Document:

Exhibit 4.2

                                  DATED ___, 2002

                               ABBEY NATIONAL PLC

                                       and

                             HOLMES FUNDING LIMITED

                                       and

                             HOLMES TRUSTEES LIMITED

                                       and

                             SPV MANAGEMENT LIMITED

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

                    AMENDED AND RESTATED MORTGAGES TRUST DEED

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

                                  ALLEN & OVERY

                                     London

                                  ICM:572242.1

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                                TABLE OF CONTENTS

Clause                                                                                                    Page

<S>      <C>                                                                                              <C>
1.       Definitions and Construction.........................................................................2
2.       Creation of Mortgages Trust..........................................................................2
3.       Conditions Precedent.................................................................................3
4.       Acquisition by Funding of an Increased Interest in the Trust Property................................3
5.       Initial Funding Share and Initial Seller Share.......................................................5
6.       Acquisition by Seller of an Interest relating to Capitalised Interest................................6
7.       Payment by the Seller to Funding of the Amount Outstanding under an Intercompany Loan................6
8.       Adjustment of Funding Share Percentage and Seller Share Percentage on Distribution Dates.............7
9.       Minimum Seller Share................................................................................10
10.      Distribution of Revenue Receipts....................................................................11
11.      Distribution of Principal Receipts..................................................................12
12.      Allocation of Losses................................................................................14
13.      Ledgers.............................................................................................14
14.      Costs and Expenses of the Mortgages Trustee.........................................................15
15.      Directions from Beneficiaries.......................................................................15
16.      Early Termination of the Mortgages Trust............................................................16
17.      Transfers...........................................................................................16
18.      Covenants of the Mortgages Trustee..................................................................16
19.      Power to Delegate...................................................................................18
20.      Powers of Investment................................................................................18
21.      Other Provisions regarding the Mortgages Trustee....................................................18
22.      No retirement of Mortgages Trustee..................................................................19
23.      Termination.........................................................................................20
24.      Further Assurances..................................................................................20
25.      Amendments, etc.....................................................................................20
26.      Non Petition Covenant...............................................................................20
27.      No Partnership or Agency............................................................................20
28.      Calculations........................................................................................21
29.      No Waiver; Remedies.................................................................................21
30.      Execution in Counterparts; Severability.............................................................21
31.      Confidentiality.....................................................................................21
32.      Exclusion of third party rights.....................................................................22
33.      Addresses for Notices...............................................................................22
34.      Governing Law and Submission to Jurisdiction........................................................23
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THIS AMENDED AND RESTATED MORTGAGES TRUST DEED is made on ___, 2002 between:

(1)      ABBEY NATIONAL PLC (registered number 2294747), a public limited
         company incorporated under the laws of England and Wales whose
         registered office is at Abbey House, Baker Street, London NW1 6XL in
         its capacity as Seller, Beneficiary and Cash Manager;

(2)      HOLMES FUNDING LIMITED (registered number 3982428), a private limited
         company incorporated under the laws of England and Wales whose
         registered office is at Abbey House, Baker Street, London NW1 6XL;

(3)      HOLMES TRUSTEES LIMITED (registered number 3982431) a private limited
         company incorporated under the laws of England and Wales whose
         registered office is at Abbey House, Baker Street, London NW1 6XL in
         its capacity as Mortgages Trustee; and

(4)      SPV MANAGEMENT LIMITED (registered number 2548079) a private limited
         company incorporated under the laws of England and Wales whose
         registered office is at 78 Cannon Street, London EC4P 5LN (the "SPV
         MANAGEMENT").

WHEREAS:

(A)      SPV Management agreed to constitute the Mortgages Trust in favour of
         Funding and the Seller on the terms and subject to the conditions set
         out in the Mortgages Trust Deed dated 25th July, 2000 (as amended
         and/or restated from time to time, the "MORTGAGES TRUST DEED").

(B)      The Mortgages Trustee agreed to hold the Trust Property as trustee for
         the Beneficiaries upon, with and subject to the trusts, powers and
         provisions of the Mortgages Trust Deed.

(C)      The Seller carries on the business of, inter alia, originating
         residential first mortgage loans to individual Borrowers in England,
         Wales and Scotland and of managing and administering such mortgage
         loans. The Seller assigned an initial portfolio of such mortgage loans
         on 26th, July 2000 and new portfolios of such mortgages loans on
         subsequent dates to the Mortgages Trustee pursuant to the Mortgage Sale
         Agreement, which portfolio is held by the Mortgages Trustee as trustee
         for the Beneficiaries upon, with and subject to the trusts, powers and
         provisions of the Mortgages Trust Deed.

(D)      On 29th November, 2000 the parties to the Mortgages Trust Deed agreed
         to amend the terms of the Mortgages Trust Deed as set out in an
         Amendment Agreement to the Mortgages Trust Deed to provide for
         repayment by Funding of its obligations in respect of certain term
         advances known as Scheduled Amortisation Term Advances.

(E)      On 23rd May, 2001 the parties to the Mortgages Trust Deed again agreed
         to amend the terms of the Mortgages Trust Deed as set out in the Second
         Deed of Amendment to the Mortgages Trust Deed to exclude application of
         the Trustee Act 2000.

(F)      On 5th July, 2001 the parties to the Mortgages Trust Deed agreed to
         amend and restate the terms of the Mortgages Trust Deed as set out in
         the Amended and Restated Mortgages Trust Deed of the same date.

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                                       2

(G)      On 8th November, 2001 the parties to the Mortgages Trust Deed agreed to
         amend and restate the terms of the Mortgages Trust Deed as set out in
         the Amended and Restated Mortgages Trust Deed of the same date.

(H)      The parties to the Mortgages Trust Deed have again agreed to amend and
         restate the terms of the Mortgages Trust Deed as set out herein.

NOW THIS DEED WITNESSES:

1.       DEFINITIONS AND CONSTRUCTION

1.1      The Amended and Restated Master Definitions and Construction Schedule
         signed for the purposes of identification by Allen & Overy and
         Slaughter and May on ___, 2002 (as the same may be amended, varied or
         supplemented from time to time with the consent of the parties hereto)
         is expressly and specifically incorporated into this Agreement and,
         accordingly, the expressions defined in the Amended and Restated Master
         Definitions and Construction Schedule (as so amended, varied or
         supplemented) shall, except where the context otherwise requires and
         save where otherwise defined herein, have the same meanings in this
         Agreement, including the Recitals hereto and this Agreement shall be
         construed in accordance with the interpretation provisions set out in
         CLAUSE 2 of that Amended and Restated Master Definitions and
         Construction Schedule.

1.2      This Deed amends and restates the Mortgage Trust Deed made on 25th
         July, 2000 between the parties hereto as amended on 29th November, 2000
         and 23rd May, 2001 and amended and restated on 5th July, 2001 and 8th
         November, 2001 (the "PRINCIPAL DEED"). As of the date of this Deed, any
         future rights or obligations (excluding such obligations accrued to the
         date of this Deed) of a party under the Principal Deed shall be
         extinguished and shall instead be governed by this Deed.

2.       CREATION OF MORTGAGES TRUST

2.1      INITIAL TRUST PROPERTY

         On 25th July, 2000 SPV Management settled on the date thereof on trust
         the sum of (pound)100 (one hundred pounds) (the "INITIAL TRUST
         PROPERTY") to be held on trust absolutely as to both capital and income
         by the Mortgages Trustee for the benefit, as tenants in common, of the
         Seller as to the Initial Seller Share Percentage and Funding as to the
         Initial Funding Share Percentage.

2.2      CLOSING TRUST PROPERTY

         Pursuant to the provisions of the Mortgage Sale Agreement, the Seller
         assigned the Closing Trust Property on the Initial Closing Date.

2.3      FUTURE TRUST PROPERTY

         From time to time and pursuant to the Mortgage Sale Agreement, the
         Seller has assigned and intends to assign the Future Trust Property to
         the Mortgages Trustee.

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                                       3

2.4      TRUST PROPERTY

         Subject to CLAUSE 3, the Mortgages Trustee shall hold the Trust
         Property as to both capital and income on trust absolutely for Funding
         (as to the Funding Share) and for the Seller (as to the Seller Share)
         as tenants in common upon, with and subject to all the trusts, powers
         and provisions of this Deed.

3.       CONDITIONS PRECEDENT

3.1      The Initial Trust Property is held by the Mortgages Trustee on the
         Mortgages Trust.

3.2      The Closing Trust Property shall be held by the Mortgages Trustee on
         the Mortgages Trust upon the satisfaction of the following conditions
         precedent:

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

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

         (c)      payment by Funding to the Seller of the Initial Consideration.

3.3      Any Future Trust Property shall be held by the Mortgages Trustee on the
         Mortgages Trust subject to satisfaction of the conditions set out in
         CLAUSE 4.1 of the Mortgage Sale Agreement for the transfer of New Loans
         and their New Related Security to the Mortgages Trustee.

4.       ACQUISITION BY FUNDING OF AN INCREASED INTEREST IN THE TRUST PROPERTY

4.1      OFFER TO ASSIGN AND CONDITIONS TO ASSIGNMENT

         On not more than 60 nor less than 30 days' written notice, Funding may
         offer to make a payment to the Seller so as to increase Funding's share
         of the Trust Property on the Distribution Date specified in that
         notice. Such offer shall only be made if the following conditions
         precedent are satisfied on the Distribution Date:

         (a)      the Principal Deficiency Ledger does not have a debit balance
                  (which remains outstanding) as at the most recent Interest
                  Payment Date;

         (b)      no Note Event of Default or Intercompany Loan Event of Default
                  shall have occurred which is continuing or unwaived as at the
                  relevant Distribution Date;

         (c)      the Funding Security Trustee is not aware that the increase in
                  the Funding share of the Trust Property (or the corresponding
                  decrease in the Seller Share of the Trust Property) would
                  adversely affect the then current credit ratings by the Rating
                  Agencies (or any of them) of the Notes;

         (d)      the Notes have been issued by the relevant Issuer, the
                  subscription proceeds received on behalf of the relevant
                  Issuer and advanced by the relevant Issuer to Funding pursuant
                  to an Intercompany Loan Agreement, the proceeds of which will
                  be applied by Funding to make the payment referred to in the
                  notice on the relevant Distribution Date;

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         (e)      Funding has entered into, if necessary, a New Start-up Loan, a
                  New Variable Rate Swap, New Fixed Floating Rate Swap and a New
                  Tracker Rate Swap and adjustments have been made, if required,
                  to the Reserve Funds;

         (f)      receipt of a solvency certificate from the Seller in form and
                  content acceptable to the Mortgages Trustee, Funding and the
                  Funding Security Trustee;

         (g)      as at the relevant Distribution Date, the aggregate
                  Outstanding Principal Balance of Loans constituting the Trust
                  Property, in respect of which the aggregate amount in arrear
                  is more than three times the monthly payment then due, is less
                  than 5 per cent. of the aggregate Outstanding Principal
                  Balance of all Loans constituting the Trust Property;

         (h)      the short term, unsecured, unguaranteed and unsubordinated
                  debt obligations of the Seller are rated at least P-1 by
                  Moody's, A-1 by Standard and Poor's and F1 by Fitch at the
                  time of, and immediately following, the payment made by
                  Funding on the relevant Distribution Date;

         (i)      the product of the WAFF and WALS for the Loans constituting
                  the Trust Property calculated on the relevant Distribution
                  Date in the same way as for the Initial Portfolio (or as
                  agreed by the Servicer and the Rating Agencies from time to
                  time) does not exceed the product of the WAFF and WALS for the
                  Loans constituting the Trust Property calculated on the most
                  recent previous Closing Date, plus [0.25] per cent.;

         (j)      the loan-to-value ratio of Loans in the Trust Property, after
                  application of the LTV Test on the relevant Distribution Date,
                  does not exceed the loan-to-value ratio (based on the LTV
                  Test) of Loans in the Trust Property on the most recent
                  previous Closing Date plus 0.50 per cent.; and

         (k)      the Reserve Fund has not been debited on or before the
                  relevant Distribution Date for the purposes of curing a
                  Principal Deficiency in respect of the Term Advances in
                  circumstances where the Reserve Fund has not been replenished
                  by a corresponding amount by the relevant Distribution Date.

         Funding may not offer to make a payment to the Seller in consideration
         of an increased share of the Trust Property after the Interest Payment
         Date falling in October, 2010 if the option to redeem the Notes on the
         Interest Payment Date in July, 2010 pursuant to Condition 5(D) of the
         Terms and Conditions of the First Issuer Notes is not exercised.

4.2      COMPLETION OF ASSIGNMENT

         Subject to satisfaction of the conditions precedent set out in CLAUSE
         4.1 above and that offer is accepted by the Seller, Funding shall pay
         to the Seller an amount equal to the increase in the Funding share of
         the Trust Property and the Funding share of the Trust Property shall
         increase by a corresponding amount, and the Seller Share shall decrease
         by the same amount.

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4.3      AUDIT OF LOANS CONSTITUTING THE TRUST PROPERTY

         If the short term, unsecured, unguaranteed and unsubordinated debt
         obligations of the Seller fall below A-1 by Standard & Poor's, P-1 by
         Moody's and/or F1 by Fitch, then the Beneficiaries shall appoint a firm
         of independent auditors (approved by the Rating Agencies) to determine
         whether the Loans and their Related Security (or any part of them)
         constituting the Trust Property complied with the representations and
         warranties set out in Schedule 1 of the Mortgage Sale Agreement as at
         the date such Loans were assigned to the Mortgages Trustee. The costs
         of such independent auditors shall be borne by the Beneficiaries pro
         rata according to their respective current percentage shares in the
         Trust Property.

4.4      TAX

         (a)      Any payment by Funding to the Seller to increase its share of
                  the Trust Property shall be inclusive of value added tax (if
                  any); and

         (b)      Any stamp duty or stamp duty reserve tax in respect of any
                  increase in Funding's share of the Trust Property shall be
                  payable by the Seller.

5.       ACQUISITION BY SELLER OF AN INTEREST RELATING TO CAPITALISED INTEREST

5.1      Any increase in the Outstanding Principal Balance due to Capitalised
         Interest will be allocated to the Funding Share of the Trust Property
         and to the Seller Share of the Trust Property, based on respectively
         the Funding Share Percentage and the Seller Share Percentage in the
         Trust Property as calculated on the previous Distribution Date.

5.2      Prior to an Insolvency Event occurring in respect of the Seller, on
         each Distribution Date the Seller shall make a cash payment to Funding
         in an amount equal to its share of the Capitalised Interest in respect
         of those Loans that are subject to Payment Holidays or Underpayments.
         As a result of making such payment the Seller Share of the Trust
         Property will increase by an amount equal to the amount paid to Funding
         for Funding's Share of the Capitalised Interest, and Funding's Share of
         the Trust Property will decrease by a corresponding amount. The cash
         payment shall be made in accordance with CLAUSE 5.4 below.

5.3      If an Insolvency Event occurs in respect of the Seller, then the Seller
         may acquire from Funding its share of the Capitalised Interest in the
         same manner as is contemplated in CLAUSE 5.2, but it is not obliged to
         do so.

5.4      In respect of the cash payment to be made by the Seller pursuant to
         CLAUSE 5.2, the Seller hereby directs the Mortgages Trustee to deduct
         from the Seller's Share of the Mortgages Trust Available Revenue
         Receipts (allocated to the Seller pursuant to CLAUSE 10.2 of this Deed)
         an amount equal to such cash payment and to pay the same to Funding in
         satisfaction of the Seller's obligations under CLAUSE 5.2. To the
         extent that the Seller's Share of the Mortgages Trust Available Revenue
         Receipts is less than the amount required to be paid by it pursuant to
         CLAUSE 6.2, then the Seller shall pay an amount equal to the shortfall
         directly to Funding from its own resources.

5.5      Any payment by the Seller pursuant to CLAUSE 5.2 shall be exclusive of
         value added tax (if any).

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6.       PAYMENT BY THE SELLER TO FUNDING OF THE AMOUNT OUTSTANDING UNDER AN
         INTERCOMPANY LOAN

6.1      CONDITIONS PRECEDENT TO ACCEPTANCE OF OFFER

         Funding may accept any offer by the Seller to pay the amount
         outstanding under any Series of an Intercompany Loan (referred to in
         this CLAUSE 6 as the "RELEVANT INTERCOMPANY LOAN"), but only if:

         (a)      the Outstanding Principal Balance of the relevant Series of
                  the Intercompany Loan is less than 10 per cent. of its
                  Outstanding Principal Balance immediately after that relevant
                  Intercompany Loan was drawn by Funding;

         (b)      the Security Trustee has received written confirmation from
                  each of the Rating Agencies that there would not be any
                  adverse effect on the then current ratings of the Notes if
                  Funding accepted the offer;

         (c)      Funding would receive the payment from the Seller on a Funding
                  Interest Payment Date (and exclusive of VAT); and

         (d)      Funding will apply the proceeds of the payment to repay the
                  relevant Series of the Intercompany Loan and the relevant
                  Issuer has confirmed to Funding that on that Funding Interest
                  Payment Date it will use the proceeds of the relevant payment
                  to repay the corresponding classes of Notes.

6.2      ADJUSTMENT TO SHARES IF OFFER ACCEPTED

         If Funding accepts the offer as described in CLAUSE 7.1 above, then the
         Funding Share of the Trust Property shall decrease by an amount
         corresponding to the amount paid by the Seller and the Seller Share of
         the Trust Property shall increase by the same amount.

7.       INITIAL FUNDING SHARE AND INITIAL SELLER SHARE

7.1      INITIAL FUNDING SHARE

         The "INITIAL FUNDING SHARE" of the Trust Property was (pound)35.25 at
         25th July, 2000 and (pound)2,256,000,035.25 at the Initial Closing Date
         and the "INITIAL FUNDING SHARE PERCENTAGE" was the Initial Funding
         Share expressed as a percentage of the Trust Property at such date,
         that is to say, 35.25 per cent. References herein to the "FUNDING
         SHARE" shall mean, prior to the first Distribution Date, the Initial
         Funding Share and thereafter shall mean the Current Funding Share (as
         defined below).

7.2      INITIAL SELLER SHARE

         The "INITIAL SELLER SHARE" of the Trust Property was the sum which
         remains of the Trust Property after deduction of the Initial Funding
         Share. As at 25th July, 2000, the Initial Seller Share was (pound)64.75
         and the "INITIAL SELLER SHARE PERCENTAGE" was equal to 100 per cent.
         minus the Initial Funding Share Percentage, that is to say, 64.75 per
         cent. The amount of the Initial Seller Share and the Initial Seller
         Share Percentage on the Initial Closing was determined immediately
         after the Initial Closing Date. References herein to the "SELLER

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         SHARE" shall mean, prior to the first Distribution Date, the Initial
         Seller Share and thereafter shall mean the Current Seller Share (as
         defined below).

7.3      ROUNDING OF PERCENTAGE SHARES

         Except for the Initial Closing Date (and unless otherwise agreed by the
         Beneficiaries), the Funding Share Percentage and the Seller Share
         Percentage shall be calculated to five decimal places.

8.       ADJUSTMENT OF FUNDING SHARE PERCENTAGE AND SELLER SHARE PERCENTAGE ON
         DISTRIBUTION DATES

8.1      DISTRIBUTION

         On each Distribution Date, excluding for the avoidance of doubt, the
         Initial Closing Date, the Funding Share Percentage and the Seller Share
         Percentage will be recalculated by the Cash Manager (on behalf of the
         Mortgages Trustee and the Beneficiaries) based on the aggregate
         Outstanding Principal Balance of the Loans constituting the Trust
         Property (as adjusted from time to time) on the second London Business
         Day immediately preceding that Distribution Date. On each Distribution
         Date, the Mortgages Trustee will distribute Principal Receipts and
         Revenue Receipts in accordance with CLAUSES [10] and [11] hereof.

