Document:

(Basis Rate Swap)
(Multicurrency - Cross Border)

                                      ISDA(R)

                  International Swap Dealers Association, Inc.

                                MASTER AGREEMENT

                         dated as of ___ September 2002

Northern Rock plc ("Party A") and The Bank of New York (the "Note Trustee")
and Granite Mortgages 02-2 plc ("Party B").

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

Accordingly, the parties agree as follows: --

1. INTERPRETATION

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

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

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

2. OBLIGATIONS

(a) GENERAL CONDITIONS.

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

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

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

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

<PAGE>

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

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

      (i) in the same currency; and

      (ii) in respect of the same Transaction,

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

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

(d) DEDUCTION OR WITHHOLDING FOR TAX.

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

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

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

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

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

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

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

                                       2                            ISDA(R) 1992

<PAGE>

      (ii) LIABILITY. If: --

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

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

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

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

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

3. REPRESENTATIONS

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

(a) BASIC REPRESENTATIONS.

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

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

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

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

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

                                       3                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

4. Agreements

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

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

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

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

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

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

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

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

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

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

                                       4                            ISDA(R) 1992

<PAGE>

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

5. EVENTS OF DEFAULT AND TERMINATION EVENTS

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

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

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

      (iii) CREDIT SUPPORT DEFAULT.

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

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

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

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

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

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

                                       5                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

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

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

                                       6                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

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

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

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

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

                                       7                            ISDA(R) 1992

<PAGE>

6. EARLY TERMINATION

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

(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

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

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

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

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

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

      (iv) RIGHT TO TERMINATE. If: --

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

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

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

                                       8                            ISDA(R) 1992

<PAGE>

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

(c) EFFECT OF DESIGNATION.

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

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

(d) CALCULATIONS.

      (i) STATEMENT. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date, each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (1) showing, in reasonable detail,
      such calculations (including all relevant quotations and specifying any
      amount payable under Section 6(e)) and (2) giving details of the relevant
      account to which any amount payable to it is to be paid. In the absence of
      written confirmation from the source of a quotation obtained in
      determining a Market Quotation, the records of the party obtaining such
      quotation will be conclusive evidence of the existence and accuracy of
      such quotation.

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

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

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

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

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

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

                                       9                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       10                           ISDA(R) 1992

<PAGE>

7. TRANSFER

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

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

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

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

8. CONTRACTUAL CURRENCY

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

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

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

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

                                       11                           ISDA(R) 1992

<PAGE>

9. MISCELLANEOUS

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

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

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

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

(e) COUNTERPARTS AND CONFIRMATIONS.

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

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

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

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

10. OFFICES; MULTIBRANCH PARTIES

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

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

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

11. EXPENSES

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

                                       12                           ISDA(R) 1992

<PAGE>

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

12. NOTICES

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

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

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

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

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

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

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

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

13. GOVERNING LAW AND JURISDICTION

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

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

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

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

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

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

                                       13                           ISDA(R) 1992

<PAGE>

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

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

14. DEFINITIONS

As used in this Agreement: --

"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).

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

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

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

"APPLICABLE RATE" means: --

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

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

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

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

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

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

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

"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).

"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.

"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.

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

                                       14                           ISDA(R) 1992

<PAGE>

"DEFAULTING PARTY" has the meaning specified in Section 6(a).

"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

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

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

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

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

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

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

                                       15                           ISDA(R) 1992

<PAGE>

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

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

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

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

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

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

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

"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

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

"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of. --

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

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

"SPECIFIED ENTITY" has the meanings specified in the Schedule.

                                       16                           ISDA(R) 1992

<PAGE>

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

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

"STAMP TAX" means any stamp, registration, documentation or similar tax.

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

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

"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).

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

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

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

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

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

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

                                       17                           ISDA(R) 1992

<PAGE>

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

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

                                                  Granite Mortgages 02-2 plc,
   Northern Rock plc, being Party A                       being Party B
---------------------------------------        ---------------------------------
         (Name of Party)                                 (Name of Party)

The Bank of New York,
being the Note Trustee
By: ...................................        By: .............................
    Name:                                          Name:
    Title:                                         Title:
    Date:                                          Date:

                                       18                           ISDA(R) 1992

<PAGE>

                                                     SABW DRAFT 1 - 22 JULY 2002
                                                               (BASIS RATE SWAP)

                                    SCHEDULE
                                     TO THE
                                MASTER AGREEMENT

                      dated as of [______] September, 2002

between

(1)   NORTHERN ROCK PLC ("PARTY A");

(2)   GRANITE MORTGAGES 02-2 plc ("PARTY B"); and

(3)   THE BANK OF NEW YORK (as Note Trustee and which has agreed to become a
      party to this Agreement solely for the purpose of taking the benefit of
      Parts 5(c) and (h) of the Schedule to this Agreement).

Part 1.  TERMINATION PROVISIONS

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

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

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

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

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

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

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

<PAGE>

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

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

(i)   Market Quotation will apply.

(ii)  The Second Method will apply.

(g)   "TERMINATION CURRENCY" means Sterling.

Part 2.  TAX REPRESENTATIONS

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

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

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

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

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

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

                                       2

<PAGE>

Part 3.  AGREEMENT TO DELIVER DOCUMENTS

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

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

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

                            None

(b)   Other documents to be delivered are:-

<TABLE>
<CAPTION>

      PARTY REQUIRED TO     FORM/DOCUMENT/CERTIFICATE    DATE BY WHICH        COVERED BY
      DELIVER DOCUMENT                                   TO BE DELIVERED      SECTION 3(D)
                                                                              REPRESENTATION
<S>   <C>                   <C>                          <C>                  <C>

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

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

      Party A               Legal opinion in form and    On signing of this   No
                            substance satisfactory to    Agreement
                            Party B

</TABLE>

Part 4.  MISCELLANEOUS

(a)   ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
      Agreement:-

      Address for notices or communications to Party A:-

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

      Attention:            Senior Manager, Treasury Settlement

      Facsimile No.:        0191 279 4694

      Address for notices or communications to Party B:-

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

                                       3

<PAGE>

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

      Attention:            Keith M. Currie

      Facsimile No.:        0191 279 4694

      With a copy to the Note Trustee:-

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

      Attention:           Corporate Trust (Global Structured Finance)

      Facsimile No.:       020 7364 6555

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

      Party A appoints as its Process Agent: none.

      Party B appoints as its Process Agent: none.

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

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

      Party A is not a Multibranch Party.

      Party B is not a Multibranch Party.

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

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

      In respect of Party A:     None.

      In respect of Party B:     The Current Issuer Deed of Charge.

(g)   CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
      Party A, none.

                                       4

<PAGE>

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

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

(i)   NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
      will not apply to Transactions entered into under this Agreement unless
      otherwise specified in a Confirmation.

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

Part 5.  OTHER PROVISIONS

(a)   DEFINITIONS AND INTERPRETATION

      (i)   The definitions and provisions contained in the 2000 ISDA
            Definitions as published by the International Swaps and Derivatives
            Association, Inc. (the "DEFINITIONS") are incorporated by reference
            herein. Any terms used and not otherwise defined herein which are
            contained in the Definitions shall have the meaning set forth
            therein.

      (ii)  Capitalised terms used in this Agreement shall, except where the
            context otherwise requires and save where otherwise defined in this
            Agreement, the Confirmation, the Schedule or the Definitions, bear
            the meanings given to them in the Master Definitions Schedule as
            amended and restated by (and appearing in Appendix 1 to) the Master
            Definitions Schedule [Third] Amendment Deed made executed by, among
            others, the Note Trustee on [____] September 2002 and the Issuer
            Master Definitions Schedule signed for the purposes of
            identification by Sidley Austin Brown & Wood and Allen & Overy on
            [____] 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). The Issuer Master Definitions Schedule specified
            above shall prevail to the extent that it conflicts with the Master
            Definitions Schedule.

(b)   *NO SET-OFF

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

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

(c)   SECURITY INTEREST

Notwithstanding Section 7, Party A hereby agrees and consents to the assignment
by way of security by Party B of its interests under this Agreement (without
prejudice to, and after giving effect to, any contractual netting provision
contained in this Agreement) to the Note Trustee (or

                                       5

<PAGE>

any successor thereto) pursuant to and in accordance with the Current Issuer
Deed of Charge and acknowledges notice of such assignment. Each of the parties
hereby confirms and agrees that the Note Trustee shall not be liable for any of
the obligations of Party B hereunder.

(d)   DISAPPLICATION OF CERTAIN EVENTS OF DEFAULT

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

Section 5(a)(viii) will not apply to Party B in respect of a transfer to the
Note Trustee or in respect of a transfer to any entity which has succeeded the
Note Trustee in that capacity.

