Document:

AMENDED AND RESTATED BANK ACCOUNT AGREEMENT       EXHIBIT 4.12

                               21 NOVEMBER 2007

                       PERMANENT FUNDING (NO. 1) LIMITED
                                 AS FUNDING 1

                                      AND

                       PERMANENT FUNDING (NO. 2) LIMITED
                                 AS FUNDING 2

                                      AND

                      PERMANENT MORTGAGES TRUSTEE LIMITED
                             AS MORTGAGES TRUSTEE

                                      AND

                             BANK OF SCOTLAND PLC
                   AS CASH MANAGER, SELLER AND ACCOUNT BANK

                                      AND

                             THE BANK OF NEW YORK
         AS FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE

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                                   CONTENTS

CLAUSE                                                                     PAGE

1.       Definitions and Interpretation.......................................1
2.       The Funding 1 Transaction Account, the Funding 1 GIC Account, the
         Funding 2 Transaction Account, the Funding 2 GIC Account and the
         Mortgages Trustee GIC Account........................................2
3.       Payment..............................................................3
4.       Mandates.............................................................3
5.       Acknowledgement by the Account Bank..................................4
6.       Certification, Indemnity and Acceleration Notice.....................5
7.       Change of Funding 1 Security Trustee and Funding 2 Security
         Trustee or Account Bank..............................................7
8.       Termination..........................................................7
9.       Further Assurance...................................................10
10.      Confidentiality.....................................................11
11.      Costs...............................................................11
12.      Notices.............................................................11
13.      Interest............................................................12
14.      Withholding.........................................................12
15.      Tax Status..........................................................13
16.      Entire Agreement....................................................13
17.      Assignment..........................................................13
18.      The Funding 1 Security Trustee and Funding 2 Security Trustee.......14
19.      Amendments, Waivers and Consents....................................14
20.      Exclusion of Third Party Rights.....................................14
21.      Counterparts and Severability.......................................14
22.      Governing Law.......................................................14
23.      Submission to Jurisdiction..........................................15

SCHEDULE

1.       Forms of Mandate....................................................16
2.       Forms of Notice of Charge and Acknowledgement.......................17
         Part 1   Notice of Charge - Funding 1 Transaction Account/Funding
                  1 GIC Account..............................................17
         Part 2   Acknowledgement - Funding 1 Transaction Account/Funding
                  1 GIC Account..............................................19
         Part 3   Notice of Charge - Funding 2 Transaction Account/Funding
                  2 GIC Account..............................................20
         Part 4   Acknowledgement - Funding 2 Transaction Account/Funding
                  2 GIC Account..............................................22

Signatories..................................................................23

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THIS AMENDED AND RESTATED BANK AGREEMENT (this AGREEMENT) is made as a deed on
21 November 2007

BETWEEN:

(1)      PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660), a
         private limited company incorporated under the laws of England and
         Wales, whose registered office is at 35 Great St. Helen's, London EC3A
         6AP (FUNDING 1);

(2)      PERMANENT FUNDING (NO. 2) LIMITED (registered number 4441772), a
         private limited company incorporated under the laws of England and
         Wales whose registered office is at 35 Great St. Helen's, London EC3A
         6AP (FUNDING 2);

(3)      PERMANENT MORTGAGES TRUSTEE LIMITED (registered number 83116), a
         private limited company incorporated under the laws of Jersey, Channel
         Islands, whose registered office is at 47 Esplanade, St. Helier,
         Jersey JE1 0BD (the MORTGAGES TRUSTEE);

(4)      BANK OF SCOTLAND PLC (registered number SC327000) (formerly The
         Governor and Company of the Bank of Scotland), a public limited
         company incorporated under the laws of Scotland whose registered
         office is at The Mound, Edinburgh, EH1 1YZ (acting in its capacities
         as the CASH MANAGER to Funding 1, Funding 2 and the Mortgages Trustee
         pursuant to the Cash Management Agreement, the SELLER and the ACCOUNT
         BANK from the branch located at (in the case of the Mortgages Trustee
         GIC Account, the Funding 1 Transaction Account, the Funding 1 GIC
         Account, the Funding 2 Transaction Account and the Funding 2 GIC
         Account) 116 Wellington Street, Leeds LS1 4LT);

(5)      THE BANK OF NEW YORK, a New York Banking Corporation acting through
         its offices at One Canada Square, London E14 5AL (acting in its
         capacities as the FUNDING 1 SECURITY TRUSTEE, which expression shall
         include such company and all other persons or companies for the time
         being acting as security trustee (or co-trustee) pursuant to the terms
         of the Funding 1 Deed of Charge and the FUNDING 2 SECURITY TRUSTEE,
         which expression shall include such company and all other persons or
         companies for the time being acting as Funding 2 Security Trustee (or
         co-trustee) pursuant to the terms of the Funding 2 Deed of Charge).

WHEREAS:

(A)      On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
         Act 2006, The Governor and Company of the Bank of Scotland was
         registered as a public company under the Companies Act 1985 and
         changed its name to Bank of Scotland plc and the business and all
         property and liabilities of Halifax (including its rights and
         obligations under the Bank Account Agreement) were transferred to Bank
         of Scotland.

(B)      The parties hereto have agreed to further amend and restate the terms
         of the Bank Account Agreement on the date hereof as set out herein.

IT IS HEREBY AGREED AS FOLLOWS:

1.       DEFINITIONS AND INTERPRETATION

1.1      The amended and restated master definitions and construction schedule
         signed by, amongst others, the parties to this Agreement and dated [*]
         November 2007 (as the same may be amended, varied or supplemented from
         time to time with the consent of the parties to this Agreement) (the
         MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) is expressly and
         specifically incorporated into this

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         Agreement and, accordingly, the expressions defined in the Master
         Definitions and Construction Schedule (as so amended, varied or
         supplemented from time to time) shall, except where the context
         otherwise requires and save where otherwise defined herein, have the
         same meanings in this Agreement, including the Recitals hereto and
         this Agreement shall be construed in accordance with the
         interpretation provisions set out in clause 3 of the Master
         Definitions and Construction Schedule.

1.2      This Agreement amends and restates the Bank Account Agreement made on
         14 June 2002 as amended and restated on 22 March 2006 and 17 October
         2006 (the PRINCIPAL AGREEMENT). As of the date of this Agreement, any
         future rights or obligations (excluding such rights and obligations
         accrued to the date of this Agreement) of a party to the Principal
         Agreement shall be extinguished and shall instead be governed by this
         Agreement.

1.3      Any reference in this Agreement to any discretion, power, right, duty
         or obligation on the part of the Mortgages Trustee shall be as
         exercised by the Mortgages Trustee only as directed by the
         Beneficiaries but subject in each case to the provisions of Clause 16
         of the Mortgages Trust Deed.

2.       THE FUNDING 1 TRANSACTION ACCOUNT, THE FUNDING 1 GIC ACCOUNT, THE
         FUNDING 2 TRANSACTION ACCOUNT, THE FUNDING 2 GIC ACCOUNT AND THE
         MORTGAGES TRUSTEE GIC ACCOUNT

2.1      INSTRUCTIONS FROM THE CASH MANAGER

         Subject to Clause 6.5, the Account Bank shall comply with any
         direction of the Cash Manager to effect a payment by debiting any one
         of the Funding 1 Transaction Account, the Funding 1 GIC Account, the
         Funding 2 Transaction Account, the Funding 2 GIC Account or the
         Mortgages Trustee GIC Account (and/or any additional or replacement
         bank accounts opened in the name of either the Mortgages Trustee
         and/or Funding 1 and/or Funding 2 from time to time with the prior
         written consent of the Funding 1 Security Trustee and/or Funding 2
         Security Trustee and the Rating Agencies, together, the BANK ACCOUNTS)
         if such direction (a) is in writing or is given by the internet
         banking service provided by the Account Bank and (b) complies with the
         Funding 1 Transaction Account Mandate, the Funding 1 GIC Account
         Mandate, the Funding 2 Transaction Account Mandate, the Funding 2 GIC
         Account Mandate or the Mortgages Trustee GIC Account Mandate as
         appropriate.

2.2      TIMING OF PAYMENT

         The Account Bank agrees that if directed pursuant to Clause 2.1 to
         make any payment then, subject to Clauses 2.4 and 6.5 below, it will
         do so prior to close of business on the London Business Day on which
         such direction is received and for value that day provided that, if
         any direction is received later than 2.30 p.m. (London time) on any
         London Business Day or, in the case of a payment to another account
         with the Account Bank at the same branch 4.00 p.m. (London time) on
         any London Business Day, the Account Bank shall make such payment at
         the commencement of business on the following London Business Day for
         value that day.

2.3      ACCOUNT BANK CHARGES

(a)      The charges of the Account Bank for the operation of each of the Bank
         Accounts payable by the Mortgages Trustee shall be debited to the
         Mortgages Trustee GIC Account only on each Distribution Date in
         accordance with the Mortgages Trust Revenue Priority of Payments and
         the terms of the Mortgages Trust Deed and the Mortgages Trustee by its
         execution hereof irrevocably agrees that this shall be done. The
         charges shall be payable at the same rates as are generally applicable
         to the business customers of the Account Bank provided that, subject
         to Clause 8.6, if there are insufficient funds standing to the credit
         of the Mortgages Trustee GIC Account to pay such charges the Account
         Bank shall not be relieved of its obligations in respect of any of the
         Bank Accounts.

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(b)      The charges of the Account Bank for the operation of each of the Bank
         Accounts payable by Funding 1 shall be debited to the Funding 1
         Transaction Account only on each date payable in accordance with the
         Funding 1 Pre-Enforcement Revenue Priority of Payments and the terms
         of the Funding 1 Deed of Charge and Funding 1 by its execution hereof
         irrevocably agrees that this shall be done. The charges shall be
         payable at the same rates as are generally applicable to the business
         customers of the Account Bank provided that, subject to Clause 8.6, if
         there are insufficient funds standing to the credit of the Funding 1
         Transaction Account to pay such charges the Account Bank shall not be
         relieved of its obligations in respect of any of the Bank Accounts.

(c)      The charges of the Account Bank for the operation of each of the Bank
         Accounts payable by Funding 2 shall be debited to the Funding 2
         Transaction Account only on each date payable in accordance with the
         Funding 2 Pre-Enforcement Revenue Priority of Payments and the terms
         of the Funding 2 Deed of Charge and Funding 2 by its execution hereof
         irrevocably agrees that this shall be done. The charges shall be
         payable at the same rates as are generally applicable to the business
         customers of the Account Bank provided that, subject to Clause 8.6, if
         there are insufficient funds standing to the credit of the Funding 2
         Transaction Account to pay such charges the Account Bank shall not be
         relieved of its obligations in respect of any of the Bank Accounts.

2.4      NO NEGATIVE BALANCE

         Notwithstanding the provisions of Clause 2.1, amounts shall only be
         withdrawn from any Bank Account to the extent that such withdrawal
         does not cause the relevant Bank Accounts to have a negative balance.

3.       PAYMENT

3.1      INSTRUCTIONS FROM THE CASH MANAGER

(a)      The Cash Manager shall, before the date upon which any payment is due
         to be made from any Bank Account (including the payments due to be
         made on each Funding 1 Interest Payment Date and/or Funding 2 Interest
         Payment Date and/or Distribution Date), submit to the Account Bank
         irrevocable written instructions or instructions by way of the
         internet banking service provided by the Account Bank as to the
         payments to be made out of such Bank Account or Bank Accounts (as the
         case may be) on such date.

(b)      The Account Bank shall comply with the instructions described in
         paragraph 3.1(a) and shall effect the payments specified in such
         instructions not later than the time specified for payment therein
         (provided that the Account Bank shall not have any liability to any
         person if it fails to effect timely payment by reason of strike,
         computer failure, power cut or other matters beyond its control) on
         the relevant date if the instructions comply with the relevant
         Mandate.

4.       MANDATES

4.1      SIGNING AND DELIVERY OF MANDATES

         Funding 1 and the Mortgages Trustee have delivered to the Account Bank
         prior to the Initial Closing Date and Funding 2 has delivered to the
         Account Bank on or prior to the Funding 2 Programme Date the duly
         executed relevant Mandates in or substantially in the forms set out in
         Schedule 1 hereto and relating to the Bank Accounts (together, the
         MANDATES), and the Account Bank hereby confirms to the Funding 1
         Security Trustee and the Funding 2 Security Trustee that the Mandates
         have been provided to it, that the Bank Accounts are open and that the
         respective Mandates are operative. The Account Bank acknowledges that
         the Mandates and any other mandates delivered from time to time
         pursuant to the terms hereof shall be subject to the terms of the
         Funding 1 Deed of Charge, the Funding 2 Deed of Charge, the Mortgages
         Trust Deed and this Agreement as appropriate.

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4.2      AMENDMENT OR REVOCATION

         The Account Bank agrees that it shall notify the Funding 1 Security
         Trustee and/or the Funding 2 Security Trustee (as applicable) as soon
         as is reasonably practicable and in accordance with Clause 12 if it
         receives any amendment to or revocation of any Mandate relating to the
         Bank Accounts (other than a change of Authorised Signatory) and shall
         require the prior written consent of the Funding 1 Security Trustee
         and/or the Funding 2 Security Trustee (as applicable) to any such
         amendment or revocation (other than a change of Authorised Signatory)
         but, unless such Mandate is revoked, the Account Bank may continue to
         comply with such Mandate (as it may from time to time be amended in
         accordance with the provisions of this Clause 4.2) unless it receives
         notice in writing from the Funding 1 Security Trustee and/or the
         Funding 2 Security Trustee (as applicable) to the effect that an
         Intercompany Loan Acceleration Notice or a Master Intercompany Loan
         Acceleration Notice has been served or that the appointment of Bank of
         Scotland as Cash Manager under the Cash Management Agreement has been
         terminated and shall, thereafter, act solely on the instructions of
         the Funding 1 Security Trustee and/or the Funding 2 Security Trustee
         (as applicable) and in accordance with the terms thereof as provided
         in Clause 6.5 of this Agreement.