8.2      CURRENT FUNDING SHARE PERCENTAGE

         On each Distribution Date (the "RELEVANT DISTRIBUTION DATE") or on the
         date that the Mortgages Trust terminates, the "CURRENT FUNDING SHARE
         PERCENTAGE" will be an amount, expressed as a percentage (calculated to
         an accuracy of three decimal places (rounded upwards)), equal to:

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

         where,

         A  =     the Current Funding Share as at the immediately preceding
                  Distribution Date (or, in the case of the first Distribution
                  Date, the Initial Funding Share as at the Initial Closing
                  Date);

         B  =     the amount of any Principal Receipts distributed to Funding on
                  that Relevant Distribution Date in accordance with the
                  provisions described in CLAUSE 9 below;

         C  =     the amount of any Losses sustained on the Loans in the period
                  from the last Distribution Date and ending on the Relevant
                  Distribution Date and allocated to Funding (based on the
                  Funding Share Percentage thereof calculated on the immediately
                  preceding Distribution Date or, in the case of the first
                  Distribution Date, the Initial Funding Share Percentage) in
                  the Distribution Period ending on the Relevant Distribution
                  Date;

         D  =     an amount equal to any consideration (excluding Deferred
                  Consideration) paid by Funding to the Seller in relation to
                  any New Loans assigned to the Mortgages Trustee on the
                  Relevant Distribution Date;

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                                       8

         E  =     an amount equal to any consideration (excluding Deferred
                  Consideration) paid by Funding to the Seller in relation to
                  any acquisition by Funding from the Seller on the Relevant
                  Distribution Date of a portion of the then Current Seller
                  Share of the Trust Property;

         F  =     an amount equal to any Capitalised Interest accruing on a loan
                  due to Borrowers taking Payment Holidays and/or making
                  Underpayments since the last Distribution Date less the amount
                  paid by the Seller on the Relevant Distribution Date to
                  acquire an interest in the Trust Property in accordance with
                  CLAUSE 5 above; and

         G  =     the aggregate Outstanding Principal Balance of all the Loans
                  constituting the Trust Property as at the Relevant
                  Distribution Date including (i) after making the
                  distributions, allocations and additions referred to in (B),
                  (C), (D), (E) and (F) above, (ii) after taking account of any
                  distributions of Principal Receipts to Funding and the Seller,
                  the amount of any Losses allocated to Funding and the Seller
                  and the amount of any other additions or subtractions to the
                  Trust Property and (ii) after making the adjustments referred
                  to paragraphs (a) to (e) (inclusive) of CLAUSE 8.4 below.

8.3      CURRENT FUNDING SHARE

         The "CURRENT FUNDING SHARE" will be an amount equal to:

                              A - B - C + D + E + F

         where "A", "B", "C", "D", "E" and "F" have the meanings specified in
         CLAUSE 6.2 above.

8.4      ADJUSTMENTS TO TRUST PROPERTY

         On each Relevant Distribution Date the aggregate Outstanding Principal
         Balance of the Loans constituting the Trust Property shall be reduced
         or, as the case may be, deemed to be reduced for the purposes of the
         calculation set out in "G" above, if any of the following events has
         occurred in the Distribution Period ending on the Relevant Distribution
         Date:

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

         (b)      a Loan or (as applicable) its Related Security (i) does not
                  comply with the Loan Warranties in the Mortgage Sale Agreement
                  or (ii) is the subject of a Product Switch or a Further
                  Advance or other obligation of the Seller to repurchase
                  (including, for the avoidance of doubt, any obligation to
                  repurchase pursuant to CLAUSE 7.4 of the Mortgage Sale
                  Agreement), and if the Seller fails to repurchase the Loan or
                  Loans under the relevant Mortgage Account and their Related
                  Security as required by the terms of the Mortgage Sale
                  Agreement, then the Trust Property shall be deemed to be
                  reduced for the purposes of the calculation in "G" above by an
                  amount equal to the Outstanding Principal Balance of the
                  relevant Loan or Loans under the relevant Mortgage Account
                  together with Arrears of Interest and Accrued Interest; and/or

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                                       9

         (c)      the Seller would be required to repurchase a Loan and its
                  Related Security in accordance with the terms of the Mortgage
                  Sale Agreement, but such Loan and its Related Security are not
                  capable of repurchase, in which case the Trust Property shall
                  be deemed to be reduced for the purposes of the calculation in
                  "G" above by an amount equal to the Outstanding Principal
                  Balance of the relevant Loan or Loans under the relevant
                  Mortgage Account together with Arrears of Interest and Accrued
                  Interest; and/or

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

         (e)      the Seller Share of Mortgages Trustee Revenue Receipts is less
                  than the Loss Amount (as defined in CLAUSE 8.3) payable to the
                  Mortgages Trustee and/or Funding in accordance with CLAUSE
                  8.3, in which case the Trust Property shall be deemed to be
                  reduced for the purposes of the calculation in "G" above by an
                  amount equal to the shortfall in the Loss Amount.

         The reductions and deemed reductions set out in paragraph (a), (b) (c),
         (d) and (e) of CLAUSE 6.4 above shall be made to the Seller Share only
         of the Trust Property (or for the purposes of calculating the Seller
         Share of the Trust Property as the case may be) until the Seller Share
         is zero. If at, or any time after the Initial Closing Date the
         Mortgages Trustees 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 any Loan and its Related Security which is
         or has been subject to any matter described in CLAUSE 6.4(A) the
         Mortgages Trustee will remit, assign or transfer the same to the
         Seller, as the case may require, and until it does so or to the extent
         that the Mortgage Trustee is unable to effect such remittance,
         assignment or transfer, the Mortgages Trustee will hold such property,
         interest, right or benefit and/or the proceeds thereof upon trust
         absolutely for the Seller (separate from the Mortgages Trust).

8.5      CURRENT SELLER SHARE PERCENTAGE

         On each Distribution Date, the "CURRENT SELLER SHARE PERCENTAGE" will
         be an amount equal to:

                    100% - Current Funding Share Percentage.

8.6      CURRENT SELLER SHARE

         The "CURRENT SELLER SHARE" will be an amount equal to:

           The total amount of trust property - Current Funding Share.

8.7      FUNDING SHARE/SELLER SHARE

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

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                                       10

9.       MINIMUM SELLER SHARE

9.1      INITIAL MINIMUM SELLER SHARE

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

9.2      FLUCTUATION OF MINIMUM SELLER SHARE ON EACH DISTRIBUTION DATE

         At the Initial Closing Date, the Minimum Seller Share will be
         (pound)256,000,000. The amount of the Minimum Seller Share will be
         recalculated on each Distribution Date in accordance with the following
         formula:

                                    X + Y + Z

         where:

         X  =     4.0% of the aggregate Outstanding Principal Balance of all
                  Loans comprised in the Trust Property;

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

                  p =      8%;

                  q =      the "FLEXIBLE DRAW CAPACITY", being an amount equal
                           to the excess of (i) the maximum amount that
                           Borrowers are entitled to draw under Flexible Loans
                           included in the Trust Property (whether or not drawn)
                           over (ii) the aggregate principal balance of actual
                           Flexible Loan advances made to Borrowers in the Trust
                           Property on the relevant Distribution Date (but
                           excluding the Initial Advances made thereunder); and

                  r =      3; and

         Z =      ___. [Banks to advise]

9.3      RECALCULATION OF MINIMUM SELLER SHARE FOLLOWING OCCURRENCE OF
         EXCEPTIONAL EVENTS

         The calculation of the Minimum Seller Share in accordance with CLAUSE
         7.2 above will be recalculated with the agreement of the parties
         hereto, the Funding Security Trustee and the Rating Agencies if either
         (i) the Seller merges or otherwise combines its business with another
         bank or other financial institution so as to increase the risks
         associated with Borrowers holding deposits in Abbey National accounts
         or (ii) the aggregate amount of the obligations to pay Delayed
         Cashbacks constitutes more than 1 per cent. of the value of the Trust
         Property.

<PAGE>
                                       11

10.      ALLOCATION AND DISTRIBUTION OF REVENUE RECEIPTS

10.1     ALLOCATION AND DISTRIBUTION OF THIRD PARTY AMOUNTS

         Pursuant to the Cash Management Agreement, the Cash Manager (at the
         direction of the Mortgages Trustee on behalf of the Beneficiaries at
         their direction and with their consent) will deduct, as and when
         identified, Third Party Amounts from the Revenue Receipts standing to
         the credit of the Mortgages Trustee GIC Account, and pay over the same
         to the proper recipients thereof. The Mortgages Trustee and the
         Beneficiaries hereby consent to such deductions.

10.2     ALLOCATION AND DISTRIBUTION OF MORTGAGES TRUSTEE AVAILABLE REVENUE
         RECEIPTS

         On each Distribution Date the Cash Manager (at the direction of the
         Mortgages Trustee and on behalf of the Beneficiaries at their direction
         and with their consent) will distribute Mortgages Trustee Available
         Revenue Receipts as follows:

         (a)      firstly, in or towards satisfaction pro rata according to the
                  respective amounts thereof of:

                  (i)      any costs, charges, liabilities and expenses then due
                           or to become due to the Mortgages Trustee under the
                           provisions of this Deed together with VAT thereon as
                           provided herein (if payable); and

                  (ii)     any amounts due and payable by the Mortgages Trustee
                           to third parties in respect of the Mortgages Trust
                           and incurred without breach by the Mortgages Trustee
                           of the documents to which it is a party (and for
                           which payment has not been provided for elsewhere),
                           including amounts due to H.M Customs and Excise
                           and/or to the Inland Revenue or any other taxation
                           authority which has jurisdiction over the Trust
                           Property or the Mortgages Trustee in respect of any
                           stamp, issue, registration, documentary and other
                           fees, duties and taxes (including interest and
                           penalties) payable by the Mortgages Trustee in
                           connection with (i) the execution and delivery of
                           this Deed; (ii) any action to be taken by or on
                           behalf of the Mortgages Trustee to enforce or to
                           resolve any doubt concerning or, for any other
                           purpose in relation to, the Mortgages Trust Deed; and
                           (iii) any such tax which is primarily due from either
                           or both of Abbey National and Funding in their
                           capacities as Beneficiaries (and, for the avoidance
                           of doubt, only in such capacities) in circumstances
                           where the Mortgages Trustee has made a payment of
                           such tax (or part thereof) by reason of a failure by
                           Abbey National or Funding to discharge their primary
                           liability in respect of such tax;

         (b)      secondly, in or towards satisfaction of any remuneration then
                  due and payable to the Servicer and any costs, charges,
                  liabilities and expenses then due or to become due to the
                  Servicer under the provisions of the Servicing Agreement,
                  together with VAT thereon as provided therein; and

         (c)      thirdly, subject to CLAUSE 10.3 below, to pay Funding and the
                  Seller the Funding Share and the Seller Share respectively of
                  any remaining Mortgages Trustee Available Revenue Receipts,
                  calculated by multiplying the total amount of such remaining
                  Mortgages Trustee Available Revenue Receipts by the Current
                  Funding

<PAGE>
                                       12

                  Share Percentage (calculated on the immediately preceding
                  Distribution Date), which product shall be allocated to
                  Funding, and the remaining Mortgages Trustee Available Revenue
                  Receipts which shall be allocated to the Seller (subject to
                  deducting any amounts due to the Mortgages Trustee and/or
                  Funding by way of set-off pursuant to Clause 7.3 of the
                  Mortgage Sale Agreement).

10.3     If, as a result of any of the matters referred to in paragraphs (a),
         (b), (c) or (d) of Clause 7.4 of the Mortgage Sale Agreement, the
         Mortgages Trustee and/or Funding suffers or incurs any costs, expenses,
         losses or other claims in connection with any recovery of interest on
         the Loans to which the Seller, the Mortgages Trustee or Funding was not
         entitled or could not enforce (referred to in this Clause 8.3 as the
         "LOSS AMOUNT"), then:

         (a)      the Seller Share of Mortgages Trustee Revenue Receipts shall
                  be reduced by an amount equal to the Loss Amount; and

         (b)      from the amount deducted from the Seller Share of the
                  Mortgages Trustee Revenue Receipts referred to in paragraph
                  (a) above:

                  (i)      an amount will be paid to the Mortgages Trustee equal
                           to the Loss Amount incurred by the Mortgages Trustee;
                           and

                  (ii)     an amount will be paid to Funding equal to the Loss
                           Amount incurred by Funding.

         [To be discussed]

11.      ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS

11.1     CALCULATION OF PRINCIPAL RECEIPTS:

         On each Relevant Distribution Date, prior to distributing Principal
         Receipts, the Cash Manager shall ascertain:

         (i)      the amount of Mortgages Trust Available Principal Receipts:

         (ii)     whether the Cash Accumulation Period has started or would
                  start during the immediately succeeding Distribution Period in
                  respect of any Bullet Term Advance (the Cash Accumulation
                  Period being calculated separately for each Bullet Term
                  Advance);

         (iii)    whether amounts are outstanding in respect of any Pass-Through
                  Term Advances or Scheduled Amortisation Term Advances that are
                  then due and payable; and

         (iv)     whether the Scheduled Amortisation Period has started or would
                  start during the immediately succeeding Distribution Period in
                  respect of any Scheduled Amortisation Term Advance.

<PAGE>
                                       13

11.2     ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS PRIOR TO THE
         OCCURRENCE OF A TRIGGER EVENT

         Prior to the occurrence of a Trigger Event, on each Distribution Date,
         the Cash Manager (at the direction of the Mortgages Trustee acting on
         behalf of the Beneficiaries at their direction and with their consent)
         shall apply Principal Receipts as provided in this CLAUSE 9:

         (a)      (subject to the terms of paragraphs (c) and (d) below), until
                  the start of a Cash Accumulation Period and during the period
                  between the end of a Cash Accumulation Period and the start of
                  the next Cash Accumulation Period, all Principal Receipts
                  shall be paid to the Seller until the Seller Share of the
                  Trust Property is equal to the Minimum Seller Share (as
                  determined on the previous Distribution Date);

         (b)      from and including the start of a Cash Accumulation Period,
                  all Principal Receipts shall be paid to Funding (but not in an
                  aggregate amount that would exceed the Current Funding Share
                  of the Trust Property) until an amount equal to the relevant
                  Bullet Amount has been accumulated by Funding, as shown on the
                  Cash Accumulation Ledger;

         (c)     from and including the date when:

                  (i)      the Cash Accumulation Period in respect of any
                           outstanding Bullet Term Advance has not started; and

                  (ii)     amounts are outstanding in respect of one or more
                           Pass-Through Term Advances that are due and payable
                           (the "PAYABLE PASS-THROUGH TERM ADVANCES") and/or one
                           or more Scheduled Amortisation Term Advances that are
                           due and payable (the "PAYABLE SCHEDULED AMORTISATION
                           TERM ADVANCES") under an Intercompany Loan Agreement
                           ("INTERCOMPANY LOAN AGREEMENT X"); and/or

                  (iii)    the Scheduled Amortisation Period has started under
                           an Intercompany Loan,

                  the Cash Manager will distribute Principal Receipts to Funding
                  in an amount calculated as follows:
<TABLE>

                 <S>                       <C>                <C>
                                                                  Outstanding Principal Balance of
                  Funding Share             x  Principal       x  Intercompany Loan Agreement X.
                  Percentage                   Receipts           --------------------------------------------
                                                                  Aggregate Outstanding Principal Balance of
                                                                  all outstanding Intercompany Loans,
</TABLE>

                  until the Payable Pass-Through Term Advances and/or, as
                  applicable, the Payable Scheduled Amortisation Term Advances
                  are fully repaid. Subject to paragraph (d) below, any excess
                  Principal Receipts will be paid to the Seller; and

         (d)      if on the last Distribution Date in a Scheduled Amortisation
                  Period, Funding has not received sufficient Principal Receipts
                  (calculated in accordance with paragraph (c) above) in order
                  to repay the Scheduled Amortisation Amounts due on the
                  relevant Payable Scheduled Amortisation Term Advances on the
                  immediately succeeding Interest Payment Date, then the Cash
                  Manager on behalf of the Mortgages Trustee shall distribute
                  Principal Receipts to Funding in an amount equal to the
                  shortfall (but not in an aggregate amount that would exceed
                  the Current Funding Share of the Trust

<PAGE>
                                       14

                  Property), which Funding will apply solely towards repayment
                  of the relevant Payable Scheduled Amortisation Term Advance on
                  the immediately succeeding Interest Payment Date.

11.3     ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE
         OCCURRENCE OF AN ASSET TRIGGER EVENT

         After the occurrence of an Asset Trigger Event, all Principal Receipts
         will be distributed pro rata and pari passu between Funding and the
         Seller according to the Current Funding Share Percentage of the Trust
         Property and the Current Seller Share Percentage of the Trust Property
         respectively (and, for the avoidance of doubt, such payments may reduce
         the Current Seller Share to an amount less than the Minimum Seller
         Share) until the Funding share of the Trust Property is zero. When the
         Funding Share of the Trust Property is zero, the remaining Principal
         Receipts (if any) will be allocated to the Seller.

11.4     ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING THE
         OCCURRENCE OF A NON-ASSET TRIGGER EVENT

         After the occurrence of a Non-Asset Trigger Event (where an Asset
         Trigger Event has not occurred), all Principal Receipts will be paid to
         Funding until the Funding Share of the Trust Property is zero and will
         thereafter be paid to the Seller.

11.5     ALLOCATION AND DISTRIBUTION OF PRINCIPAL RECEIPTS FOLLOWING ENTRY BY
         FUNDING INTO A NEW TERM ADVANCE

         If a New Issuer makes a New Term Advance to Funding pursuant to a New
         Intercompany Loan Agreement, then the parties hereto shall amend the
         terms of CLAUSE 9 as required to reflect the repayment provisions of
         that New Term Advance. For the avoidance of doubt, the parties hereto
         shall amend the terms of the Trigger Events if required to do so by the
         Rating Agencies as a result of a New Issue.

12.      ALLOCATION OF LOSSES

         Subject as provided herein (and in particular, CLAUSE 6), all Losses
         sustained on the Loans during a Distribution Period shall be applied in
         reducing pro rata both the Funding Share and the Seller Share of the
         Trust Property on each Relevant Distribution Date by multiplying the
         Losses in the relevant Distribution Period by the Current Funding Share
         Percentage, (as calculated on the immediately preceding Distribution
         Date), the product of which shall be allocated to Funding, and the
         remainder of such Losses shall be allocated to the Seller.

13.      LEDGERS

         The Mortgages Trustee shall maintain, or shall procure that there are
         maintained, the following Mortgages Trustee Ledgers:

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

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

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

<PAGE>
                                       15

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

14.      COSTS AND EXPENSES OF THE MORTGAGES TRUSTEE

         The Mortgages Trustee shall be entitled to charge and be remunerated
         for the work undertaken by it as trustee of the trusts created by this
         Deed. The remuneration shall be on such terms (if any) as the Mortgages
         Trustee may from time to time agree with the Seller and Funding in
         writing. In default of such agreement, Funding and the Seller shall
         indemnify the Mortgages Trustee from time to time with such regularity
         as is reasonably agreed between the parties, of the documentable costs
         and expenses directly and properly incurred by the Mortgages Trustee in
         performing its obligations hereunder together with any amounts in
         respect of Irrecoverable VAT incurred in respect of such costs and
         expenses. The cost of such indemnity shall be paid in accordance with
         the priority of payments set out in CLAUSE 8 of this Deed.

15.      DIRECTIONS FROM BENEFICIARIES

15.1     SERVICING AGREEMENT  AND CASH MANAGEMENT AGREEMENT

         On the Initial Closing Date the Mortgages Trustee shall enter into the
         Servicing Agreement and the Cash Management Agreement.

15.2     DIRECTIONS FROM BENEFICIARIES

         Subject to CLAUSE 13.3 below, the Mortgages Trustee covenants with the
         Seller and Funding that the Mortgages Trustee shall take all necessary
         steps and do everything which both Funding and the Seller (acting
         together) may reasonably request or direct it to do in order to give
         effect to the terms of this Deed or the other Transaction Documents to
         which the Mortgages Trustee is a party.

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

15.4     NO REQUIREMENT TO ACT

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

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

         (b)      it shall have been indemnified to its satisfaction against all
                  liabilities, proceedings, claims and demands to which it may
                  be or become liable and all costs, charges and expenses which
                  may be incurred by it in connection therewith and the terms of
                  such

<PAGE>
                                       16

                  indemnity may include the provision of a fighting fund,
                  non-recourse loan or other similar arrangement.

15.5     COVENANT OF THE MORTGAGES TRUSTEE

         Subject to CLAUSE 13.2, the Mortgages Trustee covenants with each of
         the Seller and Funding to exercise all of its rights arising under the
         Trust Property (including without limitation any rights of enforcement)
         for the benefit of and on behalf of the Beneficiaries.

16.      EARLY TERMINATION OF THE MORTGAGES TRUST

         On giving not more than 61 nor less than 31 days' notice to Funding,
         the Seller may pay to Funding the Termination Price if the aggregate
         Outstanding Principal Balance under all Intercompany Loan Agreements is
         at any time less than 10 per cent. of the aggregate Outstanding
         Principal Balance of all Intercompany Loan Agreements as at the
         respective drawdown dates thereof. Thereafter, the Mortgages Trustee
         shall hold the Trust Property for the Seller absolutely, freed and
         released from the Mortgages Trust.

