administrator otherwise
          permits the relevant Borrower to take a Non-Cash Re-draw pursuant to
          and in accordance with the terms of the Administration Agreement, the
          Seller as Beneficiary shall fund such Non-Cash Re-draw in the
          Mortgages Trust by making payment to the Mortgages Trustee of a
          Further Contribution in an amount equal to the Unpaid Interest Amount
          in respect of such Non-Cash Re-draw. Upon payment by the Seller to the
          Mortgages Trustee of such Further Contribution, the aggregate Current
          Balance of the Mortgage Loans constituting the Trust Property and the
          Seller Share of the Trust Property shall be increased by an amount
          equal to the amount of the Further Contribution so made to the
          Mortgages Trustee. The parties agree that any such Further
          Contribution received by the Mortgages Trustee from the Seller will be
          treated as Revenue Receipts and will be distributed to the
          Beneficiaries on the immediately succeeding Distribution Date in
          accordance with Clause 10 (Distribution of Revenue Receipts) below.

5.2  FURTHER ADVANCES: If at a future date the Seller elects not to repurchase
     any Mortgage Loan which becomes the subject of a Further Advance from the
     Mortgages Trustee, the Seller will be solely responsible for funding any
     such Further Advance and, subject to the provisions of this Deed, upon the
     making of such Further Advance by the Seller, the aggregate Current Balance
     of the Mortgage Loans constituting the Trust Property and the Seller Share
     of the Trust Property shall be increased by an amount equal to the amount
     of the Further Advance paid to the relevant Borrower.

6.   INCREASING THE FUNDING SHARE OF THE TRUST PROPERTY

6.1  CONDITIONS PRECEDENT: Subject as provided below, on not more than 60 nor
     less than 30 days' written notice Funding may increase the Funding Share
     (as defined in Clause 7.1 (Initial Funding Share) below) of the Trust
     Property on the date specified in that notice, subject to satisfaction of
     the following conditions precedent:

     (a)  no Event of Default under the Transaction Documents shall have
          occurred which is continuing at the relevant date;

     (b)  no Intercompany Loan Enforcement Notice has been served in respect of
          any Intercompany Loan;

     (c)  the Rating Agencies have confirmed in writing to the Mortgages
          Trustee, the Security Trustee and each Issuer that the proposed
          increase in the Funding Share of the Trust

                                       6
<PAGE>

          Property would not adversely affect the then-current ratings by the
          Rating Agencies (or any of them) of the Notes issued by any Issuer;

     (d)  the New Notes have been issued by the New Issuer, the subscription
          proceeds received on behalf of such New Issuer and advanced by such
          Issuer to Funding pursuant to an Intercompany Loan Agreement (which
          proceeds Funding will pay to the Mortgages Trustee to increase the
          Funding Share of the Trust Property on the relevant date in accordance
          with Clause 6.2 (Completion));

     (e)  if necessary, each Issuer, including any New Issuer (if any) has
          entered into appropriate hedging arrangements;

     (f)  as of the last day of the immediately preceding Trust Calculation
          Period the aggregate Current Balance of Mortgage Loans in the Trust
          Property which were at such time in arrears for at least 3 months is
          less than 4 per cent. of the aggregate Current Balance of all Mortgage
          Loans in the Trust Property at such time unless the Rating Agencies
          have confirmed that the then-current ratings of the Notes will not be
          adversely affected;

     (g)  as of the last day of the immediately preceding Trust Calculation
          Period the weighted average LTV ratio of Mortgage Loans in the Trust
          Property (after application of the LTV Test) on such date does not
          exceed the LTV ratio (based on the LTV Test) of Mortgage Loans in the
          Trust Property on the Initial Closing Date plus 0.25 per cent.;

     (h)  each Issuer Reserve Fund is fully funded on the relevant date up to
          the relevant Issuer Reserve Required Amount; and

     (i)  as at the most recent Payment Date no deficiency was recorded on the
          Issuer Principal Deficiency Ledger of any Issuer,

     provided always that Funding shall not be entitled to increase the Funding
     Share after the Payment Date falling in January 2008 if the option to
     redeem the First Issuer Notes on the Payment Date in January 2008 pursuant
     Condition 5 of the First Issuer Notes is not exercised.

6.2  COMPLETION: Subject to satisfaction of the conditions precedent set out in
     Clause 6.1 (Conditions precedent) above, Funding shall pay to the Mortgages
     Trustee the consideration for such increase in the Funding Share in
     accordance with Clause 4 (Consideration).

6.3  SPECIAL DISTRIBUTION: The parties hereto agree that Principal Receipts
     received by the Mortgages Trustee from Funding in payment of a Further
     Contribution in accordance with Clause 4 (Consideration) on any date on
     which Funding increases the Funding Share of the Trust Property shall be
     payable by the Mortgage Trustee to the Seller (in its capacity as a
     Beneficiary of the Mortgages Trust) as a Special Distribution on such date
     whether or not such date is a Distribution Date. Any such Special
     Distribution shall reduce the Seller Share of the Trust Property by the
     amount of the Special Distribution.

                                       7
<PAGE>

7.   INITIAL FUNDING SHARE AND INITIAL SELLER SHARE

7.1  INITIAL FUNDING SHARE: The "INITIAL FUNDING SHARE" of the Trust Property
     shall be (pound)86.61 aT THE date of this Deed and (pound)1,500,000,000 at
     the Initial Closing Date and the "INITIAL FUNDING SHARE PERCENTAGE" shall
     be the Initial Funding Share expressed as a percentage of the Trust
     Property at such date, that is to say, 86.61 per cent. References herein to
     the "FUNDING SHARE" shall mean, prior to the first Distribution Date, the
     Initial Funding Share and thereafter shall mean the Current Funding Share
     (as defined below).

7.2  INITIAL SELLER SHARE: The "Initial Seller Share" of the Trust Property
     shall be the sum which remains of the Trust Property after deduction of the
     Initial Funding Share. The Initial Seller Share of the Trust Property will
     be (pound)13.39 at the date of this Deed and (pound)232,000,000 at the
     Initial Closing Date and the "INITIAL SELLER SHARE PERCENTAGE" shall be
     equal to 100 per cent. minus the Initial Funding Share Percentage, that is
     to say, 13.39 per cent. The amount of the Initial Seller Share and the
     Initial Seller Share Percentage on the Initial Closing will be determined
     immediately after the Initial Closing Date. References herein to the
     "SELLER SHARE" shall mean, prior to the first Distribution Date, the
     Initial Seller Share and thereafter shall mean the Current Seller Share (as
     defined below).

7.3  ROUNDING OF PERCENTAGE SHARES: Except for the Initial Closing Date on which
     the Funding Share Percentage and the Seller Share Percentage shall be
     calculated to two decimal places, and unless otherwise agreed by the
     Beneficiaries, the Current Funding Share Percentage and the Current Seller
     Share Percentage shall be calculated to five decimal places.

8.   ADJUSTMENT OF FUNDING SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE

8.1  EFFECTIVE PERIODS:

     (a)  Subject to Clause 8.1(b) below, the Cash Manager will (on behalf of
          the Mortgages Trustee and the Beneficiaries) recalculate the Funding
          Share, the Funding Share Percentage, the Seller Share and the Seller
          Share Percentage in respect of each Trust Calculation Period on the
          Distribution Date occurring in such Trust Calculation Period, based on
          the aggregate Current Balance of the Mortgage Loans constituting the
          Trust Property (as adjusted from time to time) on the last day of the
          Trust Calculation Period immediately preceding such Distribution Date.

     (b)  Notwithstanding Clause 8.1(a) above, if during any Trust Calculation
          Period the Seller assigns New Mortgage Loans to the Mortgages Trustee,
          the recalculation of the Funding Share, the Funding Share Percentage,
          the Seller Share and the Seller Share Percentage made by the Cash
          Manager on the Distribution Date occurring in such Trust Calculation
          Period will be effective only in respect of the period beginning on
          (and including) the first day of such Trust Calculation Period and
          ending on (but excluding) the first Assignment Date to occur during
          such Trust Calculation Period (such period in respect of such
          Distribution Date, an "INTERIM CALCULATION PERIOD"), based on the
          aggregate Current Balance of the Mortgage Loans constituting the Trust

                                       8
<PAGE>

          Property (as adjusted from time to time) on the last day of the Trust
          Calculation Period immediately preceding such Distribution Date.

     (c)  In addition to the foregoing, if during any Trust Calculation Period
          the Seller assigns New Mortgage Loans to the Mortgages Trustee, the
          Cash Manager will (on behalf of the Mortgages Trustee and the
          Beneficiaries) recalculate the Funding Share, the Funding Share
          Percentage, the Seller Share and the Seller Share Percentage on such
          Assignment Date in respect of the period beginning on (and including)
          such Assignment Date and ending on the last day of such Trust
          Calculation Period (and including such last day of such Trust
          Calculation Period) (each such period in respect of each Assignment
          Date, an "INTERIM CALCULATION PERIOD"), based on the aggregate Current
          Balance of the Mortgage Loans constituting the Trust Property (as
          adjusted from time to time) on such Assignment Date (after taking
          account of the assignment of New Mortgage Loans on such date).

The parties acknowledge and agree that the Mortgage Sale Agreement provides that
(a) the Seller may not assign New Mortgage Loans to the Mortgages Trustee during
any Trust Calculation Period prior to the Distribution Date in such Trust
Calculation Period, and (b) the Seller may only make one assignment of New
Mortgage Loans to the Mortgages Trustee during any Trust Calculation Period.

