Document:

Exhibit 10.5.1

 

EXECUTION COPY

 

AMENDED AND RESTATED MASTER DEFINITIONS AND

CONSTRUCTION SCHEDULE

 

 

DATED 12th March, 2004

 

PERMANENT FUNDING (NO. 1) LIMITED

 

PERMANENT MORTGAGES TRUSTEE LIMITED

 

 

 

 

London

ICM:744616.6

 

1

 

CONTENTS

 

Clause

 

	
  1.

  	
  Definitions

  	
   

  
	
  2.

  	
  Interpretation
  and Construction

  	
   

  
	
  3.

  	
  Amendments

  	
   

  
	
  4.

  	
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  

 

 

1.                                      DEFINITIONS

 

In any
agreement, instrument or deed expressly and specifically incorporating by
reference this Master Definitions and Construction Schedule, the undersigned
hereby agree that the following words and expressions shall, unless otherwise
defined therein or unless the context otherwise requires, have the following
meanings:

 

A Principal Deficiency Sub-Ledger means one of four sub-ledgers
of the Principal Deficiency Ledger corresponding to the Term A Advances which
will be established and maintained pursuant to Clause 4.3(b) of the Cash
Management Agreement;

 

AA Principal Deficiency Sub-Ledger means one of four sub-ledgers
of the Principal Deficiency Ledger corresponding to the Term AA Advances which
will be established and maintained pursuant to Clause 4.3(b) of the Cash
Management Agreement;

 

AAA Principal Deficiency Sub-Ledger means one of four sub-ledgers
of the Principal Deficiency Ledger corresponding to the Term AAA Advances,
which will be established and maintained pursuant to Clause 4.3(b) of the Cash
Management Agreement;

 

Accession Undertaking means a form of deed of accession to the
Funding 1 Deed of Charge substantially in the form set out in Schedule 2 to the
Funding 1 Deed of Charge;

 

Account Bank means the bank at which the Mortgages Trustee GIC
Account, the Funding 1 GIC Account, and the Funding 1 Transaction Account are
maintained from time to time, being as at the Closing Date, The Governor and
Company of the Bank of Scotland situated at 116 Wellington Street, Leeds LS1
4LT and thereafter such other Authorised Entity as Funding 1 may choose with
the prior written approval of the Security Trustee or as the Mortgages Trustee
may choose with the prior written consent of the Beneficiaries;

 

Accrued Interest means as at any date (the determination
date) on or after the date hereof and in relation to any Loan,
interest on such Loan (not being interest which is currently payable on the
determination date) which has accrued from and including the Monthly Payment
Day immediately prior to the determination date to and including the
determination date;

 

Act means the Data Protection Act
1998;

 

Additional Funding 1 Liquidity Facility Provider has the meaning given in Clause
10.6(a) of the Funding 1 Deed of Charge;

 

Additional Funding 1 Security means the security created under or
pursuant to the Second Supplemental Funding 1 Deed of Charge;

 

Adjusted Reserve Fund Level means the sum of:

 

(a)                                  the amount standing to the
credit of the General Reserve Fund; and

 

(b)                                 the amount (if any) then
outstanding in respect of item (b) of the relevant Funding 1 Pre-Enforcement
Principal Priority of Payments;

 

Advance means the aggregate of the amount advanced by the
First Start-up Loan Provider to Funding 1 on the Initial Closing Date pursuant
to the First Start-up Loan Agreement, the amount advanced by the Second
Start-up Loan Provider to Funding 1 on the Second Issuer

 

1

 

Closing Date pursuant to the Second
Start-up Loan Agreement, the amount advanced by the Third Start-up Loan
Provider to Funding 1 on the Third Issuer Closing Date, the amount advanced by
the Fourth Start-up Loan Provider to Funding 1 on the Fourth Issuer Closing
Date and the amount advanced by the Start-up Loan Provider or any New Start-up
Loan Provider on the New Issuer Closing Date pursuant to any New Start-up Loan
Agreement, or such part of such amount as shall be outstanding from time to
time;

 

Amended and Restated Master Definitions and Construction
Schedule,
Master
Definitions Schedule and Master Definitions and Construction Schedule means
this schedule as amended and restated from time to time;

 

Alternative Insurance Recommendations means the recommendations
contained in the Offer Conditions provided by the Seller to Borrowers who elect
to arrange independent buildings insurance for their Properties;

 

Annualised CPR means the result of:

 

 

where “M” is expressed as a percentage and
determined as at the most recent Normal Calculation Date as indicated in the
definition of Anticipated Cash Accumulation Period;

 

Anticipated Cash Accumulation Period means on any Normal
Calculation Date, the anticipated number of months required to accumulate
sufficient Principal Receipts to pay the Relevant Accumulation Amount in
relation to the relevant Cash Accumulation Advance, which will be equal to:

 

 

calculated in months and rounded up to the
nearest whole number, where:

 

J =           the
Relevant Accumulation Amount;

 

K =          the
aggregate principal amount outstanding on that Normal Calculation Date of:

 

(a)                                  each Bullet Term Advance and
Scheduled Amortisation Term Advance that was not fully repaid on its relevant
Scheduled Repayment Date; and

 

(b)                                 each other Bullet Term Advance
and Scheduled Amortisation Instalment, the Scheduled Repayment Date of which
falls on or before the Scheduled Repayment Date of the relevant Bullet Term
Advance or Scheduled Amortisation Instalment;

 

L =                               the amount of any available
cash already standing to the credit of the Cash Accumulation Ledger at the
start of that Normal Calculation Date plus the aggregate amount of Cash
Accumulation Requirement paid to Funding 1 since the previous Funding 1
Interest Payment Date;

 

M =                          means:

 

(a)                                  on any date prior to or
including the 12th Normal Calculation Date to occur following the Initial
Closing Date, the sum of each Monthly CPR on the

 

2

 

Normal Calculation Dates which have
occurred since the Initial Closing Date divided by the number of those
Calculation Dates; and

 

(b)                                 on any subsequent date, the
sum of each Monthly CPR on the 12 most recent Normal Calculation Dates which
have occurred prior to that date divided by 12;

 

N =          0.85;
and

 

O =                             the aggregate Outstanding
Principal Balance of the Loans comprising the Trust Property on the previous
Normal Calculation Date (or, if none, the Initial Closing Date);

 

in Arrears or in  arrears means, in respect of a Mortgage
Account, that one or more Monthly Payments in respect of such Mortgage Account
have become due and unpaid by a Borrower;

 

Arrears of Interest means, in respect of a Loan on a given
date, interest, principal (if applicable) and expenses which are due and
payable on that date;

 

Asset Trigger Event means the event that occurs when there is
an amount being debited to the AAA Principal Deficiency Sub-Ledger;

 

Assignment of Halifax Mortgage Re Limited MIG Policies means an assignment of the
Halifax Mortgage Re Limited MIG Policies substantially in the form set out in
Schedule 8 to the Mortgage Sale Agreement;

 

Assignment of Third Party Rights means an assignment of
Related Security and rights of action against third parties substantially in
the form set out in Schedule 7 to the Mortgage Sale Agreement;

 

Auditors means KPMG Audit Plc of 1 Canada Square, Canary
Wharf, London E14 5AG or such other internationally independent firm of
auditors selected from time to time by, (in the case of the Mortgages Trustee),
the Mortgages Trustee and the Security Trustee, or (in the case of Funding 1),
Funding 1 and the Security Trustee;

 

Authorised Entity means (a) any entity the short term
unsecured, unsubordinated and unguaranteed debt of which is rated at least A-1+
by S&P, P-1 by Moody’s, and F1+ by Fitch or (b) any other entity approved
in writing by the Security Trustee and the Rating Agencies, in each case being
an institution authorised to carry on banking business (including accepting
deposits) under the Financial Services and Markets Act 2000;

 

Authorised Investments means:

 

(a)                                  Sterling gilt-edged
securities; and

 

(b)                                 Sterling demand or time
deposits, certificates of deposit and short-term debt obligations (including
commercial paper) provided that in all cases such investments have a maturity
date of 90 days or less and mature on or before the next following Funding 1
Interest Payment Date and the short-term unsecured, unguaranteed and
unsubordinated debt obligations of the issuing or guaranteeing entity or the
entity with which the demand or time deposits are made (being an authorised
person under the Financial Services and Markets Act 2000) are rated at least
A-1+ by Standard & Poor’s, P-1 by Moody’s and F1+ by Fitch or their
equivalents by three other internationally recognised rating agencies;

 

3

 

Authorised Signatory means any authorised signatory referred to
in, as applicable, the Funding 1 Transaction Account Mandate, the Funding 1 GIC
Account Mandate and the Mortgages Trustee GIC Account Mandate;

 

Average Fixed Rate Loan Balance has the meaning given in the
Funding 1 Swap Agreement;

 

Average Tracker Rate Loan Balance has the meaning given in the
Funding 1 Swap Agreement;

 

Average Variable Rate Loan Balance has the meaning given in the
Funding 1 Swap Agreement;

 

BACS means the Bankers’ Automated Clearing Service as
amended from time to time or any scheme replacing the same;

 

Bank Account Agreement means the agreement entered into on the
Initial Closing Date between the Account Bank, the Mortgages Trustee, Funding
1, the Cash Manager and the Security Trustee which governs the operation of the
Bank Accounts (excluding the Funding 1 Liquidity Stand-by Account) (as the same
may be amended and/or supplemented from time to time);

 

Bank Accounts means the Mortgages Trustee GIC Account,
the Funding 1 GIC Account, the Funding 1 Transaction Account, the Funding 1
Liquidity Facility Stand-by Account and any additional or replacement bank
accounts opened in the name of either the Mortgages Trustee and/or Funding 1 from
time to time with the prior written consent of the Security Trustee and the
Rating Agencies;

 

BBB Principal Deficiency Sub-Ledger means one of four sub-ledgers
of the Principal Deficiency Ledger corresponding to the Term BBB Advances which
will be established and maintained pursuant to Clause 4.3(b) of the Cash
Management Agreement;

 

Beneficiaries means both Funding 1 and the Seller together, as
beneficiaries of the Mortgages Trust, and shall include any other beneficiary
of the Mortgages Trust from time to time pursuant to the terms of the Mortgages
Trust Deed;

 

Borrower means, in relation to a Loan, the individual or
individuals specified as such in the relevant Mortgage Terms together with the
individual or individuals (if any) from time to time assuming an obligation to
repay such Loan or any part of it;

 

Buildings Policies means:

 

(a)                                  all buildings insurance
policies relating to freehold or heritable Properties which have been taken out
in the name of the relevant Borrower (and, in the case of the Halifax Policies,
the Seller) in accordance with the applicable Mortgage Terms or the Alternative
Insurance Recommendations; and

 

(b)                                 all landlord’s buildings
insurance policies relating to leasehold Properties including Properties in
Scotland held under a long lease;

 

Bullet Accumulation Liability means, on any Funding 1 Interest Payment
Date prior to any payment under item (d) of the Funding 1 Pre-Enforcement
Principal Priority of Payments, the aggregate of each Relevant Accumulation
Amount at that time of each Bullet Term Advance which is within a Cash
Accumulation Period;

 

4

 

Bullet Accumulation Shortfall means at any time that the Cash
Accumulation Ledger Amount is less than the Bullet Accumulation Liability;

 

Bullet Term Advance means any term advance where the full
amount of principal in respect of that term advance is scheduled for repayment
on a single Funding 1 Interest Payment Date (being the Scheduled Repayment
Date);

 

Business Day means a day which is a London Business Day, a New
York Business Day and a TARGET Business Day;

 

Calculation Date means the first day (or, if not a London
Business Day, the next succeeding London Business Day) of each month or the
date on which Funding 1 acquires a further interest in the Trust Property;

 

Calculation Period means the period from and including a
Calculation Date to but excluding the next following Calculation Date;

 

Calendar Year means a year from the beginning of 1st January to the
end of 31st December;

 

Capitalised Arrears means, in relation to a Loan at any date
(the determination
date), the amount (if any) at such date of any Arrears of Interest
in respect of which, at the determination date, each of the following
conditions have been satisfied:

 

(a)           the
Seller has, by arrangement with the relevant Borrower, agreed to capitalise
such Arrears of Interest; and

 

(b)                                 such Arrears of Interest have
been capitalised and added, in the accounts of the Seller (or, if the
determination date occurs after the Initial Closing Date, the Mortgages
Trustee), to the principal amount outstanding in respect of such Loan;

 