17.      TRANSFERS

17.1     FUNDING SHALL NOT ASSIGN

         Subject to the right of Funding (or the Funding Security Trustee or a
         Receiver on its behalf) to sell the Funding Share of the Trust Property
         following the service of an Intercompany Loan Enforcement Notice (which
         right is hereby conferred), Funding covenants with the Seller that it
         shall not, and shall not purport to, sell, assign, transfer, convey,
         charge, declare a trust over, create any beneficial interest in, or
         otherwise dispose of the Funding Share in the Trust Property, or any of
         Funding's rights, title and interest or benefit in any of the Portfolio
         or the Trust Property to a third party, other than pursuant to the
         terms of the Transaction Documents (including for the avoidance of
         doubt, the Funding Deed of Charge).

17.2     SELLER SHALL NOT ASSIGN

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

18.      COVENANTS OF THE MORTGAGES TRUSTEE

         Save with the prior written consent of the Beneficiaries or as provided
         in or envisaged by this Deed and the other Transaction Documents to
         which the Mortgages Trustee is a party, the Mortgages Trustee shall
         not, so long as it is acting as Mortgages Trustee hereunder:

         (a)      NEGATIVE PLEDGE

                  create or permit to subsist any mortgage, standard security
                  pledge, lien, charge or other security interest whatsoever
                  (unless arising by operation of law), upon the whole or any
                  part of its assets (including any uncalled capital) or its
                  undertakings, present or future;

<PAGE>
                                       17

         (b)      DISPOSAL OF ASSETS

                  transfer, sell, lend, part with or otherwise dispose of, or
                  deal with, or grant any option or present or future right to
                  acquire any of its assets or undertakings or any interest,
                  estate, right, title or benefit therein or thereto or agree or
                  attempt or purport to do so;

         (c)      EQUITABLE INTEREST

                  permit any person other than the Beneficiaries to have any
                  equitable or beneficial interest in any of its assets or
                  undertakings or any interest, estate, right, title or benefit
                  therein;

         (d)      BANK ACCOUNTS

                  have an interest in any bank account, other than as set out in
                  the Transaction Documents;

         (e)      RESTRICTIONS ON ACTIVITIES

                  carry on any business other than as described in this Deed and
                  the Mortgage Sale Agreement;

         (f)      BORROWINGS

                  incur any indebtedness in respect of borrowed money whatsoever
                  or give any guarantee or indemnity in respect of any such
                  indebtedness;

         (g)      MERGER

                  consolidate or merge with any other person or convey or
                  transfer its properties or assets substantially as an entirety
                  to any other person;

         (h)      EMPLOYEES OR PREMISES

                  have any employees or premises or subsidiaries;

         (i)      FURTHER SHARES

                  issue any further shares; or

         (j)      UNITED STATES ACTIVITIES

                  engage in any activities in the United States (directly or
                  through agents) or derive any income from United States
                  sources as determined under United States income tax
                  principles or hold any property if doing so would cause it to
                  be engaged or deemed to be engaged in a trade or business
                  within the United States as determined under United States tax
                  principles.

<PAGE>
                                       18

19.      POWER TO DELEGATE

19.1     POWER TO DELEGATE

         Subject to CLAUSE 17.2, the Mortgages Trustee may (notwithstanding any
         rule of law or equity to the contrary) delegate (revocably or
         irrevocably and for a limited or unlimited period of time) the
         performance of all or any of its obligations and the exercise of all or
         any of its powers under this Deed or imposed or conferred on it by law
         or otherwise to any person or body of persons fluctuating in number
         selected by it and any such delegation may be by power of attorney or
         in such other manner as the Mortgages Trustee may think fit and may be
         made upon such terms and conditions (including the power to
         sub-delegate) as the Mortgages Trustee may think fit.

19.2     NO FURTHER APPOINTMENTS

         Notwithstanding the provisions of CLAUSE 17.1, the Mortgages Trustee
         shall not appoint any agent, attorney or other delegate having power to
         act in respect of the Trust Property unless it is directed in writing
         to do so by the Beneficiaries. The appointment of any agent, attorney
         or other delegate hereunder above shall terminate immediately upon the
         occurrence of a Trigger Event.

20.      POWERS OF INVESTMENT

         Save as expressly provided for in this Deed, the Mortgages Trustee
         Guaranteed Investment Contract and the Bank Account Agreement, the
         Mortgages Trustee shall have no further or other powers of investment
         with respect to the Trust Property and neither the Trustee Investments
         Act 1961 nor any other provision relating to trustee powers of
         investment implied by statute or general law shall apply to the
         Mortgages Trust and, for the avoidance of doubt, the statutory power to
         accumulate income conferred on trustees by Section 31 of the Trustee
         Act 1925 is expressly excluded.

21.      OTHER PROVISIONS REGARDING THE MORTGAGES TRUSTEE

21.1     NO ACTION TO IMPAIR TRUST PROPERTY

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

21.2     LITIGATION

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

21.3     NO IMPLIED DUTIES

         The duties and obligations of the Mortgages Trustee under the Mortgages
         Trust shall be determined solely by the express provisions of this Deed
         (but without prejudice to the duties and obligations of the Mortgages
         Trustee under any of the other Transaction Documents). The Mortgages
         Trustee shall not be liable under this Deed except for the performance
         of such

<PAGE>
                                       19

         duties and obligations as shall be specifically set forth in this Deed.
         No implied covenants or obligations shall be read into this Deed
         against the Mortgages Trustee, and the permissible right of the
         Mortgages Trustee to do things set out in this Deed shall not be
         construed as a duty.

21.4     NO LIABILITY

         Neither the Mortgages Trustee, Funding (in its capacity as a
         Beneficiary hereunder) nor the Seller (in its capacity as a Beneficiary
         hereunder) shall be liable to each other, in the absence of wilful
         default, negligence or breach of the terms of this Deed, in respect of
         any loss or damage which arises out of the exercise or attempted or
         purported exercise or failure to exercise any of their respective
         powers.

21.5     RELIANCE ON CERTIFICATES

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

21.6     RELIANCE ON THIRD PARTIES

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

22.      NO RETIREMENT OF MORTGAGES TRUSTEE

22.1     NO RETIREMENT

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

22.2     NO REPLACEMENT

         Neither the Seller nor Funding shall at any time remove or purport to
         remove and/or replace the Mortgages Trustee as the trustee of the
         Mortgages Trust.

22.3     NO TERMINATION

         Prior to the payment by Funding of all amounts owing under the
         Intercompany Loan Agreements and under the Transaction Documents,
         neither the Seller nor Funding shall at

<PAGE>
                                       20

         any time, except in accordance with the provisions of CLAUSE 14 and 21,
         terminate or purport to terminate the Mortgages Trust and, in
         particular, but without prejudice to the generality of the foregoing,
         the Seller and Funding shall not in reliance on their absolute
         beneficial interests in the Trust Property call for the transfer to
         them or vesting in them of the legal estate in all or any part of the
         Trust Property.

23.      TERMINATION

         Subject to CLAUSE 14, the Mortgages Trust shall terminate in respect of
         the Trust Property (if any then remains) upon the date to occur of (i)
         the date on which the Funding Share of the Trust Property is zero, and
         (ii) an other date agreed in writing by Funding and the Seller.

24.      FURTHER ASSURANCES

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

25.      AMENDMENTS, ETC.

25.1     AMENDMENTS AND WAIVERS

         Without prejudice to CLAUSE 28 of the Funding Deed of Charge, no
         amendment or waiver of any provision of this Deed nor consent to any
         departure by any of the parties therefrom shall in any event be
         effective unless the same shall be in writing and signed by each of the
         parties hereto. In the case of a waiver or consent, such waiver or
         consent shall be effective only in the specific instance and as against
         the party or parties giving it for the specific purpose for which it is
         given.

25.2     ENTIRE AGREEMENT

         This Deed contains a final and complete integration of all prior
         expressions by the parties with respect to the subject matter of this
         Deed and constitutes the entire agreement among the parties with
         respect to the subject matter of this Deed superseding all prior oral
         or written understandings other than the other Transaction Documents.

26.      NON PETITION COVENANT

         The Seller 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 and for one year plus one day
         since the last day on which any such sum was outstanding.

27.      NO PARTNERSHIP OR AGENCY

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

<PAGE>
                                       21

28.      CALCULATIONS

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

29.      NO WAIVER; REMEDIES

         No failure on the part of any party to this Deed 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 right or
         remedy preclude any other or further exercise thereof or the exercise
         of any other right or remedy. The remedies in this Deed are cumulative
         and not exclusive of any remedies provided by law.

30.      EXECUTION IN COUNTERPARTS; SEVERABILITY

30.1     COUNTERPARTS

         This Deed 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.

30.2     SEVERABILITY

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

31.      CONFIDENTIALITY

31.1     GENERAL OBLIGATION OF CONFIDENTIALITY

         Unless otherwise required by applicable law, and subject to CLAUSE 29.2
         below, each of the parties agrees to maintain the confidentiality of
         this Deed in its communications with third parties and otherwise. None
         of the parties shall disclose to any person any information relating to
         the business, finances or other matters of a confidential nature of or
         relating to any other party to this Deed or any of the Transaction
         Documents which it may have obtained as a result of having entered into
         this Deed or otherwise.

31.2     EXCEPTIONS

         The provisions of CLAUSE 29.1 above shall not apply:

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

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

<PAGE>
                                       22

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

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

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

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

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

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

32.      EXCLUSION OF THIRD PARTY RIGHTS

         The parties to this Deed do not intend that any term of this Deed
         should be enforced, by virtue of the Contracts (Rights of Third
         Parties) Act 1999, by any person who is not a party to this Deed.

33.      ADDRESSES FOR NOTICES

         Any notices to be given pursuant to this Deed to any of the parties
         hereto shall be sufficiently served if sent by prepaid first class
         post, by hand or facsimile transmission and shall be deemed to be given
         (in the case of facsimile transmission) when despatched, (where
         delivered by hand) on the day of delivery if delivered before 17.00
         hours on a London Business Day or on the next London Business Day if
         delivered thereafter or (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 Abbey National PLC, at Abbey
                  House, Baker Street, London NW1 6XL (facsimile number (44) 20
                  7612 4442) for the attention of the Company Secretary with a
                  copy to Abbey National plc, c/o Abbey House (AAM 319), 201
                  Grafton Gate East, Milton Keynes MK9 1AN (facsimile number
                  (44) 1908 344 217) for the attention of Securitisation Team,
                  Risk Operations;

         (b)      in the case of the Mortgages Trustee to Holmes Trustees
                  Limited, c/o Abbey National plc, Abbey House, Baker Street,
                  London NW1 6XL (facsimile number (44) 20 7612 4442) for the
                  attention of the Company Secretary with a copy to Abbey
                  National plc, c/o Abbey House (AAM 319), 201 Grafton Gate
                  East, Milton Keynes MK9 1AN (facsimile number (44) 1908 344
                  217) for the attention of Securitisation Team, Risk
                  Operations;

<PAGE>
                                       23

         (c)      in the case of Funding, to Holmes Funding Limited, c/o Abbey
                  National plc, Abbey House, Baker Street, London NW1 6XL
                  (facsimile number (44) 20 7612 4442) for the attention of the
                  Company Secretary with a copy to Abbey National plc, c/o Abbey
                  House (AAM 319), 201 Grafton Gate East, Milton Keynes MK9 1AN
                  (facsimile number (44) 1908 344 217) for the attention of
                  Securitisation Team, Risk Operations;

         (d)      in each case with a copy to the Funding Security Trustee, for
                  the attention of JPMorgan Chase Bank, London Branch, Trinity
                  Tower, 9 Thomas More Street, London E1W 1YT (facsimile number
                  (44) 20 7777 5410) for the attention of The Manager, Trust
                  Administration,

         or to such other address or facsimile number or for the attention of
         such other person or entity as may from time to time be notified by any
         party to the others by written notice in accordance with the provisions
         of this CLAUSE 31.

34.      GOVERNING LAW AND SUBMISSION TO JURISDICTION

34.1     GOVERNING LAW

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

34.2     SUBMISSION TO JURISDICTION

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

35.      EXCLUSION OF TRUSTEE ACT 2000

         The Trustee Act 2000 is hereby excluded to the maximum extent
         permissible, to the intent that it shall not apply to the trusts
         constituted hereunder and that the parties shall be in the same
         position as they would be had that Act not come into force.

IN WITNESS of which this Deed has been executed by the parties hereto as a deed
which has been delivered on the date first appearing on page one.

EXECUTED as a DEED by               )
ABBEY NATIONAL PLC                  )       Director
as Seller, Cash Manager             )
and Beneficiary                     )       Director/Secretary
acting by                           )

<PAGE>
                                       24

EXECUTED as a DEED by               )
HOLMES FUNDING                      )       Director
LIMITED as Beneficiary              )
acting by                           )
                                    )       Director/Secretary

EXECUTED as a DEED by               )
HOLMES TRUSTEES                     )       Director
LIMITED as Mortgages Trustee        )
acting by                           )
                                    )       Director/Secretary

EXECUTED as a DEED by               )
SPV MANAGEMENT                      )       Director
LIMITED as Settlor                  )
acting by                           )       Director/SecretaryEXHIBIT 4.3

                                  DATED __, 2002

                               ABBEY NATIONAL PLC

                                    as Seller

                                       and

                             HOLMES FUNDING LIMITED

                                   as Funding

                                       and

                             HOLMES TRUSTEES LIMITED

                              as Mortgages Trustee

                                       and

                       JPMORGAN CHASE BANK, LONDON BRANCH

                           as Funding Security Trustee

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

                  AMENDED AND RESTATED MORTGAGE SALE AGREEMENT

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

                                  ALLEN & OVERY
                                     London
                                  ICM:572239.1

<PAGE>

                                    CONTENTS

CLAUSE                                                                      PAGE
------                                                                      ----

1.    Definitions, Construction and amendment and restatement...............  2
2.    Sale and Purchase of Initial Portfolio................................  2
3.    Initial Closing Date..................................................  3
4.    Sale and Purchase of New Portfolios...................................  4
5.    Trust of Monies.......................................................  9
6.    Completion of the Assignment.......................................... 10
7.    Undertakings.......................................................... 11
8.    Warranties and Repurchase by the Seller............................... 14
9.    Other Warranties...................................................... 16
10.   Further Assurance..................................................... 17
11.   Consequences of Breach................................................ 17
12.   Subordination......................................................... 17
13.   Non-Merger............................................................ 17
14.   No Agency or Partnership.............................................. 17
15.   Payments.............................................................. 17
16.   Waivers and Variation................................................. 18
17.   Notices............................................................... 18
18.   Assignment............................................................ 18
19.   Change of Funding Security Trustee.................................... 19
20.   New Intercompany Loans................................................ 19
21.   Third Party Rights.................................................... 19
22.   Governing Law......................................................... 19

SCHEDULES

1.    Representations and Warranties........................................ 21
2.    Registered Transfer................................................... 28
3.    Unregistered Transfer................................................. 29
4.    Lending Criteria...................................................... 31
5.    Power of Attorney in favour of Funding, the Mortgages Trustee,
        and the Security Trustee............................................ 34
6.    Loan Repurchase Notice................................................ 37
7.    Assignment of Third Party Rights...................................... 39
8.    Assignment of MIG Policies............................................ 41
9.    MIG Policies Assignment Notice........................................ 43
10.   ANGI Policies Insurance Acknowledgement............................... 44
11.   Properties in Possession Insurance Acknowledgement.................... 46
12.   New Portfolio Notice.................................................. 48
13.   Scottish Transfers.................................................... 47
14.   Scottish Trust Deed................................................... 47

<PAGE>

     THIS AMENDED AND RESTATED MORTGAGE SALE AGREEMENT is made on [__], 2002

BETWEEN:

(1)   ABBEY NATIONAL PLC (registered number 2294747), a public limited company
      incorporated under the laws of England and Wales, whose registered office
      is at Abbey House, Baker Street, London NW1 6XL (the "SELLER");

(2)   HOLMES FUNDING LIMITED (registered number 3982428), a private limited
      company incorporated under the laws of England and Wales, whose registered
      office is at Abbey House, Baker Street, London NW1 6XL ("FUNDING" and
      together with the Seller the "BENEFICIARIES");

(3)   HOLMES TRUSTEES LIMITED (registered number 3982431), a private limited
      company incorporated under the laws of England and Wales, whose registered
      office is at Abbey House, Baker Street, London NW1 6XL (the "MORTGAGES
      TRUSTEE"); and

(4)   JPMORGAN CHASE BANK, LONDON BRANCH (formerly known as The Chase Manhattan
      Bank, London Branch) (the "FUNDING SECURITY TRUSTEE", which expression
      where the context permits shall include such company or person and all
      other companies or persons for the time being acting as the trustee or
      trustees under the Funding Deed of Charge) whose principal office is at
      Trinity Tower, 9 Thomas More Street, London E1W 1YT.

WHEREAS:

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

(B)   The Seller assigned to the Mortgages Trustee certain of the above
      mentioned mortgage loans together with the benefit of the related security
      for the same on the terms and subject to the conditions set out in the
      Mortgage Sale Agreement dated 26th July, 2000 (as amended and/or restated
      from time to time, the "MORTGAGE SALE AGREEMENT").

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

(D)   On 29th November, 2000 the parties to the Mortgage Sale Agreement agreed
      to amend the terms of the Mortgage Sale Agreement as set out in an
      Amendment Agreement to the Mortgage Sale Agreement of the same date.

(E)   On 23rd May, 2001 the parties to the Mortgage Sale Agreement agreed to
      amend and restate the terms of the Mortgage Sale Agreement as set out in
      an Amended and Restated Mortgage Sale Agreement of the same date and the
      Seller assigned a new portfolio of mortgage loans and their related
      security to the Mortgages Trustee on that date on such amended terms.

(F)   On 5th July, 2001 the parties to the Mortgage Sale Agreement agreed to
      amend and restate the terms of the Mortgage Sale Agreement as set out in
      an Amended and Restated Mortgage Sale Agreement of the same date.

(G)   On 8th November, 2001 the parties to the Mortgage Sale Agreement agreed to
      amend and restate the terms of the Mortgage Sale Agreement as set out in
      an Amended and Restated Mortgage Sale Agreement of the same date and the
      Seller assigned a new portfolio of

<PAGE>
                                       2

      mortgage loans and their related security to the Mortgages Trustee on that
      date on such amended terms.

(H)   The parties to the Mortgage Sale Agreement have again agreed to amend and
      restate the terms of the Mortgage Sale Agreement as set out herein and the
      Seller will assign a new portfolio of mortgage loans and their related
      security to the Mortgages Trustee on the same date on such amended terms.

IT IS HEREBY AGREED as follows:

1.    DEFINITIONS, CONSTRUCTION AND AMENDMENT AND RESTATEMENT

1.1   The Amended and Restated Master Definitions and Construction Schedule
      signed for the purposes of identification by Allen & Overy and Slaughter
      and May on [__], 2002 (as the same may be amended, varied or supplemented
      from time to time with the consent of the parties hereto) is expressly and
      specifically incorporated into this Agreement and, accordingly, the
      expressions defined in the Amended and Restated Master Definitions and
      Construction Schedule (as so amended, varied or supplemented) shall,
      except where the context otherwise requires and save where otherwise
      defined herein, have the same meanings in this Agreement, including the
      Recitals hereto and this Agreement shall be construed in accordance with
      the interpretation provisions set out in CLAUSE 2 of that Amended and
      Restated Master Definitions and Construction Schedule.

1.2   Any reference in this Agreement to any discretion, power, right, duty or
      obligation on the part of the Mortgages Trustee shall be as exercised by
      the Mortgages Trustee subject in each case to the provisions of CLAUSE
      13.2 of the Mortgages Trust Deed.

1.3   For the purposes of section 2 of the Law of Property (Miscellaneous
      Provisions) Act 1989, the terms of the Transaction Documents are, so far
      as applicable, incorporated herein.

1.4   This Agreement amends and restates the Mortgage Sale Agreement made on
      26th July, 2000 between the parties hereto as amended on 29th November,
      2000, as amended and restated on 23rd May, 2001 as amended and restated on
      5th July, 2001 and as amended and restated on 8th November, 2001 (the
      "PRINCIPAL AGREEMENT"). As of the date of this Agreement, any future
      rights or obligations (excluding such obligations accrued to the date of
      this Agreement) of a party under the Principal Agreement shall be
      extinguished and shall instead be governed by this Agreement.