5.       ACKNOWLEDGEMENT BY THE ACCOUNT BANK

5.1      RESTRICTION ON ACCOUNT BANK'S RIGHTS

         Notwithstanding anything to the contrary in the Mandates, the Account
         Bank hereby:

         (a)     waives any right it has or may hereafter acquire to combine,
                 consolidate or merge any of the Bank Accounts with any other
                 account of the Cash Manager, the Mortgages Trustee, Funding 1,
                 Funding 2, the Seller, the Funding 1 Security Trustee, the
                 Funding 2 Security Trustee or any other person or any
                 liabilities of the Cash Manager, the Mortgages Trustee,
                 Funding 1, Funding 2, the Seller, the Funding 1 Security
                 Trustee, the Funding 2 Security Trustee or any other person to
                 it;

         (b)     agrees that it may not exercise any lien or, to the extent
                 permitted by law, any set-off or transfer any sum standing to
                 the credit of or to be credited to any of the Bank Accounts in
                 or towards satisfaction of any liabilities to it of the Cash
                 Manager, the Mortgages Trustee, Funding 1, Funding 2, the
                 Seller, the Funding 1 Security Trustee, the Funding 2 Security
                 Trustee or any other person owing to it;

         (c)     in addition to and without prejudice to its rights and
                 obligations as Funding 1 Secured Creditor and/or Funding 2
                 Secured Creditor, agrees that it will not take, and shall not
                 take, any steps whatsoever to recover any amount due or owing
                 to it pursuant to this Agreement or any other debts whatsoever
                 owing to it by the Mortgages Trustee, Funding 1 or Funding 2,
                 or procure the winding-up or liquidation of the Mortgages
                 Trustee, Funding 1 or Funding 2, or the making of an
                 administration order in relation to the Mortgages Trustee,
                 Funding 1 or Funding 2, or in respect of any of the
                 liabilities of the Mortgages Trustee, Funding 1 or Funding 2
                 whatsoever;

         (d)     agrees that it shall have recourse only to sums paid to or
                 received by (or on behalf of) the Mortgages Trustee, Funding 1
                 or Funding 2 pursuant to this Agreement, the Mortgage Sale
                 Agreement, the Mortgages Trust Deed, the Intercompany Loan
                 Agreements, the Master Intercompany Loan Agreement, the
                 Funding 1 Swap Agreement, the Funding 2 Swap Agreement or any
                 other document entered into by the Mortgages Trustee, Funding
                 1 and Funding 2 in relation to the Intercompany Loans, the
                 Master Intercompany Loans or the Loans;

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         (e)     agrees that it will notify in accordance with Clause 12 the
                 Cash Manager, Funding 1, Funding 2, the Mortgages Trustee, the
                 Funding 1 Security Trustee and the Funding 2 Security Trustee
                 if compliance with any instruction would cause the relevant
                 Bank Account(s) to which such instruction relates to have a
                 negative balance such notification to be given on the same
                 London Business Day that it determines that compliance with
                 such instruction would cause any such account to have a
                 negative balance;

         (f)     acknowledges that Funding 1 has, pursuant to the Funding 1
                 Deed of Charge, inter alia, assigned by way of security all
                 its rights, title, interest and benefit, present and future,
                 in and to, all sums from time to time standing to the credit
                 of the Bank Accounts and all of its rights under this
                 Agreement to the Funding 1 Security Trustee; and

         (g)     acknowledges that Funding 2 has, pursuant to the Funding 2
                 Deed of Charge, inter alia, assigned by way of security all
                 its rights, title, interest and benefit, present and future,
                 in and to, all sums from time to time standing to the credit
                 of the Bank Accounts and all of its rights under this
                 Agreement to the Funding 2 Security Trustee.

5.2      NOTICE OF ASSIGNMENT AND ACKNOWLEDGEMENT

(a)      The Account Bank agrees that promptly upon receipt of a notice of
         assignment signed by Funding 1, in (or substantially in) the form of
         notice set out in Part 1 of Schedule 2, hereto, the Account Bank shall
         sign and duly return to Funding 1, with a copy to the Funding 1
         Security Trustee and the Funding 2 Security Trustee, an
         acknowledgement in (or substantially in) the form of acknowledgement
         set out in Part 2 of Schedule 2 hereto.

(b)      The Account Bank agrees that promptly upon receipt of a notice of
         assignment signed by Funding 2, in (or substantially in) the form of
         notice set out in Part 3 of Schedule 2 hereto, the Account Bank shall
         sign and duly return to Funding 2 with a copy to the Funding 1
         Security Trustee and the Funding 2 Security Trustee, an
         acknowledgement in (or substantially in) the form of acknowledgement
         set out in Part 4 of Schedule 2 hereto.

5.3      MONTHLY STATEMENT

         Unless and until directed otherwise by the Funding 1 Security Trustee
         and the Funding 2 Security Trustee in accordance with Clause 12, the
         Account Bank shall provide the Cash Manager with a written statement
         in respect of each Bank Account on a monthly basis and also as soon as
         reasonably practicable after receipt of a request for a statement. The
         Account Bank is hereby authorised by Funding 1, Funding 2 and the
         Mortgages Trustee to provide statements in respect of each Bank
         Account to the Cash Manager, the Funding 1 Security Trustee and the
         Funding 2 Security Trustee.

6.       CERTIFICATION, INDEMNITY AND ACCELERATION NOTICE

6.1      ACCOUNT BANK TO COMPLY WITH CASH MANAGER'S INSTRUCTIONS

         Unless otherwise directed in writing by the Funding 1 Security Trustee
         and the Funding 2 Security Trustee pursuant to Clause 6.5, in making
         any transfer or payment from any Bank Account in accordance with this
         Agreement, the Account Bank shall be entitled to act as directed by
         the Cash Manager pursuant to Clauses 2.1 and 3 and to rely as to the
         amount of any such transfer or payment on the Cash Manager's
         instructions in accordance with the relevant Mandate, and the Account
         Bank shall have no liability to the Cash Manager, the Mortgages
         Trustee, Funding 1, Funding 2, the Seller, the Funding 1 Security
         Trustee or the Funding 2 Security Trustee for having acted on such
         instructions except in the case of its wilful default, fraud or
         negligence.

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6.2      FUNDING 1'S INDEMNITY

         Funding 1 shall indemnify the Account Bank or, pursuant to Clause 6.5,
         the Funding 1 Security Trustee, as the case may be, to the extent of
         funds then standing to the credit of the Funding 1 Transaction Account
         and/or the Funding 1 GIC Account against any loss, cost, damage,
         charge or expense incurred by the Account Bank or the Funding 1
         Security Trustee, as the case may be, in complying with any
         instruction delivered by Funding 1 pursuant to and in accordance with
         this Agreement, save that this indemnity shall not extend to:

         (a)     the charges of the Account Bank (if any) for the operation of
                 the Funding 1 Transaction Account and/or the Funding 1 GIC
                 Account other than as provided in this Agreement; and

         (b)     any loss, cost, damage, charge or expense arising from any
                 breach by the Account Bank of its obligations under this
                 Agreement.

6.3      FUNDING 2'S INDEMNITY

         Funding 2 shall indemnify the Account Bank or, pursuant to Clause 6.5,
         the Funding 2 Security Trustee, as the case may be, to the extent of
         funds then standing to the credit of the Funding 2 Transaction Account
         and/or the Funding 2 GIC Account against any loss, cost, damage,
         charge or expense incurred by the Account Bank or the Funding 2
         Security Trustee, as the case may be, in complying with any
         instruction delivered by Funding 2 pursuant to and in accordance with
         this Agreement, save that this indemnity shall not extend to:

         (a)     the charges of the Account Bank (if any) for the operation of
                 the Funding 2 Transaction Account and/or the Funding 2 GIC
                 Account other than as provided in this Agreement; and

         (b)     any loss, cost, damage, charge or expense arising from any
                 breach by the Account Bank of its obligations under this
                 Agreement.

6.4      MORTGAGES TRUSTEE INDEMNITY

         Subject to the Mortgages Trust Revenue Priority of Payments, the
         Mortgages Trustee shall indemnify the Account Bank to the extent of
         funds then standing to the credit of the Mortgages Trustee GIC Account
         against any loss, cost, damage, charge or expense incurred by the
         Account Bank in complying with any instruction delivered pursuant to
         and in accordance with this Agreement, save that this indemnity shall
         not extend to:

         (a)     the charges of the Account Bank (if any) for the operation of
                 the Mortgages Trustee GIC Account other than as provided in
                 this Agreement; and

         (b)     any loss, cost, damage, charge or expense arising from any
                 breach by the Account Bank of its obligations under this
                 Agreement.

6.5      CONSEQUENCES OF AN INTERCOMPANY LOAN ACCELERATION NOTICE OR A MASTER
         INTERCOMPANY LOAN ACCELERATION NOTICE

         The Account Bank acknowledges that, if it receives notice in writing
         from the Funding 1 Security Trustee and the Funding 2 Security Trustee
         to the effect that (a) the Funding 1 Security Trustee has served an
         Intercompany Loan Acceleration Notice or the Funding 2 Security
         Trustee has served a Master Intercompany Loan Acceleration Notice or
         (b) that the appointment of Bank of Scotland as Cash Manager under the
         Cash Management Agreement has been terminated (but without prejudice
         to Clause 6.1 above) all right, authority and power of the Cash
         Manager in respect of each of the Bank Accounts shall be terminated
         and be of no further effect and the Account Bank agrees that it

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         shall, upon receipt of such notice from the Funding 1 Security Trustee
         and the Funding 2 Security Trustee, comply with the directions of the
         Funding 1 Security Trustee and the Funding 2 Security Trustee or any
         successor cash manager appointed by the Funding 1 Security Trustee and
         the Funding 2 Security Trustee (subject to such successor cash manager
         having entered into an agreement with the Account Bank on
         substantially the same terms as this Agreement) in relation to the
         operation of each of the Bank Accounts.

7.       CHANGE OF FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE OR
         ACCOUNT BANK

7.1      CHANGE OF FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE

         In the event that there is any change in the identity of the Funding 1
         Security Trustee and/or the Funding 2 Security Trustee or an
         additional Funding 1 Security Trustee and/or an additional Funding 2
         Security Trustee are appointed in accordance with the provisions of
         the Funding 1 Deed of Charge and/or the Funding 2 Deed of Charge, the
         existing Funding 1 Security Trustee and the existing Funding 2
         Security Trustee, the new Funding 1 Security Trustee and the new
         Funding 2 Security Trustee or the retiring Funding 1 Security Trustee
         and the retiring Funding 2 Security Trustee, as the case may be, the
         Cash Manager, the Seller, the Mortgages Trustee, Funding 1, Funding 2
         and the Account Bank shall execute such documents and take such
         actions as such of the new Funding 1 Security Trustee and the new
         Funding 2 Security Trustee and the retiring Funding 1 Security Trustee
         and the retiring Funding 2 Security Trustee or, as the case may be,
         the existing Funding 1 Security Trustee and the existing Funding 2
         Security Trustee shall agree are reasonably necessary for the purpose
         of vesting in such new Funding 1 Security Trustee and/or the new
         Funding 2 Security Trustee the rights, benefits and obligations of the
         Funding 1 Security Trustee and/or the Funding 2 Security Trustee under
         this Agreement and releasing the retiring Funding 1 Security Trustee
         and/or the retiring Funding 2 Security Trustee from its future
         obligations hereunder.

7.2      CHANGE OF ACCOUNT BANK

         If there is any change in the identity of the Account Bank, the Cash
         Manager, the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
         Security Trustee and the Funding 2 Security Trustee shall execute such
         documents and take such actions as the new Account Bank and the
         outgoing Account Bank, the Funding 1 Security Trustee and the Funding
         2 Security Trustee may require for the purpose of vesting in the new
         Account Bank the rights and obligations of the outgoing Account Bank
         and releasing the outgoing Account Bank from its future obligations
         under this Agreement.

