Document:

EXHIBIT 10.5.1

                       GRANITE FINANCE TRUSTEES LIMITED

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                         SEVENTH AMENDED AND RESTATED
                          MASTER DEFINITIONS SCHEDULE

                             Dated 26 January 2004

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

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           SEVENTH AMENDED AND RESTATED MASTER DEFINITIONS SCHEDULE

1.       Definitions

Words and expressions used in any document which incorporates this clause or
to which this clause applies shall have the same meanings as are set out in
this Master Definitions Schedule except so far as the context requires
otherwise.

"1925 Act" means the Law of Property Act 1925;

"Accession Undertaking" means a Deed of Accession;

"Account Bank" means, in relation to the Mortgages Trustee or Funding, the
bank at which the Mortgages Trustee Bank Accounts or, in the case of Funding,
the Funding Bank Accounts are maintained from time to time, being (in the case
of the Mortgages Trustee) Lloyds TSB Bank plc, Jersey International Branch, 25
New Street, St. Helier, Jersey JE4 8ZE, Channel Islands or (in the case of
Funding) Lloyds TSB Bank plc, City Office, Bailey Drive, Gillingham Business
Park, Kent ME8 0LS or (in either case) any other Authorised Entity appointed
by the Mortgages Trustee or Funding in accordance with the Transaction
Documents;

"Accrued Interest" means, in respect of any Mortgage Loan as at any
date (the "relevant date"), the aggregate of all interest accrued but not yet
due and payable on such Mortgage Loan from and including the Monthly Payment
Date immediately preceding the relevant date until (but excluding) the
relevant date;

"Administration Agreement" means the agreement entered into on or before the
Initial Closing Date, between the Administrator, the Mortgages Trustee,
Funding, the Seller and the Security Trustee pursuant to which the
administrator agrees to provide administration services to the Mortgages
Trustee and the Beneficiaries in relation to the Mortgage Loans and their
Related Security comprised in the Mortgage Portfolio as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement administration agreement entered into by
such parties from time to time;

"Administration Fee" has the meaning given to it in Clause 13.1 (Administration
Fee) of the Administration Agreement;

"Administration Fee Rate" means 0.12% per annum (inclusive of VAT) on the
amount of the Funding Share of the Trust Property as determined on that
Distribution Date in respect of the then current Trust Calculation Period, but
only to the extent that the Mortgages Trustee has sufficient funds available
to pay such amount in accordance with the Mortgages Trustee Revenue Priority
of Payments or, at any time when the Administrator is not Northern Rock, such
other amount as set between such substitute administrator and the Mortgages
Trustee from time to time;

"Administration Procedures" means the administration, arrears and enforcement
policies and procedures forming part of the Seller's Policy from time to time
or, at any time when the Administrator is not also the Seller, the policies
and procedures from time to time which would be adopted by a reasonable,
prudent mortgage lender and, in either case, shall include the services set
out in Schedule 1 to the Administration Agreement;

"Administrator" means Northern Rock or such other person as may from time to
time be appointed

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as administrator of the Mortgage Portfolio pursuant to the Administration
Agreement;

"Administrator Termination Event" means any of the events specified in Clause
19 (Termination) of the Administration Agreement;

"Alternative Insurance Requirements" means the Seller's standard document
entitled Alternative Insurance Requirements, and any other document containing
similar recommendations or requirements which is sent to Borrowers in
accordance with the Administration Procedures;

"Arrears of Interest" means as at any date and in relation to any Mortgage
Loan, interest (other than Capitalised Interest or Accrued Interest) on such
Mortgage Loan which is currently due and payable on such date;

"Asset Trigger Event" means the event that occurs when an amount is debited to
the Class A Principal Deficiency Sub Ledger established for any Issuer with
respect to the Class A Notes of that Issuer;

"Assignation of Guarantees" means an assignation to the Mortgages Trustee of
the Seller's right, title, benefit and interest in the Guarantees governed by
Scots law substantially in the form set out in Part 2 of Schedule 5 to the
Mortgage Sale Agreement;

"Assignment Date" means the date of assignment of any New Mortgage Portfolio
to the Mortgages Trustee in accordance with Clause 4 (Sale and Purchase of New
Mortgage Portfolios) of the Mortgage Sale Agreement;

"Assignment of Guarantees" means an assignment to the Mortgages Trustee of the
Seller's right, title, benefit and interest in the Guarantees governed by
English law substantially in the form set out in Part 1 of Schedule 5 to the
Mortgage Sale Agreement;

"Assignment of Insurance Contracts" means an assignment to the Mortgages
Trustee of the Seller's right, title, benefit and interest in the Insurance
Contracts substantially in the form set out in Schedule 3 (Assignment of
Insurance Contracts) to the Mortgage Sale Agreement;

"Auditors" or "auditors" means PricewaterhouseCoopers of 89 Sandyford Road,
Newcastle upon Tyne NE99 1PL or such other internationally recognised
independent firm of auditors selected from time to time by (in the case of the
Mortgages Trustee) the Mortgages Trustee or (in the case of Funding) Funding
or (in the case of any Issuer) the relevant Issuer and appointed by the
Mortgages Trustee, Funding or, as the case may be, the relevant Issuer;

"Authorised Entity" means (a) any entity the short term and secured,
unsubordinated, and unguaranteed debt of which is rated at least A-1+ by S&P,
P-1 by Moody's and F1+ by Fitch or (b) any other entity approved in writing by
the Security Trustee and the Rating Agencies, in each case being an
institution authorised to carry on banking business (including accepting
deposits) under the Banking Act 1987;

"Authorised Institution" means an institution authorised to take deposits
under the Financial Services and Markets Act 2000;

"Authorised Investments" means:

(a)      sterling gilt-edged securities; and

(b)      sterling demand or time deposits, certificates of deposit and
         short-term debt obligations (including commercial paper) (which may
         include deposits into any account which earns a

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         rate of interest related to LIBOR) provided that in all cases such
         investments have a maturity date of 90 days or less and mature on or
         before the next following Payment Date or, in relation to any
         Mortgages Trustee Bank Account, the next following Distribution Date,
         and the short-term unsecured, unguaranteed and unsubordinated debt
         obligations of the issuing or guaranteeing entity or the entity with
         which the demand or time deposits are made (being an authorised
         institution under the Financial Services and Markets Act 2000) are
         rated at least equal to A-1+ by S&P, P-1 by Moody's and F1+ by Fitch
         or which are otherwise acceptable to the Rating Agencies (if they are
         notified in advance) to maintain the then-current rating of the
         Notes;

"Authorised Signatory" means in relation to:

(a)      any Issuer, any authorised signatory referred to in the relevant
         Issuer Account Mandates;

(b)      the Mortgages Trustee, any authorised signatory referred to in the
         Mortgages Trustee Account Mandates; and

(c)      Funding, any authorised signatory referred to in the Funding Account
         Mandates;

"Authorised Third Party" means any Person appointed by the Security Trustee
pursuant to the terms of Schedule 4 of the Administration Agreement and whom
the Rating Agencies have previously confirmed in writing to Funding and the
Security Trustee will not cause the then current ratings of the relevant
Issuer's Notes to be downgraded, withdrawn or qualified provided that if the
responsibilities that such appointed Person will assume include setting the
interest rate applicable to any Mortgage Loan, such Person must be a lender in
the UK residential mortgage market;

"Authorised Underpayment" means a Borrower Underpayment in respect of a
Flexible Mortgage Loan which is funded by, and does not exceed the amount of
any, Overpayments previously made by the Borrower in respect of such Flexible
Mortgage Loan or is otherwise permitted by the Seller in accordance with the
relevant Mortgage Conditions;

"Back-up Functions" has the meaning specified in Schedule 4 (Authorised Third
Party) to the Administration Agreement;

"Back-up Trigger Event" means any of the following circumstances:

(i)      failure by the Seller to comply with any of its obligations under the
         Mortgage Sale Agreement;

(ii)     a Completion Event and any circumstances in connection therewith; or

(iii)    an Administrator Termination Event and any circumstances in connection
         therewith;

"BACS" means the Bankers' Automated Clearing System as amended or supplemented
from time to time or any scheme replacing the same;

"BACS Amounts" means the amounts to be received by the Collection Banks from
Borrowers whether under the Direct Debiting Scheme or otherwise and to be
credited by the Collection Banks to the Collection Accounts on each Monthly
Payment Date, which each Collection Bank shall credit to the relevant
Collection Account;

"Bank Account Agreement" means the agreement entered into on or about the
Initial Closing Date between the Account Banks, the Mortgages Trustee, Funding
and the Security Trustee which governs the operation of the Mortgages Trustee
Bank Accounts and the Funding Bank Accounts other than the

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Funding (Issuer) GIC Accounts, as has been and may be amended, restated,
novated, varied or supplemented from time to time and shall include any
additional and/or replacement bank account agreement entered into by such
parties from time to time;

"Bank of England Base Rate" means the Bank of England's official dealing rate
(the repo rate) as set by the UK Monetary Policy Committee and in the event
that such rate ceases to exist or becomes inappropriate as an index for the
Base Rate Pledge such alternative rate or index, not controlled by the Seller,
that the Seller considers to be the most appropriate in the circumstances;

"Barclays" means Barclays Bank PLC;

"Barclays Collection Account" means the account in the name of Northern Rock
as Administrator (sort code 20/59/42, account number 60655996) held with
Barclays Bank PLC and maintained subject to the Collection Bank Agreement
and/or such other accounts of Northern Rock held with Barclays Bank PLC as may
be utilised from time to time for the purpose of collecting sums due to
Northern Rock in respect of the Mortgage Loans;

"Base Rate Pledge" means the guarantee of the Seller that where Mortgage Loans
are eligible to be charged at or based on the Standard Variable Rate
(including Fixed Rate Mortgage Loans upon conversion from a Fixed Rate to the
Standard Variable Rate) and they are within the Base Rate Pledge Period, the
actual variable gross interest rate charged on such Mortgage Loans will be the
lower of the following two rates:

(a)      the Standard Variable Rate; or

(b)      the Bank of England base rate plus a margin which is determined by the
         Seller;

such variable gross interest rate to be applied as necessary within one month
of a change in the Bank of England base rate;

"Base Rate Pledge Period" means, in relation to any Mortgage Loan having the
benefit of the Base Rate Pledge, the period if any during which the Borrower
may be subject to an Early Repayment Charge;

"Basis Rate Swap" means, in relation to the First Issuer, the First Issuer
Basis Rate Swap and for any other Issuer, the swap transaction documented
under the Basis Rate Swap Agreement for such Issuer;

"Basis Rate Swap Agreement" means, in relation to the First Issuer, the First
Issuer Basis Rate Swap Agreement and for any other Issuer, the ISDA Master
Agreement, Schedule, Confirmation and any credit support documents thereto
entered into among such Issuer, the Basis Rate Swap Provider, the Note Trustee
and any credit support provider, as may be amended, restated, novated, varied
or supplemented from time to time and shall include any additional and/or
replacement basis rate swap agreement entered into by such Issuer from time to
time in connection with the Notes issued by such Issuer;

"Basis Rate Swap Provider" means in relation to the First Issuer, the First
Issuer Basis Rate Swap Provider and for any other Issuer the basis rate swap
provider for such Issuer appointed from time to time in accordance with the
relevant Issuer Transaction Documents;

"Basis Rate Swap Provider Default" means the occurrence of an Event of Default
or a Downgrade Termination Event (as defined in the relevant Basis Rate Swap
Agreement) under a Basis Rate Swap Agreement where the Basis Rate Swap
Provider is the Defaulting Party or the Affected Party (as

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defined in the relevant Basis Rate Swap Agreement);

"Beneficiaries" means both Funding and the Seller together, as beneficiaries
of the Mortgages Trust and "Beneficiary" means either of them;

"Block Buildings Policy" means the block buildings insurance policies listed
in paragraph 2 of Schedule 4 (Insurance Contracts) to the Mortgage Sale
Agreement and any endorsements or extensions thereto as issued from time to
time and any additional, replacement or substitute block insurance policy
which relates to Mortgage Loans in the Mortgages Trust from time to time;

"Borrower" means, in relation to each Mortgage Loan, the person or persons who
is or are named and defined as such in the relevant Mortgage Deed or such
other person or persons (other than a guarantor) who shall become legally
obligated to comply with such Borrower's obligations under the related
Mortgage Loan;

"Borrower Underpayment" means a situation where a Borrower makes a Monthly
Payment on its Mortgage Loan which is less than the required Monthly Payment
for that month;

"Buildings Policies" means

(a)      all buildings insurance policies relating to freehold English
         Properties or any Scottish Properties which have been taken out in
         the name of the relevant Borrower or in the name of the Borrower and
         the Seller or in the name of the Borrower with the Seller's interest
         noted, in accordance with the applicable Mortgage Conditions or the
         Alternative Insurance Requirements, including, without limitation,
         the Block Buildings Policy; and

(b)      all landlord's buildings insurance policies relating to leasehold
         Mortgaged Properties;

"Business Day" means, in relation to the First Issuer Notes and the First
Issuer Intercompany Loan, a day that is a London Business Day and a New York
Business Day;

"Capital Balance" means, in relation to any Mortgage Loan at any date, the
principal balance of that Mortgage Loan to which the Seller applies the
relevant interest rate at which interest on each Mortgage Loan applies;

"Capital Payment" means a Monthly Payment made by a Borrower under a Mortgage
Loan (other than a Flexible Mortgage Loan) that is greater by (GBP)200 or
more than the amount due for that month, and in respect of which the Borrower
has notified the Seller that such overpayment is intended to reduce the
Capital Balance of the related Mortgage Loan;

"Capitalised Arrears" means, in relation to any Mortgage Loan at any date,
interest or other amounts which are overdue in respect of such Mortgage Loan
and which as at such date have been added to the Capital Balance of such
Mortgage Loan either in accordance with the Mortgage Conditions or otherwise
by arrangement with the relevant Borrower;

"Capitalised Interest" means, in relation to any Mortgage Loan at any date,
interest which is overdue in respect of such Mortgage Loan and which as at
such date has been added to the Capital Balance of such Mortgage Loan in
accordance with the Mortgage Conditions or otherwise by arrangement with the
relevant Borrower (excluding for the avoidance of doubt any Arrears of
Interest which have not been so capitalised on such date);

"Cash" means cash and/or amounts standing to the credit of a bank account, as
the context shall require;

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"Cashback" means, in relation to any Mortgage Loan, the agreement by the
Seller to pay an amount to the relevant Borrower upon completion of the
relevant Mortgage Loan;

"Cash Management Agreement" means the cash management agreement entered into
on or before the Initial Closing Date between the Cash Manager, the Mortgages
Trustee, Funding and the Security Trustee as may be amended, restated,
novated, varied or supplemented from time to time and shall include any
additional and/or replacement cash management agreement entered into by such
parties from time to time in accordance with the Transaction Documents;

"Cash Management Services" means, in relation to the any Issuer, the services
to be provided to such Issuer and the Note Trustee pursuant to the Issuer Cash
Management Agreement and in relation to the Mortgages Trustee and Funding, the
services to be provided to the Mortgages Trustee and Funding pursuant to the
Cash Management Agreement;

"Cash Manager" means Northern Rock or such other person or persons for the
time being acting, pursuant to the Cash Management Agreement, as agent for the
Mortgages Trustee, Funding and (following enforcement of the Funding Security)
the Security Trustee for the purposes of, inter alia, managing all cash
transactions and maintaining certain ledgers on behalf of the Mortgages
Trustee, Funding and (following enforcement of the Funding Security) the
Security Trustee;

"Cash Manager Termination Event" has the meaning given in Clause 12.1
(Termination) of the Cash Management Agreement;

"Cash Re-Draw" means a cash payment granted and made by the Seller in
accordance with the Mortgage Conditions at the request of a Borrower after
such Borrower has made an Overpayment in respect of any Flexible Mortgage Loan
but only to the extent of the Overpayment so made. The Seller is solely
responsible for funding any such Cash Re-draw;

"Cash Re-Draw Amount" means, in relation to any Cash Re-Draw, the amount of
monies advanced by the Seller to the relevant Borrower in respect of such Cash
Re-Draw;

"Cash Re-Draws Sub Ledger" means the sub-ledger of the Re-Draws Ledger, which
will be established by the Cash Manager on the Initial Closing Date in order
to record any Cash Re-Draws made on Flexible Mortgage Loans in the Trust
Property;

"Certificate of Title" means a solicitor's or licensed or qualified
conveyancer's report or certificate of title obtained by or on behalf of the
Seller in respect of each Mortgaged Property substantially in the form of the
pro-forma set out in the Standard Documentation;

"Class A Notes" means, in relation to the First Issuer, the Series 1 Class A
Notes and the Series 2 Class A Notes or any of them as the context may require
and, in relation to any New Issuer, the Class A Notes as defined in the
relevant Issuer Master Definitions Schedule;

"Class A Principal Deficiency Sub Ledger" means, in relation to any Issuer,
the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class A Notes issued by such Issuer;

"Class B Notes" means, in relation to the First Issuer, the Series 1 Class B
Notes and the Series 2 Class B Notes or any of them as the context may require
and, in relation to any New Issuer, the Class B Notes as defined in the
relevant Issuer Master Definitions Schedule;

"Class B Principal Deficiency Sub Ledger" means, in relation to any Issuer,
the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class B Notes issued by such

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Issuer;

"Class C Notes" means, in relation to the First Issuer, the Series 1 Class C
Notes and the Series 2 Class C Notes or any of them as the context may require
and, in relation to any New Issuer, the Class C Notes as defined in the
relevant Issuer Master Definitions Schedule;

"Class C Principal Deficiency Sub Ledger" means, in relation to any Issuer,
the sub-ledger of the Issuer Principal Deficiency Ledger of such Issuer
corresponding to the Class C Notes issued by such Issuer;

"Class D Notes" means, in relation to the Second Issuer, the Series 2 Class D
Notes and in relation to any New Issuer, the Class D Notes as defined in the
Issuer Master Definitions Schedule relating to that New Issuer;

"Clearstream, Luxembourg" means Clearstream Banking, societe anonyme;

"Closing Date" means, in relation to the First Issuer, the Initial Closing
Date and, in relation to any New Issuer, the date of any issue of New Notes by
a New Issuer;

"Closing Trust Property" means the Initial Mortgage Portfolio assigned by the
Seller to the Mortgages Trustee on the Initial Closing Date;

"Collection Account" means the Barclays Collection Account, the Lloyds TSB
Collection Account and any other account in the name of Northern Rock which is
from time to time used for the purpose of collecting, directly or indirectly,
monies due in respect of Mortgage Loans and/or the Related Security;

"Collection Bank" means any of Barclays, acting through its branch at Percy
Street, Newcastle upon Tyne NE99 1JP and Lloyds TSB acting through its branch
at City Office, Bailey Drive, Gillingham Business Park, Kent ME8 0LS and/or
such other banks as may be appointed from time to time under and in accordance
with the Transaction Documents;

"Collection Bank Agreement" means the collection bank agreement entered into
on or about the Initial Closing Date between the Collection Banks, Mortgages
Trustee, Funding, the Seller and the Administrator as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement collection bank agreement entered into by
such parties from time to time in accordance with the Transaction Documents;

"Combined Credit Balance" means the average monthly cleared credit balance of
certain accounts of the Borrower held with the Seller which, pursuant to the
Together Connection Conditions, are required to be deducted from, among other
things, the balance of the Together Connections Mortgage Loan in calculating
the Together Connections Benefit;

"Combined Debit Balance" means the aggregate of the outstanding balances of:

(a)      a Borrower's Together Connections Mortgage Loan; and

(b)      certain other products held with the Seller,

from which the Combined Credit Balance is deducted in calculating the Together
Connections Benefit;

"Common Depositary" means Citibank, N.A., in its capacity
as common depositary for Euroclear and Clearstream, Luxembourg, in relation to
the First Issuer Notes, the CDIs (as defined in the Issuer Master Definitions
Schedule relating to the First Issuer) and, in relation to any New Notes, the
Reg S

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Global Note Certificates;

"Completion Event" means a Perfection Event;

"Connection Conditions" means the Mortgage Conditions of the Seller identified
as Connection Conditions;

"Connections Benefit" means the amount by which:

(a)      the interest that would be payable on the Connections Debit Balance
         at the Connection Interest Rate exceeds:

(b)      the interest at the Connection Interest Rate that would be payable on
         the amount by which the Connections Debit Balance exceeds the
         Connections Combined Credit Balance;

"Connections Combined Credit Balance" means the average monthly cleared credit
balance in a Borrower's linked Save Direct deposit account (a deposit account
operated by a dedicated savings division of the Seller) and/or current account
with the Seller;

"Connections Debit Balance" means the outstanding balance on a Connections
Mortgage Loan from which the Connections Combined Credit Balance is deducted
in calculating the Connections Benefit;

"Connection Interest Rate" means the rate or rates of interest which are
applicable to, amongst other things, a Together Connections Mortgage Loan and
a Connections Mortgage Loan, and is calculated in accordance with the Together
Connection Conditions and the Connection Conditions, respectively;

"Connections Mortgage Loan" means a type of Flexible Mortgage Loan which has
the same basic features as a Together Connections Mortgage Loan but without
the facility for an unsecured loan or credit card;

"Conditions" or "Terms and Conditions" means in relation to any Notes issued
by any Issuer, the terms and conditions to be endorsed on such Notes in the
form or substantially in the form scheduled to the Trust Deed entered into by
such Issuer with the Note Trustee and others, as any of the same may from time
to time be amended, varied or restated in accordance with the provisions of
such Trust Deed, and any reference to a numbered Condition shall be construed
accordingly;

"Contingency Insurance Policy" means the contingency insurance policy
identified in paragraph 2(d) of Schedule 4 (Insurance Contracts) to the
Mortgage Sale Agreement and any endorsements or extensions thereto as issued
from time to time and any additional, replacement or substitute contingency
insurance policy which relates to Mortgage Loans in the Mortgages Trust from
time to time;

"Contributions" means the consideration in the form of cash provided to the
Mortgages Trustee by any Beneficiary in respect of the share of such
Beneficiary in the Trust Property under the Mortgages Trust Deed, being any of
an Initial Contribution, a Further Contribution or a Deferred Contribution;

"Contributions Ledger" means the ledger created to record (i) the making by
Funding to the Mortgages Trustee of Contributions to the Mortgages Trust
pursuant to the Mortgages Trust Deed (ii) the making by the Seller to the
Mortgages Trustee of Contributions to the Mortgages Trust pursuant to the
Mortgages Trust Deed (iii) the payment by the Mortgages Trustee to the Seller
of either (a) amounts of Initial Purchase Price for the sale of any New
Mortgage Portfolio which is acquired by the Mortgages Trustee from the Seller
under the provisions of Mortgage Sale Agreement (b) amounts of Deferred
Purchase Price in accordance with the Mortgage Sale Agreement and (iv) the
payment by

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the Mortgages Trustee to the Seller of any Special Distribution in
accordance with the Mortgages Trust Deed;

"Controlled Amortisation Amount" means on any Payment Date prior to the
occurrence of a Trigger Event or enforcement of the Issuer Security:

(a)      in relation to any Note or class of Notes issued by an Issuer which
         is a Controlled Amortisation Note, the maximum aggregate principal
         amount which may be repaid by such Issuer to the relevant Noteholder
         or Noteholders of such class on such Payment Date in accordance with
         the relevant Conditions and the Issuer Cash Management Agreement of
         such Issuer; or

(b)      in relation to the Intercompany Loan of any Issuer, the maximum
         aggregate principal amount which may be repaid by Funding to such
         Issuer in respect of such Intercompany Loan on such Payment Date
         (which will be equal to the aggregate of the Controlled Amortisation
         Amounts due on such Payment Date under the Notes issued by such
         Issuer);

"Controlled Amortisation Note" means any Note issued by an Issuer pursuant to
which prior to the occurrence of a Trigger Event or enforcement of the Issuer
Security, the Conditions of such Note impose a limit on the amount of
principal which may be repaid by such Issuer to the relevant Noteholder in
respect of such Note on any Payment Date;

"Corporate Services Agreement" means

(a)      in relation to any Issuer, the corporate services agreement entered
         into on or before the Closing Date of the issue of the relevant Notes
         among, inter alios, the relevant Corporate Services Provider,
         Holdings, the Post-Enforcement Call Option Holder and such Issuer,
         for the provision by the Corporate Services Provider of certain
         corporate services, and

(b)      in relation to the Mortgages Trustee or Funding, the corporate
         services agreement entered into on or before the Initial Closing Date
         between the relevant Corporate Services Provider and the Mortgages
         Trustee or Funding (as the case may be) for the provision by the
         relevant Corporate Services Provider of certain corporate services
         with respect to the Mortgages Trustee or Funding,

in each case as it has been and may be amended, restated, novated, varied or
supplemented from time to time and shall include any additional and/or
replacement corporate services agreements entered into by such parties from
time to time in accordance with the Transaction Documents;

"Corporate Services Provider" means in relation to any Issuer, Law Debenture
Corporate Services Limited, in relation to Funding, Mourant & Co. Capital
(SPV) Limited, and in relation to the Mortgages Trustee, Mourant & Co.
Limited, or any other person or persons for the time being acting as corporate
services provider under the relevant Corporate Services Agreement;

"CPR" means, unless otherwise defined in the text of the relevant Transaction
Document, the constant rate of scheduled and unscheduled repayments on the
Mortgage Loans in the Mortgage Portfolio each month relative to the aggregate
principal amount outstanding of such Mortgage Loans;

"Currency Swap Agreement" means, for any Issuer, the ISDA Master Agreement(s),
Schedule(s), Confirmation(s) and any credit support documents thereto entered
into among such Issuer, the relevant Currency Swap Provider, the Note Trustee
and any credit support provider, as may be amended, restated, novated, varied
or supplemented from time to time and shall include any additional

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and/or replacement currency swap agreement entered into by such Issuer from
time to time in connection with the Notes issued by such Issuer;

"Currency Swap Provider" means in relation to any Issuer the swap counterparty
to such Issuer under any relevant Currency Swap Agreement of such Issuer;

"Currency Swap Provider Default" means the occurrence of an Event of Default
or a Downgrade Termination Event (as defined in the relevant Currency Swap
Agreement) under a Currency Swap Agreement where the Currency Swap Provider is
the Defaulting Party or the Affected Party (each as defined in the relevant
Currency Swap Agreement);

"Current Balance" means in relation to any Mortgage Loan as at any given date,
the aggregate (but avoiding double counting) of:

(a)      the original principal amount advanced to the relevant Borrower and
         any Further Advances on or before the given date to the relevant
         Borrower secured or intended to be secured by the related Mortgage;

(b)      the amount of any Re-Draw under any Flexible Mortgage Loan or of any
         Further Draw under a Personal Secured Loan secured or intended to be
         secured by the related Mortgage;

(c)      any interest, disbursement, legal expense, fee, charge, rent, service
         charge, premium or payment which has been properly capitalised in
         accordance with the relevant Mortgage Conditions or with the relevant
         Borrower's consent and added to the amounts secured or intended to be
         secured by such Mortgage Loan (including interest capitalised on any
         Re-Draw under a Flexible Mortgage Loan); and

(d)      any other amount (other than unpaid interest) which is due or accrued
         (whether or not due) and which has not been paid by the relevant
         Borrower and has not been capitalised in accordance with the relevant
         Mortgage Conditions or with the relevant Borrower's consent but which
         is secured or intended to be secured by that Mortgage Loan, as at the
         end of the London Business Day immediately preceding that given date
         less any repayment or payment of any of the foregoing made on or
         before the end of the London Business Day immediately preceding that
         given date and excluding any retentions made but not released and any
         Further Advances and/or Further Draws committed to be made but not
         made by the end of the London Business Day immediately preceding that
         given date;

"Current Funding Share" means the amount of Trust Property beneficially owned
by Funding from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage and Seller Share Percentage) of the
Mortgages Trust Deed;

"Current Funding Share Percentage" means the percentage share of Funding in
the Trust Property from time to time, as determined in accordance with Clause
8 (Adjustment of Funding Share Percentage and Seller Share Percentage) of the
Mortgages Trust Deed;

"Current Seller Share" means the amount of Trust Property beneficially owned
by the Seller from time to time, as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage and Seller Share Percentage) of the
Mortgages Trust Deed;

"Current Seller Share Percentage" means the percentage share of the Seller in
the Trust Property from time to time as determined in accordance with Clause 8
(Adjustment of Funding Share Percentage and Seller Share Percentage) of the
Mortgages Trust Deed;

                                      11
<PAGE>

"Deed of Accession" means a deed executed by, inter alios, Funding, the
Security Trustee and the Note Trustee and any New Funding Secured Creditor in
the form set out in Schedule 2 to the Funding Deed of Charge or any other form
of deed as agreed between the parties;

"Deed of Consent" means a deed whereby a person in or intended to be in
occupation of a Mortgaged Property agrees with the Seller to postpone his or
her interest (if any) in the Mortgaged Property so that it ranks after the
interest of the Seller created by the relevant Mortgage;

"Deed of Postponement" means a deed whereby a Mortgagee of a Mortgaged
Property agrees with the Seller to postpone its Mortgage over the Mortgaged
Property so that the sums secured by it will rank for repayment after the sums
secured by the relevant Mortgage;

"Deferred Contribution" means the consideration in the form of cash payable by
Funding to the Mortgages Trustee from time to time in respect of the Funding
Share of the Trust Property pursuant to and in accordance with the Mortgages
Trust Deed and/or the Funding Deed of Charge including, for the avoidance of
doubt, Final Deferred Contribution (which Contribution will fund the payment
to the Seller by the Mortgages Trustee of amounts of Deferred Purchase Price
payable by the Mortgages Trustee to the Seller from time to time pursuant to
and in accordance with the Mortgage Sale Agreement);

"Deferred Purchase Price" means that portion of the Purchase Price for the
sale and assignment of the Initial Mortgage Portfolio or of any New Mortgage
Portfolio sold and assigned to the Mortgages Trustee which is not paid to the
Seller on the Initial Closing Date or, in the case of any New Mortgage
Portfolio, on the relevant Assignment Date and which is to be paid by the
Mortgages Trustee to the Seller from time to time from Deferred Contributions
received by the Mortgages Trustee from Funding and otherwise in accordance
with the Mortgage Sale Agreement;

"Direct Debit" means a payment made pursuant to the Direct Debiting Scheme;

"Direct Debiting Scheme" means the scheme for the manual or automated debiting
of bank accounts operated in accordance with the detailed rules of certain
members of the Association for Payment Clearing Services;

"Distribution Date" means the date on which the Mortgages Trust terminates and
the London Business Day as determined by the Cash Manager falling no later
than 6 Business Days after each Trust Determination Date;

"Distribution Period" means the period from, and including, a Distribution
Date to, but excluding, the next following Distribution Date or, in relation
to the first Distribution Period, the period from and including the relevant
Closing Date to, but excluding, the first Distribution Date;

"Drawdown Date" means, in respect of the First Issuer Intercompany Loan, the
Initial Closing Date, and in respect of any New Intercompany Loan, the date on
which such New Intercompany Loan is made to Funding by any New Issuer;

"Drawdown Notice" means, in respect of an Intercompany Loan, a notice
delivered by Funding to the relevant Issuer and the Security Trustee
requesting a drawing under that Intercompany Loan Agreement;

"DTC" means The Depository Trust Company;

"Early Repayment Charge" means any charge or fee which the Mortgage Conditions
applicable to a Mortgage Loan require the relevant Borrower to pay in the
event that all or part of that Mortgage

                                      12
<PAGE>

Loan is repaid before a certain date, including without limitation repayment of
any "cashback";

"Early Repayment Charge Receipts" means an amount equal to sums received by
the Mortgages Trustee from time to time in respect of Early Repayment Charges;

"Encumbrance" has the same meaning as "Security Interest";

"Enforcement Procedures" means the procedures for the enforcement of Mortgages
undertaken by the Administrator from time to time in accordance with the
Administration Procedures;

"English Mortgage" means, in respect of any Mortgage Loan in the Mortgage
Portfolio, a Mortgage secured over an English Property;

"English Mortgage Loan" means each Mortgage Loan secured by an English Mortgage;

"English Property" means a Mortgaged Property situated in England or Wales;

"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear System;

"Event of Default" means, as the context requires, any of the following:

(a)      in relation to the First Issuer Notes, a First Issuer Note Event of
         Default;

(b)      in relation to the New Notes issued by any New Issuer, a Note Event
         of Default pursuant to the Terms and Conditions of such New Notes;

(c)      in relation to the First Intercompany Loan Agreement, a First Issuer
         Intercompany Loan Event of Default; or

(d)      in relation to any New Intercompany Loan Agreement, the occurrence of
         an event of default pursuant to the Intercompany Loan Terms and
         Conditions of such New Issuer;

"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended;

"Existing Borrower's Re-Fix Rate" means at any date the fixed rate then being
offered to those of the Seller's existing Borrowers who at that date are
seeking to fix the rate of interest payable under their existing Fixed Rate
Mortgage Loan with the Seller for the applicable period;

"Final Deferred Contribution" has the meaning given to it in the Mortgages
Trust Deed;

"Final Repayment Date" means, in respect of the First Issuer Intercompany
Loan, the Payment Date falling in January, 2041 and in relation to any New
Intercompany Loan the date specified under the relevant Issuer Transaction
Documents and as defined in the relevant Issuer Master Definitions Schedule;

"Financial Period" means a Financial Year or any other period in respect of
which accounts are required to be prepared and certified by the auditors of
the relevant company to enable it to comply with all relevant legal and
accounting requirements and all requirements of any stock exchange on which
any securities of the company are listed;

"First Issuer" means Granite Mortgages 01-1 plc;

"First Issuer Liquidity Required Amount" means an amount as of any Payment
Date equal to the excess, if any, of 3% of the aggregate outstanding balance
of the Notes on that Payment Date over amounts standing to the credit of the
Issuer Reserve Fund on that Payment Date;

"Fitch" means Fitch Ratings Limited and includes any successor to its ratings
business;

                                      13
<PAGE>

"Fixed Rate Mortgage Loan" means a Mortgage Loan which is subject to a fixed
rate of interest set by reference to a predetermined rate or series of rates
for a fixed period or periods;

"Fixed Rate Period" means, in relation to any Fixed Rate Mortgage Loan or
other Mortgage Loan offered with a Fixed Rate, the period agreed between the
Borrower and the Seller or Administrator (as applicable) as set out under the
terms and conditions of such Mortgage Loan during which the interest rate
applicable to such Mortgage Loan will remain fixed;

"Flexible Cash Re-Draw Capacity" has the meaning given to it in Clause 9.2
(Fluctuation of Minimum Seller Share on Distribution Date) of the Mortgages
Trust Deed;

"Flexible Mortgage Loan" means a type of Mortgage Loan (other than a Personal
Secured Loan) product that typically incorporates features that give the
Borrower options (which may be subject to certain conditions) to, among other
things, make further drawings on the mortgage loan account and/or to overpay
or underpay interest and principal in a given month and/or to take a Payment
Holiday;

"Flexible Overpayments Sub Ledger" means the sub-ledger of the Overpayments
Ledger which will be established by the Cash Manager on the Initial Closing
Date in order to record any Overpayments made on Flexible Mortgage Loans;

"Funding" means Granite Finance Funding Limited, a company incorporated with
limited liability in Jersey, registered number 79308;

"Funding Available Principal Receipts" in respect of any Payment Date will be
calculated by the Cash Manager or otherwise on behalf of Funding (or,
following enforcement of the Funding Security, the Security Trustee) on the
Distribution Date immediately preceding such Payment Date and will be an
amount equal to the sum of all Funding Principal Receipts received by Funding
from the Mortgages Trustee and recorded on the Group 1 Principal Sub-Ledger or
Group 2 Principal Sub-Ledger, as applicable, during the Interest Period ending
on the relevant Payment Date plus amounts transferred from the Funding
Principal Ledger to the Group 1 Principal Sub-ledger or the Group 2 Principal
Sub-Ledger during the Interest Period ending on the relevant Payment Date;
provided that, subject as otherwise provided in the Transaction Documents, for
the purpose only of determining the amount of Funding Available Principal
Receipts which may be allocated to any Issuer (but not to any other Issuer)
following an enforcement of the Issuer Security relating to that Issuer, it
may also include the aggregate of any amounts standing to the credit of the
Issuer Liquidity Reserve Ledger, if any, and the Issuer Reserve Fund Ledger of
such Issuer remaining on that Payment Date after the application of such
reserve funds in accordance with the Funding Pre-Enforcement Revenue Priority
of Payments. Provided, further, that in respect of an Issuer the Notes of
which include a Class or Classes of Money Market Notes having a Final Maturity
Date on such Payment Date, Funding Available Principal Receipts will include
the amount, if any, standing to the credit of the Issuer Liquidity Reserve
Ledger in respect of that Issuer on the Distribution Date immediately
preceding such Payment Date required (after taking into account Funding
Available Principal Receipts otherwise available to such Issuer) to pay such
Class of Money Market Notes on such Payment Date;

"Funding Available Revenue Receipts" in respect of any Payment Date will be
calculated by the Cash Manager on the Distribution Date immediately preceding
such Payment Date and will be an amount equal to the sum of:

(1)      all Mortgages Trustee Available Revenue Receipts distributed to
         Funding during the Interest

                                      14
<PAGE>

         Period ending on the relevant Payment Date;

(2)      other net income of Funding including all amounts of interest
         received on the Funding GIC Account and the Funding Transaction
         Account, and/or all income from Authorised Investments (in each case
         to be received on or prior to the relevant Payment Date) as allocated
         by Funding between Group 1 and Group 2 in proportion to the Group 1
         Share Percentage and the Group 2 Share Percentage and recorded on the
         Group 1 Revenue Sub-Ledger and Group 2 Revenue Sub-Ledger on each
         Distribution Date during the Interest Period ending on the relevant
         Payment Date; and

(3)      the amount standing to the credit of the Funding Reserve Ledger,

PROVIDED THAT for the purpose only of the payments to be made to any Issuer on
the relevant Payment Date in respect of the Intercompany Loan made by that
Issuer (but not for the purpose of any other payment to be made by Funding on
the relevant Payment Date including any payment in respect of any other
Intercompany Loan made by any other Issuer), it shall also include the sum of:

(4)      the amount standing to the credit of the Issuer Reserve Fund Ledger
         in respect of such Issuer (but not in respect of any other Issuer),
         subject to any limits or conditions on the purposes for which that
         reserve may be utilised as set out in the Funding Deed of Charge; and

(5)      the amount standing to the credit of the Issuer Liquidity Reserve
         Ledger, if any, in respect of such Issuer (but not in respect of any
         other Issuer), subject to any limits or conditions on the purposes
         for which that reserve may be utilised as set out in the Funding Deed
         of Charge.