Capitalised Expenses means, in relation to a Loan, the amount
of any expense, charge, fee, premium or payment (excluding, however, any
Arrears of Interest) capitalised and added to the principal amount outstanding
in respect of such Loan in accordance with the relevant Mortgage Terms
(including for the avoidance of doubt, any High Loan-to-Value Fee);

 

Capitalised Interest means the amount of interest that would have
been paid on a Loan if not for the Borrower under that Loan taking a Payment
Holiday;

 

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

 

Cash Accumulation Advance means a Bullet Term Advance or a Scheduled
Amortisation Instalment which is within a Cash Accumulation Period;

 

Cash Accumulation Ledger means the ledger established and
maintained by the Cash Manager pursuant to Clause 4.3(a) of the Cash Management
Agreement;

 

Cash Accumulation Ledger Amount means, at any time, the
amount standing to the credit of the Cash Accumulation Ledger at that time
(immediately prior to any drawing to be applied on that Interest Payment Date
and prior to any payment under item (h) of the Funding 1 Pre-Enforcement Principal
Priority of Payments);

 

5

 

Cash Accumulation Liability means, on any Funding 1 Interest Payment
Date, prior to any payment under item (d) of the Funding 1 Pre-Enforcement
Principal Priority of Payments, the sum of:

 

(a)           the
Bullet Accumulation Liability at that time; and

 

(b)                                 the aggregate of each Relevant
Accumulation Amount at that time of each Scheduled Amortisation Instalment
which is within a Cash Accumulation Period;

 

Cash Accumulation Period means the period beginning on
the earlier of:

 

(a)                                  the commencement of the
Anticipated Cash Accumulation Period relating to the Relevant Accumulation
Amount; and

 

(b)                                 in respect of an Original
Bullet Term Advance, six months prior to the Scheduled Repayment Date of that
Original Bullet Term Advance and, in respect of an Original Scheduled
Amortisation Instalment, three months prior to the Scheduled Repayment Date of
that Original Scheduled Amortisation Instalment;

 

and ending
when Funding 1 has fully repaid the Bullet Term Advance or Scheduled
Amortisation Instalment, as applicable;

 

Cash Accumulation Requirement means on a Calculation Date:

 

(a)                                  the outstanding principal
amounts in relation to each Cash Accumulation Advance;

 

(b)                                 plus amounts due in paragraphs
2.2(a) and 2.2(b) of the Funding 1 Pre-Enforcement Principal Priority of
Payments;

 

(c)                                  less the amount standing to
the credit of the Cash Accumulation Ledger at the last Funding 1 Interest
Payment Date (which amount was not distributed on that Funding 1 Interest
Payment Date to the Issuer with the relevant Cash Accumulation Requirement);

 

(d)                                 less the sum of the Cash
Accumulation Requirement paid to Funding 1 on a previous Distribution Date
during the relevant Interest Period;

 

Cash Accumulation Shortfall means, at any time, that the Cash
Accumulation Ledger Amount is less than the Cash Accumulation Liability;

 

Cash Management Agreement means the cash management agreement entered
into on the Initial Closing Date between the Cash Manager, the Mortgages Trustee,
Funding 1, and the Security Trustee (as the same may be amended and/or
supplemented from time to time);

 

Cash Management Services means the cash management services set out
in the Cash Management Agreement;

 

Cash Manager means Halifax acting, pursuant to the Cash Management
Agreement, as agent for the Mortgages Trustee, Funding 1 and the Security
Trustee inter
alia to manage all cash transactions and maintain certain ledgers on
behalf of the Mortgages Trustee, Funding 1 and the Security Trustee (which
expression shall include such other person as may be appointed from time to
time as Cash Manager pursuant to the Cash Management Agreement);

 

6

 

Cash Manager Termination Event has the meaning given in Clause 13.1
of the Cash Management Agreement;

 

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

 

Class A Notes means the Class A First Issuer Notes, the
Class A Second Issuer Notes, the Class A Third Issuer Notes, the Class A Fourth
Issuer Notes and any class A notes issued by any New Issuer;

 

Clearing Agency means an agency registered under
provisions of section 17A of the United States Securities Exchange Act of 1934;

 

Clearing Corporation means a corporation within the meaning of
the New York Uniform Commercial Code;

 

Clearstream, Luxembourg means Clearstream Banking,
société anonyme;

 

Closing Date means the Initial Closing Date (or the First Issuer
Closing Date), the Second Issuer Closing Date, the Third Issuer Closing Date,
the Fourth Issuer Closing Date and any New Issuer Closing Date;

 

Collection Account means the collection account in the name
of the Servicer which is from time to time used for the purpose of collecting,
directly or indirectly, monies due in respect of the Loans and/or the Related
Security forming part of the Trust Property;

 

Completion means the completion of the sale and purchase of the
relevant Portfolio pursuant to and in accordance with Clause 3 or 4
(as applicable) of the Mortgage Sale Agreement;

 

Convention means the Modified Following Business Day Convention
as defined in the 2000 ISDA Definitions published by the International Swaps
and Derivatives Associations;

 

Corporate Services Agreements means, together, the Funding 1 Corporate
Services Agreement, the First Issuer Corporate Services Agreement, the Second
Issuer Corporate Services Agreement, the Third Issuer Corporate Services
Agreement, the Fourth Issuer Corporate Services Agreement and the Mortgages
Trustee Corporate Services Agreement;

 

CPR means on any Calculation Date the annualised
principal repayment rate of all the Loans comprised in the Trust Property
during the previous Calculation Period calculated as follows:

 

 

where “R’’ equals the result (expressed as a
percentage) of the total Principal Receipts received during the period of one
month (or, if shorter, from and including the Closing Date) ending on that
Calculation Date divided by the aggregate Outstanding Principal Balance of the
Loans comprised in the Trust Property as at the first day of that period;

 

Current Funding 1 Share means the amount of Trust Property
beneficially owned by Funding 1 from time to time, as determined in accordance
with Clause
8 of the Mortgages Trust Deed;

 

7

 

Current Funding 1 Share Percentage means the percentage share of
Funding 1 in the Trust Property from time to time, as determined in accordance
with Clause
8 of the Mortgages Trust Deed;

 

Current Seller Share means the amount of Trust Property,
beneficially owned by the Seller from time to time, as determined in accordance
with Clause
8 of the Mortgages Trust Deed;

 

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

 

Current Swap Excluded Termination Amount means, in relation to an
Issuer  Swap Agreement, an amount equal
to:

 

(a)                                  the amount of any termination
payment due and payable to the relevant Issuer Swap Provider as a result of an
Issuer Swap Provider Default or following an Issuer Swap Provider Downgrade
Termination Event;

 

less

 

(b)                                 the amount, if any, received
by the relevant Issuer from a replacement swap provider upon entry by that
Issuer into an agreement with such replacement swap provider to replace such
swap agreement which has terminated as a result of an Issuer Swap Provider
Default or following an Issuer Swap Provider Downgrade Termination Event.

 

Customer Files means the file or files relating to each
Loan containing, inter alia:

 

(a)                                  all material correspondence
relating to that Loan; and

 

(b)                                 the completed mortgage
documentation applicable to the Loan (other than the Title Deeds) including the
Valuation Report and the solicitor’s or licensed conveyancer’s Certificate of
Title,

 

whether original documentation, electronic
form or otherwise;

 

Data Controller means the Mortgages Trustee and the
Beneficiaries;

 

Data Processor means the Servicer;

 

Data Processor Agreement means the agreement entered into by, inter alios,
the Data Controllers and the Data Processor dated 25th November, 2003 pursuant
to which the Data Controllers appointed the Data Processor to process data on
their respective behalfs;

 

Data Subject has the same meanings as
assigned to that term in the Act;

 

D.D. Date means the date of delivery to the Account Bank or
BACS (as the case may be) of such instructions as may be necessary from time to
time for the debit of a Borrower’s account in respect of which there is a
direct debit mandate;

 

Deed of Accession means, as applicable, the First Deed of
Accession, the Second Deed of Accession, the Third Deed of Accession and any
New Deed of Accession;

 

8

 

Deed of Accession  and Release Supplemental to the Funding 1 Deed of
Charge means the deed so named dated 31st July, 2002;

 

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

 

Deed of Postponement means a deed or agreement whereby a
mortgagee of or the heritable creditor in relation to a Property agrees with
the Seller to postpone its mortgage or standard security (as applicable) over
the Property so that the sums secured by it will rank for repayment after the
sums secured by the relevant Mortgage;

 

Deedstore Loan means a type of Loan product that gives
the Borrower the option to leave a small balance owing on the loan account so
that the relevant Title Deeds can continue to be lodged with Halifax;

 

Deemed AAA Rating means the deemed rating of a Term Advance
Rating where the corresponding Notes are rated, on the Closing Date thereof,
A-1+ by S&P, P-1 by Moody’s and F1+ by Fitch;

 

Delayed Cashback means in relation to any Loan, the
agreement by the Seller to pay an amount to the relevant Borrower after a
specified period of time following completion of the relevant Loan;

 

Designated Interest Period has the meaning given to it in Clause 8.3
of the Funding 1 Liquidity Facility Agreement;

 

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

 

Distribution Date means the date which is two London
Business Days after each Calculation Date, being the date that the Mortgages
Trustee shall distribute the Mortgages Trust Available Revenue Receipts and the
Mortgages Trust Available Principal Receipts to Funding 1 and the Seller;

 

Double Taxation Treaty means any convention between the
government of the United Kingdom and any other government for the avoidance of
double taxation;

 

Drawdown Date means, in respect of:

 

(a)                                  the First Issuer Intercompany
Loan, the Initial Closing Date;

 

(b)                                 the Second Issuer Intercompany
Loan, the Second Issuer Closing Date;

 

(c)                                  the Third Issuer Intercompany
Loan, the Third Issuer Closing Date;

 

(d)                                 the Fourth Issuer Intercompany
Loan, the Fourth Issuer Closing Date; and

 

(e)                                  any New Intercompany Loan, the
date on which the New Term Advances thereunder are made;

 

9

 

Drawdown Notice means, in respect of an Intercompany Loan,
a notice delivered by Funding 1 to the Issuer and the Security Trustee
requesting a drawing under that Intercompany Loan Agreement;

 

DTC means The Depository Trust Company;

 

Early Repayment Fee means any fee (other than a Redemption Fee)
which a Borrower is required to pay in the event that the Borrower is in default
or his or her Loan becomes repayable for any other mandatory reason or he or
she repays all or any part of the relevant Loan before a specified date;

 

Eligible General Reserve Fund Principal Repayments means:

 

(a)                                  prior to the occurrence of a
Trigger Event:

 

(i)                                     repayments of principal which
are then due and payable in respect of the Original Bullet Term Advances; and

 

(ii)                                  repayments of principal in
respect of Original Scheduled Amortisation Term Advances on their respective
final maturity dates only; and

 

(b)                                 on or after the occurrence of
a Non-Asset Trigger Event but prior to the occurrence of an Asset Trigger
Event, repayments of principal in respect of Original Bullet Term Advances and
Original Scheduled Amortisation Term Advances on their respective final
maturity dates only,

 

in each case prior to the service of an
Intercompany Loan Acceleration Notice on Funding 1 and taking into account any
allocation of principal to meet any deficiency in Funding 1’s Available Revenue
Receipts;

 

Eligible Liquidity Facility Principal Repayments means:

 

(a)                                  prior to the occurrence of a
Trigger Event:

 

(i)                                     repayments of principal which
are then due and payable in respect of the Original Bullet Term Advances; and

 

(ii)                                  repayments of principal in
respect of Original Scheduled Amortisation Term Advances on their respective
Final Repayment Dates only; and

 

(b)                                 on or after the occurrence of
a Non-Asset Trigger Event but prior to the occurrence of an Asset Trigger
Event, repayments of principal in respect of Original Bullet Term Advances and
Original Scheduled Amortisation Term Advances on their respective Final
Repayment Dates,

 

in each case prior to the service of an Intercompany
Loan Acceleration Notice on Funding 1 and taking into account any allocation of
principal to meet any deficiency in Funding 1’s Available Revenue Receipts.