8.2  CURRENT FUNDING SHARE PERCENTAGE:

     (a)  On each Distribution Date (the "RELEVANT DISTRIBUTION DATE"), the
          "CURRENT FUNDING SHARE PERCENTAGE" will be calculated by the Cash
          Manager in respect of the then-current Trust Calculation Period or
          related Interim Calculation Period, as applicable, for the purpose of
          calculating the distributions to be made from the Trust Property on
          the immediately succeeding Distribution Date, and such Current Funding
          Share Percentage will be an amount, expressed as a percentage
          (calculated to an accuracy of five decimal places (rounded upwards)),
          equal to:

                               A - B - C + D + E + F
                              ________________________ x 100
                                          G

          where,

          A    =    the Current Funding Share as calculated (a) on the
                    Distribution Date immediately preceding such Relevant
                    Distribution Date, or (b) in the case of the first
                    Distribution Date, the Initial Funding Share as at the
                    Initial Closing Date;

          B    =    the amount of any Principal Receipts distributed to Funding
                    on such Relevant Distribution Date in accordance with the
                    provisions described in Clause 11 (Distribution of Principal
                    Receipts) below;

          C    =    the amount of any Losses sustained on the Mortgage Loans
                    during the Trust Calculation Period immediately preceding
                    such Relevant

                                       9
<PAGE>

                    Distribution Date and the amount of any reductions occurring
                    in respect the Mortgage Loans as described in paragraphs (a)
                    through (e) of Clause 8.5 (Adjustments to Trust Property)
                    (inclusive) below which have been allocated to Funding in
                    the Trust Calculation Period ending on the relevant
                    Distribution Date (based on (a) the Funding Share Percentage
                    thereof calculated on the Distribution Date immediately
                    preceding such Relevant Distribution Date (provided that the
                    Seller had not assigned New Mortgage Loans to the Mortgages
                    Trustee in the Trust Calculation Period immediately
                    preceding such Relevant Distribution Date), or (b) to the
                    extent that the Seller had assigned New Mortgage Loans to
                    the Mortgages Trustee during the Trust Calculation Period
                    immediately preceding such Relevant Distribution Date, the
                    Weighted Average Funding Share Percentage (as defined below)
                    thereof calculated on such Relevant Distribution Date prior
                    to the distribution to be made on such Relevant Distribution
                    Date, or (c) in the case of the first Distribution Date, the
                    Initial Funding Share Percentage);

          D    =    an amount equal to any Initial Contribution paid by Funding
                    to the Mortgages Trustee during the Trust Calculation Period
                    immediately preceding such Relevant Distribution Date in
                    relation to the Funding Share of any New Trust Property
                    assigned to the Mortgages Trustee during such Trust
                    Calculation Period (which amount the Mortgages Trustee is
                    required pursuant to Clause 4.3 (Application by Mortgages
                    Trustee) to pay to the Seller in satisfaction of the
                    Mortgages Trustee's obligation to pay to the Seller the
                    Initial Purchase Price in respect of New Mortgage Loans
                    assigned to the Mortgages Trustee during such period);

          E    =    an amount equal to any Further Contribution paid by Funding
                    to the Mortgages Trustee during the Trust Calculation Period
                    immediately preceding such Relevant Distribution Date to
                    increase the Funding Share of the Trust Property (which
                    amount the Mortgages Trustee is required pursuant to Clause
                    6.3 (Special Distribution) to pay to the Seller as a
                    Beneficiary, thereby reducing the amount of the Seller
                    Share);

          F    =    an amount equal to any Capitalised Arrears which have been
                    allocated to Funding during the Trust Calculation Period
                    immediately preceding such Relevant Distribution Date (based
                    on the Funding Share Percentage thereof calculated on the
                    Distribution Date immediately preceding such Relevant
                    Distribution Date or, in the case of the first Distribution
                    Date, the Initial Funding Share Percentage);

          G    =    the aggregate Current Balance of all the Mortgage Loans in
                    the Trust Property as at the last day of the Trust
                    Calculation Period immediately preceding such Relevant
                    Distribution Date, after making the distributions,
                    allocations and additions referred to in (B), (C), (D), (E)
                    and (F) above and

                                       10
<PAGE>

                    after taking account of (i) the assignment, if any, of New
                    Mortgage Loans during the Trust Calculation Period
                    immediately preceding such Relevant Distribution Date, (ii)
                    any distribution of Principal Receipts to the Seller
                    (including the payment of any Special Distribution to the
                    Seller) and to Funding, (iii) the amount of any Losses
                    allocated to the Seller and to Funding, (iv) the adjustments
                    referred to in paragraphs (a) through (e) of Clause 8.5
                    (Adjustments to Trust Property) (inclusive) below; and (v)
                    the amount of any other additions to or removals from the
                    Trust Property during such Trust Calculation Period,
                    including without limitation, any additions to the Trust
                    Property resulting from Cash Re-draws and Non-Cash Redraws
                    by Borrowers under Flexible Mortgage Loans which are in the
                    Trust Property or (if the Seller subsequently elects not to
                    repurchase Mortgage Loans which are the subject of Further
                    Advances from the Mortgages Trustee) Further Advances
                    assigned by the Seller.

          (b)  If during any Trust Calculation Period the Seller assigns New
               Mortgage Loans to the Mortgages Trustee, the Cash Manager will
               recalculate the Current Funding Share Percentage on each such
               Assignment Date (the "RELEVANT ASSIGNMENT DATE") in respect of
               the related Interim Calculation Period, for the sole purpose of
               calculating the distributions to be made from the Trust Property
               on the immediately succeeding Distribution Date, and such Current
               Funding Share Percentage will be an amount, expressed as a
               percentage (calculated to an accuracy of five decimal places
               (rounded upwards)), equal to:

                                      A + D
                                      ______ X 100
                                        G

          where,

          A    =    the Current Funding Share as calculated on the Distribution
                    Date immediately preceding such Relevant Assignment Date;

          D    =    an amount equal to any Initial Contribution paid by Funding
                    to the Mortgages Trustee on such Relevant Assignment Date in
                    relation to the Funding Share of any New Mortgage Loans
                    assigned to the Mortgages Trustee on such Relevant
                    Assignment Date (which amount the Mortgages Trustee is
                    required pursuant to Clause 4.3 (Application by Mortgages
                    Trustee) to pay to the Seller in satisfaction of the
                    Mortgages Trustee's obligation to pay to the Seller the
                    Initial Purchase Price in respect of New Mortgage Loans
                    assigned to the Mortgages Trustee on such Relevant
                    Assignment Date); and

          G    =    the sum of (a) the aggregate Current Balance of all the
                    Mortgage Loans in the Trust Property as at the Distribution
                    Date immediately preceding such Relevant Assignment Date,
                    and (b) the aggregate Current Balance of the New Mortgage
                    Loans assigned to the Mortgages Trustee on such Relevant
                    Assignment Date.

8.3  WEIGHTED AVERAGE FUNDING SHARE PERCENTAGE: On any Distribution Date in
     respect to which

                                       11
<PAGE>

     the Seller had assigned New Mortgage Loans to the Mortgages Trustee during
     the Trust Calculation Period immediately preceding such Distribution Date,
     the Cash Manager (on behalf of the Beneficiaries) will calculate (for the
     sole purpose of making the distributions to be made on such Distribution
     Date) the weighted average of the Current Funding Share Percentages that
     were calculated previously in respect of each Interim Calculation Period
     occurring in such immediately preceding Trust Calculation Period based on
     the amount of Revenue Receipts and Principal Receipts received and Losses
     sustained during each such Interim Calculation Period. The "WEIGHTED
     AVERAGE FUNDING SHARE PERCENTAGE" for any such Distribution Date will be
     equal to:

     (a)  in respect of the distribution of Revenue Receipts to be made on such
          Distribution Date, the sum, in respect of all Interim Calculation
          Periods during the Trust Calculation Period immediately preceding such
          Distribution Date, of (i) for each Interim Calculation Period during
          such Trust Calculation Period, the product of (1) the related Current
          Funding Share Percentage for such Interim Calculation Period, and (2)
          the amount of all Revenue Receipts received by the Mortgages Trustee
          during such Interim Calculation Period, divided by (ii) the aggregate
          of all Revenue Receipts received by the Mortgages Trustee during the
          Trust Calculation Period immediately preceding such Distribution Date;

     (b)  in respect of the distribution of Principal Receipts to be made on
          such Distribution Date, the sum, in respect of all Interim Calculation
          Periods during the Trust Calculation Period immediately preceding such
          Distribution Date, of (i) for each Interim Calculation Period during
          such Trust Calculation Period, the product of (1) the related Current
          Funding Share Percentage for such Interim Calculation Period, and (2)
          the amount of all Principal Receipts received by the Mortgages Trustee
          during such Interim Calculation Period, divided by (ii) the aggregate
          of all Principal Receipts received by the Mortgages Trustee during the
          Trust Calculation Period immediately preceding such Distribution Date;
          and

     (c)  in respect of the allocation of Losses to be made on such Distribution
          Date, the sum, in respect of all Interim Calculation Periods during
          the Trust Calculation Period immediately preceding such Distribution
          Date, of (i) for each Interim Calculation Period during such Trust
          Calculation Period, the product of (1) the related Current Funding
          Share Percentage for such Interim Calculation Period, and (2) the
          amount of all Losses sustained on the Mortgage Loans during such
          Interim Calculation Period, divided by (ii) the aggregate of all
          Losses sustained on the Mortgage Loans during the Trust Calculation
          Period immediately preceding such Distribution Date.