"Funding Bank Accounts" means the Funding GIC Account, the Funding Transaction
Account and the Funding (First Issuer) GIC Account and each other Funding
(Issuer) GIC Account established after the Initial Closing Date and each such
additional or replacement account in the name of Funding that may be opened
with the prior approval of the Security Trustee after the Initial Closing
Date;

"Funding Charged Property" means the property, assets and undertakings of
Funding which from time to time are or are expressed to be mortgaged, charged,
assigned, pledged or otherwise encumbered to, or in favour of the Security
Trustee for itself and for the Funding Secured Creditors under the Funding
Deed of Charge or any other Funding Transaction Document;

"Funding Contribution Date" means any date on which Funding makes a Further
Contribution to the Mortgages Trustee in connection with Funding's purchase of
an increased beneficial interest in the Trust Property, on which date the
Mortgages Trustee will also pay to the Seller an Initial Consideration equal
to the amount of such Further Contribution;

"Funding Deed of Charge" means the deed of charge entered into on or about the
Initial Closing Date between Funding, the Security Trustee, the First Issuer,
the Corporate Services Provider, the Account Bank, the Funding GIC Provider,
the Mortgages Trustee, the Start-up Loan Provider and the Cash Manager and the
Schedules thereto and including each Deed of Accession or Accession
Undertaking entered into in connection therewith as may be amended, restated,
novated, varied or supplemented from time to time;

"Funding Expense Sub-Ledger" means a sub-ledger of the Funding Revenue Ledger
on which receipts and payments of Funding Revenue Receipts allocable to the
payment of expenses will be recorded by the Cash Manager;

"Funding (First Issuer) Bank Account Agreement" means the agreement entered
into on or about

                                      15
<PAGE>

the Initial Closing Date between Funding, the Cash Manager, the Security
Trustee and the Account Bank which governs the operation of the Funding (First
Issuer) GIC Account as may be amended, restated, novated, varied or
supplemented from time to time and shall include any additional and/or
replacement Funding (first issuer) bank account agreement entered into by such
parties from time to time in accordance with the Transaction Documents;

"Funding (First Issuer) GIC Account" the account in the name of Funding (sort
code 30-15-57, account number 00001933, reference: GRANITE011GI) held at the
Account Bank and maintained subject to the terms of the Funding (First Issuer)
Guaranteed Investment Contract, the Funding (First Issuer) Bank Account
Agreement and the Funding Deed of Charge or such additional or replacement
account as may for the time being be in place with the prior consent of the
Security Trustee;

"Funding (First Issuer) GIC Account Mandate" means the resolutions,
instructions and signature authorities relating to the Funding (First Issuer)
GIC Account substantially in the form set out in Schedule 1 to the Funding
(First Issuer) Bank Account Agreement;

"Funding (First Issuer) Guaranteed Investment Contract" means the guaranteed
investment contract entered into on or about the Initial Closing Date between
Funding, the Funding GIC Provider, the Security Trustee and the Cash Manager
under which the Funding GIC Provider agrees to pay Funding a guaranteed rate
of interest on the balance from time to time of the Funding (First Issuer) GIC
Account, as may be amended, restated, novated, varied or supplemented from
time to time and shall include any additional and/or replacement guaranteed
investment contract entered into by Funding from time to time in accordance
with the Transaction Documents;

"Funding (Issuer) Bank Account Agreement" means, in relation to any Issuer,
the agreement entered into on or about the relevant Closing Date between
Funding, the Cash Manager, the Security Trustee and the Account Bank which
governs the operation of the Funding (Issuer) GIC Account and shall include
any additional and/or replacement Funding (Issuer) bank account agreement
entered into by such parties from time to time in accordance with the
Transaction Documents;

"Funding (Issuer) GIC Account" means, in relation to any Issuer, the account
in the name of Funding held at the Account Bank and maintained subject to the
terms of the relevant Funding (Issuer) Guaranteed Investment Contract, the
relevant Funding (Issuer) Bank Account Agreement and the Funding Deed of
Charge or such additional or replacement account as may for the time being be
in place with the prior consent of the Security Trustee;

"Funding (Issuer) Guaranteed Investment Contract" means, in relation to any
Issuer, the guaranteed investment contract entered into on about the relevant
Closing Date between Funding, the Funding GIC Provider, the Security Trustee
and the Cash Manager under which the Funding GIC Provider agrees to pay
Funding a guaranteed rate of interest on the balance from time to time of the
relevant Funding (Issuer) GIC Account, as may be amended, restated, novated,
varied or supplemented from time to time and shall include any additional
and/or replacement guaranteed investment contract entered into by Funding from
time to time in accordance with the Transaction Documents;

"Funding GIC Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding GIC Account substantially in the
form set out in Schedule 1 to the Bank Account Agreement;

"Funding GIC Provider" means Lloyds TSB Bank plc acting through its office at
Financial Markets

                                      16
<PAGE>

Division, 25 Monument Street, London or such other person or persons as are
for the time being the GIC provider to Funding under the Funding Guaranteed
Investment Contract and any Funding (Issuer) Guaranteed Investment Contract;

"Funding Guaranteed Investment Contract" means the guaranteed investment
contract entered into on or about the Initial Closing Date between Funding,
the Funding GIC Provider, the Cash Manager and the Security Trustee under
which the Funding GIC Provider agrees to pay Funding a guaranteed rate of
interest on the balance from time to time of the Funding GIC Account as may be
amended, restated, novated, varied or supplemented from time to time and shall
include any additional and/or replacement guaranteed investment contract
entered into by Funding in accordance with the Transaction Documents;

"Funding Jersey Secured Property" means, at any time, the Funding Charged
Property which is situated in Jersey at such time;

"Funding Ledgers" means the Funding Principal Ledger, the Funding Revenue
Ledger, the Funding Reserve Ledger, the Funding Principal Deficiency Ledger,
the Intercompany Loan Ledger and each Issuer Reserve Fund Ledger and each
Issuer Liquidity Reserve Ledger;

"Funding Post-Enforcement Priority of Payments" means the rules and the order
of priority in which Funding Available Revenue Receipts, Funding Available
Principal Receipts and all other monies, income, receipts and recoveries of
Funding or the Security Trustee or any Receiver of Funding and the proceeds of
enforcement of the Funding Security are to be applied following service of an
Intercompany Loan Enforcement Notice or otherwise following an enforcement of
the Funding Security as set out in Part III of Schedule 3 (Funding Priority of
Payments) to the Funding Deed of Charge, as the same may be amended, varied or
superseded from time to time in accordance with the terms of the Funding Deed
of Charge;

"Funding Pre-Enforcement Principal Priority of Payments" means the rules and
the order of priority in which Funding Available Principal Receipts will be
applied prior to the enforcement of the Funding Security as set out in Part II
of Schedule 3 (Funding Priority of Payments) to the Funding Deed of Charge, as
the same may be amended, varied or superseded from time to time in accordance
with the terms of the Funding Deed of Charge;

"Funding Pre-Enforcement Revenue Priority of Payments" means the rules and the
order of priority in which Funding Available Revenue Receipts will be applied
prior to the enforcement of the Funding Security as set out in Part I of
Schedule 3 (Funding Priority of Payments) to the Funding Deed of Charge, as
the same may be amended, varied or superseded from time to time in accordance
with the terms of the Funding Deed of Charge;

"Funding Principal Deficiency Ledger" means the ledger maintained by the Cash
Manager in the name of Funding pursuant to the Cash Management Agreement to
record the aggregate position of the Principal Deficiency Ledgers of all
Issuers as to Losses on the Mortgage Loans and the application of Funding
Available Principal Receipts to fund the Issuer Liquidity Reserve Funds;

"Funding Principal Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record
receipts and payments of Funding Principal Receipts which ledger will be
divided into two sub-ledgers: (i) the Group 1 Principal Sub-Ledger and (ii)
the Group 2 Principal Sub-Ledger;

"Funding Principal Receipts" means the Principal Receipts received by Funding
from the Mortgages

                                      17
<PAGE>

Trustee on each Distribution Date;

"Funding Priority of Payments" means, as applicable, any of the Funding
Pre-Enforcement Revenue Priority of Payments, the Funding Pre-Enforcement
Principal Priority of Payments or the Funding Post-Enforcement Priority of
Payments;

"Funding Reserve Adjustment Date" means a Payment Date in respect of which (i)
a Funding Reserve Decrease has occurred on the immediately preceding Payment
Date and (ii) such immediately preceding Payment Date was not also a Funding
Reserve Adjustment Date; provided that a Funding Reserve Adjustment Date shall
not occur on any Payment Date for Group 1 Issuers or Payment Date for Group 2
Issuers if only Notes of Group 1 Issuers or Group 2 Issuers, respectively, are
outstanding;

"Funding Reserve Decrease" means a reduction in the amount standing to the
credit of the Funding Reserve Ledger resulting from the application of such
amount to the payment of items in accordance with the Funding Pre-Enforcement
Revenue Priority of Payments (except items (A)-(D)) or the Funding
Post-Enforcement Priority of Payments (except items (A)-(C));

"Funding Reserve Fund" means the reserve fund established in the name of
Funding on the Initial Closing Date in an amount up to the Funding Reserve
Required Amount, which prior to enforcement may be (a) allocated among Issuers
and between Groups to help meet any deficit in Funding Available Revenue
Receipts and thereby any deficit recorded on the Issuer Principal Deficiency
Ledgers and/or (b) utilised to fund initial reserves and other expenses in
connection with the issuance of Notes by New Issuers;

"Funding Reserve Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record the
amount standing to the credit of the Funding Reserve Fund from time to time;

"Funding Reserve Required Amount" means the amount from time to time which is
equal to the sum of (1) the product of 0.60 per cent. and the greater of (a)
the aggregate Principal Amount Outstanding of the Notes outstanding of all
Issuers on the relevant determination date and (b) the aggregate Outstanding
Principal Balance of the Intercompany Loans of all Issuers on the relevant
determination date, or such other amount as may be agreed from time to time
with the Rating Agencies. As at the Initial Closing Date, the Funding reserve
required amount will be zero;

"Funding Revenue Ledger" means the ledger maintained by the Cash Manager in
the name of Funding pursuant to the Cash Management Agreement to record all
monies received by Funding during an Interest Period other than the Funding
Principal Receipts which ledger will be sub-divided into three sub-ledgers:
(i) the Group 1 Revenue Sub-Ledger, (ii) the Group 2 Revenue Sub-Ledger and
(iii) the Funding Expense Sub-Ledger;

"Funding Revenue Receipts" means the Mortgages Trustee Available Revenue
Receipts received by Funding from the Mortgages Trustee on each Distribution
Date;

"Funding Secured Creditors" means the Security Trustee (and any Receiver of
Funding appointed pursuant to the Funding Deed of Charge), the First Issuer,
the Corporate Services Provider in relation to Funding, the Account Bank, the
Funding GIC Provider, the Mortgages Trustee, the Start-up Loan Provider, the
Cash Manager and each New Funding Secured Creditor who accedes to the Funding
Deed of Charge from time to time pursuant to a Deed of Accession (including,
for the avoidance of doubt, any New Issuer);

"Funding Secured Obligations" means any and all of the monies, obligations and
liabilities which

                                      18
<PAGE>

Funding covenants to pay or discharge under or pursuant to Clause 2 (Covenant
to pay and to Perform) of the Funding Deed of Charge and all other amounts
owed by it to the Funding Secured Creditors pursuant to the Funding
Transaction Documents;

"Funding Security" means the security granted by Funding under or pursuant to
the Funding Deed of Charge in favour of the Security Trustee for the benefit
of the Funding Secured Creditors or any of them including the security granted
by Funding under or pursuant to any Deed of Accession and the security granted
by Funding under or pursuant to the Second Priority Funding Deed of Charge;

"Funding Share" means, prior to the first Distribution Date, the Initial
Funding Share and thereafter means the Current Funding Share;

"Funding Share Percentage" means, prior to the first Distribution Date, the
Initial Funding Share Percentage and thereafter means the Current Funding
Share Percentage;

"Funding Share/Seller Share Ledger" means the ledger to be maintained by the
Cash Manager, on behalf of the Mortgages Trustee and the Beneficiaries, to
record the Current Funding Share, the Current Funding Share Percentage, the
Current Seller Share and the Current Seller Share Percentage of the Trust
Property;

"Funding Transaction Account" means the account in the name of Funding
(account no. 0625898, sort code 30-00-02) held with the Account Bank and
maintained subject to the terms of the Bank Account Agreement and the Funding
Deed of Charge or any additional or replacement account as may for the time
being be in place with the prior consent of the Security Trustee;

"Funding Transaction Account Mandate" means the resolutions, instructions and
signature authorities relating to the Funding Transaction Account
substantially in the form set out in Schedule 1 to the Bank Account Agreement;

"Funding Transaction Document" means each of the following documents:

(a)      the Mortgages Trust Deed;

(b)      the Mortgage Sale Agreement;

(c)      the Administration Agreement;

(d)      the Funding Deed of Charge;

(e)      the Second Priority Funding Deed of Charge;

(f)      the Corporate Services Agreement;

(g)      the Bank Account Agreement;

(h)      the Funding (Issuer) Bank Account Agreement;

(i)      the Funding Guaranteed Investment Contract;

(j)      the Funding (Issuer) Guaranteed Investment Contract;

(k)      the Cash Management Agreement;

(l)      the Start-up Loan Agreement;

(m)      each New Start-up Loan Agreement to be entered into by Funding after
         the Initial Closing Date;

                                      19
<PAGE>

(n)      the Collection Bank Agreement;

(o)      the First Issuer Intercompany Loan Agreement;

(p)      each New Intercompany Loan Agreement to be entered into by Funding
         after the date hereof; and

(q)      each other deed, document, agreement, instrument or certificate
         entered into or to be entered into by Funding pursuant to or in
         connection with any of the documents set out in paragraphs (a)
         through (p) above including any agreement entered into by Funding as
         a replacement of any of the above agreements upon the termination
         thereof;

"Further Advance" means, in relation to a Mortgage Loan, any advance of
further money to the relevant Borrower following the making of the initial
advance of monies in respect of such Mortgage Loan (the "Initial Advance")
which is secured by the same Mortgage as the Initial Advance but does not
include the amount of any retention advanced to the relevant Borrower as part
of the Initial Advance after completion of the Mortgage and does not include
any Re-Draw or Further Draw;

"Further Contribution" means the consideration in the form of cash payable to
the Mortgages Trustee by any Beneficiary to increase the Funding Share or, as
the case may be, the Seller Share of the Trust Property pursuant to and in
accordance with the Mortgages Trust Deed but excluding any Initial
Contribution or Deferred Contribution paid by Funding to the Mortgages
Trustee;

"Further Draw" means additional amounts drawn by a Borrower under a Personal
Secured Loan in aggregate up to the fixed amount of credit extended under the
terms of the related Mortgage Conditions at the inception of the Borrower's
Personal Secured Loan;

"Further Draw Capacity" means an amount equal to the difference between (1)
the maximum amount of Further Draws that Borrowers may make under Personal
Secured Loans included in the Trust Property (whether or not drawn) as at the
last day of the immediately preceding Trust Calculation Period and (2) the
aggregate Current Balance of Personal Secured Loans which form part of the
Trust Property as at the last day of the immediately preceding Trust
Calculation Period;

"GIC Provider" means in relation to any person the provider of guaranteed
investment services to such person pursuant to a guaranteed investment
contract;

"Group" means either of Group 1 or Group 2;

"Group 1" means all Group 1 Issuers;

"Group 2" means all Group 2 Issuers;

"Group 1 Available Principal Receipts" means, in respect of a Payment Date for
Group 1 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to all Mortgages Trustee Principal Receipts received
by Funding from the Mortgages Trustee plus any amounts transferred from the
Funding Principal Ledger to the Group 1 Principal Sub-Ledger during the
Interest Period ending on the relevant Payment Date;

"Group 2 Available Principal Receipts" means, in respect of a Payment Date for
Group 2 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to all Mortgages Trustee Principal Receipts received
by Funding from the Mortgages Trustee plus any amounts transferred from the
Funding Principal Ledger to the Group 2 Principal Sub-Ledger during the
Interest Period ending on the relevant Payment Date;

                                      20
<PAGE>

"Group 1 Available Revenue Receipts" means, in respect of a Payment Date for
Group 1 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to the sum of (a) the amount of Mortgages Trustee
Available Revenue Receipts distributed to Funding during the Interest Period
ending on the relevant Payment Date and recorded on the Group 1 Revenue
Sub-Ledger (b) other net income of Funding (including all amounts of interest
on the Funding GIC Account and the Funding Transaction Account, and/or all
income from Authorised Investments, in each case received on or prior to the
relevant Payment Date), as allocated by Funding to Group 1 in proportion to
the Group 1 Share Percentage and recorded on the Group 1 Revenue Sub-Ledger on
each Distribution Date during the related Interest Period ending on the
relevant Payment Date, and (c) the product of the amount standing to the
credit of the Funding Reserve Ledger on such Distribution Date multiplied by
the Group 1 Share Percentage, in each case as on such Distribution Date
(unless the related Payment Date for Group 1 Issuers is also a Funding Reserve
Adjustment Date, in which case the product of the amount standing to the
credit of the Funding Reserve Ledger multiplied by the Group 1 Share
Percentage, in each case as on the Distribution Date immediately preceding the
immediately preceding Payment Date for Group 2 Issuers);

"Group 2 Available Revenue Receipts" means, in respect of a Payment Date for
Group 2 Issuers, an amount (calculated on the immediately preceding
Distribution Date) equal to the sum of (a) the amount of Mortgages Trustee
Available Revenue Receipts distributed to Funding Interest Period ending on
the relevant Payment Date and recorded on the Group 2 Revenue Sub-Ledger (b)
other net income of Funding (including all amounts of interest on the Funding
GIC Account and the Funding Transaction Account, and/or all income from
Authorised Investments, in each case received on or prior to the relevant
Payment Date), as allocated by Funding to Group 2 in proportion to the Group 2
Share Percentage and recorded on the Group 2 Revenue Sub-Ledger on each
Distribution Date during the related Interest Period ending on the relevant
Payment Date, and (c) the product of the amount standing to the credit of the
Funding Reserve Ledger on such Distribution Date multiplied by the Group 2
Share Percentage, in each case as on such Distribution Date (unless the
related Payment Date for Group 2 Issuers is also a Funding Reserve Adjustment
Date, in which case the product of the amount standing to the credit of the
Funding Reserve Ledger multiplied by the Group 2 Share Percentage, in each
case as on the Distribution Date immediately preceding the immediately
preceding Payment Date for Group 1 Issuers);

"Group 1 Issuer" means any Issuer which applies Issuer Available Revenue
Receipts and Issuer Available Principal Receipts in accordance with the
relevant priority of payments on the Payment Date falling in July, October,
January and April of each year;

"Group 2 Issuer" means any Issuer which applies Issuer Available Revenue
Receipts and Issuer Available Principal Receipts in accordance with the
relevant priority of payments on the Payment Date falling in March, June,
September and December of each year;

"Group 1 Principal Sub-Ledger" means a sub-ledger of the Funding Principal
Ledger on which receipts and payments of Funding Principal Receipts allocable
to Group 1 are recorded by the Cash Manager;

"Group 2 Principal Sub-Ledger" means a sub-ledger of the Funding Principal
Ledger on which receipts and payments of Funding Principal Receipts allocable
to Group 2 are recorded by the Cash Manager;

"Group 1 Revenue-Sub Ledger" means a sub-ledger of the Funding Revenue Ledger
on which

                                      21
<PAGE>

receipts and payments of Funding Revenue Receipts allocable to Group 1 are
recorded by the Cash Manager;

"Group 2 Revenue-Sub Ledger" means the sub-ledger of the Funding Revenue
Ledger on which receipts and payments of Funding Revenue Receipts allocable to
Group 2 are recorded by the Cash Manager;

"Group 1 Share Percentage" means

  Aggregate Outstanding Principal Balance of all Group 1 Intercompany Loans
      Aggregate Outstanding Principal Balance of all Intercompany Loans

PROVIDED THAT on any Distribution Date with respect to which Funding has made
a Further Contribution to the Mortgages Trustee in connection with Funding's
purchase of an increased beneficial interest in the Trust Property during the
immediately preceding Trust Calculation Period, the Outstanding Principal
Balance of any Intercompany Loan entered into during such Trust Calculation
Period shall be deemed to be (only for the purposes of the numerator and
denominator of the formula above) the Outstanding Principal Balance of such
Intercompany Loan multiplied by the number of days during which such
Intercompany Loan was outstanding during such Trust Calculation Period divided
by the number of days in such Trust Calculation Period.

"Group 2 Share Percentage" means

  Aggregate Outstanding Principal Balance of all Group 2 Intercompany Loans
      Aggregate Outstanding Principal Balance of all Intercompany Loans

PROVIDED THAT on any Distribution Date with respect to which Funding has made
a Further Contribution to the Mortgages Trustee in connection with Funding's
purchase of an increased beneficial interest in the Trust Property during the
immediately preceding Trust Calculation Period, the Outstanding Principal
Balance of any Intercompany Loan entered into during such Trust Calculation
Period shall be deemed to be (only for the purposes of the numerator and
denominator of the formula above) the Outstanding Principal Balance of such
Intercompany Loan multiplied by the number of days during which such
Intercompany Loan was outstanding during such Trust Calculation Period divided
by the number of days in such Trust Calculation Period.

"Group 1 Shared Issuer Revenue Receipts" has the meaning given in the rules
for application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 2 Shared Issuer Revenue Receipts" has the meaning given in the rules
for application of Funding Available Revenue Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 1 Shared Principal Receipts" has the meaning given in the rules for
application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Group 2 Shared Principal Receipts" has the meaning given in the rules for
application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Priority of Payments set out in Part II of Schedule 3 to the
Funding Deed of Charge;

"Guarantee" means each guarantee in support of the obligations of a Borrower
under a Mortgage Loan;

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<PAGE>
"Heritable Creditor" means, in relation to Scottish Mortgage Loans, the holder
of a standard security over heritable or long leasehold property in Scotland;

"Holdings" means Granite Finance Holdings Limited, a private limited company
incorporated under the laws of England and Wales, registered number 4127787;

"ICTA" means the Income and Corporation Tax Act 1988;

"in Arrears" or "in arrears" means, in respect of a Mortgage Account, that
amount equal in the aggregate to one or more Monthly Payments in respect of
such Mortgage Account are overdue and unpaid by a Borrower;

"Independent Certificates" means certificates of independent parties in
accordance with Trust Indenture Act Sections 314(c) and 314(d)(1);

"Initial Closing Date" means 26 March 2001;

"Initial Contribution" the consideration in the form of cash payable by
Funding to the Mortgages Trustee in respect of the Funding Share of the Trust
Property pursuant to and in accordance with the Mortgages Trust Deed, which
Contribution is to fund the payment to the Seller by the Mortgages Trustee of
(and is equal to) the Initial Purchase Price in respect of the Initial
Mortgage Portfolio or (if any is payable) any New Mortgage Portfolio sold and
assigned to the Mortgages Trustee and is to be funded from the proceeds of the
First Issuer Intercompany Loan or any New Intercompany Loan;

"Initial Funding Share" means the share of Funding in the Trust Property on
the Initial Closing Date, being an amount equal to approximately
(GBP)1,500,000,000;

"Initial Funding Share Percentage" means the percentage share of Funding in
the Trust Property on the Initial Closing Date being approximately 86.61 per
cent.;

"Initial Mortgage Loans" means the portfolio of residential first Mortgage
Loans and their Related Security to be sold and assigned by the Seller to the
Mortgages Trustee on the Initial Closing Date pursuant to the Mortgage Sale
Agreement;

"Initial Mortgage Portfolio" means the Initial Mortgage Loans and their
Related Security, particulars of which are set out in Appendix A to the
Mortgage Sale Agreement but excluding any such Mortgage Loan and its Related
Security which has been redeemed in full on or before the Initial Closing
Date, and (subject where applicable to the subsisting rights of redemption of
the Borrowers) all right, title, interest and benefit of the Seller in and to:

(a)      all sums of principal, interest (including, for the avoidance of
         doubt, all Accrued Interest, Arrears of Interest and Capitalised
         Arrears) and any other sum due or to become due under or in respect
         of such Mortgage Loans and their Related Security on or after the
         Initial Closing Date and including, without limitation, the right to
         demand, sue for, recover and give receipts for all such principal,
         interest or other amounts, the right to sue on all covenants and
         undertakings made or expressed to be made in favour of the Seller
         under the applicable Mortgage and all sums due or to become due in
         respect of any Early Repayment Charge;

(b)      the benefit of all securities for such principal, interest and other
         sums payable (including without limitation any interest of the Seller
         in any Life Policy), the benefit of all Deeds of Consent, MHA
         Documentation and Deeds of Postponement, any Guarantee in respect of
         such Mortgage Loan or any other collateral security for the repayment
         of the relevant Mortgage

                                      23
<PAGE>

         Loans secured by the Mortgages;

(c)      the right to exercise all the powers of the Seller in relation
         thereto subject to and in accordance with the relevant Mortgage
         Conditions;

(d)      all the estate and interest in the Mortgaged Properties in relation
         thereto vested in the Seller;

(e)      to the extent they are assignable, each Certificate of Title and
         Valuation Report and any right of action of the Seller against any
         solicitor, valuer or other person in connection with any report,
         valuation, opinion, certificate or other statement of fact or opinion
         given in connection with any Mortgage Loan and its Related Security,
         or any part thereof affecting the decision of the Seller to make or
         offer to make the relevant Mortgage Loan or part thereof;

(f)      the Buildings Policies and Insurance Contracts, in each case so far
         as they relate to such Mortgage Loans comprised in that portfolio of
         Mortgage Loans and their Related Security, including the right to
         receive the proceeds of all claims made or to be made by or on behalf
         of the Seller or to which the Seller is or may become entitled;

(g)      the MIG Policies, so far as they relate to such Mortgage Loans
         comprised in that portfolio of Mortgage Loans and their Related
         Security, including the right to receive of all claims made or to be
         made by or on behalf of the Seller or to which the Seller is or may
         become entitled;

"Initial Purchase Price" means the sum of (GBP)1,480,000,000 payable by the
Mortgages Trustee to the Seller on the Initial Closing Date in consideration
of the Seller's sale and assignment to the Mortgages Trustee of the Initial
Mortgage Portfolio or the sum agreed to from time to time between the
Mortgages Trustee and the Seller and payable by the Mortgages Trustee to the
Seller on an Assignment Date in consideration of the Seller's sale and
assignment to the Mortgages Trustee of a New Mortgage Portfolio in respect of
which any Initial Purchase Price is payable (together with any accrued
principal, interest and expenses as at the Closing Date or Assignment Date, as
applicable) in accordance with the provisions of the Mortgage Sale Agreement;

"Initial Seller Share" means the share of the Seller in the Trust Property on
the Initial Closing Date being an amount equal to approximately
(GBP)232,000,000;

"Initial Seller Share Percentage" means the percentage share of the Seller in
the Trust Property on the Initial Closing Date being approximately 13.39 per
cent.;

"Initial Trust Property" means the sum of (GBP)100 (one hundred pounds) held
on trust absolutely as to both capital and income by the Mortgages Trustee for
the benefit of the Seller and Funding pursuant to Clause 2.1 (Initial Trust
Property) of the Mortgages Trust Deed;

"Inland Revenue" means the Inland Revenue of the United Kingdom;

"Insolvency Act" means the Insolvency Act 1986;

"Insolvency Event" in respect of the Seller, the Administrator, the Cash
Manager or any Issuer Cash Manager (each, for the purposes of this definition,
a "Relevant Entity") means:

(a)      an order is made or an effective resolution passed for the winding up
         of the Relevant Entity (except, in any such case, a winding-up or
         dissolution for the purpose of a reconstruction or amalgamation the
         terms of which have been previously approved by the Security
         Trustee);

(b)      the Relevant Entity ceases or threatens to cease to carry on its
         business or stops payment or threatens to stop payment of its debts
         or is deemed unable to pay its debts within the meaning

                                      24
<PAGE>

         of section 123(a), (b), (c) or (d) of the Insolvency Act (as amended,
         modified or re-enacted) or becomes unable to pay its debts as they
         fall due or the value of its assets falls to less than the amounts of
         its liabilities (taking into account, for both these purposes,
         contingent and prospective liabilities) or otherwise becomes insolvent;

(c)      proceedings are initiated against the Relevant Entity under any
         applicable liquidation, administration, reorganisation (other than a
         reorganisation where the Relevant Entity is solvent) or other similar
         laws, save where such proceedings are being contested in good faith;
         or an administrative or other receiver, administrator or other
         similar official is appointed in relation to the whole or any
         substantial part of the undertaking or assets of the Relevant Entity;
         or a distress, execution, diligence or other process is enforced upon
         the whole or any substantial part of the undertaking or assets of the
         Relevant Entity and in any of the foregoing cases it is not
         discharged within 30 London Business Days; or if the Relevant Entity
         initiates or consents to judicial proceedings relating to itself
         under any applicable liquidation, administration, insolvency,
         reorganisation or other similar laws or makes a conveyance or
         assignment for the benefit of its creditors generally;

and in respect of Funding or any Issuer (each, for the purposes of this
definition, a "Relevant Entity"), "Insolvency Event" means:

(a)      except for the purposes of an amalgamation or restructuring as
         described in sub-clause (b) of this definition, the Relevant Entity
         ceases or threatens to cease to carry on all or a substantial part of
         its business or the Relevant Entity is deemed unable to pay its debts
         within the meaning of section 123(1)(a), (b), (c) or (d) of the
         Insolvency Act 1986 (as that section may be amended) or becomes
         unable to pay its debts within the meaning of section 123(2) of the
         Insolvency Act 1986 (as that section may be amended, modified or
         re-enacted); or

(b)      an order is made or an effective resolution is passed for the winding
         up of the Relevant Entity (except for the purposes of or pursuant to
         an amalgamation, restructuring or merger previously approved by the
         Note Trustee or the Security Trustee, as the case may be, or as
         approved in writing by an Extraordinary Resolution (as defined in the
         Issuer Trust Deed) of the Class A Noteholders); or

(c)      proceedings are otherwise initiated against the Relevant Entity under
         any applicable liquidation, insolvency, composition, reorganisation
         or other similar laws (including, but not limited to, presentation of
         a petition for an administration order) and (except in the case of
         presentation of a petition for an administration order) such
         proceedings are not, in the opinion of the Note Trustee or the
         Security Trustee (as the case may be), being disputed in good faith
         with a reasonable prospect of success; or an administration order
         being granted or an administrative receiver or other receiver,
         liquidator or other similar official being appointed in relation to
         the Relevant Entity or in relation to the whole or any substantial
         part of the undertaking or assets of the Relevant Entity; or an
         encumbrancer taking possession of the whole or any substantial part
         of the undertaking or assets of the Relevant Entity, or a distress,
         execution, diligence or other process being levied or enforced upon
         or sued out against the whole or any substantial part of the
         undertaking or assets of the Relevant Entity and such possession or
         process (as the case may be) not being discharged or not otherwise
         ceasing to apply within 30 days; or the Relevant Entity initiating or
         consenting to judicial proceedings relating to itself under
         applicable liquidation, insolvency, composition, reorganisation or
         other

                                      25
<PAGE>

         similar laws or making a conveyance or assignment for the benefit of
         its creditors generally;

"Insurance Contracts" means the insurance contracts or policies described in
Schedule 4 to the Mortgage Sale Agreement and any other additional, substitute
or replacement insurance contract or policy arranged by the Seller from time
to time relating to the Mortgage Loans in the Mortgages Trust;

"Insurance Policies" means:

(a)      the MIG Policies;

(b)      the Properties in Possession Policy;

(c)      the Contingency Insurance Policy; and

(d)      the Buildings Policies;

"Intercompany Loan Agreements" means the First Issuer Intercompany Loan
Agreement and any New Intercompany Loan Agreements and "Intercompany Loan
Agreement" means any one of them;

"Intercompany Loans" means the First Issuer Intercompany Loan and any New
Intercompany Loan and "Intercompany Loan" means any of them;

"Intercompany Loan Confirmation" means a document substantially in the form
set out in Schedule 2 (Form of Intercompany Loan Confirmation) to the
Intercompany Loan Terms and Conditions confirming the principal terms of each
Intercompany Loan Agreement between Funding, any Issuer, the Security Trustee
and the Agent Bank;

"Intercompany Loan Enforcement Notice" means an enforcement notice served by
the Security Trustee on Funding in relation to the enforcement of the Funding
Security following the occurrence of an Intercompany Loan Event of Default;

"Intercompany Loan Event of Default" means the occurrence of an event of
default as specified in Clause 14 (Default) of the Intercompany Loan Terms and
Conditions;

"Intercompany Loan Ledger" means the sub-ledger on which the Cash Manager will
record payments of interest and repayments of principal made under any
Intercompany Loan;

"Intercompany Loan Terms and Conditions" means the general terms and
conditions applicable to each Intercompany Loan Agreement, which have been
signed for the purposes of identification by the Security Trustee, the Agent
Bank and Funding on the Initial Closing Date, as amended, restated, novated,
varied or supplemented from time to time and shall include any additional
and/or replacement intercompany loan terms and conditions entered into from
time to time in accordance with the Transaction Documents;

"Interest Rate Shortfall" has the meaning given to it in Clause 4.3(a) of the
Administration Agreement;

"Interim Calculation Period" means the portion of a Trust Calculation Period
that is less than a full Trust Calculation Period during which any single
calculation of the Funding Share, Funding Share Percentage, Seller Share and
Seller Share Percentage applies;

"Irrecoverable VAT" means any amount in respect of VAT incurred by a party to
the Transaction Documents (for the purposes of this definition, a "Relevant
Party") as part of a payment in respect of

                                      26
<PAGE>

which it is entitled to be indemnified under the relevant Transaction
Documents to the extent that the Relevant Party does not or will not receive
and retain a credit or repayment of such VAT as input tax (as that expression
is defined in section 24(1) of the Value Added Tax Act 1994) for the
prescribed accounting period (as that expression is used in section 25(1) of
the Value Added Tax Act 1994) to which such input tax relates;

"Interest Rate Swap Agreement" means, for any Issuer, the ISDA Master
Agreement(s), Schedule(s), Confirmation(s) and any credit support documents
thereto entered into among such Issuer, the relevant Interest Rate Swap
Provider, the Note Trustee and any credit support provider, as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement interest rate swap agreement entered into by
such Issuer from time to time in connection with the Notes issued by such
Issuer;

"Interest Rate Swap Provider" means in relation to any Issuer the swap
counterparty to such Issuer under any relevant Interest Rate Swap Agreement of
such Issuer;

"Interest Rate Swap Provider Default" means the occurrence of an Event of
Default or a Downgrade Termination Event (as defined in the relevant Interest
Rate Swap Agreement) where the Interest Rate Swap Provider is the Defaulting
Party or the Affected Party (as defined in the relevant Interest Rate Swap
Agreement);

"Issuer" means the First Issuer or, as the context may require, any New Issuer;

"Issuer Account Bank" means, in relation to any Issuer, the bank at which the
Issuer Bank Accounts of such Issuer are maintained from time to time pursuant
to the relevant Issuer Transaction Documents;

"Issuer Account Mandates" means, in relation to any Issuer, the resolutions,
instructions, and Authorised Signatories relating to the Issuer Bank Accounts
substantially in the form scheduled to the relevant Issuer Bank Account
Agreement;

"Issuer Allocable Principal Receipts" has the meaning given to it in the rules
for application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Principal Priority of Payments set out in Part I of Schedule 3
to the Funding Deed of Charge;

"Issuer Allocable Revenue Receipts" has the meaning given to it in the rules
for application of Funding Available Principal Receipts under the Funding
Pre-Enforcement Principal Priority of Payments set out in Part I of Schedule 3
to the Funding Deed of Charge;

"Issuer Arrears Test" is satisfied on a Payment Date if any Issuer Cash
Manager or the Cash Manager calculates on the Distribution Date immediately
preceding such Payment Date that as of the last day of the Trust Calculation
Period immediately preceding that Payment Date (i) the aggregate Current
Balance of the Mortgage Loans which are then in arrears for at least 3 months
is less than 4% of the aggregate Current Balance of all Mortgage Loans, unless
the Rating Agencies have confirmed that the then-current ratings of the Notes
will not be adversely affected by such test not having been met; and (ii) the
aggregate Interest Arrears in respect of all of the Mortgage loans in the
Mortgages Trust as a percentage of the aggregate gross interest due on all
Mortgage Loans during the previous 12 months, does not exceed 2%, or such
other percentage as is then acceptable to the then-current Rating Agencies at
such time.