(e)   DISAPPLICATION OF CERTAIN TERMINATION EVENTS

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

(f)   ADDITIONAL EVENT OF DEFAULT

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

"NOTE ENFORCEMENT NOTICE. The Note Trustee serves a Note Enforcement Notice on
Party B (in which case Party B shall be the Defaulting Party)."

(g)   NORTHERN ROCK PLC AS PARTY B'S AGENT

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

(h)   SECURITY, ENFORCEMENT AND LIMITED RECOURSE

      (i)   Party A agrees with Party B and the Note Trustee to be bound by the
            terms of the Current Issuer Deed of Charge and the Current Issuer
            Cash Management Agreement and, in particular, confirms that: (i) no
            sum shall be payable by or on behalf of Party B to it except in
            accordance with the Current Issuer Priority of Payments as set out
            in the Current Issuer Cash Management Agreement or, as applicable,
            the Current Issuer Deed of Charge (as the same may be amended from
            time to time); and (ii) it will not take any steps for the winding
            up, dissolution or reorganisation or for the appointment of a
            receiver, administrator, administrative receiver, trustee,
            liquidator, sequestrator or similar officer of Party B or of any or
            all of its revenues and assets nor participate in any ex parte
            proceedings nor seek

                                       6

<PAGE>

            to enforce any judgment against Party B except as provided in the
            Current Issuer Deed of Charge.

      (ii)  In relation to all sums due and payable by Party B to Party A, Party
            A agrees that it shall have recourse only to sums available to Party
            B for the purpose of making payments to Party A in accordance with
            the relevant Current Issuer Priority of Payments, the Current Issuer
            Cash Management Agreement and/or, as applicable the Current Issuer
            Deed of Charge.

(i)   RESERVED

(j)   AUTHORISED PERSON

For the purposes of Section 3 of this Agreement, Party A represents to Party B
(which representation will be deemed to be repeated by Party A on each date on
which a Transaction is entered into and throughout the course of any
Transaction) that it is an authorised person for the purposes of the Financial
Services and Markets Act 2000.

(k)   RATINGS DOWNGRADE OF PARTY A

      (i)   In the event that the short-term, unsecured and unsubordinated debt
            obligations of Party A (or its successor) cease to be rated at least
            as high as A-1 by Standard & Poor's Rating Services, a division of
            The McGraw-Hill Companies Inc. ("S&P") and as a result of such
            downgrade the then current rating of the Notes may in the reasonable
            opinion of S&P be downgraded or placed under review for possible
            downgrade, then Party A will, on a reasonable efforts basis, within
            30 days of the occurrence of such downgrade at its own cost:

            (A)   attempt to transfer all of its rights and obligations with
                  respect to this Agreement to a replacement third party whose
                  short-term, unsecured and unsubordinated debt obligations are
                  rated at least as high as A-1 (or its equivalent) by S&P or
                  such other rating as is commensurate with the rating assigned
                  to the Notes by S&P from time to time,

            and in the event that Party A is unable to make such transfer within
            such 30 day period, then it will continue, on a reasonable efforts
            basis, to attempt to make such transfer and pending such transfer,
            Party A will, on a reasonable efforts basis, at its own cost,
            either:

            (B)   put in place an appropriate mark-to-market collateral
                  agreement, (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates to
                  collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement provided that
                  (x) Party A shall be deemed to have satisfied the requirements
                  of S&P if the amount of collateral agreed to be provided in
                  the form of cash and/or securities (the "COLLATERAL AMOUNT")
                  is determined on a basis which is no more onerous than the
                  criteria of S&P as at 31st September, 1999 (or any subsequent
                  criteria published by S&P) which enable entities rated lower

                                       7

<PAGE>

                  than a specified level to participate in structured finance
                  transactions which, through collateralisation, are rated at a
                  higher level (as referred to, in part, in the article entitled
                  New Interest Rate Currency Swap Criteria Broadens Allowable
                  Counterparties in the January 1999 issue of S&P's Structured
                  Finance publication) (the "S&P CRITERIA") and (y) the
                  Collateral Amount shall not be required to exceed such amount
                  as would be required (in accordance with the S&P Criteria) to
                  restore the rating of the Notes to the level they would have
                  been at immediately prior to such downgrading; or

            (C)   procure another person to become co-obligor in respect of the
                  obligations of Party A under this Agreement or take such other
                  action as Party A may agree with S&P as will result in the
                  rating of the Notes then outstanding following the taking of
                  such action being rated no lower than the rating of the Notes
                  immediately prior to such downgrade.

      (ii)  In the event that the short-term, unsecured and unsubordinated debt
            obligations of Party A (or its successor) cease to be rated at least
            as high as P-1 by Moody's Investors Service Limited ("MOODY'S") and
            as a result of such downgrade the then current rating of the Notes
            may in the reasonable opinion of Moody's be downgraded or placed
            under review for possible downgrade, then Party A will, on a
            reasonable efforts basis, within 30 days, and at its own cost:

            (A)   attempt to transfer all of its rights and obligations with
                  respect to this Agreement to a replacement third party whose
                  short-term, unsecured and unsubordinated debt obligations are
                  rated at least as high as P-1 (or its equivalent) by Moody's
                  or such other rating as is commensurate with the rating
                  assigned to the Notes by Moody's from time to time,

            and in the event that Party A is unable to make such transfer within
            such 30 day period, then it will continue, on a reasonable efforts
            basis, to attempt to make such transfer and pending such transfer,
            Party A will, on a reasonable efforts basis, at its own cost,
            either:

            (B)   put in place an appropriate mark-to-market collateral
                  agreement, (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates to
                  collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement provided that
                  (x) Party A shall be deemed to have satisfied the requirements
                  of Moody's if the Collateral Amount is determined on a basis
                  which is no more onerous than the Moody's Criteria and (y) the
                  Collateral Amount shall not be required to exceed such amount
                  as would be required (in accordance with the Moody's Criteria)
                  to restore the rating of the Notes to the level they would
                  have been at immediately prior to such downgrading; or

            (C)   procure another person to become co-obligor in respect of the
                  obligations of Party A under this Agreement or take such other
                  action as Party A may

                                       8

<PAGE>

                  agree with Moody's as will result in the rating of the Notes
                  then outstanding following the taking of such action being
                  rated no lower than the rating of the Notes immediately prior
                  to such downgrade.

      "MOODY'S CRITERIA" means that the Collateral Amount shall not exceed 100
      per cent. of the mark-to-market value of the outstanding Transactions as
      determined by Party A in good faith from time to time provided that if the
      short-term, unsecured and unsubordinated debt obligations of Party A (or
      its successor or assignee) cease to be rated as high as P-1 by Moody's
      then the applicable Collateral Amount shall not exceed the sum of (i) 102
      per cent. of the mark-to-market value of the outstanding Transactions
      determined by Party A in good faith from time to time and (ii) in
      aggregate of the amounts determined in respect of each class of Notes,
      equal to the principal outstanding of that class of Notes and multiplied
      by the number of days remaining from the date of the determination to the
      Expected Repayment Date of that class of Notes, divided by 365 (such
      aggregate the "Buffer Notional") multiplied by the product of 0.15 per
      cent. and the Fixed Rate Ratio (as defined in the Basis Rate Swap
      Agreement). "EXPECTED REPAYMENT DATE" means the Interest Payment Date
      falling in July 2007.

      (iii) In the event that the short-term, unsecured and unsubordinated debt
            obligations of Party A (or its successor) cease to be rated at least
            as high as F1 (or its equivalent) by Fitch Ratings Ltd ("FITCH") and
            as a result of such downgrade the then current rating of the Notes
            may in the reasonable opinion of Fitch be downgraded or placed on
            credit watch for possible downgrade, then Party A will, on a
            reasonable efforts basis, within 30 days, at its own cost:

            (A)   attempt to transfer all of its rights and obligations with
                  respect to this Agreement to a replacement third party whose
                  short-term, unsecured and unsubordinated debt ratings are
                  rated at least as high as F1 (or its equivalent) by Fitch or
                  such other rating as is commensurate with the rating assigned
                  to the Notes by Fitch from time to time,

            and in the event that Party A is unable to make such transfer within
            such 30 day period, then it will continue, on a reasonable efforts
            basis, to attempt to make such transfer and pending such transfer,
            Party A will, on a reasonable efforts basis, at its own cost,
            either:

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

            (C)   take such other action as Party A may agree with Fitch as will
                  result in the rating of the Notes then outstanding being
                  maintained.

      (iv)  If Party A does not take the measures described in either (i), (ii)
            or (iii) above such failure shall not be or give rise to an Event of
            Default but shall constitute an

                                       9

<PAGE>

            Additional Termination Event with respect to Party A and shall be
            deemed to have occurred on the thirtieth day following such
            downgrade with Party A as the sole Affected Party.