8.4  CURRENT FUNDING SHARE:

     (a)  On each Distribution Date, the "CURRENT FUNDING SHARE" will be
          calculated by the Cash Manager in respect of the then-current Trust
          Calculation Period or the related Interim Calculation Period, as
          applicable, and will be an amount equal to:

                               A - B - C + D + E + F

                                       12
<PAGE>

          where "A", "B", "C", "D" "E" and "F" have the meanings specified in
          Clause 8.2(a) above.

     (b)  On each Assignment Date, the Current Funding Share will be calculated
          by the Cash Manager in respect of the related Interim Calculation
          Period and will be an amount equal to:

                                      A + D

          where "A" and "D" have the meanings specified in Clause 8.2(b) above.

8.5  ADJUSTMENTS TO TRUST PROPERTY: If any of the following events has occurred
     during a Trust Calculation Period, then (subject to the Cash Manager
     receiving notice or otherwise being aware of the occurrence of the event)
     for the purposes of the calculation in "G" of Clauses 8.2(a) or 8.2(b)
     above, the aggregate Current Balance of the Mortgage Loans constituting the
     Trust Property shall be reduced or, as the case may be, deemed to be
     reduced:

     (a)  any Borrower exercises a right of set-off in relation to any Mortgage
          Loan in the Trust Property so that the amount of principal and/or
          interest owing under such Mortgage Loan is reduced but no
          corresponding payment is received by the Mortgages Trustee, in which
          event the aggregate Current Balance of the Mortgage Loans constituting
          the Trust Property shall be reduced by an amount equal to the amount
          so set-off by such Borrower; and/or

     (b)  a Mortgage Loan or (as applicable) its Related Security (i) is in
          breach of the Loan Warranties in the Mortgage Sale Agreement as at the
          Initial Closing Date or, as the case may be, the relevant Assignment
          Date or (ii) is the subject of a Product Switch or a Further Advance
          in respect of which the Seller has elected to repurchase the relevant
          Mortgage Loan, and the Seller fails to repurchase the relevant
          Mortgage Loan or Mortgage Loans under the relevant Mortgage Account
          and their Related Security as required by the terms of the Mortgage
          Sale Agreement; in which event the aggregate Current Balance of the
          Mortgage Loans constituting the Trust Property shall be deemed to be
          reduced for the purposes of the calculation in "G" above by an amount
          equal to the Current Balance of the relevant Mortgage Loan or Mortgage
          Loans under the relevant Mortgage Account (together with Arrears of
          Interest and Accrued Interest) which the Seller has failed to
          repurchase; and/or

     (c)  the Security Trustee is notified that a Flexible Mortgage Loan or part
          thereof has been determined by a court judgment on the point or as a
          result of a determination by a relevant regulatory authority (whether
          or not in relation to an analogous flexible mortgage loan product of
          another UK mortgage lender):

          (i)  to be unenforceable; and/or

          (ii) not to fall within the first ranking charge by way of legal
               mortgage over the relevant Mortgaged Property,

                                       13
<PAGE>

               and, in either case, such Flexible Mortgage Loan is not otherwise
               subject to the repurchase obligation under the Mortgage Sale
               Agreement, in which event, the aggregate Current Balance of the
               Mortgage Loans constituting the Trust Property shall be deemed to
               be reduced for the purposes of the calculation in "G" above by an
               amount equal to that portion of the Current Balance of the
               Flexible Mortgage Loan which is so determined to be unenforceable
               or not to fall within the first ranking charge by way of legal
               mortgage over the relevant Mortgaged Property; and/or

          (d)  the Seller would be required to repurchase a Mortgage Loan and
               its Related Security in accordance with the terms of the Mortgage
               Sale Agreement, but such Mortgage Loan and its Related Security
               are not capable of being repurchased; in which event the
               aggregate Current Balance of the Mortgage Loans constituting the
               Trust Property shall be deemed to be reduced for the purposes of
               the calculation in "G" above by an amount equal to the Current
               Balance of the relevant Mortgage Loan (together with Arrears of
               Interest and Accrued Interest) which is not capable of being
               repurchased; and/or

          (e)  the Seller breaches any other material warranty under the
               Mortgage Sale Agreement and/or (for so long as it is the
               Administrator) the Administration Agreement, in which event the
               aggregate Current Balance of Mortgage Loans constituting the
               Trust Property shall be deemed for the purposes of the
               calculation in "G" above to be reduced by an amount equivalent to
               all losses, costs, liabilities, claims, expenses and damages
               incurred by the Beneficiaries as a result of such breach.

          The reductions and deemed reductions set out in paragraphs (a), (b),
          (c), (d) and (e) of this Clause and any resulting loss shall, subject
          to Clause 9.1 (Initial Minimum Seller Share), be allocated on the
          relevant Distribution Date or Assignment Date (as applicable) first to
          the Seller Share of the Trust Property (or for the purposes of
          calculating the Seller Share of the Trust Property as the case may be)
          until the Seller Share is zero and thereafter shall be allocated to
          the Funding Share of the Trust Property. If at, or any time after the
          Initial Closing Date the Mortgages Trustee holds, or there is held to
          its order, or it receives, or there is received to its order, any
          property, interest, right or benefit relating to the whole or that
          portion of any Mortgage Loan and its Related Security which is or has
          been subject to any matter described in paragraphs (a) though (e)
          above and in respect of which the Seller Share of the Trust Property
          has been reduced or deemed reduced such property interest right or
          benefit will constitute a Revenue Receipt and the Mortgages Trustee
          will remit, assign or transfer the same to Funding (but only if and to
          the extent that the related reductions or deemed reductions were
          applied against the Funding Share of the Trust Property) or to the
          Seller, as the case may require, and until it does so or to the extent
          that the Mortgage Trustee is unable to effect such remittance,
          assignment or transfer, the Mortgages Trustee will hold such property,
          interest, right or benefit and/or the proceeds thereof upon trust
          absolutely for Funding and/or the Seller (separate from the Mortgages
          Trust), as the case may require.

8.6  CURRENT SELLER SHARE PERCENTAGE:

                                       14
<PAGE>

     (a)  On each Distribution Date, the "CURRENT SELLER SHARE PERCENTAGE" will
          be calculated by the Cash Manager in respect of the then-current Trust
          Calculation Period or the related Interim Calculation Period, as
          applicable, and the distributions to be made from the Trust Property
          on the immediately succeeding Distribution Date, and will be an amount
          equal to:

                    100% -- Current Funding Share Percentage

          where the Current Funding Share Percentage is calculated on such
          Distribution Date in accordance with Clause 8.2(a) above.

     (b)  On each Assignment Date, the Cash Manager will recalculate the Current
          Seller Share Percentage in respect of the related Interim Calculation
          Period and the distributions to be made from the Trust Property on the
          immediately succeeding Distribution Date and will be an amount equal
          to:

                    100% -- Current Funding Share Percentage

          where the Current Funding Share Percentage is as calculated on such
          Assignment Date in accordance with Clause 8.2(b) above.

8.7  WEIGHTED AVERAGE SELLER SHARE PERCENTAGE: On any Distribution Date in
     respect of which the Seller had assigned New Mortgage Loans to the
     Mortgages Trustee during the Trust Calculation Period immediately preceding
     such Distribution Date, the Cash Manager will calculate (for the sole
     purpose of making the distributions to be made on such Distribution Date)
     the weighted average of the Seller Share Percentages that were calculated
     previously in respect of the Revenue Receipts and Principal Receipts
     received, and Losses sustained, during each Interim Calculation Period
     occurring in such immediately preceding Trust Calculation Period and will
     be an amount equal to:

     (a)  in respect of the distribution of Revenue Receipts to be made on such
          Distribution Date:

                100% -- Weighted Average Funding Share Percentage

          where such Weighted Average Funding Share Percentage is as calculated
          in Clause 8.3(a) above;

     (b)  in respect of the distribution of Principal Receipts to be made on
          such Distribution Date:

                100% -- Weighted Average Funding Share Percentage

          where such Weighted Average Funding Share Percentage is as calculated
          in Clause 8.3(b) above; and

     (c)  in respect of the allocation of Losses to be made on such Distribution
          Date:

                                       15
<PAGE>

                100% -- Weighted Average Funding Share Percentage

          where such Weighted Average Funding Share Percentage is as calculated
          in Clause 8.3(c) above.

8.8  CURRENT SELLER SHARE:

     (a)  On each Distribution Date, the "CURRENT SELLER SHARE" will be
          calculated by the Cash Manager in respect of the then-current Trust
          Calculation Period or the related Interim Calculation Period, as
          applicable, and will be an amount equal to:

     The aggregate amount of the Trust Property as at the Relevant Distribution
Date - Current Funding Share

          where "Current Funding Share" has the meaning given in Clause 8.4(a)
          above.

     (b)  On each Assignment Date, the Current Seller Share will be calculated
          by the Cash Manager in respect of the related Interim Calculation
          Period and will be an amount equal to:

     The aggregate amount of the Trust Property as at the Relevant Assignment
Date - Current Funding Share

          where "Current Funding Share" has the meaning given in Clause 8.4(b)
          above.

8.9  FUNDING SHARE/SELLER SHARE: Neither the Funding Share nor the Seller Share
     may be reduced below zero. At all times the Funding Share Percentage and
     the Seller Share Percentage shall be equal to 100 per cent. of the Trust
     Property.