"Issuer Available Principal Receipts" means, in relation to the First Issuer,
the Second Issuer and the Third Issuer, the First Issuer Available Principal
Receipts, the Second Issuer Available Principal

                                      27
<PAGE>

Receipts, and the Third Issuer Available Principal Receipts respectively, and
in relation to any New Issuer, the Current Issuer Available Principal Receipts
as defined in the Issuer Master Definitions Schedule relating to that New
Issuer;

"Issuer Available Revenue Receipts" means, in relation to the First Issuer,
the Second Issuer and the Third Issuer, the First Issuer Available Revenue
Receipts, the Second Issuer Available Revenue Receipts, and the Third Issuer
Available Revenue Receipts respectively, and in relation to any New Issuer,
the Current Issuer Available Revenue Receipts as defined in the Issuer Master
Definitions Schedule relating to that New Issuer;

"Issuer Bank Account Agreement" means, in relation to the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Bank Account Agreement,
the Second Issuer Bank Account Agreement and the Third Issuer Bank Account
Agreement respectively, and in relation to any New Issuer, the Current Issuer
Bank Account Agreement as defined in the Issuer Master Definitions Schedule
relating to that New Issuer;

"Issuer Bank Accounts" means, in relation to the First Issuer, the Second
Issuer and the Third Issuer, the First Issuer Bank Accounts, the Second Issuer
Bank Accounts and the Third Issuer Bank Accounts respectively and, in relation
to any New Issuer, the Current Issuer Bank Accounts as defined in the Issuer
Master Definitions Schedule relating to that New Issuer;

"Issuer Cash Management Agreement" means, in relation to the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Cash Management
Agreement, the Second Issuer Cash Management Agreement and the Third Issuer
Cash Management Agreement respectively, and in relation to any New Issuer, the
Current Issuer Cash Management Agreement as defined in the Issuer Master
Definitions Schedule relating to that New Issuer;

"Issuer Cash Manager" means, in relation to the First Issuer, the First Issuer
Cash Manager and in relation to any New Issuer, the person identified as
managing all cash transactions and maintaining certain ledgers on behalf of
such Issuer pursuant to the relevant Issuer Cash Management Agreement or such
other person as may from time to time be appointed as cash manager for such
Issuer pursuant to the relevant Issuer Cash Management Agreement;

"Issuer Deed of Charge" means in relation to the First Issuer, the First
Issuer Deed of Charge and in relation to any New Issuer, the deed of charge
entered into such Issuer with the Note Trustee;

"Issuer Jersey Secured Property" means:

(a)      in relation to the First Issuer, the First Issuer Jersey Secured
         Property as defined in the Issuer Master Definitions Schedule
         relating to the First Issuer;

(b)      in relation to the Second Issuer, the Second Issuer Jersey Secured
         Property as defined in the Issuer Master Definitions Schedule
         relating to the Second Issuer;

(c)      in relation to the Third Issuer, the Third Issuer Jersey Secured
         Property as defined in the Issuer Master Definitions Schedule
         relating to the Third Issuer; and

(d)      in relation to any other Issuer, the Current Issuer Jersey Secured
         Property as defined in the Issuer Master Definitions Schedule
         relating to that Issuer;

"Issuer Junior Notes" means:

(a)      in relation to the First Issuer, the Series 1 Class C Notes and the
         Series 2 Class C Notes as

                                      28
<PAGE>

         defined in the Issuer Master Definitions Schedule relating to the
         First Issuer,

(b)      in relation to the Second Issuer, the Series 1 Class C Notes, the
         Series 2 Class C Notes as defined in the Issuer Master Definitions
         Schedule relating to the Second Issuer, and

(c)      in relation to any other Issuer, the Junior Notes as defined in the
         relevant Issuer Master Definitions Schedule;

"Issuer Liquidity Reserve Fund" means, in relation to the First Issuer, the
First Issuer Liquidity Reserve Fund, in relation to the Second Issuer, the
Second Issuer Liquidity Reserve Fund and in relation to any New Issuer, the
Current Issuer Liquidity Reserve Fund as defined in the Issuer Master
Definitions Schedule which in each case Funding will be required to establish
pursuant to and in the circumstances set out in the Intercompany Loan of such
New Issuer ;

"Issuer Liquidity Reserve Ledger" means, in relation to the First Issuer, the
First Issuer Liquidity Reserve Ledger, in relation to the Second Issuer, the
Second Issuer Liquidity Reserve Ledger and in relation to any New Issuer, the
Current Issuer Liquidity Reserve Ledger as defined in Issuer Master
Definitions Schedule in each case maintained by the Cash Manager in the name
of Funding to record the balance from time to time of the Issuer Liquidity
Reserve Fund, if any;

"Issuer Liquidity Reserve Required Amount" means, in relation to the First
Issuer, the First Issuer Liquidity Reserve Required Amount, in relation to the
Second Issuer, the Second Issuer Liquidity Reserve Required Amount and in
relation to any New Issuer, Current Issuer Liquidity Reserve Required Amount
as defined in the Issuer Master Definitions Schedule relating to that New
Issuer in each case required to be maintained in the Issuer Liquidity Reserve
Fund, if any;

"Issuer Master Definitions Schedule" means, in relation to the First Issuer,
the First Issuer Master Definitions Schedule and in relation to any New Issuer
the relevant master definitions schedule relating to that New Issuer;

"Issuer Mezzanine Notes" means:

(a)      in relation to the First Issuer, the Series 1 Class B Notes and the
         Series 2 Class B Notes as defined in the Issuer Master Definitions
         Schedule relating to the First Issuer,

(b)      in relation to the Second Issuer, the Series 1 Class B Notes, the
         Series 2 Class B Notes as defined in the Issuer Master Definitions
         Schedule relating to the Second Issuer, and

(c)      in relation to any New Issuer, the Mezzanine Notes as defined in the
         relevant Issuer Master Definitions Schedule;

"Issuer Post-Enforcement Priority of Payments" means, in relation to the First
Issuer, the Second Issuer and the Third Issuer, the First Issuer
Post-Enforcement Priority of Payments, the Second Issuer Post-Enforcement
Priority of Payments and the Third Issuer Post-Enforcement Priority of
Payments respectively, and in relation to any New Issuer, the Current Issuer
Post-Enforcement Priority of Payments as defined in the Issuer Master
Definitions Schedule relating to that New Issuer;

"Issuer Post-Liquidity Payments" means, in the case of the First Issuer, the
payments set out in items (H) through (J) under the First Issuer
Pre-Enforcement Revenue Priority of Payments (or the relevant payments in the
equivalent items under such other First Issuer Priority of Payments as may
apply on that Payment Date), in the case of the Second Issuer, the payments
set out in items (H) through (J) under the Second Issuer Pre-Enforcement
Revenue Priority of Payments (or the relevant payments in the equivalent items
under such other Second Issuer Priority of Payments as may apply

                                      29
<PAGE>

on that Payment Date) and in the case of any New Issuer, means the Current
Issuer Post-Liquidity Payments as defined in the Issuer Master Definitions
Schedule relating to that New Issuer;

"Issuer Post-Reserve Payments" means, in the case of the First Issuer, the
payments set out in item (K) under the First Issuer Pre-Enforcement Revenue
Priority of Payments (or the relevant payments in the equivalent items under
such other First Issuer Priority of Payments as may apply on that Payment
Date), in the case of the Second Issuer, the payments set out in item (K)
under the Second Issuer Pre-Enforcement Revenue Priority of Payments (or the
relevant payments in the equivalent items under such other Second Issuer
Priority of Payments as may apply on that Payment Date), and in the case of
any New Issuer, means the Current Issuer Post-Reserve Payments as defined in
the Issuer Master Definitions Schedule relating to that New Issuer;

"Issuer Post Start-Up Payments" means, in the case of the First Issuer, the
payments set out in items (L) and (M) under the First Issuer Pre-Enforcement
Revenue Priority of Payments (or the relevant payments in the equivalent items
under such other First Issuer Priority of Payments as may apply on that
Payment Date), in the case of the Second Issuer, the payments set out in items
(L) and (O) under the Second Issuer Pre-Enforcement Revenue Priority of
Payments (or the relevant payments in the equivalent items under such other
Second Issuer Priority of Payments as may apply on that Payment Date) and in
the case of any New Issuer, means the Current Issuer Post Start-Up Payments as
defined in the Issuer Master Definitions Schedule relating to that New Issuer;

"Issuer Pre-Enforcement Principal Priority of Payments" means, in relation to
the First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Principal Priority of Payments, the Second Issuer
Pre-Enforcement Principal Priority of Payments and the Third Issuer
Pre-Enforcement Principal Priority of Payments respectively, and in relation
to any New Issuer, the Current Issuer Pre-Enforcement Principal Priority of
Payments as defined in the Issuer Master Definitions Schedule relating to that
New Issuer;

"Issuer Pre-Enforcement Priority of Payments" means, in relation to the First
Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Priority of Payments, the Second Issuer Pre-Enforcement
Priority of Payments and the Third Issuer Pre-Enforcement Priority of Payments
respectively, and in relation to any New Issuer, the Current Issuer
Pre-Enforcement Priority of Payments as defined in the Issuer Master
Definitions Schedule relating to that New Issuer;

"Issuer Pre-Enforcement Revenue Priority of Payments" means, in relation to
the First Issuer, the Second Issuer and the Third Issuer, the First Issuer
Pre-Enforcement Revenue Priority of Payments, the Second Issuer
Pre-Enforcement Revenue Priority of Payments and the Third Issuer
Pre-Enforcement Revenue Priority of Payments respectively, and in relation to
any New Issuer, the Current Issuer Pre-Enforcement Revenue Priority of
Payments as defined in the Issuer Master Definitions Schedule relating to that
New Issuer;

"Issuer Pre-Liquidity Payments" means, in the case of the First Issuer, the
payments set out in items (A) through (G) under the First Issuer
Pre-Enforcement Revenue Priority of Payments (or the relevant payments in the
equivalent items under such other First Issuer Priority of Payments as may
apply on that Payment Date), in the case of the Second Issuer, the payments
set out in items (A) through (G) under the Second Issuer Pre-Enforcement
Revenue Priority of Payments (or the relevant payments in the equivalent items
under such other Second Issuer Priority of Payments as may apply on that
Payment Date) and, in the case of any New Issuer, means the Current Issuer
Pre-Liquidity Payments as defined in the Issuer Master Definitions Schedule
relating to that New Issuer;

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<PAGE>

"Issuer Pre-Reserve Payments" means, in relation to any Issuer (with the
exception of the First Issuer), the Current Issuer Pre-Reserve Payments as
defined in the Issuer Master Definitions Schedule relating to that New Issuer;

"Issuer Principal Deficiency Ledger" means, in relation to the First Issuer,
the First Issuer Principal Deficiency Ledger and in relation to any New
Issuer, the ledger maintained by the Issuer Cash Manager in the name of such
Issuer which will be established on the relevant Closing Date and will be
sub-divided into sub ledgers corresponding to the classes of Notes issued by
such Issuer in order to record Losses allocated to the Intercompany Loan of
such Issuer which are to be allocated to such Notes, the application of Issuer
Available Principal Receipts of such Issuer in paying interest on the Notes
issued by such Issuer and certain amounts ranking in priority thereto in
accordance with the Issuer Pre-Enforcement Revenue Priority of Payments of
such Issuer and the application by Funding of Issuer Allocable Principal
Receipts of the such Issuer to fund or replenish the Issuer Liquidity Reserve
Fund (if any) of such Issuer;

"Issuer Principal Deficiency Sub Ledger" means, in relation to the First
Issuer, any First Issuer Principal Deficiency Sub Ledger and in relation to
any New Issuer, any of the sub ledgers of the Issuer Principal Deficiency
Ledger of such Issuer relating to any class of Notes issued by such Issuer;

"Issuer Principal Payments" means, in relation to the First Issuer, the
payments set forth in items (A) through (E) under the First Issuer
Pre-Enforcement Principal Priority of Payments (or the relevant payments set
forth in the equivalent items in such other First Issuer Priority of Payments
as may apply on that Payment Date), in relation to the Second Issuer, the
payments set forth in items (A) through (E) under the Second Issuer
Pre-Enforcement Principal Priority of Payments (or the relevant payments set
forth in the equivalent items in such other Second Issuer Priority of Payments
as may apply on that Payment Date) and in relation to any New Issuer, the
Current Issuer Principal Payments as defined in the Issuer Master Definitions
Schedule relating to that New Issuer;

"Issuer Principal Receipts" means, in relation to the First Issuer, the First
Issuer Principal Receipts and in relation to any New Issuer, the principal
amounts repaid by Funding in respect of the Intercompany Loan of such Issuer;

"Issuer Priority of Payments" means, in relation to the First Issuer, the
First Issuer Priority of Payments and in relation to any New Issuer, as
applicable, any of the relevant Issuer Pre-Enforcement Revenue Priority of
Payments, the Issuer Pre-Enforcement Principal Priority of Payments or the
Issuer Post-Enforcement Priority of Payments;

"Issuer Reserve Fund" means, in relation to the First Issuer, the First Issuer
Reserve Fund, in relation to the Second Issuer, the Second Issuer Reserve Fund
and in relation to any New Issuer, the Current Issuer Reserve Fund as defined
in the Issuer Master Definitions Schedule relating to that Issuer, in each
case established in the name of Funding in respect of such Issuer as required
under the terms of the relevant Intercompany Loan of such Issuer on the
relevant Closing Date in an amount equal to the Issuer Reserve Required
Amount;

"Issuer Reserve Fund Ledger" means, in relation to the First Issuer, the First
Issuer Reserve Fund Ledger, in relation to the Second Issuer, the Second
Issuer Reserve Fund Ledger and in relation to any New Issuer, the Current
Issuer Reserve Fund Ledger as defined in the Issuer Master Definitions
Schedule relating to that Issuer, in each case maintained by the Cash Manager
in the name of Funding to record the amount credited to the Issuer Reserve
Fund held by Funding in respect of such Issuer on the relevant Closing Date,
and subsequent withdrawals and deposits in respect of the Issuer Reserve

                                      31
<PAGE>

Fund;

"Issuer Reserve Required Amount" means, in relation to the First Issuer, the
First Issuer Reserve Required Amount, in relation to the Second Issuer, the
Second Issuer Reserve Required Amount and in relation to any New Issuer, the
Current Issuer Reserve Required Amount as defined in the Issuer Master
Definitions Schedule relating to that Issuer in each case required to be
maintained in the Issuer Reserve Fund of such Issuer;

"Issuer Reserve Requirement" means a requirement that will be satisfied in
respect of any Issuer if, after taking account of the application of any
Funding Available Revenue Receipts to the credit of the Issuer Reserve Fund
Ledgers, the amount of funds in the Issuer Reserve Fund of such Issuer is
equal to the relevant Issuer Reserve Required Amount;

"Issuer Secured Creditors" means, in relation to the First Issuer, the Second
Issuer and the Third Issuer, the First Issuer Secured Creditors, the Second
Issuer Secured Creditors and the Third Issuer Secured Creditors respectively
and in relation to any New Issuer, the Current Issuer Secured Creditors as
defined in the Issuer Master Definitions Schedule relating to that New Issuer;

"Issuer Security" means in relation to the First Issuer, the First Issuer
Security and in relation to any New Issuer, the security created by such
Issuer pursuant to the relevant Issuer Deed of Charge in favour of the Note
Trustee for the benefit of the Issuer Secured Creditors;

"Issuer Senior Notes" means:

(a)      in relation to the First Issuer, the Series 1 Class A Notes and the
         Series 2 Class A Notes as defined in the Issuer Master Definitions
         Schedule relating to the First Issuer,

(b)      in relation to the Second Issuer, the Series 1 Class A Notes, the
         Series 2 Class A Notes as defined in the Issuer Master Definitions
         Schedule relating to the Second Issuer, and

(c)      in relation to any other Issuer, the Senior Notes as defined in the
         relevant Issuer Master Definitions Schedule;

"Issuer Special Notes" means:

(a)      in relation to the Second Issuer, the Series 2 Class D Notes as
         defined in the Issuer Master Definitions Schedule relating to the
         First Issuer,

(b)      in relation to any other Issuer (other than the First Issuer), the
         Special Notes as defined in the relevant Issuer Master Definitions
         Schedule;

"Issuer Start-up Loan Agreement" means, in relation to any Issuer, the
agreement entered into on or about the Closing Date in relation to that Issuer
between Funding, the relevant Start-up Loan Provider and the Security Trustee
relating to the provision of the Issuer Start-up Loan to Funding as may be
amended, restated, novated, varied or supplemented from time to time and shall
include any additional and/or replacement start-up loan agreement entered into
by such parties in accordance with the Transaction Documents;

"Issuer Start-up Loan Provider" means Northern Rock, in its capacity as
provider of an Issuer Start-up Loan and/or such other person or persons for
the time being the lender under the relevant Issuer Start-up Loan Agreement;

"Issuer Transaction Accounts" means, in relation to the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Transaction Accounts, the
Second Issuer Transaction Accounts and the Third

                                      32
<PAGE>

Issuer Transaction Accounts and in relation to any New Issuer, the Current
Issuer Transaction Accounts as defined in the Issuer Master Definitions
Schedule relating to that Issuer;

"Issuer Transaction Documents" means, in relation to the First Issuer, the
Second Issuer and the Third Issuer, the First Issuer Transaction Documents,
the Second Issuer Transaction Documents and the Third Issuer Transaction
Documents and in relation to any New Issuer, the Current Issuer Transaction
Documents as defined in the Issuer Master Definitions Schedule relating to
that Issuer;

"Jersey Account Bank" means Lloyds TSB Bank plc, Jersey International Branch;

"Jersey Secured Property" means, as the context requires, the Issuer Jersey
Secured Property or the Funding Jersey Secured Property;

"Jersey Security Law" has the meaning given to it in Clause 3.1 (Trust
Property) of the Funding Deed of Charge;

"Lending Criteria" means the lending criteria of the Seller in respect of
Mortgage Loans other than Personal Secured Loans which may be amended from
time to time (forming part of the Seller's Policy) which as at 1 January 2004
is set out in Schedule 12 (Lending Criteria) to the Mortgage Sale Agreement
and/or such other criteria as would be acceptable to a reasonable, prudent
mortgage lender. Lending Criteria for Personal Secured Loans are generally
similar though not as extensive as the Lending Criteria applicable to other
Mortgage Loans;

"LIBOR" means, unless stated otherwise, the London inter-bank offered rate for
deposits in the relevant currency, as determined by the relevant Agent Bank in
respect of the related Notes as specified in the Conditions or otherwise on
the following basis:

(1)      on the applicable Interest Determination Date the Agent Bank will
         determine the offered quotation to leading banks for deposits in the
         relevant currency for a period equal to the relevant period, to be
         determined by reference to the display as quoted on the
         Dow-Jones/Telerate Page No. 3750. If the Telerate Page No. 3750 stops
         providing these quotations, the replacement page for the purposes of
         displaying this information will be used. If the replacement page
         stops displaying the information, another service as determined by
         the relevant Issuer with the approval of the Note Trustee will be
         used. In each of these cases, such determination will be made as at
         or about 11.00 a.m. (London time) on such date;

(2)      if, on any such Interest Determination Date, the screen rate is
         unavailable, the Agent Bank will:

(a)      request the principal London office of each of the Reference Banks to
         provide the Agent Bank with its offered quotation to leading banks
         for deposits in the relevant currency of the equivalent amount, and
         for a time equal to the relevant period, in the London inter-bank
         market as at or about 11.00 a.m. (London time) on such date; and

(b)      calculate the arithmetic mean, rounded upwards to five decimal
         places, of those quotations;

(3)      if on any such Interest Determination Date, the screen rate is
         unavailable and only two or three of the Reference Banks provide
         offered quotations, the relevant rate for the relevant period will be
         the arithmetic mean of the quotations as calculated in (2); and

(4)      if fewer than two Reference Banks provide quotations, the Agent Bank
         will consult with the Note Trustee and the relevant Issuer for the
         purpose of agreeing a total of two banks to provide such quotations
         and the relevant rate for the relevant period will be the arithmetic

                                      33
<PAGE>

         mean of the quotations as calculated in (2). If no such banks agree
         then the relevant rate for the relevant period will be the rate in
         effect for the last preceding such period for which (1) or (2) was
         applicable;

"Life Policy" means each life insurance and/or assurance policy which serves
as collateral security for the repayment of a Mortgage Loan;

"Lloyds  TSB" means Lloyds TSB Bank plc;

"Lloyds TSB Collection Account" means the account in the name of Northern Rock
as Administrator (sort code 30/00/02, account number 0893639) held with Lloyds
TSB Bank plc and maintained subject to the terms of the Collection Bank
Agreement or such additional or replacement account as may for the time being
be in place;

"Loan Repurchase Notice" means the notice served upon the Seller by the
Mortgages Trustee or upon the Mortgages Trustee by the Seller requiring the
repurchase by or re-transfer to (pursuant to Clause 8.4 (Repurchase) of the
Mortgage Sale Agreement) or purchase by or transfer to (pursuant to Clause 8.5
(Purchase of Product Switches, Further Advances and purchases relating to
Personal Secured Loans) of the Mortgage Sale Agreement) the Seller of
specified Mortgage Loans and their Related Security, as set forth in Schedule
7 to the Mortgage Sale Agreement;

"London Business Day" means a day (other than a Saturday or Sunday or public
holiday) on which banks are generally open for business in London;

"London Stock Exchange" means at any time the London Stock Exchange plc or any
other Person which at that time administers and manages the primary market in
the United Kingdom upon which the Notes are formally admitted for public
trading;

"Losses" means the realised losses experienced on the Mortgage Loans which are
in the Mortgages Portfolio;

"Losses Ledger" means the ledger of such name created and maintained by the
Cash Manager in the name of the Mortgages Trustee pursuant to the Cash
Management Agreement to record the Losses on the Mortgage Portfolio;

"LTV ratio" or "loan-to-value ratio" means , in respect of any Mortgage Loan
assigned to the Mortgages Trust, the ratio of the outstanding balance of such
Mortgage Loan to the value of the Mortgaged Property securing such Mortgage
Loan; and in respect of the Seller's decision as to whether to make a mortgage
loan to a prospective borrower and for purposes of determining whether a MIG
Policy is necessary in connection with a mortgage loan, the ratio of the
outstanding balance of such mortgage loan to the lower of the purchase price
or valuation of the mortgages property securing such mortgage loan as
determined by the relevant valuation by the Seller;

"LTV tests" mean two tests which assign a credit enhancement value (i) to each
Mortgage Loan in the Mortgage Portfolio based on its current LTV ratio and the
amount of mortgage indemnity cover on that Mortgage Loan, and (ii) calculated
to include any related unsecured portion of a Mortgage Loan in respect of the
Together product based on its current LTV ratio and the amount of mortgage
indemnity cover on that mortgage loan. The weighted average credit enhancement
value of the Mortgage Portfolio is then determined;

"Mandates" means the resolutions, instructions and signature authorities
relating to any of the Barclays Collection Account, the Lloyds TSB Collection
Account, the Mortgages Trustee Bank

                                      34
<PAGE>

Accounts, the Funding Bank Accounts and the Issuer Transaction Accounts in the
respective forms agreed between the relevant parties from time to time in
accordance with the Collection Bank Agreement, the Bank Account Agreement, the
relevant Funding (Issuer) Bank Account Agreement and the relevant Issuer Bank
Account Agreement, as applicable;

"Master Definitions Schedule" means this Master Definitions Schedule signed
for the purposes of identification by Brown & Wood and Clifford Chance Limited
Liability Partnership on or about the Initial Closing Date, as the same may be
amended, varied or supplemented from time to time, which is a schedule of the
definitions used in the Transaction Documents;

"MHA Documentation" means an affidavit, consent or renunciation granted in
terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 in
connection with a Scottish Mortgage or the Mortgaged Property secured thereby;

"MIG Policies" means the MIG insurance policy identified in paragraph 1 of
Schedule 4 (Insurance Contracts) to the Mortgage Sale Agreement and any
endorsements or extensions thereto as issued from time to time and any
additional, replacement or substitute MIG insurance policy which relates to
the Mortgage Loans in the Mortgages Portfolio from time to time;

"Minimum Seller Share" means an amount included in the Initial Seller Share
which is calculated in accordance with Clause 9.2 (Fluctuation of Minimum
Seller Share on each Distribution Date) of the Mortgages Trust Deed and which,
as at the Initial Closing Date is (GBP)50,000,000. The Minimum Seller Share
may be recalculated in accordance with the Mortgages Trust Deed;

"Money Market Notes" means, in respect of any Issuer, the Money Market Notes
as defined in the relevant Issuer Master Definitions Schedule and eligible for
purchase by money market funds under Rule 2a-7 of the US Investment Company
Act of 1940, as amended;

"Monthly Payment" means, in respect of a Mortgage Loan, the amount which the
applicable Mortgage Conditions require a Borrower to pay on a Monthly Payment
Date in respect of such Mortgage Loan;

"Monthly Payment Date" means, in respect of a Mortgage Loan, the date in each
month on which the relevant Borrower is required to make a payment of interest
and, if applicable, principal, in respect of such Mortgage Loan, as required
by the applicable Mortgage Conditions;

"Moody's" means Moody's Investors Services Inc. and includes any successor to
its rating business;

"Mortgage" means (i) in respect of any Mortgage Loan in the Mortgage Portfolio
(other than Personal Secured Loans), the first priority charge by way of legal
mortgage (in relation to English Mortgage Loans) or first ranking standard
security (in relation to Scottish Mortgage Loans), in each case which secures
the repayment of that Mortgage Loan including the Mortgage Conditions
applicable to it; and (ii) in respect of any Personal Secured Loan in the
Mortgage Portfolio, the second priority legal charge over English Properties
or the second ranking standard security over Scottish Properties;

"Mortgage Account" means as the context requires (i) all Mortgage Loans
secured on the same Mortgaged Property and thereby forming a single mortgage
account or (ii) an account maintained by the Administrator in respect of a
particular Mortgage Loan to record all amounts due in respect of that Mortgage
Loan (whether by way of principal, interest or otherwise) and all amounts
received in respect thereof;

                                      35
<PAGE>

"Mortgage Conditions" means, in relation to a Mortgage Loan, the terms and
conditions applicable to that Mortgage Loan and its Related Security as set
out in the relevant Seller's "Mortgage Conditions" booklet and the Seller's
relevant general conditions from time to time as varied by the relevant
Mortgage Loan Agreement and the relevant Mortgage Deed, and any variation or
supplement thereto;

"Mortgage Deed" means, in relation to each Mortgage, the deed creating such
Mortgage including, unless the context otherwise requires, the Mortgage
Conditions applicable thereto;

"Mortgage Loan" means unless specified otherwise any mortgage loan and any
Permitted Replacement Mortgage Loan which is sold and assigned by the Seller
to the Mortgages Trustee from time to time pursuant to the terms of the
Mortgage Sale Agreement and referenced by its mortgage loan identifier number
and comprising the aggregate of all principal sums, interest, costs, charges,
expenses and other monies (including all Further Advances) due or owing with
respect to that Mortgage Loan under the relevant Mortgage Conditions by a
Borrower on the security of a Mortgage from time to time outstanding or, as
the context may require, the Borrower's obligations in respect of the same;

"Mortgage Loan Agreement" means, in relation to any Mortgage Loan, the
agreement, facility letter or accepted offer of advance pursuant to which the
monies secured by the relevant Mortgage were advanced to the Borrower (as
varied from time to time in accordance with the applicable Mortgage Conditions
and including any modifying agreement within the meaning of Section 82 of the
Consumer Credit Act 1974 insofar as it relates to that Mortgage Loan);

"Mortgage Loan Files" means, in relation to each Mortgage Loan, the file or
files (including files kept in microfiche format or similar electronic data
retrieval system) containing correspondence between the Borrower and the
Seller and including the Standard Mortgage Documentation applicable to that
Mortgage Loan, each letter of offer in respect of such Mortgage Loan and other
relevant documents;

"Mortgage Portfolio" means, on any particular date, the combined Initial
Mortgage Portfolio and any New Mortgage Portfolio which has been sold and
assigned to the Mortgages Trustee on such date pursuant to the Mortgage Sale
Agreement, taking account of, among other things, the addition and/or removal
of any Mortgage Loans to or from that portfolio from the relevant Closing Date
but excluding any Mortgage Loan and its Related Security which has been
redeemed in full or repurchased by the Seller pursuant to Clause 8 (Warranties
and Repurchase by the Seller) of the Mortgage Sale Agreement;

"Mortgage Rate" means the rate at which interest accrues on a Mortgage Loan
from time to time;

"Mortgage Sale Agreement" means the mortgage sale agreement entered into on or
about the Initial Closing Date among the Seller, the Mortgages Trustee,
Funding and the Security Trustee in relation to the assignment from time to
time of the Mortgage Portfolio to the Mortgages Trustee as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement mortgage sale agreement entered into by such
parties from time to time in accordance with the Transaction Documents;

"Mortgage Terms" means, in relation to a Mortgage Loan and the relevant
Mortgage, the applicable Mortgage Conditions;

"Mortgaged Property" means, in relation to any Mortgage Loan, the freehold or
leasehold property

                                      36
<PAGE>

in England and Wales or (as applicable) the heritable or long leasehold
property in Scotland and, in each case, all rights and security attached or
appurtenant or related thereto and all buildings and fixtures thereon which
are subject to the Mortgage securing repayment of such Mortgage Loan;

"Mortgagee" means, in relation to any Mortgage Loan, the person for the time
being entitled to exercise the rights of the mortgagee or (in Scotland)
Heritable Creditor under the relevant Mortgage securing repayment of such
Mortgage Loan;

"Mortgages Trust" means the bare trust of the Trust Property as to both
capital and income, held by the Mortgages Trustee on trust absolutely for
Funding (as to the Funding Share) and the Seller (as to the Seller Share)
pursuant to the Mortgages Trust Deed so that each Beneficiary has an undivided
beneficial interest therein;

"Mortgages Trust Deed" means the mortgages trust deed entered into among the
Mortgages Trustee, Funding and the Seller on 26 March 2001 as may be amended,
restated, novated, varied or supplemented from time to time and shall include
any additional and/or replacement mortgage trust deed entered into by such
parties from time to time in accordance with the Transaction Documents;

"Mortgages Trustee" means Granite Finance Trustees Limited, a company
incorporated with limited liability under the laws of Jersey, registered
number 79309;

"Mortgages Trustee Available Revenue Receipts" means on any Distribution Date
an amount equal to the aggregate of (in each case in the period prior to the
end of the immediately preceding Trust Calculation Period):

(a)      Revenue Receipts received by the Mortgages Trustee (which shall
         include, in respect of any Non-Flexible Mortgage Loan only, the
         amount of any Overpayment made by the Borrower in respect of such
         Mortgage Loan as is equal to the amount of any Underpayment of
         interest made by such Borrower in respect of such Mortgage Loan in
         the immediately preceding Trust Calculation Period provided that such
         Underpayment of interest is made prior to 31 December in the year in
         which such Overpayment is received from the Borrower),

(b)      interest payable to the Mortgages Trustee on the Mortgages Trustee
         Bank Accounts, which will be received on or prior to the relevant
         Distribution Date, and

(c)      any Contribution paid by the Seller to the Mortgages Trustee to fund
         any Non-Cash Re-Draw in respect of any Flexible Mortgage Loan,

         less

(d)      Third Party Amounts, and

(e)      amounts distributed on each previous Distribution Date in accordance
         with the Mortgages Trust Distribution of Revenue Receipts

PROVIDED THAT Revenue Receipts in paragraph (a) above shall for this purpose
include such amount of any Overpayment made by a Borrower in respect of a
Non-Flexible Mortgage Loan and standing to the credit of the Overpayments
Ledger as is applied on such date in reduction of any Underpayment of Interest
made by such Borrower in respect of such Mortgage Loan in the immediately
preceding Trust Calculation Period (provided that such Underpayment of
Interest is made prior to 31 December in the year in which such Overpayment is
received from the Borrower) in accordance with Clause 13.1 (Non-Flexible
Mortgage Loans) of the Mortgages Trust Deed;

                                      37
<PAGE>

"Mortgages Trustee Bank Accounts" means the Mortgages Trustee Transaction
Account and the Mortgages Trustee GIC Account;

"Mortgages Trustee Collection Accounts Amounts" means all amounts from time to
time standing to the credit of the Collection Accounts to the extent that such
amounts represent payments into the Collection Accounts of sums derived or
resulting from the Mortgage Loans and their Related Security sold to the
Mortgages Trustee pursuant to the Mortgage Sale Agreement;

"Mortgages Trustee Distribution of Principal Receipts" means the order in
which the Cash Manager will apply the Mortgages Trustee Principal Receipts on
each Distribution Date, as set forth in Clause 11 (Distribution of Principal
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Distribution of Revenue Receipts" means the order in which
the Cash Manager will apply the Mortgages Trustee Available Revenue Receipts
on each Distribution Date, as set forth in Clause 10 (Distribution of Revenue
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee GIC Account Mandate" means the resolutions, instructions
and signature authorities relating to the Mortgages Trustee GIC Account
substantially in the form set out in Schedule 1 to the Bank Account Agreement;

"Mortgages Trustee GIC Account" means the account in the name of the Mortgages
Trustee (sort code 30/16/63, account number 27034016) held at the Account Bank
and maintained subject to the terms of Mortgages Trustee Guaranteed Investment
Contract and the Bank Account Agreement or such additional or replacement bank
account of the Mortgages Trustee as may for the time being be in place with
the prior consent of the Security Trustee which is subject to a Guaranteed
Investment Contract;

"Mortgages Trustee GIC Provider" means Lloyds TSB Bank plc, Jersey
International Branch, 25 New Street, St. Helier, Jersey JE4 8ZE, Channel
Islands or such other person or persons as are for the time being the GIC
provider to Funding under the Funding Guaranteed Investment Contract and any
Funding (Issuer) Guaranteed Investment Contract;

"Mortgages Trustee Guaranteed Investment Contract" means the guaranteed
investment contract dated on or about the Initial Closing Date between the
Mortgages Trustee, the Mortgages Trustee GIC Provider, the Security Trustee
and the Cash Manager under which the Mortgages Trustee GIC Provider agrees to
pay the Mortgages Trustee a guaranteed rate of interest on the balance of the
Mortgages Trustee GIC Account from time to time as may be amended, restated,
novated, varied or supplemented from time to time and shall include any
additional and/or replacement guaranteed investment contract entered into by
such parties from time to time in accordance with the Transaction Documents;;

"Mortgages Trustee Ledgers" means all of the ledgers as are required to be
maintained pursuant to Clause 15 (Ledgers) of the Mortgages Trust Deed;

"Mortgages Trustee Principal Priority of Payments" means the order in which
the Cash Manager will apply the Mortgages Trustee Principal Receipts on each
Distribution Date, as set forth in Clause 11 (Distribution of Principal
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Principal Receipts" means, on any Distribution Date, any
Mortgages Trustee Retained Principal Receipts plus the Principal Receipts
received by the Mortgages Trustee in the immediately preceding Trust
Calculation Period which may be distributed, subject to Clause 13
(Overpayments) of the Mortgages Trust Deed, in accordance with Clause 11 of
the Mortgages Trust

                                      38
<PAGE>

Deed;

"Mortgages Trustee Priority of Payments" means, as applicable, the Mortgages
Trustee Revenue Priority of Payments or the Mortgages Trustee Principal
Priority of Payments;

"Mortgages Trustee Retained Principal Receipts" means on a Seller Share Event
Distribution Date, the Mortgages Trustee Principal Receipts which are not
distributed to the Seller by the Cash Manager and which are instead deposited
into the Mortgages Trustee GIC Account;

"Mortgages Trustee Revenue Priority of Payments" means the order in which the
Cash Manager will apply the Mortgages Trustee Available Revenue Receipts on
each Distribution Date, as set forth in Clause 10 (Distribution of Revenue
Receipts) of the Mortgages Trust Deed;

"Mortgages Trustee Transaction Account" means the account in the name of the
Mortgages Trustee (sort code 30/16/63, account number 27033010) held at the
Account Bank and maintained subject to the terms of the Bank Account
Agreement, or such additional or replacement bank account of the Mortgages
Trustee as may for the time being be in place;

"Mortgages Trustee Transaction Account Mandate" means the resolutions,
instructions and signature authorities relating to the Mortgages Trustee
Transaction Account substantially in the form set out in Schedule 1 to the
Bank Account Agreement;

"New Closing Date" means the date of any issue of New Notes by a New Issuer;

"New Funding Secured Creditor" means any person identified as such in any Deed
of Accession executed pursuant to the Funding Deed of Charge by such person
and the other parties thereto;

"New Intercompany Loan" means a loan of the net proceeds of any issue of New
Notes, such loan being advanced to Funding by a New Issuer pursuant to the
terms of a New Intercompany Loan Agreement;

"New Intercompany Loan Agreement" means a new intercompany loan agreement
entered into between Funding and a New Issuer in relation to a New
Intercompany Loan;

"New Issuer" means a new wholly-owned subsidiary of Funding, which is
established to issue New Notes and to make a New Intercompany Loan to Funding;

"New Mortgage Loans" means Mortgage Loans, other than the Initial Mortgage
Loans, which the Seller may sell and assign, from time to time, to the
Mortgages Trustee after the Initial Closing Date pursuant to the Mortgage Sale
Agreement;

"New Mortgage Portfolio" means any portfolio of Mortgage Loans and their
Related Security which are sold and assigned to the Mortgages Trustee on or
about the relevant Assignment Date, particulars of which are set out in the
Schedule to each New Mortgage Portfolio Notice delivered pursuant to the
Mortgage Sale Agreement but excluding any such Mortgage Loan and its Related
Security which has been redeemed in full on or before the relevant Assignment
Date, and (subject where applicable to the subsisting rights of redemption of
the Borrowers) all right, title, interest and benefit of the Seller in and to:

(a)      all sums of principal, interest (including, for the avoidance of
         doubt, all Accrued Interest, Arrears of Interest and Capitalised
         Arrears) and any other sum due or to become due under or in respect
         of such Mortgage Loans and their Related Security on or after such
         Closing Date and all sums of interest and other sums payable (but not
         paid before such Closing Date) in

                                      39
<PAGE>

         respect of any period before such Closing Date and including, without
         limitation, the right to demand, sue for, recover and give receipts
         for all such principal, interest or other amounts, the right to sue
         on all covenants and undertakings made or expressed to be made in
         favour of the Seller under the applicable Mortgage and all sums due
         or to become due in respect of any Early Repayment Charge;

(b)      the benefit of all securities for such principal, interest and other
         sums payable (including without limitation any interest of the Seller
         in any Life Policy), the benefit of all Deeds of Consent, MHA
         Documentation and Deeds of Postponement, any Guarantee in respect of
         such Mortgage Loan or any other collateral security for the repayment
         of the relevant Mortgage Loans secured by the Mortgages;

(c)      the right to exercise all the powers of the Seller in relation
         thereto subject to and in accordance with the relevant Mortgage
         Conditions;

(d)      all the estate and interest in the Mortgaged Properties in relation
         thereto vested in the Seller;

(e)      to the extent they are assignable, each Certificate of Title and
         Valuation Report and any right of action of the Seller against any
         solicitor, valuer or other person in connection with any report,
         valuation, opinion, certificate or other statement of fact or opinion
         given in connection with any Mortgage Loan and its Related Security
         in that portfolio of Mortgage Loans, or any part thereof or affecting
         the decision of the Seller to make or offer to make the relevant
         Mortgage Loan or part thereof;

(f)      the Buildings Policies and Insurance Contracts, in each case so far
         as they relate to such Mortgage Loans comprised in that portfolio of
         Mortgage Loans and their Related Security, including the right to
         receive the proceeds of all claims made or to be made by or on behalf
         of the Seller or to which the Seller is or may become entitled;

(g)      the MIG Policies, so far as they relate to such Mortgage Loans
         comprised in that portfolio of Mortgage Loans and their Related
         Security, including the right to receive of all claims made or to be
         made by or on behalf of the Seller or to which the Seller is or may
         become entitled;

"New Notes" means the notes issued and/or to be issued by the New Issuers to
investors;

"New Start-Up Loan" means a start-up loan made by a New Start-Up Loan Provider
to Funding under a New Start-Up Loan Agreement;

"New Start-Up Loan Agreement" means any new start-up loan agreement entered
into from time to time between Funding and a New Start-Up Loan Provider
pursuant to which a New Start-Up Loan is advanced to Funding;

"New Start-Up Loan Provider" means the lender under any New Start-Up Loan
Agreement;