2.    SALE AND PURCHASE OF INITIAL PORTFOLIO

2.1   Subject to CLAUSE 2.2, in consideration of the Purchase Price (which shall
      be paid in accordance with CLAUSE 3.3) and the covenant of the Mortgages
      Trustee to hold the Trust Property upon trust, with and subject to all the
      trusts, powers and provisions of the Mortgages Trust Deed, the Seller
      hereby agrees to assign and transfer to the Mortgages Trustee with full
      title guarantee (or in relation to rights and assets situated in or
      governed by the law of Scotland, with absolute warrandice), the Initial
      Portfolio.

2.2   The obligation of the Seller under CLAUSE 2.1 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 Term Advances under the
            First Intercompany Loan Agreement;

<PAGE>
                                       3

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

      (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 such of the Transaction Documents as are to be executed
            immediately after the Initial Closing Date pursuant to the
            provisions of this CLAUSE 2, the same having been executed and being
            available for delivery and the parties knowing of no reason why the
            same should not be delivered immediately thereafter.

2.3   The sale of the Portfolio shall not include any obligation to pay any
      Delayed Cashback, which obligation shall at all times and notwithstanding
      the sale of the Portfolio remain an obligation of the Seller.

3.    INITIAL CLOSING DATE

3.1   A meeting shall take place on the Initial Closing Date at the offices of
      Allen & Overy, One New Change, London EC4M 9QQ or such offices as the
      parties may agree at which the Seller shall deliver to the Funding
      Security Trustee or its representative the following documents:

      (a)   two originals of the power of attorney substantially in the form set
            out in Schedule 5, duly executed by the Seller;

      (b)   a certified copy of each of the Insurance Acknowledgements;

      (c)   a duly executed assignment of the MIG Policies from the Seller and a
            certified copy of a notice (the original of which shall be served by
            courier or by special delivery) of such assignment from the Seller
            to Carfax or such other insurer under the MIG Policies in the form
            (mutatis mutandis) set out in Schedules 9 and 10 respectively and a
            certified copy of consent to assignment of the MIG Policies (or
            acknowledgement that the Mortgages Trustee will be an insured under
            the MIG Policies following the assignment) from Carfax or such other
            insurers in such form as the Mortgages Trustee reasonably requires;

      (d)   a certified copy of the board minute of the Seller authorising its
            duly appointed representatives to agree the sale of the Portfolio
            and authorising execution and performance of this Agreement, the
            Servicing Agreement, the other Transaction Documents and all of the
            documentation to be entered into pursuant to this Agreement;

      (e)   a duly executed assignment of rights against third parties in the
            form of the Assignment of Third Party Rights; and

      (f)   a solvency certificate from an authorised signatory of the Seller
            dated as at the Initial Closing Date.

3.2      The Seller undertakes that from the Initial Closing Date until the
         completion of the assignment in accordance with CLAUSE 6.1, the Seller
         shall hold the Title Deeds and Customer Files relating to the 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.

3.3   Subject to fulfilment of the conditions referred to in CLAUSES 2.2 and 3,
      the Seller shall be paid the Purchase Price by telegraphic transfer as
      follows:

<PAGE>
                                       4

      (a)   the Initial Consideration shall be paid by Funding on the Initial
            Closing Date; and

      (b)   the Deferred Consideration (including any Postponed Deferred
            Consideration) shall be paid by Funding quarterly on the Interest
            Payment Dates (provided there are available funds and after the
            making of any provisions in accordance with normal accounting
            practice) in accordance with the Funding Pre-Enforcement Revenue
            Priority of Payments or, as the case may be, the Funding
            Post-Enforcement Priority of Payments.

3.4   The Seller shall provide all reasonable co-operation to the Mortgages
      Trustee, Funding and the Funding Security Trustee to enable them to carry
      out their respective duties and enforce their rights under the Transaction
      Documents. Without prejudice to the generality of the foregoing, the
      Seller shall:

      (a)   upon reasonable prior notice and during normal office hours, permit
            the Mortgages Trustee, Funding, the Funding Security Trustee and
            their authorised employees and agents and other persons nominated by
            the Funding Security Trustee and approved by the Seller (such
            approval not to be unreasonably withheld or delayed), to review the
            Customer Files and the Title Deeds in relation to the Portfolio
            (subject to such person(s) agreeing to keep the same confidential
            but provided that disclosure shall be permitted to the professional
            advisors and auditors of the party making the disclosure and/or to
            the extent that such disclosure is required by law or for the
            purpose of any judicial or other proceedings); and/or

      (b)   give promptly all such information and explanations relating to the
            Loans and their Related Security as the Mortgages Trustee, Funding
            or the Funding Security Trustee may reasonably request (including a
            list of the Loans and their Related Security in the Portfolio along
            with details of the location of the Title Deeds relating thereto),

      provided that prior to completion in accordance with CLAUSE 6, the Seller
      shall be under no obligation to provide any information or documentation
      to any person other than the Mortgages Trustee and/or the Funding Security
      Trustee or their respective employees or allow such person access to the
      Customer Files or Title Deeds if to do so would result in a breach of the
      applicable Mortgage Terms or the Data Protection Act 1998.

4.    SALE AND PURCHASE OF NEW PORTFOLIOS

4.1   Subject to fulfilment of the conditions set out in CLAUSES 2.2, 3.1, 4.2
      and 4.3, if the Seller shall, at any time and from time to time serve a
      properly completed New Portfolio Notice on the Mortgages Trustee and
      Funding with a copy to the Funding Security Trustee (such service to be in
      the Seller's sole discretion), then on the date for completion of the
      assignment and transfer specified in the New Portfolio Notice the Seller
      shall assign and transfer with full title guarantee (or in relation to
      rights and assets situated in or governed by the law of Scotland, with
      absolute warrandice) to the Mortgages Trustee the relevant New Portfolio.

4.2   The conditions to be met as at each Assignment Date are:

      (a)   the Seller shall as at the relevant Assignment Date make the
            Representations and Warranties to the Mortgages Trustee, Funding and
            the Funding Security Trustee in relation to each New Loan in the New
            Portfolio being sold on the relevant Assignment Date in accordance
            with CLAUSE 8 and such Representations and Warranties must be true
            in relation to each New Loan (but if such Representation and

<PAGE>
                                       5

            Warranties are only discovered to be untrue after the relevant
            Assignment Date, the Mortgages Trustee's only remedy shall be under
            CLAUSE 7);

      (b)   the Lending Criteria applicable at the time of origination of each
            relevant New Loan have been applied to the New Loan and to the
            circumstances of the Borrower at the time the New Loan was made;

      (c)   the total amount of arrears in respect of all the Loans in the
            Mortgages Trust, as a percentage of the total amount of gross
            interest due to the Mortgages Trustee during the previous 12 months
            on all Loans outstanding during all or part of such period, must not
            exceed 2 per cent. "Arrears" for this purpose in respect of a Loan
            on any date means the aggregate amount overdue on the Loan on that
            date but only where such aggregate amount overdue equals or exceeds
            an amount equal to twice the Monthly Payment then due on the Loan;

      (d)   as at the relevant Assignment Date, the aggregate Outstanding
            Principal Balances of the Loans in the Mortgages Trust, in respect
            of which the aggregate amount in arrears is more than three times
            the Monthly Payment then due, is less than 5 per cent. of the
            aggregate Outstanding Principal Balances of the Loans in the
            Mortgages Trust;

      (e)   no New Loan has on the relevant Assignment Date an aggregate amount
            in arrear which is more than the amount of the Monthly Payment then
            due and each New Loan was made at least three calendar months prior
            to the relevant Assignment Date;

      (f)   each New Loan is secured by a Mortgage constituting a valid and
            subsisting first charge by way of legal mortgage or first ranking
            standard security over the relevant Property (except in the case of
            some Flexible Loans in respect of which the Mortgage constitutes
            valid and subsisting first and second charges by way of legal
            mortgage or first and second ranking standard securities over the
            relevant Property), subject only (in appropriate cases) to
            registration or recording at HM Land Registry or the Registers of
            Scotland;

      (g)   no Outstanding Principal Balance of any New Loan is, at the relevant
            Assignment Date, greater than (pound)350,000;

      (h)   for so long as amounts are owed by Funding to the First Issuer under
            the First Intercompany Loan Agreement, no New Loan has a final
            maturity date beyond July, 2038;

      (i)   each Borrower has made at least one full Monthly Payment in respect
            of the relevant New Loan;

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

      (k)   the Principal Deficiency Ledger shall not have a debit balance as at
            the relevant Assignment Date;

      (l)   the Mortgages Trustee is not aware that the credit rating then
            assigned to any of the Notes by the Ratings Agencies (or any of
            them) will be adversely affected by the purchase of the relevant New
            Portfolio;

<PAGE>
                                       6

      (m)   the short term, unsecured, unguaranteed and unsubordinated debt
            obligations of the Seller are rated at least P-1 by Moody's, A-1 by
            S&P and F-1 by Fitch at the time of, and immediately following, the
            assignment of the New Loans to the Mortgages Trustee;

      (n)   except where the Seller assigns New Loans to the Mortgages Trustee
            in consideration of the payment by Funding of the Purchase Price
            funded by a New Intercompany Loan from an Issuer, the aggregate
            Outstanding Principal Balance (excluding Arrears of Interest) of New
            Loans transferred in any one Interest Period must not exceed 10 per
            cent. of the aggregate Outstanding Principal Balance of Loans
            (excluding Arrears of Interest) in the Portfolio as at the beginning
            of that Interest Period;

      (o)   the purchase of the New Portfolio on the relevant Assignment Date
            does not result in the product of WAFF and WALS for the Portfolio
            after such purchase calculated on the relevant Assignment Date in
            the same way as for the Initial Portfolio (or as agreed by the
            Servicer and the Rating Agencies from time to time) exceeding the
            product of WAFF and WALS for the Portfolio calculated on the most
            recent previous Closing Date plus 0.25 per cent.;

      (p)   the yield (as calculated below) of the Loans in the Mortgages Trust
            together with the yield of the New Loans to be assigned to the
            Mortgages Trustee on the relevant Assignment Date (together the
            purposes of this paragraph, the "RELEVANT LOANS") and the Second
            Reserve Fund Calculation is not less than LIBOR for three month
            sterling deposits as at the immediately preceding Interest Payment
            Date plus 0.80 per cent. The yield of the Relevant Loans is to be
            calculated as follows:

                   (A x B) + (C x (D - E + F)) + (G x (H + I))
                   -------------------------------------------
                                       J

            where,

            A  =  the average Outstanding Principal Balance, on the relevant
                  Assignment Date, of the Relevant Loans which are Fixed Rate
                  Loans

            B  =  LIBOR plus the Fixed Rate Spread on the relevant Assignment
                  Date

            C  =  the average Outstanding Principal Balance, on the relevant
                  Assignment Date, of the Relevant Loans which are Variable Rate
                  Loans

            D  =  the weighted average Variable Rate of the Relevant Loans on
                  the relevant Assignment Date

            E  =  the current SVR for the Relevant Loans on the relevant
                  Assignment Date

            F  =  LIBOR plus the Variable Rate Spread on the relevant
                  Assignment Date

            G  =  the average Outstanding Principal Balance, on the relevant
                  Assignment Date, of the Relevant Loans which are Tracker Loans

            H  =  LIBOR plus the Tracker Rate Spread on the relevant
                  Assignment Date

<PAGE>
                                       7

            I  =  the weighted average margin of the Tracker Loans over the
                  Bank of England Repo Rate on the Relevant Assignment Date

            J  =  the average Outstanding Principal Balance of the Relevant
                  Loans on the relevant Assignment Date;

      (q)   the purchase of the New Portfolio on the relevant Assignment Date
            does not result in the loan-to-value ratio of Loans in the Portfolio
            on the Assignment Date (after the purchase of the New Portfolio)
            after application of the LTV Test on the relevant Assignment Date
            exceeding the loan-to-value ratio (based on the LTV Test) of Loans
            in the Portfolio on the most recent previous Closing Date plus 0.50
            per cent.;

      (r)   the assignment by the Seller to the Mortgages Trustee of New Loans
            on the relevant Assignment Date does not result in the Variable Rate
            Loans with a discount of more than 0.80 per cent. to the Abbey SVR
            as at the relevant Assignment Date that have more than two years
            remaining on their incentive period [and the Tracker Rate Loans with
            a discount of more than __ per cent. to the Tracker Rate as at the
            relevant Assignment Date that have more than two years remaining on
            their incentive period] in aggregate accounting for more than 20 per
            cent. of the aggregate Outstanding Principal Balance of all Loans
            constituting the Trust Property; and

      (s)   the First Reserve Fund has not been debited on or before the
            relevant Assignment Date for the purposes of curing a Principal
            Deficiency in respect of the Term BBB Advances and/or the Term AA
            Advances in circumstances where the First Reserve Fund has not been
            replenished by a corresponding amount by the relevant Assignment
            Date.

      In this CLAUSE 4.2 references to any Monthly Payment due at any date means
      the Monthly Payment payable in respect of the month in which that date
      falls.

4.3   No assignment of a New Portfolio may occur after the Interest Payment Date
      falling in October, 2010 if the option to redeem the First Issuer Notes on
      the Interest Payment Date in July, 2010 pursuant to Condition 5 of those
      Notes is not exercised.

4.4   Subject to fulfilment of the conditions referred to in CLAUSE 4.2 AND 4.3,
      the consideration to be provided to the Seller by the assignment of the
      New Portfolio to the Mortgages Trustee on an Assignment Date shall be the
      aggregate of:

      (a)   the payment by Funding to the Seller by telegraphic transfer on the
            New Portfolio Date of the proceeds of any New Intercompany Loan
            advanced to Funding by a New Issuer; and/or

      (b)   the covenant of the Mortgages Trustee to hold the Trust Property on
            trust pursuant to the terms of the Mortgages Trust Deed; and

      (c)   the Deferred Consideration (including any Postponed Deferred
            Consideration) which shall be paid by Funding quarterly on the
            Interest Payment Dates (provided there are available funds and after
            making any provisions in accordance with normal accounting practice)
            in accordance with the Funding Pre-Enforcement Revenue Priority of
            Payments or, as the case may be, the Funding Post-Enforcement
            Priority of Payments.

<PAGE>
                                       8

4.5   On the date of the assignment of the relevant New Portfolio, a meeting
      shall take place 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
      Funding Security Trustee or its representative the following documents:

      (a)   two originals of the power of attorney substantially in the form set
            out in Schedule 5, duly executed by the Seller;

            [NOTE: POWER OF ATTORNEY DATED 26/7/2000 DOES NOT COVER SCOTTISH
            MORTGAGES SCOTS LAWYERS TO CONFIRM WHETHER IT SHOULD]

      (b)   a duly executed assignment of the MIG Policies from the Seller and a
            certified copy of a notice (the original of which shall be served by
            courier or by special delivery) of such assignment from the Seller
            to Carfax or such other insurer under the MIG Policies in the form
            (mutatis mutandis) set out in Schedules 9 and 10 respectively and a
            certified copy of consent to assignment of the MIG policies (or
            acknowledgement that the Mortgages Trustee will be an insured under
            the MIG Policies following the assignment) from Carfax or such other
            insurers in such form as the Mortgages Trustee reasonably requires;

      (c)   a duly executed assignment of rights against third parties comprised
            in the relevant New Portfolio dated as of the date of the sale and
            purchase of the New Portfolio and in the form (mutatis mutandis) of
            the Assignment of Third Party Rights;

      (d)   a certificate of a duly authorised officer of the Seller attaching a
            copy of the board minute referred to in CLAUSE 3.1(D) 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;

      (e)   a solvency certificate from the Seller dated as of the date of the
            sale and purchase of the New Portfolio; and

      (f)   a Scottish Trust Deed in respect of the Scottish Loans in the New
            Portfolio (if any) and their Related Security, in the form (mutatis
            mutandis) set out in Schedule 14 and with the annexure thereto duly
            completed, duly executed by the Seller, the Mortgages Trustee and
            Funding.

4.6   The Seller undertakes that from the Assignment Date until the completion
      of the sale and purchase in accordance with CLAUSE 6.1, the Seller shall
      hold the Title Deeds and Customer Files relating to the New 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.

4.7   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 Interest Payment Date in [__]; or

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

<PAGE>
                                       9

                  the Seller undertakes to use all reasonable endeavours to
                  offer to assign, in accordance with the provisions of this
                  CLAUSE 4, 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:

      (A)   until the earlier of the Interest Payment Date falling in [__] (or
            such later date as may be notified by Funding) and the occurrence of
            a Trigger Event, sufficient New Loans and their Related Security so
            that the aggregate Outstanding Principal Balance of Loans in the
            Portfolio is not less than (pound)[__]; and

      (B)   until the earlier of the Interest Payment Date falling in [__] (or
            such later date as may be notified by Funding) and the occurrence of
            a Trigger Event, sufficient New Loans and their Related Security so
            that the aggregate Outstanding Principal Balance of Loans in the
            Portfolio is not less than (pound)[__],

      (or such other amount or amounts specified by Funding in the notice
      referred to in CLAUSE 4.7(II)(B) above) provided that the Seller shall not
      be obliged to assign to the Mortgages Trustee, and the Mortgages Trustee
      shall not be obliged to acquire, New Loans and their Related Security if
      in the opinion of the Seller the assignment to the Mortgages Trustee of
      New Loans and their Related Security would adversely affect the business
      of the Seller.

4.8   On each Assignment Date that Funding provides consideration for New Loans
      to be assigned to the Mortgages Trustee pursuant to CLAUSE 4.4(A) above,
      the Beneficiaries shall appoint a firm of independent Auditors to
      determine whether the Loans and their Related Security (or any part of
      them) constituting the Trust Property complied with the representations
      and warranties set out in Schedule 1 of this Agreement as at the date such
      Loans were assigned to the Mortgages Trustee. The costs of such
      independent auditors shall be borne by the relevant New Issuer (which
      shall be procured by Funding).

5.    TRUST OF MONIES

5.1   Notwithstanding the assignment effected by this Agreement if at, or at any
      other time after, the Initial Closing Date (but prior to any repurchase in
      accordance with CLAUSE 8.5) 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 the Seller undertakes with the Mortgages Trustee, Funding and the
      Funding Security Trustee that it will hold such property, interest, right
      or benefit and/or the proceeds thereof upon trust for the Mortgages
      Trustee subject at all times to the Mortgages Trust.

5.2   If at, or any time after, the Initial Closing Date the Mortgages Trustee
      holds, or there is held to its order, or it receives, or there is received
      to its order, any property, interest, right or benefit relating to:

      (a)   any Loan or Loans under a Mortgage Account and its Related Security
            repurchased by the Seller pursuant to CLAUSE 8.5; or

      (b)   (without prejudice to Clause 11) amounts owed by a Borrower to the
            Seller which the Seller has not agreed to sell under CLAUSE 2.1,

      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 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

<PAGE>
                                       10

      and/or the proceeds thereof upon trust for the Seller as the 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 an amount equal to the moneys so paid in error to the Seller in
      accordance with the Servicing Agreement.

6.    COMPLETION OF THE ASSIGNMENT

6.1   The assignments and transfers contemplated by this Agreement shall be
      completed on the fifth London Business Day after the earliest to occur of:

      (a)   the service of an Intercompany Loan Enforcement Notice or a Note
            Enforcement Notice; or

      (b)   the Seller being required to perfect legal title to the Mortgages,
            or procure any or all of the acts referred to in this CLAUSE 6 by an
            order of a court of competent jurisdiction or by any regulatory
            authority of which the Seller is a member or any organisation whose
            members comprise (but are not necessarily limited to) mortgage
            lenders and with whose instructions it is customary for the Seller
            to comply; or

      (c)   it becoming necessary by law to do any or all of the acts referred
            to in this CLAUSE 6; or

      (d)   the Funding Security Trustee certifying that, in its reasonable
            opinion, the property, assets and rights of Funding comprised in the
            security constituted by the Funding Deed of Charge or any material
            part thereof is/are in jeopardy and that the doing of any or all of
            the acts referred to in paragraphs (a) to (c) inclusive of CLAUSE
            6.3 is necessary in order materially to reduce such jeopardy; or

      (e)   unless otherwise agreed by the Rating Agencies and the Funding
            Security Trustee, the termination of the Seller's role as Servicer
            under the Servicing Agreement; or

      (f)   the Seller calling for completion by serving notice to that effect
            on the Mortgages Trustee, Funding and the Funding Security Trustee;
            or

      (g)   the date on which the Seller ceases to be assigned a long term
            unsecured, unsubordinated and unguaranteed debt obligations rating
            from S&P of BBB- or more, or from Moody's of Baa3 or more, or from
            Fitch of BBB- or more; or

      (h)   the last final repayment date of the Intercompany Loans.