8.10 ADJUSTMENTS ON DISTRIBUTION DATES: In calculating and making the
     distributions to be made on each Distribution Date, the Mortgages Trustee
     will be obliged to and will procure that the Cash Manager will take account
     of and make adjustments to such calculations and distributions in order
     that:

     (a)  any increase in the Funding Share as a result of the payment by
          Funding to the Mortgages Trustee of any Contribution (excluding any
          Deferred Contribution) during the Trust Calculation Period immediately
          preceding such Distribution Date (or during any Interim Calculation
          Period during such Trust Calculation Period) has taken effect or is
          deemed to have taken effect as an increase in the Funding Share of the
          Trust Property from the date on which such Contribution was paid to
          the Mortgages Trustee in accordance with the terms of this Deed; and

     (b)  any decrease in the Seller Share as a result of the payment to the
          Seller by the Mortgages Trustee of any Special Distribution has taken
          effect or is deemed to have taken effect as a decrease in the Seller
          Share of the Trust Property from the date on which such Special
          Distribution was paid to the Seller in accordance with the terms of
          this Deed.

9.   MINIMUM SELLER SHARE

                                       16
<PAGE>

9.1  INITIAL MINIMUM SELLER SHARE: The Seller Share of the Trust Property
     includes an amount equal to the Minimum Seller Share. Unless and until the
     Funding Share of the Trust Property is in an amount equal to zero, or
     following the occurrence of an Asset Trigger Event, the Seller will not be
     entitled to receive Principal Receipts which would reduce the Seller Share
     of the Trust Property to an amount less than the Minimum Seller Share and
     the Seller consents and directs the Mortgages Trustee accordingly.

9.2  FLUCTUATION OF MINIMUM SELLER SHARE ON EACH DISTRIBUTION DATE:

     (a)  At the Initial Closing Date, the Minimum Seller Share will be
          (pound)50,000,000. The amount of the MiNIMUM Seller Share will be
          recalculated on each Distribution Date in accordance with the
          following formula:

                                   X + Y + Z

          where:

          X    =    2.0% of the aggregate Current Balance of all Mortgage Loans
                    comprised in the Trust Property as at the last day of the
                    immediately preceding Trust Calculation Period;

          Y    =    the product of: (p x q) x r where:

               p    =    8%;

               q    =    the "Flexible Cash Re-Draw Capacity", being an amount
                         equal to the difference between (i) the maximum amount
                         of Cash Re-draws that Borrowers may draw under Flexible
                         Mortgage Loans included in the Trust Property (whether
                         or not drawn) as at the last day of the immediately
                         preceding Trust Calculation Period and (ii) the
                         aggregate Current Balance of Cash Re-draws which form
                         part of the Trust Property as at the last day of the
                         immediately preceding Trust Calculation Period; and

               r    =    3; and

          Z    =    the aggregate Current Balance of Re-Draws in the Trust
                    Property as at the last day of the immediately preceding
                    Trust Calculation Period.

9.3  RECALCULATION OF MINIMUM SELLER SHARE FOLLOWING OCCURRENCE OF EXCEPTIONAL
     EVENTS: The calculation of the Minimum Seller Share in accordance with
     Clause 9.2 (Fluctuation of Minimum Seller Share on each Distribution Date)
     above will be recalculated by the Cash Manager with the agreement of the
     parties hereto subject to the approval of the Rating Agencies if the Seller
     merges or otherwise combines its business with another bank or other
     financial institution so as to increase the risks associated with Borrowers
     holding deposits in Northern Rock accounts.

                                       17
<PAGE>

10.  DISTRIBUTION OF REVENUE RECEIPTS

10.1 DISTRIBUTION OF THIRD PARTY AMOUNTS: Pursuant to the Cash Management
     Agreement, the Cash Manager (at the direction of the Mortgages Trustee
     acting on behalf of the Beneficiaries at their direction and with their
     consent which is hereby given) will deduct, as and when identified, Third
     Party Amounts from the Revenue Receipts standing to the credit of the
     Mortgages Trustee GIC Account or other Mortgages Trustee Bank Account, and
     pay over the same to the proper recipients thereof. The Mortgages Trustee
     and the Beneficiaries hereby consent to such deductions.

10.2 DISTRIBUTION OF MORTGAGES TRUSTEE AVAILABLE REVENUE RECEIPTS: Subject as
     provided in Clause 8.8 (Adjustments on Distribution Dates), on each
     Distribution Date the Cash Manager (at the direction of the Mortgages
     Trustee acting on behalf of the Beneficiaries at their direction and with
     their consent which is hereby given) will distribute Mortgages Trustee
     Available Revenue Receipts as follows:

     (a)  firstly, in no order of priority between them but in or towards
          satisfaction pro rata according to the respective amounts due of:

          (i)  any fees, costs, charges, liabilities and expenses then due or to
               become due to the Mortgages Trustee under the provisions of this
               Deed together with (if applicable) VAT thereon (to the extent not
               already included) as provided herein; and

          (ii) any amounts due and payable by the Mortgages Trustee to third
               parties in respect of the Mortgages Trust but only if incurred
               without breach by the Mortgages Trustee of the documents to which
               it is a party and payment has not been provided for elsewhere;

     (b)  secondly, in no order of priority between them but in or towards
          satisfaction pro rata according to the respective amounts due of:

          (i)  any remuneration then due and payable to the Administrator and
               any costs, charges, liabilities and expenses then due or to
               become due to the Administrator under the provisions of the
               Administration Agreement prior to the immediately succeeding
               Distribution Date, in each case together with (if applicable) VAT
               thereon (to the extent not already included) as provided therein;
               and

          (ii) any remuneration then due and payable to the Cash Manager and any
               costs, charges, liabilities and expenses then due or to become
               due to the Cash Manager under the provisions of the Cash
               Management Agreement prior to the immediately succeeding
               Distribution Date, in each case together with (if applicable) VAT
               thereon (to the extent not already included) as provided therein;

                                       18
<PAGE>

     (c)  thirdly, in no order of priority between them but in proportion to the
          respective amounts due, and subject to the proviso below, to pay
          Mortgages Trustee Available Revenue Receipts to:

          (i)  (subject as provided in Clause 8.8 (Adjustments on Distribution
               Dates)) the Seller in an amount determined by multiplying the
               total amount of the remaining Mortgages Trustee Available Revenue
               Receipts by the Current Seller Share Percentage of the Trust
               Property, as determined on the immediately preceding Distribution
               Date or, in the case of the first Distribution Date, the Initial
               Seller Share Percentage; and

          (ii) (subject as provided in Clause 8.8 (Adjustments on Distribution
               Dates)) Funding in an amount equal to the lesser of:

               (A)  an amount determined by multiplying the total amount of the
                    remaining Mortgages Trustee Available Revenue Receipts by
                    the Current Funding Share Percentage of the Trust Property,
                    as determined on the immediately preceding Distribution Date
                    or, in the case of the first Distribution Date, the Initial
                    Funding Share Percentage); and,

               (B)  the aggregate of Funding's revenue obligations on the
                    immediately succeeding Payment Date under the relevant
                    Funding Pre-Enforcement Revenue Priority of Payments or the
                    Funding Post-Enforcement Priority of Payments (but excluding
                    any principal amount due under any Intercompany Loan and any
                    amount due under Item (P) of the Funding Pre-Enforcement
                    Revenue Priority of Payments and/or Item (F) of the Funding
                    Post-Enforcement Priority of Payments), less (in each case
                    only to the extent that such amounts of interest or other
                    income would not otherwise be payable under any Intercompany
                    Loan made by any Issuer or, as applicable, any Notes issued
                    by any Issuer, on the immediately succeeding Payment Date)
                    the sum of (i) interest or other income (including, for the
                    avoidance of doubt, amounts standing to the credit of any
                    Issuer Reserve Fund or Issuer Liquidity Reserve Fund after
                    the Intercompany Loan relating to that Issuer has been fully
                    repaid) credited or to be credited to each Funding Bank
                    Account on the immediately succeeding Payment Date (ii) all
                    other income (not derived from the distribution of Revenue
                    Receipts under this Deed) which will constitute Funding
                    Available Revenue Receipts and/or Issuer Available Revenue
                    Receipts on the immediately succeeding Payment Date; and

     (d)  finally, any excess remaining after items (a) to (c) above, to which
          Funding is entitled (but which as a result of the set-off pursuant to
          this Deed is not paid to Funding on such Distribution Date) towards
          payment of any amounts of Deferred Purchase Price due to the Seller
          under the terms of the Mortgage Sale Agreement, which payment

                                       19
<PAGE>

          also satisfies Funding's obligation to pay on such date to the
          Mortgages Trustee a Deferred Contribution for the Funding Share of the
          Trust Property;

PROVIDED THAT if an Assignment Date has occurred during the Trust Calculation
Period immediately preceding such Distribution Date, then the Cash Manager will
use (i) the Weighted Average Seller Share Percentage (instead of the Current
Seller Share Percentage) as calculated pursuant to Clause 8.7(a) above in
determining the amount of Mortgages Trustee Available Revenue Receipts to
distribute to the Seller pursuant to Clause 10.2(c)(i) above, and (ii) the
Weighted Average Funding Share Percentage (instead of the Current Funding Share
Percentage) as calculated pursuant to Clause 8.3(a) above in determining the
amount of Mortgages Trustee Available Revenue Receipts to distribute to Funding
pursuant to Clause 10.2(c)(ii)(A) above.