"New Trust Property" means, as the context requires, each New Mortgage
Portfolio from time to time sold and assigned by the Seller to the Mortgages
Trustee or as of any Closing Date the New Mortgage Portfolio sold and assigned
to the Mortgages Trustee on such date or as of any Distribution Date, any and
all New Mortgage Portfolios assigned by the Seller to the Mortgages Trustee
during the immediately preceding Trust Calculation Period;

"New York Business Day" means a day (other than a Saturday or a Sunday or
public holiday) on which banks are generally open in the city of New York;

                                      40
<PAGE>

"Non-Asset Trigger Event" means the occurrence of any of the following events:

(a)      an Insolvency Event occurs in relation to the Seller;

(b)      the role of the Seller as Administrator under the Administration
         Agreement is terminated and a new Administrator is not appointed
         within 60 days; or

(c)      on the Distribution Date immediately succeeding a Seller Share Event
         Distribution Date, the Current Seller Share is equal to or less than
         the Minimum Seller Share (determined using the amounts of the Current
         Seller Share and Minimum Seller Share that would exist after making
         distributions of Mortgages Trustee Principal Receipts due on that
         Distribution Date on the basis that the Cash Manager assumes that
         those Mortgages Trustee Principal Receipts are distributed in the
         manner described under the Mortgages Trustee Principal Priority of
         Payments set forth in Clause 11.1 of the Mortgages Trust Deed;

"Non-Cash Re-Draw" means an Authorised Underpayment or a Payment Holiday under
a Flexible Mortgage Loan included in the Mortgages Trust, which will result in
the Seller being required to pay to the Mortgages Trustee an amount equal to
the Unpaid Interest associated with that Authorised Underpayment or Payment
Holiday;

"Non-Cash Re-Draws Sub Ledger" means the sub-ledger of the Re-Draws Ledger,
which will be established by the Cash Manager on the Initial Closing Date in
order to record any Non-Cash Re-Draws made with respect to Flexible Mortgage
Loans;

"Non-Flexible Mortgage Loan" means a Mortgage Loan other than a Flexible
Mortgage Loan;

"Non-Flexible Overpayments Sub Ledger" means the sub-ledger of the
Overpayments Ledger corresponding to Non-Flexible Mortgage Loans, which will
be established by the Cash Manager on the Initial Closing Date in order to
record any Overpayments made with respect to Non-Flexible Mortgage Loans;

"Non-Flexible Underpayments Ledger" means the ledger maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record any Underpayments made with respect to Non-Flexible
Mortgage Loans in the Mortgages Trust from time to time;

"Northern Rock Collection Accounts Amounts" means all amounts from time to
time standing to the credit of the Collection Accounts to the extent that such
amounts represent payments into the Collection Accounts of sums derived or
resulting from mortgage loans originated by Northern Rock which have not been
sold to the Mortgages Trustee pursuant to the Mortgage Sale Agreement;

"Northern Rock" means Northern Rock plc (registered number 3273685), a public
limited company incorporated under the laws of England and Wales, whose
registered office is at Northern Rock House, Gosforth, Newcastle upon Tyne NE3
4PL;

"Note Determination Date" means, in relation to the First Issuer, the First
Issuer Note Determination Date and in relation to any New Notes, the
Distribution Date immediately preceding the Payment Date;

"Note Enforcement Notice" means, in relation to the First Issuer, the First
Issuer Note Enforcement Notice and in relation to any New Issuer, a notice
issued by the Note Trustee to such Issuer and the Security Trustee declaring
the Notes issued by such Issuer or any class of such Notes to be due and

                                      41
<PAGE>

repayable pursuant to Conditions of such New Notes;

"Note Event of Default" means, in relation to the First Issuer, a First Issuer
Note Event of Default and in relation to any New Issuer, the occurrence of an
event of default by the relevant Issuer as specified in the relevant
Conditions of the Notes issued by such New Issuer;

"Noteholders" means, in relation to the First Issuer Notes, the Class A
Noteholders, the Class B Noteholders and the Class C Noteholders or any of
them and, in relation to any New Notes, the holders for the time being of such
New Notes;

"Note Principal Payment" means the principal amount redeemable from time to
time on each Note in accordance with the Conditions;

"Notes" means in relation to the First Issuer, the First Issuer Notes and, in
relation to any New Issuer, the New Notes issued by such New Issuer;

"Note Trustee" means The Bank of New York, or such person or persons for the
time being acting as note trustee or trustees under the Trust Deeds relating
to the Notes;

"Offer Conditions" means the terms and conditions applicable to a specified
Mortgage Loan as set out in the relevant offer letter to the Borrower;

"Official List" means the Official List maintained by the UK Listing
Authority;

"Operating Agreements" means the Administration Agreement, the Mortgage Sale
Agreement, the Seller's Power of Attorney and the Mortgages Trust Deed;

"Option Exercise Date" means the date on which the Post-Enforcement Call
Option Holder exercises its option to acquire all of the Notes outstanding as
at such date, together with accrued interest thereon;

"Outstanding Principal Balance" means:

(a)      in relation to any Note and as of any date, means the unpaid
         principal balance of that Note at such date; and

(b)      in relation to any Intercompany Loan and as of any date, means the
         unpaid principal balance of that Intercompany Loan at such date;

"Overpayment" means in respect of any Mortgage Loan, any additional amounts of
Principal Receipts received in a month above the regular, scheduled Monthly
Payment, paid by the relevant Borrower which (a) is permitted by the terms of
such Mortgage Loan or by agreement with the Borrower and (b) reduces the
Current Balance of such Mortgage Loan;

"Overpayments Ledger" means the ledger of such name maintained by the Cash
Manager in the name of the Mortgages Trustee pursuant to the Cash Management
Agreement to record Overpayments on Mortgage Loans in the Mortgages Trust from
time to time which ledger will be sub-divided into two sub ledgers: (i) the
Non-Flexible Overpayments Sub Ledger corresponding to Overpayments made on
Non-Flexible Mortgage Loans, and (ii) the Flexible Overpayments Sub Ledger
corresponding to Overpayments made on Flexible Mortgage Loans;

"Paying Agent and Agent Bank Agreement" means, in relation to the First
Issuer, the First Issuer Paying Agent and Agent Bank Agreement and, in
relation to any New Issuer, has the meaning specified under the relevant
Issuer Transaction Documents;

                                      42
<PAGE>

"Paying Agents" means in relation to the First Issuer, the Principal Paying
Agent and the US Paying Agent initially appointed as paying agents pursuant to
the First Issuer Paying and Agent Bank Agreement and, in relation to any New
Issuer, the Principal Paying Agent and US Paying Agent appointed pursuant to
the Paying Agent and Agent Bank Agreement relating to that New Issuer or, if
applicable, any successor paying agents;

"Payment Date" means (i) in relation to any Group 1 Issuer, the twentieth day
of July, October, January and April in each year or, if such day is not a
Business Day, the next succeeding Business Day, and (ii) in relation to any
Group 2 Issuer, the twentieth day of March, June, September and December or,
if such day is not a Business Day, the next Succeeding Business Day;

"Payment Holiday" means, in respect of any Flexible Mortgage Loan, a period of
one or more Monthly Payment Dates when the relevant Borrower under such
Mortgage Loan is permitted by the Seller in accordance with the relevant
Mortgage Conditions not to make its regular Monthly Payment;

"Perfection" means the perfection of the assignment and assignation of the
Mortgage Portfolio pursuant to and in accordance with Clause 6 (Perfection of
the Assignment) of the Mortgage Sale Agreement;

"Perfection Date" means the date of any Perfection;

"Perfection Event" means any of the events specified in Clause 6.1 (Perfection
Events) of the Mortgage Sale Agreement;

"Permitted Product Switch" means any variation in the financial terms and
conditions of a Mortgage Loan in which a Borrower exchanges its then-current
Mortgage Loan product for a different mortgage loan product offered by the
Seller or (in limited circumstances) the Administrator from time to time,
provided that such new mortgage loan for which the prior Mortgage Loan is to
be exchanged is a Permitted Replacement Mortgage Loan, and further provided
that no such product switch shall be permitted unless at the date of such
product switch each of the conditions set out in Clause 4.2 (Conditions to
Effecting an Assignment of New Mortgage Loans) of the Mortgage Sale Agreement
is satisfied (save to the extent that conditions (a), (c), (k), (n) and (o) of
such Clause must only be satisfied on the most recent Assignment Date for the
assignment of New Mortgage Loans to the Mortgages Trust);

"Permitted Replacement Mortgage Loan" means a mortgage loan (i) that is
subject to a variable rate of interest, (ii) that has a Maturity Date prior to
January 2039, and (iii) upon which the related Borrower has made at least one
Monthly Payment;

"Person" means a reference to any person, individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organisation, governmental entity or other
entity of similar nature (whether or not having separate legal personality);

"Personal Secured Loan" means a Mortgage Loan for unrestricted purposes
offered to a Borrower who has an existing Mortgage Loan (other than a Personal
Secured Loan) with the Seller, which is secured on the same Mortgaged Property
which secures the Borrower's existing Mortgage Loan. Certain Personal Secured
Loans permit the Borrower to make Further Draws up to the fixed amount of
credit extended under the related Mortgage Conditions at the inception of the
Personal Secured Loan;

"Post-Enforcement Call Option Agreement" means the post-enforcement call
option agreement

                                      43
<PAGE>

entered into on or about a Closing Date between the relevant Issuer, the
relevant Post-Enforcement Call Option Holder, the Note Trustee and the Note
Depository;

"Post-Enforcement Call Option Holder" means, in respect to the First Issuer,
GPCH Limited, a company incorporated with limited liability under the laws of
England and Wales, registered number 4128437, or such other person or persons
for the time being acting as post-enforcement call option holder under the
relevant Post-Enforcement Call Option Agreement, and, in relation to any New
Issuer, has the meaning specified under the relevant Issuer Master Definitions
Schedule;

"Potential Intercompany Loan Event of Default" means the occurrence of any
event which with the giving of notice, any relevant certificate, the lapse of
time or fulfilment of any other condition (or any combination of the
foregoing) would become an Intercompany Loan Event of Default;

"Potential Note Event of Default" means any condition, event or act which with
the lapse of time and/or the giving of any notice and/or determination of
materiality and/or fulfilment of any similar condition would constitute a Note
Event of Default;

"Previous Intercompany Loan" means a loan made by any Previous Issuer to
Funding on the Closing Date relating to such Previous Issuer under the
relevant Previous Intercompany Loan Agreement;

"Previous Intercompany Loan Agreement" means an intercompany loan agreement
entered into on the relevant Closing Date between, among others, Funding and a
Previous Issuer;

"Previous Issuer" means a wholly-owned subsidiary of Funding, which was
established to issue Previous Issuer Notes and to make a Previous Issuer
Intercompany Loan to Funding;

"Previous Issuer Notes" means the notes issued by any Previous Issuer;

"Previous Start-up Loan" means the start-up loan that any Previous Start-up
Loan Provider made available to Funding on the Closing Date relating to such
Previous Issuer pursuant to the relevant Previous Start-up Loan Agreement;

"Previous Start-up Loan Agreement" means a start-up loan agreement entered
into on the relevant Closing Date as amended from time to time between
Funding, the Previous Start-up Loan Provider and the Security Trustee;

"Previous Start-up Loan Provider" means Northern Rock in its capacity as
start-up loan provider under the relevant Previous Start-up Loan Agreement;

"Principal Deficiency Ledger" means, in relation to any Issuer, the ledger of
such name maintained by the Issuer Cash Manager pursuant to the Issuer Cash
Management Agreement, comprising such sub-ledgers as relate to the classes of
Notes of differing ratings issued by such Issuer as contemplated in the
relevant Issuer Cash Management Agreement;

"Principal Distribution" means, in relation to the Mortgages Trust, any
distribution by the Mortgages Trustee to any Beneficiary pursuant to Clause 11
(Distribution of Principal Receipts) or Clause 6.3 (Special Distribution) of
the Mortgages Trust Deed;

"Principal Directions" means, with respect to the Security Trustee, the
directions of the Note Trustee(s) for the Holders of the highest ranking class
of Notes outstanding (meaning the Class A Notes for so long as there are Class
A Notes outstanding and thereafter, the Class B Notes so long as there are no
Class A Notes outstanding and thereafter, the Class C Notes so long as there
are neither

                                      44
<PAGE>

Class A Notes nor Class B Notes outstanding and thereafter, the Class D Notes
for so long as there are no Class A Notes, Class B Notes nor Class C Notes
outstanding;

"Principal Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record
any Mortgages Trustee Retained Principal Receipts plus the Principal Receipts
on the Mortgage Loans and distributions of such Principal Receipts to the
Seller and Funding on each Distribution Date;

"Principal Receipts" means, in relation to the Mortgages Trustee, any payment
in respect of principal received in respect of any Mortgage Loan, whether as
all or part of a Monthly Payment in respect of such Mortgage Loan, on
redemption (including partial redemption) of such Mortgage Loan, on
enforcement or on the disposal of such Mortgage Loan or otherwise (including
payments pursuant to any Insurance Policy)(and which may include the amount of
any Overpayment in respect of any Non-Flexible Mortgage Loan, but only to the
extent permitted by Clause 13.1 (Non-Flexible Mortgage Loans) of the Mortgages
Trust Deed, and which also may include the amount of any Further Contribution
made by Funding from time to time) and in relation to any distributions of
Principal Receipts which have been or are to be made on a Distribution Date,
Principal Receipts shall mean Mortgages Trustee Principal Receipts;

"Proceedings" means any suit, action or proceedings arising out of or in
connection with any of the Transaction Documents;

"Product Switch" means a variation to the financial terms and conditions of
any Mortgage Loan but excluding:

(a)      any variation in the financial terms and conditions of a Mortgage
         Loan involving a Permitted Product Switch;

(b)      variation agreed with a Borrower to control or manage arrears on a
         Mortgage Loan;

(c)      variation in the maturity date of a Mortgage Loan unless, while the
         First Issuer Intercompany Loan is outstanding, it is extended beyond
         January 2039;

(d)      variation imposed by statute;

(e)      variation of the rate of interest payable in respect of Mortgage Loan
         where that rate is offered to the Borrowers of more than 10 per cent.
         by Current Balance of Mortgage Loans comprised in the Trust Property
         in any Interest Period;

(f)      a change between interest-only and repayment Mortgage Loans;

(g)      a transfer of equity; and/or

(h)      a release of a party to a Mortgage Loan or a release of part of the
         land subject to the Mortgage;

"Properties in Possession Policy" means the properties in possession insurance
policy identified in paragraph 2(e) of Schedule 4 (Insurance Contracts) to the
Mortgage Sale Agreement and any endorsements or extensions thereto as issued
from time to time and any additional, replacement or substitute properties in
possession insurance policy which relates to Mortgage Loans in the Mortgages
Trust from time to time;

"PS/FA/PSL Event" means the occurrence of either (i) confirmation from
Northern Rock that it will purchase the relevant Mortgage Loans which are
subject to any Further Advances or Product Switches

                                      45
<PAGE>

(other than Re-Fixed Mortgage Loans) in accordance with Clause 8.5 (Purchase
of Product Switches and Further Advances and purchases related to Personal
Secured Loans) under the Mortgage Sale Agreement, (ii) any Mortgage Loan
becoming a Re-Fixed Mortgage Loan, or (iii) Northern Rock making a Personal
Secured Loan to the Borrower of a Mortgage Loan;

"Purchase Price" means:

(a)      in respect of the Initial Mortgage Portfolio, the amount payable
         therefor by the Mortgages Trustee pursuant to Clause 3.2 (Purchase
         Price) of the Mortgage Sale Agreement; and

(b)      in respect of each New Mortgage Portfolio, the amount payable
         therefor by the Mortgages Trustee pursuant to Clause 4.5 (Purchase
         Price) of the Mortgage Sale Agreement;

"Rating Agencies" means S&P, Moody's and Fitch, and "Rating Agency" means any
of them;

"Receiver" means, in relation to the Funding Deed of Charge, any person or
persons appointed (and any additional person or persons appointed or
substituted) as an administrative receiver, receiver, manager, or receiver and
manager of the Funding Charged Property by the Security Trustee pursuant the
Funding Deed of Charge and in relation to any Issuer Deed of Charge, any
person or persons appointed (and any additional person or persons appointed or
substituted) pursuant thereto by the Note Trustee as an administrative
receiver, receiver, manager, or receiver and manager of the property charged
or secured under such Issuer Deed of Charge;

"Re-Draw" means either a Cash Re-Draw or a Non-Cash Re-Draw;

"Re-Draws Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record
Re-Draws on Flexible Mortgage Loans in the Mortgages Trust from time to time
which ledger shall be sub-divided into two sub ledgers: (i) the Non-Cash
Re-Draws Sub Ledger corresponding to Non-Cash Re-Draws and (ii) the Cash
Re-Draws Sub Ledger corresponding to Cash Re-Draws;

"Re-Fixed Mortgage Loan" means, as at any given date, a Mortgage Loan which on
or before such date had been a Fixed Rate Mortgage Loan in respect of which
the fixed period by reference to which the relevant fixed interest was charged
had come to an end, but as at or before that such date, the interest charged
under such Mortgage Loan was again fixed for a further fixed period by the
Seller or the Administrator as the case may be (following an election by the
Borrower) in accordance with the original terms of the Fixed Rate Mortgage
Loan;

"Registered Land" means land in England or Wales, title to which is registered
at H.M. Land Registry;

"Registered Transfer" means, in relation to Registered Land, a deed of
transfer of a Mortgage or Mortgages over registered land in the form referred
to in paragraph (a) of Clause 6.3 (Transfer Documents) of the Mortgage Sale
Agreement with such modifications as may be permitted from time to time in
accordance with such Clause;

"Registers of Scotland" means the Land Register of Scotland and/or the General
Register of Sasines;

"Reg S" means Regulation S under the United States Securities Act of 1933, as
amended;

"Reg S Global Note Certificates" or "Regulation S Global Note Certificates"
means the Global Note Certificates in registered form representing the Reg S
Notes;

"Reg S Individual Note Certificates" or "Regulation S Individual Note
Certificates" means the

                                      46
<PAGE>

Individual Note Certificates in registered form representing the Reg S Notes;

"Reg S Notes" means generally all Notes which are issued pursuant to Reg S and
in relation to an Issuer means the Notes issued or to be issued by that Issuer
pursuant to Reg S;

"Regulations" means as the context may require either (i) the Unfair Terms in
Consumer Contracts Regulations 1999 and/or, as applicable, the Unfair Terms in
Consumer Contracts Regulations 1994 or (ii) the Regulations set out in
Schedule 2 to the First Issuer Paying Agent and Agent Bank Agreement;

"Related Security" means, in relation to a Mortgage Loan, the security for the
repayment of such Mortgage Loan including the relevant Mortgage and all other
documents, matters and things related thereto acquired and referred to as part
of the Initial Mortgage Portfolio or, as the case may be, the New Mortgage
Portfolio, sold to the Mortgages Trustee pursuant to the Mortgage Sale
Agreement and which constitute all or part of the security for the payment of
all sums due in respect of such Mortgage Loan, including for the avoidance of
doubt, guarantees, MIG Policies and assignments and charges over Life
Policies;

"Relevant Distribution" has the meaning given to it in Clause 4.2
(Consideration) of the Mortgages Trust Deed;

"Repayment Mortgage Loan" means a Mortgage Loan in respect of which the
Borrower is under an obligation to the mortgagee to make monthly payments of
principal so that the whole principal (in addition to interest) is repaid by
the stated maturity date for that Mortgage Loan;

"Representations and Warranties" means the representations and warranties set
out in Schedule 1 (Representations and Warranties) to the Mortgage Sale
Agreement;

"Revenue Ledger" means the ledger maintained by the Cash Manager in the name
of the Mortgages Trustee pursuant to the Cash Management Agreement to record
Revenue Receipts received by the Mortgages Trustee and the payment of the same
on each Distribution Date in accordance with the terms of the Mortgages Trust
Deed;

"Revenue Receipts" means, in relation to the Mortgages Trustee, any payment
received in respect of any Mortgage Loan, whether as all or part of a Monthly
Payment in respect of such Mortgage Loan, on redemption (including partial
redemption) of such Mortgage Loan, on enforcement of such Mortgage Loan
(including the proceeds of sale thereof), on the disposal of such Mortgage
Loan or otherwise (including payments pursuant to any Insurance Policy) which
in any such case is not a Principal Receipt in respect of such Mortgage Loan;

"Right to Buy Mortgage Loan" means (i) in relation to an English Mortgage
Loan, a Mortgage Loan in respect of which the "right to buy" provisions of the
Housing Act 1985 apply (other than any Mortgage Loan in respect of which the
period during which the statutory charge referred to in section 156 of that
Act would have existed, had the relevant circumstances applied, has expired)
and (ii) in relation to a Scottish Mortgage Loan, a Mortgage Loan in respect
of which the "right to buy" provisions of the Housing (Scotland) Act 1987
apply (other than any Mortgage Loan in respect of the period during which the
seller's standard security referred to in section 72 of that Act remains in
effect has expired);

"Scottish Mortgage" means, in respect of any Mortgage Loan in the Mortgage
Portfolio, a Mortgage secured over a Scottish Property;

"Scottish Mortgage Loan" means each Mortgage Loan secured by a Scottish
Mortgage;

                                      47
<PAGE>

"Scottish Property" means a Mortgaged Property situated in Scotland;

"Scottish Transfer" means an assignation of a Scottish Mortgage or Mortgages
in the relevant form referred to in paragraphs (c) and (d) of Clause 6.3
(Transfer Documents) of the Mortgage Sale Agreement with such modifications as
may be permitted from time to time in accordance with such Clause;

"Scottish Trust" means, collectively, the trusts declared and created in terms
of each Scottish Trust Deed;

"Scottish Trust Deed" means a declaration of trust substantially in the form
set out in Schedule 11 to the Mortgage Sale Agreement declared by the Seller
in favour of the Mortgages Trustee over its whole right, title, benefit and
interest in and to the Scottish Trust Property specified therein;

"Scottish Trust Property" has the meaning given to it in each Scottish Trust
Deed and means, collectively, the whole trust property forming the subjects of
each such Scottish Trust Deed;

"S&P" and "Standard & Poor's" means Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., and includes any successor to its
rating business;

"SEC" means the United States Securities and Exchange Commission;

"Second Issuer" means Granite Mortgages 01-2 plc;

"Second Issuer Liquidity Required Amount" means an amount as of any Payment
Date equal to the excess, if any, of 3% of the aggregate outstanding balance
of the Notes on that Payment Date over amounts standing to the credit of the
Issuer Reserve Fund on that Payment Date;

"Second Priority Funding Deed of Charge" means the deed of charge entered into
on or about 28 January 2004 between Funding and the Security Trustee as may be
amended, restated, novated, varied or supplemented from time to time;

"Securities Act" means the United States Securities Act of 1933, as amended;

"Security Documents" means the any Issuer Deed of Charge, the Funding Deed of
Charge, and each Deed of Accession entered into pursuant to the Funding Deed
of Charge, the Second Priority Funding Deed of Charge and any other security
document entered into pursuant to any of the foregoing;

"Security Interest" or "Encumbrance" means any mortgage or sub mortgage,
standard security, charge or sub charge (whether legal or equitable),
encumbrance, pledge, lien, hypothecation, assignment or assignation by way of
security or other security interest or title retention arrangement and any
agreement, trust or arrangement having substantially the same economic or
financial effect as any of the foregoing (other than a lien arising in the
ordinary course of business or by operation of law);

"Security Power of Attorney for Funding" means the power of attorney granted
by Funding in favour of the Security Trustee on the Initial Closing Date
pursuant to the Funding Deed of Charge;

"Security Trustee" means, The Bank of New York, whose principal office is at
48th Floor, One Canada Square, London E14 5AL, or such other persons and all
other persons for the time being acting as the security trustee or security
trustees pursuant to the Funding Deed of Charge;

"Seller" means Northern Rock plc;

"Seller Share Event" means the event which will occur if, on a Distribution
Date, (i) the result of the

                                      48
<PAGE>

calculation of the Current Seller Share for such Distribution Date would be
equal to or less than the Minimum Seller Share for such Distribution Date
(determined using the amounts of the Current Seller Share and Minimum Seller
Share that would exist after making the distributions of Mortgages Trustee
Principal Receipts due in that Distribution Date on the basis that the Cash
Manager assumes that those Mortgages Trustee Principal Receipts are
distributed in the manner described under the Mortgages Trustee Principal
Priority of Payments set forth in Clause 11.1 of the Mortgages Trust Deed, and
(ii) a Seller Share Event has not occurred on the immediately preceding
Distribution Date;

"Seller Share Distribution Date" means a Distribution date on which a Seller
Share Event occurs;

"Seller Share" means, prior to the first Distribution Date, the Initial Seller
Share and thereafter, shall mean the Current Seller Share;

"Seller Share Ledger" means a ledger which shall record the Seller Share of
the Trust Property and the Seller Share Percentage;

"Seller Share Percentage" means, prior to the first Distribution Date, the
Initial Seller Share Percentage and thereafter shall mean the Current Seller
Share Percentage;

"Seller's Policy" means the originating, lending and underwriting,
administration, arrears and enforcement policies and procedures which are
applied from time to time by the Seller to mortgage loans and the security for
their repayment which are beneficially owned solely by the Seller and which
may be amended by the Seller from time to time;

"Seller's Power of Attorney" means the power of attorney granted by the Seller
in favour of Funding, the Mortgages Trustee and the Security Trustee on the
Initial Closing Date, substantially in the form set out in Schedule 10 (Power
of Attorney in favour of the Mortgages Trustee, Funding and the Security
Trustee) to the Mortgage Sale Agreement;

"Series" in relation to any Notes issued by any Issuer has the meaning given
to it in the relevant Issuer Master Definitions Schedule;

"Services" has the meaning set out in Clause 3.1 (General) of the
Administration Agreement;

"Share Trust Deed" means the share trust deed dated 23 January 2001 between
the Share Trustee and Holdings as has been and may be amended, restated,
novated, varied or supplemented from time to time;

"Share Trustee" means The Law Debenture Intermediary Corporation P.L.C. as
share trustee under the Share Trust Deed;

"Shortfall" or "Interest Rate Shortfall" means, as of any Payment Date and in
respect of Funding, a deficiency of Funding Available Revenue Receipts over
the amounts due by Funding under the Funding Pre-Enforcement Revenue Priority
of Payments on such Payment Date, and, as of any Payment Date and in respect
of any Issuer, the deficiency of Issuer Allocable Revenue Receipts over the
amounts due by such Issuer under the relevant Issuer Pre-Enforcement Revenue
Priority of Payments, as the context requires;

"Special Distribution" has the meaning given to it in Clause 6.3 (Special
Distribution) of the Mortgages Trust Deed;

"Special Repayment Notes" means, in relation to the Second Issuer, the
(GBP)10,000,000 Series 2 Class D Floating Rate Notes issued by the Second
Issuer and, in relation to any other Issuer, means any

                                      49
<PAGE>

Series and/or class of Notes issued by such Issuer that are either:

(a)      interest only Notes; or

(b)      Notes, the Outstanding Principal Balance of which is to be repaid
         solely from the Issuer Available Revenue Receipts,

and that are designated as Special Repayment Notes in the Issuer Master
Definitions Schedule relating to such Issuer;

"Specified Date" means the date on which the United Kingdom participates in
the third stage of European economic and monetary union pursuant to the Treaty
establishing the European Community or otherwise participates in European
economic and monetary union in a manner with an effect similar to such third
stage;

"Standard Documentation" or "Standard Mortgage Documentation" means:

(a)      in relation to the First Issuer the standard documentation referred
         to in Schedule 12 (Standard Documentation) to the Mortgage Sale
         Agreement as at 26 March 2001,

(b)      in relation to the Second Issuer, the standard documentation referred
         to in Schedule 12 (Standard Documentation) to the Mortgage Sale
         Agreement as at 28 September 2001, and

(c)      in relation to any other Issuer, the standard documentation referred
         to in Schedule 1 (Standard Documentation) to the relevant Issuer
         Master Definitions Schedule

or, in each case, any update or replacement therefor as the Seller may from
time to time introduce acting in accordance with the standards of a
reasonable, prudent mortgage lender;

"Standard Variable Rate" or "SVR" means, as applicable, the Northern Rock
standard variable mortgage base rate and/or the standard variable mortgage
base rate applicable to Mortgage Loans within the Mortgages Trust in
accordance with the Mortgage Conditions;

"Start-up Loan" means the start-up loan that the Start-up Loan Provider shall
make available to Funding pursuant to the Start-up Loan Agreement;

"Start-up Loan Agreement" means the agreement entered into on or about the
Initial Closing Date between Funding, the Start-up Loan Provider and the
Security Trustee relating to the provision of the Start-up Loan to Funding as
may be amended, restated, novated, varied or supplemented from time to time
and shall include any additional and/or replacement start-up loan agreement
entered into by such parties in accordance with the Transaction Documents;

"Start-up Loan Provider" means Northern Rock, in its capacity as provider of
the Start-up Loan and/or such other person or persons for the time being the
lender under the Start-up Loan Agreement;

"Step-up Date" means the Payment Date in respect of an Issuer on which the
interest rate on the Notes issued by such Issuer increases by a pre-determined
amount following the payment made by such Issuer on such Payment Date, which
date in respect of the First Issuer is the Payment Date occurring in January
2008, and, in relation to any New Issuer, has the meaning specified under the
relevant Issuer Master Definitions Schedule;

"Subsidiary" means (a) a subsidiary as defined in Section 736 of the Companies
Act 1985 and (b) unless the context requires otherwise, a subsidiary
undertaking within the meaning of Section 258 of the Companies Act 1985;

                                      50
<PAGE>

"Subordinated Principal Test" means:

(a)      in respect of the First Issuer Notes, the test which is satisfied (1)
         on any Payment Date occurring on or after the fourth anniversary of
         the Initial Closing Date; and (2) on any Payment Date on which (a)
         the percentage equal to the aggregate Principal Amount Outstanding of
         the Class B Notes and the Class C Notes as at that Payment Date over
         the aggregate Principal Amount Outstanding of the First Issuer Notes
         as at that Payment Date is greater than (b) the product of (i) 2 and
         (ii) the percentage equal to the aggregate Principal Amount
         Outstanding of the Class B Notes and the Class C Notes as at the
         Initial Closing Date over the aggregate Principal Amount Outstanding
         of the First Issuer Notes as at the Initial Closing Date; or

(b)      in respect of any New Notes issued by any New Issuer, has the meaning
         given to it under the relevant Issuer Transaction Documents and as
         defined in the Issuer Master Definitions Schedule relating to that
         New Issuer;

"Swap Agreements" means, for any Issuer, any of the Basis Rate Swap
Agreements, any of the Currency Swap Agreements, any Interest Rate Swap
Agreement or any other ISDA Master Agreement, Schedule and Confirmation
thereto entered into among such Issuer, the relevant Swap Provider and the
Note Trustee, as may be amended, restated, novated, varied or supplemented
from time to time, and shall include any additional and/or replacement swap
agreement entered into by such Issuer from time to time in connection with the
Notes issued by such Issuer

"Swap Provider" means any of the Currency Swap Provider and/or the Basis Rate
Swap Provider and/or the Interest Rate Swap Provider, as the context requires,
or any other swap provider appointed from time to time in accordance with the
Transaction Documents or relevant Issuer Transaction Documents;

"TARGET Business Day" means a day on which the Trans-European Automated
Real-time Gross settlement Express (TARGET) system is open;

"Taxes" means all present and future taxes, levies, imposts, duties (other
than stamp duty), fees, deductions, withholdings or charges of any nature
whatsoever and wheresoever imposed, including, without limitation, value added
tax or other tax in respect of added value and any franchise, transfer, sales,
gross receipts, use, business, occupation, excise, personal property, real
property or other tax imposed by any national, local or supranational taxing
or fiscal authority or agency together with any penalties, fines or interest
thereon and "Tax" and "Taxation" shall be construed accordingly;

"Terms and Conditions" has the same meaning as "Conditions";

"Third Party Amounts" means:

(a)      payments of insurance premiums, if any, due to the Seller in respect
         of any Insurance Policy arranged by the Seller and/or the MIG
         provider to the extent not paid or payable by the Seller (or to the
         extent such insurance premiums have been paid by the Seller in
         respect of any Further Advance which is not repurchased by the Seller
         to reimburse the Seller);

(b)      amounts under an unpaid Direct Debit which are repaid by the
         Administrator to the bank making such payment if such bank is unable
         to recoup that amount itself from the relevant customer's account;

(c)      other charges the benefit of which have been re-assigned to the
         Seller (excluding Early

                                      51
<PAGE>

         Repayment Charges); and/or

(d)      recoveries in respect of amounts deducted from Mortgage Loans as
         described in paragraphs (a) through (e) of Clause 8.5 (Adjustments to
         Trust Property) (inclusive) of the Mortgages Trust Deed;

"Title Deeds" means, in relation to each Mortgage Loan and its Related
Security and the Mortgaged Property relating thereto, all conveyancing deeds
and documents which make up the title to the Mortgaged Property and the
security for the Mortgage Loan and all searches and enquiries undertaken in
connection with the grant by the Borrower of the related Mortgage including,
in the case of Registered Land, the relevant Charge Certificate;

"Together Connections Benefit" means the amount by which:

(a)      the interest that would be payable on the Combined Debit Balance at
         the Connection Interest Rate exceeds:

(b)      the interest at the Connection Interest Rate that would be payable on
         the amount by which the Combined Debit Balance exceeds the Combined
         Credit Balance;

"Together Connection Conditions" means the Mortgage Conditions of the Seller
identified as Together Connection Conditions;

"Together Connections Mortgage Loans" means a type of Flexible Mortgage Loan
which has the same basic features as a Together Mortgage Loan, but also allows
the Borrower to link the Mortgage Loan with certain accounts that are held
with the Seller, the balance amounts of which, pursuant to the Together
Connection Conditions, are required to be included in the calculation of the
Combined Credit Balance;

"Together Mortgage Loan" means a type of Flexible Mortgage Loan which allows a
Borrower to obtain an additional unsecured drawdown loan and, in some cases, a
credit card;

"Total Property" means at any time the aggregate amount standing to the credit
of the Collection Accounts and held by Northern Rock on trust for the
Mortgages Trustee and itself, subject to and in accordance with the Collection
Bank Agreement;

"Transaction Document" means any of the following documents:

(a)      the Subscription Agreement;

(b)      the Underwriting Agreement;

(c)      the First Issuer Intercompany Loan Agreement;

(d)      the Mortgages Trust Deed;

(e)      the Mortgage Sale Agreement;

(f)      the First Issuer Deed of Charge;

(g)      the Funding Deed of Charge;

(h)      the Basis Rate Swap Agreement;

(i)      each Currency Swap Agreement;

(j)      the Depository Agreement;

                                      52
<PAGE>

(k)      the First Issuer Trust Deed;

(l)      the First Issuer Paying Agent and Agent Bank Agreement;

(m)      the Administration Agreement;

(n)      the Cash Management Agreement;

(o)      the First Issuer Cash Management Agreement;

(p)      the Funding Guaranteed Investment Contract;

(q)      the Funding (First Issuer) Guaranteed Investment Contract;

(r)      the Mortgages Trustee Guaranteed Investment Contract;

(s)      the Post-Enforcement Call Option Agreement;

(t)      the Bank Account Agreement;

(u)      the Funding (First Issuer) Bank Account Agreement;

(v)      the First Issuer Bank Account Agreement;

(w)      the Collection Bank Agreement;

(x)      the Start-Up Loan Agreement;

(y)      the Loyalty Discount Deed;

(z)      the First Issuer Corporate Services Agreement;

(aa)     the Share Trust Deed;

(bb)     each Corporate Services Agreement; and

(cc)     the Second Priority Funding Deed of Charge;

"Transaction" means the transaction contemplated by the Transaction Documents;

"Trigger Event" means any of an Asset Trigger Event or a Non-Asset Trigger
Event, as the case may be;

"Trust Calculation Period" means the period from (and including) the first
date of each calendar month (or in the case of the first such Trust
Calculation Period, the Initial Closing Date) to (and including) the last day
of the same calendar month;

"Trust Corporation" means a corporation entitled by rules made under the
Public Trustee Act 1906, or entitled pursuant to any comparable legislation
applicable to a trustee in any jurisdiction, to carry out the function of a
custodian trustee;

"Trust Determination Date" means the first day (or, if not a London Business
Day, the next succeeding London Business Day) of each calendar month;

"Trust Indenture Act" means the United States Trust Indenture Act of 1939, as
amended;

"Trust Property" means:

(a)      the Initial Trust Property;

(b)      the Closing Trust Property (excluding any Mortgage Loans that have
         been repurchased by the Seller pursuant to the Mortgage Sale
         Agreement and any Early Repayment Charge Receipts

                                      53
<PAGE>

         that have been paid to the Seller pursuant to the Mortgage Sale
         Agreement);

(c)      any New Trust Property (excluding any Mortgage Loans that have been
         repurchased by the Seller pursuant to the Mortgage Sale Agreement and
         any Early Repayment Charge Receipts that have been paid to the Seller
         pursuant to the Mortgage Sale Agreement);

(d)      any Scottish Trust Property;

(e)      any Contribution made from time to time to the Mortgages Trustee by
         any Beneficiary until it has been applied by the Mortgages Trustee in
         accordance with the Mortgages Trust Deed;

(f)      any Re-Draw made under a Flexible Mortgage Loan which forms part of
         the Trust Property;

(g)      any Further Draw made under a Personal Secured Loan which forms part
         of the Trust Property;

(h)      any Further Advances made by the Seller to existing Borrowers which
         are assigned to the Trust in accordance with the Mortgage Sale
         Agreement;

(i)      amounts on deposit (and interest earned on such amounts) from time to
         time in the Mortgages Trustee Bank Accounts;

(j)      any Permitted Replacement Mortgage Loan and its Related Security
         (excluding any Early Repayment Charge Receipts that have been paid to
         the Seller pursuant to the Mortgage Sale Agreement) relating to a
         Permitted Product Switch;

(k)      the proceeds of sale of any Mortgage Loan and its Related Security
         forming part of the Trust Property;

(l)      all other property which shall form part of the Trust Property
         pursuant to Clause 2 (Creation of Mortgages Trust) of the Mortgages
         Trust Deed;

         less

(1)      any actual Losses in relation to the Mortgage Loans and any actual
         reductions occurring in respect of the Mortgage Loans as described in
         Clause 8.5 (Adjustments to Trust Property) of the Mortgages Trust
         Deed; and

(2)      distributions of principal made from time to time to the
         Beneficiaries of the Mortgages Trust.