8.       TERMINATION

8.1      TERMINATION EVENTS

         The Cash Manager or Funding 1, in the case of the Funding 1
         Transaction Account or the Funding 1 GIC Account, or Funding 2, in the
         case of the Funding 2 Transaction Account or the Funding 2 GIC Account
         or the Cash Manager, Funding 1, Funding 2 or the Mortgages Trustee (as
         trustee for the Beneficiaries) in the case of the Mortgages Trustee
         GIC Account or any other Bank Account opened in the name of the
         Mortgages Trustee:

         (a)     may (with the prior written consent of the Funding 1 Security
                 Trustee and the Funding 2 Security Trustee) terminate this
                 Agreement in the event that the matters specified in
                 paragraphs (i) or (vi) below occur; and

         (b)     shall (with the prior written consent of the Funding 1
                 Security Trustee and the Funding 2 Security Trustee) terminate
                 this Agreement in the event that any of the matters specified
                 in paragraphs (ii) to (v) (inclusive) below occur,

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         in each case by serving a written notice of termination on the Account
         Bank in any of the following circumstances:

         (i)     if a deduction or withholding for or on account of any Tax is
                 imposed, or it appears likely that such a deduction or
                 withholding will be imposed, in respect of the interest
                 payable on any Bank Account; or

         (ii)    if the short-term unsecured, unsubordinated and unguaranteed
                 debt obligations of the Account Bank falls below A-1 by S&P
                 and P-1 by Moody's and F1 by Fitch Ratings respectively; or

         (iii)   if the Account Bank, otherwise than for the purposes of such
                 amalgamation or reconstruction as is referred to in paragraph
                 (iv) below, ceases or, through an authorised action of the
                 board of directors of the Account Bank, threatens to cease to
                 carry on all or substantially all of its business or the
                 Account Bank is deemed unable to pay its debts as and when
                 they fall due within the meaning of Section 123(1) (a) of the
                 Insolvency Act 1986 (on the basis that the reference in such
                 section to [POUND]750 was read as a reference to [POUND]10
                 million), Section 123(1)(b), (d) and (e), 123(1)(c) (on the
                 basis that the words "for a sum exceeding [POUND]10 million"
                 were inserted after the words "extract registered bond" and
                 "extract registered protest" and 123(2) of the Insolvency Act
                 1986 (as that Section may be amended) or ceases to be an
                 appropriately authorised institution under the Financial
                 Services and Markets Act 2000; or

         (iv)    if an order is made or an effective resolution is passed for
                 the winding-up of the Account Bank except a winding-up for the
                 purposes of or pursuant to a solvent amalgamation or
                 reconstruction the terms of which have previously been
                 approved in writing by the Mortgages Trustee (as trustee for
                 the Beneficiaries), the Funding 1 Security Trustee and the
                 Funding 2 Security Trustee (such approval not to be
                 unreasonably withheld or delayed); or

         (v)     if proceedings are initiated against the Account Bank under
                 any applicable liquidation, insolvency, bankruptcy,
                 composition, reorganisation (other than a reorganisation where
                 the Account Bank is solvent) or other similar laws (including,
                 but not limited to, presentation of a petition for an
                 administration order, the filing of documents with the court
                 for the appointment of an administrator or the service of a
                 notice of intention to appoint an administrator) and (except
                 in the case of presentation of petition for an administration
                 order, the filing of documents with the court for the
                 appointment of an administrator or the service of a notice of
                 intention to appoint an administrator) such proceedings are
                 not, in the reasonable opinion of the Mortgages Trustee (as
                 trustee for the Beneficiaries), Funding 1 and Funding 2, being
                 disputed in good faith with a reasonable prospect of success
                 or an administration order is granted or an administrator,
                 administrative receiver or other receiver, liquidator, trustee
                 in sequestration or other similar official is appointed in
                 relation to the Account Bank or in relation to the whole or
                 any substantial part of the undertaking or assets of the
                 Account Bank, or an encumbrancer takes possession of the whole
                 or any substantial part of the undertaking or assets of the
                 Account Bank, or a distress, execution or diligence or other
                 process is levied or enforced upon or sued out against the
                 whole or any substantial part of the undertaking or assets of
                 the Account Bank and such possession or process (as the case
                 may be) is not discharged or otherwise ceases to apply within
                 30 days of its commencement, or the Account Bank initiates or
                 consents to judicial proceedings relating to itself under
                 applicable liquidation, insolvency, bankruptcy, composition,
                 reorganisation or other similar laws or makes a conveyance or
                 assignment or assignation for the benefit of its creditors
                 generally or takes steps with a view to obtaining a moratorium
                 in respect of any of indebtedness; or

                                       8

<PAGE>

         (vi)    if the Account Bank fails to perform any of its obligations
                 under this Agreement and such failure remains unremedied for
                 three Business Days after the Cash Manager or the Funding 1
                 Security Trustee and the Funding 2 Security Trustee have given
                 notice of such failure.

8.2      TERMINATION OPTION

         With the prior written consent of Funding 1 Security Trustee and the
         Funding 2 Security Trustee, the Mortgages Trustee (as trustee for the
         Beneficiaries) may, upon a breach by the Account Bank of its
         obligations under this Agreement, the Mortgages Trustee Guaranteed
         Investment Contract, the Cash Management Agreement, the Funding 1 Deed
         of Charge or the Funding 2 Deed of Charge, and/or Funding 1 may, upon
         a breach by the Account Bank of its obligations under this Agreement,
         any Funding 1 Bank Account Agreement, the Funding 1 Guaranteed
         Investment Contract, the Funding 1 Liquidity Facility Agreement, the
         Cash Management Agreement, any Funding 1 Issuer Cash Management
         Agreement or the Funding 1 Deed of Charge and/or Funding 2 may, upon a
         breach by the Account Bank of its obligations under this Agreement,
         the Master Issuer Bank Account Agreement, the Funding 2 Guaranteed
         Investment Contract, the Cash Management Agreement, the Master Issuer
         Cash Management Agreement or the Funding 2 Deed of Charge, terminate
         the appointment of the Account Bank by serving a written notice of
         termination to the Account Bank and the Cash Manager, the Mortgages
         Trustee, Funding 1 and Funding 2 shall, subject to the terms of Clause
         8.5, use reasonable endeavours to find a replacement financial
         institution or institutions within 60 days of the date of the notice.

8.3      NOTIFICATION OF TERMINATION EVENT

         Each of the Mortgages Trustee, Funding 1, Funding 2, the Cash Manager
         and the Account Bank undertakes and agrees to notify the Funding 1
         Security Trustee and the Funding 2 Security Trustee in accordance with
         Clause 12 promptly upon becoming aware thereof of any event which
         would or could entitle the Funding 1 Security Trustee and the Funding
         2 Security Trustee to serve a notice of termination pursuant to Clause
         8.4.

8.4      TERMINATION BY FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY
         TRUSTEE

         In addition, prior to the service of an Intercompany Loan Acceleration
         Notice and/or a Master Intercompany Loan Acceleration Notice, the
         Funding 1 Security Trustee and the Funding 2 Security Trustee may
         terminate this Agreement and close any of the Bank Accounts by serving
         a notice of termination if any of the events specified in Clause
         8.1(b)(i) to (vi) (inclusive) of this Agreement occurs in relation to
         the Account Bank. Following the service of an Intercompany Loan
         Acceleration Notice and/or a Master Intercompany Loan Acceleration
         Notice the Funding 1 Security Trustee and the Funding 2 Security
         Trustee may serve a notice of termination at any time.

8.5      REPLACEMENT ACCOUNT BANK

         The termination of the Account Bank under Clauses 8.1, 8.2 and 8.4 of
         this Agreement shall not be effective:

         (a)     until a replacement financial institution or institutions (in
                 each case, (i) 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) and F1 (in the
                 case of Fitch Ratings) and (ii) being an authorised
                 institution under the Financial Services and Markets Act 2000)
                 shall have entered into an agreement in form and substance
                 similar to this Agreement; and

         (b)     unless such termination would not adversely affect the then
                 current ratings of the Notes.

                                       9

<PAGE>

         In the event of such termination the Account Bank shall assist the
         other parties hereto to effect an orderly transition of the banking
         arrangements documented hereby and the Mortgages Trustee, Funding 1
         and Funding 2 (as applicable) shall reimburse the Account Bank for its
         reasonable costs and any amounts in respect of Irrecoverable VAT
         thereon (including reasonable costs and expenses) incurred during the
         period of, and until completion of, such transition.

         In the event of a termination as a result of the circumstances
         outlined in Clause 8.1(b)(ii), the Account Bank shall reimburse the
         Mortgages Trustee, Funding 1 and Funding 2 (as applicable) for its
         reasonable costs and any amounts in respect of Irrecoverable VAT
         thereon (including reasonable costs and expenses) incurred during the
         period of, and until completion of, an orderly transition of the
         banking arrangements documented hereby.

8.6      AUTOMATIC TERMINATION

         This Agreement shall automatically terminate (if not terminated
         earlier pursuant to this Clause 8) on the date falling 90 days after
         the termination of the Mortgages Trust Deed.

8.7      TERMINATION BY ACCOUNT BANK

         The Account Bank may terminate this Agreement and cease to operate the
         Bank Accounts at any time:

         (a)     on giving not less than six months' prior written notice
                 thereof ending on any London Business Day which does not fall
                 on either a Distribution Date, a Funding 1 Interest Payment
                 Date or a Funding 2 Interest Payment Date or less than ten
                 London Business Days before any such date to each of the other
                 parties hereto without assigning any reason therefor; and

         (b)     on giving not less than three months' prior written notice
                 thereof ending on any London Business Day which does not fall
                 on either a Distribution Date, a Funding 1 Interest Payment
                 Date or a Funding 2 Interest Payment Date or less than ten
                 London Business Days before any such date to each of the other
                 parties hereto, if the Account Bank shall have demanded
                 payment of its due charges or any interest and the same shall
                 have remained unpaid for a period of one month, provided that
                 if the relevant amounts have been paid on or before the date
                 six weeks after the date of delivery of such notice then the
                 notice shall have no effect,

         Provided that such termination shall not take effect:

         (i)     until a replacement financial institution or institutions (in
                 each case, (x) with a short-term unsecured, unsubordinated and
                 unguaranteed debt obligation rating of A-1 (in the case of
                 S&P), P-1 (in the case of Moody's) and F1 (in the case of
                 Fitch Ratings) and (y) being an authorised institution under
                 the Financial Services and Markets Act 2000) shall have
                 entered into an agreement in form and substance similar to
                 this Agreement; and

         (ii)    if the then current ratings of the Notes would be adversely
                 affected thereby.

         In either case the Account Bank shall not be responsible for any costs
         or expenses occasioned by such termination and cessation. In the event
         of such termination and cessation the Account Bank shall assist the
         other parties hereto to effect an orderly transition of the banking
         arrangements documented hereby.

                                      10

<PAGE>

9.       FURTHER ASSURANCE

         The parties hereto agree that they will co-operate fully to do all
         such further acts and things and execute any further documents as may
         be necessary or reasonably desirable to give full effect to the
         arrangements contemplated by this Agreement.

10.      CONFIDENTIALITY

         None of the parties hereto shall during the term of this Agreement or
         after its termination disclose to any person whatsoever (except as
         provided herein or in any of the Transaction Documents to which it is
         a party or with the authority of the other parties hereto or so far as
         may be necessary for the proper performance of its obligations
         hereunder or unless required by law or any applicable stock exchange
         requirement or any governmental or regulatory authority or ordered to
         do so by a court of competent jurisdiction or by the Inland Revenue or
         the Commissioners of Customs and Excise or the Bank of England or the
         Financial Services Authority) any information relating to the
         business, finances or other matters of a confidential nature of any
         other party hereto of which it may in the course of its duties
         hereunder have become possessed and each of the parties hereto shall
         use all reasonable endeavours to prevent any such disclosure.

11.      COSTS

         The Mortgages Trustee agrees to pay the reasonable costs and any
         amounts in respect of Irrecoverable VAT thereon (including reasonable
         legal costs and expenses) of the Account Bank in connection with the
         negotiation of this Agreement and the establishment of the Bank
         Accounts and the negotiation and execution of any further documents
         and the taking of any further action to be executed or taken pursuant
         to Clauses 7, 8 (other than Clauses 8.1(b)(ii), 8.1(b)(iii),
         8.1(b)(iv), 8.1(b)(v), 8.1(b)(vi), 8.6 and 8.7(a)) and 9.

12.      NOTICES

12.1     Any notices to be given pursuant to this Agreement to any of the
         parties hereto shall be sufficiently served if sent by prepaid first
         class post, by hand or facsimile transmission and shall be deemed to
         be given (in the case of facsimile transmission) when despatched,
         (where delivered by hand) on the day of delivery if delivered before
         17.00 hours on a Business Day or on the next Business Day if delivered
         thereafter or on a day which is not a Business Day or (in the case of
         first class post) when it would be received in the ordinary course of
         the post and shall be sent:

         (a)     in the case of the Cash Manager: to Bank of Scotland plc,
                 Halifax Division, Level 3, Lovell Park, 1 Lovell Park Road,
                 Leeds LS1 1NS (facsimile number +44 (0) 113 235 7511) for the
                 attention of Head of Mortgage Securitisation with a copy to
                 Bank of Scotland plc, Treasury Division, 33 Old Broad Street,
                 London EC2N 1HZ (facsimile number +44 (020) 7574 8303) for the
                 attention of Head of Mortgage Securitisation and Covered
                 Bonds;

         (b)     in the case of the Mortgages Trustee: to Permanent Mortgages
                 Trustee Limited, 47 Esplanade, St. Helier, Jersey JE1 OBD
                 (facsimile number +44 (0) 1534 726391) for the attention of
                 the Secretary with a copy to Bank of Scotland plc, Treasury
                 Division, 33 Old Broad Street, London EC2N 1HZ (facsimile
                 number +44 (020) 7574 8303) for the attention of Head of
                 Mortgage Securitisation and Covered Bonds;

         (c)     in the case of the Seller: to Bank of Scotland plc, Halifax
                 Division, Level 3, Lovell Park, 1 Lovell Park Road, Leeds LS1
                 1NS (facsimile number +44 (0) 113 235 7511) for the attention
                 of the Head of Mortgage Securitisation with a copy to Bank of
                 Scotland plc, Treasury Division, 33 Old Broad Street, London
                 EC2N 1HZ (facsimile number +44 (020) 7574 8303) for the
                 attention of Head of Mortgage Securitisation and Covered
                 Bonds;

                                      11

<PAGE>

         (d)     in the case of Funding 1: to Permanent Funding (No. 1)
                 Limited, 35 Great St. Helen's, London EC3A 6AP (facsimile
                 number +44 (020) 7398 6325) to the attention of the Secretary
                 with a copy to Bank of Scotland plc, Treasury Division, 33 Old
                 Broad Street, London EC2N 1HZ (facsimile number +44 (020) 7574
                 8303) for the attention of Head of Mortgage Securitisation and
                 Covered Bonds;

         (e)     in the case of Funding 2: to Permanent Funding (No. 2)
                 Limited, 35 Great St. Helen's, London EC3A 6AP (facsimile
                 number +44 (020) 7398 6325) to the attention of the Secretary
                 with a copy to Bank of Scotland plc, Treasury Division, 33 Old
                 Broad Street, London EC2N 1HZ (facsimile number +44 (020) 7574
                 8303) for the attention of Head of Mortgage Securitisation and
                 Covered Bonds;

         (f)     in the case of the Funding 1 Security Trustee and the Funding
                 2 Security Trustee: to The Bank of New York, at One Canada
                 Square, Canary Wharf, London E14 5AL (facsimile number +44
                 (020) 7964 2533) for the attention of Corporate Trust
                 Administration - ABS/MBS; and

         (g)     in the case of the Account Bank: to Bank of Scotland plc,
                 Leeds Business Centre, 116 Wellington Street, Leeds, LS1 4LT
                 (facsimile number +44 (0) 113 215 5899) for the attention of
                 the Corporate Banking Channel Support with copies to: Bank of
                 Scotland plc, Halifax Division, Level 3, Lovell Park, 1 Lovell
                 Park Road, Leeds LS1 1NS (facsimile number +44 (0) 113 235
                 7511) for the attention of Head of Mortgage Securitisation;
                 and Bank of Scotland plc, Treasury Division 33 Old Broad
                 Street, London EC2N 1HZ (facsimile number +44 (020) 7574 8303)
                 for the attention of Head of Mortgage Securitisation and
                 Covered Bonds,

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by
         any party to the others by written notice in accordance with the
         provisions of this Clause 12.