 

Following the occurrence of an Asset
Trigger Event, the Funding 1 Liquidity Facility will not be available to repay
principal in respect of Original Bullet Term Advances or Original Scheduled Term
Advances;

 

Eligible Liquidity Fund Principal Repayments means:

 

10

 

(a)                                  prior to the occurrence of a
Trigger Event:

 

(i)                                     repayments of principal which
are then due and payable in respect of the Original Bullet Term Advances; and

 

(ii)                                  repayments of principal in
respect of Original Scheduled Amortisation Term Advances on their respective
Final Repayment Dates only; and

 

(b)                                 on or after the occurrence of
a Non-Asset Trigger Event but prior to the occurrence of an Asset Trigger
Event, repayments of principal in respect of Original Bullet Term Advances and
Original Scheduled Amortisation Term Advances on their respective Final
Repayment Dates,

 

in each case prior to the service of an Intercompany
Loan Acceleration Notice on Funding 1 and taking into account any allocation of
principal to meet any deficiency in Funding 1’s Available Revenue Receipts;

 

Encumbrance has the same meaning as Security Interest;

 

Enforcement Procedures means the procedures for the enforcement
of Mortgages undertaken by the Servicer from time to time in accordance with
the Seller’s Policy;

 

English Loan means a Loan which is secured by an English Mortgage;

 

English Mortgage means a Mortgage secured over a property
in England or Wales;

 

Euroclear means Euroclear Bank S.A./N.V., as operator of the
Euroclear System or the successor for the time being to such business;

 

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

 

Exhibit means the exhibit to the Mortgage Sale Agreement
which sets out details of the Provisional Portfolio and the Standard
Documentation;

 

Extension  Request has the meaning given in Clause
2.3(a) of the Funding 1 Liquidity Facility Agreement;

 

Facility Office means the office through which the Funding
1 Liquidity Facility Provider (or any replacement liquidity facility provider)
will perform all or any of its obligations under the Funding 1 Liquidity
Facility Agreement;

 

Final Repayment Date means the final repayment date of each
Term Advance, as specified in the relevant Issuer Master Definitions and
Construction Schedule;

 

Financial Year means the 12 month period ending on the
last day of the calendar year;

 

First Deed of Accession means the first deed of accession to the
Funding 1 Deed of Charge entered into on the Second Issuer Closing Date between
Funding 1, the First Issuer, the Second Issuer, the Corporate Services
Provider, the Account Bank, the Security Trustee, the Seller, the First
Start-up Loan Provider, the Second Start-up Loan Provider, the Cash Manager,
the Funding 1 Swap Provider and the Funding 1 Liquidity Facility Provider as
supplemented, amended and/or restated from time to time;

 

11

 

First Deed of Amendment to the Intercomany Loan Terms and
Conditions means the first deed of amendment to the Intercompany Loan Terms and
Conditions entered into on the Third Issuer Closing Date between Funding 1, the
First Issuer, the Second Issuer, the Security Trustee and the Agent Bank;

 

First Issuer means Permanent Financing (No. 1) PLC (registered
number 4416192), a public limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE;

 

First Issuer Closing Date or the Initial Closing Date means 14th June,
2002;

 

First Issuer Intercompany Loan Agreement means the First Issuer
Intercompany Loan Confirmation and the Intercompany Loan Terms and Conditions
together entered into on the Initial Closing Date by the First Issuer, Funding
1 and the Security Trustee (as the same may be amended and/or supplemented from
time to time);

 

First Issuer Security means security created by the First Issuer
pursuant to the First Issuer Deed of Charge in favour of the First Issuer
Secured Creditors;

 

First Start-up Loan means the start-up loan that the First
Start-up Loan Provider made available to Funding 1 pursuant to the First
Start-up Loan Agreement;

 

First Start-up Loan Agreement means the agreement entered into on the
Initial Closing Date between Funding 1, the First Start-up Loan Provider and
the Security Trustee relating to the provision of the First Start-up Loan to
Funding 1 (as the same may be amended and/or supplemented from time to time);

 

First Start-up Loan Provider means Halifax in its capacity as provider
of the First Start-up Loan;

 

Fitch means Fitch Ratings Limited;

 

Fixed Rate Loans means those Loans to the extent that and
for such time that the interest rate payable by the Borrower on all or part of
the Outstanding Principal Balance does not vary and is fixed for a certain
period of time by the Seller;

 

Flexible Draw Capacity means an amount equal to the excess of (a)
the maximum amount that Borrowers may draw under Flexible Loans included in the
Trust Property (whether or not drawn) over (b) the aggregate principal balance
of actual Flexible Loan advances in the Trust Property on the relevant
Calculation Date;

 

Flexible Loan means a type of Loan product that typically
incorporates features that give the Borrower options to, among other things,
make further drawings on the loan account and/or to overpay or underpay
interest and principal in a given month;

 

Flexible Loan Conditions means Mortgage Conditions applicable to
any Flexible Loan;

 

Flexible Loan Drawing means any further drawing of monies made
by a Borrower under a Flexible Loan other than the Initial Advance;

 

Fourth Issuer means Permanent Financing (No. 4) PLC (registered
number 4988201), a public limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE;

 

12

 

Fourth Issuer Closing Date means on or about 12th March, 2004;

 

Fourth Issuer Intercompany Loan Agreement means the Fourth Issuer
Intercompany Loan Confirmation and the Intercompany Loan Terms and Conditions
together entered into on the Fourth Issuer Closing Date by the Fourth Issuer,
Funding 1 and the Security Trustee (as the same may be amended and/or
supplemented from time to time);

 

Fourth Issuer Security means the security created by the Fourth
Issuer pursuant to the Fourth Issuer Deed of Charge in favour of the Fourth
Issuer Secured Creditors;

 

Fourth Start-up Loan means the start-up loan that the Fourth
Start-up Loan Provider has made available to Funding 1 pursuant to the Fourth
Start-up Loan Agreement;

 

Fourth Start-up Loan Agreement means the agreement entered into on the
Fourth Issuer Closing Date between Funding 1, the Fourth Start-up Loan Provider
and the Security Trustee relating to the provision of the Fourth Start-up Loan
to Funding 1 (as the same may be amended and/or supplemented from time to
time);

 

Fourth Start-up Loan Provider means Halifax in its capacity as provider
of the Fourth Start-up Loan;

 

Freedom of Agency Indemnity Policy means the freedom of agency
indemnity policy written by Royal & Sun Alliance Insurance PLC in favour of
the Seller and any endorsements or extensions thereto as issued from time to
time, or any such similar alternative or replacement policy or policies as may
in future be issued in favour of the Seller;

 

FSMA 2000 or FSMA means the Financial Services and
Markets Act 2000 (as amended from time to time);

 

Funding 1 means Permanent Funding (No. 1) Limited (registered
number 4267660), a limited company incorporated under the laws of England and
Wales, whose registered office is at Blackwell House, Guildhall Yard, London
EC2V 5AE;

 

Funding 1 Agreements or Funding 1 Transaction Documents means each
of the Transaction Documents to which Funding 1 is a party (as the same may be
amended, varied and/or supplemented from time to time) including (but not
limited to) the Master Definitions and Construction Schedule the Servicing
Agreement, the Mortgages Trust Deed, the Halifax Deed and Power of Attorney,
the Funding 1 Deed of Charge (including, for the avoidance of doubt the Second
Supplemental Funding 1 Deed of Charge), the Funding 1 Swap Agreement, the
Funding 1 Corporate Services Agreement, the Funding 1 Liquidity Facility
Agreement, each Intercompany Loan Agreement, the First Deed of Amendment to the
Intercompany Loan Terms and Conditions, the Cash Management Agreement, the Bank
Account Agreement, the Funding 1 Guaranteed Investment Contract, each Start-up
Loan Agreement, the Mortgage Sale Agreement, each Scottish Declaration of
Trust, the Seller Power of Attorney, the Insurance Acknowledgements, the
Insurance Endorsements and all other agreements referred to therein or
otherwise referred to as “Funding 1 Agreements” in each Accession Undertaking entered
into by, inter
alios, Funding 1 and the Security Trustee, from time to time;

 

Funding 1 Available Principal Receipts means on the day falling four
Business Days prior to each Funding 1 Interest Payment Date, an amount equal to
the aggregate of:

 

(a)                                  all Funding 1 Principal
Receipts received by Funding 1 during the Interest Period ending on the
relevant Funding 1 Interest Payment Date;

 

13

 

(b)                                 all other Funding 1 Principal
Receipts standing to the credit of the Cash Accumulation Ledger which are to be
applied on the next Funding 1 Interest Payment Date to repay a Bullet Term
Advance and/or, subject to Rule 1 as set out in paragraph 2.2(a) of Part II of
Schedule 3 to the Funding 1 Deed of Charge, a Scheduled Amortisation
Instalment, or to make a payment under items (a) (b) or (c) of the Funding 1
Pre-Enforcement Principal Priority of Payments and, if such Funding 1 Interest
Payment Date occurs on or after a Trigger Event, the remainder of such receipts
standing to the credit of the Cash Accumulation Ledger;

 

(c)                                  the amounts (if any) to be
credited to the Principal Deficiency Ledger pursuant to paragraphs (g), (i),
(k) and (m) in the Funding 1 Pre-Enforcement Revenue Priority of Payments on
the relevant Funding 1 Interest Payment Date;

 

(d)                                 in so far as available for and
needed to make Eligible Liquidity Facility Principal Repayments, any amounts
available to be drawn under the Funding 1 Liquidity Facility (but less any
amounts applied or to be applied on the relevant date in payment of interest
and other revenue expenses as set out in paragraphs (a) to (f), (h) and (l) of
the Funding 1 Pre-Enforcement Revenue Priority of Payments plus any amounts
which will be repaid to the Funding 1 Liquidity Facility Provider under item
(a) of the relevant priority of payments (relating to the allocation of Funding
1 Available Principal Receipts) on the next Funding 1 Interest Payment Date
(i.e. occurring at the end of such period of four Business Days) to the extent
that such repayment is available to be redrawn on that Funding 1 Interest
Payment Date); and

 

(e)                                  in so far as available for and
needed to make Eligible General Reserve Fund Principal Repayments, the amount
that would then be standing to the credit of the General Reserve Ledger (but
less any amounts applied or to be applied on the relevant date in payment of
interest and other revenue expenses as set out in paragraphs (a) to (n)
(inclusive) of the Funding 1 Pre-Enforcement Revenue Priority of Payments plus
any amounts which will be credited to the General Reserve Ledger under item (b)
of the relevant priority of payments (relating to the allocation of Funding 1
Available Principal Receipts) on the next Funding 1 Interest Payment Date (i.e.
occurring at the end of such period of four Business Days),

 

(f)                                    in so far as available for and
needed to make Eligible Liquidity Reserve Fund Principal Repayments, the amount
that would then be standing to the credit of the Liquidity Reserve Ledger (but
less any amounts applied or to be applied on the relevant date in payment of
interest and other revenue expenses as set out in paragraphs (a) to (f)
(inclusive) and (h), (j) and (l) of the Funding 1 Pre-Enforcement Revenue
Priority of Payments plus any amounts which will be credited to the Liquidity
Reserve Ledger under item (c) of the relevant priority of payments (relating to
the allocation of Funding 1 Available Principal Receipts) on the next Funding 1
Interest Payment Date (i.e. occurring at the end of such period of four Business
Days),

 

less

 

(g)                                 the amounts to be applied on
the relevant Funding 1 Interest Payment Date to pay paragraphs (a) to (f)
(inclusive), (h), (j) and (l) of the Funding 1 Pre-Enforcement Revenue Priority
of Payments;

 

Funding 1 Available Revenue Receipts means for each Funding 1
Interest Payment Date, an amount calculated on the day falling four Business
Days prior to such Funding 1 Interest Payment Date, and equal to the aggregate
of:

 

14

 

(a)                                  all Mortgages Trust Available
Revenue Receipts distributed or to be distributed to Funding 1 during the then
current Interest Period;

 

(b)                                 any amounts paid or to be paid
by the Seller to Funding 1 during the then current Interest Period in
consideration of the seller acquiring a further interest in the Trust Property;

 

(c)                                  other net income of Funding 1
including all amounts of interest received on the Funding 1 GIC Account, the
Funding 1 Transaction Account and/or Authorised Investments and amounts
received by Funding 1 under the Funding 1 Swap Agreement (other than any early
termination amount received by Funding 1 under the Funding 1 Swap Agreement),
in each case to be received during the then current Interest Period; and

 

(d)                                 the amounts then standing to
the credit of the General Reserve Ledger,

 

(e)                                  if a Liquidity Reserve Fund
Rating Event has occurred and is continuing, and there are no amounts standing
to the credit of the General Reserve Ledger, the amounts then standing to the
credit of the Liquidity Reserve Ledger and available to be drawn, to the extent
necessary to pay the items in paragraphs (a) to (f), (h), (j) and (l) in the
Funding 1 Pre-enforcement Revenue Priority of Payments; and

 

(f)                                    if a Liquidity Reserve Fund
Rating Event has occurred but is no longer continuing due to an increase in the
Seller’s Rating since the preceding Funding Interest Payment Date, and Funding
1 elects to terminate the Liquidity Reserve Fund, all amounts standing to the
credit of the Liquidity Reserve Ledger,