"Trust Property Calculation Adjustments" has the meaning set out in the
Mortgages Trust Deed;

"Trustee Acts" means the Trustee Act 1925 and the Trustee Act 2000;

"UK Account Bank" means Lloyds TSB Bank plc, London Branch;

"UK Listing Authority" means at any time the Financial Services Authority in
its capacity as competent authority for the purposes of Part VI of the
Financial Services and Markets Act 2000 or such other Person which at that
time performs an analogous role in relation to the regulation of financial
markets and the issue of public debt securities in the United Kingdom;

"Unauthorised Underpayment" means a Borrower Underpayment in respect of a
Mortgage Loan which is not funded by, or exceeds the amount of any,
Overpayments previously made by the Borrower in respect of such Mortgage Loan
or is otherwise not permitted by the Seller in accordance with the relevant
Mortgage Conditions;

                                      54
<PAGE>

"Underpayment" means any Authorised Underpayment or Unauthorised Underpayment;

"United Kingdom" means the United Kingdom of Great Britain and Northern
Ireland;

"United States" means the United States of America;

"Unpaid Interest" means, in relation to any Non-Cash Re-Draw of any Flexible
Mortgage Loan, the interest which would, but for such Non-Cash Re-Draw, have
been payable in respect of that Mortgage Loan on the relevant Monthly Payment
Date for such Mortgage Loan;

"Unpaid Interest Amount" means the amount of the Unpaid Interest in relation
to any Non-Cash Re-Draw on any Flexible Mortgage Loan;

"Unregistered Land" means land in England or Wales, title to which is not
registered at H.M. Land Registry;

"Unregistered Transfer" means, in relation to Unregistered Land, a deed of
transfer of a Mortgage or Mortgages in the form referred to in paragraph (b)
of Clause 6.3 of the Mortgage Sale Agreement with such modifications as may be
permitted from time to time in accordance with such Clause;

"US Global Note Certificates" or "US Global Note Certificate" means the Global
Note Certificates in registered form representing the US Notes;

"US Individual Note Certificates" or "US Individual Note Certificate" means
the Individual Note Certificates in registered form representing the US Notes;

"US Notes" means generally the Notes which are not Reg S Notes and in relation
to an Issuer the Notes issued by that Issuer which are not Reg S Notes;

"Valuation Report" means the valuation report or reports for mortgage
purposes, in the form of the pro-forma contained in the Standard
Documentation, obtained by the Seller from a Valuer in respect of each
Mortgaged Property or a valuation report in respect of a valuation made using
a methodology which would be acceptable to a reasonable prudent mortgage
lender;

"Valuer" means an Associate or Fellow of the Royal Institution of Chartered
Surveyors or the Incorporated Society of Valuers and Auctioneers who was at
the relevant times either a member of a firm which was on the list of Valuers
approved by or on behalf of the Seller from time to time or an Associate or
Fellow of the Royal Institute of Chartered Surveyors or the Incorporated
Society of Valuers and Auctioneers employed in-house by the Seller acting for
the Seller in respect of the valuation of a Mortgaged Property;

"WAFF" means the weighted average repossession frequency in respect of the
Mortgage Portfolio; and

"WALS" means the weighted average loss severity in respect of the Mortgage
Portfolio.

2.      Interpretation and Construction

Any reference in this Master Definitions Schedule or any Transaction Document
to:

"agreed form" means, in relation to any document, the draft of that document
the form of which has been agreed between the parties thereto (or if such
document is delivered pursuant to another Transaction Document, between the
parties to such Transaction Document) and initialled on their behalf for the
purpose of identification;

                                      55
<PAGE>

the "assets" of any person shall be construed as a reference to the whole or
any part of its business, undertakings, property, intellectual property,
shares, securities, debts, accounts, revenues (including any right to receive
revenues), goodwill, shareholdings and uncalled capital including premium
whether now or hereafter acquired and any other assets whatsoever;

the "assignment" of any Mortgage Loan shall be construed, in relation to any
Scottish Mortgage Loan and its Related Security, so as to include the transfer
of the beneficial interest therein and/or the legal title thereto, and the
terms "assign" and "assigned" shall in that context be construed accordingly;

"disposal" shall be construed as any sale, lease, transfer, conveyance,
assignment, assignation, licence, sub-licence or other disposal and "dispose"
shall be construed accordingly;

a "guarantee" means any guarantee, bond, indemnity, letter of credit, third
party security or other legally binding assurance against financial loss
granted by one person in respect of any indebtedness of another person, or any
agreement to assume any indebtedness of any other person or to supply funds or
to invest in any manner whatsoever in such other person by reason of, or
otherwise in relation to, indebtedness of such other person;

"indebtedness" shall be construed so as to include any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;

"leasehold" shall be construed so as to include any property held under a duly
registered or recorded long lease in Scotland;

a "month" is a reference to a period starting on one day in a calendar month
and ending on the numerically corresponding day in the next calendar month
save that, where any such period would otherwise end on a day which is not a
business day, it shall end on the next business day, unless that day falls in
the calendar month succeeding that in which it would otherwise have ended, in
which case it shall end on the preceding business day, provided that, if a
period starts on the last business day in a calendar month or if there is no
numerically corresponding day in the month in which that period ends, that
period shall end on the last business day in that later month (and references
to "months" shall be construed accordingly);

"party" shall be construed as a party to a particular agreement, as the case
may be;

"set-off" shall be construed so as to include equivalent or analogous rights
under the laws of jurisdictions other than England and Wales;

"subsidiary" means, (a) a subsidiary within the meaning of Section 736 of the
Companies Act 1985, and (b) unless the context requires otherwise, a
subsidiary undertaking within the meaning of Section 258 of the Companies Act
1985;

"VAT" means value added tax imposed by the United Kingdom as referred to in
the Value Added Tax Act 1994 and legislation (whether delegated or otherwise)
replacing the same or supplemental thereto or in any primary or subordinate
legislation promulgated by the European Union or any official body or agency
thereof, and any similar turnover tax replacing or introduced in addition to
any of the same;

a "wholly-owned subsidiary" of a company or corporation shall be construed as
a reference to any company or corporation which has no other members except
that other company or corporation and that other company's or corporation's
wholly-owned subsidiaries or persons acting on behalf of that other company or
corporation or its wholly-owned subsidiaries; and

                                      56
<PAGE>

the "winding-up" or "administration" of a company or corporation shall be
construed so as to include any equivalent or analogous proceedings under the
law of the jurisdiction in which such company or corporation is incorporated
or any jurisdiction in which such company or corporation carries on business
including the seeking of liquidation, winding-up, bankruptcy, reorganisation,
dissolution, administration, arrangement, adjustment, protection or relief of
debtors.

2.1      "(GBP)", "sterling" or "pounds sterling" denotes the lawful
         currency for the time being of the United Kingdom of Great Britain
         and Northern Ireland; ("euro"), "euro" or "Euro" denotes the lawful
         currency for the time being of the member states of the European
         Union that adopt the single currency introduced at the start of the
         third stage of European Economic Monetary Union pursuant to the
         Treaty of Rome of 25th March, 1957, establishing the European
         Community as amended from time to time and as amended by, inter alia,
         the Treaty of European Union of 7th February, 1992; "$", "US$", "US
         dollars" or "dollars" denotes the lawful currency for the time being
         of the United States of America.

2.2      In this Master Definitions Schedule and in any of the Transaction
         Documents in which this Master Definitions Schedule is expressed to
         be incorporated or to which this Master Definitions Schedule is
         expressed to apply:

         (a)  words denoting the singular number only shall include the
              plural number also and vice versa;

         (b)  words denoting one gender only shall include the other genders;

         (c)  words denoting persons only shall include firms and
              corporations and vice versa;

         (d)  references to any statutory provision shall be deemed also to
              refer to any statutory modification or re-enactment thereof or
              any statutory instrument, order or regulation made thereunder
              or under any such re-enactment;

         (e)  references to any agreement or other document (including any of
              the Transaction Documents) shall be deemed also to refer to
              such agreement or document as amended, varied, supplemented or
              novated from time to time;

         (f)  clause, paragraph and schedule headings are for ease of
              reference only;

         (g)  reference to a statute shall be construed as a reference to
              such statute as the same may have been, or may from time to
              time be, amended or re-enacted to the extent such amendment or
              re-enactment is substantially to the same effect as such
              statute on the date hereof;

         (h)  unless stated otherwise reference to a time of day shall be
              construed as a reference to London (GMT) time; and

         (i)  references to any person shall include references to his
              successors, transferees and assigns and any person deriving
              title under or through him.

2.3      Any requirement in any Transaction Document for any action to be
         taken according to the standards of a "reasonable, prudent mortgage
         lender" shall be satisfied by the relevant party taking the relevant
         action in accordance with the Seller's Policy from time to time.

2.4      Save as provided otherwise, where any obligation in a Transaction
         Document is owed to more than one party that obligation is owed to
         each of them separately and may be enforced by any of them.

                                      57
<PAGE>

2.5     (a)    Where a term is defined in an Issuer Master Definitions
               Schedule and is used but not defined in this Master
               Definitions Schedule then, in connection with the relevant
               Issuer, that term shall have the meaning indicated in that
               Issuer Master Definitions Schedule; and

        (b)    Where a term is used but not defined in a document to which
               this Master Definitions Schedule applies and that term is not
               defined in this Master Definitions Schedule but is defined in
               an Issuer Master Definitions Schedule, then in connection with
               the relevant Issuer that term shall have the meaning indicated
               in that Issuer Master Definitions Schedule.

3.       Governing Law

This Master Definitions Schedule is governed by, and shall be construed in
accordance with, the laws of England (provided that any terms hereof which are
particular to Scots law will be construed in accordance with the laws of
Scotland).

                                      58EXHIBIT 4.3

                             Dated 28 January 2004

                               NORTHERN ROCK PLC

                                   as Seller

                       GRANITE FINANCE TRUSTEES LIMITED

                             as Mortgages Trustee

                        GRANITE FINANCE FUNDING LIMITED

                                    - and -

                             THE BANK OF NEW YORK

                              as Security Trustee

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

                                EIGHTH AMENDED
                            MORTGAGE SALE AGREEMENT

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

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

<PAGE>

                                   CONTENTS

Clause                                                                Page No.

1.    Definitions and Construction.........................................4

2.    Sale and Purchase of Initial Mortgage Portfolio......................5

3.    Initial Closing Date.................................................5

4.    Sale and Purchase of New Mortgage Portfolios.........................7

5.    Trust of Monies.....................................................14

6.    Perfection of the Assignment........................................15

7.    Undertakings........................................................17

8.    Warranties and Repurchase by the Seller.............................21

9.    Further Assurance...................................................27

10.   Consequences of Breach..............................................27

11.   Subordination.......................................................27

12.   Non-Merger..........................................................27

13.   No Agency or Partnership............................................27

14.   Payments............................................................28

15.   Assignment..........................................................28

16.   Security Trustee....................................................28

17.   New Intercompany Loans..............................................29

18.   Non Petition Covenant; Limited Recourse.............................29

19.   Amendments and Waiver...............................................30

20.   Notices.............................................................31

21.   Third Party Rights..................................................31

22.   Execution in Counterparts; Severability.............................31

23.   Governing Law and Submission to Jurisdiction........................32

24.   Process Agent.......................................................32

25.   Appropriate Forum...................................................32

26.   Transaction Documents...............................................33

                                       2
<PAGE>

SCHEDULE 1 REPRESENTATIONS AND WARRANTIES.................................35

SCHEDULE 2 FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND AND
      SCOTTISH TRANSFERS..................................................44

Part 1  FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)............45

Part 2  FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)..........46

Part 3  FORM OF TRANSFER (LAND REGISTER - SCOTLAND).......................48

Part 4  FORM OF TRANSFER (SASINE REGISTER - SCOTLAND).....................50

SCHEDULE 3 ASSIGNMENT OF INSURANCE CONTRACTS..............................51

SCHEDULE 4 INSURANCE CONTRACTS............................................54

SCHEDULE 5 Part 1 ASSIGNMENT OF GUARANTEES................................55

Part 2  ASSIGNATION OF GUARANTEES.........................................57

SCHEDULE 6 NEW MORTGAGE PORTFOLIO NOTICE..................................60

SCHEDULE 7 LOAN REPURCHASE NOTICE.........................................63

SCHEDULE 8 FORM OF NOTIFICATION TO BORROWERS..............................65

SCHEDULE 9 OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE
      LOANS)..............................................................66

SCHEDULE 10  POWER OF ATTORNEY IN FAVOUR OF THE MORTGAGES TRUSTEE,
      FUNDING AND THE SECURITY TRUSTEE....................................67

SCHEDULE 11  FORM OF SCOTTISH TRUST DEED..................................70

SCHEDULE 12  LENDING CRITERIA.............................................77

SCHEDULE 13  STANDARD DOCUMENTATION.......................................80

APPENDIX A THE INITIAL MORTGAGE LOAN PORTFOLIO............................81

                                       3
<PAGE>

THIS EIGHTH AMENDED MORTGAGE SALE AGREEMENT DATED 28 January 2004 FURTHER
AMENDS AND RESTATES THE MORTGAGE SALE AGREEMENT DATED 26 MARCH 2001 BETWEEN:

(1)    NORTHERN ROCK PLC (registered number 3273685), a public limited company
       incorporated under the laws of England and Wales, whose registered
       office is at Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL
       in its capacity as Seller and in its capacity as a Beneficiary;

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

(3)    GRANITE FINANCE FUNDING LIMITED (registered number 79308), a private
       limited company incorporated under the laws of Jersey, but acting out
       of its branch office established in England (registered overseas
       company number FC022999 and branch number BR005916) at 4 Royal Mint
       Court, London EC3N 4HJ in its capacity as a Beneficiary; and

(4)    THE BANK OF NEW YORK a New York banking corporation whose London branch
       address is at 48th Floor, One Canada Square, London E14 5AL in its
       capacity as Security Trustee.

WHEREAS:

(A)    The Seller carries on the business (inter alia) of originating mortgage
       loans secured on residential properties in England, Wales and Scotland.

(B)    The Seller has agreed to sell and assign to the Mortgages Trustee
       certain mortgage loans, together with the benefit of the related
       security for the same, on the terms and subject to, the conditions set
       out in this Mortgage Sale Agreement (the "Agreement").

(C)    The Mortgages Trustee has agreed to hold certain of the above mentioned
       mortgage loans as bare trustee for the Beneficiaries upon, with and
       subject to the trusts, powers and provisions of the Mortgages Trust
       Deed.

IT IS HEREBY AGREED AS FOLLOWS:

1.     Definitions and Construction

1.1.   The provisions of the Master Definitions Schedule as amended and
       restated by (and appearing in Appendix 1 to) the Master Definitions
       Schedule Seventh Amendment and Restatement Deed made on 26 January 2004
       between, among others, the Seller, Funding and the Mortgages Trustee
       (as the same have been and may be amended, varied or supplemented from
       time to time with the consent of the parties hereto) are expressly and
       specifically incorporated into and shall apply to this Agreement.

                                       4
<PAGE>

2.     Sale and Purchase of Initial Mortgage Portfolio

2.1    Agreement to Assign: Subject to Clause 2.2 (Conditions), in
       consideration of the Purchase Price for the Initial Mortgage Portfolio
       (which shall be paid in accordance with Clause 3.3 (Effect of Payment
       of Initial Purchase Price)) and the covenant of the Mortgages Trustee
       to hold the Trust Property upon trust for the Seller and Funding as
       beneficiaries of the Mortgages Trust upon, with and subject to all the
       trusts, powers and provisions of the Mortgages Trust Deed and the
       Mortgages Trustee's agreement in Clause 3.5 (Early Repayment Charges)
       to pay to the Seller any and all Early Repayment Charge Receipts, the
       Seller hereby agrees to sell and assign the Initial Mortgage Portfolio
       to the Mortgages Trustee on the Initial Closing Date with full title
       guarantee.

2.2    Conditions: The obligation of the Seller under Clause 2.1 (Agreement to
       Assign) shall be subject to and conditional upon:

       (a)    the issue by the First Issuer of the Notes on the Initial
              Closing Date and the borrowing by Funding of the amount provided
              for under the First Issuer Intercompany Loan Agreement;

       (b)    the constitution of the Mortgages Trust on or prior to the
              Initial Closing Date;

       (c)    the Transaction Documents having been executed and delivered by
              the parties thereto on or before the Initial Closing Date or, in
              the case of any Transaction Documents which are to be executed
              immediately after the Initial Closing Date, the same having been
              executed and being available for delivery and none of the
              parties knowing of any reason why the same should not be
              delivered immediately thereafter;

       (d)    the payment of the Initial Contribution by Funding to the
              Mortgages Trustee in accordance with the terms of the Mortgages
              Trust Deed; and

2.3    the payment of the Initial Purchase Price by the Mortgages Trustee to
       the Seller in accordance with paragraph (a) of Clause 3.2 (Purchase
       Price).

3.     Initial Closing Date

3.1    Initial Closing and Conditions Precedent: A meeting shall take place on
       the Initial Closing Date at the offices of Brown & Wood, 7 Princes
       Court, London EC2R 8AQ, or such offices as the parties may agree, at
       which the Seller shall deliver to the Security Trustee (upon request),
       Funding and the Mortgages Trustee or the representative of such party
       (or procure such delivery to such party of) the following documents:

       (a)    an original power of attorney in the form set out in Schedule 10
              (Power of Attorney in favour of the Mortgages Trustee, Funding
              and the Security Trustee) duly executed by the Seller;

       (b)    a certificate of solvency in relation to the Seller dated as at
              the Initial Closing Date (in the form of the agreed draft) duly
              executed by the Seller;

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<PAGE>

       (c)    a list of the Mortgage Loans in the Initial Mortgage Portfolio;

       (d)    an assignment of the Insurance Contracts to the extent that such
              Insurance Contracts relate to the Initial Mortgage Portfolio in
              the form set out in Schedule 3 (Assignment of Insurance
              Contracts) duly executed by the Seller; and

       (e)    a certified copy of the board minutes of the securitisation
              sub-committee of the Seller authorising its duly appointed
              representatives to agree the sale and assignment of the Initial
              Mortgage Portfolio and authorising the execution and performance
              of this Agreement, the Mortgages Trust Deed, the Administration
              Agreement, the other Transaction Documents and all of the
              documentation to be entered into pursuant to the Transaction
              Documents.

3.2    Purchase Price: Subject to fulfilment of the conditions referred to in
       paragraphs (a) to (and including) (d) of Clause 2.2 (Conditions) and
       Clause 3.1 (Initial Closing and Conditions Precedent), the Mortgages
       Trustee shall pay the Purchase Price for the Initial Mortgage Portfolio
       to the Seller, in the manner that the Seller directs, for value, as
       follows:

       (a)    the Initial Purchase Price for the Initial Mortgage Portfolio
              shall be paid by the Mortgages Trustee to the Seller on the
              Initial Closing Date (which Initial Purchase Price shall be paid
              by the Mortgages Trustee from funds received by the Mortgages
              Trustee from Funding on such date in respect of Funding's
              Initial Contribution for the Funding Share of the Closing Trust
              Property pursuant to the Mortgages Trust Deed);

       (b)    subject to and in accordance with the Mortgages Trustee Revenue
              Priority of Payments, an amount of Deferred Purchase Price in
              respect of the Mortgage Portfolio shall be paid by the Mortgages
              Trustee to the Seller on each Distribution Date but only from
              and to the extent (if any) of any Relevant Distribution (as
              defined under paragraph (b) of Clause 4.2 (Consideration
              provided by Funding) of the Mortgages Trust Deed) available for
              payment on such date and in an amount equal to the Deferred
              Contribution for the Funding Share of the Trust Property paid by
              Funding to the Mortgages Trustee on such date or in respect of
              which the payment of such Deferred Contribution is otherwise
              satisfied on such date in accordance with the Mortgages Trust
              Deed; and

       (c)    a final amount of Deferred Purchase Price in respect of the
              Mortgage Portfolio shall be paid by the Mortgages Trustee to the
              Seller following the receipt by the Mortgages Trustee from
              Funding of any Final Deferred Contribution, which payment shall
              be in an amount equal to such Final Deferred Contribution for
              the Funding Share of the Trust Property paid by Funding to the
              Mortgages Trustee or in respect of which the payment of such
              Final Deferred Contribution is otherwise satisfied in accordance
              with the Mortgages Trust Deed.

3.3    Effect of Payment of Initial Purchase Price: The parties hereto
       acknowledge that the effect of the payment to the Seller by the
       Mortgages Trustee of the Initial Purchase Price on the Initial Closing
       Date will be the assignment to the Mortgages Trustee of the beneficial
       ownership of, and all of the Seller's beneficial right, title, interest
       and benefit in and to, the

                                       6
<PAGE>

       Initial Mortgage Portfolio subject to the terms and provisions of the
       Mortgages Trust Deed, which assignment will be perfected upon the
       occurrence of any of the events set forth in Clause 6 (Perfection of
       the Assignment) and the transfer to the Mortgages Trustee of legal
       title to the Initial Mortgage Portfolio in accordance with Clause 6
       (Perfection of the Assignment).

3.4    Documents: The Seller undertakes that from the Initial Closing Date
       until the perfection of the assignment in accordance with Clause 6.1
       (Perfection Events) and delivery of the Title Deeds in accordance with
       Clause 6.2 (Perfection), the Seller shall hold the deeds and documents
       constituting the Title Deeds and Mortgage Loan Files and all other
       certificates, notices, policies, endorsements and other matters
       necessary to establish title thereto relating to the Mortgage Portfolio
       that are in its possession or under its control or held to its order to
       the order of the Mortgages Trustee or the Security Trustee or as the
       Mortgages Trustee or the Security Trustee shall direct.

3.5    Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
       the Seller as part of the Deferred Purchase Price any and all Early
       Repayment Charge Receipts received by the Mortgages Trustee in respect
       of the Mortgage Loans included in the Initial Mortgage Portfolio
       PROVIDED THAT, if any Mortgage Loans in respect of which Early
       Repayment Charges are payable are the subject of a trust pursuant to
       Clause 5.1 (Trust in favour of Mortgages Trustee), the Seller, the
       Mortgages Trustee, Funding and the Security Trustee agree that the
       benefit of any Early Repayment Charges payable under such Mortgage Loan
       shall, on the date of payment to the Seller of the related Early
       Repayment Charge Receipts, be released from such trust.

3.6    Insurance: The Seller shall as soon as reasonably practical after the
       sale and assignment of the Initial Mortgage Portfolio on the Initial
       Closing Date procure that the respective interests of the Mortgages
       Trustee, Funding and the Security Trustee are noted by the relevant
       insurers in relation to each Insurance Contract.

4.     Sale and Purchase of New Mortgage Portfolios

4.1    Agreement to Assign: Subject to fulfilment of the conditions set out in
       Clauses 2.2 (Conditions), 3.1 (Initial Closing and Conditions
       Precedent), 4.2 (Conditions to Effecting an Assignment of New Mortgage
       Loans) and 4.3 (No Further Assignment), in consideration of either:

       (a)    the Purchase Price, if any is payable (which if it is payable
              shall be paid in accordance with Clause 4.5 (Purchase Price)),
              for the New Mortgage Portfolio and the covenant by the Mortgages
              Trustee to hold the Trust Property upon trust for the Seller and
              Funding as beneficiaries of the Mortgages Trust, upon, and with
              and subject to the trusts, powers and provisions of the
              Mortgages Trust Deed; or

       (b)    the covenant by the Mortgages Trustee to hold the Trust Property
              upon trust for the Seller and Funding as beneficiaries of the
              Mortgages Trust upon, and with and subject to the trusts, powers
              and provisions of the Mortgages Trust Deed,

                                       7
<PAGE>

       and (in either case) the Mortgages Trustee's agreement in Clause 4.8
       (Early Repayment Charges) to pay to the Seller any and all Early
       Repayment Charge Receipts, if the Seller shall at any time and from
       time to time serve a properly completed New Mortgage Portfolio Notice
       as set out in Schedule 6 (New Mortgage Portfolio Notice) on the
       Mortgages Trustee and Funding with a copy (upon request) to the
       Security Trustee (such service to be in the Seller's sole discretion),
       then on the Assignment Date specified in the New Mortgage Portfolio
       Notice the Seller agrees that it shall sell and assign to the Mortgages
       Trustee the relevant New Mortgage Portfolio with full title guarantee
       (or, in relation to assets and rights situated in or governed by the
       law of Scotland, with absolute warrandice), PROVIDED THAT (a) the
       Seller hereby covenants and undertakes that it will not sell and assign
       New Mortgage Loans to the Mortgages Trustee during any Trust
       Calculation Period prior to the Distribution Date in such Trust
       Calculation Period, and (b) the Seller hereby agrees that it is only
       permitted to make one sale and assignment of New Mortgage Loans to the
       Mortgages Trustee during any Trust Calculation Period.

4.2    Conditions to Effecting an Assignment of New Mortgage Loans: The
       conditions to be met as at each Assignment Date in order to effect a
       sale and assignment of New Mortgage Loans are:

       (a)    the aggregate Arrears of Interest in respect of all of the
              Mortgage Loans in the Mortgages Trust, as a percentage of the
              aggregate gross interest due during the previous 12 months on
              all Mortgage Loans outstanding during all or part of such
              period, does not exceed 2 per cent., or such other percentage as
              agreed to by the Rating Agencies on such Assignment Date.
              "Arrears of Interest" for this purpose in respect of a Mortgage
              Loan on any date means the aggregate amount overdue on the
              Mortgage Loan on that date, but only where such aggregate amount
              overdue equals or exceeds an amount equal to the Monthly Payment
              then due on the Mortgage Loan and such amount has been overdue
              for an entire calendar month;

       (b)    the long term, unsecured, unguaranteed and unsubordinated debt
              obligations of the Seller are rated no lower than A3 by Moody's
              and A- by Fitch at the time of, and immediately following, the
              assignment of the New Mortgage Loans to the Mortgages Trustee;

       (c)    on the relevant Assignment Date, the aggregate Current Balance
              of the Mortgage Loans in the Mortgages Trust, in respect of
              which the aggregate amount is then in arrears for at least 3
              months, is less than 4 per cent. of the aggregate Current
              Balance of all Mortgage Loans in the Mortgages Trust on such
              Assignment Date, unless the Rating Agencies have confirmed that
              the then current ratings of the Notes will not be adversely
              affected;

       (d)    the Lending Criteria applicable at the time of origination of
              each relevant New Mortgage Loan have been applied to the New
              Mortgage Loan and to the circumstances of the Borrower at the
              time the New Mortgage Loan was made, provided that material
              variations from such Lending Criteria may occur so long as the
              Rating Agencies have been notified of any such material
              variations;

                                       8
<PAGE>

       (e)    no New Mortgage Loan has on the relevant Assignment Date an
              aggregate amount in arrears which is greater than the amount of
              the Monthly Payment then due;

       (f)    the Rating Agencies have not provided written confirmation to
              the Mortgages Trustee, the Security Trustee and the Issuer that
              the assignment to the Mortgages Trustee of the New Mortgage
              Loans on the Assignment Date will adversely affect the then
              current ratings of the existing Notes of any Issuer (provided
              that, in respect of the assignment by the Seller to the
              Mortgages Trustee of a New Mortgage Portfolio in connection with
              the issuance by a New Issuer of New Notes and the drawing by
              Funding of a New Intercompany Loan, the condition to be met at
              the relevant Assignment Date of such New Mortgage Portfolio will
              be that the Rating Agencies have confirmed in writing to the
              Mortgages Trustee, the Security Trustee and the Issuer that the
              assignment to the Mortgages Trustee of the New Mortgage
              Portfolio on such Assignment Date will not adversely affect the
              then current ratings of the existing Notes of any Issuer);

       (g)    the aggregate Current Balance of New Mortgage Loans transferred
              in any one Interest Period does not exceed 10 per cent. of the
              aggregate Current Balance of Mortgage Loans in the Mortgages
              Trust as at the beginning of that Interest Period;

       (h)    each Issuer Reserve Fund is fully funded on the relevant
              Assignment Date up to the relevant required amount or, if any
              Issuer Reserve Fund is not so fully funded, no payments have
              been made from such Issuer Reserve Fund;

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

       (j)    the assignment of the New Mortgage Portfolio on the relevant
              Assignment Date does not result in the product of WAFF and WALS
              for the Mortgage Portfolio after such purchase, calculated on
              the relevant Assignment Date in the same way as for the Initial
              Mortgage Portfolio (or as agreed by the Administrator and the
              Rating Agencies from time to time), exceeding the product of
              WAFF and WALS for the Mortgage Portfolio calculated on the most
              recent preceding Closing Date plus 0.35 per cent.;

       (k)    to the extent necessary, each Issuer has entered into
              appropriate hedging arrangements in respect of such New Mortgage
              Loans before such Mortgage Loans are assigned to the Mortgage
              Trust;

       (l)    no event of default under the Transaction Documents has occurred
              which is continuing as at the relevant Assignment Date;

       (m)    the weighted average yield on the Mortgage Portfolio together
              with the New Mortgage Portfolio to be assigned to the Mortgages
              Trustee on the relevant Assignment Date is not less than LIBOR
              for three-month sterling deposits plus 0.56 per cent., taking
              into account the weighted average yield on the Mortgage Loans
              and the margins on any Basis Rate Swaps as at the relevant
              Assignment Date;

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<PAGE>

       (n)    the assignment of the New Mortgage Portfolio on the relevant
              Assignment Date does not result in the weighted average loan to
              value ratio of Mortgage Loans in the Mortgage Portfolio on the
              relevant Assignment Date (after the purchase of the New Mortgage
              Portfolio) after application of the LTV Test on the relevant
              Assignment Date exceeding the loan to value ratio (based on the
              LTV Test) of Mortgage Loans in the Mortgage Portfolio on the
              most recent preceding Closing Date plus 0.25 per cent.;

       (o)    no New Mortgage Loan has a maturity date on or after January
              2039;

       (p)    the related Borrower under each New Mortgage Loan has made at
              least one Monthly Payment;

       (q)    for so long as any Notes issued by any Issuer that have a Final
              Repayment Date earlier than January 2041 are outstanding, the
              assignment of New Mortgage Loans to the Mortgages Trustee may
              only occur if, following such assignment, the aggregate number
              of Repayment Mortgage Loans in the Mortgage Portfolio is greater
              than or equal to 25 per cent. of the aggregate number of
              Mortgage Loans in the Mortgage Portfolio;

       (r)    the Rating Agencies have provided written confirmation that the
              then current ratings on the Notes would not be adversely
              affected by the assignment to the Mortgages Trustee of a New
              Mortgage Loan in respect of a mortgage loan product having
              characteristics and/or features that differ materially from the
              characteristics and/or features of the Mortgage Loans in the
              Initial Mortgage Portfolio;

       (s)    the Seller shall as at the relevant Assignment Date make the
              Representations and Warranties (which shall apply to Personal
              Secured Loans except where specifically excluded) to the
              Mortgages Trustee, Funding and the Security Trustee in relation
              to each New Mortgage Loan in the New Mortgage Portfolio being
              sold on the relevant Assignment Date in accordance with Clause 8
              (Warranties and Repurchase by the Seller) and such
              Representations and Warranties must be true in relation to each
              New Mortgage Loan (but if such Representation and Warranties are
              only discovered to be untrue after the relevant Assignment Date,
              the Mortgages Trustee's only remedy shall be under Clause 7
              (Undertakings); and

       (t)    following the purchase by the Mortgages Trust of any New
              Mortgage Portfolio, the aggregate Current Balance of Mortgage
              Loans in the Mortgages Trust that are subject to a maximum rate
              of interest and which charge interest at the lesser of the
              Seller's Standard Variable Rate and the maximum rate of interest
              (as specified in the relevant Mortgage Conditions) (the "Capped
              Rate Mortgage Loans") will not exceed 3 per. cent of the
              aggregate Current Balance of all Mortgage Loans in the Mortgages
              Trust (including such Capped Rate Mortgage Loans) as of such
              Assignment Date, unless Moody's has confirmed in writing that
              the then current ratings of the Notes will not be adversely
              affected,

       PROVIDED THAT, if an Initial Purchase Price is payable to the Seller by
       the Mortgages Trustee on the relevant Assignment Date, only the
       conditions set out in paragraphs (e), (f), (i),

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<PAGE>

       (k), (l), (m), (o), (p), (q), (r) and (s) are required to be satisfied
       to effect an assignment of the New Mortgage Loans.

       Notwithstanding the foregoing, the Mortgages Trustee may waive or vary
       any of the conditions set forth in Clause 4.2 provided that each of the
       Rating Agencies has confirmed in writing (whether or not such
       confirmation is addressed to the Mortgages Trustee) that the relevant
       waiver or variation will not adversely affect the then current ratings
       of the existing Notes of any Issuer or that it approves the relevant
       waiver or variation.

4.3    No Further Assignment: The Seller and the Mortgages Trustee agree that
       the Seller may not sell and assign any New Mortgage Portfolio after the
       Step-up Date in respect of the Notes of any Issuer if the option to
       redeem any such Notes on the related Step-up Date pursuant to Condition
       5(D) of those Notes is not exercised.

4.4    Closing and Conditions Precedent: A meeting shall take place on the
       date of the sale and assignment of the relevant New Mortgage Portfolio
       at the offices of the Seller or at such other office as may be agreed
       by the parties at which the Seller shall deliver to the Security
       Trustee or its representative the following documents:

       (a)    a certificate of solvency in relation to the Seller dated the
              relevant Assignment Date (in the form of the agreed draft) duly
              executed by the Seller;

       (b)    an assignment of the Insurance Contracts to the extent that such
              Insurance Contracts relate to the New Mortgage Portfolio in the
              form set out in Schedule 3 (Assignment of Insurance Contracts)
              duly executed by the Seller;

       (c)    a certificate of a duly authorised officer of the Seller
              attaching a copy of the board minutes referred to in paragraph
              (e) of Clause 3.1 (Initial Closing and Conditions Precedent) and
              confirming that the resolutions referred to therein are in full
              force and effect and have not been amended or rescinded as at
              the date of the certificate; and

       (d)    a Scottish Trust Deed in respect of the Scottish Mortgage Loans
              in the New Mortgage Portfolio (if any) and their Related
              Security, in the form set out in Schedule 11 and with the
              annexure thereto duly completed, duly executed by the Seller.

4.5    Purchase Price: Subject to fulfilment of the conditions referred to in
       Clauses 4.2 (Conditions to Effecting an Assignment of New Mortgage
       Loans), 4.3 (No Further Assignment) and 4.4 (Closing and Conditions
       Precedent), the Mortgages Trustee shall, if and to the extent that the
       same is payable, pay the Purchase Price for the New Mortgage Portfolio
       to the Seller, in the manner that the Seller directs, for value, as
       follows:

       (a)    (if any Initial Purchase Price is payable in respect of the New
              Mortgage Portfolio which shall only be the case if an Initial
              Contribution is paid by Funding to the Mortgages Trustee on such
              date pursuant to the terms of the Mortgages Trust Deed) the
              Initial Purchase Price for the New Mortgage Portfolio shall be
              paid by the Mortgages Trustee to the Seller on the relevant
              Assignment Date (which Initial Purchase Price shall be paid by
              the Mortgages Trustee from funds received by the Mortgages
              Trustee from Funding on such date in respect of Funding's
              Initial

                                      11
<PAGE>

              Contribution for the Funding Share of the New Trust Property
              pursuant to the Mortgages Trust Deed), PROVIDED THAT if on any
              date the Seller is obliged to repurchase any Mortgage Loan or
              Mortgage Loans pursuant to Clause 8.4 (Repurchase), 8.5
              (Purchase of Product Switches, Further Advances and purchases
              relating to Personal Secured Loans) or 8.6 (Repurchase of Fixed
              Rate Mortgage Loans), and on such date the Seller sells and
              assigns New Mortgage Loans and their Related Security to the
              Mortgages Trustee, the Seller is entitled to set-off against the
              repurchase price payable by it on such repurchase as set forth
              under Clause 8.7 (Completion of Repurchase) the amount of any
              Initial Purchase Price payable for any such New Mortgage Loans
              and shall instead pay (or be paid) such net amount; and

       (b)    subject to and in accordance with the Mortgages Trustee Revenue
              Priority of Payments, an amount of Deferred Purchase Price in
              respect of the Mortgage Portfolio shall be paid by the Mortgages
              Trustee to the Seller on each Distribution Date but only from
              and to the extent (if any) of any Relevant Distribution (as
              defined under paragraph (b) of Clause 4.2 (Consideration
              provided by Funding) of the Mortgages Trust Deed) available for
              payment on such date and in an amount equal to the Deferred
              Contribution for the Funding Share of the Trust Property paid by
              Funding to the Mortgages Trustee on such date or in respect of
              which the payment of such Deferred Contribution is otherwise
              satisfied on such date in accordance with the Mortgages Trust
              Deed.

4.6    Effect of Payment of Initial Purchase Price or Fulfilment of
       Conditions: The parties hereto acknowledge that the effect of either
       the payment to the Seller by the Mortgages Trustee of the Initial
       Purchase Price on the relevant Assignment Date or, if no Initial
       Purchase Price is payable on such date, the confirmation from the
       Seller of the fulfilment of the conditions referred to in Clauses 4.2
       (Conditions to Effecting an Assignment of New Mortgage Loans) and the
       delivery to the Security Trustee of the documents referred to in Clause
       4.4 (Closing and Conditions Precedent) on such date, will be the
       assignment and transfer to the Mortgages Trustee of the beneficial
       ownership of, and all of the Seller's beneficial right, title, interest
       and benefit in and to, the New Mortgage Portfolio subject to the terms
       and provisions of the Mortgages Trust Deed. Upon payment to the Seller
       by the Mortgages Trustee of the Initial Purchase Price on the relevant
       Assignment Date or, if no Initial Purchase Price is payable on such
       date, upon receipt of confirmation from the Seller of the fulfilment of
       the conditions referred to in Clauses 4.2 (Conditions to Effecting an
       Assignment of New Mortgage Loans), the fact that any of the conditions
       referred to in Clause 4.2 may not have been satisfied or waived, or any
       of the conditions precedent set out in Clause 4.4 (Closing and
       Conditions Precedent) have not been delivered or waived, shall not
       prevent the sale and assignment of the New Mortgage Portfolio to the
       Mortgages Trustee on the relevant Assignment Date (or prevent any
       Scottish Trust Deed from taking effect) and any unsatisfied conditions
       precedent shall deemed to have been waived. The foregoing is without
       prejudice to all of the rights and remedies of the Mortgages Trustee
       against the Seller, including without limitation, all claims for breach
       of Representation and Warranty. Each such assignment and transfer will
       be perfected upon the occurrence of any of the events set forth in
       Clause 6 (Perfection of the Assignment) and the transfer and
       assignation to the Mortgages Trustee of legal title to such New
       Mortgage Portfolio in accordance with Clause 6 (Perfection of the
       Assignment).