6.2   Completion of the transfer of Mortgages in the Portfolio over Registered
      Land shall be effected by means of a transfer in the form of the
      Registered Transfer and, in the case of Mortgages in the Portfolio over
      Unregistered Land, by a transfer in the form of the Unregistered Transfer
      and, in the case of Scottish Mortgages in the Portfolio, by an assignation
      in the applicable form of Scottish Transfer, and in respect of any other
      matter comprised in the Portfolio, shall be in such form as the Mortgages
      Trustee may reasonably require.

6.3   Prior to completion pursuant to CLAUSE 6.1, neither the Mortgages Trustee
      nor Funding nor the Funding Security Trustee will:

<PAGE>
                                       11

      (a)   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 at H.M. Land Registry or the Registers of Scotland
            in relation to, the Mortgages Trustee's and/or Funding's interests
            in the Portfolio;

      (b)   give or require the giving of any notice to any Borrower of the
            assignment or assignation of that Borrower's Loan and its Related
            Security to the Mortgages Trustee or the charge by Funding of
            Funding's interest in that Borrower's Loan and its Related Security
            to the Funding 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 Funding
            Security Trustee (as the case may be).

6.4   Within 25 London Business Days following completion pursuant to CLAUSE
      6.1, the Seller will do such of the acts or things referred to in CLAUSE
      6.3 as the Funding Security Trustee or the Mortgages Trustee requires the
      Seller to do.

6.5   The Seller shall indemnify each of the Mortgages Trustee and Funding and
      the Funding Security Trustee from and against any and all costs, fees and
      expenses which may be incurred by the Mortgages Trustee and/or Funding
      and/or the Funding Security Trustee by reason of the doing of any act
      matter or thing referred to in this CLAUSE 6.

7.    UNDERTAKINGS

7.1   The Mortgages Trustee and Funding undertake that they will at all times
      (or will direct the Servicer at all times to) administer and enforce (and
      exercise their powers and rights and perform their obligations under) the
      Loans comprised in the Portfolio and their Related Security in accordance
      with the Seller's Policy (for so long as it exists and thereafter in
      accordance with such policies as would be applied by a reasonable, prudent
      mortgage lender in the conduct of its business), provided that if the
      Seller fails to comply with its obligations to repurchase any Loan and its
      Related Security pursuant to CLAUSE 8.5 the Mortgages Trustee shall be
      entitled to waive any Early Repayment Fee in respect of such Loan and its
      Related Security if, in the Mortgages Trustee's reasonable opinion, such
      waiver is reasonably necessary in order to effect:

      (a)   an interest rate change; or

      (b)   a change in the terms and conditions relating to a Loan in respect
            of which interest is calculated by reference to SVR, to a Tracker
            Loan.

7.2   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 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

<PAGE>
                                       12

      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 Loan.

7.3   If, as a result of a breach of Representation and Warranty 1.19, the
      Mortgages Trustee or Funding suffers any loss, cost, expense or liability
      (any such loss, cost, expense or liability referred to in this sub-clause
      as a "LOSS"), then the Seller agrees to hold the Mortgages Trustee and
      Funding harmless against any such Loss and to indemnify the Mortgages
      Trustee and Funding on an after Tax basis in relation to any Loss which
      may arise in connection therewith. If the Seller fails to so indemnify the
      Mortgages Trustee and Funding within 30 London Business Days of demand
      being made therefor, then the amounts due may be deducted by way of
      set-off from income due to the Seller pursuant to CLAUSE 8.2(C) of the
      Mortgages Trust Deed.

7.4   Each of the Seller and the Mortgages Trustee and Funding undertakes with
      the others that if and to the extent that any determination shall be made
      by any court, tribunal, ombudsman or other competent authority in respect
      of any Loan and its Related Security that:

      (a)   any material term which relates to the recovery of interest under
            the Standard Documentation applicable to any Loan and its Related
            Security is unfair; or

      (b)   the treatment of any Borrower in relation to the interest payable by
            that Borrower under any Loan is unfair; or

      (c)   the interest payable under any Loan is to be set by reference to the
            Abbey SVR (and not its successors or assigns or those deriving title
            from them); or

      (d)   the variable margin under any Tracker Loan must be set by Abbey
            National (rather than by its successors or assigns or those deriving
            title from them); or

      (e)   the interest payable under any Loan is to be set by reference to an
            interest rate other than that set or purported to be set by either
            the Servicer or the Mortgages Trustee as a result of the Seller
            having more than one variable mortgage rate; or

      (f)   a Borrower should be or should have been offered the opportunity to
            switch to an interest rate other than that required by the Servicer
            or Mortgage Trustee for that Borrower as a result of the Seller
            having more than one variable mortgage rate; or

      (g)   there has been any breach of or non-observance or non-compliance
            with any obligation, undertaking, covenant or condition on the part
            of the Seller relating to the interest payable by or available to a
            Borrower under any Loan,

      then, at Funding's and the Funding Security Trustee's direction, the
      Mortgages Trustees will serve upon the Seller a notice in the form of the
      Loan Repurchase Notice requiring the Seller to repurchase the relevant
      Loan and all other Loans under the relevant Mortgage Account and its
      Related Security in accordance with CLAUSE 8.5 (but in the case of a
      determination in respect of (c) above, only if at any time on or after
      such determination, the Abbey SVR shall be below or shall fall below the
      standard variable rate set by such successors or assigns or those deriving
      title from them) and the Seller shall indemnify each of the Mortgages
      Trustee, Funding and the Funding Security Trustee on demand on an
      after-tax basis from and against any and all loss, liability, claim,
      expense or damage suffered or incurred by any of them as a result of any
      such determination referred to in this CLAUSE 7.4.

<PAGE>
                                       13

7.5   The Seller hereby undertakes with the Mortgages Trustee, Funding and the
      Funding Security Trustee that:

      (a)   if the long term unsecured, unsubordinated and unguaranteed debt
            obligations of the Seller cease to be assigned a rating of Baa2 or
            more from Moody's and BBB or more from S&P and BBB or more from
            Fitch, the Seller shall deliver to the Mortgages Trustee, Funding,
            the Funding Security Trustee and the Rating Agencies a draft letters
            of notice to each of the Borrowers of the sale and purchase effected
            by this Agreement; and

      (b)   if the long term unsecured, unsubordinated and unguaranteed debt
            obligations of the Seller cease to be assigned a rating of Baa3 or
            more from Moody's and BBB- or more from S&P and BBB- or more from
            Fitch, then the Seller shall within 10 London Business Days of it
            becoming aware of such a rating being assigned give notice of the
            sale and purchase effected by this Agreement to each Borrower.

7.6   The Seller undertakes with the Mortgages Trustee, Funding and the Funding
      Security Trustee that, pending completion under CLAUSE 6, the Seller:

      (a)   shall not do or omit to do any act or thing which might, in the
            reasonable opinion of the Funding Security Trustee, prejudice the
            interests of Funding and/or the Funding Security Trustee in the
            Portfolio;

      (b)   shall promptly notify the Mortgages Trustee, Funding and the Funding
            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 Loan comprised in the 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;

      (c)   shall, if reasonably required so to do by the Mortgages Trustee or
            the Funding Security Trustee, participate or join in any legal
            proceedings to the extent necessary to protect preserve and enforce
            the Seller's or the Mortgages Trustee's or Funding's or the Funding
            Security Trustee's title to or interest in any Loan or its Related
            Security;

      (d)   shall use all reasonable efforts to obtain the title numbers to each
            Property in respect of which a Mortgage is registered at H.M. Land
            Registry or the Land Register and the recording dates to each
            Scottish Mortgage recorded at the Sasine Register to the extent that
            such title number or recording date does not appear in the Exhibit
            to this Agreement (or, as the case may be, the relevant New
            Portfolio Notice) and shall in any event obtain the same prior to
            the Interest Payment Date falling in the month during which the
            first anniversary of the Closing Date (or, as the case may be, the
            relevant Assignment Date) falls; and

      (e)   shall make and enforce claims under the Buildings Policies and the
            Abbey Insurance Policies and hold the proceeds of such claims on
            trust for the Mortgages Trustee or as the Mortgages Trustee may
            direct.

7.7   The Seller undertakes with the Mortgages Trustee, Funding and the Funding
      Security Trustee that it will not do nor omit to do any act or thing
      (whether in connection with any Loan or its Related Security or any loan
      or its related security owned by the Seller outside the Portfolio) which
      is or constitutes or causes any non-observance or non-compliance with or
      any breach of any obligation, undertaking, covenant or condition on the
      part of the Seller (including,

<PAGE>
                                       14

      without limitation, to any Borrower under any Loan or Related Security
      (and without prejudice to the foregoing, the Seller shall not introduce or
      maintain more than one standard variable mortgage rate). The Seller shall
      indemnify each of the Mortgages Trustee, Funding and the Funding Security
      Trustee on demand on an after-tax basis from and against any and all loss,
      liability, claim, expense or damage suffered or incurred by any of them as
      a result of any such non-observance, non-compliance or breach on the part
      of the Seller referred to in this CLAUSE 7.7.

7.8   The Seller hereby further undertakes with the Mortgages Trustee and
      Funding that it is and at all times shall remain solely responsible for
      funding any Flexible Loan Drawings made by a Borrower and for funding any
      request for any Further Advance made by a Borrower and, 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
      Drawing or Further Advance in any circumstances whatsoever.

8.    WARRANTIES AND REPURCHASE BY THE SELLER

8.1   The Seller makes the Representations and Warranties:

      (a)   in respect of each Loan and its Related Security in the Initial
            Portfolio as at the date hereof and on the Initial Closing Date; and

      (b)   in relation to each New Loan and its Related Security in a New
            Portfolio, on the date of the service of the relevant New Portfolio
            Notice and on the relevant Assignment Date.

      The Seller acknowledges that the Representations and Warranties are made
      with a view (as the case may be) to inducing the Mortgages Trustee,
      Funding and the Funding Security Trustee either to enter into this
      Agreement and the other Transaction Documents to which is a party or to
      agree to purchase the New Loans and their Related Security comprised in
      each New Portfolio and that each of the Mortgages Trustee, Funding and the
      Funding 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 in fact
      possessed or discoverable by the Mortgages Trustee, Funding and/or the
      Funding Security Trustee or otherwise disclosed to any of them and that
      prior to entering into this Agreement and the other Transaction Documents
      to which each is a party neither the Mortgages Trustee nor Funding nor the
      Funding Security Trustee has made any enquiries of any matter.

8.2   The Mortgages Trustee's, Funding's and the Funding 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 or under CLAUSE 6 of the
      Mortgages Trust Deed.

8.3   In the event of a material breach of any of the Representations or
      Warranties in respect of any Loan and/or its Related Security or if any of
      the Representations or Warranties proves to be materially untrue as at the
      Closing Date or, as the case may be, the relevant Assignment Date, and
      provided that:

      (a)   the Mortgages Trustee has given the Seller not less than 20 days'
            notice in writing;

      (b)   the Mortgages Trustee has obtained the consent of the Funding
            Security Trustee; and

<PAGE>
                                       15

      (c)   such breach or untruth, where capable of remedy, is not remedied
            within the 20 day period referred to in (a) (or such longer period
            as Funding and the Funding Security Trustee may direct the Mortgages
            Trustee),

      then at Funding's and the Funding Security Trustee's direction the
      Mortgages Trustee may serve upon the Seller a notice in the form of the
      Loan Repurchase Notice requiring the Seller to repurchase the relevant
      Loan and its Related Security (and any other Loan secured or intended to
      be secured by that Related Security or any part of it) in accordance with
      CLAUSE 8.5.

8.4   If the Seller accepts an application from, or makes an offer (which is
      accepted) to, a Borrower for a Further Advance or a Product Switch then,
      at Funding and the Funding Security Trustee's direction, the Mortgages
      Trustee will serve upon the Seller a notice in the form of the Loan
      Repurchase Notice requiring the Seller to repurchase the relevant Loan and
      its Related Security (and any other Loan secured or intended to be secured
      by that Related Security or any part of it) in accordance with CLAUSE 8.5.

8.5   Upon receipt of a Loan Repurchase Notice duly signed on behalf of the
      Mortgages Trustee, the Seller shall sign and return a duplicate copy and
      shall repurchase from the Mortgages Trustee, and the Mortgages Trustee
      shall re-assign to the Seller free from the Security created by the
      Funding Deed of Charge, the relevant Loan (and any other Loan secured or
      intended to be secured by that Related Security or any part of it) and
      their Related Security. Completion of such repurchase shall take place on
      the Distribution Date after receipt of such notice by the Seller or such
      other date as the Mortgages Trustee may direct in the Loan Repurchase
      Notice (provided that the date so specified by the Mortgages Trustee shall
      not be later than 90 days after receipt by the Seller of such notice) when
      the Seller shall pay to the Mortgages Trustee GIC Account (or as the
      Mortgages Trustee shall direct) an amount equal to the aggregate
      Outstanding Principal Balance of such Loan or Loans and any Related
      Security and all Arrears of Interest and Accrued Interest relating thereto
      as at the date of such repurchase and the provisions of CLAUSE 8.6 shall
      apply.

8.6   On the date of completion of any repurchase of a Loan and its Related
      Security in accordance with CLAUSE 8.5 above, the Funding Security
      Trustee, 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)   a memorandum of release of such Loan and its Related Security from
            the security constituted by the Funding Deed of Charge in a form
            reasonably acceptable to the Seller;

      (b)   if completion of the assignment to the Mortgages Trustee has
            occurred in accordance with CLAUSE 6:

            (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;

<PAGE>
                                       16

      (c)   a re-assignment 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
            MIG Policies, be substantially in the form of the Assignment of MIG
            Policies); and

      (d)   a notification to the Servicer that all further sums due in respect
            of such repurchased Loan are for the Seller's account.

      Upon such completion the Seller shall cease to be under any further
      obligation to hold any Title Deeds or other documents relating to such
      Loan or Loans and its Related Security to the order of the Mortgages
      Trustee and if the Mortgages Trustee holds the Title Deeds it will return
      them to the Seller. Any such repurchase by the Seller of a Loan or 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 Funding Security Trustee may have against the Seller arising from
      the relevant Representation or Warranty in relation to that Loan or 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 Loan and other
      Related Security.

8.7   Forthwith after the Seller becomes aware of any event which may reasonably
      give rise to an obligation under CLAUSE 8.5 to repurchase any Loan it
      shall notify the Mortgages Trustee, Funding and the Funding Security
      Trustee in writing thereof as soon as reasonably practicable.

8.8   The terms of this CLAUSE 8 shall not prejudice the rights of the Mortgages
      Trustee or the Beneficiaries under the Mortgages Trust Deed.

8.9   The parties to this Agreement may, with the prior consent of the Funding
      Security Trustee, waive or amend the Representations and Warranties. In
      determining whether to give its consent to the proposed waiver or
      amendments to the Representations and Warranties, the Funding Security
      Trustee shall, in relation to the First Issue, exercise its discretion in
      accordance with the terms of the Funding Deed of Charge and in relation to
      the Second Issue, the Third Issue and any New Issue, shall give its
      consent thereto provided that the Rating Agencies have confirmed that the
      then current ratings of the Notes would not be adversely affected as a
      result of such amendments (but without prejudice to the exercise by the
      Funding Security Trustee of its discretions in relation to the First
      Issue).

9.    OTHER WARRANTIES

      The Seller represents and warrants to the Mortgages Trustee, Funding and
      the Funding Security Trustee that:

      (a)   the Seller has not acquired or owned or possessed any rights in any
            Issuer, the Mortgage Trustee or Funding such that it would "control"
            such Issuer within the meaning of section 416 ICTA 1988; and

      (b)   there is not any "connection" (within the meaning of Section 87
            Finance Act 1996) between any Issuer and any Borrower.

<PAGE>
                                       17

10.   FURTHER ASSURANCE

      The parties hereto agree that they will co-operate fully to do all such
      further acts and things and execute any further documents that may be
      necessary or desirable to give full effect to the transactions
      contemplated by this Agreement (but subject always to CLAUSE 6).

11.   CONSEQUENCES OF BREACH

      Without prejudice to CLAUSE 8, Funding and the Mortgages Trustee and the
      Funding Security Trustee severally acknowledge to and agree with the
      Seller, and the Funding 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 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.

12.   SUBORDINATION

      The Seller agrees with Funding, the Mortgages Trustee and the Funding
      Security Trustee that on the enforcement of any Mortgage any sums owed to
      the Seller by a Borrower and which are 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 which are secured under such
      Mortgage and to the rights and remedies of the Mortgages Trustee in
      respect of such sums owed to the Mortgages Trustee by the Borrower.

13.   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 indemnity in CLAUSE 6.5 and the provisions of
      CLAUSE 4) shall not merge and shall remain in full force and effect
      notwithstanding the sale and purchase contemplated by this Agreement.

14.   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 partnership between the parties and
      that in fulfilling its obligations hereunder, each party shall be acting
      entirely for its own account.

15.   PAYMENTS

      Except as otherwise specifically provided, 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

<PAGE>
                                       18

      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.

16.   WAIVERS AND VARIATION

16.1  Exercise or failure to exercise any right under this Agreement shall not,
      unless otherwise herein provided, constitute a waiver of that or any other
      right.

16.2  No variation of this Agreement shall be effective unless it is in writing
      and signed by (or by some person duly authorised by) each of the parties
      hereto.

17.   NOTICES

      Any notices to be given pursuant to this Agreement to any of the parties
      hereto shall be sufficiently served if sent by prepaid first class post,
      by hand or by facsimile transmission and shall be deemed to be given (in
      the case of facsimile transmission) when despatched 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 Abbey National plc, Abbey House, Baker
            Street, London NW1 6XL (facsimile number (44) 20 7612 4442) for the
            attention of the Company Secretary with a copy to Abbey National
            plc, c/o Abbey House, (AAM 319), 201 Grafton Gate East, Milton
            Keynes MK9 1AN (facsimile number (44) 1908 344217) for the attention
            of Securitisation Team, Risk Operations;

      (b)   in the case of Funding, to Holmes Funding Limited, c/o Abbey
            National plc, Abbey House, Baker Street, London NW1 6XL (facsimile
            number (44) 20 7612 4442) for the attention of the Company Secretary
            with a copy to Abbey National plc, c/o Abbey House, (AAM 319), 201
            Grafton Gate East, Milton Keynes MK9 1AN (facsimile number (44) 1908
            344217) for the attention of Securitisation Team, Risk Operations;

      (c)   in the case of the Mortgages Trustee, to Holmes Trustees Limited,
            c/o Abbey National plc, Abbey House, Baker Street, London NW1 6XL
            (facsimile number (44) 20 7612 4442) for the attention of the
            Company Secretary with a copy to Abbey National plc, c/o Abbey
            House, (AAM 319), 201 Grafton Gate East, Milton Keynes MK9 1AN
            (facsimile number (44) 1908 344217) for the attention of
            Securitisation Team, Risk Operations; and

      (d)   in the case of the Funding Security Trustee, to JPMorgan Chase Bank,
            London Branch, Trinity Tower, 9 Thomas More Street, London E1W 1YT
            (facsimile number (44) 20 7777 5410) for the attention of the
            Manager, Trust Administration,

      or to such other address or facsimile number or for the attention of such
      other person or entity as may from time to time be notified by any party
      to the others by written notice in accordance with the provisions of this
      CLAUSE 17.

18.   ASSIGNMENT

18.1  Subject always to the provisions of CLAUSE 19, 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 whether by way of security
      or otherwise all or any of its rights under this Agreement without such
      consent to the Funding

<PAGE>
                                       19

      Security Trustee pursuant to the Funding Deed of Charge and the Funding
      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 Funding Security Trustee under the Funding Deed of Charge.

18.2  The Seller acknowledges that on the assignment pursuant to the Funding
      Deed of Charge by Funding to the Funding Security Trustee of Funding's
      rights under this Agreement the Funding Security Trustee may enforce such
      rights in the Funding 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 Funding Security Trustee any rights or
      equities in its favour arising from any course of dealing between the
      Seller and Funding.