13.      INTEREST

13.1     The Account Bank shall pay, on the last Business day of each month in
         respect of the current month, interest on any cleared credit balances
         on the Funding 1 Transaction Account at a rate of Sterling LIBOR for
         three-month sterling deposits in respect of the then current Funding 1
         Interest Period less 0.25% per annum.

13.2     The Account Bank shall pay, on the last Business day of each month in
         respect of the current month, interest on any cleared credit balances
         on the Funding 2 Transaction Account at a rate of Sterling LIBOR for
         three-month sterling deposits in respect of the then current Funding 2
         Interest Period less 0.25% per annum.

13.3     Interest shall be paid on the Mortgages Trustee GIC Account, the
         Funding 1 GIC Account and the Funding 2 GIC Account in accordance with
         the terms of the Mortgages Trustee Guaranteed Investment Contract, the
         Funding 1 Guaranteed Investment Contract and the Funding 2 Guaranteed
         Investment Contract respectively.

13.4     Any other accounts opened by the Mortgages Trustee, Funding 1 or
         Funding 2 with the Account Bank shall bear interest at a rate as
         agreed between the Account Bank and the Mortgages Trustee, Funding 1
         or Funding 2 respectively.

                                      12

<PAGE>

14.      WITHHOLDING

         All payments by the Account Bank under this Agreement shall be made in
         full without any deduction or withholding (whether in respect of
         set-off, counterclaim, duties, Taxes, charges or otherwise whatsoever)
         unless the deduction or withholding is required by law, in which event
         the Account Bank shall:

         (a)     ensure that the deduction or withholding does not exceed the
                 minimum amount legally required;

         (b)     pay to the relevant taxation or other authorities within the
                 period for payment permitted by applicable law the full amount
                 of the deduction or withholding;

         (c)     furnish to the Mortgages Trustee, Funding 1, Funding 2, the
                 Funding 1 Security Trustee or the Funding 2 Security Trustee
                 (as the case may be) within the period for payment permitted
                 by the relevant law, either:

                 (i)     an official receipt of the relevant taxation
                         authorities involved in respect of all amounts so
                         deducted or withheld; or

                 (ii)    if such receipts are not issued by the taxation
                         authorities concerned on payment to them of amounts so
                         deducted or withheld, a certificate of deduction or
                         equivalent evidence of the relevant deduction or
                         withholding; and

         (d)     account to Funding 1 in full by credit to the Funding 1
                 Transaction Account or the Funding 1 GIC Account (as the case
                 may be), to Funding 2 in full by credit to the Funding 2
                 Transaction Account or the Funding 2 GIC Account (as the case
                 may be) and to the Mortgages Trustee in full by credit to the
                 Mortgages Trustee GIC Account of an amount equal to the amount
                 of any rebate, repayment or reimbursement of any deduction or
                 withholding which the Account Bank has made pursuant to this
                 Clause 14 (as appropriate) and which is subsequently received
                 by the Account Bank.

15.      TAX STATUS

15.1     The Account Bank hereby represents and warrants that it is a bank for
         the purposes of section 991 of the Income Tax Act 2007, is entering
         into this Agreement in the ordinary course of its business, will pay
         interest pursuant hereto in the ordinary course of such business, will
         bring into account payments (other than deposits) made under this
         Agreement in computing its income for United Kingdom Tax purposes and
         undertakes that it will not cease to be so or to do so otherwise than
         as a result of the introduction of, change in, or change in the
         interpretation, administration or application of, any law or
         regulation or any practice or concession of HM Revenue and Customs
         occurring after the date of this Agreement.

15.2     The Account Bank will procure that any of its successors or assigns
         will provide the same representation as to its tax status as is
         provided by the Account Bank in Clause 15.1 above.

16.      ENTIRE AGREEMENT

         This Agreement and the schedules together constitute the entire
         agreement and understanding between the parties in relation to the
         subject matter hereof and cancel and replace any other agreement or
         understanding in relation thereto.

                                      13

<PAGE>

17.      ASSIGNMENT

         Subject as provided in or contemplated by Clauses 5.1(f), 5.1(g) and
         7.2:

         (a)     the Account Bank may not assign or transfer any of its rights
                 or obligations hereunder without the prior written consent of
                 the Mortgages Trustee, Funding 1, Funding 2, the Funding 1
                 Security Trustee and the Funding 2 Security Trustee;

         (b)     the Mortgages Trustee, Funding 1 and Funding 2 may not assign
                 or transfer any of their rights or obligations hereunder
                 without the prior written consent of the Account Bank, the
                 Funding 1 Security Trustee and the Funding 2 Security Trustee;
                 and

         (c)     the Account Bank may not act through any other branch other
                 than the branch specified on page 1 of this Agreement without
                 the prior written consent of the Mortgages Trustee, Funding 1,
                 Funding 2, the Funding 1 Security Trustee and the Funding 2
                 Security Trustee (such consent not to be unreasonably
                 withheld).

18.      THE FUNDING 1 SECURITY TRUSTEE AND FUNDING 2 SECURITY TRUSTEE

         The Funding 1 Security Trustee and the Funding 2 Security Trustee have
         agreed to become parties to this Agreement for the better preservation
         and enforcement of their rights under this Agreement but shall have no
         responsibility for any of the obligations of, nor assume any
         liabilities to, the Cash Manager, the Account Bank, the Mortgages
         Trustee, Funding 1 or Funding 2 hereunder. Furthermore, any liberty or
         power may, subject to Clause 19, be exercised or made in the Funding 1
         Security Trustee's and the Funding 2 Security Trustee's absolute
         discretion without any obligation to give reasons therefor.

19.      AMENDMENTS, WAIVERS AND CONSENTS

19.1     Subject to Clauses 2, 3 and 4 of the Controlling Beneficiary Deed (as
         applicable) and (in the case of Funding 1) Clause 25.8 of the Funding
         1 Deed of Charge and (in the case of Funding 2) Clause 12 of the
         Funding 2 Deed of Charge, no amendment or waiver of any provision of
         this Agreement shall be effective unless the same shall be in writing
         and signed by (or by some person duly authorised by) each of the
         parties to this Agreement. In the case of a waiver, such waiver shall
         be effective only in the specific instance and as against the party or
         parties giving it for the specific purpose for which it is given. No
         single or partial exercise of, or failure or delay in exercising, any
         right under this Agreement shall constitute a waiver or preclude any
         other or further exercise of that or any other right.

19.2     Funding 1, Funding 2, the Funding 1 Security Trustee and the Funding 2
         Security Trustee will each exercise all rights, powers, benefits
         and/or discretions conferred on it under this Agreement (including,
         without limitation, in giving its consent, approval or authorisation
         to any event, matter or thing requested hereunder) in accordance with
         Clauses 2, 3 and 4 of the Controlling Beneficiary Deed (as applicable)
         and (in the case of Funding 1) Clause 25 of the Funding 1 Deed of
         Charge and (in the case of Funding 2) Clause 12 of the Funding 2 Deed
         of Charge.

20.      EXCLUSION OF THIRD PARTY RIGHTS

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

                                      14

<PAGE>

21.      COUNTERPARTS AND SEVERABILITY

21.1     This Agreement may be signed (manually or by facsimile) and delivered
         in one or more counterparty, all of which, taken together, shall
         constitute one and the same document.

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

22.      GOVERNING LAW

         This Agreement shall be governed by, and construed in accordance with,
         the laws of England.

23.      SUBMISSION TO JURISDICTION

         Each party to this Agreement hereby irrevocably submits to the
         exclusive jurisdiction of the English courts in any action or
         proceeding arising out of or relating to this Agreement, and hereby
         irrevocably agrees that all claims in respect of such action or
         proceeding may be heard and determined by such courts. Each party to
         this Agreement hereby irrevocably waives, to the fullest extent it may
         possibly do so, any defence or claim that the English courts are an
         inconvenient forum for the maintenance or hearing of such action or
         proceeding. The Mortgages Trustee irrevocably appoints Structured
         Finance Management Limited, located at 35 Great St. Helen's, London
         EC3A 6AP, as its agent for service of process.

IN WITNESS whereof the parties hereto have executed and delivered this
Agreement as a deed the day and year first before written.

                                      15

<PAGE>

                                  SCHEDULE 1

                               FORMS OF MANDATE

                             IN THE FORMS ATTACHED

                                      16

<PAGE>

                                  SCHEDULE 2

                 FORMS OF NOTICE OF CHARGE AND ACKNOWLEDGEMENT

                                    PART 1

    NOTICE OF CHARGE - FUNDING 1 TRANSACTION ACCOUNT/FUNDING 1 GIC ACCOUNT

To:                     The Governor and Company of the Bank of Scotland
                        116 Wellington Street
                        Leeds
                        England LS1 4LT

For the attention of:   Company Secretary

and to:                 The Bank of New York
                        1 Canada Square
                        Canary Wharf
                        London E14 5AF

For the attention of:  Corporate Trust

                                                                   14 June 2002

Dear Sirs,

RE: PERMANENT FUNDING (NO. 1) LIMITED:

*        FUNDING 1 TRANSACTION ACCOUNT NUMBER 00856456 (SORT CODE 12-08-83)
         (THE FUNDING 1 TRANSACTION ACCOUNT)

*        FUNDING 1 GIC ACCOUNT NUMBER 00856368 (SORT CODE 12-08-83) (THE
         FUNDING 1 GIC ACCOUNT)

We hereby give you notice that, by a deed of charge dated of even date herewith
and made between, inter alios, ourselves, Halifax plc and State Street Bank and
Trust Company (the SECURITY TRUSTEE), a copy of which is enclosed (the FUNDING
1 DEED OF CHARGE), we:

(a)      charged by way of first fixed charge all of our right, title, benefit
         and interest present and future in, to and under the Funding 1
         Transaction Account and the Funding 1 GIC Account and all sums of
         money standing to the credit thereof and all interest accruing thereon
         from time to time; and

(b)      assigned all of our right, title, benefit and interest present and
         future in, to and under the bank account agreement of even date
         herewith between ourselves, yourselves, the Security Trustee and
         Halifax plc in its capacity as Seller and Cash Manager.

Accordingly, amounts may and shall be withdrawn from time to time from the
Funding 1 Transaction Account or the Funding 1 GIC Account in accordance with
the provisions of the Funding 1 Deed of Charge only until such time as you
receive notice in writing from the Security Trustee in which case you shall
thereafter comply with all directions of the Security Trustee.

Please note that the foregoing authorisations and instructions may not be
revoked or varied by ourselves without the prior written consent of the
Security Trustee.

                                      17

<PAGE>

Please acknowledge receipt of this notice and your acceptance of the
instructions herein contained by signing two copies of the attached form of
acknowledgement, returning one copy to ourselves and sending the other copy
direct to the Security Trustee at 1 Canada Square, Canary Wharf, London E14 5AF
for the attention of Corporate Trust.

This notice of charge and assignment is governed by, and construed in
accordance with, the laws of England. Words defined in the Master Definitions
and Construction Schedule referred to in clause 1 of the Funding 1 Deed of
Charge shall have the same meaning in this notice.

Yours faithfully

...........................
for and on behalf of
PERMANENT FUNDING (NO. 1) LIMITED

                                      18

<PAGE>

                                    PART 2

     ACKNOWLEDGEMENT - FUNDING 1 TRANSACTION ACCOUNT/FUNDING 1 GIC ACCOUNT

To:                     Permanent Funding (No. 1) Limited
                        Blackwell House
                        Guildhall Yard
                        London EC2V 5AE

and to:                 1 Canada Square
                        Canary Wharf
                        London E14 5AF

                        For the attention of Corporate Trust

                                                                   14 June 2002

Dear Sirs,

RE: PERMANENT FUNDING (NO. 1) LIMITED:

*        FUNDING 1 TRANSACTION ACCOUNT NUMBER 00856456 (SORT CODE 12-08-83)
         (THE FUNDING 1 TRANSACTION ACCOUNT)

*        FUNDING 1 GIC ACCOUNT NUMBER 00856368 (SORT CODE 12-08-83) (THE
         FUNDING 1 GIC ACCOUNT)

We acknowledge receipt of your letter dated 14 June 2002, a copy of which is
attached. Words and expressions defined in that letter have the same meanings
herein.

In consideration of your agreeing to maintain the Funding 1 Transaction Account
and the Funding 1 GIC Account with us, we now agree and confirm to the Security
Trustee that we accept and will comply with the authorisations and instructions
contained in that letter and will not accept or act upon any instructions
contrary thereto unless the same shall be in writing signed by the Security
Trustee.

This acknowledgement is governed by, and construed in accordance with, the laws
of England.