 

less:

 

(a)                                  any payment made by the Seller
to Funding 1 during the then current Interest Period of the amount outstanding
under an Intercompany Loan; and

 

(b)                                 the proceeds of any New
Intercompany Loan received by Funding 1 during the then current Interest
Period;

 

Funding 1 Bank Accounts means the Funding 1 GIC Account, the
Funding 1 Transaction Account, the Funding 1 Liquidity Facility Stand-by
Account and such other bank account(s) held in the name of Funding 1 with the
approval of the Security Trustee from time to time;

 

Funding 1 Charged Property means the property charged by Funding 1
pursuant to the Funding 1 Deed of Charge and includes, for the avoidance of
doubt, the property charged by Funding 1 pursuant to the Second Supplemental
Funding 1 Deed of Charge;

 

Funding 1 Corporate Services Agreement means in respect of Holdings,
Funding 1 and the Post-Enforcement Call Option Holder, the agreement dated on
the Initial Closing Date and made between the Funding 1 Corporate Services
Provider, the Share Trustee, Holdings, Funding 1, the Post-Enforcement Call
Option Holder, Halifax and the Security Trustee for the provision by the
Funding 1 Corporate Services Provider of certain corporate services and
personnel to Funding 1, Holdings and the Post-Enforcement Call Option Holder (as
the same may be amended and/or supplemented from time to time);

 

Funding 1 Corporate Services Fee Letter means the letter dated the
date of the Funding 1 Corporate Services Agreement between, inter alios,
Funding 1, PECOH, Holdings, the

 

15

 

Security Trustee and the Funding 1
Corporate Services Provider, setting out the amount of fees payable to the
Funding 1 Corporate Services Provider by Funding 1;

 

Funding 1 Corporate Services Provider means Structured Finance
Management Limited or such other person or persons for the time being acting as
corporate services provider to Funding 1, Holdings and the Post-Enforcement
Call Option Holder under the Funding 1 Corporate Services Agreement;

 

Funding 1 Deed of Charge means the deed of charge entered into on
the Initial Closing Date between Funding 1, the First Issuer, the Corporate
Services Provider, the Account Bank, the Security Trustee, the Seller, the
First Start-up Loan Provider, the Cash Manager, the Funding 1 Swap Provider and
the Funding 1 Liquidity Facility Provider, as supplemented and amended by the
Deed of Accession and Release Supplemental to the Funding 1 Deed of Charge, the
Second Supplemental Funding 1 Deed of Charge and as supplemented and amended by
the First Deed of Accession, the Second Deed of Accession and the Third Deed of
Accession and as the same may be further supplemented, amended and/or restated
or varied from time to time;

 

Funding 1 GIC Account means the account in the name of Funding 1
and the Security Trustee (sort code 12-24-55, account number 00998203) held at
the Account Bank and maintained subject to the terms of the Funding 1
Guaranteed Investment Contract, the Bank Account Agreement and the Funding 1
Deed of Charge or such additional or replacement account as may for the time
being be in place with the prior consent of the Security Trustee;

 

Funding 1 GIC Account Agreement has the same meaning as Funding 1
Guaranteed Investment Contract;

 

Funding 1 GIC Account Mandate means the bank account mandate between
Funding 1 and the Account Bank relating to the operation of the Funding 1 GIC
Account;

 

Funding 1 GIC Balance means, on any day during an Interest
Period, the amount standing to the credit of the Funding 1 GIC Account as at
the opening of business on such day;

 

Funding 1 GIC Provider means The Governor and Company of the Bank
of Scotland acting pursuant to the Funding 1 Guaranteed Investment Contract and
or such other person for the time being acting as provider of a guaranteed
investment contract to Funding 1;

 

Funding 1 GIC Rate means the rate of interest accruing on the
balance standing to the credit of the Funding 1 GIC Account equal to a rate of
three month LIBOR less 0.25 per cent. per annum;

 

Funding 1 Guaranteed Investment Contract or Funding 1 GIC Account Agreement means
the guaranteed investment contract entered into on the Initial Closing Date
between Funding 1, the Funding 1 GIC Provider, the Cash Manager and the
Security Trustee, in relation to interest to be earned on the Funding 1 GIC
Balance (as the same may be amended and/or supplemented from time to time);

 

Funding 1 Income Deficit means the amount of the shortfall between
Funding 1 Available Revenue Receipts and the amounts required to pay items (a)
to (f) (inclusive), (h), (j), and (i) of the Funding 1 Pre-Enforcement Revenue
Priority of Payments

 

Funding 1 Interest Payment Date means the 10th day of
September, December, March and June in each year (or, if such day is not a
Business Day, the next succeeding Business Day);

 

16

 

Funding 1 Ledgers means the Funding 1 Principal Ledger, the
Funding 1 Revenue Ledger, the General Reserve Ledger, the Liquidity Reserve
Ledger, the Principal Deficiency Ledger, the Intercompany Loan Ledger, the Cash
Accumulation Ledger and the Funding 1 Liquidity Facility Ledger;

 

Funding 1 Liquidity Documents means the Funding 1 Liquidity Facility
Agreement, a Novation Certificate or any other document designated as such by
the Funding 1 Liquidity Facility Provider and Funding 1;

 

Funding 1 Liquidity Drawing means a Funding 1 Liquidity Facility
Drawing or a Funding 1 Liquidity Facility Stand-by Drawing as the context so
requires;

 

Funding 1 Liquidity Facility means the sterling advances facility made in
respect of certain of the payment obligations of Funding 1 arising out of the
First Issuer Intercompany Loan Agreement, and/or the Second Issuer Intercompany
Loan Agreement and/or the Third Issuer Intercompany Loan Agreement and/or the
Fourth Issuer Intercompany Loan made available by the Funding 1 Liquidity
Facility Provider to Funding 1 under the Funding 1 Liquidity Facility Agreement
and drawable by way of Funding 1 Liquidity Facility Drawings and/or Funding 1
Liquidity Facility Stand-by Drawings;

 

Funding 1 Liquidity Facility Agreement means the liquidity facility
agreement made on the Initial Closing Date as amended and restated on the
Second Issuer Closing Date, the Third Issuer Closing Date and as further
amended and restated on the Fourth Issuer Closing Date and from time to time
between Funding 1, the Funding 1 Liquidity Facility Provider, the Cash Manager
and the Security Trustee pursuant to which the Funding 1 Liquidity Facility
Provider agreed to provide Funding 1, from time to time during the Funding 1
Liquidity Facility Commitment Period, with advances for the purposes specified
therein, subject to and in accordance with the terms thereof (as the same may
be further amended and/or supplemented from time to time);

 

Funding 1 Liquidity Facility Commitment means, as at the Fourth Issuer
Closing Date, £150,000,000, or such other amount as may be calculated in
accordance with Clause 2.2 (Facility Limits) and/or Clause 7.2 (Voluntary
Cancellation) of the Funding 1 Liquidity Facility Agreement from time to time;

 

Funding 1 Liquidity Facility Commitment Period means, subject to Clause 2.3
of the Funding 1 Liquidity Facility Agreement, the period from and including
the Initial Closing Date up to and excluding the Funding 1 Liquidity Facility
Commitment Termination Date;

 

Funding 1 Liquidity Facility Commitment Termination Date means, subject to being
extended in accordance with Clause 2.3 of the Funding 1 Liquidity
Facility Agreement, the date falling 364 days after the  Initial Closing Date or, if such date is not
a Business Day, the preceding Business Day or, if earlier, the date on which
the Funding 1 Liquidity Facility Commitment is reduced to zero pursuant to the
provisions of the Funding 1 Liquidity Facility Agreement;

 

Funding 1 Liquidity Facility Default means an event specified as
such in Clause
16.1 of the Funding 1 Liquidity Facility Agreement;

 

Funding 1 Liquidity Facility Drawdown Date means the date of the advance
of a Funding 1 Liquidity Facility Drawing or a Funding 1 Liquidity Facility
Stand-by Drawing which date shall be an Funding 1 Interest Payment Date;

 

17

 

Funding 1 Liquidity Facility Drawdown Notice means a notice substantially
in the form set out in Schedule 3 to the Funding 1 Liquidity Facility
Agreement;

 

Funding 1 Liquidity Facility Drawing means a drawing (other than a
Funding 1 Liquidity Facility Stand-by Drawing) made or to be made under the
Funding 1 Liquidity Facility;

 

Funding 1 Liquidity Facility Interest Period means, with respect to a
Funding 1 Liquidity Facility Loan, each successive period beginning on (and
including) an Funding 1 Interest Payment Date and ending on (but excluding) the
next following Funding 1 Interest Payment Date except that the first Funding 1
Liquidity Facility Interest Period shall start on the Funding 1 Liquidity
Facility Drawdown Date for that Funding 1 Liquidity Facility Loan and end on
the day before the next following Funding 1 Interest Payment Date;

 

Funding 1 Liquidity Facility Ledger means a ledger to be
maintained by the Cash Manager pursuant to Clause 4.3 of the Cash Management
Agreement;

 

Funding 1 Liquidity Facility Loan means the aggregate principal
amount of all Funding 1 Liquidity Facility Drawings and Funding 1 Liquidity
Facility Stand-by Drawings for the time being advanced and outstanding under
the Funding 1 Liquidity Facility;

 

Funding 1 Liquidity Facility Margin means nought point five per
cent. (0.50%) per annum;

 

Funding 1 Liquidity Facility Provider means JPMorgan Chase Bank,
acting through its office at 125 London Wall, London EC2Y 5AJ and/or such other
bank or banks with at least the Requisite Ratings which agrees to provide a
liquidity facility to Funding 1 on substantially similar terms to the Funding 1
Liquidity Facility Agreement;

 

Funding 1 Liquidity Facility Request means a request substantially
in the form set out in Schedule 3 to the Funding 1 Liquidity Facility Agreement
made by Funding 1 for a Funding 1 Liquidity Facility Drawing or a Funding 1
Liquidity Facility Stand-by Drawing pursuant to a Funding 1 Liquidity Drawdown
Notice;

 

Funding 1 Liquidity Facility Stand-by Account means an account to be opened
in the name of Funding 1 with the Funding 1 Liquidity Facility Provider or, if
the Funding 1 Liquidity Facility Provider ceases to have the Requisite Ratings,
the Funding 1 Account Bank or, if the Funding 1 Account Bank ceases to have the
Requisite Ratings, a bank which has the Requisite Ratings;

 

Funding 1 Liquidity Facility Stand-by Deposit means the amount standing to
the credit of the Funding 1 Liquidity Facility Stand-by Account from time to
time together with interest on such deposit;

 

Funding 1 Liquidity Facility Stand-by Drawing means a drawing (other than a
Funding 1 Liquidity Facility Drawing) made or to be made under the Funding 1
Liquidity Facility Agreement;

 

Funding 1 Liquidity Principal Shortfall means as applicable, at any
time, the amount by which:

 

(a)                                  prior to the occurrence of a
Trigger Event, the aggregate amount of Funding 1’s obligation to repay when due
and payable:

 

(i)                                     the principal amount due and
payable in respect of the relevant Original Bullet Term Advances on their
respective Scheduled Repayment Dates (and

 

18

 

to the extent not repaid on such Scheduled
Repayment Dates, on each Funding 1 Interest Payment Date thereafter); and

 

(ii)                                  the principal amount due and
payable in respect of the relevant Original Scheduled Amortisation Term
Advances on their respective Final Repayment Dates;

 

(b)                                 following the occurrence of a
Non-Asset Trigger Event but prior to the occurrence of an Asset Trigger Event,
the aggregate amount of Funding 1’s obligation to repay when due and payable:

 

(i)                                     the principal amount due and
payable in respect of the relevant Original Bullet Term Advances on their
respective Final Repayment Dates; and

 

(ii)                                  the principal amount due and
payable in respect of the relevant Original Scheduled Amortisation Term
Advances on their respective Final Repayment Dates; or

 

exceeds the sum of:

 

(A)                              the Funding 1 Available
Principal Receipts

 

less:

 

(B)                                amounts (if any) ranking prior
to the applicable payment described in paragraph (a) or  (b) above in the Funding 1
Pre-Enforcement Principal Priority of Payments at that date;

 

Funding 1 Liquidity Revenue Shortfall means at any time, the amount
by which the aggregate of Funding 1’s obligations in respect of items listed in
paragraph
2.2 (a) to (f), (h) (j) and (l) of the Funding 1
Pre-Enforcement Revenue Priority of Payments exceeds the amount of Funding 1 Available
Revenue Receipts.