19.   CHANGE OF FUNDING SECURITY TRUSTEE

19.1  If there is any change in the identity of the Funding 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 Funding Security Trustee and the outgoing Funding Security
      Trustee may reasonably require for the purpose of vesting in the successor
      Funding Security Trustee the rights and obligations of the outgoing
      Funding Security Trustee hereunder and releasing the outgoing Funding
      Security Trustee from its future obligations under this Agreement and the
      Seller shall give notice thereof to the Rating Agencies.

19.2  It is hereby acknowledged and agreed that by its execution of this
      Agreement the Funding Security Trustee shall not assume or have any of the
      obligations or liabilities of the Seller or Funding or the Mortgages
      Trustee hereunder.

20.   NEW INTERCOMPANY LOANS

      If Funding enters into a New Intercompany Loan Agreement, then the Seller,
      Funding, the Funding Security Trustee and the Mortgages Trustee shall
      execute such documents and take such action as may be reasonably required
      by the Funding Security Trustee and the Rating Agencies for the purpose of
      including the New Issuer in the Transaction including, without limitation:

      (a)   effecting any necessary changes to CLAUSE 4.2;

      (b)   ensuring that any Transaction Document relevant to a New Issue has
            been executed and delivered prior to the Relevant Closing Date; and

      (c)   executing and delivering all Assignments of MIG Policies and
            Assignments of Third Party Rights in relation to any New Portfolio.

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.

22.   GOVERNING LAW

22.1  This Agreement shall be governed by and construed in accordance with the
      laws of England (provided that any terms hereof which are particular to
      Scots law shall be construed in accordance with the laws of Scotland).

<PAGE>
                                       20

22.2  This Agreement may be executed (manually or by facsimile) in any number of
      counterparts and all such counterparts taken together shall be deemed to
      constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have executed this Agreement for delivery
on the day and year first before written.

SIGNED for and on behalf of       )
ABBEY NATIONAL PLC                )

SIGNED for and on behalf of       )
HOLMES FUNDING LIMITED            )

SIGNED for and on behalf of       )
HOLMES TRUSTEES LIMITED           )

SIGNED for and on behalf of       )
JPMORGAN CHASE BANK,              )
LONDON BRANCH                     )

<PAGE>
                                       21

                                   SCHEDULE 1

                         REPRESENTATIONS AND WARRANTIES

1.    LOANS

1.1   The particulars of the Loans set out in the Exhibit (or, as the case may
      be, the relevant New Portfolio Notice) are true, complete and accurate in
      all material respects.

1.2   Each Loan was originated by the Seller and was originated and is
      denominated in pounds sterling (or was originated and is denominated in
      Euro if the Euro has been adopted as the lawful currency for the time
      being of the United Kingdom).

1.3   Each Loan in the Initial Portfolio was made not earlier than 1st August,
      1995 and not later than 31st December, 1999, and each Loan in each New
      Portfolio was made not later than three calendar months before the
      relevant Assignment Date and each Loan matures for repayment not later
      than July 2038.

1.4   No Loan has an Outstanding Principal Balance of more than (pound)350,000.

1.5   The Lending Criteria are the lending criteria applicable to the Loans and
      their Related Security.

1.6   Prior to the making of each Initial Advance or Further Advance:

      (a)   the Lending Criteria and all preconditions to the making of any Loan
            were satisfied in all material respects subject only to such
            exceptions as would be acceptable to a reasonable, prudent mortgage
            lender; and

      (b)   the requirements of the relevant MIG Policy were met, so far as
            applicable to that Loan.

1.7   (a)   Each Loan was made and its Related Security taken substantially on
            the terms of the Standard Documentation without any material
            variation thereto and nothing has been done subsequently to add to,
            lessen, modify or otherwise vary the express provisions of any of
            the same in any material respect.

      (b)   The brochures, application forms, offers, offer conditions and
            marketing material distributed by the Seller to the Borrower when
            offering a Loan to a Borrower:

            (A)   do not conflict in any material respect with the terms of the
                  relevant Standard Documentation agreed to by the relevant
                  Borrower at the time that the Loan was entered into;

            (B)   do not conflict with and would not prohibit or otherwise limit
                  the terms of, the Transaction Documents or the matters
                  contemplated thereby, including for the avoidance of doubt and
                  without limitation:

                  (i)   the assignment and transfer of the Loans and their
                        Related Security to the Mortgages Trustee;

                  (ii)  the administration of the Loans and their Related
                        Security by the Seller or a delegate of the Seller or
                        the appointment of a new Servicer

<PAGE>
                                       22

                        following the occurrence of an Insolvency Event in
                        relation to the Seller; and

                  (iii) so far as the Seller is aware to the best of its
                        knowledge, information and belief, the ability of the
                        Mortgages Trustee or the Funding Security Trustee to set
                        the variable rate payable under any Variable Rate Loan
                        independently of (and without regard to the level of)
                        the Abbey SVR, subject to any applicable cap on that
                        variable rate which is not itself linked to any rate set
                        by the Seller and to set the variable margin under any
                        Tracker Loan independently of (and without regard to the
                        level of) any differential set by the Seller, subject to
                        any applicable cap on that variable margin which is not
                        itself linked to any margin set by the Seller.

1.8   The Seller is under no obligation to make further advances (other than
      Flexible Loan Drawings and Delayed Cashbacks) or to release retentions or
      to pay fees or other sums relating to any Loan or its Related Security to
      any Borrower.

1.9   Each Borrower has made at least one Monthly Payment.

1.10  Other than with respect to monthly interest payments, no Borrower is or
      has, since the date of the relevant Mortgage, been in material breach of
      any obligation owed in respect of the relevant Loan or under the Related
      Security and accordingly no steps have been taken by the Seller to enforce
      any Related Security.

1.11  The total amount of arrears of interest or principal, together with any
      fees, commissions and premiums payable at the same time as such interest
      payment or principal repayment, on any Loan is not on the Initial Closing
      Date (or, as the case may be, the Assignment Date) more than the Monthly
      Payment payable in respect of such Loan in respect of the month in which
      such date falls and has at no date in the past been more than two times
      the Monthly Payment payable in respect of such Loan in respect of the
      month in which such date falls.

1.12  No Loan is guaranteed by a third party.

1.13  The Outstanding Principal Balance, all Accrued Interest and all Arrears of
      Interest on each Loan and its Related Security constitute a valid debt due
      to the Seller from the relevant Borrower and the terms of each Loan and
      its Related Security constitute valid and binding obligations of the
      Borrower.

1.14  Interest on each Loan is charged in accordance with the Standard
      Documentation.

1.15  Interest on each Loan is payable monthly in arrears.

1.16  No agreement for any Loan or any part of it is or has even been, wholly or
      partly regulated by the Consumer Credit Act 1974 (other than Sections 137
      to 140 of such Act) or any modification or re-enactment thereof or, to the
      extent it is so regulated or partly regulated, all the requirements of the
      Consumer Credit Act 1974 as modified or re-enacted have been met in full.
      No agreement for any Loan or any part of it constitutes an extortionate
      credit bargain under Sections 137 to 140 of such Act.

1.17  All of the Borrowers are individuals.

1.18  No Loan in the Initial Portfolio is a Flexible Loan.

<PAGE>
                                       23

1.19  In relation to any Loan in respect of which interest is calculated by
      reference to SVR, the Mortgages Trustee or the Funding Security Trustee
      has a right pursuant to the Mortgage Terms to set the SVR at any time and
      from time to time at a level which is independent of the right pursuant to
      the Mortgage Terms to set the variable margin applicable to any Tracker
      Loan and such SVR is and will be binding on the Borrower and enforceable
      against it. The Seller has not, since the date of the relevant Mortgage,
      done or omitted to do any act or thing which has caused any non-observance
      or non-compliance with nor any breach of any obligation, undertaking,
      covenant or condition on the part of the Seller under any Loan or its
      Related Security.

2.    MORTGAGES

2.1   The whole of the Outstanding Principal Balance on each Loan and any
      Arrears of Interest and all Accrued Interest is secured by a Mortgage.

2.2   Each Mortgage is in the form of the pro forma contained in the Standard
      Documentation.

2.3   Each Mortgage constitutes a valid and subsisting first charge by way of
      legal mortgage or first ranking standard security over the relevant
      Property (except in the case of some Flexible Loans in respect of which
      the Mortgage may constitute valid and subsisting first and second charges
      by way of legal mortgage or first and second ranking standard securities
      over the relevant Property) subject only in certain appropriate cases to
      applications for registrations or recordings at H.M. Land Registry or the
      Registers of Scotland which where requisite have been made and are pending
      and in relation to such cases the Seller is not aware of any caution,
      notice, inhibition or any other matter that would prevent such
      registration or recording.

2.4   Each Mortgage (or, in the case of some Flexible Loans, each first and
      second Mortgage together) has first priority for the whole of the
      Outstanding Principal Balance on the Loan and all Arrears of Interest and
      Accrued Interest thereon and all future interest, fees, costs and expenses
      payable under or in respect of such Mortgage.

2.5   None of the Mortgages secures a Loan made to a tenant to purchase a
      dwelling pursuant to the Housing Act 1985 or the Housing (Scotland) Act
      1987 or any subsequent applicable right-to-buy legislation.

2.6   Each Loan and its Related Security is, save in relation to any Loan and
      Related Security which is not binding by virtue of the Unfair Terms in
      Consumer Contracts Regulations 1994 or (as the case may be) the Unfair
      Terms in Consumer Contracts Regulations 1999, valid and binding and
      enforceable in accordance with its terms. To the best of the Seller's
      knowledge, none of the Loans or their Related Security is not binding by
      virtue of its being unfair pursuant to the Unfair Terms in Consumer
      Contracts Regulations 1994 or (as the case may be) the Unfair Terms in
      Consumer Contracts Regulations 1999.

2.7   Each of the Mortgages over Registered Land is protected by a restriction
      prohibiting any dealings in the relevant title without the consent of the
      Seller unless the Seller is prevented by any change in legislation or the
      decision of any competent court, authority or regulatory body applicable
      to mortgage lenders (or a class of them) generally from imposing such a
      restriction.

3.    THE PROPERTIES

3.1   All of the Properties are in England, Wales or Scotland.

<PAGE>
                                       24

3.2   Each Property constitutes a separate dwelling unit and is either freehold,
      heritable or leasehold.

3.3   Every person who, at the date upon which an English Mortgage was granted,
      had attained the age of eighteen and was or was in or about to be in
      actual occupation of the relevant Property, is either named as a Borrower
      or has signed a Deed of Consent in the form of the pro forma contained in
      the Standard Documentation. At the date upon which any Scottish Mortgage
      was granted, all necessary MHA Documentation had been obtained so as to
      ensure that neither that Scottish Mortgage nor the related Property is
      subject to or affected by any statutory right of occupancy.

3.4   No Property has been let otherwise than by way of:

      (a)   an assured shorthold tenancy which meets the requirements of section
            19A or section 20 of the Housing Act 1988; or

      (b)   an assured tenancy; or

      (c)   a short assured tenancy which meets the requirements of section 32
            of the Housing (Scotland) Act 1988

      in each case which meets the Seller's Policy in connection with lettings
      to non-owners.

3.5   No Property is the subject of a shared ownership lease arrangement or
      staircase purchasing arrangement.

4.    VALUERS' AND SOLICITORS' REPORTS

4.1   Not more than six months prior to the grant of each Mortgage (or such
      longer period as may be acceptable to a reasonable, prudent mortgage
      lender) the Seller received a Valuation Report on the relevant Property
      (or such other form of report concerning the valuation of the relevant
      Property as would be acceptable to a reasonable, prudent mortgage lender),
      the contents of which were such as would be acceptable to a reasonable,
      prudent mortgage lender.

4.2   The principal amount of the Initial Advance other than with respect to
      Flexible Loans with a LTV ratio of between 75 per cent. and 89.99 per
      cent. advanced to then existing Abbey National Borrowers (including any
      retention(s) subsequently advanced to the Borrower but disregarding
      Capitalised Expenses) is either:

      (a)   not more than 75 per cent. of the lower of the purchase price and
            the appraised value of the Property as stated in the valuation
            report referred to above in paragraph 4.1 (the "APPRAISED VALUE")
            (or, in case of a remortgage, of the appraised value) of the
            Property; or

      (b)   greater than 75 per cent. (but not more than 95 per cent.) of the
            lower of the purchase price and the appraised value (or, in the case
            of a remortgage, of the appraised value), in which case that part of
            the Initial Advance which exceeds 75 per cent. of the lower of the
            purchase price and the appraised value (or, in the case of a
            remortgage, of the appraised value) is recoverable under a MIG
            Policy.

<PAGE>
                                       25

4.3   Prior to the taking of each Mortgage, the Seller:

      (a)   instructed the Seller's solicitor or licensed or qualified
            conveyancer to carry out an investigation of title to the relevant
            Property and to undertake such other searches, investigation,
            enquiries and other actions on behalf of the Seller as are set out
            in the General Instructions to Solicitors or the Lenders' Handbook
            contained in the Standard Documentation (or such comparable or
            successor instructions and/or guidelines as may for the time being
            be in place), subject only to such variations as would be acceptable
            to a reasonable, prudent mortgage lender; and

      (b)   received a Certificate of Title from the solicitor or licensed or
            qualified conveyancer referred to in paragraph (a) relating to such
            Property the contents of which were such as would be acceptable to a
            reasonable, prudent mortgage lender.

4.4   The benefit of all Valuation Reports any other valuation report referred
      to in paragraph 4.1, Home Loan Protection Policies and Certificates of
      Title can be validly assigned to the Mortgages Trustee without obtaining
      the consent of the relevant valuer, Insurer, solicitor or licensed or
      qualified conveyancer.

4.5   Each solicitor or licensed or qualified conveyancer has complied with the
      instructions referred to in paragraph 4.3(a).

5.    BUILDINGS INSURANCE

5.1   Insurance cover for each Property is or will at all relevant times be
      available under:

      (a)   a policy arranged by the Borrower in accordance with the relevant
            Mortgage Conditions or in accordance with the Alternative Insurance
            Recommendations; or

      (b)   Abbey National Plc Policies or a policy introduced to the Borrower
            by Abbey National; or

      (c)   a policy arranged by the relevant landlord; or

      (d)   the Properties in Possession Policy.

5.2   No act, event or circumstance has occurred which would adversely affect
      the Properties in Possession Policy or entitle the insurers to refuse to
      make payment thereunder or to reduce the amount payable in respect of any
      claim thereunder.

5.3   All claims under the Properties in Possession Policy have been paid in
      full within a reasonable time of the date of submission of the claim and,
      save in respect of minor claims, there are no claims outstanding.

6.    MIG POLICIES

6.1   Where applicable, the MIG Policies are in full force and effect in
      relation to the Portfolio and all premiums thereon have been paid.

6.2   The benefit of the MIG Policies can be and will, with effect from the
      Closing Date (or, as the case may be, the relevant Assignment Date), have
      been (or, as the case may be, will be) validly assigned to the Mortgages
      Trustee and charged to the Funding Security Trustee,

<PAGE>
                                       26

      insofar as they relate to the Initial Portfolio (or, as the case may be,
      the relevant New Portfolio).

6.3   No act, event or circumstance has occurred which would adversely affect
      the MIG Policies or entitle the insurers to refuse to make payment
      thereunder or to reduce the amount payable in respect of any claim
      thereunder in each case so as adversely to affect the Trust Property or
      any part of it.

6.4   All valid claims under the MIG Policies have been paid in full within a
      reasonable time of the date of submission of the claim.

7.    THE SELLER'S TITLE

7.1   The Seller has good title to, and is the absolute unencumbered legal and
      beneficial owner of, all property, interests, rights and benefits agreed
      to be sold by the Seller to the Mortgages Trustee pursuant to this
      Agreement free and clear of all mortgages, securities, charges, liens,
      encumbrances, claims and equities (including, without limitation, rights
      of set-off or counterclaim and overriding interests within the meaning of
      section 3 (xvi) of the Land Registration Act 1925 or section 28(1) of the
      Land Registration (Scotland) Act 1979) and the Seller is not in breach of
      any covenant or obligation implied by reason of its selling the Portfolio
      with full title guarantee or absolute warrandice (or which would be
      implied if the Registered Transfers or Unregistered Transfers or Scottish
      Transfers, as applicable, were completed).

7.2   All steps necessary to perfect the Seller's title to the Loans and the
      Related Security were duly taken at the appropriate time or are in the
      process of being taken, in each case (where relevant) within any
      applicable priority periods or time limits for registration with all due
      diligence and without undue delay.

7.3   Save for Title Deeds held at H.M. Land Registry or the Registers of
      Scotland, the Title Deeds and the Customer Files relating to each of the
      Loans and their Related Security are held by, or are under the control of:

      (a)   the Seller; or

      (b)   the Seller's solicitors to the order of the Seller,

      and the Title Deeds held at H.M. Land Registry have been sent to it with a
      request that any such Title Deeds will be returned to the Seller or its
      solicitors on its behalf.

7.4   Neither the entry by the Seller into this Agreement nor any transfer or
      assignment contemplated by this Agreement affects or will adversely affect
      any of the Loans and their Related Security and the Seller may freely
      transfer and assign its interest therein without breaching any term or
      condition applying to any of them.

7.5   The Seller has not knowingly waived or acquiesced in any breach of any of
      its rights in respect of a Loan or Mortgage, other than waivers and
      acquiescence such as a reasonable, prudent mortgage lender might make.

<PAGE>
                                       27

8.    GENERAL

8.1   The Seller has, since the making of each Loan, kept or procured the
      keeping of full and proper accounts, books and records showing clearly all
      transactions, payments, receipts, proceedings and notices relating to such
      Loan.

8.2   Neither the Seller nor any of its agents has received written notice of
      any litigation or dispute (subsisting, threatened or pending) in respect
      of any Borrower, Property, Loan, Related Security, MIG Policy or
      Properties in Possession Policy which might have a material adverse effect
      on the Trust Property or any part of it.

8.3   The Seller has received from each Borrower a variable direct debit
      instruction in favour of the Seller signed by the relevant Borrower and
      addressed to its bank, variable as to the amount payable by such Borrower
      by unilateral notice given from time to time by the Seller to such
      Borrower's bank without further instruction or consent from such Borrower
      or such other method of payment as may be acceptable to a reasonable,
      prudent mortgage lender.

8.4   There are no authorisations, approvals, licences or consents required as
      appropriate for the Seller to enter into or to perform the obligations
      under this Agreement or to render this Agreement legal, valid, binding,
      enforceable and admissible in evidence.

8.5   The Insurance Acknowledgements are valid, binding and enforceable against
      the relevant insurer by the Mortgages Trustee and the Funding Security
      Trustee.

<PAGE>
                                       28

                                   SCHEDULE 2

                               REGISTERED TRANSFER

IN THE FORM OF HM LAND REGISTRY FORM TR4 AS SHOWN OVERLEAF WITH SUCH AMENDMENTS
AS THE MORTGAGES TRUSTEE MAY REASONABLY REQUIRE TO GIVE EFFECT TO THIS AGREEMENT
OR IN SUCH OTHER FORM AS THE MORTGAGES TRUSTEE MAY REASONABLY REQUIRE TO TAKE
ACCOUNT OF CHANGES IN LAW OR PRACTICE.

<PAGE>
                                       29

                                   SCHEDULE 3

                              UNREGISTERED TRANSFER

THIS DEED OF TRANSFER OF MORTGAGES is made the _____ day of _____________ 20[__]

BETWEEN:

(1)   ABBEY NATIONAL PLC whose registered office is at Abbey House, Baker
      Street, London NW1 6XL (hereinafter called the "TRANSFEROR") of the one
      part; and

(2)   HOLMES TRUSTEES LIMITED whose registered office is Abbey House, Baker
      Street, London NW1 6XL (hereinafter called the ("TRANSFEREE") of the other
      part.

WHEREAS:

(A)   By the charges by way of legal mortgage (the "MORTGAGES") brief
      particulars of which are set out in the Annexure hereto the properties
      brief particulars of which are similarly set out became security for the
      repayment of the moneys therein mentioned.

(B)   By a Mortgage Sale Agreement (as amended and/or restated from time to
      time) made between, inter alia, the Transferor and the Transferee on 26th
      July, 2000, the Transferor agreed to sell and the Transferee agreed to buy
      all right, title, interest, benefit and obligation (both present and
      future) of the Transferor in and under those Mortgages and all other
      mortgages in favour of the Transferor over such properties which do not
      relate to registered land for the consideration mentioned in the said
      Mortgage Sale Agreement.