Yours faithfully,

..........................
for and on behalf of
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

                                      19

<PAGE>

                                    PART 3

    NOTICE OF CHARGE - FUNDING 2 TRANSACTION ACCOUNT/FUNDING 2 GIC ACCOUNT

To:                     The Governor and Company of the Bank of Scotland
                        116 Wellington Street
                        Leeds
                        England LS1 4LT

For the attention of:   Corporate Banking Channel Support

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

For the attention of:   Corporate Trust

                                                                17 October 2006

Dear Sirs,

RE: PERMANENT FUNDING (NO. 2) LIMITED:

*        FUNDING 2 TRANSACTION ACCOUNT NUMBER 06052778 (SORT CODE 12-08-83)
         (THE FUNDING 2 TRANSACTION ACCOUNT)

*        FUNDING 2 GIC ACCOUNT NUMBER 06052751 (SORT CODE 12-08-83) (THE
         FUNDING 2 GIC ACCOUNT)

We hereby give you notice that, by a deed of charge dated of even date herewith
and made between, inter alios, ourselves, Halifax plc and The Bank of New York
(the FUNDING 2 SECURITY TRUSTEE), a copy of which is enclosed (the FUNDING 2
DEED OF CHARGE), we:

(a)      charged by way of first fixed charge all of our right, title, benefit
         and interest present and future in, to and under the Funding 2
         Transaction Account and the Funding 2 GIC Account and all sums of
         money standing to the credit thereof and all interest accruing thereon
         from time to time; and

(b)      assigned all of our right, title, benefit and interest present and
         future in, to and under the bank account agreement of even date
         herewith between ourselves, yourselves, the Funding 2 Security Trustee
         and Halifax plc in its capacity as Cash Manager.

Accordingly, amounts may and shall be withdrawn from time to time from the
Funding 2 Transaction Account and the Funding 2 GIC Account in accordance with
the provisions of the Bank Account Agreement and the Funding 2 Deed of Charge
only until such time as you receive notice in writing from the Funding 2
Security Trustee in which case you shall thereafter comply with all directions
of the Funding 2 Security Trustee.

Please note that the foregoing authorisations and instructions may not be
revoked or varied by ourselves without the prior written consent of the Funding
2 Security Trustee.

Please acknowledge receipt of this notice and your acceptance of the
instructions herein contained by signing two copies of the attached form of
acknowledgement, returning one copy to ourselves and sending the other

                                      20

<PAGE>

copy direct to the Funding 2 Security Trustee at 48th Floor, One Canada Square,
London E14 5AL for the attention of Corporate Trust.

This notice of charge and assignment is governed by, and construed in
accordance with, the laws of England. Words defined in the Master Definitions
and Construction Schedule referred to in clause 1 of the Funding 2 Deed of
Charge shall have the same meaning in this notice.

Yours faithfully

..........................
for and on behalf of
PERMANENT FUNDING (NO. 2) LIMITED

                                      21

<PAGE>

                                    PART 4

     ACKNOWLEDGEMENT - FUNDING 2 TRANSACTION ACCOUNT/FUNDING 2 GIC ACCOUNT

To:                     Permanent Funding (No. 2) Limited
                        35 Great St. Helen's
                        London EC3A 6AP

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

                        For the attention of Corporate Trust

                                                                17 October 2006

Dear Sirs,

RE: PERMANENT FUNDING (NO. 2) LIMITED:

*        FUNDING 2 TRANSACTION ACCOUNT NUMBER 06052778 (SORT CODE 12-08-83)
         (THE FUNDING 2 TRANSACTION ACCOUNT)

*        FUNDING 2 GIC ACCOUNT NUMBER 06052751 (SORT CODE 12-08-83) (THE
         FUNDING 2 GIC ACCOUNT)

We acknowledge receipt of your letter dated 17 October 2006, a copy of which is
attached. Words and expressions defined in that letter have the same meanings
herein.

In consideration of your agreeing to maintain the Funding 2 Transaction Account
and the Funding 2 GIC Account with us, we now agree and confirm to the Funding
2 Security Trustee that we accept and will comply with the authorisations and
instructions contained in that letter and will not accept or act upon any
instructions contrary thereto unless the same shall be in writing signed by the
Funding 2 Security Trustee.

This acknowledgement is governed by, and construed in accordance with, the laws
of England.

Yours faithfully,

..........................
for and on behalf of
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

                                      22

<PAGE>

                                  SIGNATORIES

FUNDING 1

EXECUTED as a DEED by                       ) /S/ CLAUDIA WALLACE
PERMANENT FUNDING (NO. 1)                   )
LIMITED acting by two directors             ) /S/ HELENA WHITAKER

FUNDING 2

EXECUTED as a DEED by                       ) /S/ CLAUDIA WALLACE
PERMANENT FUNDING (NO. 2)                   )
LIMITED acting by two directors             ) /S/ HELENA WHITAKER

MORTGAGES TRUSTEE

EXECUTED as a DEED on behalf of             )
PERMANENT MORTGAGES                         ) /S/ ABU KAPADIA
TRUSTEE LIMITED,                            )
a company incorporated in Jersey,           )
Channel Islands, by                         )
being a person who,                         )
in accordance with the laws of that         )
territory is acting under the authority of  )
the company in the presence of:             )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

CASH MANAGER, SELLER AND ACCOUNT BANK

EXECUTED as a DEED by                       ) /S/ IAN STEWART
BANK OF SCOTLAND PLC                        )
acting by its attorney                      ) /S/ DAVID WILKINSON
in the presence of:                         )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

                                      23

<PAGE>

FUNDING 1 SECURITY TRUSTEE

EXECUTED as a DEED                          ) /S/ VINCENT GIRAUD
for and on behalf of                        )
THE BANK OF NEW YORK                        )
by its authorised signatory                 )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

FUNDING 2 SECURITY TRUSTEE

EXECUTED as a DEED                          ) /S/ VINCENT GIRAUD
for and on behalf of                        )
THE BANK OF NEW YORK                        )
by its authorised signatory                 )

Witness's signature: /S/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         40 BANK STREET
         LONDON E14 5DU

                                      24AMENDED AND RESTATED MASTER ISSUER BANK ACCOUNT     EXHIBIT 4.13
                                   AGREEMENT

                               21 NOVEMBER 2007

                          PERMANENT MASTER ISSUER PLC
                              (AS MASTER ISSUER)

                                      AND

                             BANK OF SCOTLAND PLC
        (AS MASTER ISSUER CASH MANAGER AND MASTER ISSUER ACCOUNT BANK)

                                      AND

                             THE BANK OF NEW YORK
                      (AS MASTER ISSUER SECURITY TRUSTEE)

<PAGE>

                                   CONTENTS

CLAUSE                                                                     PAGE

1.       Definitions and Interpretation.......................................1
2.       The Master Issuer Transaction Account................................2
3.       Additional Master Issuer Accounts....................................2
4.       Payments.............................................................4
5.       Mandates and Statements..............................................4
6.       Acknowledgement by the Master Issuer Account Bank....................5
7.       Certification, Indemnity and Acceleration Notice.....................6
8.       Change of Master Issuer Security Trustee or Master
         Issuer Account Bank..................................................7
9.       Termination..........................................................7
10.      Further Assurance...................................................10
11.      Confidentiality.....................................................10
12.      Costs...............................................................11
13.      Notices.............................................................11
14.      Interest............................................................12
15.      Withholding.........................................................12
16.      Tax Status..........................................................13
17.      Entire Agreement....................................................13
18.      Variation and Waiver................................................13
19.      Assignment..........................................................13
20.      The Master Issuer Security Trustee..................................13
21.      Exclusion of Third Party Rights.....................................14
22.      Counterparts........................................................14
23.      Governing Law.......................................................14
24.      Submission to Jurisdiction..........................................14

SCHEDULE

1.       Form of Master Issuer Transaction Account Mandate...................15
2.       Form of Notice of Assignment and Acknowledgement of Assignment......16
         Part 1   Notice of Assignment - Master Issuer Accounts..............16
         Part 2   Acknowledgement - Master Issuer Accounts...................18

Signatories..................................................................19

<PAGE>

THIS AMENDED AND RESTATED MASTER ISSUER BANK ACCOUNT AGREEMENT (this AGREEMENT)
is made as a deed on 21 November 2007

BETWEEN:

(1)      PERMANENT MASTER ISSUER PLC (registered number 5922774), a public
         limited company incorporated under the laws of England and Wales,
         whose registered office is at 35 Great St. Helen's, London EC3A 6AP
         (the MASTER ISSUER);

(2)      BANK OF SCOTLAND PLC (registered number SC327000) (formerly The
         Governor and Company of the Bank of Scotland), a public limited
         company incorporated under the laws of Scotland whose registered
         office is at The Mound, Edinburgh, EH1 1YZ (acting in its capacities
         as the MASTER ISSUER ACCOUNT BANK and the MASTER ISSUER CASH MANAGER);
         and

(3)      THE BANK OF NEW YORK, a New York banking corporation, acting through
         its offices at One Canada Square, London E14 5AL (acting in its
         capacity as the MASTER ISSUER SECURITY TRUSTEE , which expression
         shall include such company and all other persons and companies for the
         time being acting as security trustee under the Master Issuer Deed of
         Charge).

WHEREAS:

(A)      On the Reorganisation Date, pursuant to the HBOS Group Reorganisation
         Act 2006, The Governor and Company of the Bank of Scotland was
         registered as a public company under the Companies Act 1985 and
         changed its name to Bank of Scotland plc and the business and all
         property and liabilities of Halifax (including its rights and
         obligations under the Master Issuer Bank Account Agreement) were
         transferred to Bank of Scotland.

(B)      The parties hereto have agreed to amend and restate the Master Issuer
         Bank Account Agreement on the date hereof as set out herein.

IT IS HEREBY AGREED as follows:

1.       DEFINITIONS AND INTERPRETATION

1.1      The amended and restated master definitions and construction schedule
         signed by, amongst others, the parties to this Agreement and dated 21
         November 2007 (as the same may be amended, varied or supplemented from
         time to time with the consent of the parties to this Agreement) (the
         MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) and the amended and
         restated master issuer master definitions and construction schedule
         signed by, amongst others, the parties to this Agreement and dated 21
         November 2007 (as the same may be amended, varied or supplemented from
         time to time with the consent of the parties to this Agreement) (the
         MASTER ISSUER MASTER DEFINITIONS AND CONSTRUCTION SCHEDULE) are
         expressly and specifically incorporated into this Agreement and,
         accordingly, the expressions defined in the Master Definitions and
         Construction Schedule and the Master Issuer Master Definitions and
         Construction Schedule shall, except where the context otherwise
         requires and save where otherwise defined herein, have the same
         meanings in this Agreement, and this Agreement shall be construed in
         accordance with the interpretation provisions set out in clause 3 of
         the Master Definitions and Construction Schedule and in Clause 3 of
         the Master Issuer Master Definitions and Construction Schedule.

1.2      This Agreement amends and restates the Master Issuer Bank Account
         Agreement dated 16 October 2006 (the PRINCIPAL AGREEMENT). As of the
         date of this Agreement, any future rights or obligations (excluding
         such rights and obligations accrued to the date of this Agreement) of
         a party to the Principal Agreement shall be extinguished and shall
         instead be governed by this Agreement.

                                       1

<PAGE>

2.       THE MASTER ISSUER TRANSACTION ACCOUNT

2.1      INSTRUCTIONS FROM MASTER ISSUER CASH MANAGER TO MASTER ISSUER ACCOUNT
         BANK

         Subject to Clause 7.3, the Master Issuer Account Bank shall comply
         with any direction of the Master Issuer Cash Manager to effect a
         payment by debiting the Master Issuer Transaction Account if such
         direction (a) is in writing, is given by telephone and confirmed in
         writing not later than close of business on the day on which such
         direction is given or is given by the internet banking service
         provided by the Master Issuer Account Bank or otherwise (b) complies
         with the Master Issuer Transaction Account Mandate.

2.2      TIMING OF PAYMENT

         The Master Issuer Account Bank agrees that if directed pursuant to
         Clause 2.1 to make any payment, then, subject to Clauses 2.4 and 7.3
         below, it will do so prior to close of business on the London Business
         Day on which such direction is received and for value that day,
         provided that, if any direction is received later than 2.30 p.m.
         (London time) or, in the case of a payment to another account with the
         Master Issuer Account Bank at the same branch, 4.00 p.m. (London time)
         on any London Business Day, the Master Issuer Account Bank shall make
         such payment at the commencement of business on the following London
         Business Day for value that day.

2.3      MASTER ISSUER TRANSACTION ACCOUNT CHARGES

         The charges of the Master Issuer Account Bank for the operation of the
         Master Issuer Transaction Account shall be debited to the Master
         Issuer Transaction Account only on the first day of each month (or, if
         such day is not a London Business Day, the next succeeding London
         Business Day) in accordance with the order of priority set out in the
         Master Issuer Cash Management Agreement, or, following the service of
         a Note Acceleration Notice (that is not withdrawn), the Master Issuer
         Deed of Charge, and the Master Issuer by its execution hereof
         irrevocably agrees that this shall be done. The charges shall be
         payable at the same rates as are generally applicable to the business
         customers of the Master Issuer Account Bank.

2.4      NO OVERDRAWN BALANCE

         Notwithstanding the provisions of Clause 2.1, amounts shall only be
         withdrawn from the Master Issuer Transaction Account to the extent
         that such withdrawal does not cause the Master Issuer Transaction
         Account to become overdrawn.

3.       ADDITIONAL MASTER ISSUER ACCOUNTS

3.1      TERMINATION OF MASTER ISSUER SWAPS

         If any or all of the Master Issuer Swap Agreements terminate and the
         Master Issuer is unable to enter into replacement hedging
         arrangements, the Master Issuer shall instruct the Master Issuer Cash
         Manager to open, as necessary, the relevant Additional Master Issuer
         Account at the Master Issuer Account Bank. The Master Issuer shall
         deliver a mandate to the Master Issuer Account Bank relating to such
         Additional Master Issuer Account in accordance with this Agreement and
         the Master Issuer Deed of Charge.