 

Funding 1 Liquidity Shortfall means a Funding 1 Liquidity Revenue
Shortfall and/or a Funding 1 Liquidity Principal Shortfall, as applicable;

 

Funding 1 Liquidity Subordinated Amounts means the sum of (a) any
additional amounts due to any withholding taxes and increased costs on the
provision of the Funding 1 Liquidity Facility and (b) any additional costs
incurred by the Funding 1 Liquidity Facility Provider to comply with the
requirements of the Bank of England, the Financial Services Authority and/or
the European Central Bank and/or changes to the capital adequacy rules
applicable to the Funding 1 Liquidity Facility Provider and Funding 1;

 

Funding 1 Post-Enforcement Priority of Payments means the order of priority in
which the Security Trustee will apply all monies following an Intercompany Loan
Event of Default and enforcement of the Funding 1 Security (as set out in Part
III of Schedule 3 to the Funding 1 Deed of Charge);

 

Funding 1 Power of Attorney means the Security Power of Attorney;

 

Funding 1 Pre-Enforcement Principal Priority of Payments means the order in which,
prior to enforcement of the Funding 1 Security, the Cash Manager will apply the
Funding 1 Available Principal Receipts on each Funding 1 Interest Payment Date,
as set out in Part II of Schedule 3 to the Funding 1 Deed of Charge;

 

19

 

Funding 1 Pre-Enforcement Revenue Priority of Payments means the order of priority
in which Funding 1 Available Revenue Receipts will be applied prior to the
enforcement of the Funding 1 Security as set out in Part I of Schedule 3 to the
Funding 1 Deed of Charge;

 

Funding 1 Principal Ledger means the ledger on which receipts and
payments of Funding 1 Principal Receipts will be recorded by the Cash Manager;

 

Funding 1 Principal Priority of Payments means the order of priority
for the application of Funding 1 Available Principal Receipts, prior to
enforcement of the Funding 1 Security, set out in each Intercompany Loan
Agreement and in Part II of Schedule 3 to the Funding 1 Deed of Charge;

 

Funding 1 Principal Receipts means the Funding 1 Share of Principal
Receipts received by Funding 1 from the Mortgages Trustee on each Distribution
Date;

 

Funding 1 Priority of Payments means, as applicable, the Funding 1
Post-Enforcement Priority of Payments, the Funding 1 Pre-Enforcement Revenue
Priority of Payments and/or, as the case may be, the Funding 1 Principal
Priorities of Payment;

 

Funding 1 Revenue Ledger means the ledger on which the Cash Manager
will record all monies received by Funding 1 during an Interest Period other
than the Funding 1 Principal Receipts;

 

Funding 1 Revenue Receipts means the Funding 1 Share of Mortgages
Trust Available Revenue Receipts received by Funding 1 from the Mortgages
Trustee on each Distribution Date;

 

Funding 1 Secured Creditors means the Security Trustee, the Funding 1
Swap Provider, the Cash Manager, the Funding 1 Liquidity Facility Provider, the
Account Bank, the First Issuer, the Second Issuer, the Third Issuer, the Fourth
Issuer, the Seller, the Corporate Services Provider, the First Start-up Loan
Provider, the Second Start-up Loan Provider, the Third Start-up Loan Provider,
the Fourth Start-up Loan Provider, the Funding 1 GIC Provider and such other
creditors of Funding 1 who may accede to the Funding 1 Deed of Charge from time
to time pursuant to an Accession Undertaking (including, for the avoidance of
doubt, any New Issuer);

 

Funding 1 Secured Obligations means the moneys and liabilities which
Funding 1 covenants and undertakes in Clause 2 of the Funding 1 Deed of Charge to
pay or discharge and all claims, demands or damages for breach of any such
covenant, and references to Funding 1 Secured Obligations includes references
to any of them;

 

Funding 1 Security means the security granted by Funding 1 to
the Security Trustee under and pursuant to the terms of the Funding 1 Deed of
Charge;

 

Funding 1 Share means, prior to the first Calculation
Date, the Initial Funding 1 Share and thereafter means the Current Funding 1
Share;

 

Funding 1 Share Percentage means, prior to the first Calculation
Date, the Initial Funding 1 Share Percentage and thereafter means the Current
Funding 1 Share Percentage;

 

Funding 1 Share/Seller Share Ledger means the ledger to be
maintained by the Cash Manager (in accordance with the Cash Management
Agreement and the Mortgages Trust Deed), on behalf of the Mortgages Trustee and
the Beneficiaries, to record the Current

 

20

 

Funding 1 Share, the Current Funding 1
Share Percentage, the Current Seller Share and the Current Seller Share
Percentage of the Trust Property;

 

Funding 1 Swap means the swap documented under the
Funding 1 Swap Agreement which enables Funding 1 to hedge against the possible
variance between the Mortgages Trustee Variable Base Rate payable on the
Variable Rate Loans, the fixed rates of interest payable on the Fixed Rate
Loans and the rates of interest payable on the Tracker Rate Loans and a LIBOR
based rate for three-month sterling deposits;

 

Funding 1 Swap Agreement means the ISDA Master Agreement and
schedule relating to the Funding 1 Swap entered into on the Initial Closing
Date (as amended and restated on the Second Issuer Closing Date on the Third
Issuer Closing Date and as further amended and restated on the Fourth Issuer
Closing Date and from time to time) and any confirmation documented thereunder
from time to time, each between Funding 1, the Funding 1 Swap Provider and the
Security Trustee (as the same may be further amended and/or restated from time
to time);

 

Funding 1 Swap Excluded Termination Amount means in relation to the
Funding 1 Swap Agreement an amount equal to:

 

(a)                                  the amount of any termination
payment due and payable to the Funding 1 Swap Provider as a result of a Funding
1 Swap Provider Default or a Funding 1 Swap Provider Downgrade Termination
Event;

 

less

 

(b)                                 the amount, if any, received
by Funding 1 from a replacement swap provider upon entry by Funding 1 into an
agreement with such replacement swap provider to replace the Funding 1 Swap
Agreement which has terminated as a result of such Funding 1 Swap Provider
Default or following the occurrence of such Funding 1 Swap Provider Downgrade
Termination Event;

 

Funding 1 Swap Provider means Halifax acting in its capacity as
the Funding 1 Swap Provider pursuant to the Funding 1 Swap Agreement;

 

Funding 1 Swap Provider Default means the occurrence of an
Event of Default (as defined in the Funding 1 Swap Agreement) where the Funding
1 Swap Provider is the Defaulting Party (as defined in the Funding 1 Swap
Agreement);

 

Funding 1 Swap Provider Downgrade Termination Event means the occurrence of an
Additional Termination Event (as defined in the Funding 1 Swap Agreement)
following the failure by the Funding 1 Swap Provider to comply with the
requirements of the ratings downgrade provisions set out in the Funding 1 Swap
Agreement;

 

Funding 1 Transaction Account means the account in the name of Funding 1
(account no. 00998318, sort code 12-24-55) held with the Account Bank and
maintained subject to the terms of the Bank Account Agreement and the Funding 1
Deed of Charge or such other account as may for the time being be in place with
the prior consent of the Security Trustee and designated as such;

 

Funding 1 Transaction Account Mandate means the bank account
mandate between Funding 1 and the Account Bank relating to the operation of the
Funding 1 Transaction Account;

 

21

 

Funding 1 Transaction Documents has the same meaning as
“Funding 1 Agreements”;

 

Funding 2 means Permanent Funding (No. 2) PLC (registered
number 4441772), a public limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE;

 

Further Advance means, in relation to a Loan, any advance
of further money to the relevant Borrower following the making of the Initial
Advance which is secured by the same Mortgage as the Initial Advance but does
not include the amount of any retention advanced to the relevant Borrower as
part of the Initial Advance after completion of the Mortgage and does not
include a Flexible Loan Drawing nor a Home Cash Reserve Advance;

 

Future Trust Property means any or all New Portfolios to be sold
to the Mortgages Trustee on any Sale Date;

 

General Reserve Fund means the fund established from the
proceeds of the First Start-up Loan Agreement, the Second Start-up Loan, the
Third Start-up Loan and any New Start-up Loan Agreement which may be used by
Funding 1 to meet any deficit in Revenue Receipts or Principal Receipts;

 

General Reserve Fund Required Amount means £330,000,000;

 

General Reserve Fund  Threshold means the lesser of:

 

(a)                                  the General Reserve Fund
Required Amount, and

 

(b)                                 the highest amount which the
Adjusted Reserve Fund Level has been since the first Funding 1 Interest Payment
Date upon which interest is due and payable in respect of Term Advances made
upon the Closing Date relating to the then most recent issue of Issuer Notes;

 

General Reserve Ledger means the ledger established and
maintained by the Cash Manager pursuant to Clause 4.3(b) of the Cash Management
Agreement;

 

Halifax means Halifax plc (registered number 02367076), a
public limited company incorporated under the laws of England and Wales, whose
registered office is at Trinity Road, Halifax, West Yorkshire HX1 2RG;

 

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

 

Halifax Deed and Power of Attorney means the deed and power of
attorney made by Halifax in favour of Funding 1 and its successors and assigns,
on the Initial Closing Date, pursuant to the Mortgages Trust Deed;

 

Halifax Insurance Policies means:

 

(a)                                  the MIG Policies;

 

(b)                                 the Properties in Possession
Cover;

 

(c)                                  the Freedom of Agency
Indemnity Policy;

 

22

 

(d)                                 the Halifax Policies; and

 

(e)                                  the Search Indemnity Policy;

 

Halifax Intermediary means Halifax General Insurance Services
Limited and/or such other person as may be authorised to issue Buildings
Policies to Borrowers on behalf of the Halifax Policies Insurer;

 

Halifax Policies means those of the Buildings Policies
which are issued to Borrowers by the Seller and/or a Halifax Intermediary on
behalf of the Halifax Policies Insurer;

 

Halifax Policies Insurer means in relation to policies issued
before 1st January, ,2004 Royal & Sun Alliance Insurance plc and in
relation to policies or renewals issued after 1st January, 2004, St Andrew’s
Insurance and/or any other insurer who agrees with the Seller to issue
buildings insurance policies to Borrowers from time to time as a consequence of
an introduction or intermediation by a Halifax Intermediary;

 

Halifax Variable Base Rate means the standard variable rate of
interest or if the Seller has more than one standard variable rate of interest,
the relevant standard variable rate of interest set by the Seller which applies
to the Variable Rate Loans beneficially owned by the Seller on the Seller’s
residential mortgage book;

 

High Loan-to-Value Fee means any fee incurred by a Borrower as a
result of taking out a loan with an LTV Ratio in excess of a certain percentage
specified in the Offer Conditions;

 

Holding Company means a holding company within the meaning
of section 736 of the Companies Act 1985;

 

Holdings means Permanent Holdings Limited (registered number
4267664), a limited company incorporated under the laws of England and Wales,
whose registered office is at Blackwell House, Guildhall Yard, London EC2V 5AE;

 

Home Cash Reserve Advance means, in relation to a Loan, an advance
of further money in a sum of not less than £25,005 to the relevant Borrower
following the making of the Initial Advance which is secured by the same
Mortgage as the Initial Advance and against which sum the Borrower can make
drawings of not less than £1,000 at any time;

 

Home Cash Reserve Drawing means any drawing of monies made by a
Borrower under a Home Cash Reserve Advance;

 

Home Improvement Loan means a type of Further Advance product
that can only be used by the Borrower for the purposes of making repairs,
alterations and/or improvements to the relevant Property;

 

Home Owner Loan means a type of Further Advance product
that is a regulated agreement under section 8 of the Consumer Credit Act 1974
and which can be used by the Borrower for any purpose, including but not
limited to, the purchase of a car;

 

HVR 1 means the Variable Mortgage Rate set by the Seller
which applies to certain loans beneficially owned by the Seller on the Seller’s
residential mortgage book;

 

HVR 2 means the second Variable Base Rate that was made
available to Borrowers between 1st March, 2001 and 1st February, 2002;

 

23

 

ICTA means the Income and Corporation Taxes Act 1988;

 

Initial Advance means, in respect of any Loan, the
original principal amount advanced by the Seller including any retention(s)
advanced to the relevant Borrower after the date of the Mortgage but excluding
any (a) High Loan-to-Value Fee, (b) Further Advance, (c) Flexible Loan Drawing,
(d) Home Cash Reserve Advance and (e) Early Repayment Fee relating to any such
Loan;

 

Initial Closing Date means 14th June, 2002;

 

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

 

Initial Funding 1 Share means the share of Funding 1 in the Trust
Property on the Initial Closing Date, being an amount equal to £3,500,000,035;