NOW THIS DEED WITNESSETH as follows:

The Transferor hereby transfers unto the Transferee with full title guarantee
all right, title, interest, benefit and obligation (both present and future) of
the mortgagee in and under the Mortgages which do not relate to registered land
including for the avoidance of doubt:

(a)   the right to demand, sue for, recover, receive and give receipts for all
      principal moneys payable or to become payable under the relevant Mortgages
      or the unpaid part thereof and the interest due or to become due thereon
      (provided that the principal moneys payable under any Mortgage shall not
      be deemed to be due for the purpose of this paragraph merely because the
      legal date for redemption of the relevant Mortgage has passed);

(b)   the benefit of all securities for such principal moneys and interest, the
      benefit of all consents to mortgage signed by occupiers of the mortgaged
      properties and the benefit of and the right to sue on all covenants with,
      or vested in, the mortgagee in each Mortgage and the rights to exercise
      all powers of the mortgagee in relation to each Mortgage;

(c)   all the estate and interest in the mortgaged properties vested in the
      mortgagee subject to redemption or cesser; and

(d)   all causes of action of the mortgagee against any person in connection
      with any report, valuation, opinion, certificate, consent to mortgage or
      other statement of fact or opinion given in connection with any Mortgage
      or affecting the decision to make the relevant advance.

IN WITNESS of which this document has been executed and delivered as a deed the
day and year first before written.

<PAGE>
                                       30

THE COMMON SEAL of                )
ABBEY NATIONAL PLC                )
was hereunto affixed in the       )
presence of:                      )

.....................................   Authorised Signatory

.....................................   Authorised Signatory

<PAGE>
                                       31

                                   SCHEDULE 4

                                LENDING CRITERIA

LENDING CRITERIA

The Loans in the Initial Portfolio or, as the case may be, the relevant New
Portfolio were originated according to the Seller's lending policy at the
relevant time, which in the case of the Initial Portfolio included the criteria
set out below. However, the Seller retains the right to revise its lending
policy from time to time, and so the criteria applicable to the New Loans may
not be the same as those set out below.

(1)   Types of Property

      Properties may be either freehold, heritable or leasehold. In the case of
      leasehold properties, the unexpired portion of the lease must in most
      cases not expire earlier than 30 years after the term of the Loan.

      All properties have been valued by a valuer approved by the Seller.

(2)   Term of Loan

      There is no minimum term on the Loans. The maximum term is normally 35
      years. For interest only loans where the Borrower is using a pension plan
      as the relevant repayment mechanism to repay the loan at maturity, the
      maximum term is extended to 57 years to reflect the long-term nature of
      pension plans. For such pension-linked loans, if the property is a
      leasehold and the lease has 55 or fewer years unexpired as at the date of
      completion of the mortgage, the maximum term is 25 years. Otherwise, the
      maximum term on a leasehold property may not exceed the unexpired residue
      of the term of the relevant lease.

(3)   Age of Applicant

      All Borrowers must be aged 18 or over. The Mortgage Account must mature no
      later than the time when the Borrower reaches 85 years of age if the Loan
      has a related MIG policy. Otherwise there is no maximum age limit unless
      the Mortgage Account is linked to a pension policy when the Mortgage
      Account must mature no later than the time when the Borrower reaches 75
      years of age.

(4)   Loan to Value Ratio

      The maximum original loan to value ratio of Loans in the Initial Portfolio
      is 95 per cent. (excluding any capitalised high loan to value fee, booking
      fee or valuation fee).

      Value is determined, in the case of a remortgage, on the basis of the
      valuer's valuation only and, in the case of a Property which is being
      purchased, on the lower of the valuer's valuation and the purchase price
      and, in the case of a further advance, on the basis of the valuer's
      valuation or, where appropriate, according to a methodology which would
      meet the standards of a reasonable, prudent mortgage lender and which has
      been approved by the Director of Group Property and Survey of the Seller
      (or his successor).

<PAGE>
                                       32

(5)   Mortgage Indemnity Policy

      Cover under the then current MIG Policies was required for each Mortgage
      Account where the aggregate of the Outstanding Principal Balance at
      origination (excluding capitalised High Loan-to-Value Fees, booking fees
      or valuation fees), or the aggregate Outstanding Principal Balance
      (including any further advance at the time at which it was advanced),
      exceeded 75 per cent. of the Property value as determined above.

(6)   Status of Applicant(s)

      The maximum amount of the aggregate Loan(s) under a Mortgage Account is
      determined by a number of factors, including the applicant's income. In
      determining income, the Seller includes basic salary, regular overtime,
      bonus and commission as primary income. If these payments are not
      guaranteed or regular, they are treated as secondary income, together
      with, inter alia, rental income from tenanted residential property (up to
      75 per cent. of such rental income).

      The amount available is initially calculated as follows:

      Single Applicant   --   3 times primary income plus 1 times secondary
                              income.

      Multiple           --   3 times  primary income of one applicant plus
                              primary income of  any other applicant (up to a
                              maximum of 3 other applicants) plus 1 times
                              secondary income of all applicants, or

                              2.5 times joint primary income (of
                              two applicants) plus 1 times
                              primary income of any other
                              applicant plus 1 times secondary
                              income of all applicants

      This criterion is similarly applied to the relevant share of net profit
      for self employed applicants.

      The Seller may exercise discretion within its lending criteria in applying
      those factors which are used to determine the maximum amount of the
      Loan(s). Accordingly, the above parameters may vary.

(7)   Credit History

(a)   Credit Search

      A credit search is carried out in respect of all applicants. Applications
      may be declined where an adverse credit history (e.g. county court
      judgement, default, bankruptcy notice) is revealed.

(b)   Existing Lender's Reference

      The Seller may also seek a reference from any existing and/or previous
      lender. Any reference must satisfy the Seller that the account has been
      properly conducted and that no history of material arrears exists.

<PAGE>
                                       33

(c)   First Time Buyers/Applicants in rented accommodation

      Where applicants currently reside in rented accommodation, a landlord's
      reference may be sought by the Seller. In addition, if considered
      appropriate, a further reference may be taken in connection with any other
      property rented by the applicant(s) within the three preceding years.

(d)   Bank Reference

      A bank reference may be sought or the applicants may be required to
      provide bank statements in support of their application.

(8)   Scorecard

      The Seller uses some of the above criteria and various other criteria to
      provide an overall score for the application which reflects a statistical
      analysis of the risk of advancing the Loan.

<PAGE>
                                       34

                                   SCHEDULE 5

POWER OF ATTORNEY IN FAVOUR OF FUNDING, THE MORTGAGES TRUSTEE,
FUNDING AND THE FUNDING SECURITY TRUSTEE

THIS DEED OF POWER OF ATTORNEY is made on the [__], 2002 by:

(1)   ABBEY NATIONAL PLC whose registered office is at Abbey House, Baker
      Street, London NW1 6XL (registered number 2294747) (the "SELLER");

in favour of each of:

(2)   HOLMES FUNDING LIMITED whose registered office is at Abbey House, Baker
      Street, London NW1 6XL (registered number 3982428) ("FUNDING");

(3)   HOLMES TRUSTEES LIMITED whose registered office is at Abbey House, Baker
      Street, London NW1 6XL (registered number 3982431) (the "MORTGAGES
      TRUSTEE"); and

(4)   JPMORGAN CHASE BANK, LONDON BRANCH (formerly known as The Chase Manhattan
      Bank, London Branch) whose principal office is at Trinity Tower, 9 Thomas
      More Street, London E1W 1YT in its capacity as trustee (the "FUNDING
      SECURITY TRUSTEE", which expression shall include such company and all
      other persons or companies for the time being acting as the trustee or
      trustees under the Funding Deed of Charge).

WHEREAS:

(1)   By virtue of a mortgage sale agreement (the "MORTGAGE SALE AGREEMENT")
      dated 26th July, 2000, as amended on 29th November, 2000, as amended and
      restated on 23rd May, 2001, as amended and restated on 5th July, 2001, as
      amended and restated on 8th November, 2001 and as amended and restated on
      [__, 2002] and made between the Seller (1) Funding (2) the Mortgages
      Trustee (3) and The Chase Manhattan Bank, London Branch (4) provision was
      made for the execution by the Seller of this Power of Attorney.

(2)   Words and phrases in this Deed shall (save where expressed to the
      contrary) have the same meanings respectively as the words and phrases in
      the Master Definitions Schedule dated [__], 2002 and signed for the
      purposes of identification by Allen & Overy and Slaughter and May.

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 Servicing 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 the protection or preservation of that
      Attorney's interest in the Loans 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 execute, sign, seal and deliver (using the company seal of the
            Seller where appropriate) a conveyance, assignment, assignation or
            transfer of the Loans or any of

<PAGE>
                                       35

            them to the Mortgages Trustee and its successors in title or other
            person or persons entitled to the benefit thereof;

      (b)   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 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
            at H.M. Land Registry as proprietor thereof or to be registered or
            recorded in the Registers of Scotland as heritable creditor thereof
            (as the case may be);

      (c)   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 Loans 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 including any of the acts referred to in
            CLAUSE 6.2(A) TO (C) of the Mortgage Sale Agreement;

      (d)   to exercise its rights, powers and discretions under the Loans
            including the right to fix the rate or rates of interest payable
            under the Loans in accordance with the terms thereof;

      (e)   to discharge the Mortgages or any of them and to sign, seal, deliver
            and execute such receipts releases surrenders instruments and deeds
            as may be requisite or advisable in order to discharge the relevant
            Property or Properties from the Mortgages or any of them; and

      (f)   to exercise all the powers of the Seller in relation to such Loans
            and their Related Security.

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 Loans or their Related Security by virtue
      of this Deed.

<PAGE>
                                       36

IN WITNESS WHEREOF the Seller has executed this document as a deed the day and
year first before written.

THE COMMON SEAL of                )
ABBEY NATIONAL PLC                )
was hereunto affixed in           )
the presence of:                  )

....................................  Authorised Signatory

....................................  Authorised Signatory

<PAGE>
                                       37

                                   SCHEDULE 6

                             LOAN REPURCHASE NOTICE

Dated [______________]

1.    It is hereby agreed that for the purpose of this notice the "PRINCIPAL
      AGREEMENT" shall mean the Mortgage Sale Agreement dated 26th July, 2000
      (as amended and/or restated from time to time) made between ABBEY NATIONAL
      PLC (the "SELLER") (1) HOLMES FUNDING LIMITED (2) HOLMES TRUSTEES LIMITED
      (the "MORTGAGES TRUSTEE") (3) and JPMORGAN CHASE BANK, LONDON BRANCH
      (formerly known as The Chase Manhattan Bank, London Branch) (the "FUNDING
      SECURITY TRUSTEE") (4).

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 CLAUSE 8.4 of the Principal Agreement, upon receipt of
      this Loan Repurchase Notice by the Seller there shall exist between the
      Seller and the Mortgages Trustee an agreement (the "AGREEMENT FOR SALE")
      for the sale by the Mortgages Trustee to the Seller of the Loans and their
      Related Security more particularly described in the Schedule hereto.
      Completion of such sale shall take place on [ ].

4.    The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
      provisions of the Principal Agreement.

............................................
Signed for and on behalf of

HOLMES TRUSTEES LIMITED

[On duplicate

............................................
Signed for and on behalf of
ABBEY NATIONAL PLC]

<PAGE>
                                       38

                                    SCHEDULE

1.                                        2.                           3.
Title No. (if registered)                 Borrower                     Property

<PAGE>
                                       39

                                   SCHEDULE 7

                        ASSIGNMENT OF THIRD PARTY RIGHTS

THIS DEED is made on [__], 2002

BETWEEN

(1)   ABBEY NATIONAL PLC (registered number 2294747), a public limited company
      incorporated under the laws of England and Wales, whose registered office
      is at Abbey House, Baker Street, London NW1 6XL (the "TRANSFEROR"); and

(2)   HOLMES TRUSTEES LIMITED (registered number 3982431), a private limited
      company incorporated under the laws of England and Wales, whose registered
      office is at Abbey House, Baker Street, London NW1 6XL (the "TRANSFEREE").

WHEREAS:

(A)   By the charges by way of legal mortgage or standard securities (the
      "MORTGAGES") brief particulars of which are set out in the Annexure hereto
      the properties brief particulars of which are similarly set out became
      security for the repayment of the moneys therein mentioned.

(B)   By a Mortgage Sale Agreement made between, inter alia, the Transferor and
      the Transferee on 26th July, 2000, as amended on 29th November, 2000, as
      amended and restated on 23rd May, 2001, as amended and restated on 5th
      July, 2001, as amended and restated on 8th November, 2001 and as amended
      and restated on [__, 2002] the Transferor agreed to sell and the
      Transferee agreed to buy all right, title, interest and benefit (both
      present and future) of the Transferor in and under those Mortgages and all
      Related Security (as defined in the Master Definition Schedule of even
      date herewith and signed, for the purposes of identifications by Slaughter
      and May and Allen & Overy relating hereto) and all monies secured by those
      Mortgages and Related Security.

NOW THIS DEED WITNESSETH as follows:

The Transferor hereby transfers and assigns unto the Transferee with full title
guarantee (or, in relation to rights and assets situated in or governed by the
law of Scotland, with absolute warrandice):

(i)   the benefit of all Related Security relating to the Mortgages (including
      without limitation all securities for the principal moneys and interest
      secured by the Mortgages and the benefit of all consents to mortgage
      signed by occupiers of the mortgaged properties and all MHA Documentation)
      other than any such Related Security which has been transferred to the
      Transferee by other means or which is not otherwise capable of such
      transfer; and

(ii)  all causes and rights of action of the Transferor against any person in
      connection with any report, valuation, opinion, certificate, consent to
      mortgage or other statement of fact or opinion given in connection with
      any Mortgage or affecting the decision to make the relevant advance.

IN WITNESS of which this document has been executed and delivered as a deed the
day and year first before written.

<PAGE>
                                       40

THE COMMON SEAL of                  )
ABBEY NATIONAL PLC                  )
was hereunto affixed in the         )
presence of:                        )

...................................   Authorised Signatory

...................................   Authorised Signatory

<PAGE>

                                       41

                                   SCHEDULE 8

                           ASSIGNMENT OF MIG POLICIES

THIS DEED is made on [__], 2002

BETWEEN:

(1)   ABBEY NATIONAL PLC (registered number 2294747), a public limited company
      incorporated under the laws of England and Wales, whose registered office
      is at Abbey House, Baker Street, London NW1 6XL (the "SELLER"); and

(2)   HOLMES TRUSTEES LIMITED (registered number 3982431), a private limited
      company incorporated under the laws of England and Wales, whose registered
      office is at Abbey House, Baker Street, London NW1 6XL (the "MORTGAGES
      TRUSTEE").

WHEREAS:

(A)   By a Mortgage Sale Agreement made between, inter alia, the Seller and the
      Mortgages Trustee on 26th July, 2000, as amended on 29th November, 2000,
      as amended and restated on 23rd May, 2001, as amended and restated on 5th
      July, 2001, as amended and restated on 8th November, 2001 and as amended
      and restated on [__, 2002], the Seller agreed to transfer to the Mortgages
      Trustee certain charges by way of legal mortgage secured on residential
      property in England and Wales and standard securities secured on
      residential property in Scotland together with the benefit of any monies
      secured thereby.

(B)   The Seller has the benefit of mortgage indemnity insurance policies
      numbered CAR 9401A, CAR 9401X and CAR 9601A and issued by Carfax Insurance
      Limited on 4th November, 1994, 4th November, 1994 and 30th December, 1996
      respectively.

(C)   The Seller has agreed with the Mortgages Trustee to assign to the
      Mortgages Trustee the benefit of the MIG Policies to the extent that they
      relate to the Loans in the Portfolio.

NOW THIS DEED WITNESSETH as follows:

1.    Capitalised terms in this Deed (including the recitals) shall, except
      where the context otherwise requires and save where otherwise defined in
      this Deed, bear the meanings given to them in the Master Definitions and
      Construction Schedule dated 26th July, 2000 signed on behalf of, inter
      alios, the parties to this Deed (as the same may be amended, varied or
      supplemented from time to time) and this Deed shall be construed in
      accordance with the interpretation provisions set out in CLAUSE 2 thereof.

2.    The Seller with full title guarantee hereby conveys, transfers and assigns
      to the Mortgages Trustee absolutely all its right, title, interest and
      benefit in the MIG Policies to the extent that they relate to the Loans
      and the Mortgages in the Portfolio, and all moneys and proceeds to become
      payable under any of the same and all covenants relating thereto and all
      powers and remedies for enforcing the same.

3.    This Deed shall be governed by and construed in accordance with English
      law.

IN WITNESS of which this document has been executed and delivered as a deed the
day and year first before written.

<PAGE>
                                       42

THE COMMON SEAL of                 )
ABBEY NATIONAL PLC                 )
was hereunto affixed in the        )
presence of:                       )

.....................................     Authorised Signatory

.....................................     Authorised Signatory

<PAGE>
                                       43

                                   SCHEDULE 9

                         MIG POLICIES ASSIGNMENT NOTICE

To:   Carfax Insurance Limited
      The Albany
      South Esplanade
      St. Peter Port
      Guernsey
      Channel Islands

                                                                      [__], 2002

Dear Sirs,

RE:   ASSIGNMENT OF MORTGAGE INDEMNITY INSURANCE POLICIES NUMBERED CAR 9401A,
      CAR9401X AND CAR 9601A ISSUED ON 4TH NOVEMBER, 1994, 4TH NOVEMBER, 1994
      AND 30TH DECEMBER, 1996 RESPECTIVELY (THE "MIG POLICIES")

We hereby give you notice that, by an Assignment dated [__], 2002 and made
between ourselves and Holmes Trustees Limited (the "MORTGAGES TRUSTEE"), we
assigned all of our right, title, benefit and interest in the MIG Policies (to
the extent that they relate to the loans and the mortgages in a portfolio
referred to in a mortgage sale agreement dated 26th July, 2000 (as amended
and/or restated from time to time) between ourselves, Holmes Funding Limited,
the Mortgages Trustee and JP Morgan Chase Bank, London Branch (formerly known as
The Chase Manhattan Bank, London Branch) to the Mortgages Trustee.

Yours faithfully,

...........................
For and on behalf of
ABBEY NATIONAL PLC

Copy:    Holmes Trustees Limited
         Holmes Funding Limited

<PAGE>
                                       44

                                   SCHEDULE 10

              ABBEY NATIONAL PLC POLICIES INSURANCE ACKNOWLEDGEMENT

    ON THE HEADED NOTEPAPER OF EACH OF THE ABBEY NATIONAL PLC POLICY INSURERS

To:   Abbey National PLC (the "SELLER")
      Abbey House
      Baker Street
      London NW1 6XL

      Holmes Trustees Limited (the "MORTGAGES TRUSTEE")
      Abbey House
      Baker Street
      London NW1 6XL

      Holmes Funding Limited ("FUNDING")
      Abbey House
      Baker Street
      London NW1 6XL

      The Chase Manhattan Bank, London Branch (the "SECURITY TRUSTEE")
      Trinity Tower
      9 Thomas More Street
      London E1W 1YT

Dear Sirs,

                           ABBEY NATIONAL PLC POLICIES

We refer to the home insurance policies issued or to be issued by the Seller on
our behalf to borrowers in respect of properties mortgaged by such borrowers to
the Seller on or after [ ], 20[ ], and in respect of which the Seller and the
borrower is named or will be named as the insured (the "ABBEY NATIONAL PLC
POLICIES").

The Seller has informed us that:

(a)   the Seller may transfer or agree to transfer its interest in properties
      which are covered by Abbey National Insurance Plc Policies to the
      Mortgages Trustee;

(b)   the Mortgages Trustee may declare a trust over its interest in such
      properties in favour of Funding and the Seller; and

(c)   Funding may charge its interest in such properties to the Security
      Trustee.

<PAGE>
                                       45

In consideration of the execution of the attached indemnity in our favour by the
Seller and the payment of (pound)1 made by each of the Seller, the Mortgages
Trustee, Funding and the Security Trustee (receipt whereof is hereby
acknowledged), we hereby confirm that the arrangements set out in (a), (b) and
(c) will not cause the Abbey National Plc Policies to lapse or terminate and,
notwithstanding any such arrangements, we will continue to pay claims in the
same way and in the same amount as we would have paid, had the arrangements not
been entered into.