11.  DISTRIBUTION OF PRINCIPAL RECEIPTS

11.1 DISTRIBUTION OF PRINCIPAL RECEIPTS PRIOR TO THE OCCURRENCE OF A TRIGGER
     EVENT: Subject as provided in Clause 8.8 (Adjustments on Distribution
     Dates), prior to the occurrence of a Trigger Event (and whether or not
     there has been an enforcement of the Funding Security or any Issuer
     Security), on each Distribution Date, the Cash Manager (at the direction of
     the Mortgages Trustee acting on behalf of the Beneficiaries at their
     direction and with their consent which is hereby given) shall, subject to
     the provisos below, distribute Principal Receipts as follows:

     (a)  to the Seller an amount in respect of any Special Distribution (if
          any) which is then payable to the Seller under Clause 6.3 (Special
          Distribution) above;

     (b)  to Funding an amount in respect of each Issuer which is equal to the
          lesser of:

          (i)  the principal amount due on the Intercompany Loan of such Issuer
               equal to the Controlled Amortisation Amount due, if any, on the
               Payment Date immediately succeeding such Distribution Date; and

          (ii) an amount equal to:

<TABLE>

 <S>                                                                       <C>
                                                                           Outstanding Principal Balance on such Issuer's
                                                                           Intercompany Loan
Mortgages Trustee Principal Receipts x Current Funding Share Percentage  x_______________________________________________
                                                                           Aggregate Outstanding Principal Balance on all
                                                                           Intercompany Loans
</TABLE>

     (c)  to Funding an amount in respect of each Issuer towards any principal
          amount remaining due and payable (following the payment to Funding set
          forth in (b) above) on the immediately succeeding Payment Date under
          any Intercompany Loan; and

     (d)  all remaining Principal Receipts to the Seller (as Beneficiary),

PROVIDED THAT in relation to (a) through (d) above the following rules (the
"RULES FOR THE APPLICATION OF MORTGAGES TRUSTEE PRINCIPAL RECEIPTS") shall
apply:

                                       20
<PAGE>

(1)  If the Notes of any Issuer have become immediately due and payable as a
     result of the service of a Note Enforcement Notice or if the Intercompany
     Loan of any Issuer (and the other Intercompany Loans of any other Issuers)
     have become immediately due and payable as a result of the service of an
     Intercompany Loan Enforcement Notice, or otherwise upon the occurrence of
     any Trigger Event, principal payments in respect of the Intercompany Loan
     of that Issuer may be made in excess of any Controlled Amortisation Amount
     and paragraph (b)(i) above shall no longer apply in relation to that Issuer
     and, except following a Non-Asset Trigger Event, the amount of Principal
     Receipts to be distributed to Funding in respect of that Issuer on that
     Distribution Date may not exceed the amount determined under paragraph
     (b)(ii) above.

(2)  If the Notes of any Issuer have become immediately due and payable as a
     result of the service of a Note Enforcement Notice or if the Intercompany
     Loan of any Issuer (and the other Intercompany Loans of any other Issuers)
     have become immediately due and payable as a result of the service of an
     Intercompany Loan Enforcement Notice, then for the purpose of calculating
     the amount in respect of that Issuer under paragraph (b)(ii) above, that
     amount may be reduced to the extent of any remaining amounts standing to
     the credit of the Issuer Reserve Ledger and/or the Issuer Liquidity Reserve
     Ledger (if any) for that Issuer which are to be utilised on the immediately
     succeeding Payment Date to repay principal on that Issuer's Intercompany
     Loan, but only to the extent that those amounts would not otherwise be
     payable on that Intercompany Loan on that Payment Date.

(3)  The amount of Principal Receipts payable to Funding in respect of each
     Issuer on a Distribution Date will be reduced in proportion to the
     aggregate of the Issuer Available Revenue Receipts of that Issuer which are
     to be applied on the immediately succeeding Payment Date in reduction of
     deficiencies recorded on the Issuer Principal Deficiency Ledger of that
     Issuer, but only to the extent that the Issuer Available Revenue Receipts
     which are to be so applied on that Payment Date would not otherwise be
     payable as principal on the relevant Notes on that Payment Date.

(4)  For the purpose of determining the Principal Receipts to be distributed to
     Funding in respect of the amount due on the Intercompany Loan of any Issuer
     under (b) and (c) above, the Outstanding Principal Balance of that
     Intercompany Loan shall be deemed to be reduced by the amount of:

     (a)  any deficiency recorded on the Issuer Principal Deficiency Ledger of
          that Issuer as at that Distribution Date, but only to the extent that
          such deficiency has arisen under a result of (i) Losses on the
          Mortgage Loans allocated by Funding to that Issuer and/or (ii) the
          application of Funding Available Principal Receipts to fund the Issuer
          Liquidity Reserve Fund of that Issuer but not as a result of any other
          principal deficiency of that Issuer; and

     (b)  the Outstanding Principal Balance as at such Distribution Date of any
          Special Repayment Notes issued by that Issuer.

                                       21

<PAGE>

(5)  Funding will not be entitled to receive and the Cash Manager shall procure
     that Funding does not receive any amount of Principal Receipts from the
     Mortgages Trustee on a Distribution Date which is not required by Funding
     to repay principal falling due on any Intercompany Loan on the immediately
     succeeding Payment Date in order to fund payments of principal falling due
     on any Notes issued by any Issuer on that Payment date.

(6)  The Mortgages Trustee will not distribute any Overpayment (other than a
     Capital Overpayment) in respect of any Non-Flexible Mortgage Loan until the
     first Distribution Date following December 31 of the year in which such
     Overpayment is received; provided that if a Borrower has made an
     Underpayment of principal in respect of such Non-Flexible Mortgage Loan
     following the Overpayment then the Mortgages Trustee will distribute
     principal in an amount up to the amount of such Underpayment (but not
     exceeding the amount of the Overpayment previously made) on the immediately
     succeeding Distribution Date.

(7)  If an Assignment Date has occurred during the Trust Calculation Period
     immediately preceding a Distribution Date, then the Cash Manager shall use
     the Weighted Average Funding Share Percentage (instead of the Current
     Funding Share Percentage) as calculated pursuant to Clause 8.3(b) above in
     determining the amount of Mortgages Trustee Principal Receipts to be
     distributed to Funding in respect of each Issuer pursuant to Clause
     11.1(b)(ii) above.

11.2 DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE OCCURRENCE OF AN ASSET
     TRIGGER EVENT: After the occurrence of an Asset Trigger Event, the Cash
     Manager (at the direction of the Mortgages Trustee acting on behalf of the
     Beneficiaries at their direction and with their consent which is hereby
     given) shall, on each Distribution Date, apply all Principal Receipts
     between Funding and the Seller, in no order of priority between them and
     pro rata according to the Funding Share Percentage of the Trust Property
     and the Seller Share Percentage of the Trust Property respectively (and,
     for the avoidance of doubt, such payments may reduce the Seller Share to an
     amount less than the Minimum Seller Share), PROVIDED THAT if an Assignment
     Date has occurred in the Trust Calculation Period immediately preceding any
     such Distribution Date, the Cash Manager will apply all Principal Receipts
     between Funding and the Seller pro rata according to the Weighted Average
     Funding Share Percentage (as calculated pursuant to Clause 8.3(b) above)
     and Weighted Average Seller Share Percentage (as calculated pursuant to
     Clause 8.7(b) above) for such Distribution Date.

11.3 DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE OCCURRENCE OF A NON-ASSET
     TRIGGER EVENT: After the occurrence of a Non-Asset Trigger Event and until
     the occurrence of an Asset Trigger Event, the Cash Manager (at the
     direction of the Mortgages Trustee acting on behalf of the Beneficiaries at
     their direction and with their consent which is hereby given) shall, on
     each Distribution Date, apply all Principal Receipts to Funding until the
     Funding Share of the Trust Property has been reduced to zero and shall
     thereafter, on each Distribution Date, apply all Principal Receipts to the
     Seller.

                                       22

<PAGE>

12.  ALLOCATION OF LOSSES

     Subject as provided otherwise herein (including Clause 8.4 (Adjustments to
     Trust Property) of this Deed), all Losses sustained on the Mortgage Loans
     during a Trust Calculation Period shall be applied in reducing pro rata
     both the Funding Share and the Seller Share of the Trust Property on the
     Distribution Date immediately succeeding such Trust Calculation Period by
     multiplying the Losses sustained in such relevant Trust Calculation Period
     by the Current Funding Share Percentage (as calculated on the Distribution
     Date immediately preceding such Trust Calculation Period), PROVIDED THAT,
     if during the Trust Calculation Period immediately preceding a Distribution
     Date the Seller had assigned New Mortgage Loans to the Mortgages Trustee,
     such Losses shall be multiplied by the Weighted Average Funding Share
     Percentage (as calculated on such Distribution Date pursuant to Clause
     8.3(c) above) rather than the Current Funding Share Percentage. The
     remainder of such Losses shall be allocated to the Seller.

13.  OVERPAYMENTS

13.1 NON-FLEXIBLE MORTGAGE LOANS: The Mortgages Trustee shall not distribute to
     the Beneficiaries any Overpayment in respect of any Non-Flexible Mortgage
     Loan which does not constitute a Capital Payment until the first
     Distribution Date following 31st December of the year in which such
     Overpayment is received, save to the extent that any such Overpayment by a
     Borrower is applied in reduction of an Underpayment by such Borrower in
     respect of such Mortgage Loan prior to such date. Any such Overpayment
     shall be retained in the Mortgages Trustee GIC Account and the Cash Manager
     will maintain a separate ledger to record its receipt and subsequent
     payment from time to time. Where any such Overpayment has been made in
     error the Cash Manager and/or the Administrator will be authorised to
     refund the amount of such Overpayment to the relevant Borrower at any time
     prior to 31st December of the year in which such Overpayment was made.

13.2 FLEXIBLE MORTGAGE LOANS: Overpayments in respect of any Flexible Mortgage
     Loan will not be retained in the Mortgages Trustee GIC Account but will be
     distributed to the Beneficiaries on the immediately succeeding Distribution
     Date as Principal Receipts.