            Each of Party B and the Note Trustee shall use their reasonable
            endeavours to co-operate with Party A in putting in place such
            credit support documentation, including agreeing to such
            arrangements in such documentation as may satisfy S&P, Moody's and
            Fitch with respect to the operation and management of the collateral
            (subject always to proviso (x) and (y) in (i)(B) and (ii)(B) above)
            and entering into such documents as may reasonably be requested by
            Party A in connection with the provision of such collateral.

(l)   ADDITIONAL REPRESENTATION

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

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

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

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

(m)   RECORDING OF CONVERSATIONS

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

(n)   RELATIONSHIP BETWEEN THE PARTIES

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

"15.  RELATIONSHIP BETWEEN THE PARTIES

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

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

                                       10

<PAGE>

            terms and conditions of a Transaction shall not be considered
            investment advice or a recommendation to enter into that
            Transaction. It has not received from the other party any assurance
            or guarantee as to the expected results of that Transaction.

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

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

(o)   TAX

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

      "(d)  Deduction or Withholding for Tax

      (i)   Requirement to Withhold

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

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

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

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

            (4)   if X is Party A, X will promptly pay in addition to the
                  payment to which Party B is otherwise entitled under this
                  Agreement, such additional amount (the "GROSS UP AMOUNT") as
                  is necessary to ensure that the net amount actually received
                  by Party B will equal the full amount which

                                       11

<PAGE>

                  Party B would have received had no such deduction or
                  withholding been required.

(ii)  LIABILITY

If:

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

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

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

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

      (iii) TAX CREDIT ETC.

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

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

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

                                       12

<PAGE>

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

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

                  ""INDEMNIFIABLE TAX" means any Tax."

(p)   CHANGE OF ACCOUNT

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

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

(q)   CONDITION PRECEDENT

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

(r)   REPRESENTATIONS

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

      (ii)  Section 5(a)(iv) is hereby amended by the insertion of the words
            "specified in Section 3" after the words "A representation."

(s)   CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

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

                                       13

<PAGE>

                                                     SABW DRAFT 1 - 22 JULY 2002
                                                               (BASIS RATE SWAP)

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

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

Attention:        Securitisation Team, Risk Operations

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

Attention:        Global Structured Finance (Corporate Trust)

                                                          [____] September, 2002

Dear Sirs,

CONFIRMATION - FOURTH ISSUER BASIS RATE SWAP

The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the "SWAP
TRANSACTION"). This letter constitutes a "CONFIRMATION" as referred to in the
1992 ISDA Master Agreement (Multicurrency-Cross Border) entered into between us
and both of you on the date hereof as amended and supplemented from time to time
(the "Agreement").

The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps & Derivatives Association, Inc. (the
"DEFINITIONS") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
shall prevail. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule [Third] Amendment Deed executed by, among others, the Note Trustee on
[____] September, 2002 and the Issuer Master Definitions Schedule signed for the
purposes of identification by Sidley Austin Brown & Wood and Allen & Overy on
[____] 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). The

                                       1

<PAGE>

Issuer Master Definitions Schedule specified above shall prevail to the extent
that it conflicts with the Master Definitions Schedule. The following
expressions shall have the following meanings:

The term "TRANSACTION" as used herein shall, for the purposes of the
Definitions, have the same meaning as "SWAP TRANSACTION".

ADDITIONAL ISSUER AMOUNT means, in respect of a Payment Date, an amount in
Sterling equal to the amount produced by applying the Blended Rate for the
Determination Period ending immediately prior to such Payment Date to the
Additional Notional Amount, such amount to be calculated by the Calculation
Agent on the basis of the actual number of days in such Determination Period,
divided by 365.

ADDITIONAL NOTIONAL AMOUNT means GBP [______].

ADDITIONAL SWAP PROVIDER AMOUNT means, in respect of a Payment Date, an amount
in Sterling which is equal to the amount produced by applying a rate equal to
the Three Month LIBOR applicable to the Interest Period ending on such Payment
Date plus the Blended Spread for the Determination Period ending during such
Interest Period to the Additional Notional Amount, such amount to be calculated
by the Calculation Agent on the basis of the actual number of days in such
Interest Period, divided by 365.

AVERAGE FIXED RATE MORTGAGE LOAN BALANCE means, in respect of a Determination
Period, an amount equal to the sum of the aggregate of the outstanding current
balances of the Fixed Rate Mortgage Loans at the start of business on the first
day of such Determination Period as notified to the Calculation Agent by the
Cash Manager in accordance with the Cash Management Agreement.

AVERAGE FLEXIBLE MORTGAGE LOAN BALANCE means, in respect of a Determination
Period, an amount equal to the sum of the aggregate of the outstanding current
balances of the Flexible Mortgage Loans at the start of business on the first
day of such Determination Period as notified to the Calculation Agent by the
Cash Manager in accordance with the provisions of the Cash Management Agreement.

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

AVERAGE VARIABLE RATE MORTGAGE LOAN BALANCE means, in respect of a Determination
Period, an amount equal to the sum of the aggregate of the outstanding current
balances of the Variable Rate Mortgage Loans at the start of business on the
first day of such Determination Period as notified to the Calculation Agent by
the Cash Manager in accordance with the provisions of the Cash Management
Agreement.

BASIS RATE NOTE AMORTISATION AMOUNT means, in respect of a Payment Date, an
amount in Sterling equal to (a) GBP[____] (being the original outstanding
principal balance of the Notes, other than the Class D Notes (converted to GBP
at the applicable Exchange Rate in the case of Notes denominated in USD or in
EUR)) MINUS (b) the aggregate

                                       2

<PAGE>

outstanding principal balance of the Notes, other than the Class D Notes
(converted to GBP at the applicable Exchange Rate in the case of Notes
denominated in USD or in EUR) on the immediately preceding Payment Date (in the
case of the first Payment Date, on the Effective Date), as determined after
taking account of any changes made on such date to the outstanding principal
balance of the Notes PLUS (c) the balance of the Principal Deficiency Ledger on
such immediately preceding Payment Date as determined after taking account of
any changes made on such date to the balance of the Principal Deficiency Ledger
(converted to GBP at the applicable Exchange Rate in the case of Principal
Deficiency Ledger entries in USD or in EUR) PLUS (d) the aggregate outstanding
principal balance on the immediately preceding Payment Date of any Fixed Rate
Mortgage Loans which have become Re-Fixed Mortgage Loans since the immediately
preceding Payment Date.

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

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

CLASS D NOTES means the (pound)[____] Series 3 Class D Notes due [____] issued
by the Current Issuer.

CURRENT ISSUER means Granite Mortgages 02-2 plc.

DETERMINATION DATE means the first Business Day of any calendar month which
includes a Payment Date.

DETERMINATION PERIOD means the period from (and including) the Closing Date to
(but excluding) the first Determination Date and thereafter from (and including)
one Determination Date to (but excluding) the next Determination Date.

EXCHANGE RATE means: For the Series 1 Notes:  GBP1.00:USD [____]
                     For the Series 2 Notes: GBP1.00: EUR [____]

FIXED RATE MORTGAGE LOANS means those Mortgage Loans within the Mortgage
Portfolio from time to time which are subject to fixed rates of interest set by
reference to a pre-determined interest rate or series of interest rates for a
fixed period or periods (and shall, for the avoidance of doubt, exclude Flexible
Mortgage Loans and Variable Rate Mortgage Loans).

                                       3

<PAGE>

FIXED RATE RATIO means, in respect of a Determination Period, the Average Fixed
Rate Mortgage Loan Balance divided by the Average Mortgage Loan Balance.

FIXED RATE SPREAD means [____] % per annum.

FLEXIBLE MORTGAGE LOANS means those Mortgage Loans within the Mortgage Portfolio
that typically incorporate features that give the borrower options (which may be
subject to certain conditions) to, among other things, make further drawings on
the mortgage loan account, and/or to overpay or underpay interest and principal
in a given month and/or to take a payment holiday.

FLEXIBLE RATIO means, in respect of a Determination Period, the Average Flexible
Mortgage Loan Balance divided by the Average Mortgage Loan Balance.

FLEXIBLE SPREAD means [____] % per annum.

FLEXIBLE SWAP RATE means, in respect of a Determination Period, a rate of
interest equal to the Variable Rate Swap SVR for such Determination Period MINUS
the weighted average of the discounts charged to borrowers of Flexible Mortgage
Loans as at the start of business on the first day of such Determination Period
(the weighted average being calculated by reference to the then outstanding
current balances of such Flexible Mortgage Loans as at that date), as determined
by the Cash Manager in accordance with the provisions of the Cash Management
Agreement.

FUNDING means Granite Finance Funding Limited.