 

Initial Funding 1 Share Percentage means the percentage share of
Funding 1 in the Trust Property on the Initial Closing Date being 35 per cent.;

 

Initial Loans means the portfolio of residential first
mortgage loans assigned by the Seller to the Mortgages Trustee on the Initial
Closing Date pursuant to the Mortgage Sale Agreement;

 

Initial Portfolio means the Provisional Portfolio other than
any Loan and its Related Security redeemed in full on or before the Initial
Closing Date;

 

Initial Related Security means the Related Security assigned by the
Seller to the Mortgages Trustee on the Initial Closing Date pursuant to the
Mortgage Sale Agreement;

 

Initial Relevant Screen Rate has the meaning given in Condition 4(C);

 

Initial Seller Share means the share of the Seller in the Trust
Property on the Initial Closing Date being an amount equal to £6,500,000,065;

 

Initial Seller Share Percentage means the percentage share of
the Seller in the Trust Property on the Initial Closing Date being 65 per
cent.;

 

Initial Trust Property means the sum of £100 (one hundred pounds)
that SFM Offshore Limited (as the Share Trustee of the Mortgages Trustee)
settled on trust and held on trust absolutely as to both capital and income by
the Mortgages Trustee for the benefit of the Seller and Funding 1 pursuant to Clause 2.1
of the Mortgages Trust Deed;

 

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

 

(a)                                  an order is made or an
effective resolution passed for the winding up, bankruptcy, liquidation or
sequestration of the Relevant Entity;

 

(b)                                 the Relevant Entity ceases or
threatens to cease to carry on its business or stops payment or threatens to
stop payment of its debts or is deemed unable to pay its debts within the
meaning of section 123(a), (b), (c) or (d) of the Insolvency Act 1986 (as
amended) or becomes unable to pay its debts as they fall due or the value of
its assets falls to less than the amounts of its liabilities (taking into
account, for both these purposes, contingent and prospective liabilities) or
otherwise becomes insolvent; and

 

24

 

(c)                                  proceedings (including, but
not limited to, presentation of an application for an administration order, the
filing of documents with the court for the appointment of an administrator or
the service of a notice of intention to appoint an administrator) are initiated
against the Relevant Entity under any applicable liquidation, administration,
winding up, sequestration, insolvency, bankruptcy, composition, reorganisation
(other than a reorganisation where the Relevant Entity is solvent) or other
similar laws, save where such proceedings are being contested in good faith; or
an administrative or other receiver, administrator, trustee or other similar
official is appointed in relation to the whole or any substantial part of the
undertaking or assets of the Relevant Entity or the appointment of an
administrator takes effect; or a distress, execution or diligence or other
process shall be levied or enforced upon or sued out against the whole or any
substantial part of the undertaking or assets of the Relevant Entity and in any
of the foregoing cases it is not discharged within 15 London Business Days; or
if the Relevant Entity initiates or consents to judicial proceedings relating
to itself under any applicable liquidation, administration, winding up,
sequestration, bankruptcy, composition, insolvency, reorganisation or other
similar laws or makes a conveyance, assignment or assignation for the benefit
of, or enters into any composition with, its creditors generally or takes steps
with a view to obtaining a moratorium in respect of any indebtedness;

 

Insurance Acknowledgements means a letter from the relevant insurer
substantially in the form set out in Schedule 11 to the Mortgage Sale Agreement
or such other form as the relevant insurer shall require in respect of (a) the
MIG Policies numbers GECM-UK-003 and GECM-UK-004 issued by GE Mortgage
Insurance Limited and (b) the MIG Policies numbers 227001, 227001(A), 227002,
227003 and 227006;

 

Insurance Endorsements means an endorsement from the relevant
insurer substantially in the form set out in Schedule 10 to the Mortgage Sale
Agreement or such other form as the relevant insurer shall require in respect of
(a) each of the MIG Policies excluding the Halifax Mortgage Re Limited MIG
Policies, (b) the Freedom of Agency Indemnity Policy, (c) the Search Indemnity
Policy, (d) Halifax Policies and (e) the insurance policy maintained by the
Seller in respect of the Title Deeds stored by the Seller;

 

Insurance Policies means the Buildings Policies and the
Halifax Insurance Policies and Insurance Policy shall be construed
accordingly;

 

Intercompany Loan Acceleration Notice means a notice served by the
Security Trustee on Funding 1 following the occurrence of an Intercompany Loan
Event of Default, pursuant to Clause 14.10 of the Intercompany Loan Terms
and Conditions;

 

Intercompany Loan Agreements means the First Issuer Intercompany Loan
Agreement, the Second Issuer Intercompany Loan Agreement, the Third Issuer
Intercompany Loan Agreement, the Fourth Issuer Intercompany Loan Agreement and
any New Intercompany Loan Agreement and Intercompany Loan Agreement means any one
of them;

 

Intercompany Loan Confirmation means a document substantially in the form
set out in Schedule 3 to the Intercompany Loan Terms and Conditions confirming
the principal terms of each Intercompany Loan Agreement between Funding 1 and
the relevant Issuer;

 

Intercompany Loan Determination Date means the first day of the
relevant Interest Period;

 

Intercompany Loan Events of Default means the occurrence of an
event of default as specified in Clause 14 of the Intercompany Loan Terms
and Conditions;

 

25

 

Intercompany Loan Ledger means a ledger maintained by the Cash
Manager to record payments of interest and repayments of principal made on each
of the current Term Advances and any New Term Advances under any Intercompany
Loans;

 

Intercompany Loans means the loan made available pursuant to
an Intercompany Loan Agreement;

 

Intercompany Loan Terms and Conditions means the standard terms and
conditions incorporated into each Intercompany Loan Agreement, signed for the
purposes of identification on  the
Initial Closing Date by Funding 1, the Security Trustee and the Agent Bank as
amended and restated on 25th November, 2003;

 

Interest Period means the period from (and including) a
Funding 1 Interest Payment Date (or in respect of the first Interest Period,
the relevant Closing Date) to (but excluding) the next following (or first)
Funding 1 Interest Payment Date;

 

Irrecoverable VAT means any amount in respect of VAT
incurred by a party to the Transaction Documents (for the purposes of this
definition, a Relevant Party) as part of a payment in respect of which it is
entitled to be indemnified under the relevant Transaction Documents to the
extent that the Relevant Party does not or will not receive and retain a credit
or repayment of such VAT as input tax (as that expression is defined in section
24(1) of the Value Added Tax Act 1994) for the prescribed accounting period (as
that expression is used in section 25(1) of the Value Added Tax Act 1994) to
which such input tax relates;

 

Issuer means the First Issuer, the Second Issuer, the Third
Issuer, the Fourth Issuer or, as the context may require, any New Issuer;

 

Issuer Account Bank means the First Issuer Account Bank, the
Second Issuer Account Bank, the Third Issuer Account Bank, the Fourth Issuer
Account Bank and/or, as the context requires, the bank at which the accounts of
any New Issuer are maintained;

 

Issuer Accounts means any of the First Issuer Accounts,
the Second Issuer Accounts, the Third Issuer Accounts, the Fourth Issuer
Accounts or, as the context may require, any accounts held by any New Issuer;

 

Issuer Agreements means those agreements to which any Issuer
is party (including, for the avoidance of doubt, in the case of the First
Issuer, the First Issuer Transaction Documents, in the case of the Second Issuer,  the Second Issuer Transaction Documents, in
the case of the Third Issuer, the Third Issuer Transaction Documents, in the
case of the Fourth Issuer, the Fourth Issuer Transaction Documents and any, in
the case of any New Issuer, New Issuer Transaction Documents);

 

Issuer Master Definitions and Construction Schedule means, as the context so
requires, the First Issuer Master Definitions and Construction Schedule dated
the Initial Closing Date, the Second Issuer Master Definitions and Construction
Schedule dated the Second Issuer Closing Date and the Third Issuer Master
Definitions and Construction Schedule dated the Third Issuer Closing Date, the
Fourth Issuer Master Definitions and Construction Schedule dated the Fourth
Issuer Closing Date each signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood, and/or each other master
definitions and construction schedule which relates to a New Issuer;

 

Issuer Notes includes all of the Class A First Issuer Notes, the
Class B First Issuer Notes, Class C First Issuer Notes, the Class A Second
Issuer Notes, the Class B Second Issuer Notes, the Class C Second Issuer Notes,
the Class A Third Issuer Notes, the Class B Third Issuer Notes, the Class C
Third Issuer

 

26

 

Notes the Class A Fourth Issuer Notes, the
Class B Fourth Issuer Notes, the Class M Fourth Issuer Notes, the Class C
Fourth Issuer Notes and, as the context may require, any New Notes;

 

Issuer Security means the security created by the First
Issuer pursuant to the First Issuer Deed of Charge in favour of the First
Issuer Secured Creditors, the security created by the Second Issuer pursuant to
the Second Issuer Deed of Charge in favour of the Second Issuer Secured
Creditors, the security created by the Third Issuer pursuant to the Third
Issuer Deed of Charge in favour of the Third Issuer Secured Creditors, the
security created by the Fourth Issuer pursuant to the Fourth Issuer Deed of
Charge in favour of the Fourth Issuer Secured Creditors, and/or, as the context
may require, security created by any New Issuers;

 

Issuer Swap Agreements means, the First Issuer Swap Agreements
and/or the Second Issuer Swap Agreements and/or the Third Issuer Swap
Agreements and/or the Fourth Issuer Agreement and Issuer Swap Agreement means
any one of them;

 

Issuer Swap Provider means the First Issuer Swap Providers
and/or the Second Issuer Swap Providers and/or the Third Issuer Swap Providers
and/or the Fourth Issuer Swap providers and/or any New Issuer Swap Providers;

 

Issuer Swap Provider Default means an Event of Default where the
relevant Issuer Swap Provider is the defaulting party (as defined in the
relevant Issuer Swap Agreement);

 

Issuer Swap Provider Downgrade Termination Event means the occurrence of an
additional termination event following the failure by a First Issuer Swap
Provider and/or a Second Issuer Swap Provider and/or a Third Issuer Swap
Provider and/or a Fourth Issuer Swap Provider to comply with the requirements
of the ratings down grade provisions (as set out in the relevant swap
agreement);

 

Large Loan Discount means the discount which allows a Borrower
to pay interest at a discretionary discount to the standard variable rate of
interest charged on Variable Rate Loans in, or to be included in, the Mortgages
Trust (other than the Tracker Rate Loans) based on the aggregate size of the
Loans under the Mortgage Account (a) at origination or (b) when a Further
Advance is made;

 

Law includes common or customary law and any
constitution, decree, judgment, legislation, order, ordinance, regulation,
statute, treaty or other legislative measure in any jurisdiction and any
present or future directive, regulation, guideline, practice, concession,
request or requirement whether or not having the force of law issued by any
governmental body, agency or department or any central bank or other fiscal,
monetary, taxation, regulatory, self regulatory or other authority or agency;

 

Lending Criteria means the criteria contained in Schedule 4
to the Mortgage Sale Agreement or such other criteria as would be acceptable to
a reasonable, prudent mortgage lender;

 

LIBOR means:

 

(a)                                  in relation to any Funding 1
Liquidity Facility Drawing or, as the case may be, Funding 1 Liquidity Facility
Stand-by Drawing:

 

(i)                                     the display rate per annum of
the offered quotation for deposits in the currency of the relevant Funding 1
Liquidity Drawing or unpaid sum for a period equal to the required period which
appears on Moneyline Telerate

 

27

 

Page 3750 or Moneyline Telerate Page 3740
(as appropriate) at or about 11.00 a.m. on the relevant Quotation Date; or

 

(ii)                                  if the display rate cannot be
determined under paragraph (a) above, the rate determined by the Funding 1
Liquidity Facility Provider to be the arithmetic mean (rounded, if necessary,
to the nearest five decimal places with the midpoint rounded upwards) of the
rates notified to the Liquidity Facility Provider by each of the Reference
Banks quoting (provided that at least two Reference Banks are quoting) as the
rate at which such Reference Bank is offering deposits in the required currency
and for the required period in an amount comparable to that amount to prime
banks in the London inter-bank market at or about 11.00 a.m. on the relevant
Quotation Date for such period;

 

for the
purposes of this definition:

 

Quotation Date means, in relation to any
Interest Period for which an interest rate is to be determined under the
Funding 1 Liquidity Facility Agreement, the day on which quotations would
ordinarily be given by banks in the London inter-bank market for deposits in
the relevant currency for delivery on the first day of that Interest Period;
provided that if, for any such period, quotations would ordinarily be given on
more than one date, the Quotation Date for that period shall be the last of
those dates;