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<PAGE>

4.7    Documents: The Seller undertakes that from the relevant Assignment Date
       until the perfection of the assignment in accordance with Clause 6.1
       (Perfection Events) and the delivery of the Title Deeds in accordance
       with Clause 6.2 (Perfection), the Seller shall hold the deeds and
       documents constituting the Title Deeds and Mortgage Loan Files and all
       other certificates, notices, policies, endorsements and other matters
       necessary to establish title thereto relating to the Mortgage Portfolio
       that are in its possession or under its control or held to its order to
       the order of the Mortgages Trustee or as the Mortgages Trustee shall
       direct.

4.8    Early Repayment Charges: The Mortgages Trustee hereby agrees to pay to
       the Seller as part of the Deferred Purchase Price any and all Early
       Repayment Charge Receipts received by the Mortgages Trustee in respect
       of the Mortgage Loans included in the New Mortgage Portfolio PROVIDED
       THAT, if any Mortgage Loans in respect of which Early Repayment Charges
       are payable are the subject of a trust pursuant to Clause 5.1 (Trust in
       favour of Mortgages Trustee), the Seller, the Mortgages Trustee,
       Funding and the Security Trustee agree that the benefit of any Early
       Repayment Charges payable under such Mortgage Loan shall, on the date
       of payment to the Seller of the related Early Repayment Charge
       Receipts, be released from such trust.

4.9    Insurance: The Seller shall as soon as reasonably practical after
       completion of the sale and assignment of each New Mortgage Portfolio
       procure that the respective interests of the Mortgages Trustee, Funding
       and the Security Trustee are noted by the relevant insurers in relation
       to each Insurance Contract.

4.10   Mortgage Portfolio: Prior to the earlier to occur of:

       (a)    a Trigger Event; and

       (b)    (i)    if Funding does not enter into a New Intercompany Loan
                     Agreement, the Payment Date in January 2008; or

              (ii)   if Funding does enter into New Intercompany Loan
                     Agreements, the latest Payment Date specified by Funding
                     by notice in writing to the Seller and the Mortgages
                     Trustee as applying in relation to this covenant,

              the Seller undertakes to use all reasonable efforts to offer to
              sell and assign, in accordance with the provisions of this
              Clause 4 (Sale and Purchase of New Mortgage Portfolios), to the
              Mortgages Trustee and the Mortgages Trustee undertakes to use
              all reasonable endeavours to acquire from the Seller and to hold
              pursuant to the terms of the Mortgages Trust Deed, sufficient
              New Mortgage Loans and their Related Security so that the
              Overcollateralisation Test is not breached on three consecutive
              Distribution Dates PROVIDED THAT the Seller shall not be obliged
              to sell and assign to the Mortgages Trustee, and the Mortgages
              Trustee shall not be obliged to acquire, New Mortgage Loans and
              their Related Security if in the opinion of the Seller the sale
              and assignment to the Mortgages Trustee of New Mortgage Loans
              and their Related Security would adversely affect the business
              of the Seller.

                                      13
<PAGE>

       For the purposes of this Clause 4.10, the "Overcollateralisation Test"
       shall be calculated on each Distribution Date and shall be breached on
       any Distribution Date where the aggregate Current Balance of Mortgage
       Loans in the Mortgage Portfolio on such Distribution Date is less than
       an amount equal to the product of 1.05 and the Principal Amount
       Outstanding of all Notes of all Issuers at such Distribution Date, and
       for this purpose, where such Notes outstanding are Controlled
       Amortisation Notes, the Principal Amount Outstanding of such Notes will
       be calculated on a straight-line basis by applying the appropriate CPR
       to such Notes on a monthly, rather than a quarterly basis.

5.     Trust of Monies

5.1    Trust in favour of Mortgages Trustee: Notwithstanding the assignment
       and transfer effected by this Agreement (or by any Scottish Trust Deed
       made pursuant hereto) if at, or at any other time after, the Initial
       Closing Date or, as the case may be in respect of any New Mortgage
       Portfolio, the relevant Assignment Date (but prior to any repurchase in
       accordance with Clause 8.5 (Purchase of Product Switches, Further
       Advances and purchases relating to Personal Secured Loans)) the Seller
       holds, or there is held to its order, or it receives, or there is
       received to its order any property, interest, right or benefit and/or
       the proceeds thereof hereby agreed to be sold to the Mortgages Trustee,
       the Seller undertakes with the Mortgages Trustee, Funding and the
       Security Trustee that it will hold such property, interest, right or
       benefit and/or the proceeds thereof upon trust for the Mortgages
       Trustee (pursuant, in the case of any property, interest, right or
       benefit and/or the proceeds thereof relating to a Scottish Mortgage
       Loan or its Related Security, to the relevant Scottish Trust Deed)
       subject at all times to the Mortgages Trust. In addition, if for any
       reason the assignment and transfer of the Initial Mortgage Portfolio,
       or any New Mortgage Portfolio (or any part thereof), or any property,
       interest, right or benefit therein or any of the proceeds thereof (each
       a "relevant asset"), is held to be ineffective or unenforceable against
       any Borrower, the Seller undertakes with the Mortgages Trustee, Funding
       and the Security Trustee and hereby declares that it will hold such
       relevant asset upon trust for the Mortgages Trustee. The Mortgages
       Trustee agrees that it will hold its beneficial interest in such
       relevant asset subject at all times to the Mortgages Trust.

5.2    Trust in favour of Seller: If at, or any time after, the Initial
       Closing Date or, as the case may be in respect of any New Mortgage
       Portfolio, the relevant Assignment Date, the Mortgages Trustee holds,
       or there is held to its order, or it receives, or there is received to
       its order, any property, interest, right or benefit relating to:

       (a)    any Mortgage Loan or Mortgage Loans under a Mortgage Account and
              its Related Security repurchased by the Seller pursuant to
              Clause 8 (Warranties and Repurchase by the Seller); or

       (b)    (without prejudice to Clause 10 (Consequences of Breach)) any
              Early Repayment Charges payable by a Borrower in respect of any
              Mortgage Loan in the Mortgages Trust;

       and/or the proceeds thereof, the Mortgages Trustee undertakes with the
       Seller that it will remit, assign or transfer the same to the Seller,
       as the case may require, and until it does so or

                                      14
<PAGE>

       to the extent that the Mortgages Trustee is unable to effect such
       remittance, assignment or transfer, the Mortgages Trustee undertakes to
       hold such property, interest, right or benefit and/or the proceeds
       thereof upon trust for the Seller as the sole beneficial owner thereof
       or as the Seller may direct provided that the Mortgages Trustee shall
       not be in breach of its obligations under this Clause 5 if, having
       received any such moneys and paid them to third parties in error, it
       pays (at the direction of the Beneficiaries) to the Seller an amount
       equal to the moneys so paid in error in accordance with the
       Administration Agreement. In addition, if the Seller is required or
       elects to repurchase any Mortgage Loan and its Related Security
       pursuant to Clauses 8.4 (Repurchase), 8.5 (Purchase of Product
       Switches, Further Advances and purchases relating to Personal Secured
       Loans) or 8.6 (Repurchase of Fixed Rate Mortgage Loans) and such
       Mortgage Loan or its Related Security, or any part thereof, or any
       property, interest, right or benefit therein or any of the proceeds
       thereof (each, a "relevant asset"), is held by the Seller subject to a
       trust pursuant to Clause 5.1 (Trust in favour of Mortgages Trustee),
       then the Seller, the Mortgages Trustee, Funding and the Security
       Trustee agree that such relevant asset shall be released from the trust
       constituted pursuant to Clause 5.1 (Trust in favour of Mortgages
       Trustee) on the date that such relevant asset would otherwise have been
       repurchased or re-transferred pursuant to Clause 8.7 (Completion of
       Repurchase).

6.     Perfection of the Assignment

6.1    Perfection Events: The execution of transfers and assignations of the
       Mortgages to the Mortgages Trustee and the notifications to Borrowers
       notifying such Borrowers of the assignment or assignation of their
       Mortgage Loans and Related Security to the Mortgages Trustee shall be
       completed within 20 business days of receipt of a written request in
       accordance with Clause 6.2 (Perfection) upon the occurrence of any of
       the following events:

       (a)    the valid service of an Intercompany Loan Enforcement Notice or
              a Note Enforcement Notice, provided that the perfection of an
              assignment of the Mortgage Portfolio shall not be required if
              the sole reason for the service of any Note Enforcement Notice
              is a default by a Currency Swap Provider of any Issuer; or

       (b)    unless otherwise agreed by the Rating Agencies, the termination
              of the Seller's role as Administrator under the Administration
              Agreement and failure of any substitute administrator to assume
              the duties of the Administrator; or

       (c)    the Seller being required by an order of a court of competent
              jurisdiction, or by a change in law occurring after the Initial
              Closing Date, or by a regulatory authority of which the Seller
              is a member or with whose instructions it is customary that the
              Seller comply, to perfect the transfer of legal title to the
              Mortgage Loans and the Related Security in favour of the
              Mortgages Trustee; or

       (d)    the security under the Funding Deed of Charge or any material
              part of such security being in jeopardy and it being necessary
              to perfect the transfer of legal title to the Mortgage Loans and
              their Related Security in favour of the Mortgages Trustee in
              order to reduce such jeopardy materially; or

                                      15
<PAGE>

       (e)    the occurrence of an Insolvency Event in relation to the Seller;
              or

       (f)    notice in writing from the Seller to the Mortgages Trustee and
              Funding (with a copy to the Security Trustee) requesting such
              transfer.

6.2    Perfection: If an event set forth in any of paragraphs (a) to (f) of
       Clause 6.1 (Perfection Events) occurs and either the Mortgages Trustee
       or Funding (with the consent of the Security Trustee) or the Security
       Trustee so requests in writing, the Seller shall perfect the
       assignments as contemplated by and in accordance with this Clause 6
       (Perfection of the Assignment) in relation to all Mortgage Loans then
       in the Mortgage Portfolio and shall:

       (a)    deliver to the Mortgages Trustee all Title Deeds and (subject to
              receipt of up to date schedules) the transfers and assignations
              referred to in Clause 6.3 (Transfer Documents) duly executed by
              the Seller; and

       (b)    give formal notice of the transfers and assignations to the
              relevant Borrowers, insurers and other persons (all such notices
              being in such form or forms as may be required by the Mortgages
              Trustee or Funding (with the written consent of the Security
              Trustee) or the Security Trustee).

6.3    Transfer Documents: If an event set forth in any of paragraphs (a) to
       (f) of Clause 6.1 (Perfection Events) occurs, the transfers that the
       Seller is required to deliver are:

       (a)    transfers in the form set out in Part 1 of Schedule 2 (Form of
              Transfer (Registered Land - England and Wales)) of all the
              English Mortgages then in the Mortgage Portfolio secured (or
              intended to be secured) over English Properties which comprise
              registered land (including any English Property which is the
              subject of an application for first registration at the Land
              Registry);

       (b)    transfers in the form set out in Part 2 of Schedule 2 (Form of
              Transfer (Unregistered Land - England and Wales)) of all the
              English Mortgages then in the Mortgage Portfolio secured (or
              intended to be secured) over English Properties which comprise
              unregistered land (excluding any which is the subject of an
              application for first registration);

       (c)    assignations in the form set out in Part 3 of Schedule 2 (Form
              of Transfer (Land Register - Scotland)) of all the Scottish
              Mortgages then in the Mortgage Portfolio secured (or intended to
              be secured over Scottish Properties title to which is registered
              (or in the course of being registered) in the Land Register of
              Scotland;

       (d)    assignations in the form set out in Part 4 of Schedule 2 (Form
              of Transfer (Sasine Register - Scotland)) of all the Scottish
              Mortgages then in the Mortgage Portfolio secured (or intended to
              be secured) over Scottish Properties title to which is recorded
              (or in the course of being recorded) in the General Register of
              Sasines;

       (e)    transfers and assignations of the benefit of the Guarantees
              relating to any relevant Mortgage Loan in the form of the
              Assignment of Guarantees set out in Part 1 of Schedule 5
              (Assignment of Guarantees) in relation to Guarantees governed by

                                      16
<PAGE>

              English law and in the form of the Assignation of Guarantees set
              out in Part 2 of Schedule 5 (Assignation of Guarantees) in
              relation to Guarantees governed by Scots law; and

       (f)    transfers and assignations of the Related Security or any other
              property or security sold to the Mortgages Trustee under this
              Agreement in such form as the Mortgages Trustee or the Security
              Trustee may reasonably require.

       The Mortgages Trustee or Funding (with the consent of the Security
       Trustee) or the Security Trustee may require that the form of any
       transfer or assignation referred to in this Clause 6.3 be changed at
       any time to reflect changes in law or relevant registry practice or
       requirements.

6.4    Prior to Perfection: Prior to perfection pursuant to Clause 6.1
       (Perfection Events) and subject to Clause 7.3 (Seller Ratings) and
       Clauses 3.6 (Insurance) and 4.9 (Insurance) neither the Mortgages
       Trustee nor Funding nor the Security Trustee will:

       (a)    register or record itself at, or submit or require the
              submission of any notice, form, request or application to, or
              pay any fee for the registration or recording of, or the noting
              of any interest at, the Land Charges Department of H.M. Land
              Registry or in the Registers of Scotland or at H.M. Land
              Registry in relation to the Mortgages Trustee's and/or Funding's
              interests in the Mortgage Portfolio;

       (b)    give or require the giving of any notice to any Borrower,
              insurer or any other person of the assignment or assignation of
              that Borrower's Mortgage Loan and its Related Security or such
              other property as may be included in the Mortgage Portfolio to
              the Mortgages Trustee or the charge by Funding of Funding's
              beneficial interest in that Borrower's Mortgage Loan and its
              Related Security or such property to the Security Trustee
              pursuant to the Funding Deed of Charge; or

       (c)    send or require to be sent to any solicitor who has acted on
              behalf of the Seller in respect of any Mortgage with respect to
              which the Seller has not received a complete set of the Title
              Deeds a letter or other communication requiring such solicitor
              to hold such documents to the order of the Mortgages Trustee or
              the Security Trustee (as the case may be).

6.5    Further Assurance: The Seller shall, subject to the other provisions of
       this Clause 6 (Perfection of the Assignment), upon request do all such
       other deeds, assurances, agreements, instruments, acts and things as
       the Mortgages Trustee, Funding or the Security Trustee may require in
       order to give effect to the terms of this Agreement and the assignments
       and assignations contemplated herein.

7.     Undertakings

7.1    Administration: The Mortgages Trustee and Funding undertake that they
       will at all times (or will direct the Administrator at all times to)
       administer and enforce (and exercise their powers and rights and
       perform their obligations under) the Mortgage Loans comprised in the
       Mortgage Portfolio and their Related Security in accordance with the
       Administration Procedures (for so long as these exist and thereafter in
       accordance with such policies as would

                                      17
<PAGE>

       be applied by a reasonable, prudent mortgage lender in the conduct of
       its business).

7.2    Reimbursement of Borrower: The Seller hereby undertakes with the
       Mortgages Trustee and Funding that, in the event that any Borrower
       establishes that it has at any time prior to the Initial Closing Date
       or, as the case may be, the relevant Assignment Date, paid to the
       Seller any amounts in excess of sums due to the Seller as at the date
       of payment under the Mortgage Conditions applicable to that Mortgage
       Loan (other than any Overpayment made by a Borrower under Flexible
       Mortgage Loan) the Seller will reimburse the Borrower for such
       overpayment together with any interest, cost or other expense
       associated therewith. The Seller further agrees to hold the Mortgages
       Trustee and Funding harmless against any such claims and to indemnify
       the Mortgages Trustee and Funding on an after Tax basis in relation to
       any costs, expense, loss or other claim which may arise in connection
       therewith. Any payment made by the Seller to the Mortgages Trustee and
       Funding in discharge of the foregoing indemnity shall be regarded as a
       rebate of part of the Purchase Price of the relevant Mortgage Loan.

7.3    Seller Ratings: The Seller hereby undertakes with the Mortgages
       Trustee, Funding and the Security Trustee that if the long term
       unsecured, unsubordinated and unguaranteed debt obligations of the
       Seller cease to be assigned a long term credit rating:

       (a)    from Moody's of no lower than Baal or from Fitch of no lower
              than BBB , the Seller (unless Moody's or Fitch, as applicable,
              confirms that the then current ratings of the Notes will not be
              adversely affected) will deliver to the Mortgages Trustee,
              Funding, the Security Trustee (upon request) and the Rating
              Agencies details of the names and addresses of the Borrowers
              with Mortgage Loans then in the Mortgage Portfolio on computer
              diskette and a draft letter of notice to such Borrowers of the
              sale and assignment of those Mortgage Loans and the Related
              Security to the Mortgages Trustee in the form set out in
              Schedule 8 (Form of Notification to Borrowers); and

       (b)    from S&P of no lower than BBB-, from Moody's of no lower than
              Baa3 or from Fitch of no lower than BBB-, the Seller (unless
              S&P, Moody's and Fitch, as applicable, confirms that the
              then-current ratings of the Notes will not be adversely
              affected) shall within 10 Business Days of such cessation give
              notice of the sale and assignment effected by this Agreement
              (and, in the case of any Scottish Mortgage Loan, the making of
              the relevant Scottish Trust Deed) to each Borrower with a
              Mortgage Loan then in the Mortgage Portfolio in the form set out
              in Schedule 8 (Form of Notification to Borrowers) (and if the
              Seller fails to give such notice, then the Mortgages Trustee
              shall give such notice as the Seller's attorney under the power
              of attorney set out in Schedule 10 (Power of Attorney in favour
              of the Mortgages Trustee, Funding and the Security Trustee)),

       (c)    provided that, in respect of Clause 7.3(a), should the Seller be
              required as described in such Clause to provide the details of
              the names and addresses of Borrowers to the Mortgages Trustee
              and Funding, each of the Mortgages Trustee and Funding (to the
              extent, in respect of Funding, that such information is to be
              delivered to Funding other than at its United Kingdom branch
              office) hereby agrees to appoint an agent that is located in the
              United Kingdom and which maintains all appropriate

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<PAGE>

              registrations, notifications, licences and authorities (if any)
              required under the Data Protection Act 1998 to receive and
              maintain such information on its behalf, and under no
              circumstances shall either the Mortgages Trustee or Funding
              accept such information at its Jersey registered office or
              otherwise in Jersey (unless Jersey is declared an "approved
              state" by the European Commission, in which case such data may
              be delivered to the Mortgages Trustee and/or Funding at their
              respective Jersey offices).

7.4    Pending Perfection: The Seller undertakes to the Mortgages Trustee,
       Funding and the Security Trustee that, pending perfection under Clause
       6 (Perfection of the Assignment), the Seller:

       (a)    shall promptly notify the Mortgages Trustee, Funding and (upon
              request) the Security Trustee if it receives written notice of
              any litigation or claim calling into question in any material
              way the Seller's or the Mortgages Trustee's title to any
              Mortgage Loan comprised in the Mortgage Portfolio or its Related
              Security or if it becomes aware of any material breach of any of
              the Representations and Warranties or other obligations under
              this Agreement; and

       (b)    shall, if reasonably required so to do by the Mortgages Trustee,
              participate or join in and lend its name to and take such other
              steps as may reasonably be required by the Mortgages Trustee in
              relation to, any legal proceedings in respect of the Mortgage
              Loans and the Related Security to the extent necessary to
              protect, preserve and enforce the Seller's or the Mortgages
              Trustee's or Funding's or the Security Trustee's title to or
              interest in any Mortgage Loan or its Related Security provided
              that the Seller is reimbursed, subject to and in accordance with
              the relevant priority of payments under and in accordance with
              the Transaction Documents, by the Mortgages Trustee or Funding
              for the reasonable legal expenses and costs of such proceedings.

7.5    Responsibility of Seller: The Seller hereby further undertakes with the
       Mortgages Trustee and Funding that it is and at all times shall remain
       solely responsible for any Product Switches (other than a Re-Fixed
       Mortgage Loan), for funding any Cash Re-Draws made by a Borrower under
       a Flexible Mortgage Loan, for funding any request for any Further
       Advance made by a Borrower, for funding any request for any Further
       Draw under a Personal Secured Loan and for paying to the Mortgages
       Trustee from time to time an amount equal to the Unpaid Interest
       associated with any Non-Cash Re-Draw made by a Borrower under a
       Flexible Mortgage Loan. For the avoidance of doubt, neither the
       Mortgages Trustee nor Funding will be required to advance moneys to the
       Seller or to a Borrower in order to fund such a Re-Draw or Further
       Advance or Further Draw in any circumstances whatsoever.

7.6    Product Switches and Further Advances:

       (a)    Neither the Mortgages Trustee nor Funding shall (and each shall
              procure that its agents do not):

              (i)    issue to any Borrower any offer of a Further Advance; or

                                      19
<PAGE>

              (ii)   issue to any Borrower any offer of a Product Switch
                     (other than a Re-Fixed Mortgage Loan),

              without first having given notice in writing to the Seller
              seeking confirmation from the Seller that the Seller will
              repurchase the Mortgage Loan to which such offer relates from
              the Mortgages Trustee in accordance with the terms of this
              Agreement.

       (b)    If the Seller gives such confirmation to the Mortgages Trustee,
              the Mortgages Trustee (or its agents, including the
              Administrator, on its behalf) shall then issue to that Borrower
              the relevant offer referred to in paragraph (a) above and shall
              (in the case of any offer referred to in paragraph (a) above)
              then notify the Seller in writing as soon as the Mortgages
              Trustee has accepted the mortgage documentation completed by the
              Borrower in relation to such offer.

       (c)    The Mortgages Trustee shall not itself make any Further Advance
              or Product Switch (other than in relation to a Re-Fixed Mortgage
              Loan).

7.7    Standard Variable Rate: Subject to the provisions of Clause 7.9, the
       Seller covenants with and undertakes to the Mortgages Trustee, Funding
       and the Security Trustee that, where the Administrator determines on
       any date that there will be a Shortfall during the next succeeding
       Interest Period and notifies the Seller to such effect, the Seller
       shall take all steps which are necessary, including publishing any
       notice which is required in accordance with the Mortgage Conditions, to
       set the Standard Variable Rate and such other discretionary rates and
       margins applicable to the Mortgage Loans at such levels as may be
       notified to the Seller by the Mortgages Trustee, Funding or the
       Security Trustee (which rates shall be the same rates as previously
       notified to the Mortgages Trustee, Funding and the Security Trustee in
       accordance with Clause 4.3(b) of the Administration Agreement) as being
       the rates required in order for no Shortfall to arise.

7.8    Security Powers of Attorney: The Seller shall grant security powers of
       attorney to the Mortgages Trustee, Funding and the Security Trustee in
       the form set out in Schedule 10 (Power of Attorney in favour of the
       Mortgages Trustee, Funding and the Security Trustee) allowing any of
       the Mortgages Trustee, Funding and the Security Trustee and their
       delegates from time to time (inter alia) to set the Standard Variable
       Rate, such other discretionary rates and margins applicable to the
       Mortgage Loans and (save for the Security Trustee) the rate of (and
       terms relating to) the Existing Borrowers' Re-Fix Rate should the
       Seller fail to do so in accordance with its obligations under this
       Agreement, but only to the extent that such rates have been previously
       notified to the Mortgages Trustee, Funding and the Security Trustee in
       accordance with Clause 4.3(b) of the Administration Agreement. Nothing
       in this Clause 7.8 shall prevent the Seller (or any of its attorneys
       from time to time) from setting a higher Northern Rock Standard
       Variable Rate or higher rates for other discretionary rates and margins
       (or in the case of the Existing Borrowers' Re-Fix Rate setting a higher
       rate and imposing terms more advantageous to the Mortgages Trustee)
       than those to be set or required by the Mortgages Trustee, Funding and
       (other than in respect to an Existing Borrower's Re-Fix Rate) the
       Security Trustee.

7.9    Shortfall: Unless any of the Mortgages Trustee, Funding or the Security
       Trustee needs to do

                                      20
<PAGE>

       so to avoid a Shortfall, none of the Mortgages Trustee, Funding or the
       Security Trustee shall set the Standard Variable Rate and other
       discretionary rates and margins for Mortgage Loans which are in the
       Mortgages Trust (disregarding any discounts or additions to it) at
       rates higher than the then equivalent rates for mortgage loans which
       are not in the Mortgages Trust.

7.10   Forwarding of Notice: The Security Trustee undertakes, upon receipt of
       any notice as specified in Clause 8.5(c) of the Mortgages Trust Deed,
       to forward such notice to the Mortgages Trustee, Funding, the Seller
       and the Cash Manager in the manner set forth in Clause 20 within three
       (3) London Business Days of receipt thereof. The Security Trustee shall
       have no other obligation other than the foregoing following receipt of
       such notice.

8.     Warranties and Repurchase by the Seller

8.1    Representations and Warranties: The Seller makes the Representations
       and Warranties set out in Schedule 1 (Representations and Warranties)
       to each of the Mortgages Trustee, Funding and the Security Trustee:

       (a)    in respect of each Mortgage Loan and its Related Security in the
              Initial Mortgage Portfolio as at the date hereof and on the
              Initial Closing Date;

       (b)    in relation to each New Mortgage Loan (other than Personal
              Secured Loans if specifically excluded from a Representation and
              Warranty) and its Related Security in a New Mortgage Portfolio,
              on the date of the service of the relevant New Mortgage
              Portfolio Notice and on the relevant Assignment Date;

       (c)    in the form set out in Part 2 of Schedule 1 (Representations and
              Warranties) in relation to the matters and at the dates set out
              therein; and

       (d)    in the form set out in Part 3 of Schedule 1 (Representations and
              Warranties) in relation to the matters and at the dates set out
              therein.

8.2    Reliance: The Seller acknowledges that the Representations and
       Warranties are made with a view to inducing the Mortgages Trustee,
       Funding and the Security Trustee either to enter into this Agreement
       and the other Transaction Documents to which each is a party or to
       agree to purchase the New Mortgage Loans and their Related Security
       comprised in each New Mortgage Portfolio, and that each of the
       Mortgages Trustee, Funding and the Security Trustee has entered into
       this Agreement and the other Transaction Documents to which it is a
       party in reliance upon the Representations and Warranties
       notwithstanding any information possessed or discoverable by the
       Mortgages Trustee, Funding and/or the Security Trustee. The Mortgages
       Trustee, Funding and the Security Trustee acknowledge that they have
       not entered into this Agreement in reliance upon any representation,
       warranty or undertaking other than those set out in this Agreement or
       upon any other enquiry, investigation or search whatsoever.

8.3    Remedies: The Mortgages Trustee's, Funding's and the Security Trustee's
       sole remedy in respect of a breach of any of the Representations and
       Warranties shall be to take action under this Clause 8 (Warranties and
       Repurchase by the Seller) or under Clause 8.4 (Adjustments to Trust
       Property) of the Mortgages Trust Deed. Furthermore, in respect of any
       actual or

                                      21
<PAGE>

       alleged breach of Clause 8.1 (Representations and Warranties), the
       Mortgages Trustee, Funding or the Security Trustee shall, as
       applicable:

       (a)    notify the Seller as soon as reasonably practicable following
              any claim or intimation of claim by any person of or arising
              from such actual or alleged breach and thereafter keep the
              Seller informed in relation to such claim or intimation;

       (b)    not settle or compromise any such claim made or intimated or
              otherwise do anything which may be prejudicial to the position
              of the Seller in relation thereto having regard to this
              Agreement, except pursuant to the written directions of the
              Seller or with the Seller's prior written approval, such
              directions and approval not to be unreasonably withheld; and

       (c)    comply with the Seller's reasonable directions as to answering,
              disputing, defending, compromising, settling, or otherwise in
              relation to the claim made or initiated (including without
              limitation the instruction of particular legal advisers), and if
              and to the extent required by the Seller, do such things as the
              Seller may reasonably require to enable and authorise the Seller
              or persons nominated by the Seller to answer, dispute, defend,
              compromise, settle or otherwise deal with any such claim or
              intimated claim, or mitigate loss or potential loss on behalf of
              the Mortgages Trustee, subject in each case to the Seller
              indemnifying the Mortgages Trustee, Funding and the Security
              Trustee against the consequences of complying with the Seller's
              directions and requirements.

8.4    Repurchase: Subject to Clause 8.14 (Repurchase Not Possible), in the
       event of a material breach of any of the Representations or Warranties
       in respect of any Mortgage Loan and/or its Related Security as at the
       Initial Closing Date or, as the case may be, the relevant Assignment
       Date, which could have a material adverse effect on the Mortgage Loan
       and/or its Related Security (having regard to, among other things,
       whether a loss is likely to be incurred in respect of the Mortgage Loan
       to which the breach relates after taking account of the likelihood of
       recoverability or otherwise of any sums under any applicable insurance
       policies), and further provided that:

       (a)    the Mortgages Trustee, Funding or the Security Trustee has given
              the Seller not less than 28 days' notice in writing;

       (b)    the Mortgages Trustee has obtained the consent of the Security
              Trustee; and

       (c)    such breach, where capable of remedy, is not remedied to the
              satisfaction of Funding and the Security Trustee within the 28
              day period referred to in (a) (or such longer period as Funding
              and the Security Trustee may direct the Mortgages Trustee),

       then at Funding's (with the consent of the Security Trustee) or the
       Security Trustee's direction, the Mortgages Trustee may serve upon the
       Seller a notice in the form of the Loan Repurchase Notice whereupon the
       Seller will be required to repurchase (i) the relevant Mortgage Loan
       and its Related Security, (ii) any other Mortgage Loan secured or
       intended to be secured by that Related Security or any part of it and
       (iii) any other Mortgage Loan secured on the same

                                      22
<PAGE>

       Mortgaged Property as the relevant Mortgage Loan to which the breach
       relates in accordance with Clause 8.7 (Completion of Repurchase),
       provided, however, that the Security Trustee shall have no duty to
       provide any such notice to the Seller or consider granting its consent
       pursuant to this Clause 8.4 unless the Security Trustee has been
       notified by a party to a Transaction Document of such material breach
       of such Representation or Warranty which, in the opinion of such party
       (as communicated to the Security Trustee), could have a material
       adverse effect on the related Mortgage Loan and/or its Related
       Security, taking into account the considerations provided in this
       Clause 8.4, and further provided that prior to receipt of such notice
       the Security Trustee shall be entitled to assume that no such material
       breach has occurred.

8.5    Purchase of Product Switches, Further Advances and purchases relating
       to Personal Secured Loans: In the event of there being at any date in
       respect of any Mortgage Loan assigned to the Mortgages Trustee
       hereunder a PS/FA/PSL Event (other than a Mortgage Loan becoming a
       Re-Fixed Mortgage Loan, such PS/FA/PSL Event being dealt with under
       Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans)), the Seller may
       at any time serve notice in the form of the Loan Repurchase Notice on
       the Mortgages Trustee whereupon the Mortgages Trustee will be required
       to sell and to transfer to the Seller in accordance with Clause 8.7
       (Completion of Repurchase):

       (a)    any Mortgage Loan subject to a PS/FA/PSL Event, together with
              its Related Security;

       (b)    any other Mortgage Loan secured or intended to be secured by the
              Related Security referred to in (a) above or any part of it; and

       (c)    any other Mortgage Loan secured on the same Mortgaged Property
              that secures the Mortgage Loan subject to a PS/FA/PSL Event,
              together with its Related Security,

       each such Mortgage Loan to be identified in the Loan Repurchase Notice
       (any such Mortgage Loan or Mortgage Loans, a "PS/FA/PSL Mortgage
       Loan"), free from the Mortgages Trust and any right or interest that
       the Security Trustee may have in such PS/FA/PSL Mortgage Loan and its
       Related Security under the Funding Deed of Charge. Any PS/FA/PSL
       Mortgage Loan purchased by the Seller shall be released from the
       Mortgages Trust and shall no longer constitute Trust Property and shall
       be released from any right or interest that the Security Trustee may
       have had in such Mortgage Loan and its Related Security under the
       Funding Deed of Charge prior to such repurchase.

8.6    Repurchase of Fixed Rate Mortgage Loans

       (a)    Where a Mortgage Loan bears interest at a fixed rate for a
              certain period (the "initial fixed rate period"), after the
              expiry of which the Borrower is entitled to apply for a new
              fixed rate (whether or not subject to certain conditions), the
              Mortgages Trustee may by notice in writing to the Seller given
              at any time not more than 60 days before the expiry of that
              initial fixed rate period (which for the avoidance of doubt
              shall exclude any period of extension to which the relevant
              Borrower is entitled), offer to re-sell to the Seller that
              Mortgage Loan together with its Related Security if that
              Mortgage Loan becomes a Re-Fixed Mortgage Loan during the
              3-month period immediately following the end of that initial
              fixed rate period. The offer will be in

                                      23
<PAGE>

              writing in the form set out in Schedule 9 (Offer under Clause
              8.6 ) and will be signed by or on behalf of the Mortgages
              Trustee.

       (b)    The Seller may accept the offer made in accordance with
              paragraph (a) above on the date on which that Mortgage Loan
              becomes a Re-Fixed Mortgage Loan during the 3-month period
              immediately following the end of the initial fixed rate period
              relating to it, only by payment to the Mortgages Trustee of the
              consideration payable for the repurchase of the relevant
              Mortgage Loan and its Related Security in accordance with Clause
              8.7 (Completion of Repurchase).

       (c)    The parties hereto acknowledge that the effect of the payment to
              the Mortgages Trustee by the Seller of the consideration for the
              repurchase of the relevant Mortgage Loan and its Related
              Security in accordance with paragraph (b) above will be the
              assignment and transfer to the Seller of the beneficial
              ownership of, and all of the Mortgages Trustee's beneficial
              right, title, interest and benefit in and to, that Mortgage
              Loan, and completion of the repurchase shall be effected by the
              parties in accordance with Clause 8.7 (Completion of
              Repurchase).

       (d)    The Seller hereby covenants and undertakes that if it does not
              accept the offer made by the Mortgages Trustee in accordance
              with paragraph (b) above, then whether or not the Mortgage Loan
              becomes a Re-Fixed Mortgage Loan, it will set the Existing
              Borrowers' Re-Fix Rate applicable for the 3-month period
              immediately after expiry of the initial fixed rate period
              relating to that Mortgage Loan at a rate not less than that (and
              on terms not less advantageous to the Mortgages Trustee or
              Funding than those) notified from time to time to the Seller by
              the Mortgages Trustee, Funding or the Administrator as being
              required by the Mortgages Trustee or Funding.

8.7    Completion of Repurchase: Completion of any repurchase or re-transfer
       or purchase or transfer, as applicable, shall take place:

       (a)    in the case of any repurchase or re-transfer pursuant to Clause
              8.4 (Repurchase) or any purchase or transfer pursuant to Clause
              8.5 (Purchase of Product Switches, Further Advances and
              purchases relating to Personal Secured Loans) on the first
              London Business Day immediately following expiry of a period of
              10 days following the date of the service upon the Seller of the
              relevant Loan Repurchase Notice or at the Seller's earlier
              election; or

       (b)    in the case of any repurchase or re-transfer pursuant to Clause
              8.6 (Repurchase of Fixed Rate Mortgage Loans), immediately upon
              the Mortgage Loan becoming a Re-Fixed Mortgage Loan,

       whereupon, the Seller shall pay to the Mortgages Trustee an amount
       equal to the Current Balance of such Mortgage Loan or Mortgage Loans
       and any Related Security and all Arrears of Interest and Accrued
       Interest relating thereto as at the date of completion of such
       repurchase. The provisions of Clause 8.8 (Transfers), Clause 8.9
       (Documentation) and Clause 8.16 (Scottish Trust) shall apply to any
       such repurchase or re-transfer.

                                      24
<PAGE>

8.8    Transfers: On the date of completion of any repurchase of a Mortgage
       Loan and its Related Security in accordance with this Clause 8
       (Warranties and Repurchase by the Seller), the Mortgages Trustee and
       Funding shall at the cost of the Seller execute and deliver or cause
       their respective duly authorised attorneys to execute and deliver to
       the Seller:

       (a)    if perfection of the assignment and assignation to the Mortgages
              Trustee has occurred in accordance with Clause 6 (Perfection of
              the Assignment):

              (i)    if the relevant Mortgage is over Registered Land, a
                     transfer of such Mortgage to the Seller in the form of
                     the Registered Transfer; or

              (ii)   if the relevant Mortgage is over Unregistered Land, a
                     transfer to the Seller in the form of the Unregistered
                     Transfer; or

              (iii)  if the relevant Mortgage is a Scottish Mortgage, an
                     assignation to the Seller in the applicable form of
                     Scottish Transfer;

       (b)    a re-assignment or retrocession of the rights of the Mortgages
              Trustee in respect of the relevant Related Security each in a
              form reasonably acceptable to the Seller (which shall, in the
              case of the re-assignment of the Insurance Contracts, be
              substantially in the form of the Assignment of Insurance
              Contracts set out in Schedule 3 (Assignment of Insurance
              Contracts); and

       (c)    a notification to the Administrator that all further sums due in
              respect of such repurchased Mortgage Loan are for the Seller's
              account.

8.9    Documentation: Upon any completion of the repurchase of any Mortgage
       Loan and its Related Security in accordance with this Clause 8
       (Warranties and Repurchase by the Seller) the Seller shall cease to be
       under any further obligation to hold any Title Deeds or other documents
       relating to such Mortgage Loan or Mortgage Loans and its Related
       Security to the order of the Mortgages Trustee and the Security Trustee
       and if the Mortgages Trustee or the Security Trustee then holds the
       Title Deeds, the Mortgages Trustee or, as the case may be, the Security
       Trustee shall forthwith return them to the Seller. Any such repurchase
       by the Seller of a Mortgage Loan or Mortgage Loans and its or their
       Related Security shall constitute a discharge and release of the Seller
       from any claims which the Mortgages Trustee and/or Funding or the
       Security Trustee may have against the Seller arising from the relevant
       Representation or Warranty in relation to that Mortgage Loan or
       Mortgage Loans and its or their Related Security only, but shall not
       affect any rights arising from a breach of any other express provision
       of this Agreement or any Representation or Warranty in relation to any
       other Mortgage Loan and other Related Security.

8.10   Notification: Forthwith after the Seller becomes aware of any event
       which may reasonably give rise to an obligation under Clause 8
       (Warranties and Repurchase by the Seller) to repurchase any Mortgage
       Loan it shall notify the Mortgages Trustee, Funding and the Security
       Trustee in writing thereof as soon as reasonably practicable.

8.11   No Prejudice: The terms of this Clause 8 (Warranties and Repurchase by
       the Seller) shall not prejudice the rights of the Mortgages Trustee or
       the Beneficiaries under the Mortgages

                                      25
<PAGE>

       Trust Deed.