INTEREST PERIOD means in relation to the Current Issuer Notes a period from (and
including) a Payment Date (or in respect of the first Interest Period, the
Closing Date) to (but excluding) the next following (or first) Payment Date.

ISSUER AMOUNT means, in respect of a Payment Date, an amount in Sterling equal
to the amount produced by applying the Blended Rate for the Determination Period
ending immediately prior to such Payment Date to the Notional Amount, such
amount to be calculated by the Calculation Agent on the basis of the actual
number of days in such Determination Period, divided by 365.

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

NOTES means the Current Issuer Notes.

NOTIONAL AMOUNT means an amount in Sterling equal to GBP[____] (being the
original outstanding principal balance of the Notes, other than the Class D
Notes, (converted to GBP at the applicable Exchange Rate in the case of Notes
denominated in USD or in EUR)).

PAYMENT DATE means the twentieth day of [____] in each year or, if such day is
not a Business Day, the next succeeding Business Day, beginning in [o].

                                       4

<PAGE>

PRINCIPAL DEFICIENCY LEDGER means the Issuer Principal Deficiency Ledger of such
name maintained for the Current Issuer by the Cash Manager pursuant to the
Current Issuer Cash Management Agreement.

REFERENCE LENDERS means Abbey National plc, Alliance & Leicester plc, Barclays
Bank plc, Halifax plc, Lloyds TSB Bank plc, National Westminster Bank Plc and
Woolwich plc (or their respective successors) and such additional or replacement
residential mortgage lenders as shall be determined by the Calculation Agent and
REFERENCE LENDER means any one of them.

SWAP PROVIDER AMOUNT means, in respect of a Payment Date, an amount in Sterling
which is equal to the amount produced by applying a rate equal to the Three
Month LIBOR applicable to the Interest Period relating to such Payment Date plus
the Blended Spread for the Determination Period ending during such Interest
Period to the Notional Amount, such amount to be calculated by the Calculation
Agent on the basis of the actual number of days in such Interest Period, divided
by 365.

THREE MONTH LIBOR means, in respect of an Interest Period, the London Interbank
Offered Rate for three-month Sterling deposits for such Interest Period (as
determined by the Agent Bank in accordance with Condition 4 of the Current
Issuer Notes and notified to the parties on the Payment Date on which the
relevant Interest Period began); provided however that for the first Interest
Period such rate shall be interpolated as set forth in Condition 4.

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

VARIABLE RATE RATIO means, in respect of a Determination Period, the Average
Variable Rate Mortgage Loan Balance divided by the Average Mortgage Loan
Balance.

VARIABLE RATE SPREAD means [____] % per annum.

VARIABLE RATE SWAP SVR means, in respect of a Determination Period, the rate
equal to the average of the standard variable rates or their equivalent charged
to existing borrowers on residential mortgage loans as published from time to
time as at the start of business on the first day of such Determination Period
after excluding the highest and lowest rate, of the Reference Lenders, as
determined by the Cash Manager in good faith and notified to the Calculation
Agent from time to time in accordance with the Cash Management Agreement.

WEIGHTED AVERAGE FIXED RATE means, in respect of a Determination Period, the
rate equal to the weighted average of the fixed rates of interest charged to
borrowers of Fixed Rate Mortgage Loans as at the start of business on the first
day of such Determination Period (the weighted average being calculated by
reference to the then outstanding current balances of such Fixed Rate Mortgage
Loans as at that date) as notified by the

                                       5

<PAGE>

Cash Manager to the Calculation Agent in accordance with the provisions of the
Cash Management Agreement.

1.    This Confirmation supplements, forms part of, and is subject to, the
      Agreement. All provisions contained in the Agreement govern this
      Confirmation except as expressly modified below.

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

      PARTY A:          Northern Rock plc

      PARTY B:          Granite Mortgages 02-2 plc

      TRADE DATE:       [____] 2002

      EFFECTIVE DATE:   [____] 2002

      TERMINATION DATE:          The earlier of (i) the Payment Date
                                 falling in [____] and (ii) the date on which
                                 the outstanding principal balance of the
                                 Notes, other than the Class D Notes, are
                                 reduced to zero.

      BUSINESS DAY CENTERS
      FOR ALL PAYMENTS:          London

      CALCULATION OF
      AMOUNTS:                   On the Distribution Date immediately
                                 preceding each Payment Date, the Calculation
                                 Agent shall calculate the Swap Provider
                                 Amount for such Payment Date and the Issuer
                                 Amount for such Payment Date, and forthwith
                                 notify Party A, Party B, the Cash Manager
                                 and the Current Issuer Cash Manager of the
                                 amounts so determined and of the net amount
                                 determined as set out below.

                                 Notwithstanding any other provision of this
                                 Confirmation, if on any date (i) additional
                                 Mortgage Loans are added to the Mortgage
                                 Portfolio and (ii) Funding draws down a new
                                 intercompany loan (any such date, a "NEW
                                 LOAN DATE"), then the Calculation Agent may
                                 make any adjustments it deems appropriate to
                                 the Average Fixed Rate Mortgage Loan
                                 Balance, the Average Flexible Mortgage Loan
                                 Balance, the Average Variable Rate Mortgage
                                 Loan Balance and the Weighted Average Fixed
                                 Rate for the Determination Period in which
                                 such New Loan Date occurs in order to
                                 reflect the addition of such Mortgage Loans.

      PAYMENTS:                  If in relation to any Payment Date:

                                       6

<PAGE>

                                 (i)     the Swap Provider Amount for such
                                         Payment Date exceeds the Issuer
                                         Amount for such Payment Date, Party
                                         A shall pay the amount of such
                                         excess to Party B on such Payment
                                         Date;

                                  (ii)   the Issuer Amount for such Payment
                                         Date exceeds the Swap Provider
                                         Amount for such Payment Date, Party
                                         B shall pay the amount of such
                                         excess to Party A on such Payment
                                         Date;

                                  (iii)  the Swap Provider Amount for such
                                         Payment Date is equal to the Issuer
                                         Amount for such Payment Date, no
                                         amount shall be due and payable by
                                         either party hereunder in relation
                                         to such Payment Date.

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

3.    CONDITIONAL BASIS RATE SWAP TRANSACTIONS

The terms set out below are applicable to each of the additional basis rate swap
Transactions (comprising the Additional Swap Provider Amounts and Additional
Issuer Amounts). The following terms reflect such additional [____] Transactions
each on the terms set out below and each such Transaction shall be referred to
in numerical sequence beginning with "Transaction 1" through "Transaction
[____]" (together, the "CONDITIONAL TRANSACTIONS") and such Transactions are to
become effective on a sequential basis, starting on the first Payment Date on
which the conditions referred to below are satisfied for that Transaction;
provided, however, that for purposes of calculating any termination payment due
pursuant to Section 6 of the Agreement, any additional basis rate swap
Transaction that would have become effective on the Payment Date immediately
following the Termination Date if the Agreement had not terminated shall be
deemed to be effective on such Termination Date.

The first Transaction shall be conditional upon the Basis Rate Note Amortisation
Amount for any Payment Date being greater than or equal to the Additional
Notional Amount (each a "FIRST CONDITION") and each subsequent Transaction shall
be conditional upon (i) the First Condition having occurred, (ii) the
immediately preceding Transactions having become effective and (iii) the then
relevant Basis Rate Note Amortisation Amount less the aggregate of the
Additional Notional Amounts of the preceding Transactions which have become
effective on or before the relevant Payment Date equaling or exceeding the
Additional Notional Amount in respect of such Transaction.

On each Distribution Date the Calculation Agent shall notify Party A and Party B
as to the Basis Rate Note Amortisation Amount and the Conditional Transactions
in numerical

                                       7

<PAGE>

order that are then currently effective and are to become effective on the next
Payment Date.

      CALCULATION OF
      ADDITIONAL
      AMOUNTS:          On the Distribution Date immediately preceding each
                        Payment Date, the Calculation Agent shall calculate
                        the Additional Swap Provider Amount for such Payment
                        Date and the Additional Issuer Amount for such
                        Payment Date, and forthwith notify Party A, Party B,
                        the Cash Manager and the Current Issuer Cash Manager
                        of the amounts so determined and of the net amount
                        determined as set out below.

      ADDITIONAL
      PAYMENTS:         If in relation to any Payment Date:

                        (i)      the Additional Swap Provider Amount for such
                                 Payment Date exceeds the Additional Issuer
                                 Amount for such Payment Date, Party B shall
                                 pay the amount of such excess to Party A on
                                 such Payment Date;

                        (ii)     the Additional Issuer Amount for such
                                 Payment Date exceeds the Additional Swap
                                 Provider Amount for such Payment Date, Party
                                 A shall pay the amount of such excess to
                                 Party B on such Payment Date;

                        (iii)    the Additional Swap Provider Amount for such
                                 Payment Date is equal to the Additional
                                 Issuer Amount for such Payment Date, no
                                 amount shall be due and payable by either
                                 party hereunder in relation to such Payment
                                 Date.