14.  ARREARS

     The aggregate Current Balance of the Mortgage Loans in the Mortgages Trust
     will be increased at any time by the amount in which the Mortgage Loans
     that have been assigned to the Mortgages Trust are in arrears and those
     arrears have been capitalised. Such increase shall be allocated to the
     Beneficiaries at any time in proportion to their respective percentage
     shares in the Trust Property as determined in respect of the Trust
     Calculation Period or Interim Calculation Period, as the case may be, in
     which the arrears occur.

15.  LEDGERS

     The Mortgages Trustee shall maintain, or shall procure that the Cash
     Manager shall maintain, the following Mortgages Trustee Ledgers:

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     (a)  the Principal Ledger, which shall record all receipts of Principal
          Receipts and distribution of the same to Funding and the Seller;

     (b)  the Revenue Ledger, which shall record all receipts of Revenue
          Receipts and distribution of the same in accordance with this Deed;

     (c)  the Losses Ledger, which shall record Losses in relation to the
          Mortgage Loans;

     (d)  the Funding Share/Seller Share Ledger which shall record the Funding
          Share, the Seller Share of the Trust Property, the Funding Share
          Percentage and the Seller Share Percentage;

     (e)  the Overpayments Ledger; which shall be divided into sub ledgers to
          record (i) Overpayments on Non-Flexible Mortgage Loans received into
          and paid out of the Mortgages Trustee GIC Account from time to time
          and (ii) Overpayments on Flexible Mortgage Loans;

     (f)  the Non-Flexible Underpayments Ledger; which shall record
          Underpayments on Non-Flexible Mortgage Loans from time to time;

     (g)  the Re-Draw Ledger, which shall be divided into sub ledgers to record
          (i) Cash Re-Draws made in respect of Flexible Mortgage Loans and (ii)
          Non-Cash Re-Draws made in respect of Flexible Mortgage Loans; and

     (h)  the Contributions Ledger, which will be divided into sub ledgers to
          record (i) the making by Funding of Contributions to the Mortgages
          Trust, (ii) the making by the Seller of Contributions to the Mortgages
          Trust and the application of such Contributions by the Mortgages
          Trustee in payment to the Seller of (a) amounts of Initial Purchase
          Price for the sale of any New Mortgage Portfolio which is acquired by
          the Mortgages Trustee from the Seller under the provisions of the
          Mortgage Sale Agreement or (b) amounts of Deferred Purchase Price in
          accordance with the Mortgage Sale Agreement or (c) any Special
          Distribution in accordance with the Mortgages Trust Deed.

16.  FEES AND EXPENSES OF THE MORTGAGES TRUSTEE

16.1 REMUNERATION: The Mortgages Trustee shall be entitled to charge and be
     remunerated for the work undertaken by it as trustee of the trusts created
     by this Deed. The remuneration shall be on such terms (if any) as the
     Mortgages Trustee may from time to time agree with the Beneficiaries in
     writing.

16.2 EXPENSES AND LIABILITIES: Each Beneficiary shall indemnify the Mortgages
     Trustee from time to time with such regularity as is reasonably agreed
     between the parties, in respect of the Funding Share and the Seller Share,
     respectively, of the documentable costs, expenses and/or liabilities
     directly and properly incurred by the Mortgages Trustee in performing its
     obligations hereunder or otherwise in acting as trustee in accordance with
     the terms of this Deed and the other Transaction Documents to which the
     Mortgages Trustee is a party

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     inclusive (if applicable) of any amounts in respect of Irrecoverable VAT
     incurred in respect of such costs and expenses.

17.  DIRECTIONS FROM BENEFICIARIES

17.1 ADMINISTRATION AGREEMENT AND CASH MANAGEMENT AGREEMENT: On the Initial
     Closing Date the Mortgages Trustee shall enter into the Administration
     Agreement and the Cash Management Agreement.

17.2 DIRECTIONS FROM BENEFICIARIES: Subject to Clause 17.3 (No Breach) below,
     the Mortgages Trustee covenants with the Beneficiaries that the Mortgages
     Trustee shall take all necessary steps and do everything which both Funding
     and the Seller (acting together) may reasonably request or direct it to do
     in order to give effect to the terms of this Deed or the other Transaction
     Documents to which the Mortgages Trustee is a party; provided that at any
     time after the Funding Share has been reduced to zero the Mortgages Trustee
     shall not be required to act at the direction of both Funding and the
     Seller (acting together) and shall instead act in accordance with any
     direction given solely by the Seller.

17.3 NO BREACH: Each of Funding and the Seller covenant with each other and with
     the Mortgage Trustee that neither shall direct or request the Mortgages
     Trustee to do any act or thing which breaches the terms of, or is otherwise
     expressly dealt with (such that the Mortgages Trustee has no discretion)
     under any of the Transaction Documents.

17.4 NO REQUIREMENT TO ACT: The Mortgages Trustee will not be bound and shall
     have no power to take any proceedings, actions or steps under or in
     connection with any of this Deed or the other Transaction Documents to
     which it is a party unless:

     (a)  it shall have been directed to do so by the Beneficiaries or it is
          required to do so under any express provision of this Deed or the
          other Transaction Documents (but subject to Clause 17.2 (Directions
          from Beneficiaries) in respect of conflict of directions); and

     (b)  it shall have been indemnified to its satisfaction against all
          liabilities, proceedings, claims and demands to which it may be or
          become liable and all costs, charges and expenses which may be
          incurred by it in connection therewith and the terms of such indemnity
          may include the provision of a fighting fund, non-recourse loan or
          other similar arrangement.

17.5 COVENANT OF THE MORTGAGES TRUSTEE: Subject to Clause 17.2 (Directions from
     Beneficiaries) the Mortgages Trustee covenants with each of the Seller and
     Funding to exercise all of its rights arising under or in respect of the
     Trust Property (including without limitation any rights of enforcement) for
     the benefit of and on behalf of the Beneficiaries.

18.  EARLY TERMINATION OF THE MORTGAGES TRUST

     Prior to its termination in accordance with Clause 26 (Termination),
     provided that all amounts due from Funding to the Funding Secured Creditors
     have been repaid in full, the Mortgages Trust constituted by this Deed may
     be terminated at the option of the Seller, following a

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     request in writing by the Seller to the Mortgages Trustee (which shall be
     copied to Funding and the Cash Manager) at any time on or after the date on
     which all of the Intercompany Loans have been repaid in full or there is no
     further claim under any Intercompany Loan and/or the Funding Share of the
     Trust Property is reduced to zero or such other date as may be agreed in
     writing between the Mortgages Trustee, Funding and the Seller.

19.  AUDIT OF MORTGAGE LOANS CONSTITUTING THE TRUST PROPERTY

     If the long term, unsecured, unguaranteed and unsubordinated debt
     obligations of the Seller fall below A3 by Moody's then, if required by
     Moody's, the Beneficiaries shall appoint a firm of independent auditors
     (approved by the Rating Agencies) to determine whether the Mortgage Loans
     and their Related Security (or any part of them) constituting the Trust
     Property complied with the representations and warranties set out in
     Schedule 1 (Representations and Warranties) of the Mortgage Sale Agreement
     as at the date such Mortgage Loans were assigned to the Mortgages Trustee.
     The costs of such independent auditors shall be borne by the Beneficiaries
     pro rata according to their respective current percentage shares in the
     Trust Property.

20.  TRANSFERS

20.1 FUNDING SHALL NOT ASSIGN: Subject to the right of Funding to assign by way
     of security its right, title, benefit and interest in the Trust Property
     and/or under this Deed to the Security Trustee under the Funding Deed of
     Charge and subject to the right of the Security Trustee or a Receiver to
     sell the Funding Share of the Trust Property and/or such right and interest
     under this Deed following the service of an Intercompany Loan Enforcement
     Notice (which right is hereby conferred), Funding covenants with the Seller
     that it shall not, and shall not purport to, sell, assign, transfer,
     convey, charge, declare a trust over, create any beneficial interest in, or
     otherwise dispose of the Funding Share in the Trust Property, or any of
     Funding's rights, title, interest or benefit in any of the Mortgage
     Portfolio or the Trust Property.

20.2 SELLER SHALL NOT ASSIGN: The Seller covenants with Funding that it shall
     not, and shall not purport to, sell, assign, transfer, convey, charge,
     declare a trust over, create any beneficial interest in, or otherwise
     dispose of the Seller Share in the Trust Property or any of the Seller's
     rights, title, interest or benefit in the Trust Property, other than
     pursuant to the Transaction Documents.

21.  REPRESENTATIONS AND COVENANTS

21.1 REPRESENTATIONS: On the date hereof, each of the parties to this Deed makes
     the representations and warranties set out in Schedule 1 (Representation
     and Warranties) to this Deed to each of the other parties hereto.

21.2 COVENANTS OF THE MORTGAGES TRUSTEE: Save with the prior written consent of
     or at the direction of the Beneficiaries or as provided in or envisaged by
     this Deed and/or the other Transaction Documents, the Mortgages Trustee
     shall not, so long as it is acting as Mortgages Trustee hereunder:

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<PAGE>

     (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) or (to
          the extent that it is within the control of the Mortgages Trustee)
          upon the whole or any part of the Trust Property;

     (b)  Disposal: transfer, sell, 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 (to the extent that it is within
          the control of the Mortgages Trustee) the Trust Property or any
          interest, estate, right, title or benefit therein or thereto or agree
          or attempt or purport to do so;

     (c)  Equitable Interest: knowingly permit any person other than the
          Beneficiaries to have any equitable interest in any of its assets or
          undertakings or (to the extent that it is within the control of the
          Mortgages Trustee) the Trust Property or any interest, estate, right,
          title or benefit therein;

     (d)  Bank Accounts: have an interest in any bank account, other than as set
          out in the Transaction Documents.