8.12   Claims against Seller: If a breach of a Representation or Warranty
       arises in respect of any Mortgage Loan and (in either case) no
       repurchase requirement arises in respect of the Seller pursuant to this
       Clause 8 (Warranties and Repurchase by the Seller), neither the
       Mortgages Trustee, Funding nor the Security Trustee shall have any
       claim against the Seller in respect of, or in relation to, such breach
       of Representation or Warranty in relation to that Mortgage. For the
       avoidance of doubt, save as provided for in this Clause 8 (Warranties
       and Repurchase by the Seller), the Seller is not obliged to repurchase
       any other Mortgage Loan or its Related Security.

8.13   Assignment: If the Seller makes any payment to the Mortgages Trustee
       GIC Account (or as the Mortgages Trustee shall direct) in full
       satisfaction of any claim made by the Mortgages Trustee, Funding or the
       Security Trustee in relation to any Representation or Warranty set out
       in Schedule 1 (Representations and Warranties), the Mortgages Trustee,
       Funding or the Security Trustee, as the case may be, shall assign to
       the Seller such rights as they have against any third party which
       relate to such claim.

8.14   Repurchase Not Possible: If a Mortgage Loan has never existed, or has
       ceased to exist, such that it is not outstanding on the date on which
       it is due to be repurchased pursuant to this Clause 8 (Warranties and
       Repurchase by the Seller), the Seller shall not be obliged to
       repurchase the Mortgage Loan and the Related Security but shall instead
       indemnify the Mortgages Trustee, Funding and the Security Trustee
       against any loss suffered by reason of any Representation or Warranty
       relating to or otherwise affecting that Mortgage Loan being untrue or
       incorrect by reference to the facts subsisting at the date on which the
       relevant Representation or Warranty was given, provided that the amount
       of such indemnity shall not exceed the sum of (i) the Current Balance
       of the Mortgage Loan that would have been payable by the Borrower in
       respect of such Mortgage Loan on and after the relevant completion date
       for the repurchase in relation to such Mortgage Loan had the Mortgage
       Loan existed and complied with each of the Representations and
       Warranties set out Schedule 1 (Representations and Warranties) as at
       such date in relation to such Mortgage Loan and (ii) interest thereon
       from such relevant completion date at the weighted average yield of the
       Mortgage Loans.

8.15  Indemnity: The Seller shall indemnify the Mortgages Trustee against any
      loss suffered as a result of any Borrower exercising a Right of Set Off
      against the Mortgages Trustee provided that the amount of such indemnity
      in relation to any Mortgage Loan shall not exceed the sum of the Current
      Balance of that Mortgage Loan and interest payable by the Borrower under
      that Mortgage Loan as at the date that the Borrower exercises the Right
      of Set Off. In this clause "Right of Set Off" means any right of set off
      arising from a deposit of money made by the Borrower with the Seller or
      from any transaction between the Borrower and the Seller other than one
      relating to the Mortgage Loan.

8.16   Scottish Trust: Upon any completion of the repurchase or purchase by
       the Seller of any Scottish Mortgage Loan and its Related Security in
       accordance with this Clause 8 (Warranties and Repurchase by the Seller)
       such Scottish Mortgage Loan and its Related Security shall thereupon be
       released from the Scottish Trust and shall cease to form part of the
       Scottish

                                      26
<PAGE>

       Trust Property.

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 that may be
       necessary or desirable to give full effect to the transactions
       contemplated by this Agreement (but subject always to Clause 6
       (Perfection of the Assignment)).

10.    Consequences of Breach

       Without prejudice to Clause 8 (Warranties and Repurchase by the
       Seller), the Mortgages Trustee, Funding and the Security Trustee
       severally acknowledge to and agree with the Seller, and the Security
       Trustee acknowledges to and agrees with Funding and the Mortgages
       Trustee, that the Seller shall have no liability or responsibility
       (whether, in either case, contractual, tortious or delictual, express
       or implied) for any loss or damage for or in respect of any breach of,
       or any act or omission in respect of, any of its obligations hereunder
       other than loss or damage directly (and not indirectly or
       consequentially) suffered by the Mortgages Trustee and/or Funding or
       the assets comprised in the Funding Security constituted by the Funding
       Deed of Charge by reason of such breach, act or omission. For this
       purpose (and without limiting the scope of the above exclusion in
       respect of indirect or consequential loss or damage) any loss or damage
       suffered by the Mortgages Trustee and/or Funding or such assets which
       would not have been suffered by it or such assets had the breach, act
       or omission in question not also been or given rise to an Event of
       Default or enforcement of the security constituted by the Funding Deed
       of Charge shall be treated as indirect or consequential loss or damage.

11.    Subordination

       The Seller agrees with the Mortgages Trustee, Funding and the Security
       Trustee that on the enforcement of any Mortgage any sums owed to the
       Seller by a Borrower secured under such Mortgage and the rights and
       remedies of the Seller in respect of the sums owed to the Seller shall
       at all times be subject and subordinated to any sums owed to the
       Mortgages Trustee by the Borrower and to the rights and remedies of the
       Mortgages Trustee in respect of such sums owed to the Mortgages Trustee
       by the Borrower.

12.    Non-Merger

       Any term of this Agreement to which effect is not given on the Initial
       Closing Date or on any Assignment Date (including in particular, but
       without limitation, the liability of the Seller under the
       Representations and Warranties and the provisions of Clause 4 (Sale and
       Purchase of New Mortgage Portfolios)) shall not merge and shall remain
       in full force and effect notwithstanding the sale and purchase
       contemplated by this Agreement.

13.    No Agency or Partnership

       It is hereby acknowledged and agreed by the parties that nothing in
       this Agreement shall be construed as giving rise to any relationship of
       agency, save as expressly provided herein, or

                                      27
<PAGE>

       partnership between the parties and that in fulfilling its obligations
       hereunder, each party shall be acting entirely for its own account.

14.    Payments

       All payments to be made pursuant to this Agreement shall be made in
       sterling in immediately available funds without exercising or seeking
       to exercise any right of set-off as may otherwise exist and shall be
       deemed to be made when they are received by the payee and shall be
       accounted for accordingly unless failure to receive any payment is due
       to an error by the payee's bank.

15.    Assignment

15.1   Assignment: Subject always to the provisions of Clause 16 (Security
       Trustee), no party hereto shall be entitled to assign all or any part
       of its rights or obligations hereunder to any other party without the
       prior written consent of each of the other parties hereto (which shall
       not, if requested, be unreasonably withheld) save that Funding shall be
       entitled to assign by way of security all or any of its rights under
       this Agreement without such consent to the Security Trustee pursuant to
       the Funding Deed of Charge and the Security Trustee may at its sole
       discretion assign all or any of its rights under or in respect of this
       Agreement without such consent to any successor Security Trustee under
       the Funding Deed of Charge and may assign all of any part of the
       Funding Security upon an enforcement of the Funding Security in
       accordance with the Funding Deed of Charge.

15.2   Acknowledgement of Security Assignment: The Seller acknowledges that on
       the assignment pursuant to the Funding Deed of Charge by Funding to the
       Security Trustee of Funding's rights under this Agreement the Security
       Trustee may enforce such rights in the Security Trustee's own name
       without joining Funding in any such action (which right the Seller
       hereby waives) and the Seller hereby waives as against the Security
       Trustee any rights or equities in its favour arising from any course of
       dealing between the Seller and Funding.

16.    Security Trustee

16.1   Vesting of Rights: If there is any change in the identity of the
       security trustee in accordance with the Funding Deed of Charge, the
       Seller, the Mortgages Trustee and Funding shall execute such documents
       and take such action as the successor security trustee and the outgoing
       security trustee may require for the purpose of vesting in the
       successor security trustee the rights and obligations of the outgoing
       security trustee hereunder and releasing the outgoing security trustee
       from its future obligations under this Agreement and the Seller shall
       give notice thereof to the Rating Agencies.

16.2   No Assumption: It is hereby acknowledged and agreed that by its
       execution of this Agreement the Security Trustee shall not assume or
       have any of the obligations or liabilities of the Seller or Funding or
       the Mortgages Trustee hereunder. Furthermore, any liberty or power
       which may be exercised or any determination which may be made hereunder
       by the Security Trustee may be exercised or made in the Security
       Trustee's absolute discretion without any obligation to give reasons
       therefor, but in any event must be exercised or made in

                                      28
<PAGE>

       accordance with the provisions of the Funding Deed of Charge. Without
       prejudice to the generality of the foregoing, all references to the
       Security Trustee taking action in connection with any duty of the
       Seller shall also be read subject to Clause 25 and Schedule 4 of the
       Administration Agreement.

17.    New Intercompany Loans

       If Funding enters into a New Intercompany Loan Agreement, then the
       Seller, the Mortgages Trustee, Funding and the Security Trustee shall
       execute such documents and take such action as may be required by the
       Rating Agencies for the purpose of including the New Issuer in the
       Transaction including, without limitation:

       (a)    effecting any necessary changes to Clause 4 (Sale and Purchase
              of New Mortgage Portfolios);

       (b)    ensuring that any Transaction Document relevant to a New Issuer
              has been executed and delivered prior to the relevant Closing
              Date;

       (c)    executing and delivering all documents required by Clause 4.4
              (Closing and Conditions Precedent) in relation to any New
              Mortgage Portfolio.

18.    Non Petition Covenant; Limited Recourse

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

18.2   Limited Recourse: Each of the parties hereto agrees that:

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

       (b)    in relation to Funding:

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

              (ii)   notwithstanding any other provision of this Agreement or
                     any other Transaction Document, no sum due or owing to
                     any party to this Agreement from or by Funding under this
                     Agreement shall be payable by Funding except to the
                     extent that Funding has sufficient funds available or
                     (following

                                      29
<PAGE>

                     enforcement of the Funding Security) the Security Trustee
                     has realised sufficient funds from the Funding Security
                     to pay such sum subject to and in accordance with the
                     relevant Funding Priority of Payments and provided that
                     all liabilities of Funding required to be paid in
                     priority thereto or pari passu therewith pursuant to such
                     Funding Priority of Payments have been paid, discharged
                     and/or otherwise provided for in full; and

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

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

19.    Amendments and Waiver

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

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

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

                                      30
<PAGE>

20.    Notices

       Any notices or other communication or document to be given or delivered
       pursuant to this Agreement to any of the parties hereto shall be
       sufficiently served if sent by prepaid first class post, by hand or by
       facsimile transmission and shall be deemed to be given (in the case of
       facsimile transmission) when despatched or (where delivered by hand) on
       the day of delivery if delivered before 17.00 hours on a London
       Business Day or on the next London Business Day if delivered thereafter
       or (in the case of first class post) when it would be received in the
       ordinary course of the post and shall be sent:

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

       (b)    in the case of the Mortgages Trustee, to Granite Finance
              Trustees Limited, 22 Grenville Street, St. Helier, Jersey JE4
              8PX, Channel Islands, (facsimile number 01534-609-333) for the
              attention of the Company Secretary;

       (c)    in the case of Funding, to Granite Finance Funding Limited, 4
              Royal Mint Court, London EC3N 4HJ, (facsimile number
              0207-332-6199) for the attention of the Company Secretary; and

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

       or to such other address or facsimile number or for the attention of
       such other person or entity as may from time to time be notified by any
       party to the others by fifteen days prior written notice in accordance
       with the provisions of this Clause 20.

21.    Third Party Rights

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

22.    Execution in Counterparts; Severability

22.1   Counterparts: This Agreement may be executed in any number of
       counterparts (manually or by facsimile) and by different parties hereto
       in separate counterparts, each of which when so executed shall be
       deemed to be an original and all of which when taken together shall
       constitute one and the same instrument.

22.2   Severability: 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.

                                      31
<PAGE>

23.    Governing Law and Submission to Jurisdiction

23.1   Governing Law: This Agreement is governed by, and shall be construed in
       accordance with, English law (PROVIDED THAT any terms of this Agreement
       which are particular to the law of Scotland shall be construed in
       accordance with Scots law).

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

24.    Process Agent

       The Mortgages Trustee irrevocably and unconditionally appoints Mourant
       & Co. Capital (SPV) Limited at 4 Royal Mint Court, London EC3N 4HJ or
       otherwise at its registered office for the time being as its agent for
       service of process in England in respect of any proceedings in respect
       of this Agreement and undertakes that in the event of Mourant & Co.
       Capital (SPV) Limited ceasing so to act it will appoint another person
       with a registered office in London as its agent for service of process.

25.    Appropriate Forum

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

                                      32
<PAGE>

26.    Transaction Documents

       To the extent necessary to comply with the requirements of Section 2
       Law of Property (Miscellaneous Provisions) Act 1989, this Agreement
       incorporates by reference to them the Transaction Documents.

AS WITNESS whereof the parties hereto have executed this Agreement for
delivery on the day and year first before written.

EXECUTED for and on behalf of                   )
NORTHERN ROCK PLC                               )
by:                                             )

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

Title:
            -------------------

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

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

Name:

Title:

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

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

Name:

Title:

                                      33
<PAGE>

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

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

Name:

Title:

                                      34
<PAGE>

                                  SCHEDULE 1
                        REPRESENTATIONS AND WARRANTIES

                                    Part 1

1.     The particulars of each Mortgage Loan and its related Mortgage in the
       Initial Mortgage Portfolio set out in Appendix A to this Agreement are
       complete, true and accurate in all material respects.

2.     Immediately prior to a Closing Date or an Assignment Date, as the case
       may be, subject to completion of any registration or recording which
       may be pending at H.M. Land Registry or the Registers of Scotland, the
       Seller was the absolute beneficial and legal owner of the Mortgages,
       the Related Security and the other property to be assigned and
       transferred by the Seller to the Mortgages Trustee under this Agreement
       at such Closing Date or such Assignment Date, as the case may be, and
       the Seller has not assigned (whether by way of absolute assignment or
       by way of security only), transferred, charged, disposed of or dealt
       with the benefit of any of the Mortgage Loans or their related
       Mortgages, any of the other rights relating thereto or any of the
       property, rights, titles, interests or benefits to be sold or assigned
       pursuant to this Agreement other than pursuant to this Agreement.

3.     With the exception of Personal Secured Loans, each Mortgage Loan and
       its related Mortgage and the Related Security constitutes a valid and
       binding obligation of the Borrower enforceable in accordance with its
       terms (save any terms which are not binding by virtue of the Unfair
       Terms in Consumer Contracts Regulations 1994 or the Unfair Terms in
       Consumer Contracts Regulations 1999) and each such related Mortgage and
       the Related Security secures the repayment of all advances, interest,
       costs and expenses payable by the relevant Borrower to the Seller in
       priority to any other charges registered against the relevant Mortgaged
       Property.

4.     At the time that it was made, each Mortgage Loan (other than Personal
       Secured Loans) complied in all respects with applicable laws and
       regulations including, without limitation, consumer protection, data
       protection and contract law.

5.     Subject to completion of any registration which may be pending at H.M.
       Land Registry or the Registers of Scotland, each Mortgage (other than a
       Mortgage in respect of a Personal Secured Loan) either constitutes, or
       will constitute, following registration at H.M. Land Registry (in
       England and Wales), a first ranking charge by way of legal mortgage or
       following registration or recording at the Registers in Scotland, a
       first ranking standard security over the relevant Mortgaged Property.

6.     Each relevant Mortgaged Property is located in England, Wales or
       Scotland.

7.     All steps necessary to perfect the Seller's title to each Mortgage Loan
       and its related Mortgage were duly taken at the appropriate time or are
       in the process of being taken with all due diligence.

8.     No lien or right of set-off or counterclaim (other than a Right of
       Set-off referred to in Clause 8.15 (Indemnity)) has been created or
       arisen between the Seller and any Borrower which

                                      35
<PAGE>

       would entitle such Borrower to reduce the amount of any payment
       otherwise due under the relevant Mortgage Loan save in relation to the
       Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
       in Consumer Contracts Regulations 1999 and save in relation to section
       75 of the Consumer Credit Act 1974.

9.     Prior to making a Mortgage Loan to a Borrower, the Seller instructed or
       required to be instructed on its behalf solicitors to carry out in
       relation to the relevant Mortgaged Property all investigations,
       searches and other actions that would have been undertaken by the
       Seller acting in accordance with standards consistent with those of a
       reasonable and prudent mortgage lender, lending to Borrowers in England
       and Wales (in respect of English Mortgage Loans) and Scotland (in
       respect of Scottish Mortgage Loans), when advancing money in an amount
       equal to such advance to an individual to be secured on a mortgaged
       property of the kind permitted under the Lending Criteria and a report
       on title was received by or on behalf of the Seller from such
       solicitors which, either initially or after further investigation
       revealed no material matter which would cause the Seller, acting
       reasonably, to decline the Mortgage Loan having regard to the Lending
       Criteria.

10.    In relation to each Mortgage the Borrower has a good and marketable
       title to the relevant Mortgaged Property.

11.    Prior to making a Mortgage Loan the relevant Mortgaged Property was
       valued by an independent valuer from the panel of valuers from time to
       time appointed by the Seller or by an employee valuer of the Seller,
       and the results of such valuation would be acceptable to a reasonable
       and prudent mortgage lender.

12.    Prior to making a Mortgage Loan, the nature and amount of such Mortgage
       Loan, the circumstances of the relevant Borrower and nature of the
       relevant Mortgaged Property satisfied the Lending Criteria in force at
       that time in all material respects.

13.    The exercise of any discretion by the Seller in the making of any
       Mortgage Loan has been consistent with the practice of a reasonable and
       prudent mortgage lender.

14.    Each Mortgage Loan and its related Mortgage has been made on the terms
       of the Standard Mortgage Documentation (so far as applicable) which has
       not been varied in any material respect, save for the making of the
       Base Rate Pledge.

15.    With the exception of agreements for Personal Secured Loans, no
       agreement for any Mortgage Loan (other than to the extent it relates to
       the funding of buildings insurance premiums) is or has ever been,
       wholly or partly regulated by the Consumer Credit Act 1974 (other than
       by Sections 137 to 140 of such Act) or constitutes an extortionate
       credit bargain under Sections 137 to 140 of such Act or, to the extent
       it is so regulated or partly regulated, all the requirements of the
       Consumer Credit Act have been met in full. No Mortgage Loan is, or has
       ever been, a linked transaction within Section 19 of the Consumer
       Credit Act.

16.    Interest on each Mortgage Loan: (a) is charged on the capital balance
       of each Mortgage Loan in accordance with the provisions of that
       Mortgage Loan and its related Mortgage; (b) is not in any event
       adjusted by reference to the principal amount due thereunder; (c) is
       payable

                                      36
<PAGE>

       monthly in advance; and (d) is calculated by reference to the Standard
       Variable Rate or the Bank of England Base Rate, subject to any
       applicable caps, discounts and fixed rates and the Base Rate Pledge;
       and (e) subject to (d) above, may be set by the Seller and its
       successors and assigns to that Mortgage Loan.

17.    No payment of interest (or in the case of Repayment Mortgage Loans,
       principal and interest) equivalent to an amount in excess of one
       month's instalment at the applicable rate in respect of a Mortgage Loan
       in the Initial Mortgage Portfolio was at any time during the 12 months
       before the relevant Closing Date or Assignment Date, as the case may
       be, in arrears.

18.    So far as the Seller is aware, no Borrower is in material breach of its
       Mortgage.

19.    So far as the Seller is aware, the underwriting, origination and
       completion of each Mortgage Loan is not the subject of fraud by any
       person (including, without limitation, the Borrower or any professional
       or third party employed or engaged on behalf of the Seller).

20.    As at the date of this Agreement, the first payment due has been paid
       by the relevant Borrower in respect of each Mortgage Loan and each
       Mortgage Loan was fully performing.

21.    Where any Borrower is or was entitled to repayment of any early
       repayment charge in respect of any mortgage previously held by the
       Borrower with the Seller, that repayment has been or will be made by
       the Seller.

22.    Except where a Mortgaged Property was at completion of the relevant
       Mortgage (or, where appropriate, in the case of self-build properties,
       at the date of completion of the relevant mortgaged property) covered
       by the Block Buildings Policy or a block buildings policy providing
       equivalent cover, the Seller took all reasonable steps to ensure that
       at the date of completion of the relevant Mortgage Loan each Mortgaged
       Property was:

       (a)    insured under a buildings policy either (i) in the joint names
              of the Borrower and the Seller or (ii) with the interest of the
              Seller noted thereon;

       (b)    insured under a Block Buildings Policy; or

       (c)    with respect to leasehold properties, insured by the relevant
              landlord with the Seller's approval,

       and in all cases against risks usually covered by a comprehensive
       buildings policy and to an amount not less than the full reinstatement
       cost of such Mortgaged Property as determined by an independent valuer
       or a valuer employed by the Seller.

23.    The Block Buildings Policy referred to above covers such fire and other
       commercial risks as would be required by the Seller acting in
       accordance with its normal standard for an amount not less than the
       full reinstatement value of the Properties covered by the Block
       Buildings Policy.

24.    The Insurance Contracts are in full force and effect and all premiums
       thereon due on or before the date of this Agreement have been paid in
       full and the Seller is not aware of any

                                      37
<PAGE>

       circumstances giving the insurer under the Insurance Contracts the
       right to avoid or terminate such policy in so far as it relates to the
       Mortgaged Properties or the Mortgage Loans. Where the Lending Criteria
       then in force required that a Mortgage Loan was covered by the
       Insurance Contract referred to in paragraph 1 of Schedule 4 (Insurance
       Contracts), that Mortgage Loan is covered by such Insurance Contract.

25.    To the extent that a Guarantee was required under the Lending Criteria
       in relation to a particular Mortgage Loan, that Guarantee constitutes
       the valid, binding and enforceable obligations of the guarantor
       thereunder (save to the extent that the Guarantee is not valid, binding
       or enforceable by virtue of the Unfair Terms in Consumer Contracts
       Regulations 1994 or the Unfair Terms in Consumer Contracts Regulations
       1999).

26.    If a Mortgaged Property is leasehold or long leasehold, written notice
       has been given to the landlord of the creation of the Mortgage.

27.    In relation to each English Mortgage, any person who at the date when
       the Mortgage Loan was made has been identified by the Borrower to the
       Seller as residing or about to reside in the relevant Mortgaged
       Property is either named as a joint Borrower or has signed a form of
       consent declaring that he or she agrees that any present or future
       rights or interests as he or she may have or acquire over or in respect
       of the relevant Mortgaged Property shall be postponed and made subject
       to the rights, interests and remedies of the Seller under the relevant
       Mortgage and that he or she shall not claim any such rights or
       interests against the Seller. In relation to each Scottish Mortgage,
       all necessary MHA Documentation has been obtained to as to ensure that
       neither the relevant Mortgage nor the relevant Mortgaged Property is
       subject to or affected by any statutory right of occupancy.

28.    No Borrower was under 18 years of age at the time of completion of the
       relevant Mortgage Loan.

29.    No Mortgage Loan has a final maturity beyond January 2039.

30.    The Seller has procured that full and proper accounts, books and
       records have been kept showing clearly all material transactions,
       payments, receipts and proceedings relating to that Mortgage Loan and
       its Mortgage and all such accounts, books and records are up to date
       and in the possession of the Seller or held to its order (subject to
       the provisions of the Mortgages Trust Deed).

31.    The origination and collection practices employed by the Seller with
       respect to the Mortgage Loans have been, in all respects, legal and
       consistent with the practice of a reasonable and prudent mortgage
       lender.

32.    The Seller has not received written notice of any litigation or claim
       calling into question in any material way its title to any Mortgage
       Loan and its Mortgage or the value of any security. The Seller is not
       engaged in any litigation, and no litigation is pending or threatened
       by the Seller, against any person in connection with any report,
       valuation, opinion, certificate, consent or other statement of fact or
       opinion given in connection with any Mortgage Loan received by the
       Seller in connection with the origination of any Mortgage Loan.

                                      38
<PAGE>

33.    In respect of any Mortgaged Property which is subject to a second or
       subsequent mortgage or standard security, the Seller has first priority
       for the full amount of the Mortgage Loan (other than in respect of a
       Personal Secured Loan) and all costs, fees and expenses relative
       thereto.

34.    Subject to completion of any registration or recording which may be
       pending at the H.M. Land Registry or the Registers of Scotland, all
       Property Deeds and Mortgage Loan Files are held by, or to the order of,
       the Seller.

35.    Each Borrower is a natural person, and no Borrower is at present an
       employee or an officer of the Seller.

36.    All Mortgage Loans were originated by or on behalf of the Seller in the
       ordinary course of the Seller's residential secured lending activities.
       No Mortgage Loan was acquired by the Seller subject to any discount and
       no Mortgage Loan has been written down by the Seller in its accounts.

37.    The Mortgage Loans and their related Mortgages contain no obligations
       on the part of the Seller to make any further advances, and all costs,
       fees and expenses incurred in making, closing or registering the
       Mortgage Loans and the Related Security have been paid in full.

38.    All formal approvals, consents and other steps necessary to permit a
       legal or equitable or beneficial transfer or a transfer of servicing
       away from the Seller of the Mortgage Loans and their related Mortgages
       to be sold under this Agreement whenever required under the Transaction
       Documents have been obtained or taken and there is no requirement in
       order for the transfer to be effective to notify the Borrower before,
       on or after any equitable or beneficial transfer or before any legal
       transfer of the Mortgage Loans and their related Mortgages.

39.    So far as the Seller is aware, none of the terms in any Mortgage Loan
       and its related Mortgage are unfair terms within the meaning of the
       Unfair Terms in Consumer Contracts Regulations 1994 or the Unfair Terms
       in Consumer Contracts Regulations 1999 in any material respect save
       those which impose Early Repayment Charges.

40.    The Seller has confirmed to all relevant Borrowers that where any
       Mortgage Loan provides that where any Early Repayment Charge is payable
       at any time when the interest rate payable under that Mortgage Loan is
       equal to or set by reference to the Standard Variable Rate (including
       without limitation where the Mortgage Loan provides for a capped or
       discounted rate), the interest rate payable under that Mortgage Loan
       will be no more than 1.99 per cent. above the Bank of England's base
       rate.

41.    In relation to a Right to Buy Mortgage Loan:

(a)    in the case of each English Mortgage Loan the Seller was at the time of
       origination of that Mortgage Loan an approved lending institution
       within the meaning given to that expression in the Housing Act 1985;

       (b)    the original advance was made to the person exercising the right
              to buy; and

                                      39
<PAGE>

       (c)    the original advance was made for the purposes of enabling the
              recipient thereof to purchase the relevant Mortgaged Property.

       For the purpose of this paragraph 41, "Right to Buy Mortgage Loan"
       means (i) in relation to an English Mortgage Loan, a Mortgage Loan in
       respect of which the "right to buy" provisions of the Housing Act 1985
       apply (other than any Mortgage Loan in respect of which the period
       during which the statutory charge referred to in section 156 of that
       Act would have existed, had the relevant circumstances applied, has
       expired) and (ii) in relation to a Scottish Mortgage Loan, a Mortgage
       Loan in respect of which the "right to buy" provisions of the Housing
       (Scotland) Act 1987 apply (other than any Mortgage Loan in respect of
       which the period during which the seller's standard security referred
       to in section 72 of that Act remains in effect has expired).

42.    The loyalty discount applicable to certain Mortgage Loans after seven
       years will not apply to any such Mortgage Loans during any period when
       the interest rate is fixed.

43.    The Seller has paid to the relevant Borrower the full amount of the
       cashback payment in relation to any Cashback Mortgage Loan, either upon
       completion of the relevant Mortgage Loan or, if subsequent to
       completion, prior to the assignment of such Mortgage Loan to the
       Mortgages Trustee.

44.    No Mortgage Loan has a Current Balance of more than (pound)500,000.

45.    Each English Mortgage Loan and its Related Security in the Mortgage
       Portfolio was made not earlier than 1 July 1995 and each Scottish
       Mortgage Loan and its Related Security in the Mortgage Portfolio was
       made not earlier than 1 July 2001.

46.    Each Mortgage Loan was originated by the Seller in pounds sterling and
       is denominated in pounds sterling (or originated and denominated in
       euro at any time when the euro has been adopted as the lawful currency
       of the United Kingdom) and is currently repayable in pounds sterling.

47.    The Seller's Lending Criteria are consistent with the criteria that
       would be used by a reasonable and prudent mortgage lender.

48.    The Seller is not aware of any material claim outstanding under any of
       the Buildings Policies relating to a Mortgaged Property.

49.    No Mortgage Loan has an LTV greater than 95 per cent. In relation to
       Personal Secured Loans, the combined LTV of the maximum amount of
       credit provided under a Personal Secured Loan and the other Mortgage
       Loans secured on the same property is not greater than 95 per cent.

50.    Each Mortgage Loan (other than a Personal Secured Loan) has been made
       for one of the following purposes:

       (a)    the purchase of land; or

                                      40
<PAGE>

       (b)    the provisions of dwellings or business premises on any land; or

       (c)    the alteration, enlarging, repair or improvement of a dwelling
              or business premises on any land provided the creditor is the
              creditor under (i) an agreement by which the debtor is provided
              with credit for any of the purposes in (a) or (b) above or (ii)
              an agreement refinancing an agreement under which the debtor is
              provided with credit for any of the purposes in (a) or (b)
              above; or (iii) a debtor-creditor agreement secured by any land
              mortgage or standard security to refinance any existing
              indebtedness of the debtor, whether to the creditor or another
              person, under any agreement by which the debtor was provided
              with credit for any of the purposes in (a) and (b) above.

                                      41
<PAGE>

                                    Part 2

1.     In respect of each of the Preliminary Prospectus as of its date (except
       insofar as the information contained therein has been amended,
       supplemented or deleted in the Prospectus) and the Prospectus as at the
       date thereof:

       (a)    each of them contained all information with respect to the
              Seller, the Initial Mortgage Portfolio and to the Notes which
              was material in the context of the issue and offering of the
              Notes (including all information required by English law);

       (b)    the statements contained in each of them relating to the Seller
              and the Initial Mortgage Portfolio were in every material
              particular true and accurate and not misleading;

       (c)    the opinions and intentions expressed in each of them with
              regard to the Seller and the Initial Mortgage Portfolio were
              honestly held, were reached after considering all relevant
              circumstances and were based on reasonable assumptions;

       (d)    there were no other facts in relation to the Seller, the Initial
              Mortgage Portfolio or the Notes the omission of which would, in
              the context of the issue and offering of the Notes, make any
              statement in either of them misleading; and

       (e)    all reasonable enquiries had been made by the Seller to
              ascertain such facts and to verify the accuracy of all such
              information and statements.

2.     The Seller has not acquired or owned or possessed any rights in the
       Mortgages Trustee or Funding such that it would "control" the Mortgages
       Trustee or Funding within the meaning of section 416 ICTA 1988.

       There is not any "connection" (within the meaning of section 87 Finance
       Act 1996) between either the Mortgages Trustee or Funding,
       respectively, and any Borrower.

                                      42
<PAGE>

                                    Part 3

The Seller makes the following representations and warranties to each of the
Mortgages Trustee, Funding and the Security Trustee:

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

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

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

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

       (a)    result in the existence or imposition of, nor oblige it to
              create, any Security Interest in favour of any person over all
              or any of its present or future revenues or assets save for any
              which are created under or pursuant to the Funding Deed of
              Charge;

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

       (c)    conflict with its constitutional documents; or

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

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

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

                                      43
<PAGE>

                                  SCHEDULE 2
            FORMS OF TRANSFERS: REGISTERED AND UNREGISTERED LAND
                            AND SCOTTISH TRANSFERS

                                      44
<PAGE>

                                    Part 1

           FORM OF TRANSFER (REGISTERED LAND - ENGLAND AND WALES)

                 In the form of H.M. Land Registry Form TR4

                                      45
<PAGE>

                                    Part 2

          FORM OF TRANSFER (UNREGISTERED LAND - ENGLAND AND WALES)

This Transfer of Mortgages is made on [ ] between NORTHERN ROCK PLC
(registered number 3273685) whose registered office is at Northern Rock House,
Gosforth, Newcastle upon Tyne NE3 4PL (hereinafter called the "Transferor") of
the one part and GRANITE FINANCE TRUSTEES LIMITED (registered number 79309)
whose registered office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX,
Channel Islands (hereinafter called the "Transferee") of the other part.

WHEREAS:

(A)    By the charges by way of legal mortgage ("Mortgages") brief particulars
       of which are set out in the Annexure hereto the properties brief
       particulars of which are similarly set out ("Properties") became
       security for the repayment of the moneys therein mentioned.

(B)    By a mortgage sale agreement dated 26 March 2001 made between inter
       alios the Transferor and the Transferee (as amended, restated, varied,
       supplemented or novated from time to time), the Transferor has agreed
       to sell and the Transferee has agreed to buy all right, title, interest
       and benefit (both present and future) in and under the Mortgages for
       the consideration hereinafter mentioned.

NOW THIS DEED WITNESSETH as follows:

1.     In consideration of the sums payable and the other consideration under
       the Agreement by the Transferee (receipt of which is hereby
       acknowledged) the Transferor with full title guarantee hereby transfers
       unto the Transferee all right, title, interest and benefit (both
       present and future) in and under the Mortgages including for the
       avoidance of doubt:

       (i)    the right to demand, sue for, recover, receive and give receipts
              for all principal moneys payable or to become payable under the
              Mortgages or the unpaid part thereof and the interest due or to
              become due thereon; and

       (ii)   the benefit of all securities for such principal moneys and
              interest, the benefit of all consents to mortgage signed by
              occupiers of the Properties, and the benefit of and the right to
              sue on all covenants with the Transferor in each Mortgage and
              the right to exercise all powers of the Transferor in relation
              to each Mortgage; and

       (iii)  all the estate and interest in the Properties vested in the
              Transferor subject to redemption or cesser; and

       (iv)   all causes of action of the Transferor against any person in
              connection with any report, valuation, opinion, certificate or
              other statement of fact or opinion or consent to mortgage given
              in connection with any Mortgage or affecting the Transferor's
              decision to make the relevant advance.

                                      46
<PAGE>

IN WITNESS of which NORTHERN ROCK PLC has caused this Transfer to be executed
and delivered as a deed on the date which appears first above.

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

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

Name:

Title:

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

Name:

Title:

[Alternative methods of executing as a deed will be acceptable if effective]

                                      47
<PAGE>

                                    Part 3

                FORM OF TRANSFER (LAND REGISTER - SCOTLAND)

We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:

1      the Standard Securities granted by the respective parties whose names
       are specified in Column 3 of the Schedule annexed and executed as
       relative hereto in favour of us the Transferor for all sums due and to
       become due, to the extent of all sums now due and which may at any time
       or times hereafter become due under the said Standard Securities,
       registered said Standard Securities in the Land Register under the
       Title Number specified in the relative entry in Column 4 of the said
       Schedule on the date specified in the relative entry in Column 5 of the
       said Schedule; and

2      the whole rights and interest of us the Transferor in and under all and
       any personal bonds, credit agreements or agreements for loan (however
       constituted) secured by the said Standard Securities and granted by or
       entered into with the said respective parties whose names are specified
       in Column 3 of the said Schedule, together with all sums, present and
       future, due thereunder and all other rights, interests and benefits
       pertaining thereto:

With interest from and also arrears and accumulations of interest due and
unpaid as at [                  ]: And we grant warrandice: IN WITNESS WHEREOF
these presents typewritten on this [and the preceding] page are together with
the Schedule annexed hereto executed at [                  ] on the
[         ] day of [         ] as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

by ..............................       ..................................

and .............................       ..................................

                                      48
<PAGE>

             Schedule referred to in the foregoing Assignation by
                               Northern Rock plc
                 in favour of GRANITE FINANCE TRUSTEES LIMITED

      1           2              3                4               5

 Account No.   Address     Borrowers Full   Title Number  Registration Date
                               Names

                                      49
<PAGE>

                                    Part 4

               FORM OF TRANSFER (SASINE REGISTER - SCOTLAND)

We, NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(Registered Number 3273685) and having our Registered Office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (the Transferor) CONSIDERING THAT
in terms of a Mortgage Sale Agreement among us the Transferor, GRANITE FINANCE
TRUSTEES LIMITED, incorporated under the law of Jersey (Registered Number
79309) and having its Registered Office at 22 Grenville Street, St Helier,
Jersey JE4 8PX, Channel Islands (the Transferee) and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgage Sale Agreement) we have sold our whole right, title and interest
in and to the Standard Securities and others hereinafter mentioned to the
Transferee NOW THEREFORE we the Transferor IN CONSIDERATION of the sums
payable in terms of and in implement pro tanto of the Mortgage Sale Agreement
HEREBY ASSIGN to the Transferee as trustee under and in terms of the Mortgages
Trust Deed among us, the Transferor, the Transferee and others dated 26 March
2001 (as amended, restated, varied, supplemented or novated from time to time,
the Mortgages Trust Deed) and its successor or successors as trustee or
trustees under and in terms of the Mortgages Trust Deed:

1      the Standard Securities granted by the respective parties whose names
       are specified in Column 3 of the Schedule annexed and executed as
       relative hereto in favour of us the Transferor for all sums due and to
       become due, to the extent of all sums now due and which may at any time
       or times hereafter become due under the said Standard Securities,
       recorded said Standard Securities in the Register for the County
       specified in the relative entry in Column 4 of the said Schedule on the
       date specified in the relative entry in Column 5 of the said Schedule;
       and

2      the whole rights and interest of us the Transferor in and under all and
       any personal bonds, credit agreements or agreements for loan (however
       constituted) secured by the said Standard Securities and granted by or
       entered into with the said respective parties whose names are specified
       in Column 3 of the said Schedule, together with all sums, present and
       future, due thereunder and all other rights, interests and benefits
       pertaining thereto:

With interest from and also arrears and accumulations of interest due and
unpaid as at [                  ]: And we grant warrandice: IN WITNESS WHEREOF
these presents typewritten on this [and the preceding] page are together with
the Schedule annexed hereto executed at [                  ] on the
[         ] day of [                  ] as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

by ..............................       ..................................

and .............................       ..................................

REGISTER on behalf of the within named GRANITE FINANCE  TRUSTEES  LIMITED as
trustee   within   mentioned   in  the   REGISTERS   of  the   COUNTIES   of
[                  ]

                                      50
<PAGE>

   Schedule referred to in the foregoing Assignation by Northern Rock PLC
               in favour of Granite Finance Trustees Limited

      1          2              3               4                5

 Account No.  Address    Borrowers Full      County        Recording Date
                              Names

                                      51
<PAGE>

                                  SCHEDULE 3
                       ASSIGNMENT OF INSURANCE CONTRACTS

THIS ASSIGNMENT is made by way of deed on [         ]

BETWEEN

NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL ("Northern Rock");
and

GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
(the "Mortgages Trustee")

WHEREAS

(A)    By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time "Mortgage Sale Agreement")
       and made between Northern Rock, as Seller, the Mortgages Trustee,
       Granite Finance Funding Limited ("Funding") and The Bank of New York,
       as security trustee (the "Security Trustee"), certain mortgages and
       standard securities (the "Mortgages") and the loans secured thereby
       were agreed to be transferred to the Mortgages Trustee.