3.2      OPERATION OF ADDITIONAL MASTER ISSUER ACCOUNTS

         In the event that an Additional Master Issuer Account is created
         pursuant to Clause 3.1, the relevant account shall be operated in
         accordance with the following provisions:

                                       2

<PAGE>

         (a)     subject to Clause 7.3, the Master Issuer Account Bank shall
                 comply with any direction of the Master Issuer Cash Manager to
                 effect a payment by debiting the relevant Additional Master
                 Issuer Account if such direction (i) is in writing or is given
                 by the internet banking service provided by the Master Issuer
                 Account Bank or otherwise (ii) complies with the mandates of
                 such Additional Master Issuer Account;

         (b)     the Master Issuer Account Bank shall be entitled to rely on
                 any direction given by telephone which, in its opinion (acting
                 reasonably and in good faith), purports to be given by any
                 Authorised Signatory referred to in the mandates of the
                 relevant Additional Master Issuer Account, from time to time
                 and in respect of which the person giving the direction quotes
                 a code reference notified in writing by the Master Issuer Cash
                 Manager from time to time to the Master Issuer Account Bank
                 and no delay in giving (or the absence of giving) the written
                 confirmation of any such direction shall affect the validity
                 of, or time of giving, the relevant telephone direction;

         (c)     the Master Issuer Account Bank agrees that if directed
                 pursuant to Clause 3.2(a) to make any payment then, subject to
                 Clauses 3.2(e) and 7.3 below, it will do so prior to close of
                 business on the London Business Day on which such direction is
                 received and for value that day, provided that, if any
                 direction is received later than 2.30 p.m. (London time) or,
                 in the case of a payment to another account with the Master
                 Issuer Account Bank at the same branch, 4.00 p.m. (London
                 time) on any London Business Day, the Master Issuer Account
                 Bank shall make such payment at the commencement of business
                 on the following London Business Day for value that day;

         (d)     the charges of the Master Issuer Account Bank for the
                 operation of the Additional Master Issuer Accounts (if
                 established) shall be debited to the relevant Additional
                 Master Issuer Account on each Interest Payment Date in
                 accordance with the order of priority set out in the Master
                 Issuer Cash Management Agreement or following enforcement of
                 the Master Issuer Security, the Master Issuer Deed of Charge,
                 and the Master Issuer by its execution hereof irrevocably
                 agrees that this shall be done. The charges shall be payable
                 at the same rates as are generally applicable to the business
                 customers of the Master Issuer Account Bank; and

         (e)     notwithstanding the provisions of Clause 3.2(a), and subject
                 to the Master Issuer Deed of Charge, amounts shall only be
                 withdrawn from an Additional Master Issuer Account to the
                 extent that such withdrawals do not cause that Additional
                 Master Issuer Account to become overdrawn.

3.3      MASTER ISSUER SWAP COLLATERAL ACCOUNT

         In the event that any collateral is posted by a Master Issuer Currency
         Swap Provider pursuant to a Master Issuer Currency Swap Agreement, the
         Master Issuer shall instruct the Master Issuer Cash Manager to open a
         bank account (which, for the avoidance of doubt, shall include any
         Master Issuer Swap Collateral Securities Account) with Bank of
         Scotland, Treasury Division, for the purposes of holding such
         collateral (any such account, a MASTER ISSUER SWAP COLLATERAL
         ACCOUNT). A Master Issuer Swap Collateral Account shall be opened in
         respect of each Master Issuer Currency Swap Provider that is required
         to post collateral pursuant to a Master Issuer Currency Swap
         Agreement. In the event that any such Master Issuer Currency Swap
         Account is opened with Bank of Scotland, Treasury Division, the
         parties to this Agreement, not including the Master Issuer Account
         Bank, will enter into an agreement on substantially the same terms as
         this Agreement (with such amendments as shall be deemed necessary) in
         respect of such Master Issuer Swap Collateral Account.

                                       3

<PAGE>

4.       PAYMENTS

4.1      INSTRUCTIONS FROM THE MASTER ISSUER CASH MANAGER

(a)      The Master Issuer Cash Manager shall, before the date upon which any
         payment is due to be made from a Master Issuer Account (including the
         payments due to be made on each Interest Payment Date), submit to the
         Master Issuer Account Bank irrevocable written instructions, or
         instructions by way of the internet banking service provided by the
         Master Issuer Account Bank, as to the payments to be made out of the
         relevant Master Issuer Account on such date.

(b)      The Master Issuer Account Bank shall comply with the instructions
         described in Clause 4.1(a) and shall effect the payments specified in
         such instructions not later than the time specified for payment
         therein (provided that the Master Issuer Account Bank shall not have
         any liability to any person if it fails to effect timely payment by
         reason of strike, computer failure, power cut or other matters beyond
         its control) on the relevant date if the instructions comply with the
         relevant Master Issuer Account Mandate.

5.       MANDATES AND STATEMENTS

5.1      SIGNING AND DELIVERY OF MANDATES

         The Master Issuer has delivered to the Master Issuer Account Bank
         prior to the Programme Date the Master Issuer Transaction Account
         Mandate in or substantially in the form set out in Schedule 1 hereto
         duly executed and relating to the Master Issuer Transaction Account,
         and the Master Issuer Account Bank hereby confirms to the Master
         Issuer Security Trustee that the Master Issuer Transaction Account
         Mandate has been provided to it, that the Master Issuer Transaction
         Account is open and that the Master Issuer Transaction Account Mandate
         is operative. The Master Issuer agrees that, if an Additional Master
         Issuer Account is opened pursuant to Clause 3.1 or a Master Issuer
         Swap Collateral Account is opened pursuant to Clause 3.3, it will
         deliver to the Master Issuer Account Bank a duly executed mandate
         relating to such Additional Master Issuer Account or, as the case may
         be, Master Issuer Swap Collateral Account. The Master Issuer Account
         Bank acknowledges that the Master Issuer Transaction Account Mandate
         and any other mandates delivered from time to time pursuant hereto
         shall be subject to the terms of the Master Issuer Deed of Charge and
         this Agreement.

5.2      AMENDMENT OR REVOCATION

         The Master Issuer Account Bank agrees that it shall notify the Master
         Issuer Security Trustee as soon as is reasonably practicable and in
         accordance with Clause 13 if it receives any amendment to or
         revocation of any Master Issuer Account Mandate that it holds (other
         than a change of Authorised Signatory) and shall require the prior
         written consent of the Master Issuer Security Trustee to any such
         amendment or revocation (other than a change of Authorised Signatory),
         but, unless a Master Issuer Account Mandate is revoked, the Master
         Issuer Account Bank may continue to comply with that amended Master
         Issuer Account Mandate (as it may from time to time be amended in
         accordance with the provisions of this Clause 5.2) unless it receives
         notice in writing from the Master Issuer Security Trustee to the
         effect that a Note Acceleration Notice has been served or that the
         appointment of Bank of Scotland as Master Issuer Cash Manager under
         the Master Issuer Cash Management Agreement has been terminated and
         shall, thereafter, act solely on the instructions of the Master Issuer
         Security Trustee and in accordance with the terms thereof as provided
         in Clause 7.3 of this Agreement.

                                       4

<PAGE>

6.       ACKNOWLEDGEMENT BY THE MASTER ISSUER ACCOUNT BANK

6.1      RESTRICTION ON MASTER ISSUER ACCOUNT BANK'S RIGHTS

         Notwithstanding anything to the contrary in any Master Issuer Account
         Mandate, the Master Issuer Account Bank hereby:

         (a)     waives any right it has or may hereafter acquire to combine,
                 consolidate or merge any Master Issuer Account with any other
                 account of the Master Issuer Cash Manager, the Master Issuer,
                 the Mortgages Trustee, Funding 2, the Seller, the Master
                 Issuer Security Trustee or any other person or any liabilities
                 of the Master Issuer Cash Manager, the Master Issuer, the
                 Mortgages Trustee, Funding 2, the Seller, the Master Issuer
                 Security Trustee or any other person owing to it;

         (b)     agrees that it may not exercise any lien or, to the extent
                 permitted by law, any set-off or transfer any sum standing to
                 the credit of or to be credited to any Master Issuer Account
                 in or towards satisfaction of any liabilities of the Master
                 Issuer Cash Manager, the Master Issuer, the Mortgages Trustee,
                 Funding 2, the Seller, the Master Issuer Security Trustee or
                 any other person owing to it;

         (c)     in addition to and without prejudice to its rights and
                 obligations as a Master Issuer Secured Creditor, agrees that
                 it will not take, and shall not take, any steps whatsoever to
                 recover any amount due or owing to it pursuant to this
                 Agreement or any other debts whatsoever owing to it by the
                 Master Issuer, or procure the winding-up or liquidation of the
                 Master Issuer or the making of an administration order in
                 relation to the Master Issuer or the filing of documents with
                 the court in relation to the Master Issuer or the service of a
                 notice of intention to appoint an administrator in relation to
                 the Master Issuer in respect of any of the liabilities of the
                 Master Issuer whatsoever other than to the extent expressly
                 permitted under the Master Issuer Deed of Charge;

         (d)     agrees that it shall have recourse only to sums paid to or
                 received by (or on behalf of) the Master Issuer pursuant to
                 the Transaction Documents, subject always to and in accordance
                 with the order of priority set out in the Master Issuer Cash
                 Management Agreement or, as applicable, the Master Issuer Deed
                 of Charge;

         (e)     agrees that it will notify, in accordance with Clause 13, the
                 Master Issuer Cash Manager, the Master Issuer and the Master
                 Issuer Security Trustee if compliance with any instruction
                 would cause any Master Issuer Account to have a negative
                 balance, such notification to be given on the same London
                 Business Day that it determines that compliance with such
                 instruction would cause any such account to have a negative
                 balance; and

         (f)     acknowledges that the Master Issuer has, pursuant to the
                 Master Issuer Deed of Charge, inter alia, assigned by way of
                 security all its rights, title, interest and benefit, present
                 and future, in and to all sums from time to time standing to
                 the credit of the Master Issuer Accounts and all of its rights
                 under this Agreement to the Master Issuer Security Trustee.

6.2      NOTICE OF ASSIGNMENT AND ACKNOWLEDGEMENT

         The Master Issuer Account Bank agrees that promptly upon receipt of a
         notice of assignment signed by the Master Issuer in (or substantially
         in) the form of notice set out in Part 1 of Schedule 2 hereto, the
         Master Issuer Account Bank shall sign and duly return to the Master
         Issuer, with a copy to the Master Issuer Security Trustee, an
         acknowledgement in (or substantially in) the form of acknowledgement
         set out in Part 2 of Schedule 2.

                                       5

<PAGE>

6.3      MONTHLY STATEMENT

         Unless and until directed otherwise by the Master Issuer Security
         Trustee in accordance with Clause 13, the Master Issuer Account Bank
         shall provide the Master Issuer Cash Manager with a written statement
         setting out the amounts standing to the credit of the Master Issuer
         Accounts as at the close of business on the London Business Day
         immediately preceding the relevant statement date or such other
         relevant date set out in a statement request (a) on a monthly basis
         and, in any event, within three London Business Days of the relevant
         statement date and (b) as soon as reasonably practicable after receipt
         of a request for a statement. The Master Issuer Account Bank is hereby
         authorised by the Master Issuer to provide statements in respect of
         the Master Issuer Accounts to the Master Issuer Cash Manager and the
         Master Issuer Security Trustee.

7.       CERTIFICATION, INDEMNITY AND ACCELERATION NOTICE

7.1      MASTER ISSUER ACCOUNT BANK TO COMPLY WITH MASTER ISSUER CASH MANAGER'S
         INSTRUCTIONS

         Unless otherwise directed in writing by the Master Issuer Security
         Trustee pursuant to Clause 7.3, in making any transfer or payment from
         the Master Issuer Accounts in accordance with this Agreement, the
         Master Issuer Account Bank shall be entitled to act as directed by the
         Master Issuer Cash Manager pursuant to Clauses 2.1 and 4.1 or pursuant
         to Clause 3.1, as the case may be, and to rely as to the amount of any
         such transfer or payment on the Master Issuer Cash Manager's
         instructions in accordance with the relevant Master Issuer Account
         Mandate, and the Master Issuer Account Bank shall have no liability to
         the Master Issuer Cash Manager, the Master Issuer or the Master Issuer
         Security Trustee for having acted on such instructions except in the
         case of its wilful default, fraud or negligence.

7.2      MASTER ISSUER'S INDEMNITY

         Subject to the priority of payments set out in the Master Issuer Cash
         Management Agreement or the Master Issuer Deed of Charge, as the case
         may be, the Master Issuer shall indemnify the Master Issuer Account
         Bank or, pursuant to Clause 7.3, the Master Issuer Security Trustee,
         as the case may be, to the extent of funds then standing to the credit
         of the relevant Master Issuer Account against any loss, cost, damage,
         charge or expense incurred by the Master Issuer Account Bank or the
         Master Issuer Security Trustee, as the case may be, in complying with
         any instruction delivered pursuant to and in accordance with this
         Agreement, save that this indemnity shall not extend to:

         (a)     the charges of the Master Issuer Account Bank (if any) for the
                 operation of the Master Issuer Accounts other than as provided
                 in this Agreement; and

         (b)     any loss, cost, damage, charge or expense arising from any
                 breach by the Master Issuer Account Bank of its obligations
                 under this Agreement.

7.3      CONSEQUENCES OF A MASTER INTERCOMPANY LOAN ACCELERATION NOTICE OR A
         NOTE ACCELERATION NOTICE

         The Master Issuer Account Bank acknowledges that if it receives notice
         in writing from the Master Issuer Security Trustee to the effect that
         (a) the Master Issuer Security Trustee has served a Master
         Intercompany Loan Acceleration Notice, (b) the Note Trustee has served
         a Note Acceleration Notice or (c) the appointment of Bank of Scotland
         as Master Issuer Cash Manager under the Master Issuer Cash Management
         Agreement has been terminated (but without prejudice to Clause 7.1
         above), then all right, authority and power of the Master Issuer Cash
         Manager in respect of the Master Issuer Accounts shall be terminated
         and be of no further effect, and the Master Issuer Account Bank agrees
         that it shall, upon receipt of such notice from the Master Issuer
         Security Trustee, comply with the directions of the Master Issuer
         Security Trustee or any successor cash manager appointed by the

                                       6

<PAGE>

         Master Issuer Security Trustee (subject to such successor cash manager
         having entered into an agreement with the Master Issuer Account Bank
         on substantially the same terms as this Agreement) in relation to the
         operation of the Master Issuer Accounts.