     (e)  Restrictions on Activities: carry on any business other than as
          described in this Deed and the Transaction Documents;

     (f)  Borrowings: incur any indebtedness in respect of borrowed money
          whatsoever or give any guarantee or indemnity in respect of any such
          indebtedness;

     (g)  Merger: consolidate or merge with any other person or convey or
          transfer its properties or assets substantially or as an entirety to
          any other person;

     (h)  Premises or Employees: have any premises or employees or subsidiaries;
          or

     (i)  Further shares: issue any further shares;

     (j)  United States 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 or
          deemed to be engaged in a trade or business within the United States
          as determined under United States tax principles.

22.  POWER TO DELEGATE

22.1 POWER TO DELEGATE: Subject to Clause 22.2 (No further appointments), the
     Mortgages Trustee may (notwithstanding any rule of law or equity to the
     contrary) delegate (revocably or irrevocably and for a limited or unlimited
     period of time) the performance of all or any of its obligations and the
     exercise of all or any of its powers under this Deed or imposed or
     conferred on it by law or otherwise to any person or body of persons
     fluctuating in number selected by it and any such delegation may be by
     power of attorney or in such other manner

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     as the Mortgages Trustee may think fit and may be made upon such terms and
     conditions (including the power to sub-delegate) as the Mortgages Trustee
     may think fit.

22.2 NO FURTHER APPOINTMENTS: Notwithstanding the provisions of Clause 22.1
     (Power to delegate), the Mortgages Trustee shall not appoint any agent,
     attorney or other delegate having power to act in respect of the Trust
     Property unless it is directed in writing to do so by the Beneficiaries.
     The appointment of any agent, attorney or other delegate hereunder above
     shall terminate immediately upon the occurrence of a Trigger Event.

23.  POWERS OF INVESTMENT

     The Mortgages Trustee may invest, and may appoint the Cash Manager to
     invest on its behalf, any amounts standing to the credit of the Mortgages
     Trustee Transaction Account in Authorised Investments. Save as expressly
     provided in this Deed, the Mortgages Trustee Guaranteed Investment Contract
     and the Bank Account Agreement, the Mortgages Trustee shall have no further
     or other powers of investment with respect to the Trust Property and (to
     the extent permitted by applicable law) the Trustee Act 2000 shall not nor
     shall any other provision relating to trustee powers of investment implied
     by statute or general law shall apply to the Mortgages Trust.

24.  OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE

24.1 NO ACTION TO IMPAIR TRUST PROPERTY: Except for actions expressly authorised
     by this Deed, the Mortgages Trustee shall take no action reasonably likely
     to impair the interests of the Beneficiaries in any Trust Property now
     existing or hereafter created or to impair the value of any Mortgage Loan
     or its Related Security subject to the Mortgages Trust.

24.2 LITIGATION: The Mortgages Trustee must not prosecute or defend any legal or
     other proceedings anywhere in the world (at the cost of the Trust Property)
     unless it obtains legal or other advice that it is in the interests of the
     Beneficiaries to do so.

24.3 NO IMPLIED DUTIES: The duties and obligations of the Mortgages Trustee
     under the Mortgages Trust shall be determined solely by the express
     provisions of this Deed (but without prejudice to the duties and
     obligations of the Mortgages Trustee under any of the other Transaction
     Documents). The Mortgages Trustee shall not be liable under this Deed
     except for the performance of such duties and obligations as shall be
     specifically set forth in this Deed. No implied covenants or obligations
     shall be read into this Deed against the Mortgages Trustee, and the
     permissible right of the Mortgages Trustee to do things set out in this
     Deed shall not be construed as a duty.

24.4 NO LIABILITY: Neither the Mortgages Trustee, Funding (in its capacity as a
     Beneficiary hereunder) nor the Seller (in its capacity as a Beneficiary
     hereunder) shall be liable to each other, in the absence of wilful default,
     gross negligence or breach of the terms of this Deed, in respect of any
     loss or damage which arises out of the exercise or attempted or purported
     exercise or failure to exercise any of their respective powers.

24.5 RELIANCE ON CERTIFICATES: The Mortgages Trustee may rely on and shall be
     protected in

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     acting on, or in refraining from acting in accordance with, any resolution,
     officer's certificate, certificate of auditors or any other certificate,
     statement, instrument, opinion, report, notice, request, consent, order,
     appraisal, bond or other paper or document believed by it to be genuine and
     to have been signed or presented to it pursuant to the Transaction
     Documents by the proper party or parties.

24.6 RELIANCE ON THIRD PARTIES: The Mortgages Trustee may, in relation to these
     presents, act on the opinion or advice of or a certificate or any
     information obtained from any lawyer, banker, valuer, broker, accountant,
     financial adviser, securities dealer, merchant bank, computer consultant or
     other expert in the United Kingdom or elsewhere and shall not, provided
     that it shall not have acted fraudulently or in breach of any of the
     provisions of the Transaction Documents, be responsible for any loss
     occasioned by so acting. Any such opinion, advice, certificate or
     information may be sent or obtained by letter, telemessage, telex, cable or
     facsimile device and the Mortgages Trustee shall not be liable for acting
     on any opinion, advice, certificate or information purporting to be so
     conveyed although the same shall contain some error or shall not be
     authentic, provided that such error or lack of authenticity shall not be
     manifest.

24.7 MIG POLICIES: The Mortgages Trustee is not required to maintain any MIG
     Policy with the the then-current insurer and may contract for mortgage
     indemnity guarantee protection from any insurer then providing MIG
     insurance policies, subject to prior agreement with the Rating Agencies and
     confirmation that the then-current ratings by the Rating Agencies (or any
     of them) of the Notes issued by any Issuer would not be adversely affected.

25.  NO RETIREMENT OF MORTGAGES TRUSTEE

25.1 NO RETIREMENT: The Mortgages Trustee shall not, and shall not purport to,
     retire as the trustee of the Mortgages Trust or appoint any additional
     trustee of the Mortgages Trust and shall have no power to retire or appoint
     any additional trustee under the Trustee Act 1925 or otherwise.

25.2 NO REPLACEMENT: Neither the Seller nor Funding shall at any time remove or
     purport to remove and/or replace the Mortgages Trustee as the trustee of
     the Mortgages Trust.

25.3 NO TERMINATION: Prior to the payment by Funding of all amounts owing under
     the Intercompany Loan Agreements and under the Transaction Documents,
     neither the Seller nor Funding shall at any time, except in accordance with
     the provisions of Clause 18 (Early Termination of the Mortgages Trust) and
     Clause 26 (Termination), terminate or purport to terminate the Mortgages
     Trust and, in particular, but without prejudice to the generality of the
     foregoing, the Seller and Funding shall not in reliance on their absolute
     beneficial interests in the Trust Property call for the transfer to them or
     vesting in them of the legal estate in all or any part of the Trust
     Property.

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26.  TERMINATION

     Subject to Clause 18 (Early Termination of the Mortgages Trust), the
     Mortgages Trust hereby constituted shall terminate upon the date upon which
     the Trust Property is zero.

27.  FURTHER ASSURANCES

     The parties 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
     Deed.

28.  NO PARTNERSHIP OR AGENCY

     Nothing in this Deed shall be taken to constitute or create a partnership
     between any of the parties to this Deed or to make or appoint the Seller
     the agent of Funding (or vice versa).

29.  CALCULATIONS

     In the absence of manifest error, any determination or calculation by or on
     behalf of the Mortgages Trustee in connection with the provisions of this
     Deed shall be deemed to be conclusive.

30.  CONFIDENTIALITY

30.1 GENERAL OBLIGATION OF CONFIDENTIALITY: Unless otherwise required by
     applicable law, and subject to Clause 30.2 (Exceptions) below, each of the
     parties agrees to maintain the confidentiality of this Deed in its
     communications with third parties and otherwise. None of the parties shall
     disclose to any person any information relating to the business, finances
     or other matters of a confidential nature of or relating to any other party
     to this Deed or any of the Transaction Documents which it may have obtained
     as a result of having entered into this Deed or otherwise.

30.2 EXCEPTIONS: The provisions of Clause 30.1 (General Obligation of
     Confidentiality) above shall not apply:

     (a)  to the disclosure of any information to any person who is a party to
          any of the Transaction Documents as expressly permitted by the
          Transaction Documents;

     (b)  to the disclosure of any information which is or becomes public
          knowledge otherwise than as a result of the wrongful conduct of the
          recipient;

     (c)  to the extent that the recipient is required to disclose the same
          pursuant to any law or order of any court or pursuant to any direction
          or requirement (whether or not having the force of law) of any central
          bank or any governmental or other regulatory or Taxation authority;

     (d)  to the disclosure of any information to professional advisers who
          receive the same under a duty of confidentiality;

     (e)  to the disclosure of any information with the consent of the parties
          hereto;

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     (f)  to the disclosure to the Rating Agencies or any of them of such
          information as may be requested by any of them for the purposes of
          setting or reviewing the rating assigned to the Notes (or any of
          them), provided that no information which would disclose the identity
          of a Borrower shall be disclosed to the Rating Agencies or any of
          them;

     (g)  to the disclosure of any information disclosed to a prospective
          assignee of Funding (provided that it is disclosed on the basis that
          the recipient will hold it confidential); or

     (h)  to any disclosure for the purposes of collecting in or enforcing the
          Trust Property or any of it.