4.    Account Details:

      Payments to Party A:       Bank:           Northern Rock plc
                                 Account Name:   Northern Rock Group
                                                 Treasury
                                 Sort Code:      30-00-59
                                 Reference:      Granite Mortgages 02-2 plc

      Payments to Party B:       Bank:           Citibank N.A.
                                 Account Name:   Granite Mortgages 02-2 plc
                                 Account Number: [____]
                                 Sort Code:      18-50-08
                                 Reference:      Northern Rock plc

5.    Notice Details:

      Party A:                   Northern Rock plc

                                       8

<PAGE>

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

      Facsimile Number:          0191-279-4694

      Attention:                 Treasury Settlements Manager

      Party B:                   Granite Mortgages 02-2 plc

      Address:                   Fifth Floor
                                 100 Wood Street
                                 London
                                 EC2V 7EX

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

      Facsimile Number:          0191-279-4694

      Attention:                 Keith M. Currie

      With a copy to the
      Note Trustee:              The Bank of New York

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

      Facsimile Number:         0207 964 6262

      Attention:                 Global Structured Finance
                                 (Corporate Trust)

                                       9

<PAGE>

Yours faithfully,

NORTHERN ROCK PLC

by:

Name:

Title:

Confirmed as of the date first written:

GRANITE MORTGAGES 02-2 PLC

By:

Name:

Title:

THE BANK OF NEW YORK
     as Note Trustee

By:

Name:

Title:

                                       10(Dollar Currency Swap)
(Multicurrency - Cross Border)

                                      ISDA(R)

                  International Swap Dealers Association, Inc.

                                MASTER AGREEMENT

                           dated as of September 2002

[____________] ("Party A") and The Bank of New York (the "Note Trustee") and
Granite Mortgages 02-2 plc ("Party B).

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

Accordingly, the parties agree as follows: --

1. INTERPRETATION

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

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

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

2. OBLIGATIONS

(a) GENERAL CONDITIONS.

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

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

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

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

<PAGE>

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

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

      (i) in the same currency; and

      (ii) in respect of the same Transaction,

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

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

(d) DEDUCTION OR WITHHOLDING FOR TAX.

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

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

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

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

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

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

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

                                       2                            ISDA(R) 1992

<PAGE>

      (ii) LIABILITY. If: --

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

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

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

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

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

3. REPRESENTATIONS

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

(a) BASIC REPRESENTATIONS.

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

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

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

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

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

                                       3                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

4. Agreements

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

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

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

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

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

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

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

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

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

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

                                       4                            ISDA(R) 1992

<PAGE>

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

5. EVENTS OF DEFAULT AND TERMINATION EVENTS

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

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

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

      (iii) CREDIT SUPPORT DEFAULT.

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

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

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

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

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

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

                                       5                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

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

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

                                       6                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

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

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

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

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

                                       7                            ISDA(R) 1992

<PAGE>

6. EARLY TERMINATION

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

(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.

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

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

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

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

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

      (iv) RIGHT TO TERMINATE. If: --

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

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

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

                                       8                            ISDA(R) 1992

<PAGE>

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

(c) EFFECT OF DESIGNATION.

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

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

(d) CALCULATIONS.

      (i) STATEMENT. On or as soon as reasonably practicable following the
      occurrence of an Early Termination Date, each party will make the
      calculations on its part, if any, contemplated by Section 6(e) and will
      provide to the other party a statement (1) showing, in reasonable detail,
      such calculations (including all relevant quotations and specifying any
      amount payable under Section 6(e)) and (2) giving details of the relevant
      account to which any amount payable to it is to be paid. In the absence of
      written confirmation from the source of a quotation obtained in
      determining a Market Quotation, the records of the party obtaining such
      quotation will be conclusive evidence of the existence and accuracy of
      such quotation.

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

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

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

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

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

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

                                       9                            ISDA(R) 1992

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       10                           ISDA(R) 1992

<PAGE>

7. TRANSFER

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

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

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

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

8. CONTRACTUAL CURRENCY

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

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

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

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

                                       11                           ISDA(R) 1992

<PAGE>

9. MISCELLANEOUS

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

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

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

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

(e) COUNTERPARTS AND CONFIRMATIONS.

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

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

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

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

10. OFFICES; MULTIBRANCH PARTIES

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

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

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

11. EXPENSES

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

                                       12                           ISDA(R) 1992

<PAGE>

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

12. NOTICES

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

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

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

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

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

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

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

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

13. GOVERNING LAW AND JURISDICTION

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

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

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

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

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

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

                                       13                           ISDA(R) 1992

<PAGE>

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

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

14. DEFINITIONS

As used in this Agreement: --

"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).

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

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

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

"APPLICABLE RATE" means: --

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

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

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

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

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

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

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

"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).

"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.

"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.

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

                                       14                           ISDA(R) 1992

<PAGE>

"DEFAULTING PARTY" has the meaning specified in Section 6(a).

"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).

"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

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

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

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

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

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

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

                                       15                           ISDA(R) 1992

<PAGE>

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

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

"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).

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

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

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

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

"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.

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

"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of. --

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

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

"SPECIFIED ENTITY" has the meanings specified in the Schedule.

                                       16                           ISDA(R) 1992

<PAGE>

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

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

"STAMP TAX" means any stamp, registration, documentation or similar tax.

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

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

"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).

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

"TERMINATION CURRENCY" has the meaning specified in the Schedule.

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

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

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

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

                                       17                           ISDA(R) 1992

<PAGE>

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

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

                                                   Granite Mortgages 02-2 plc,
    [_________], being Party A                            being Party B
---------------------------------------        ---------------------------------
         (Name of Party)                                 (Name of Party)

By: ...................................        By: .............................
    Name:                                          Name:
    Title:                                         Title:
    Date:                                          Date:

                                       18                           ISDA(R) 1992

<PAGE>

                                                      SABW DRAFT 1- 22 JULY 2002
                                                      (SERIES 1 CLASS A1 NOTES)

                                    SCHEDULE

                                     TO THE

                                MASTER AGREEMENT

                      dated as of [______] September, 2002

between

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

(2)   GRANITE MORTGAGES 02-2 plc ("PARTY B"); and

(3)   THE BANK OF NEW YORK (the "NOTE TRUSTEE", which expression shall include
      its successors and assigns and which has agreed to become a party to this
      Agreement solely for the purpose of taking the benefit of Parts 5(c) and
      (h) of the Schedule to this Agreement).

Part 1.  TERMINATION PROVISIONS.

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

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

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

      Section 5(a)(v), none

      Section 5(a)(vi), none

      Section 5(a)(vii), none

      Section 5(b)(iv), none

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

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

                                       1
<PAGE>

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

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

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

      (i)   Market Quotation will apply.

      (ii)  The Second Method will apply.

(g)   "TERMINATION CURRENCY" means Sterling.

Part 2.  TAX REPRESENTATIONS

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

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

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

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

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

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

                                       2
<PAGE>

Part 3.  AGREEMENT TO DELIVER DOCUMENTS

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

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

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

                             None

(b)   Other documents to be delivered are:-

      PARTY REQUIRED                                              COVERED BY
      TO DELIVER     FORM/DOCUMENT/           DATE BY WHICH       SECTION 3(D)
      DOCUMENT       CERTIFICATE              TO BE DELIVERED     REPRESENTATION

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

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

      Party A        Legal opinion of the     On signing of       No
                     counsel to Party A       this Agreement
                     in form and substance
                     satisfactory to Party B

      Party B        Legal opinion of the     On signing of       No
                     counsel to Party B       this Agreement
                     in form and substance
                     satisfactory to Party A

                                       3
<PAGE>

Part 4.  MISCELLANEOUS

(a)   ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
      Agreement:-

      Address for notices or communications to Party A:-

      Address:        [__________]

      Attention:      [__________]

      Facsimile No.:  [__________]

      Address for notices or communications to Party B:-

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

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

      Attention:          Keith M. Currie

      Facsimile No.:      0191 279 4694

      With a copy to the Note Trustee:-

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

      Attention:          Corporate Trust (Global Structured Finance)

      Facsimile No.:      020 7964 6061

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

      Party A appoints as its Process Agent: none.

      Party B appoints as its Process Agent: none.

                                       4
<PAGE>

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

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

      Party A [is/is not] a Multibranch Party [and may act through the following
      offices: London].

      Party B is not a Multibranch Party.

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

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

      In respect of Party A: None.

      In respect of Party B: The Current Issuer Deed of Charge.

(g)   CREDIT SUPPORT PROVIDER.