8.       CHANGE OF MASTER ISSUER SECURITY TRUSTEE OR MASTER ISSUER ACCOUNT BANK

8.1      CHANGE OF MASTER ISSUER SECURITY TRUSTEE

         In the event that there is any change in the identity of the Master
         Issuer Security Trustee or an additional Master Issuer Security
         Trustee is appointed in accordance with the provisions of the Master
         Issuer Deed of Charge, the existing Master Issuer Security Trustee,
         the new Master Issuer Security Trustee or the retiring Master Issuer
         Security Trustee, as the case may be, the Master Issuer Cash Manager,
         the Master Issuer and the Master Issuer Account Bank shall execute
         such documents and take such actions as such of the existing Master
         Issuer Security Trustee, the new Master Issuer Security Trustee or the
         retiring Master Issuer Security Trustee, as the case may be, shall
         agree are reasonably necessary for the purpose of vesting in such new
         Master Issuer Security Trustee the rights, benefits and obligations of
         the Master Issuer Security Trustee under this Agreement and under the
         Master Issuer Deed of Charge and, if relevant, releasing the retiring
         Master Issuer Security Trustee from its future obligations hereunder
         and thereunder.

8.2      CHANGE OF ACCOUNT BANK

         If there is any change in the identity of the Master Issuer Account
         Bank, then the Master Issuer Cash Manager, the Master Issuer, the
         Master Issuer Security Trustee and any other existing Master Issuer
         Account Bank shall execute such documents and take such actions as the
         new Master Issuer Account Bank, the retiring Master Issuer Account
         Bank and the Master Issuer Security Trustee may require for the
         purpose of vesting in the new Master Issuer Account Bank the rights
         and obligations of the retiring Master Issuer Account Bank and
         releasing the outgoing Master Issuer Account Bank from its future
         obligations under this Agreement.

9.       TERMINATION

9.1      TERMINATION EVENTS

         The Master Issuer Cash Manager or the Master Issuer:

         (a)     shall (with the prior written consent of the Master Issuer
                 Security Trustee) terminate this Agreement and close the
                 Master Issuer Accounts in the event any of the matters
                 specified in paragraphs 9.1(b)(ii) to 9.1(b)(iv) below occur;
                 and

         (b)     may (with the prior written consent of the Master Issuer
                 Security Trustee) terminate this Agreement and close the
                 Master Issuer Accounts in the event any of the matters
                 specified in paragraphs 9.1(b)(i) or 9.1(b)(vi) below occur,

         in each case, by serving a written notice of termination on the Master
         Issuer Account Bank in the following circumstances:

                 (i)     a deduction or withholding for or on account of any
                         Tax is imposed, or it appears likely that such a
                         deduction or withholding will be imposed, in respect
                         of the interest payable on any of the Master Issuer
                         Accounts held with it; or

                 (ii)    the short-term, unsecured, unsubordinated and
                         unguaranteed debt obligations of the Master Issuer
                         Account Bank cease to have a rating of at least P-1
                         from Moody's, A-

                                       7

<PAGE>

                         1 from S&P or F1 from Fitch, as the case may be,
                         unless each rating agency confirms that its
                         then-current rating of the Notes would not be
                         adversely affected as a result of such ratings falling
                         below these minimum ratings; or

                 (iii)   the Master Issuer Account Bank, otherwise than for the
                         purposes of such amalgamation or reconstruction as is
                         referred to in paragraph 9.1(b)(iv) below, ceases or,
                         through an authorised action of the board of directors
                         of the Master Issuer Account Bank, threatens to cease
                         to carry on all or substantially all of its business
                         or is deemed unable to pay its debts as and when they
                         fall due within the meaning of section 123(1)(a) of
                         the Insolvency Act 1986 (on the basis that the
                         reference in such section to [POUND]750 was read as a
                         reference to [POUND]10 million), sections 123(1)(b),
                         (c), (d) and (e) (on the basis that the words "for a
                         sum exceeding [POUND]10 million" were inserted after
                         the words "extract registered bond" and "extract
                         registered protest") and section 123(2) of the
                         Insolvency Act 1986 (as that Section may be amended)
                         or ceases to be an appropriately authorised
                         institution under the Financial Services and Markets
                         Act 2000; or

                 (iv)    an order is made or an effective resolution is passed
                         for the winding-up of the Master Issuer Account Bank
                         except a winding-up for the purposes of or pursuant to
                         a solvent amalgamation or reconstruction the terms of
                         which have previously been approved in writing by the
                         Master Issuer Security Trustee (such approval not to
                         be unreasonably withheld or delayed);

                 (v)     proceedings are initiated against the Master Issuer
                         Account Bank under any applicable liquidation,
                         insolvency, bankruptcy, composition, reorganisation
                         (other than a reorganisation where the Master Issuer
                         Account Bank is solvent) or other similar laws
                         (including, but not limited to, presentation of a
                         petition for an administration order, the filing of
                         documents with the court for the appointment of an
                         administrator or the service of a notice of intention
                         to appoint an administrator) and (except in the case
                         of presentation of a petition for an administration
                         order, the filing of documents with the court for the
                         appointment of an administrator or the service of a
                         notice of intention to appoint an administrator) such
                         proceedings are not, in the reasonable opinion of the
                         Master Issuer Security Trustee, being disputed in good
                         faith with a reasonable prospect of success or an
                         administration order is granted or the appointment of
                         an administrator takes effect or an administrative
                         receiver or other receiver, liquidator, trustee in
                         sequestration or other similar official is appointed
                         in relation to the Master Issuer Account Bank or in
                         relation to the whole or any substantial part of the
                         undertaking or assets of the Master Issuer Account
                         Bank, or an encumbrancer takes possession of the whole
                         or any substantial part of the undertaking or assets
                         of the Master Issuer Account Bank, or a distress,
                         execution or diligence or other process shall be
                         levied or enforced upon or sued out against the whole
                         or any substantial part of the undertaking or assets
                         of the Master Issuer Account Bank and such possession
                         or process (as the case may be) is not discharged or
                         otherwise ceases to apply within 30 days of its
                         commencement, or the Master Issuer Account Bank
                         initiates or consents to judicial proceedings relating
                         to itself under applicable liquidation, insolvency,
                         bankruptcy, composition, reorganisation or other
                         similar laws or makes a conveyance or assignment or
                         assignation for the benefit of its creditors generally
                         or takes steps with a view to obtaining a moratorium
                         in respect of any of indebtedness; or

                 (vi)    the Master Issuer Account Bank fails to perform any of
                         its obligations under this Agreement and such failure
                         remains unremedied for three London Business Days

                                       8

<PAGE>

                         after the Master Issuer Cash Manager or the Master
                         Issuer Security Trustee, as the case may be, has given
                         notice of such failure.

         In the event of a termination as a result of the circumstances
         outlined in (b)(ii) above, the Master Issuer Account Bank shall
         reimburse the Master Issuer for its reasonable costs and any amounts
         in respect of Irrecoverable VAT thereon (including reasonable costs
         and expenses) incurred during the period of, and until completion of,
         an orderly transition of the banking arrangements documented hereby.

9.2      TERMINATION OPTION

         The Master Issuer and the Master Issuer Security Trustee, upon a
         breach by the Master Issuer Account Bank of its obligations under this
         Agreement, may, by giving one month's prior written notice to the
         Master Issuer Account Bank (with a copy to the Master Issuer Security
         Trustee), terminate the appointment of the Master Issuer Account Bank,
         provided that:

         (a)     such termination shall not be effective until a replacement
                 financial institution or institutions (in each case (i) with a
                 short-term unsecured, unsubordinated and unguaranteed debt
                 obligation rating of at least P-1 in the case of Moody's, A-1
                 in the case of S&P and F1 in the case of Fitch and (ii) being
                 an authorised institution under the Financial Services and
                 Markets Act 2000) shall have entered into an agreement in form
                 and substance similar to this Agreement; and

         (b)     such termination would not adversely affect the then-current
                 ratings of the Notes.

         The Master Issuer Cash Manager and the Master Issuer shall use
         reasonable endeavours to agree such terms with such a replacement
         financial institution or institutions within 60 days of the date of
         the notice. In the event of such termination, the Master Issuer
         Account Bank shall assist the other parties hereto to effect an
         orderly transition of the banking arrangements documented hereby, and
         the Master Issuer shall reimburse the Master Issuer Account Bank for
         its reasonable costs and any amounts in respect of Irrecoverable VAT
         thereon (including reasonable costs and expenses) incurred during the
         period of, and until completion of, such transition.

9.3      NOTIFICATION OF TERMINATION EVENT

         Each of the Master Issuer, the Master Issuer Cash Manager and the
         Master Issuer Account Bank undertakes and agrees to notify the Master
         Issuer Security Trustee in accordance with Clause 13 promptly upon
         becoming aware thereof of any event which would or could entitle the
         Master Issuer Security Trustee to serve a notice of termination
         pursuant to Clauses 9.2 to 9.4 (inclusive).

9.4      TERMINATION BY MASTER ISSUER SECURITY TRUSTEE

         In addition, prior to the service of a Master Intercompany Loan
         Acceleration Notice or a Note Acceleration Notice, the Master Issuer
         Security Trustee may terminate this Agreement and close the Master
         Issuer Accounts by serving a notice of termination if any of the
         events specified in Clause 9.1(b)(i) to (vi) (inclusive) of this
         Agreement occurs in relation to the Master Issuer Account Bank.
         Following the service of a Master Intercompany Loan Acceleration
         Notice or a Note Acceleration Notice, the Master Issuer Security
         Trustee may serve a notice of termination at any time.

                                       9

<PAGE>

9.5      AUTOMATIC TERMINATION

         This Agreement shall automatically terminate (if not terminated
         earlier pursuant to this Clause 9) on the date falling 90 days after
         all Master Issuer Secured Liabilities have been irrevocably discharged
         in full.

9.6      TERMINATION BY MASTER ISSUER ACCOUNT BANK

         The Master Issuer Account Bank may terminate this Agreement and cease
         to operate the Master Issuer Accounts at any time:

         (a)     on giving not less than six months' prior written notice
                 thereof ending on any London Business Day which does not fall
                 on either an Interest Payment Date or less than ten London
                 Business Days before an Interest Payment Date to each of the
                 other parties hereto without assigning any reason therefor;
                 and

         (b)     on giving not less than three months' prior written notice
                 thereof ending on any London Business Day which does not fall
                 on either an Interest Payment Date or less than ten London
                 Business Days before an Interest Payment Date to each of the
                 other parties hereto, if the Master Issuer Account Bank shall
                 have demanded payment of its due charges or any interest and
                 the same shall have remained unpaid for a period of one month
                 (provided that if the relevant amounts have been paid on or
                 before the date six weeks after the date of delivery of such
                 notice, the notice shall have no effect),

         provided that such termination shall not take effect:

                 (i)     until a replacement financial institution or
                         institutions (in each case, (A) with a short-term
                         unsecured, unsubordinated and unguaranteed debt
                         obligation rating of at least P-1 in the case of
                         Moody's, A-1 in the case of S&P and F1 in the case of
                         Fitch and (B) being an authorised institution under
                         the Financial Services and Markets Act 2000) shall
                         have entered into an agreement in form and substance
                         similar to this Agreement; and

                 (ii)    if the then-current ratings of the Notes would be
                         adversely affected thereby.

         In either case the Master Issuer Account Bank shall not be responsible
         for any costs or expenses occasioned by such termination and
         cessation. In the event of such termination and cessation, the Master
         Issuer Account Bank shall assist the other parties hereto to effect an
         orderly transition of the banking arrangements documented hereby.

10.      FURTHER ASSURANCE

         The parties hereto agree that they will co-operate fully to do all
         such further acts and things and execute any further documents as may
         be necessary or reasonably desirable to give full effect to the
         arrangements contemplated by this Agreement.

11.      CONFIDENTIALITY

         During the continuance of this Agreement or after its termination,
         each of the Master Issuer, the Master Issuer Account Bank, the Master
         Issuer Cash Manager and the Master Issuer Security Trustee shall use
         its best endeavours not to disclose to any person, firm or company any
         information relating to the business, finances or other matters of a
         confidential nature of any other party to this Agreement of which it
         may exclusively by virtue of being party to the Transaction Documents
         have

                                      10

<PAGE>

         become possessed and shall use all reasonable endeavours to prevent
         any such disclosure as aforesaid; PROVIDED, HOWEVER, THAT the
         provisions of this Clause 11 shall not apply:

         (a)     to any information already known to the recipient otherwise
                 than as a result of entering into any of the Transaction
                 Documents;

         (b)     to any information subsequently received by the recipient that
                 it would otherwise be free to disclose;

         (c)     to any information that is or becomes public knowledge
                 otherwise than as a result of the conduct of the recipient;

         (d)     to any extent that the recipient is required to disclose the
                 same pursuant to any law or order of any court of competent
                 jurisdiction or pursuant to any direction, request or
                 requirement (whether or not having the force of law) of any
                 central bank or any governmental or other authority
                 (including, without limitation, any official bank examiners or
                 regulators);

         (e)     to the extent that the recipient needs to disclose the same
                 for determining the existence of, or declaring, a Note Event
                 of Default, determining the existence of an event described in
                 Clause 9.1 above, to the extent that the recipient seeks the
                 protection or enforcement of any of its rights under any of
                 the Transaction Documents or in connection therewith or for
                 the purpose of discharging, in such manner as it thinks fit,
                 its duties under or in connection with such agreements, in
                 each case to such persons as require to be informed of such
                 information for such purposes; or

         (f)     in relation to any information disclosed to professional
                 advisers of the recipient or (in connection with a prospective
                 rating of any debt to be issued by the Master Issuer) to any
                 Rating Agency or any prospective new cash manager, account
                 bank or Master Issuer Security Trustee.