 

Reference Banks means the principal London
office of each of ABN AMRO Bank N.V., Barclays Bank PLC, Citibank, N.A. and the
Royal Bank of Scotland plc or any bank that replaces any of them; and

 

Moneyline Telerate Page
3750
means the display designated as Page 3750; and Moneyline Telerate Page 3740
means the display designated as Page 3740, in each case on the Moneyline
Telerate Service (or such other pages as may replace Page 3750 or Page 3740 on
that service or such other service as may be nominated by the British Bankers’
Association (including the Reuters Screen) as the information vendor for the
purposes of displaying British Bankers’ Association Interest Settlement Rates
for deposits in the currency concerned);

 

(b)                                 in relation to the Mortgages
Trustee GIC Rate, the Funding 1 GIC Rate and the rate of interest payable on
the Start-up Loans, LIBOR as determined in accordance with the Intercompany
Loan Agreements;

 

Liquidity Reserve Fund means the fund established pursuant to the
Funding 1 Deed of Charge in the event that a Liquidity Reserve Fund Rating
Event occurs;

 

Liquidity Reserve Fund Rating Event means the Seller’s long-term,
unsecured, unsubordinated and unguaranteed debt obligations are rated below A-
by S&P, A3 by Moody’s or A- by Fitch (unless the relevant Rating Agency
confirms that its then current ratings of the Fourth Issuer Notes will not be
adversely affected as a consequence of a ratings downgrade of the Seller);

 

Liquidity Reserve Ledger means the ledger that shall be maintained
by the Cash Manager pursuant to the Cash Management Agreement to record the
balance from time to time of the Liquidity Reserve Fund;

 

Liquidity Reserve Required Amount means, on any Interest
Payment Date, an amount equal to 3 per cent. of the aggregate outstanding
balance of the Fourth Issuer Notes on that date;

 

28

 

Loan means each loan referenced by its loan identifier
number and comprising the aggregate of all principal sums, interest, costs,
charges, expenses and other monies (including all further advances including
Further Advances) due or owing with respect to that loan under the relevant
Mortgage Terms by a Borrower on the security of a Mortgage from time to time
outstanding or, as the context may require, the Borrower’s obligations in
respect of the same;

 

Loan Repurchase Notice means a notice in the form set out in
Schedule 6 to the Mortgage Sale Agreement;

 

Loan Warranties means the Representations and Warranties;

 

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

 

London Stock Exchange means the London Stock Exchange plc;

 

Loss Amount means the amount of any costs, expenses, losses or
other claims suffered or incurred by, as applicable, the Mortgages Trustee
and/or Funding 1 in connection with any recovery of interest on the Loans to
which the Seller, the Mortgages Trustee or Funding 1 was not entitled or could
not enforce as a result of any of the matters referred to in paragraphs (a),
(b), (c) or (d) of Clause 7.3 of the Mortgage Sale Agreement;

 

Losses means all realised losses on the Loans;

 

Losses Ledger means the ledger of such name maintained by the Cash
Manager pursuant to the Cash Management Agreement to record the Losses;

 

LTV ratio or loan-to-value ratio means the ratio
(expressed as a percentage) of the outstanding balance of a Loan to the value
of the Mortgaged Property securing that Loan;

 

LTV Test means a test which assigns a credit enhancement value
to each loan in the portfolio based on its current loan-to-value ratio and the
amount of mortgage indemnity cover on that loan.  The weighted average credit enhancement value for the portfolio
is then determined;

 

Managers has the meaning given to it in the relevant Issuer
Master Definitions and Construction Schedule;

 

Mandate means the Funding 1 Transaction Account Mandate, the
Funding 1 GIC Account Mandate and/or the Mortgages Trustee GIC Account Mandate,
as the case may be;

 

Mandatory Liquid Asset Cost means the cost imputed to the Funding 1
Liquidity Facility Provider of compliance with:

 

(a)                                  cash and special deposit
requirements of the Bank of England and/or the banking supervision or other
costs imposed by the Financial Services Authority, as determined in accordance
with Schedule 2 of the Funding 1 Liquidity Facility Agreement; and

 

(b)                                 any reserve asset requirements
of the European Central Bank;

 

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

 

29

 

MIG Policies means the mortgage indemnity guarantee policies
written by General Accident Fire and Life Assurance Corporation PLC, GE Capital
Mortgage (UK) Limited, Royal & Sun Alliance Insurance Plc and Halifax
Mortgage Re Limited in favour of the Seller, or any other mortgage indemnity
guarantee policy as may be effected from time to time to cover the Seller in
respect of New Loans and their Related Security, such other mortgage indemnity
guarantee policy to provide such level of cover as would be acceptable to a
reasonable, prudent mortgage lender at the date of such other policy;

 

Minimum Seller Share means an amount included in the Current
Seller Share which is calculated in accordance with Clause 9.2 of the Mortgages
Trust Deed and which, as at the Fourth Issuer Closing Date, will be
£1,406,739,244;

 

Monthly CPR on any Normal Calculation Date means the total
Principal Receipts received during the period of one month (or, if shorter,
from and including the Initial Closing Date) ending on that Normal Calculation
Date divided by the aggregate Outstanding Principal Balance of the Loans
comprised in the Trust Property as at the immediately preceding Normal
Calculation Date;

 

Monthly Payment means the amount which the relevant
Mortgage Terms require a Borrower to pay on each Monthly Payment Day in respect
of that Borrower’s Loan;

 

Monthly Payment Day means the date on which interest (and
principal in relation to a repayment mortgage) is due to be paid by a Borrower
on a Loan or, if any such day is not a business day, the next following
business day;

 

Moody’s means Moody’s Investors Service Limited and includes
any successor to its rating business;

 

Mortgage Account means all Loans secured on the same
Property and thereby forming a single mortgage account;

 

Mortgage Conditions or Loan Conditions means the terms and
conditions applicable to a Loan as contained in the Seller’s “Mortgage
Conditions” booklet applicable from time to time;

 

Mortgagee means the person for the time being entitled to
exercise the rights of the mortgagee or heritable creditor (as applicable)
under a Mortgage;

 

Mortgage Sale Agreement means the mortgage sale agreement dated
the Initial Closing Date and made between the Seller, Funding 1, the Mortgages
Trustee and the Security Trustee in relation to the assignment of the Initial
Portfolio and the sale of any New Portfolio to the Mortgages Trustee from time
to time, as amended and restated on the Second Issuer Closing Date, the Third
Issuer Closing Date and as further amended and restated on the Fourth Issuer
Closing Date and from time to time;

 

Mortgage Terms means all the terms and conditions
applicable to a Loan, including without limitation the applicable Mortgage
Conditions and Offer Conditions;

 

Mortgages means first fixed charges by way of legal mortgage (in
relation to English Loans) and first ranking standard securities (in relation
to Scottish Loans) sold by the Seller to the Mortgages Trustee pursuant to the
Mortgage Sale Agreement, which secure the repayment of the relevant Loans and a Mortgage
means any one of them;

 

Mortgages Trust means the trust of the Trust Property as
to both capital and income, including the Initial Trust Property, held by the
Mortgages Trustee on trust absolutely for

 

30

 

Funding 1 (as to the Funding 1 Share) and
the Seller (as to the Seller Share) pursuant to the Mortgages Trust Deed;

 

Mortgages Trust Available Principal Receipts means the Principal Receipts
available to the Mortgages Trustee to distribute in accordance with Clause 11
of the Mortgages Trust Deed;

 

Mortgages Trust Available Revenue Receipts means an amount equal to the
aggregate of the following amounts, as calculated on each Calculation Date:

 

(a)                                  Revenue Receipts on the Loans
(but excluding Principal Receipts); and

 

(b)                                 interest payable to the
Mortgages Trustee on the Mortgages Trustee GIC Account; less

 

(c)                                  Third Party Amounts,

 

which amounts may be paid daily from monies
on deposit in the Mortgages Trustee GIC Account;

 

Mortgages Trust Deed means the mortgages trust deed made
between the Mortgages Trustee, Funding 1, the Seller and SFM Offshore Limited
on 13th June, 2002, as amended and restated on the Second Issuer Closing Date,
the Third Issuer Closing Date and as further amended and restated on the Fourth
Issuer Closing Date and from time to time;

 

Mortgages Trustee means Permanent Mortgages Trustee Limited
(registered number 83116), a private company with limited liability
incorporated in Jersey, Channel Island, whose registered office is at 47
Esplanade, St. Helier, Jersey JE1 0BD, Channel Islands;

 

Mortgages Trustee Collection Account Amounts means all amounts from time
to time standing to the credit of the Collection Account to the extent that
such amounts represent payments into the Collection Account of sums derived or
resulting from mortgage loans originated by Halifax which have been sold to the
Mortgages Trustee pursuant to the Mortgage Sale Agreement;

 

Mortgages Trustee Corporate Services Agreement means the agreement dated the
Initial Closing Date and made between the Mortgages Trustee Corporate Services
Provider, the Mortgages Trustee and the Security Trustee for the provision by
the Mortgages Trustee Corporate Services Provider of certain corporate services
and personnel to the Mortgages Trustee;

 

Mortgages Trustee Corporate Services Fee Letter means the letter dated the
date of the Mortgages Trustee Corporate Services Agreement between the
Mortgages Trustee, the Mortgages Trustee Corporate Services Provider and the
Security Trustee, setting out the amount of fees payable to the Mortgages
Trustee Corporate Services Provider by the Mortgages Trustee;

 

Mortgages Trustee Corporate Services Provider means SFM Offshore Limited or
such other person or persons for the time being acting as corporate services
provider to the Mortgages Trustee under the Mortgages Trustee Corporate
Services Agreement;

 

Mortgages Trustee GIC Account means the account in the name of the
Mortgages Trustee (sort code 12-24-55, account number 00998406) maintained with
the Account Bank pursuant to the Bank Account Agreement and the Mortgages
Trustee Guaranteed Investment Contract, or such additional or replacement bank
account of the Mortgages Trustee as may for the time

 

31

 

being be in place with the prior consent of
the Security Trustee which is subject to a Guaranteed Investment Contract;

 

Mortgages Trustee GIC Account Agreement has the same meaning as Mortgages
Trustee Guaranteed Investment Contract;

 

Mortgages Trustee GIC Account Mandate means the bank account
mandate between the Mortgages Trustee and the Account Bank relating to the
operation of the Mortgages Trustee GIC Account;

 

Mortgages Trustee GIC Balance means, on any day during an Interest
Period, the amount standing to the credit of the Mortgages Trustee GIC Account
as at the opening of business on such day;

 

Mortgages Trustee GIC Provider means The Governor and Company of the Bank
of Scotland acting pursuant to the Mortgages Trustee Guaranteed Investment Contract
or its successor or assignee and any provider of a replacement Mortgages
Trustee GIC Account;

 

Mortgages Trustee GIC Rate means the rate of interest accruing on the
balance standing to the credit of the Mortgages Trustee GIC Account equal to a
rate of three month LIBOR less 0.25 per cent. per annum;

 

Mortgages Trustee Guaranteed Investment Contract or Mortgages Trustee GIC Account Agreement
means the guaranteed investment contract entered into on the Initial Closing
Date between the Mortgages Trustee, the Mortgages Trustee GIC Provider, the
Cash Manager and the Security Trustee in relation to interest to be earned on
the Mortgages Trustee GIC Balance (as the same may be amended and/or
supplemented from time to time);

 

Mortgages Trustee Ledgers means the Principal Ledger, the Revenue
Ledger, the Losses Ledger and the Funding 1 Share/Seller Share Ledger;

 

Mortgages Trustee Tracker Rate means the rate of interest (before
applying any cap or minimum rate) which is set by the Servicer from time to
time in respect of Tracker Rate Loans pursuant to Clause 4.1 of the Servicing
Agreement;

 

Mortgages Trustee Variable Base Rate means the variable base rates
which apply to the Variable Rate Loans in the Portfolio as set, other than in
limited circumstances, by the Servicer, as set out in Clause 4.1 of the Servicing
Agreement;

 

Mortgages Trust Principal Priority of Payments means the order in which the
Cash Manager applies Principal Receipts on the Loans on each Distribution Date
to each of Funding 1 and the Seller, depending on whether a Trigger Event has
occurred, as set out in Clause 11 of the Mortgages Trust Deed;

 

Mortgages Trust Revenue Priority of Payments means the order in which the
Cash Manager applies the Mortgages Trust Available Revenue Receipts on each Distribution
Date, as set out in Clause 10 of the Mortgages Trust Deed;

 