Yours faithfully,

FOR AND ON BEHALF OF [THE RELEVANT ABBEY NATIONAL PLC POLICIES INSURER]

<PAGE>
                                       46

                                   SCHEDULE 11

               PROPERTIES IN POSSESSION INSURANCE ACKNOWLEDGEMENT

ON THE HEADED NOTEPAPER OF BAKER STREET RISK AND INSURANCE (GUERNSEY) LIMITED

To:   Abbey National PLC (the "SELLER")
      Abbey House
      Baker Street
      London NW1 6XL

      Holmes Trustees Limited (the "MORTGAGES TRUSTEE")
      Abbey House
      Baker Street
      London NW1 6XL

      Holmes Funding Limited ("FUNDING")
      Abbey House
      Baker Street
      London NW1 6XL

      The Chase Manhattan Bank, London Branch (the "SECURITY TRUSTEE")
      Trinity Tower
      9 Thomas More Street
      London E1W 1YT

Dear Sirs,

PROPERTIES IN POSSESSION POLICY NUMBER 23-94-000004 (THE "POLICY")

We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:

(a)   the Seller may assign or agree to transfer its interest in properties
      which are (or may from time to time be) covered by the Policy to the
      Mortgages Trustee;

(b)   the Mortgages Trustee may declare a trust over its interest in such
      properties in favour of Funding and the Seller; and

(c)   Funding may charge its interest in such properties to the Security
      Trustee.

In consideration of the payment of (pound)1 made by each of the Seller, the
Mortgages Trustee, Funding and the Security Trustee (receipt whereof is hereby
acknowledged), we hereby confirm that the arrangements set out in (a), (b) and
(c) will not cause the Policy to lapse or terminate and, notwithstanding any
such arrangements, we will continue to pay claims under the Policy in the same
way and in the same amount as we would have paid them, had the said arrangements
not been entered into.

Yours faithfully,

FOR AND ON BEHALF OF BAKER STREET RISK AND INSURANCE (GUERNSEY) LIMITED

<PAGE>
                                       47

               PROPERTIES IN POSSESSION INSURANCE ACKNOWLEDGEMENT

               ON THE HEADED NOTEPAPER OF CARFAX INSURANCE LIMITED

To:   Abbey National PLC (the "SELLER")
      Abbey House
      Baker Street
      London NW1 6XL

      Holmes Trustees Limited (the "MORTGAGES TRUSTEE")
      Abbey House
      Baker Street
      London NW1 6XL

      Holmes Funding Limited ("FUNDING")
      Abbey House
      Baker Street
      London NW1 6XL

      The Chase Manhattan Bank, London Branch (the "SECURITY TRUSTEE")
      Trinity Tower
      9 Thomas More Street
      London E1W 1YT

Dear Sirs,

PROPERTIES IN POSSESSION POLICY NUMBER CAR00001PIP (THE "POLICY")

We refer to the transaction entered into or to be entered into between, inter
alios, each of the parties to whom this letter is addressed, pursuant to which:

(a)   the Seller may assign or agree to transfer its interest in properties
      which are (or may from time to time be) covered by the Policy to the
      Mortgages Trustee;

(b)   the Mortgages Trustee may declare a trust over its interest in such
      properties in favour of Funding and the Seller; and

(c)   Funding may charge its interest in such properties to the Security
      Trustee.

In consideration of the payment of (pound)1 made by each of the Seller, the
Mortgages Trustee, Funding and the Security Trustee (receipt whereof is hereby
acknowledged), we hereby confirm that the arrangements set out in (a), (b) and
(c) will not cause the Policy to lapse or terminate and, notwithstanding any
such arrangements, we will continue to pay claims under the Policy in the same
way and in the same amount as we would have paid them, had the said arrangements
not been entered into.

Yours faithfully,

FOR AND ON BEHALF OF CARFAX INSURANCE LIMITED

<PAGE>
                                       48

                                   SCHEDULE 12

                              NEW PORTFOLIO NOTICE

                                                          Dated [______________]

1.    It is hereby agreed for the purpose of this notice the "Principal
      Agreement" shall mean the Mortgage Sale Agreement dated 26th July, 2000
      (as amended and/or restated from time to time) made between (1) ABBEY
      NATIONAL PLC (the "SELLER") (2) HOLMES FUNDING LIMITED ("FUNDING") (3)
      HOLMES TRUSTEES LIMITED (the "MORTGAGES TRUSTEE") and (4) JPMORGAN CHASE
      BANK, LONDON BRANCH (formerly known as The Chase Manhattan Bank, London
      Branch) (the "FUNDING 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.    In accordance with and subject to Clause 4.1 of the Principal Agreement,
      upon receipt by the Seller of the duplicate of this notice signed by
      Funding and the Mortgages Trustee, there shall exist between the Seller,
      Funding and the Mortgages Trustee an agreement (the "AGREEMENT FOR SALE")
      for the assignment and transfer by the Seller to the Mortgages Trustee of
      the New Loans and the Related Security more particularly described in the
      Schedule hereto (other than any New Loans and their Related Security which
      have been redeemed in full prior to the next following Assignment Date).
      Completion of such assignment and transfer shall take place on [ ].

4.    The Agreement for Sale shall incorporate, mutatis mutandis, the relevant
      provisions of the Principal Agreement.

................................
Signed for and on behalf of

ABBEY NATIONAL PLC

[On duplicate]

We hereby acknowledge receipt of the New Portfolio Notice dated [ ], and confirm
that we are prepared to purchase New Loans as set out in that notice.

................................
SIGNED FOR AND ON BEHALF OF
HOLMES FUNDING LIMITED

................................
Signed for and on behalf of
HOLMES TRUSTEES LIMITED

<PAGE>
                                       49

                                    SCHEDULE

1.                                        2.                         3.
Title No. (if registered)                 Borrower                   Property

<PAGE>
                                       50

                                   SCHEDULE 13

                           FORMS OF SCOTTISH TRANSFER

                             PART 1 -- LAND REGISTER

We, ABBEY NATIONAL PLC, incorporated under the Companies Acts in England
(Registered Number 2294747) and having our Registered Office formerly at Abbey
House, Baker Street, London NW1 6XL and now at Abbey National House, 2 Triton
Square, Regents Place, London NW1 3AN (the TRANSFEROR) CONSIDERING THAT in terms
of a Mortgage Sale Agreement among us the Transferor, HOLMES TRUSTEES LIMITED,
incorporated under the Companies Acts in England (Registered Number 3982431) and
having its Registered Office formerly at Abbey House, Baker Street, London N1
6XL and now at Abbey National House, 2 Triton Square, Regents Place, London NW1
3AN others dated 26 July 2000 as amended and restated on [_______] 2002 (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 25 July 2000 as amended and
restated on [_______] 2002 (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 the sums specified in the relative entry in Column 6 of
      the said Schedule being the amounts now due under the said respective
      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[, the dates of the respective personal
      bonds, credit agreements or agreements for loan being specified in the
      relative entry in Column 7 of the said Schedule]:

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
ABBEY NATIONAL plc

by ..............................          ...................................

and .............................          ...................................

<PAGE>
                                       51

     SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY ABBEY NATIONAL PLC
                      IN FAVOUR OF HOLMES TRUSTEES LIMITED

1         2         3            4        5              6      [7
Account   Address   Borrowers    Title    Registration   Sum    Date of Bond or
No.                 Full Names   Number   Date           Due    Loan Agreement]

<PAGE>
                                       52

                             PART 2 -- SASINE REGISTER

We, ABBEY NATIONAL PLC, incorporated under the Companies Acts in England
(Registered Number 2294747) and having our Registered Office formerly at Abbey
House, Baker Street, London NW1 6XL and now at Abbey National House, 2 Triton
Square, Regents Place, London NW1 3AN (the TRANSFEROR) CONSIDERING THAT in terms
of a Mortgage Sale Agreement among us the Transferor, HOLMES TRUSTEES LIMITED,
incorporated under the Companies Acts in England (Registered Number 3982431) and
having its Registered Office formerly at Abbey House, Baker Street, London N1
6XL and now at Abbey National House, 2 Triton Square, Regents Place, London NW1
3AN others dated 26 July 2000 as amended and restated on [_______] 2002 (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 25 July 2000 as amended and
restated on [_______] 2002 (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 the sums specified in the relative entry in Column 6 of
      the said Schedule being the amounts now due under the said respective
      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[, the dates of the respective personal
      bonds, credit agreements or agreements for loan being specified in the
      relative entry in Column 7 of the said Schedule]:

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
ABBEY NATIONAL plc

by ...............................          ...................................

and ..............................          ...................................

REGISTER on behalf of the within named HOLMES TRUSTEES LIMITED as trustee within
mentioned in the REGISTERS of the COUNTIES of [_______]

<PAGE>
                                       53

     SCHEDULE REFERRED TO IN THE FOREGOING ASSIGNATION BY ABBEY NATIONAL PLC
                      IN FAVOUR OF HOLMES TRUSTEES LIMITED

1         2          3            4        5           6         [7
Account   Address    Borrowers    County   Recording   Sum Due   Date of Bond or
No.                  Full Names            Date                  Loan Agreement]

<PAGE>
                                       54

                                   SCHEDULE 14

                           FORM OF SCOTTISH TRUST DEED

DECLARATION OF TRUST

among

ABBEY NATIONAL PLC, a public limited company incorporated under the laws of
England and Wales (registered number 2294747) and having its Registered Office
formerly at Abbey House, Baker Street, London NW1 6XL and now at Abbey National
House, 2 Triton Square, Regents Place, London NW1 3AN (the SELLER);

and

HOLMES TRUSTEES LIMITED, a private limited company incorporated under the laws
of England and Wales (registered number 3982431) and having its Registered
Office formerly at Abbey House, Baker Street, London NW1 6XL and now at Abbey
National House, 2 Triton Square, Regents Place, London NW1 3AN as trustee under
and in terms of the mortgages trust deed aftermentioned (the MORTGAGES TRUSTEE)

and

HOLMES FUNDING LIMITED, a private limited company incorporated under the laws of
England and Wales (registered number 3982428) and having its Registered Office
formerly at Abbey House, Baker Street, London NW1 6XL and now at Abbey National
House, 2 Triton Square, Regents Place, London NW1 3AN (FUNDING)

WHEREAS:--

(A)   Title to the Scottish Trust Property aftermentioned is held by and vested
      in the Seller;

(B)   In terms of a Mortgages Trust Deed entered into among the Seller, Holmes
      Funding Limited, the Mortgages Trustee and SPV Management Limited dated 25
      July 2000 (as subsequently amended and restated) and the Mortgages Trust
      constituted in terms thereof the Mortgages Trustee holds the Trust
      Property on trust for the Beneficiaries therein specified;

(C)   In terms of a Mortgage Sale Agreement entered into among the Seller,
      Holmes Funding Limited, the Mortgages Trustee and The Chase Manhattan
      Bank, London Branch dated 26 July 2000 as amended and restated on
      [_______] 2002 (the MORTGAGE SALE AGREEMENT) the Seller has agreed to sell
      the said 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 implement of Clause 4.5 of the Mortgage Sale Agreement and pending the
      taking of legal title to the said 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:--

<PAGE>
                                       55

1     INTERPRETATION

      In this deed:--

      1.1   words and expressions defined in the Amended and Restated Master
            Definitions and Construction Schedule signed for the purposes of
            identification by Allen & Overy and Slaughter and May on [_______]
            2002 (as the same may be amended, varied or supplemented from time
            to time with the consent of the parties hereto) 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 of the said Amended
            and Restated Master Definitions and Construction Schedule; and

      1.2   SCOTTISH TRUST PROPERTY shall mean the Scottish Loans and the
            Scottish Mortgages and other Related Security relative thereto,
            brief particulars of which Scottish Loans and Related Security are
            detailed in the schedule annexed and executed as relative hereto,
            and all principal sums, including any further advances, present or
            future, interest and expenses comprised therein and secured thereby,
            together with (a) all monies, rights, interests, benefits and others
            pertaining thereto or deriving therefrom, (b) all powers and
            remedies for enforcing the same and (c) all proceeds resulting from
            the enforcement of any of the said Scottish Loans and the Related
            Security relative thereto.

2     DECLARATION OF TRUST

      The Seller hereby DECLARES that from and after the date hereof the Seller
      holds and subject to clause 8 hereof, shall henceforth hold the Scottish
      Trust Property and its whole right, title 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 of this deed immediately subsequent to the execution
      hereof by the Seller acknowledges such intimation.

4     DEALINGS WITH SCOTTISH TRUST PROPERTY AND NEGATIVE PLEDGE

      The Seller warrants and undertakes 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, diligence or other Security Interest;

      4.2   it shall not create or agree to create any fixed or floating charge
            or other Security Interest or Encumbrance 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 Scottish Trust
            Property or part thereof remains subject to the trust hereby
            created; and

<PAGE>
                                       56

      4.3   it shall deal with the Scottish Trust Property (including without
            prejudice to said generality 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 6 hereof, any such action as may be necessary
            (including for the avoidance of doubt 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     TRANSFER OF TITLE

      5.1   The Mortgages Trustee and its foresaids as beneficiaries hereunder
            shall have the right to call upon the Seller to execute and deliver
            to the Mortgages Trustee, subject to the terms of clause 6 of the
            Mortgage Sale Agreement, valid assignations of the Scottish Trust
            Property or any part thereof, and that notwithstanding the winding
            up of the Seller or the making of any administration order in
            respect of the Seller or the appointment of a receiver to all or any
            part of the Scottish Trust Property.

      5.2   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 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 Trust Property.

      5.3   For further assuring the said rights and powers specified in this
            clause 5, the Seller has granted a power of attorney in favour of
            the Mortgages Trustee, the said Holmes Funding Limited and the
            Security Trustee substantially in the form set out in Schedule 5 to
            the Mortgage Sale Agreement.

6     MORTGAGES TRUSTEE DECLARATION OF TRUST

      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 and its foresaids under and
      in terms of the Mortgages Trust and all sums and amounts received or held
      by the Mortgages Trustee relating thereto or deriving therefrom have been
      added (to the extent aforesaid) to the Trust Property as defined in and
      held by the Mortgages Trustee under the Mortgages Trust Deed.

7     MORTGAGES TRUST INTIMATION

      The Mortgages Trustee hereby intimates to Funding and the Seller, as
      Beneficiaries of the Mortgages Trust, the declaration of trust made in
      terms of clause 6 hereof and Funding and the Seller by their respective
      executions of this deed acknowledge such intimation.

<PAGE>
                                       57

8     TERMINATION OF TRUST

      If:--

      8.1   legal title to any part or parts of the Scottish Trust Property is
            taken by the Mortgages Trustee or its foresaids (including the
            Issuer or the Security Trustee) in accordance with the provisions of
            clause 5 hereof (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

      8.2   any part or parts of the Scottish Trust Property forms the subject
            of a repurchase in accordance with the terms of clause 8 of the
            Mortgage Sale Agreement;

      the trust hereby declared and created shall (but only when any of the
      events or transactions before stated has been completed irrevocably,
      validly and in 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.

9     CHANGE OF TRUSTEE

      Except with the prior consent of the Mortgages Trustee 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.

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

      This deed shall be governed by and construed in accordance with the law of
      Scotland and each of the parties hereby prorogates the non-exclusive
      jurisdiction of the Scottish courts so far as not already subject thereto
      and waives any right or plea of forum non conveniens in respect of such
      jurisdiction.

<PAGE>
                                       58

12    REGISTRATION

      The parties hereto consent to the registration of these presents for
      preservation:

IN WITNESS WHEREOF these presents typewritten on this and the preceding four
pages together with the Schedule annexed hereto are executed for and on behalf
of the Seller, the Mortgages Trustee and Funding at [_______] on [_______] as
follows:--

SUBSCRIBED for and on behalf of the said
ABBEY NATIONAL PLC

by ............................           ....................................

and ...........................           ....................................

SUBSCRIBED for and on behalf of the said
HOLMES TRUSTEES LIMITED

by ............................           ....................................

and ...........................           ....................................

SUBSCRIBED  for and on behalf of the said HOLMES FUNDING
LIMITED

by ............................           ....................................

and ...........................           ....................................

<PAGE>
                                       59

        SCHEDULE REFERRED TO IN THE FOREGOING DECLARATION OF TRUST AMONG
     ABBEY NATIONAL PLC, HOLMES TRUSTEES LIMITED AND HOLMES FUNDING LIMITED

            [Details of Scottish Mortgage Loans and Related Security]

<PAGE>
                                       60

                                     EXHIBIT

                            PART 1: INITIAL PORTFOLIO

                         PART 2: STANDARD DOCUMENTATION

<PAGE>
                                       61

                                     EXHIBIT

                                     PART 1

                                INITIAL PORTFOLIO

This is Part 1 of the Exhibit to a Mortgage Sale Agreement dated 26th July, 2000
made between Abbey National PLC (1) Holmes Funding Limited (2) Holmes Trustees
Limited (3) and The Chase Manhattan Bank, London Branch (4)

------------------------------------------
ABBEY NATIONAL PLC

------------------------------------------
HOLMES FUNDING LIMITED

------------------------------------------
HOLMES TRUSTEES LIMITED

------------------------------------------
THE CHASE MANHATTAN BANK, LONDON BRANCH

<PAGE>
                                       62

                                     EXHIBIT

                                     PART 2

                             STANDARD DOCUMENTATION

This is Part 2 of the Exhibit to a Mortgage Sale Agreement dated 26th July,
2000, as amended on 29th November, 2000, as amended and restated on 23rd May,
2001, as amended and restated on 5th July, 2001, as amended and restated on 8th
November, 2001 and as amended and restated on [__, 2002] made between Abbey
National PLC (1) Holmes Funding Limited (2) Holmes Trustees Limited (3) and
JPMorgan Chase Bank, London Branch (formerly known as The Chase Manhattan Bank,
London Branch) (4)

------------------------------------------
ABBEY NATIONAL PLC

------------------------------------------
HOLMES FUNDING LIMITED

------------------------------------------
HOLMES TRUSTEES LIMITED

------------------------------------------
JPMORGAN CHASE BANK, LONDON BRANCH

<PAGE>
                                       63

                           LIST OF STANDARD DOCUMENTS

1.    Mortgage Deed (CPA20103) -- 2 versions -- June 1996 and January 1998

2.    3rd Party Mortgage Deed (Q90) -- November 1994

3.    Deed of Substitution (CPA10063) -- July 1995

4.    Certificate of Title & Funds Request (CPA20105) -- 2 versions -- August
      1997 and August 1999

5.    Deed of Consent (M94/CPA10049) -- 2 versions -- July 1995 and December
      1997

6.    Deed of Consent -- Additional Loan (CPA30147) -- March 1998

7.    Deed of Guarantee (CPC10017) -- August 1997

8.    Deed of Postponement (Additional Loan Q95) -- November 1994

9.    Deed of Postponement (New Loan Q96) -- November 1994

10.   Mortgage Application Form (CPA20073) -- 2 versions -- April 1996 and
      undated

11.   Deed of Further Charge -- March 1998

12.   Additional Loan Application -- undated

13.   Mortgage Conditions (1995 Edition) -- 2 versions (1995 print and 1998
      reprint)

14.   Re-mortgage Application Form -- August 1997

15.   Offer Letter (with Mortgage Account Summary in completion letter) -- 7th
      January 1999

16.   Mortgage Conditions (1994 Edition)

17.   Mortgage Overpayments and Underpayments -- undated

18.   High Loan to Value Fee -- 2 versions -- December 1997 and undated

19.   Interest Charging and Accrued Interest -- 2 versions - January 1998 and
      undated

20.   Valuation for Mortgage Purposes (blank form) -- April 1997

21.   Additional Loan Valuation -- July 1995

22.   Home Improvement Loan Application Form -- May 1995

23.   Tariff of Charges for Residential Mortgages and Secured Loans -- June 1997

24.   Deed of Covenant -- July 1995

25.   Assignment of Building Contract -- July 1995

<PAGE>
                                       64

26.   Your Additional Loan Offer -- March 1998

27.   General Instructions for Solicitors and Licensed Conveyancers -- 1994
      edition

28.   Council of Mortgage Lenders -- Lenders' Handbook -- 1999 edition

29.   Fee Schedules -- January 1998, March 2000 and April 2000

30.   Properties in Possession Policy and endorsements

31.   Offer Letter for flexible mortgage product

32.   Flexible Mortgage Standard Offer Conditions

33.   Flexible Mortgage -- Copy of proposed credit agreement containing notice
      of right to withdraw

34.   Flexible Mortgage Product -- Drawdown Conditions

35.   Special conditions

36.   [SCOTTISH DOCUMENTS]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]