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

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

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

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

Part 5.  OTHER PROVISIONS

(a)   DEFINITIONS AND INTERPRETATION

      (i)   The definitions and provisions contained in the 2000 ISDA
            Definitions as published by the International Swaps and Derivatives
            Association, Inc. (the "DEFINITIONS") are incorporated by reference
            herein. Any terms used and not otherwise defined herein which are
            contained in the Definitions shall have the meaning set forth
            therein.

      (ii)  Capitalised terms used in this Agreement shall, except where the
            context otherwise requires and save where otherwise defined in this
            Agreement, the Confirmation, the Schedule or the Definitions, bear
            the meanings given to them in the Master Definitions Schedule as
            amended and restated by (and appearing in Appendix 1 to) the Master
            Definitions Schedule Third Amendment Deed executed by, among others,
            the Note Trustee on [_____] September 2002 and the Issuer Master
            Definitions Schedule signed for the purposes of identification by
            Sidley Austin Brown & Wood and Allen and Overy on [____] 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). The Issuer Master Definitions

                                       5

<PAGE>

            Schedule specified above shall prevail to the extent that it
            conflicts with the Master Definitions Schedule.

(b)   NO SET-OFF

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

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

(c)   SECURITY INTEREST

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

(d)   DISAPPLICATION OF CERTAIN EVENTS OF DEFAULT

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

      Section 5(a)(viii) will not apply to Party B in respect of a transfer to
      the Note Trustee or in respect of a transfer to any entity which has
      succeeded the Note Trustee in that capacity.

      Section 5(a)(ii) shall not apply in respect of Party A with respect to any
      failure to perform its obligations as Calculation Agent as a result of the
      Cash Manager failing to provide any information or calculations to Party A
      pursuant to this Agreement or the Cash Management Agreement.

(e)   DISAPPLICATION OF CERTAIN TERMINATION EVENTS

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

(f)   ADDITIONAL EVENT OF DEFAULT

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

      "NOTE ENFORCEMENT NOTICE. The Note Trustee serves a Note Enforcement
      Notice on Party B (in which case Party B shall be the Defaulting Party)."

                                       6
<PAGE>

(g)   NORTHERN ROCK PLC AS PARTY B'S AGENT

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

(h)   SECURITY, ENFORCEMENT AND LIMITED RECOURSE

      (i)   Party A agrees with Party B and the Note Trustee to be bound by the
            terms of the Current Issuer Deed of Charge and the Current Issuer
            Cash Management Agreement and, in particular, confirms that: (i) no
            sum shall be payable by or on behalf of Party B to it except in
            accordance with the Issuer Priority of Payments of Party B as set
            out in the Current Issuer Cash Management Agreement or, as
            applicable, the Current Issuer Deed of Charge (as the same may be
            amended from time to time); and (ii) it will not take any steps for
            the winding up, dissolution or reorganisation or for the appointment
            of a receiver, administrator, administrative receiver, trustee,
            liquidator, sequestrator or similar officer of Party B or of any or
            all of its revenues and assets nor participate in any ex parte
            proceedings nor seek to enforce any judgment against Party B except
            as provided in the Current Issuer Deed of Charge.

      (ii)  In relation to all sums due and payable by Party B to Party A, Party
            A agrees that it shall have recourse only to sums available to Party
            B for the purpose of making payments to Party A in accordance with
            the relevant Issuer Priority of Payments, the Current Issuer Cash
            Management Agreement and/or, as applicable the Current Issuer Deed
            of Charge.

      (iii) If, on any date, Party B does not pay the full amount it would
            otherwise owe under any Transaction (including, for the avoidance of
            doubt, any related Conditional Transactions, and after the
            application of Section 2(c) to such Transaction) because of the
            limitation contained in clause (i) of this paragraph (h), then (i)
            payment by Party B of the shortfall will not then fall due but will
            instead be deferred until the first Payment Date thereafter on which
            sufficient funds are available (subject to the limitation in clause
            (i) of this paragraph (h)), (ii) failure by Party B to make the full
            payment under such Transaction (including, for the avoidance of
            doubt, any related Conditional Transactions, and after the
            application of Section 2(c) to such Transaction) shall not
            constitute an Event of Default for the purpose of Section 5(a)(i),
            and (iii) the obligation of Party A to make payment to Party B, in
            respect of the same Transaction, on such date, will be reduced so
            that Party A will be obligated to pay the Equivalent Percentage of
            the amount it would otherwise owe under that Transaction.
            "EQUIVALENT PERCENTAGE" means the percentage obtained by dividing
            the amount paid by Party B by the amount it would have paid absent
            such limitation.

                                       7
<PAGE>

      (iv)  For the avoidance of doubt, if an Early Termination Date results
            from an Event of Default, the Unpaid Amounts owing to Party A will
            include any amount payable by Party B, the payment of which was
            deferred under clause (iii) of this paragraph (h).

(i)   SCOPE OF AGREEMENT

      It is hereby understood and agreed that the provisions of this Agreement
      shall only apply to the swap transactions entered into between Party A and
      Party B on the date as of which this Agreement is made as evidenced by the
      Confirmation substantially in the form attached hereto as Appendix B, and
      that no other swap transaction may be entered into pursuant hereto except
      where the Rating Agencies have confirmed in writing that the then current
      ratings of the Current Issuer Notes would not be adversely affected by
      such other swap transaction.

(j)   AUTHORISED PERSON

      For the purposes of Section 3 of this Agreement, Party A represents to
      Party B (which representation will be deemed to be repeated by Party A on
      each date on which a Transaction is entered into and throughout the course
      of any Transaction) that it is an authorised person for the purposes of
      the Financial Services and Markets Act 2000.

(k)   RATINGS DOWNGRADE OF PARTY A

      (i)   In the event that the long-term, unsecured and unsubordinated debt
            obligations of Party A (or its successor), or any guarantor of Party
            A, cease to be rated at least as high as AA- by Standard & Poor's
            Rating Services, a division of The McGraw-Hill Companies Inc.
            ("S&P") and as a result of such downgrade the then current rating of
            the Notes may in the reasonable opinion of S&P be downgraded or
            placed under review for possible downgrade, then Party A shall,
            within 30 days of the occurrence of such downgrade at its own cost
            either:-

            (A)   put in place an appropriate mark-to-market collateral
                  agreement, (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates to
                  collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement provided that
                  (x) Party A shall be deemed to have satisfied the requirements
                  of S&P if the amount of collateral agreed to be provided in
                  the form of cash and/or securities (the "COLLATERAL AMOUNT")
                  is determined on a basis which is no more onerous than the
                  criteria of S&P as at 31st September, 1999 (or any subsequent
                  criteria published by S&P) which enable entities rated lower
                  than a specified level to participate in structured finance
                  transactions which, through collateralisation, are rated at a
                  higher level (as referred to, in part, in the article entitled
                  New Interest Rate Currency Swap Criteria Broadens Allowable
                  Counterparties in the January 1999 issue of S&P's Structured
                  Finance publication) (the "S&P CRITERIA") and (y) the
                  Collateral Amount shall not be required to exceed such amount
                  as would

                                       8
<PAGE>

                  be required (in accordance with the S&P Criteria) to restore
                  the rating of the Notes to the level they would have been at
                  immediately prior to such downgrading; or

            (B)   transfer all of its rights and obligations with respect to
                  this Agreement to a replacement third party whose long-term,
                  unsecured and unsubordinated debt obligations are rated at
                  least as high as AA- (or its equivalent) by S&P or such other
                  rating as is commensurate with the rating assigned to the
                  Notes by S&P from time to time; or

            (C)   procure another person to become co-obligor in respect of the
                  obligations of Party A under this Agreement or take such other
                  action as Party A may agree with S&P as will result in the
                  rating of the Notes then outstanding following the taking of
                  such action being rated no lower than the rating of the Notes
                  immediately prior to such downgrade.

      (ii)  In the event that the long-term, unsecured and unsubordinated debt
            obligations of Party A (or its successor), or any guarantor of Party
            A cease to be rated at least as high as Aa3 by Moody's Investors
            Service Limited ("MOODY'S") and as a result of such downgrade the
            then current rating of the Notes may in the reasonable opinion of
            Moody's be downgraded or placed under review for possible downgrade,
            then Party A will, on a reasonable efforts basis, within 30 days,
            and at its own costs:-

            (A)   attempt to transfer all of its rights and obligations with
                  respect to this Agreement to a replacement third party whose
                  long-term, unsecured and unsubordinated debt obligations are
                  rated at least as high as Aa3 (or its equivalent) by Moody's
                  or such other rating as is commensurate with the rating
                  assigned to the Notes by Moody's from time to time; or

            (B)   put in place an appropriate mark-to-market collateral
                  agreement, (which may be based on the credit support
                  documentation published by ISDA, or otherwise, and relates to
                  collateral in the form of cash or securities or both) in
                  support of its obligations under this Agreement provided that
                  (x) Party A shall be deemed to have satisfied the requirements
                  of Moody's if the Collateral Amount is determined on a basis
                  which is no more onerous than the Moody's Criteria and (y) the
                  Collateral Amount shall not be required to exceed such amount
                  as would be required (in accordance with the Moody's Criteria)
                  to restore the rating of the Notes to the level they would
                  have been at immediately prior to such downgrading; or

            (C)   procure another person to become co-obligor in respect of the
                  obligations of Party A under this Agreement or take such other
                  action as Party A may agree with Moody's as will result in the
                  rating of the Notes then outstanding following the taking of
                  such action being rated no lower than the rating of the Notes
                  immediately prior to such downgrade.