31.  PERPETUITY PERIOD

     The perpetuity period for the purposes of this Mortgages Trust Deed shall
     be the period of 80 years commencing on the date hereof.

32.  NON PETITION COVENANT; LIMITED RECOURSE

32.1 NON PETITION COVENANT: Each of the parties hereto hereby agrees that it
     shall not institute against either Funding or the Mortgages Trustee any
     winding-up, administration, insolvency or similar proceedings so long as
     any sum is outstanding under any Intercompany Loan Agreement of any Issuer
     or for two years plus one day since the last day on which any such sum was
     outstanding.

32.2 LIMITED RECOURSE: Each of the parties hereto agrees that:

     (a)  in relation to the Mortgages Trustee, any amount payable by the
          Mortgages Trustee to any other party to this Deed under this Deed not
          being an amount payable out of the Trust Property in accordance with
          the terms of this Deed shall only be payable to the extent that on
          that date the Mortgages Trustee has sufficient funds to pay such
          amount out of fees paid to it under this Deed; and

     (b)  in relation to Funding:

          (i)  only the Security Trustee may enforce the security created in
               favour of the Security Trustee under the Funding Deed of Charge
               in accordance with the provisions thereof;

          (ii) notwithstanding any other provision of this Deed or any other
               Transaction Document, no sum due or owing to any party to this
               Deed from or by Funding under this Deed shall be payable by
               Funding except to the extent that Funding has sufficient funds
               available or (following enforcement of the Funding Security) the
               Security Trustee has realised sufficient funds from the Funding
               Security to pay such sum subject to and in accordance with the
               relevant Funding Priority of Payments and provided that all
               liabilities of Funding required to be paid in priority thereto or
               pari passu therewith

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               pursuant to such Funding Priority of Payments have been paid,
               discharged and/or otherwise provided for in full; and

          (iii) it shall not take any steps for the purpose of recovering any
               amount payable by Funding or enforcing any rights arising out of
               this Deed against Funding otherwise than in accordance with the
               Funding Deed of Charge.

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

33.  AMENDMENTS AND WAIVER

33.1 ENTIRE AGREEMENT: This Deed sets out the entire agreement and understanding
     between the parties with respect to the subject matter of this Deed
     superseding all prior oral or written understandings other than the other
     Transaction Documents.

33.2 AMENDMENTS AND WAIVER: No amendment or waiver of any provision of this Deed
     nor consent to any departure by any of the parties therefrom shall in any
     event be effective unless the same shall be in writing and signed by each
     of the parties hereto. In the case of a waiver or consent, such waiver or
     consent shall be effective only in the specific instance and as against the
     party or parties giving it for the specific purpose for which it is given.

33.3 RIGHTS CUMULATIVE: The respective rights of each of the parties to this
     Deed are cumulative and may be exercised as often as they consider
     appropriate. No failure on the part of any party to exercise, and no delay
     in exercising, any right hereunder shall operate as a waiver thereof, nor
     shall any single or partial exercise of any such right preclude any other
     or further exercise thereof or the exercise of any other right. The
     remedies in this Deed are cumulative and not exclusive of any remedies
     provided by law.

34.  NOTICES

     Any notices or other communication or document to be given or delivered
     pursuant to this Deed to any of the parties hereto shall be sufficiently
     served if sent by prepaid first class post, by hand or by facsimile
     transmission and shall be deemed to be given (in the case of facsimile
     transmission) when despatched or (where delivered by hand) on the day of
     delivery if

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     delivered before 17.00 hours on a London Business Day or on the next London
     Business Day if delivered thereafter or (in the case of first class post)
     when it would be received in the ordinary course of the post and shall be
     sent:

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

     (b)  in the case of the Mortgages Trustee, to Granite Finance Trustees
          Limited, 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel
          Islands (facsimile number 01534-609333) for the attention of the
          Company Secretary (with a copy to the Seller in accordance with (a)
          above);

     (c)  in the case of Funding, to Granite Finance Funding Limited, 4th Floor,
          35 New Bridge Street, Blackfriars, London EC4V 6BW (facsimile number
          020 7332 6199) for the attention of the Company Secretary (with a copy
          to the Seller in accordance with (a) above);

     (d)  in the case of the Security Trustee, to The Bank of New York, 48th
          Floor, One Canada Square, London E14 5AL (facsimile number 020 7964
          6399) for the attention of the Global Structured Finance (Corporate
          Trust);

     (e)  in the case of the Fitch Ratings Ltd, to Fitch Ratings Ltd, Eldon
          House, 2 Eldon Street, London EC2M 7UA (facsimile number 020 7417
          6262) for the attention of European Structured Finance Surveillance;

     (f)  in the case of Moody's, to Moody's, 1st Floor, 2 Minster Court,
          Mincing Lane, London EC3R 7XB (facsimile number 020 7772 5400) for the
          attention of David Harrison (with a copy to the Seller in accordance
          with (a) above);

     (g)  in the case of Standard & Poor's, to Standard & Poor's, Garden House,
          18 Finsbury Circus, London EC2M 7NJ (facsimile number 020 7826 3598)
          for the attention of Heather Dyke (with a copy to the Seller in
          accordance with (a) above),

     or to such other address or facsimile number or for the attention of such
     other person or entity as may from time to time be notified by any party to
     the others by fifteen days prior written notice in accordance with the
     provisions of this Clause 34.

35.  THIRD PARTY RIGHTS

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

36.  EXECUTION IN COUNTERPARTS; SEVERABILITY

36.1 COUNTERPARTS: This Deed may be executed in any number of counterparts
     (manually or by

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

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

37.  GOVERNING LAW AND SUBMISSION TO JURISDICTION

37.1 GOVERNING LAW: This Deed is governed by, and shall be construed in
     accordance with, English law.

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

37.3 PROCESS AGENT: The Mortgages Trustee irrevocably and unconditionally
     appoints Mourant & Co. Capital (SPV) Limited at Fourth Floor, New Bridge
     Street, Blackfriars, London EC4V 6BW or otherwise at its registered office
     for the time being as its agent for service of process in England in
     respect of any proceedings in respect of this Agreement and undertakes that
     in the event of Mourant & Co. Capital (SPV) Limited ceasing so to act it
     will appoint another person with a registered office in London as its agent
     for service of process.

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

                                       34

<PAGE>

                                   SCHEDULE 1

                         REPRESENTATIONS AND WARRANTIES

1.   STATUS: It is duly incorporated and registered under the laws of the
     jurisdiction in which it is incorporated, capable of being sued in its own
     right and not subject to any immunity from any proceedings, and it has the
     power to own its property and assets and to carry on its business as it is
     being conducted.

2.   POWERS AND AUTHORITY: It has the power to enter into, perform and deliver,
     and has taken all necessary corporate and other action to authorise the
     execution, delivery and performance by it of each of the Transaction
     Documents to which it is or will be a party, and each such Transaction
     Document has been duly executed and delivered by it.

3.   LEGAL VALIDITY: Each Transaction Document to which it is or will be a party
     constitutes or when executed in accordance with its terms will constitute
     its legal, valid and binding obligation.

4.   NON-CONFLICT: The execution by it of each of the Transaction Documents to
     which it is a party and the exercise by it of its rights and the
     performance of its obligations under such Transaction Documents will not:

          (a)  conflict with any document which is binding upon it or any of its
               assets;

          (b)  conflict with its constitutional documents; or

          (c)  conflict with any law, regulation or official or judicial order
               of any government, governmental body or court, domestic or
               foreign, having jurisdiction over it.

5.   NO LITIGATION: It is not a party to any material litigation, arbitration or
     administrative proceedings and, to its knowledge, no material litigation,
     arbitration or administrative proceedings are pending or threatened against
     it.

6.   CONSENTS AND LICENCES: All governmental consents, licences and other
     approvals and authorisations required in connection with the entry into,
     performance, validity and enforceability of, and the transactions
     contemplated by, the Transaction Documents have been obtained or effected
     (as appropriate) and are in full force and effect.

                                       35

<PAGE>

                                 EXECUTION PAGE

AS SELLER                                                              )
EXECUTED AS A DEED                                                     )
under THE COMMON SEAL of                                               )
NORTHERN ROCK PLC                                                      )
affixed by order of the Board of Directors                             )
in the presence of:                                                    )

------------------------------------
Authorised Signatory

Name:

Title:

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

Authorised Signatory

Name:

Title:

AS CASH MANAGER                                                        )
EXECUTED AS A DEED                                                     )
under THE COMMON SEAL of                                               )
NORTHERN ROCK PLC                                                      )
affixed by order of the Board of Directors                             )
in the presence of:                                                    )

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

Authorised Signatory

Name:

Title:

                                       36

<PAGE>

AS BENEFICIARY                                                         )
EXECUTED AS A DEED                                                     )
under THE COMMON SEAL of                                               )
NORTHERN ROCK PLC                                                      )
affixed by order of the Board of Directors                             )
in the presence of:                                                    )

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

Authorised Signatory

Name:

Title:

EXECUTED AS A DEED by                                                  )
GRANITE FINANCE TRUSTEES LIMITED                                       )
acting by:                                                             )

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

Name:

Title:

------------------------------------
Director/Secretary

Name:

Title:

                                       37

<PAGE>

EXECUTED AS A DEED by                                                  )
GRANITE FINANCE FUNDING LIMITED                                        )
acting by:                                                             )

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

Name:

Title:

------------------------------------
Director/Secretary

Name:

Title:

EXECUTED AS A DEED by                                                  )
GRANITE FINANCE FUNDING LIMITED                                        )
acting by:                                                             )

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

Name:

Title:

------------------------------------
Director/Secretary

Name:

Title:

                                       38

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