(B)    Northern Rock has the benefit of the Insurance Contracts, as defined in
       the Master Definitions Schedule dated 26 March 2001 (as amended,
       varied, supplemented or novated from time to time) which relate to the
       Mortgages and the mortgaged properties upon which they are secured (the
       "Mortgaged Properties") as well as to certain mortgages and properties
       in which the Mortgages Trustee have no interest.

(C)    This Assignment is supplemental to the Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee absolutely all the estate and interest in
the Insurance Contracts including the rights to receive the proceeds of any
claim to the extent only that such estate, interest, and rights relate to the
Mortgaged Properties and/or the Mortgages, to hold the same unto the Mortgages
Trustee absolutely.

                                      52
<PAGE>

IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a Deed or the date which first appears above.

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

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

Name:

Title:

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

Name:

Title:

                                      53
<PAGE>

<TABLE>
<CAPTION>

                                      SCHEDULE 4
                                  INSURANCE CONTRACTS

Policy number          Insurer                  Policy name/type        Date of Policy

<S>                   <C>                      <C>                     <C>
1. NR 9501             Northern Rock Mortgage   Mortgage Indemnity      18.07.1996
                       Indemnity Company
                       Limited

2.(a)BL-HHS            AXA General Insurance    Supercover              01.01.1997
                       Limited                  Buildings and
                                                Contents

(b)DR-FHH              AXA General Insurance    Superchoice             01.01.1997
                       Limited                  Buildings and
                                                Contents

(c)DR-SGD              AXA General Insurance    Supercover Gold         01.11.1999
                       Limited                  Buildings and
                                                Contents

(d)AG112/Z1413248      AXA General Insurance    Contingency             18.10.1999
                       Limited Insurance

(e)AG112/Z1413256      AXA General Insurance    Properties in           18.10.1999
                       Limited Possession

(f)BL-BBR              AXA General Insurance    Cover Me                18.12.2000
                       Limited                  Buildings and
                                                Contents

</TABLE>

                                          54
<PAGE>

                                  SCHEDULE 5
                                    Part 1
                           ASSIGNMENT OF GUARANTEES

THIS ASSIGNMENT is made by way of deed on [         ]

BETWEEN:

NORTHERN ROCK PLC (registered number 3273685) whose registered office is at
Northern Rock House, Gosforth, Newcastle upon Tyne NE3 4PL ("Northern Rock");
and

GRANITE FINANCE TRUSTEES LIMITED (registered number 79309) whose registered
office is at 22 Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
(the "Mortgages Trustee")

WHEREAS:

(A)    By a mortgage sale agreement dated 26 March 2001 ( as amended, varied,
       supplemented or novated from time to time the "Mortgage Sale
       Agreement") and made between Northern Rock, the Mortgages Trustee,
       Granite Finance Funding Limited and The Bank of New York, certain
       mortgages (the "Mortgages") were agreed to be transferred and assigned
       to the Mortgages Trustee.

(B)    Northern Rock has the benefit of the Guarantees as defined in the
       Master Definitions Agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time) which relate to certain of
       the Mortgages.

(C)    This Assignment is made pursuant to the Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

In further consideration of the sums and the other consideration referred to
in the Mortgage Sale Agreement, Northern Rock with full title guarantee hereby
assigns unto the Mortgages Trustee all its right, title, interest and benefit
(both present and future) in the Guarantees relating to the Mortgages the
subject of a Transfer of even date herewith including for the avoidance of
doubt:

(i)    the benefit of and the right to sue on all covenants with and
       undertakings to Northern Rock in each Guarantee and the right to
       exercise all powers of Northern Rock in relation to each Guarantee; and

(ii)   all the estate and interest in the Guarantees vested in Northern Rock;

to hold the same unto the Mortgages Trustee absolutely.

IN WITNESS of which NORTHERN ROCK PLC has caused this Assignment to be
executed and delivered as a deed on the date which first appears above.

                                      55
<PAGE>

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

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

Name:

Title:

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

Name:

Title:

[Alternative methods of executing as a deed will be acceptable if effective]

                                      56
<PAGE>

                                    Part 2

                           ASSIGNATION OF GUARANTEES

ASSIGNATION

by

NORTHERN  ROCK PLC,  incorporated  in England  (Registered  Number  3273685)
whose  Registered  Office is at  Northern  Rock House,  Gosforth,  Newcastle
upon Tyne NE3 4PL (Northern Rock);

in favour of

GRANITE FINANCE TRUSTEES LIMITED, incorporated in Jersey (Registered Number
79309) whose Registered Office is at 22 Grenville Street, St Helier, Jersey
JE4 8PX, Channel Islands (the "Mortgages Trustee")

WHEREAS:

(A)    By a mortgage sale agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time, the "Mortgage Sale
       Agreement") and made between Northern Rock, the Mortgages Trustee,
       Granite Finance Funding Limited and The Bank of New York, certain
       mortgage loans and their related security (the "Mortgages") were agreed
       to be transferred and assigned to the Mortgages Trustee;

(B)    Northern Rock has the benefit of the Guarantees as defined in the
       Master Definitions Agreement dated 26 March 2001 (as amended, varied,
       supplemented or novated from time to time) which relate to certain of
       the Mortgages;

(C)    This Assignation is made pursuant to the Mortgage Sale Agreement;

NOW THEREFORE the parties hereby AGREE as follows:

1      Assignation

       Northern Rock hereby assigns to the Mortgage Trustee with absolute
       warrandice its whole right, title, benefit and interest, present and
       future, in and to the Guarantees governed by Scots law and detailed in
       the Schedule hereto (the "Scottish Guarantees") relating to the
       Mortgages including for the avoidance of doubt the benefit of and the
       right to sue on all obligations and undertakings to Northern Rock in
       each Scottish Guarantee and the right to exercise all powers of
       Northern Rock in relation to each Scottish Guarantee.

                                      57
<PAGE>

2      Intimation

       Northern Rock hereby undertakes to the Mortgages Trustee that it will,
       within fourteen days of the execution of this deed, serve a notice of
       assignation by recorded delivery post in such form as the Mortgage
       Trustee shall approve upon each of the Guarantors pursuant to each
       Scottish Guarantee.

3      Governing Law

       This deed shall be governed by Scots law and the parties hereto submit
       to the non-exclusive jurisdiction of the Scottish courts.

IN WITNESS WHEREOF these presents consisting of this and the preceding page
together with the Schedule annexed hereto are executed as follows:

SUBSCRIBED for and on behalf of the
said
NORTHERN ROCK PLC

at ..............................       ..................................

on ..............................       ..................................

by ..............................

and .............................

SUBSCRIBED for and on behalf of the
said
GRANITE FINANCE TRUSTEES LIMITED

at ..............................       ..................................

on ..............................       ..................................

by ..............................

and .............................

                                      58
<PAGE>

     Schedule referred to in the foregoing Assignation of Guarantees by
      Northern Rock PLC in favour of Granite Finance Trustees Limited

                            [Details of Guarantees]

                                      59
<PAGE>

                                  SCHEDULE 6
                         NEW MORTGAGE PORTFOLIO NOTICE

                                                    Dated [                  ]

1.     It is hereby agreed for the purpose of this notice the "Principal
       Agreement" shall mean the Mortgage Sale Agreement dated 26 March 2001
       made between (1) NORTHERN ROCK PLC (the "Seller"), (2) GRANITE FINANCE
       TRUSTEES LIMITED (the "Mortgages Trustee") (3) GRANITE FINANCE FUNDING
       LIMITED ("Funding") and (4) THE BANK OF NEW YORK (the "Security
       Trustee"), as the same may be amended, varied, supplemented or novated
       from time to time.

2.     Save where the context otherwise requires, words and expressions in
       this notice shall have the same meanings respectively as when used in
       the Principal Agreement.

3.     In accordance with and subject to Clause 4.1 (Agreement to Assign) of
       the Principal Agreement, upon receipt by the Seller of the duplicate of
       this notice signed by the Mortgages Trustee, there shall exist between
       the Seller and the Mortgages Trustee an agreement (the "Agreement for
       Sale") for the sale and assignment by the Seller to the Mortgages
       Trustee of the New Mortgage Loans and the Related Security more
       particularly described in the Schedule hereto (other than any New
       Mortgage Loans and their Related Security which have been redeemed in
       full prior to the next following Assignment Date). Completion of such
       sale shall take place, subject to the provisions of the Principal
       Agreement, on [               ] (the "Assignment Date").

4.     The Seller hereby confirms that the conditions required to be fulfilled
       pursuant to Clause 4.2 (Conditions to Effecting an Assignment of New
       Mortgage Loans) of the Principal Agreement have been fulfilled [/save
       for conditions ( ) ( ) and ( )]

5.     The Agreement for Sale shall incorporate, mutatis mutandis, the
       relevant provisions of the Principal Agreement.

Signed for and on behalf of                     )
NORTHERN ROCK PLC                               )
by:                                             )

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

[On duplicate

We hereby acknowledge receipt of the New Mortgage Portfolio Notice dated [
], and confirm [that the conditions set out in paragraph ( ) ( ) and ( ) of
Clause 4.2 (Conditions to Effecting an Assignment of New Mortgage Loans) have
been waived and] the sale and assignment of the New Mortgage Loans as set out
in that notice.

                                      60
<PAGE>

Signed for and on behalf of                     )
GRANITE FINANCE TRUSTEES LIMITED                )
by:                                             )

------------------------------]

                                      61
<PAGE>

                                   Schedule

1              2                       3                         4

Account No.    Property Address        Name(s)                   Date of
                                                                 Mortgage
                                                                 Completion

                                      62
<PAGE>

                                  SCHEDULE 7
                            LOAN REPURCHASE NOTICE

                                                    Dated [                  ]

1.     We refer to the Mortgage Sale Agreement dated 26 March 2001 (as
       amended, varied, supplemented or novated from time to time the
       "Principal Agreement") made between (1) NORTHERN ROCK PLC (the
       "Seller"), (2) GRANITE FINANCE TRUSTEES LIMITED (the "Mortgages
       Trustee") (3) GRANITE FINANCE FUNDING LIMITED ("Funding") and (4) THE
       BANK OF NEW YORK (the "Security Trustee").

2.     Save where the context otherwise requires, words and expressions in
       this notice shall have the same meanings respectively as when used in
       the Principal Agreement.

3.     We hereby send this notice pursuant to and in accordance with Clause
       [8.4 (Repurchase)/8.5 (Purchase of Product Switches, Further Advances
       and purchases relating to Personal Secured Loans)]* of the Principal
       Agreement, upon receipt of which you as [the Seller/the Mortgages
       Trustee]* will be required to [repurchase from us/re-sell to
       us/purchase from us/sell to us]* the Mortgage Loan(s) and Related
       Security set out in the attached schedule in accordance with the terms
       of Clause 8 (Repurchase) of the Principal Agreement on [insert date].

Signed for and on behalf of                     )
[GRANITE FINANCE TRUSTEES                       )
LIMITED/NORTHERN ROCK PLC]                      )
by:                                             )

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

* Delete as appropriate

                                      63
<PAGE>

                                   Schedule

1              2                       3                         4

Account No.    Property Address        Name(s)                   Date of
                                                                 Mortgage
                                                                 Completion

                                      64
<PAGE>

                                  SCHEDULE 8
                       FORM OF NOTIFICATION TO BORROWERS

[To:      Borrower]

Dear Sirs,

Northern Rock

Account No.[                  ]

We hereby notify you that on [        ] 2001, Northern Rock agreed to sell your
mortgage to Granite Finance Trustees Limited.

[Additional text will be allowed with Mortgages Trustee's and Security
Trustee's consent]

Yours faithfully,

Northern Rock plc

                                      65
<PAGE>

                                  SCHEDULE 9
      OFFER UNDER CLAUSE 8.6 (REPURCHASE OF FIXED RATE MORTGAGE LOANS)

To:   Northern Rock plc
      Northern Rock House
      Gosforth
      Newcastle upon Tyne
      NE3 4PL

From: Granite Finance Trustees Limited
      22 Grenville Street
      St Helier
      Jersey
      Channel Islands
      JE4 8PX

Date: [                  ]

Pursuant to Clause 8.6 (Repurchase of Fixed Rate Mortgage Loans) of the
mortgage sale agreement dated 26 March 2001 made between (1) Northern Rock
plc, (2) Granite Finance Funding Limited, (3) Granite Finance Trustees Limited
and (4) The Bank of New York (as amended, varied, supplemented or novated from
time to time the "Agreement") we hereby offer to re-sell to you the Mortgage
Loan(s) together with their Related Security, details of which are set out in
the attached print out, if such Mortgage Loan(s) become Re-Fixed Mortgage
Loans within 3 months of the expiry of the relevant initial fixed rate periods
applicable to that/those Mortgage Loans. If you wish to do so, please accept
this offer by payment to us of the consideration for the repurchase of the
relevant Mortgage Loan(s) and Related Security in accordance with Clause 8.6
(Repurchase of Fixed Rate Mortgage Loans) of the Agreement if such Mortgage
Loan(s) become Re-Fixed Mortgage Loans within 3 months of the expiry of the
relevant initial fixed rate periods applicable to that/those Mortgage Loans.
Capitalised terms used in this notice and not defined herein have the meanings
given to them in the Agreement.

Signed by or on behalf of                       )
GRANITE FINANCE TRUSTEES LIMITED                )
as Seller                                       )
[acting as its attorney NORTHERN ROCK PLC:]     )

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

                                      66
<PAGE>

                                  SCHEDULE 10

                        POWER OF ATTORNEY IN FAVOUR OF
          THE MORTGAGES TRUSTEE, FUNDING AND THE SECURITY TRUSTEE

THIS DEED OF POWER OF ATTORNEY is made on the [o] by:

(1)    NORTHERN ROCK PLC whose registered office is at Northern Rock House,
       Gosforth, Newcastle upon Tyne NE3 4PL (registered number 3273685) in
       its capacity as Seller,

in favour of each of:

(2)    GRANITE FINANCE TRUSTEES LIMITED whose registered office is at 22
       Grenville Street, St. Helier, Jersey JE4 8PX, Channel Islands
       (registered number 79309) in its capacity as Mortgages Trustee;

(3)    GRANITE FINANCE FUNDING LIMITED, acting out of its branch office
       established in England (registered overseas company number FC022999 and
       branch number BR005916) at 4 Royal Mint Court, London EC3N 4HJ and

(4)    THE BANK OF NEW YORK a New York Banking Corporation whose London branch
       address is at 48th Floor, One Canada Square, London E14 5AL in its
       capacity as Security Trustee.

WHEREAS:

(A)    By virtue of a mortgage sale agreement (the "Mortgage Sale Agreement")
       dated 26 March 2001 and as subsequently amended, and made between (1)
       the Seller, (2) the Mortgages Trustee (3) Funding and (4) the Security
       Trustee, provision was made for the execution by the Seller of this
       Power of Attorney.

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

NOW THIS DEED WITNESSETH:

1.     The Seller irrevocably and by way of security for the performance of
       the covenants, conditions and undertakings on the part of the Seller
       contained in the Mortgage Sale Agreement and the Administration
       Agreement HEREBY APPOINTS each of Funding, the Mortgages Trustee and
       the Security Trustee (each an "Attorney") and any receiver and/or
       administrator appointed from time to time in respect of Funding and/or
       the Mortgages Trustee or their assets severally to be its true and
       lawful attorney for the Seller and in the Seller's name or otherwise to
       do any act, matter or thing which any Attorney considers necessary for

                                      67
<PAGE>

       the protection or preservation of that Attorney's interest in the
       Mortgage Loans, the Mortgages, the Mortgage Deeds and their Related
       Security or which ought to be done under the covenants, undertakings
       and provisions contained in the Mortgage Sale Agreement including
       (without limitation) any or all of the following that is say:

       (a)    to exercise its rights, powers and discretions under the
              Mortgage Loans, the Mortgages, the Mortgage Deeds and the
              Related Security including the right to fix the rate or rates of
              interest payable under the Mortgage Loans in accordance with the
              terms thereof (including whilst such Mortgage Loans subsist and
              subject to the consent of the Mortgages Trustee being given to
              the setting of such rates, setting the Standard Variable Rate of
              the Seller, such other discretionary rates and margins
              applicable to the Mortgage Loans and (other than in respect of
              the Security Trustee) the rate of (and terms relating to) the
              Existing Borrowers' Re-Fix Rate in the circumstances referred to
              in Clause 4 (Interest Rates) of the Administration Agreement
              provided that nothing in this Clause shall prevent the Seller
              (or any of its attorneys from time to time) from setting higher
              rates (and in the case of the Existing Borrowers' Re-Fix Rate,
              imposing terms more advantageous to the Mortgages Trustee) than
              those set or to be set or required or to be required by the
              Mortgages Trustee or Funding under this power of attorney;

       (b)    to exercise all the powers exercisable by the Seller by reason
              of its remaining for the time being the registered owner at H.M.
              Land Registry or registered or recorded heritable creditor in
              the Registers of Scotland of any of the Mortgage Loans, the
              Mortgages, the Mortgage Deeds and the Related Security and in
              particular, but without prejudice to the generality of the
              foregoing, to make Further Advances to Borrowers;

       (c)    to demand, sue for and receive all moneys due or payable under
              the Mortgage Loans, the Mortgages, the Mortgage Deeds and the
              Related Security or any such collateral security or related
              rights;

       (d)    to execute, sign, seal and deliver (using the company seal of
              the Seller where appropriate) a conveyance, assignation or
              transfer of the Mortgage Loans, the Mortgages, the Mortgage
              Deeds and the Related Security or any of them to the Mortgages
              Trustee and its successors in title or other person or persons
              entitled to the benefit thereof;

       (e)    to execute, sign, seal and deliver (using the company seal of
              the Seller where appropriate) a conveyance, assignment,
              assignation or transfer of the Related Security or any item
              comprised therein (to the extent only that such item or items
              relate to the Mortgage Loans) to the Mortgages Trustee and its
              successors in title or other person or persons entitled to the
              benefit thereof or entitled to be registered or recorded at H.M.
              Land Registry or the Registers of Scotland as proprietor or
              heritable creditor thereof (as the case may be);

       (f)    to discharge the Mortgages or the Related Security or any of
              them and to sign, seal, deliver and execute such receipts,
              releases, surrenders, instruments and deeds as may

                                      68
<PAGE>

              be required or advisable in order to discharge the relevant
              Mortgaged Property or Properties from the Mortgages or any of
              them; and

       (g)    to do every other act or thing which the Seller is obliged to do
              under the Mortgage Sale Agreement or which that Attorney may
              otherwise consider to be necessary proper or expedient for fully
              and effectually vesting or transferring the interests sold
              thereunder in the Mortgage Loans, the Mortgages, the Mortgage
              Deeds and their Related Security or any or each of them and/or
              the Seller's estate right and title therein or thereto in the
              Mortgages Trustee and its successors in title or other person or
              persons entitled to the benefit thereof (as the case may be) in
              the same manner and as fully and effectually in all respects as
              the Seller could have done.

2.     Each Attorney shall have the power by writing under its hand by an
       officer of the Attorney from time to time to appoint a substitute who
       shall have power to act on behalf of the Seller as if that substitute
       shall have been originally appointed Attorney by this deed (including,
       without limitation, the power of further substitution) and/or to revoke
       any such appointment at any time without assigning any reason therefor.

3.     The laws of England shall apply to this deed and the interpretation
       thereof and to all acts of the Attorney carried our or purported to be
       carried out under the terms hereof.

4.     The Seller hereby agrees at all times hereafter to ratify and confirm
       whatsoever the said Attorney or its attorneys shall lawfully do or
       cause to be done in and concerning the Mortgage Loans, the Mortgages or
       the Mortgage Deeds or their Related Security by virtue of this deed.

IN WITNESS whereof the Seller has executed this document as a deed the day and
year first before written.

EXECUTED under THE COMMON SEAL of               )
NORTHERN ROCK PLC                               )
affixed in the presence of:                     )

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

Name:

Title:

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

Name:

Title:

                                      69
<PAGE>

                                  SCHEDULE 11

                          FORM OF SCOTTISH TRUST DEED

DECLARATION OF TRUST

among

NORTHERN ROCK PLC, incorporated under the Companies Acts in England
(registered number 3273685), having its registered office at Northern Rock
House, Gosforth, Newcastle upon Tyne NE3 4PL (in its capacity as seller of the
Mortgage Loans, the "Seller" and, in its capacity as a beneficiary of the
Mortgages Trust, the "Seller Beneficiary");

GRANITE FINANCE TRUSTEES LIMITED, incorporated under the laws of Jersey
(registered number 79309), and having its registered office at 22 Grenville
Street, St. Helier, Jersey, JE4 8PX, Channel Islands (the "Mortgages
Trustee"); and

GRANITE FINANCE FUNDING LIMITED, incorporated under the laws of Jersey
(registered number 79308), but acting out of its branch office established in
England (registered overseas company number FC022999 and branch number
BR005916) at 4 Royal Mint Court, London EC3N 4HJ ("Funding" and, in its
capacity as a beneficiary of the Mortgages Trust, the "Funding Beneficiary"
and, together with the Seller Beneficiary, the "Beneficiaries" and each a
"Beneficiary").

WHEREAS:

(A)    Title to the Scottish Trust Property referred to below is held by and
       vested in the Seller;

(B)    In terms of the Mortgages Trust Deed entered into among the Seller,
       Funding and the Mortgages Trustee dated 26 March 2001 (as amended,
       restated, varied, supplemented or novated from time to time, the
       "Mortgages Trust Deed") and the Mortgages Trust constituted in terms
       thereof the Mortgages Trustee holds the Trust Property on trust for the
       Beneficiaries;

(C)    In terms of the Mortgage Sale Agreement entered into among the Seller,
       the Mortgages Trustee, Funding and the Security Trustee dated 26 March
       2001 (as amended, restated, varied, supplemented or novated from time
       to time, the "Mortgage Sale Agreement") the Seller has agreed to sell
       and assign the Scottish Trust Property to the Mortgages Trustee to be
       held thereafter by the Mortgages Trustee under and in terms of the
       Mortgages Trust; and

(D)    In implementation of Clause 4.4 of the Mortgage Sale Agreement and
       pending the taking of legal title to the Scottish Trust Property by the
       Mortgages Trustee, the Seller has undertaken to grant this deed;

NOW THEREFORE the parties HEREBY AGREE and DECLARE as follows:

                                      70
<PAGE>

1      Interpretation

In this deed:-

1.1    Words and expressions defined in the Master Definitions Schedule as
       amended and restated by (and appearing in Appendix 1 to) the Master
       Definitions [ ] Amendment and Restatement Deed made on [ ] between,
       among others, the parties hereto (as the same have been and may be
       further amended , restated, varied or supplemented from time to time
       with the consent of the parties thereto) shall, except where the
       context otherwise requires and save where otherwise defined herein,
       have the same meanings in this deed, including the recitals hereto, and
       this deed shall be construed in accordance with the interpretation
       provisions set out in Clause 2 thereof; and

1.2    "Scottish Trust Property" shall mean the Scottish Mortgage Loans and
       the Scottish Mortgages and other Related Security relative thereto
       brief particulars of which are detailed in the schedule annexed and
       executed as relative hereto, together with:

       a)     all principal sums (including all Further Advances, Further
              Draws and Re-Draws), interest and expenses, present or future,
              comprised therein and secured thereby and the right to demand,
              recover, receive and give receipts for the same;

       b)     the Seller's whole right and interest in the Mortgaged
              Properties secured by the said Scottish Mortgages;

       c)     all rights of action of the Seller against any person in
              connection with any report, valuation, opinion, certificate,
              consent or other statement of fact or opinion given in
              connection with any of the said Scottish Mortgage Loans and
              their Related Security;

       d)     all powers and remedies for enforcing the said Scottish Mortgage
              Loans and their Related Security and all proceeds resulting
              therefrom; and

       e)     all other monies, rights, interests, benefits and others
              pertaining thereto or deriving therefrom, including the benefit
              and proceeds of any insurance policy pertaining thereto.

2      Declaration of Trust

       The Seller hereby DECLARES that from and after the date hereof it holds
       and, subject to Clause 9 (Termination of Trust) hereof, shall
       henceforth hold the Scottish Trust Property and its whole rights,
       title, benefit and interest, present and future, therein and thereto in
       trust absolutely for the Mortgages Trustee and its assignees (whether
       absolutely or in security) whomsoever.

3      Intimation

       The Seller hereby intimates to the Mortgages Trustee the coming into
       effect of the trust hereby declared and created and the Mortgages
       Trustee by its execution hereof immediately subsequent to the execution
       of this Deed by the Seller acknowledges such intimation.

                                      71
<PAGE>

4      Dealings with Trust Property and Negative Pledge

       The Seller warrants and undertakes to the Mortgages Trustee that:

       4.1    as at the date hereof, it holds (subject to any pending
              registration or recording in the Registers of Scotland) legal
              title to the Scottish Trust Property unencumbered by any fixed
              or floating charge or other Security Interest;

       4.2    it shall not create or agree to create any fixed or floating
              charge or other Security Interest over or which may attach to or
              affect the whole or any part of the Scottish Trust Property or
              otherwise dispose of the same at any time when such property or
              part thereof remains subject to the trust hereby created; and

       4.3    it shall deal with the Scottish Trust Property (including
              without limitation the calculation and setting of any interest
              rate applicable thereto) in accordance with the provisions of
              the Transaction Documents and the specific written instructions
              (if any) of the Mortgages Trustee or its foresaids and shall
              take, subject to Clause 9 (Termination of Trust) hereof, any
              such action as may be necessary (including without limitation
              the raising or defending of any proceedings in any court of law
              whether in Scotland or elsewhere) to secure or protect the title
              to the Scottish Trust Property but only in accordance with the
              specific written instructions (if any) of the Mortgages Trustee
              or its foresaids.

5      Change of Trustee

       Except with the prior written consent of the Mortgages Trustee or its
       foresaids and (for so long as each retains any right or interest in the
       Scottish Trust Property) Funding and the Security Trustee, the Seller
       shall not be entitled to resign office as a trustee or assume a new
       trustee or trustees under this Deed.

6      Power of Beneficiary

       6.1    The Mortgages Trustee, as beneficiary hereunder, shall have the
              right in the circumstances stated in Clause 6 (Perfection of the
              Assignment) of the Mortgage Sale Agreement to complete its title
              to the Scottish Trust Property or any part thereof or to call
              upon the Seller to execute and deliver to the Mortgages Trustee
              or its foresaids valid assignations and transfers (including
              where applicable Scottish Transfers) of the Scottish Trust
              Property or any part thereof, and that notwithstanding the
              winding-up of the Seller or the administration of the Seller, or
              the appointment of any receiver to all or any part of the
              Scottish Trust Property.

       6.2    Without prejudice to the generality of Clause 6.1, the Seller
              undertakes to the Mortgages Trustee and binds and obliges itself
              that, upon the occurrence of any one of the events specified in
              Clause 6.1(a) to (f) of the Mortgage Sale Agreement, it will
              within five London Business Days of such occurrence provide such
              information as is necessary to enable the Mortgages Trustee to
              complete Scottish Transfers (including all schedules and
              annexures thereto) in relation to the whole of the Scottish
              Mortgages comprised within the Scottish Trust Property.

                                      72
<PAGE>

       6.3    For further assuring the said rights and powers specified in
              this Clause 6, the Seller has granted a power of attorney in
              favour of the Mortgages Trustee, Funding and the Security
              Trustee substantially in the form set out in Schedule 10 to the
              Mortgage Sale Agreement.

7      Mortgages Trustee Declaration of Trust

       7.1    The Mortgages Trustee by its said execution of this Deed hereby
              DECLARES that its whole right, title and beneficial interest in
              and to the Scottish Trust Property in terms of this Deed are and
              shall be held (to the extent not already so held) by the
              Mortgages Trustee under and in terms of the Mortgages Trust and
              all monies received or held by the Mortgages Trustee relating
              thereto or deriving therefrom have been and shall be comprised
              in the Trust Property as defined in the Mortgages Trust Deed and
              shall be subject to and administered by the whole terms and
              conditions of the Mortgages Trust Deed and the Administration
              Agreement.

       7.2    Each of the Seller, the Seller Beneficiary, Funding and the
              Funding Beneficiary hereby acknowledge, accept and agree to the
              declaration constituted by and the whole other terms and
              conditions of the foregoing Clause 7.1.

8      Mortgages Trust Intimation

       The Mortgages Trustee hereby intimates to the Beneficiaries of the
       Mortgages Trust, the declaration of trust made in terms of Clause 7
       hereof and the Beneficiaries of the Mortgages Trust by their respective
       executions of this Deed acknowledge such intimation.

9      Termination of Trust

       If at any time during the subsistence of the trust hereby declared and
       created:

       9.1    full legal title to any part or parts of the Scottish Trust
              Property is taken by the Mortgages Trustee or its foresaids in
              accordance with the provisions of Clause 6 (Perfection of the
              Assignment) of the Mortgage Sale Agreement (which in the case of
              any Scottish Mortgage shall be constituted by the registration
              or recording of the title thereto in the Registers of Scotland);
              or

       9.2    any Scottish Mortgage Loan and Related Security comprised within
              the Scottish Trust Property has been repurchased by the Seller
              pursuant to Clauses 8.4 to 8.6 (inclusive) of the Mortgage Sale
              Agreement; or

       9.3    any such Scottish Mortgage Loan and Related Security has been
              redeemed in full and therefore no longer forms part of the
              Mortgage Portfolio; then

       the trust hereby declared and created shall (but only when the relevant
       events or transaction have been completed irrevocably, validly and
       full) ipso facto fall and cease to be of effect in respect of such part
       or parts of the Scottish Trust Property but shall continue in full
       force and effect in respect of the whole remainder (if any) of the
       Scottish Trust Property.

                                      73
<PAGE>

10     Variation

       This Deed and the trust hereby declared and created shall not be varied
       in any respect without the consent in writing of the Mortgages Trustee
       or its foresaids and (for so long as each retains any right or interest
       in the Scottish Trust Property) Funding and the Security Trustee.

11     Governing Law

11.1   This Deed shall be governed by, and construed in accordance with, Scots
       law, other than Clauses 7 and 8 hereof which shall be governed by, and
       construed in accordance with, English law.

11.2   The parties hereto submit to the non-exclusive jurisdiction of the
       Scottish courts so far as not already subject thereto and waive any
       right or plea of forum non conveniens in respect of such jurisdiction.

12     Registration

       The parties consent to the registration of this deed for preservation.

IN WITNESS WHEREOF these presents consisting of this and the preceding [four]
pages together with the Schedule hereto are subscribed by the Seller, the
Mortgages Trustee and Funding as follows:

As Seller and as Seller Beneficiary:

SUBSCRIBED by
NORTHERN ROCK PLC
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)

......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on

                                      74
<PAGE>

As Mortgages Trustee:

SUBSCRIBED by
GRANITE FINANCE TRUSTEES LIMITED
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)

......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on

As Funding and as Funding Beneficiary:

SUBSCRIBED by
GRANITE FINANCE FUNDING LIMITED
acting by:

......................   Director          .....................      Director
(Print Full Name)                               (Signature)

......................   Director/         .....................      Director/
(Print Full Name)        Secretary              (Signature)         Secretary

all together at
on

                                      75
<PAGE>

This is the Schedule to the foregoing Scottish Trust Deed between Northern
Rock PLC, Granite Finance Trustees Limited and Granite Finance Funding
Limited

                Scottish Mortgage Loans and Related Security

   1                   2                        3                  4

Account No.    Property Address        Borrower Name(s)          Date of
                                                                 Mortgage
                                                                 Completion

                                      76
<PAGE>

                                  SCHEDULE 12

                              LENDING CRITERIA /1/

General

To proceed with obtaining a Mortgage Loan, each prospective Borrower completes
an application form which includes information with respect to the applicant's
income from all sources, current employment details, bank account information
(where the Borrower has a bank account), current mortgage information (if
applicable) and certain other personal information. A credit reference agency
search is made against each Borrower at their current address and, if
necessary, former addresses, in all cases which will give details of any
public information which includes county court judgements and details of any
bankruptcy.

Employment details

The Seller operates the following policy in respect of the verification of
Borrower income details. Under this policy, Borrowers are categorised as
either "employed" or "self-employed" by the Seller.

Proof of income for employed prospective Borrowers may be established by:

(a)    two current cumulative monthly payslips or, if paid weekly, the last
       three consecutive payslips; or

(b)    Form P60, or employer's reference, with evidence of continued
       employment.

Proof of income for self-employed prospective Borrowers may be established by:

(a)    a letter from the Borrower's accountant in acceptable form; or

(b)    acceptable confirmation of self-employment which might include any of a
       tax return, accountant's letter or a trade invoice, together with a
       certificate from the Borrower as to income.

For certain Mortgage Loan products, particularly those that may involve larger
maximum loan amounts or higher loan to value ("LTV") ratios, the Seller
generally will require an acceptable accountant's letter or audited accounts.

Income Capacity

The following maximum income multiples are applied in determining the amount
of the Mortgage Loan:

(a)    Single applicant- 3.50 times gross income for all Mortgage Loans (other
       than Together Mortgage Loans); 3.80 times gross income for Together
       Mortgage Loans.

--------
/1/ These Lending Criteria apply to Mortgage Loans other than Personal Secured
Loans.

                                      77
<PAGE>

(b)    Joint applicants - a sum equal to: (1) the higher of 2.75 times the
       joint gross income of the applicants (3.00 times joint gross income for
       Together Mortgage Loans), or 3.50 times the highest earning applicant's
       gross income (3.80 times the highest joint gross income for Together
       Mortgage Loans) plus (2) the gross income of the other applicant.

Valuation

The Seller requires that a valuation of the Mortgaged Property be obtained
either from its in-house valuation department or from an independent firm of
professional valuers selected from a panel of approved valuers. Details of
professional indemnity insurance held by panel valuers are kept by the Seller.
All valuations of Properties are reviewed by the person underwriting the
Mortgage Loan and/or the valuation team.

Property Types

The Seller applies the criteria set out below in determining the eligibility
of Properties to serve as security for Mortgage Loans. Under these criteria,
eligible property types include freehold, heritable and leasehold houses,
leasehold and heritable flats and mixed commercial and residential use
properties where there is a separate entrance for the residential part of the
Mortgaged Property. In the case of a Mortgage Loan secured by a leasehold
property, the Seller requires that the unexpired term of the lease be at least
30 years from the end of the agreed mortgage term, with a minimum remaining
term of 50 years from the beginning of the mortgage term.

Certain property types falling outside the criteria may be considered on a
case by case basis. However, certain property types will not be considered for
the purposes of providing security for a Mortgage Loan. The types of property
falling within this category comprise freehold flats (in England and Wales),
shared ownership or shared equity schemes and properties of non-standard
construction of a type considered to be defective.

Loan Amount

Generally, the maximum loan amount is (pound)500,000, but this varies
according to the application in question. In exceptional cases, this limit may
be exceeded.

Term

Each Mortgage Loan must have an initial term of between 7 and 30 years (in the
case of a Together Mortgage Loan, a Together Connections Mortgage Loan and a
Connections Mortgage Loan) or between 7 and 35 years in the case of all other
Mortgage Loans.

Age of applicant

All Borrowers in respect of non-Together Mortgage Loans must be aged 18 or
over. All Borrowers in respect of Together Mortgage Loans must be aged 21 or
over. There are no maximum age limits.

                                      78
<PAGE>

Discretion to lend outside Lending Criteria

On a case-by-case basis, and within approved limits as detailed in the
Seller's lending policy, the Seller may have determined that, based upon
compensating factors, a prospective Borrower who did not strictly qualify
under its lending criteria warranted an underwriting exception. Compensating
factors may include, but are not limited to, a low LTV ratio, stable
employment and time in residence at the applicant's current residence.

Maximum Loan To Value

For Mortgage Loans up to (pound)250,000, the maximum LTV ratio permitted is 95
per cent. of the current market value of the Mortgaged Property determined by
the valuation. For Mortgage Loans up to (pound)400,000 the maximum LTV ratio
permitted is 90 per cent. of the current market value of the Mortgaged
Property determined by relevant valuation. For Mortgage Loans of over
(pound)400,000 the maximum LTV ratio permitted is 85 per cent. of the current
market value of the Mortgaged Property determined by valuation.

                                      79
<PAGE>

<TABLE>
<CAPTION>

                                         SCHEDULE 13

                                    STANDARD DOCUMENTATION

Doc No.          Document                                                Period in Use

<S>             <C>                                                     <C>
1.               (a) NRBS Mortgage Offer - General Conditions            01/07/95 to 31/12/95

                 (b)NRBS Mortgage Offer - General Conditions             01/01/96 to 30/11/96

                 (c)NRBS Mortgage Offer - General Conditions             01/12/96 to 30/09/97

2.               NRBS Mortgage Deed                                      01/07/95 to 30/09/97

3.               NRBS Mortgage Conditions Booklet 1995                   01/07/95 to 30/09/97

4.               (a)NR plc Mortgage Offer - General Conditions           01/10/97 to 31/12/97

                 (b)NR plc Mortgage Offer - General Conditions           01/12/97 to 31/12/97

                 (c)NR plc Mortgage Offer - General Conditions           01/01/98 to 31/05/98

                 (d)NR plc Mortgage Offer - General Conditions           01/06/98 to 31/12/98

                 (e)NR plc Mortgage Offer - General Conditions           01/01/99 to present

5.               NRBS/NR plc Transitional Mortgage Deed                  01/07/97 to 01/10/97

6.               NR plc Mortgage Deed                                    01/10/97 to present

7.               NR plc Mortgage Conditions 1997                         01/10/97 to present

8.               NR plc "Together" Mortgage Deed                         01/04/99 to present

9.               Discounted Mortgage Brochures

10.              Discounted Mortgage Special Conditions

11.              Cashback Mortgage Brochures

12.              Cashback Mortgage Special Conditions

13.              Fixed Rate Mortgage Brochures

14.              Fixed Rate Mortgage Special Conditions

15.              Together Mortgage Brochures

16.              Together Mortgage Special Conditions

</TABLE>

                                             80
<PAGE>

<TABLE>
<CAPTION>

                                                           APPENDIX A
                                              THE INITIAL MORTGAGE LOAN PORTFOLIO

Account No            Property Address            Name of Borrower(s)        Date of Mortgage Completion        Current Balance

<S>                  <C>                         <C>                        <C>                                <C>

</TABLE>

                                                               81

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