                                       9
<PAGE>

                  "MOODY'S CRITERIA" means that the Collateral Amount shall not
                  exceed 100 per cent. of the mark-to-market value of the
                  outstanding Transactions as determined by Party A in good
                  faith from time to time provided that if the short-term,
                  unsecured and unsubordinated debt obligations of Party A (or
                  its successor or assignee) cease to be rated as high as P-1 by
                  Moody's then the applicable Collateral Amount shall not exceed
                  the sum of (i) 102 per cent. of the mark-to-market value of
                  the outstanding Transactions determined by Party A in good
                  faith from time to time and (ii) in aggregate of the amounts
                  determined in respect of each class of Notes, equal to the
                  principal outstanding of that class of Notes and multiplied by
                  the number of days remaining from the date of the
                  determination to the Expected Repayment Date of that class of
                  Notes, divided by 365 (such aggregate the "Buffer Notional")
                  multiplied by the product of 0.15 per cent. and the Fixed Rate
                  Ratio (as defined in the Basis Rate Swap Agreement). "EXPECTED
                  REPAYMENT DATE" means the Payment Date falling in [________].

            (iii) In the event that the long-term, unsecured and unsubordinated
                  debt obligations of Party A (or its successor), or any
                  guarantor of Party A, cease to be rated at least as high as
                  AA- (or its equivalent) by Fitch Ratings Ltd ("FITCH") and as
                  a result the then current rating of the Notes may in the
                  reasonable opinion of Fitch be downgraded or placed on credit
                  watch for possible downgrade, then Party A will, on a
                  reasonable efforts basis, within 30 days, at its own cost,
                  either:-

                  (A)   attempt to transfer all of its rights and obligations
                        with respect to this Agreement to a replacement third
                        party whose long-term, unsecured and unsubordinated debt
                        ratings are rated at least as high as AA- (or its
                        equivalent) by Fitch or such other rating as is
                        commensurate with the rating assigned to the Notes by
                        Fitch from time to time; or

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

                  (C)   take such other action as Party A may agree with Fitch
                        as will result in the rating of the Notes then
                        outstanding being maintained.

            (iv)  If Party A does not take the measures described in either (i),
                  (ii) or (iii) above such failure shall not be or give rise to
                  an Event of Default but shall constitute an Additional
                  Termination Event with respect to Party A and shall be deemed
                  to have occurred on the thirtieth day following such downgrade
                  with Party A as the sole Affected Party.

                  Each of Party B and the Note Trustee shall use their
                  reasonable endeavours to co-operate with Party A in putting in
                  place such credit support documentation, including agreeing to
                  such arrangements in such documentation as may satisfy S&P,
                  Moody's and Fitch with respect to the operation and management
                  of the

                                       10
<PAGE>

                  collateral (subject always to proviso (x) and (y) in (i)(A)
                  and (ii)(B) above) and entering into such documents as may
                  reasonably be requested by Party A in connection with the
                  provision of such collateral.

(l)   ADDITIONAL REPRESENTATION

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

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

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

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

(m)   RECORDING OF CONVERSATIONS

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

(n)   RELATIONSHIP BETWEEN THE PARTIES

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

      "15.  RELATIONSHIP BETWEEN THE PARTIES

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

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

      (ii)  ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits
            of and understanding (through independent professional advice), and
            understands and

                                       11
<PAGE>

            accepts, the terms, conditions and risks of that Transaction. It is
            also capable of assuming, and assumes, the financial and other risks
            of that Transaction.

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

(o)   TAX

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

      "(d)  DEDUCTION OR WITHHOLDING FOR TAX

      (i)   Requirement to Withhold

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

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

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

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

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

                                       12
<PAGE>

      (ii)  Liability

            If:

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

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

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

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

      (iii) Tax Credit etc.

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

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

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

                  (3)   It will use all reasonable endeavours to obtain any Tax
                        credit, allowance, set-off or repayment as soon as is
                        reasonably

                                       13
<PAGE>

                        practicable provided that it shall be the sole judge of
                        the amount of any such Tax credit, allowance, set-off or
                        repayment and of the date on which the same is received
                        and shall not be obliged to disclose to Party A any
                        information regarding its tax affairs or tax
                        computations save that Party B shall, upon request by
                        Party A, supply Party A with a reasonably detailed
                        explanation of its calculation of the amount of any such
                        Tax credit, allowance, set-off or repayment and of the
                        date on which the same is received.

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

                        "Indemnifiable Tax" means any Tax."

(p)   CHANGE OF ACCOUNT

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

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

(q)   CONDITION PRECEDENT

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

(r)   REPRESENTATIONS

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

      (ii)  Section 5(a)(iv) is hereby amended by the insertion of the words
            "specified in Section 3" after the words "A representation".

(s)   TRANSFERS

      Section 7 of this Agreement shall be deleted in its entirety and replaced
      by the following:

      "(i)  Without prejudice to Section 6(b)(ii) as amended in the Schedule,
            Party A may transfer all its interest and obligations in and under
            this Agreement to any other entity whose long-term, unguaranteed,
            unsecured and unsubordinated debt obligations are then rated not
            less than AA- by Standard & Poor's, Aa3 by Moody's and AA- by Fitch
            (or its equivalent by any substitute rating agency) or to an entity
            whose obligations under this Agreement are guaranteed by an entity
            whose long-term, unguaranteed, unsecured and unsubordinated debt
            obligations

                                       14
<PAGE>

            are then rated not less than AA- by Standard & Poor's, Aa3 by
            Moody's and AA- by Fitch (or its equivalent by any substitute rating
            agency) subject to the prior written confirmation from Standard &
            Poor's, Moody's and Fitch that the then current ratings of the Notes
            will not be adversely affected and to providing prior written
            notification to the Note Trustee.

      (ii)  Neither this Agreement nor any interest or obligation in or under
            this Agreement may be transferred by Party B to any other entity
            other than the Note Trustee. For the avoidance of doubt, the
            prohibition of transfer by Party B contained in this sub-paragraph
            includes prohibition of transfer pursuant to Sections 6(b)(ii) and
            6(b)(iii) of the Agreement."

(t)   CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

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

                                       15
<PAGE>

                                                    SABW DRAFT 2-23 AUGUST 2002
                                                        (SERIES 2 CLASS A NOTES)

From:             [______________]

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

Attention:        Securitisation Team, Risk Operations

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

Attention:        Corporate Trust (Global Structured Finance)

                                                          [____] September, 2002

Dear Sirs,

RE:   CROSS CURRENCY SWAP TRANSACTIONS RELATING TO GRANITE MORTGAGES 02-2 PLC
      U.S. $600,000,000 SERIES 1 CLASS A1 NOTES DUE JANUARY 2017

The purpose of this letter is to confirm the terms and conditions of the swap
transactions entered into between us on the Trade Date specified below (the
"SWAP TRANSACTIONS"). This letter constitutes a "CONFIRMATION" as referred to in
the 1992 ISDA Master Agreement (Multicurrency-Cross Border) entered into between
us and both of you on the date hereof as amended and supplemented from time to
time (the "Agreement").

The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps & Derivatives Association, Inc. (the
"DEFINITIONS") are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
shall prevail. Any terms not otherwise defined herein or in the Definitions
shall have the meanings given to them in the Master Definitions Schedule as
amended and restated by (and appearing in Appendix 1 to) the Master Definitions
Schedule Third Amendment Deed executed by, among others, the Note Trustee on
[_____] September 2002 and the Issuer Master Definitions Schedule signed for the
purposes of identification by Sidley Austin Brown & Wood and Allen & Overy on
[___] 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). The
Issuer Master Definitions Schedule specified above shall prevail to the extent
that it conflicts with the Master Definitions Schedule.

1     This Confirmation supplements, forms part of, and is subject to, the
      Agreement. All provisions contained in, incorporated in, or incorporated
      by reference to, the Agreement shall govern this Confirmation except as
      expressly modified below.