12.      COSTS

         The Master Issuer agrees to pay the reasonable costs and any amounts
         in respect of Irrecoverable VAT thereon (including reasonable legal
         costs and expenses) of the Master Issuer Account Bank in connection
         with the negotiation of this Agreement and the establishment of the
         Master Issuer Accounts respectively and the negotiation and execution
         of any further documents and the taking of any further action to be
         executed or taken pursuant to Clauses 8, 9 (other than Clauses
         9.1(b)(ii), 9.1(b)(iii), 9.1(b)(iv), 9.1(b)(iv), 9.1(b)(vi), 9.5 and
         9.6(a)) and 10.

13.      NOTICES

         Any notices to be given pursuant to this Agreement to any of the
         parties hereto shall be sufficiently served if sent by prepaid first
         class post, by hand or facsimile transmission and shall be deemed to
         be given (in the case of facsimile transmission) when despatched,
         (where delivered by hand) on the day of delivery if delivered before
         5.00 p.m. (London time) on a London Business Day or on the next London
         Business Day if delivered thereafter or on a day which is not a London
         Business Day or (in the case of first class post) when it would be
         received in the ordinary course of the post and shall be sent:

         (a)     in the case of the Master Issuer Cash Manager, to Bank of
                 Scotland plc, Halifax Division, Level 3, Lovell Park, 1 Lovell
                 Park Road, Leeds LS1 1NS (facsimile number

                                      11

<PAGE>

         +44 (0) 113 235 7511) for the attention of the Head of Mortgage
         Securitisation with a copy to Bank of Scotland plc, Treasury Division,
         33 Old Broad Street, London EC2N 1HZ (facsimile number +44 (0)20 7574
         8303) for the attention of Head of Mortgage Securitisation and Covered
         Bonds;

         (b)     in the case of the Master Issuer, to Permanent Master Issuer
                 PLC, 35 Great St. Helen's, London EC3A 6AP (facsimile number
                 +44 (0)20 7398 6325) for the attention of the Directors, with
                 a copy to Bank of Scotland plc, Treasury Division, 33 Old
                 Broad Street, London EC2N 1HZ (facsimile number +44 (0)20 7574
                 8303) for the attention of Head of Mortgage Securitisation and
                 Covered Bonds;

         (c)     in the case of the Master Issuer Security Trustee, to The Bank
                 of New York, One Canada Square, London E14 5AL (facsimile
                 number +44 (0)20 7964 2533) for the attention of Corporate
                 Trust Administration - ABS/MBS; and

         (d)     in the case of the Master Issuer Account Bank, to Bank of
                 Scotland plc, Leeds Business Centre, 116 Wellington Street,
                 Leeds, LS1 4LT (facsimile number +44 (0)113 215 5899) for the
                 attention of the Corporate Banking Channel Support with copies
                 to: Bank of Scotland plc, Halifax Division, Level 3, Lovell
                 Park, 1 Lovell Park Road, Leeds LS1 1NS (facsimile number +44
                 (0) 113 235 7511) for the attention of the Head of Mortgage
                 Securitisation; and Bank of Scotland plc, Treasury Division,
                 33 Old Broad Street, London EC2N 1HZ (facsimile number +44
                 (0)20 7574 8303) for the attention of Head of Mortgage
                 Securitisation and Covered Bonds.

14.      INTEREST

14.1     The Master Issuer Account Bank shall pay, on the last Business Day of
         each month in respect of the current month, interest on any cleared
         credit balances on the Master Issuer Transaction Account at a rate of
         Sterling-LIBOR for three-month sterling deposits in respect of the
         then current Funding 2 Interest Period less 0.25% per annum.

14.2     Any Additional Master Issuer Account or Master Issuer Swap Collateral
         Account opened with the Master Issuer Account Bank or any other bank
         shall be an interest bearing account.

15.      WITHHOLDING

         All payments by the Master Issuer Account Bank under this Agreement
         shall be made in full without any deduction or withholding (whether in
         respect of set-off, counterclaim, duties, Taxes, charges or otherwise
         whatsoever) unless the deduction or withholding is required by law, in
         which event the Master Issuer Account Bank shall:

         (a)     ensure that the deduction or withholding does not exceed the
                 minimum amount legally required;

         (b)     pay to the relevant taxation or other authorities within the
                 period for payment permitted by applicable law the full amount
                 of the deduction or withholding;

         (c)     furnish to the Master Issuer or the Master Issuer Security
                 Trustee (as the case may be) within the period for payment
                 permitted by the relevant law, either:

                 (i)     an official receipt of the relevant taxation
                         authorities involved in respect of all amounts so
                         deducted or withheld; or

                 (ii)    if such receipts are not issued by the taxation
                         authorities concerned on payment to them of amounts so
                         deducted or withheld, a certificate of deduction or
                         equivalent evidence of the relevant deduction or
                         withholding; and

                                      12

<PAGE>

         (d)     account to the Master Issuer in full by credit to the relevant
                 Master Issuer Account of an amount equal to the amount of any
                 rebate, repayment or reimbursement of any deduction or
                 withholding which the Master Issuer Account Bank has made
                 pursuant to this Clause 15 and which is subsequently received
                 by the Master Issuer Account Bank.

16.      TAX STATUS

16.1     The Master Issuer Account Bank hereby represents and warrants that it
         is a bank for the purposes of section 991 of the Income Tax Act 2007,
         is entering into this Agreement in the ordinary course of its
         business, will pay interest pursuant hereto in the ordinary course of
         such business, will bring into account payments (other than deposits)
         made under this Agreement in computing its income for United Kingdom
         Tax purposes and undertakes that it will not cease to be so or to do
         so otherwise than as a result of the introduction of, change in, or
         change in the interpretation, administration or application of, any
         law or regulation or any practice or concession of HM Revenue and
         Customs occurring after the date of this Agreement.

16.2     The Master Issuer Account Bank will procure that any of its successors
         or assigns will provide the same representation as to its Tax status
         as is provided by the Master Issuer Account Bank in Clause 16.1 above.

17.      ENTIRE AGREEMENT

         This Agreement and the schedules together constitute the entire
         agreement and understanding between the parties in relation to the
         subject matter hereof and cancel and replace any other agreement or
         understanding in relation thereto.

18.      VARIATION AND WAIVER

         No variation, waiver or novation of this Agreement or any provision(s)
         of this Agreement shall be effective unless it is in writing and
         executed by (or by some person duly authorised by) each of the parties
         hereto. No single or partial exercise of, or failure or delay in
         exercising, any right under this Agreement shall constitute a waiver
         or preclude any other or further exercise of that or any other right.

19.      ASSIGNMENT

         Subject as provided in or contemplated by Clauses 6.1(f) and 8.2:

         (a)     the Master Issuer Account Bank may not assign or transfer any
                 of its rights or obligations hereunder without the prior
                 written consent of the Master Issuer and the Master Issuer
                 Security Trustee; and

         (b)     the Master Issuer may not assign or transfer any of its rights
                 or obligations hereunder without the prior written consent of
                 the Master Issuer Account Bank and the Master Issuer Security
                 Trustee, except that the Master Issuer may assign its rights
                 hereunder without such consent pursuant to the Master Issuer
                 Deed of Charge.

20.      THE MASTER ISSUER SECURITY TRUSTEE

         The Master Issuer Security Trustee has agreed to become a party to
         this Agreement for the better preservation and enforcement of its
         rights under this Agreement but shall have no responsibility for any
         of the obligations of, nor assume any liabilities to, the Master
         Issuer Cash Manager, the Master Issuer Account Bank or the Master
         Issuer hereunder. Furthermore, any liberty or power which may be
         exercised or made in the Master Issuer Security Trustee's absolute
         discretion without any

                                      13

<PAGE>

         obligation to give reasons therefor, but shall in any event be
         exercised in accordance with the provisions of the Master Issuer Deed
         of Charge.

21.      EXCLUSION OF THIRD PARTY RIGHTS

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

22.      COUNTERPARTS

         This Agreement may be signed (manually or by facsimile) and delivered
         in one or more counterparts, all of which, taken together, shall
         constitute one and the same document.

23.      GOVERNING LAW

         This Agreement shall be governed by, and construed in accordance with,
         the laws of England and Wales.

24.      SUBMISSION TO JURISDICTION

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

IN WITNESS whereof the parties hereto have executed and delivered this
Agreement as a deed the day and year first before written.

                                      14

<PAGE>

                                  SCHEDULE 1

               FORM OF MASTER ISSUER TRANSACTION ACCOUNT MANDATE

                                      15

<PAGE>

                                  SCHEDULE 2

        FORM OF NOTICE OF ASSIGNMENT AND ACKNOWLEDGEMENT OF ASSIGNMENT

                                    PART 1

                 NOTICE OF ASSIGNMENT - MASTER ISSUER ACCOUNTS

To:                     The Governor and Company of the Bank of Scotland
                        116 Wellington Street
                        Leeds
                        LS1 4LT

For the attention of:   Company Secretary

With a copy to:         The Bank of New York
                        48th Floor
                        One Canada Square
                        London
                        E14 5AL

For the attention of:   Global Structured Finance - Corporate Trust

                                                          Date: 17 October 2006

Dear Sirs,

RE: PERMANENT MASTER ISSUER PLC

We hereby give you notice that, by a deed of charge dated of even date herewith
and made between, inter alios, ourselves, Halifax plc and The Bank of New York,
(the MASTER ISSUER SECURITY TRUSTEE), a copy of which is enclosed (the MASTER
ISSUER DEED OF CHARGE), we:

(a)      charged by way of first fixed charge all of our rights in respect of
         any amount standing from time to time to the credit of the Master
         Issuer Transaction Account - account number 06052794 (sort code
         12-08-83), all interest paid or payable in relation to those amounts
         thereon from time to time and all debts represented by those amounts;

(b)      charged by way of first fixed charge all of our rights in respect of
         any amount standing form time to time to the credit of any Additional
         Master Issuer Account established pursuant to clause 3.1 of the Master
         Issuer Bank Account Agreement and all interest paid or payable in
         relation to those amounts thereon from time to time;

(c)      assigned (or to the extent not assignable charged) by way of first
         fixed security all of our rights in respect of the Master Issuer Bank
         Account Agreement of even date herewith between ourselves, yourselves,
         the Master Issuer Security Trustee and Halifax plc in its capacity as
         Master Issuer Cash Manager.

Accordingly, amounts may and shall be withdrawn from time to time from the
Master Issuer Transaction Account or any Additional Master Issuer Account
established pursuant to clause 3.1 of the Master Issuer Bank Account Agreement
in accordance with the provisions of the Master Issuer Cash Management
Agreement and the Master Issuer Deed of Charge until such time as you receive
notice in writing from the

                                      16

<PAGE>

Master Issuer Security Trustee in which case you shall thereafter comply with
all directions of the Master Issuer Security Trustee.

Please note that the foregoing authorisations and instructions may not be
revoked or varied by ourselves without the prior written consent of the Master
Issuer Security Trustee.

Please acknowledge receipt of this notice and your acceptance of the
instructions herein contained by signing two copies of the attached form of
acknowledgement, returning one copy to ourselves and sending the other copy
direct to the Master Issuer Security Trustee at 48th Floor, One Canada Square,
London E14 5AL for the attention of the Global Structured Finance-Corporate
Trust.

This notice of charge and assignment is governed by, and construed in
accordance with, the laws of England and Wales. Words defined in the Master
Issuer Master Definitions and Construction Schedule referred to in clause 1 of
the Master Issuer Deed of Charge shall have the same meaning in this notice.

Yours faithfully

..............................
for and on behalf of
PERMANENT MASTER ISSUER PLC

                                      17

<PAGE>

                                    PART 2

                   ACKNOWLEDGEMENT - MASTER ISSUER ACCOUNTS

To:                      Permanent Master Issuer PLC
                         35 Great St. Helen's
                         London EC3A 6AP

For the attention of the Company Secretary

and to:                  The Bank of New York
                         48th Floor
                         One Canada Square
                         London
                         E14 5AL
                         (the MASTER ISSUER SECURITY TRUSTEE)

                         For the attention of Global Structured
                         Finance-Corporate Trust

                                                          Date: 17 October 2006

Dear Sir,

RE: PERMANENT MASTER ISSUER PLC

We acknowledge receipt of your letter dated 17 October 2006, a copy of which is
attached. Words and expressions defined in that letter have the same meanings
herein.

In consideration of your agreeing to maintain or establish the Master Issuer
Accounts with us, we now agree and confirm to the Master Issuer Security
Trustee that we accept and will comply with the authorisations and instructions
contained in that letter and will not accept or act upon any instructions
contrary thereto unless the same shall be in writing signed by the Master
Issuer Security Trustee.

This acknowledgement is governed by, and construed in accordance with, the laws
of England and Wales.

Yours faithfully,

..............................
for and on behalf of
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

                                      18
<PAGE>

                                  SIGNATORIES

MASTER ISSUER

EXECUTED as a DEED on behalf of     )
PERMANENT MASTER ISSUER PLC
acting by

Director                                         /s/ CLAUDIA WALLACE

Director                            )            /s/ HELENA WHITAKER

MASTER ISSUER CASH MANAGER AND MASTER ISSUER ACCOUNT BANK

EXECUTED as a DEED by               )
BANK OF SCOTLAND PLC                )            /s/ IAN STEWART
acting by its attorney              )
in the presence of:                 )            /s/ DAVID WILKINSON

Witness's signature: /s/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         LONDON
         E14 5DU

MASTER ISSUER SECURITY TRUSTEE

EXECUTED as a DEED                  )
for and on behalf of                )            /s/ VINCENT GIRAUD
THE BANK OF NEW YORK                )
by its authorised signatory         )

Authorised signatory                )

Witness's signature: /s/ CHRIS WALL

Name:

Address: ALLEN & OVERY LLP
         LONDON
         E14 5DU

                                      19

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