<PAGE>

2     The terms of the particular Swap Transactions to which this Confirmation
      relates are as follows:

Party A:                                [_________]

Party B:                                Granite Mortgages 02-2 plc

Trade Date:                             [_________] September, 2002

Effective Date:                         [_________] September, 2002

Termination Date:                       The earlier of (i) the Payment Date
                                        falling in January 2008 and (ii) the
                                        date on which the Series 1 Class A1
                                        Notes are redeemed or repaid in full

Payment Date:                           Each Payment Date in respect of the
                                        Series 1 Class A1 Notes

USD Amortisation Amount:                in respect of a Payment Date, the amount
                                        (in USD) to be applied in repayment of
                                        the principal amount of the Series 1
                                        Class A1 Notes on such Payment Date as
                                        notified to the Calculation Agent by the
                                        Cash Manager

Exchange Rate:                          GBP 1.00:USD [_________]

A.    FLOATING PAYMENTS

FLOATING AMOUNTS FOR PARTY A:

Floating Rate Payer:                    Party A

Party A Currency Amount:                USD 600,000,000

Party A Payment Dates:                  each Payment Date

Floating Rate Option:                   USD-LIBOR-BBA

Designated Maturity:                    3 months; except for the initial
                                        Calculation Period which shall be the
                                        linear interpolation of 3 and 4 months

Spread A for the Calculation            [_________]% per annum
Periodsup to and including the
Calculation Period ending immediately
prior to the Payment Date in

                                       2
<PAGE>

January 2008:

Spread A for the Calculation Periods    [_________]% per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in January 2008:

Party A Floating Rate Day Count
Fraction:                               Actual/360

Reset Dates:                            The first day of each Calculation
                                        Period

FLOATING AMOUNTS FOR PARTY B:

Floating Rate Payer:                    Party B

Party B Currency Amount:                GBP [_________]

Party B Payment Dates:                  Each Payment Date

Floating Rate Option:                   GBP-LIBOR-BBA

Designated Maturity:                    3 months except for the initial
                                        Calculation Period which shall be the
                                        linear interpolation of 3 and 4 months

Spread B for the Calculation Periods    [_________]% per annum
up to and including the Calculation
Period ending immediately prior
to the Payment Date in [_________]:

Spread B for the Calculation Periods    [_________]% per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in [_________] up to
and including the Calculation Period
ending immediately prior to the
Termination Date:

Party B Floating Rate Day Count
Fraction:                               Actual/365 (Fixed)

Reset Dates:                            the first day of each Calculation
                                        Period

Calculation Agent:                      Party A

                                       3
<PAGE>

B.    EXCHANGE:

Initial Exchange Date:                  Effective Date

Party A Initial Exchange Amount:        Party B Currency Amount

Party B Initial Exchange Amount:        Party A Currency Amount

Final Exchange Date:                    Termination Date

Party A Final Exchange Amount:          Party A Currency Amount

Party B Final Exchange Amount:          Party B Currency Amount

The Transactions referred to above are hereinafter referred to as the "PRINCIPAL
TRANSACTION"

C.    CONDITIONAL INTEREST RATE AND CURRENCY TRANSACTIONS

The terms set out below are applicable to each of the additional interest rate
and currency Transactions (comprising the Additional Initial Exchanges Amounts
and Additional Final Exchange Amounts, Party A Additional Floating Amounts and
Party B Additional Floating Amounts set out below). The following terms reflect
such additional 60,000 Transactions each on the terms set out below and each
such Transaction shall be referred to in numerical sequence beginning with
"Transaction 1" through "Transaction 60,000" (together, the "CONDITIONAL
TRANSACTIONS") and such Transactions are to become effective on a sequential
basis, starting on the first Additional Initial Exchange Date on which the
conditions referred to below are satisfied for that Transaction.

The first Transaction shall be conditional upon the USD Amortisation Amount for
any Payment Date being greater than or equal to the Party B Additional Currency
Amount (as defined below) (each a "FIRST CONDITION") and each subsequent
Transaction shall be conditional upon, (i) the First Condition having occurred,
(ii) the immediately preceding Transactions having become effective, and (iii)
the then relevant USD Amortisation Amount less the aggregate of the Party A
Additional Initial Exchange Amounts of the preceding Transactions which have
become effective on (but not prior to) the relevant Additional Initial Exchange
Date equalling or exceeding the Party A Additional Initial Exchange Amount on
such Transaction.

On each Calculation Date, Party B shall notify Party A as to the USD
Amortisation Amount and the Conditional Transactions in numerical order that are
then currently effective and are to become effective on the next Party A Payment
Date.

                                       4
<PAGE>

(1)   ADDITIONAL INITIAL EXCHANGE AMOUNTS
AND ADDITIONAL FINAL EXCHANGE AMOUNTS

Additional Initial Exchange Date        the Payment Date on which the conditions
and the Effective Date:                 referred to above for the relevant
                                        Transaction comprising one of the
                                        Conditional Transactions are satisfied
                                        (being the "RELEVANT PAYMENT DATE" for
                                        that Transaction)

Party A Additional Initial Exchange
Amount:                                 Party B Additional Currency Amount

Party B Additional Initial Exchange
Amount:                                 Party A Additional Currency Amount

Party A Additional Final Exchange
Amount:                                 Party A Additional Currency Amount

Party B Additional Final Exchange
Amount:                                 Party B Additional Currency Amount

Additional Final Exchange Date:         Termination Date

(2)   ADDITIONAL FLOATING AMOUNTS

PARTY A ADDITIONAL FLOATING AMOUNTS

Party A Additional Currency Amount:     GBP [_________]

Party A Additional Floating Amount
Payer:                                  Party A

Party A Additional Floating Amount
Payer Payment Dates:                    each Payment Date following the
                                        Relevant Payment Date

Party A Additional Floating Rate
Option:                                 GBP - LIBOR - BBA

Designated Maturity:                    3 months

Spread A for the Calculation Periods    [_________]% per annum
up to and including the Calculation
Period ending immediately prior to
the Payment Date in January 2008:

Spread A for the Calculation Periods    [_________]% per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in January 2008:

Party A Additional Floating Rate Day
Count Fraction:                         Actual/365 (Fixed)

Reset Dates:                            The first day of each Calculation Period

                                       5
<PAGE>

PARTY B ADDITIONAL FLOATING AMOUNTS

Party B Additional Currency Amount:     USD 10,000

Party B Additional Floating Amount
Payer:                                  Party B

Party B Additional Floating Amount      each Party A Payment Date following the
Payer Payment Date:                     Relevant Payment Date

Party B Additional Floating Rate
Option:                                 USD - LIBOR - BBA

Designated Maturity:                    3 months

Spread B For the Calculation Period     [_________]% per annum
up to and including the Calculation
Period ending immediately prior to
the Payment Date in January 2008:

Spread B for the Calculation Period     [_________]% per annum
from and including the Calculation
Period beginning on (and including)
the Payment Date in January 2008:

Party B Additional Floating Rate Day    Actual/360
Count Fraction:

Reset Dates:                            the first day of each Calculation Period

(3)   ACCOUNT DETAILS:

PAYMENTS TO PARTY A:

Account for Payments in USD:            [_________]

Account for Payments in GBP:            [_________]

PAYMENTS TO PARTY B:

Account for Payments in USD:            Citibank, N.A., New York
                                        10990765
                                        Citibank, N.A., London
                                        Agency and Trust
                                        S.W.I.F.T. CITIUS33
                                        for further credit to
                                        A/C Granite Mortgages 02-2 plc
                                        A/C 10456837.

                                       6
<PAGE>

Account for Payments in GBP:            Citibank N.A., London
                                        8378088
                                        Agency and Trust
                                        Sort Code 18-50-08
                                        for further credit to
                                        A/C Granite Mortgages 02-2 plc
                                        A/C 10456845.
(4)   NOTICE DETAILS:

Party A:                                [_________]

Address:                                [_________]

Facsimile Number:                       [_________]

Attention:                              [_________]

Party B:                                Granite Mortgages 02-2 plc

Address:                                Fifth Floor
                                        100 Wood Street
                                        London
                                        EC2V 7EX

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

Facsimile Number:                       44-191-279-4694

Attention:                              Keith M. Currie

With a copy to the                      The Bank of New York
Note Trustee:

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

Facsimile Number:                       020 7964 6061

(5)   OFFICES:                          The Office of Party A for each of the
                                        Transactions evidenced by this
                                        Confirmation is London.

                                       7
<PAGE>

(6)   MISCELLANEOUS:

(a)   Section 2(c)(ii) of the Agreement will not apply to the Transactions
      evidenced by this Confirmation.

                                       8
<PAGE>

Yours faithfully,

[PARTY A]

By:

Name:
Title:

Confirmed as of the date first written:

GRANITE MORTGAGES 02-2 PLC

By:

Name:
Title:

THE BANK OF NEW YORK
   as Note Trustee

By:

Name:
Title:

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