New Bullet Term Advance means any term advance made under a New
Intercompany Loan Agreement where the full amount of principal on such term
advance is scheduled for repayment on a single interest payment date (other
than the final repayment date);

 

New Deed of Accession means any new deed of accession to the
Funding 1 Deed of Charge entered into on any New Issuer Closing Date
between Funding 1, each Issuer, the Corporate

 

32

 

Services Provider, the Account Bank, the
Security Trustee, the Seller, each Start-up Loan Provider, the Cash Manager,
the Funding 1 Swap Provider and the Funding 1 Liquidity Facility Provider as
supplemented, amended and/or restated from time to time;

 

New Funding 1 Secured Creditor means such other creditor of Funding 1 who
accedes to the Funding 1 Deed of Charge from time to time including pursuant to
an Accession Undertaking;

 

New Funding 1 Swap means a new swap under the existing
Funding 1 Swap Agreement;

 

New Intercompany Loan means a loan of the proceeds of any issue
of New Notes, such loan being advanced to Funding 1 by a New Issuer pursuant to
the terms of a New Intercompany Loan Agreement;

 

New Intercompany Loan Agreement means a new intercompany loan
agreement entered into between Funding 1 and a New Issuer in relation to a New
Intercompany Loan;

 

New Intercompany Loan Confirmation means a new Intercompany Loan
Confirmation confirming the terms of the New Intercompany Loan Agreement;

 

New Issuer means a new wholly owned subsidiary of Holdings,
which is established to issue New Notes and to make a New Intercompany Loan to
Funding 1;

 

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

 

New Issuer Security means security created by any New Issuer;

 

New Issue Swap Provider means any entity who enters into a hedging
arrangement with a New Issuer;

 

New Issuer Transaction Document means any document or
agreement to which any New Issuer is a party (together the New Issuer Transaction Documents);

 

New Liquidity Facility Provider means a new liquidity
facility provider to Funding 1 and/or, as the context may require, to the
Issuer(s);

 

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

 

New Loan Type means on any date a type of Loan:

 

(a)                                  which has one or more features
(including, without limitation, relating to the applicable lending criteria
used to originate such type of Loan, the purpose of such type of Loan, the
manner of calculating interest or fixing the interest rate in relation to such
type of Loan and/or the terms for repayment of principal in relation to such
type of Loan) which mean that such type of Loan is generally regarded as a
distinct category of mortgage loan within the UK mortgage industry and/or by
one of more of the Rating Agencies; and

 

(b)                                 where no such type of Loan is
at that date, or has previously been, comprised in the Mortgages Trust,

 

33

 

(and such types include Flexible Loans,
HomeOwner Loans, Deedstore Loans, capped rate loans, buy-to-let loans,
right-to-buy loans, limited recourse loans, equity release loans and drawdown
loans as at the Initial Closing Date);

 

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

 

New Portfolio means in each case the portfolio of Loans and their
Related Security (other than any Loans and their Related Security which have
been redeemed in full prior to the Sale Date or which do not otherwise comply
with the terms of Clause 4 of the Mortgage Sale Agreement as
at the Sale Date), particulars of which are set out in the relevant New
Portfolio Notice or in a document stored upon electronic media (including, but
not limited to, a CD-ROM), and all right, title, interest and benefit of the
Seller in and to:

 

(a)                                  all payments of principal and
interest (including, for the avoidance of doubt, all Accrued Interest, Arrears
of Interest, Capitalised Expenses and Capitalised Arrears) and other sums due
or to become due in respect of such Loans and their Related Security including,
without limitation, the right to demand, sue for, recover and give receipts for
all principal monies, interest and costs and the right to sue on all covenants
and any undertakings made or expressed to be made in favour of the Seller under
the applicable Mortgage Terms;

 

(b)                                 subject where applicable to
the subsisting rights of redemption of Borrowers, all Deeds of Consent, Deeds
of Postponement, MHA Documentation and all third party guarantees and any other
collateral security for the repayment of the relevant New Loans secured by the
relevant New Mortgages;

 

(c)                                  the right to exercise all the
powers of the Seller in relation thereto;

 

(d)                                 all the estate and interest in
the relevant Properties vested in the Seller;

 

(e)                                  each relevant Certificate of
Title and Valuation Report and any right of action of the Seller against any
solicitor, licensed conveyancer, qualified conveyancer, valuer or other person
in connection with any report, valuation, opinion, certificate or other
statement of fact or opinion given in connection with such Loans and their
Related Security, or any part thereof or affecting the decision of the Seller
to make or offer to make any such Loan or part thereof;

 

(f)                                    the proceeds of all claims to
which the Seller is entitled under the Buildings Policies and the Properties in
Possession Cover;

 

(g)                                 the MIG Policies, so far as
they relate to the New Loans comprised in the relevant portfolio of Loans and
their Related Security, including the right to receive the proceeds of any
claims; and

 

(h)                                 all proceeds from the
enforcement of such Loans and their Related Security;

 

New Portfolio Notice means a notice in the form set out in
Schedule 12 to the Mortgage Sale Agreement served in accordance with the terms
of the Mortgage Sale Agreement;

 

New Related Security means the Related Security for the New
Loans (including any Mortgages) sold to the Mortgages Trustee by the Seller;

 

34

 

New Scheduled Amortisation Term Advance means any Term Advance made
under a New Intercompany Loan Agreement which is referred to as a Scheduled Amortisation
Term Advance in the offering document or prospectus relating to any relevant
New Issuer;

 

New Start-up Loan means a loan issued to Funding 1 under a
New Start-up Loan Agreement;

 

New Start-up Loan Agreement means a loan agreement under which the
Start-up Loan Provider or a New Start-up Loan Provider shall provide Funding 1
with a New Start-up Loan for the purposes of meeting the costs of the New Issue
and/or further funding the Reserve Fund, if required;

 

New Start-up Loan Provider means an entity who shall supply a New
Start-up Loan to Funding 1;

 

New Term Advance means an advance of funds by a New Issuer
to Funding 1 under the terms of a New Intercompany Loan Agreement, which
advance is funded by a corresponding class of New Notes;

 

New York Business Day means a day (other than a Saturday or a
Sunday) on which banks are generally open for business (including dealings in
foreign currency) in the city of New York;

 

Non-Asset Trigger Event means the occurrence of any of the
following events on a Calculation Date:

 

(a)                                  an Insolvency Event occurs in
relation to the Seller on or about that Calculation Date;

 

(b)                                 the role of the Seller as
Servicer under the Servicing Agreement is terminated and a new Servicer is not
appointed within 60 days of such termination;

 

(c)                                  as at the Calculation Date
immediately preceding the relevant Calculation Date the Current Seller Share is
equal to or less than the Minimum Seller Share; or

 

(d)                                 on any Calculation Date, the
Outstanding Principal Balance of Loans comprising the Trust Property at that
date (i) during the period from and including the Fourth Issuer Closing Date up
to and excluding the Funding 1 Interest Payment date in June 2006 is less than
£21,500,000,000 or (ii) during the period from and including the Funding 1
Interest Payment in June 2006 Date to but excluding the Interest Payment Date
in June 2008 is less than £15,750,000,000

 

Normal Calculation Date means the first day (or, if not a London
Business Day, the next succeeding London Business Day) of each month;

 

Note Acceleration Notice means a First Issuer Note Acceleration
Notice, a Second Issuer Note Acceleration Notice, a Third Issuer Note
Acceleration Notice, a Fourth Issuer Note Acceleration Notice or such other
acceleration notice served in relation to the Notes pursuant to the relevant
terms and conditions thereof;

 

Note Determination Date means two Business Days prior to each
Funding 1 Interest Payment Date;

 

Note Event of Default means the occurrence of an event of
default by the relevant Issuer as specified in the relevant Conditions of the
Notes (including a First Issuer Note Event of

 

35

 

Default, a Second Issuer Note Event of
Default, a Third Issuer Note Event of Default and a Fourth Issuer Note Event of
Default);

 

Notes means the First Issuer Notes, the Second Issuer
Notes, the Third Issuer Notes, the Fourth Issuer Notes and/or as the context
may require, any New Notes;

 

Note Trustee means The Bank of New York, acting through its
offices at 48th Floor, One Canada Square, London E14 5AL or such other person
or companies as may from time to time be appointed as Note Trustee (or
co-trustee) pursuant to the First Issuer Trust Deed and/or the Second Issuer
Trust Deed and/or the Third Issuer Trust Deed and/or the Fourth Issuer Trust
Deed;

 

Notice of Extension has the meaning given to it in Clause
2.3(c) of the Funding 1 Liquidity Facility Agreement;

 

Novation Certificate means a certificate to effect a novation
of the Funding 1 Liquidity Facility under the Funding 1 Liquidity Facility
Agreement, substantially in the form set out in Schedule 4 to the Funding 1
Liquidity Facility Agreement;

 

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

 

Original Bullet Term Advance means a Term Advance which at any time has
been a Bullet Term Advance (even if such Term Advance has subsequently become a
Pass-Through Term Advance);

 

Original Pass-Through Term Advance means a Term Advance which,
at the time it was advanced, was a Pass-Through Term Advance;

 

Original Scheduled Amortisation Instalment means that part of a Term
Advance which at any time has been a Scheduled Amortisation Instalment (even if
such Term Advance has subsequently become a Pass-Through Term Advance);

 

Original Scheduled Amortisation Term Advance means a Term Advance which at
any time has been a Scheduled Amortisation Term Advance (even if such Term
Advance has subsequently become a Pass-Through Term Advance);

 

Outstanding Principal Balance:

 

(a)                                  in relation to a Loan at any
date (the determination
date), means the aggregate principal balance of the Loan at such
date (but avoiding double counting) including:

 

(i)                                     the Initial Advance;

 

(ii)                                  Capitalised Expenses;

 

(iii)                               Capitalised Arrears; and

 

(iv)                              in increase in the principal
amount due under that Loan due to the Borrower making Flexible Drawings and/or
taking Payment Holidays or making Underpayments,

 

in each
case relating to such Loan less any prepayment, repayment or payment of the
foregoing made on or prior to the determination date;

 

36

 

(b)                                 in relation to an Intercompany
Loan at any date, means the unpaid principal balance of that Intercompany Loan
at that date (including any capitalised arrears) or, as the context so
requires, of a Term Advance made under that Intercompany Loan; and

 

(c)                                  in relation to any Notes at
any date, means the unpaid principal balance of those Notes, or, as the context
so requires, any series and/or class of such Notes as at that date;

 

Overpayment means a payment by a Borrower in an amount greater
than the Monthly Payment then due on the Loan;

 

Pass-Through Repayment Restrictions means, at any time on a
Funding 1 Interest Payment Date, no amount may be applied in repayment of any
Original Pass-Through Term Advance unless:

 

(a)                                  the sum of the Cash
Accumulation Ledger Amount and the amount of Funding 1 Available Principal
Receipts after the application of items (a), (b) and (c) and before item (d) of
the Funding 1 Pre-Enforcement Principal Priority of Payments,

 

is
greater than or equal to

 

(b)                                 the sum of the Cash
Accumulation Liability and the aggregate amount of all Original Pass-Through
Term Advances which are due and payable as at that time;

 

Pass-Through Term Advance means a Term Advance which has no
Scheduled Repayment Date(s) other than a Final Repayment Date; or if a Trigger
Event occurs or, the relevant Issuer Security and/or Funding 1 Security is
enforced, the Bullet Term Advance or the Scheduled Amortisation Term Advance
will be deemed to be a Pass-Through Term Advance;

 

Payable Pass-Through Term Advances in relation to the
Intercompany Loan has the meaning given in Part II of Schedule 3 to the Funding
1 Deed of Charge;

 

Payment Holiday means the period of time that a Borrower
under a Loan refrains from making payments of interest and principal on his
Loan as expressly permitted by the terms of the Borrower’s Loan;

 

Perfection means the perfection of certain matters relating to
the sale and purchase of the Portfolio as contemplated in, pursuant to and in
accordance with Clause 6 of the Mortgage Sale Agreement;

 

Personal Data means any information of what
ever nature satisfying the definition of ‘personal data’ in the Act that , by
whatever means, is provided to the Data Processor by the Data Controller, is
accessed by the Data Processor on the authority of the Data Controller or is
otherwise received by the Data Processor on the Data Controller’s behalf, for
the purposes of the Processing specified in Clause 3.1(a) of the Data
Processor Agreement dated on or about the Closing Date and made between the
Data Controller and the Data Processor;

 

Portfolio means the Initial Portfolio and any New Portfolio
(other than any Loan and its Related Security which has been redeemed in full
or repurchased by the Seller pursuant to Clause 8 of the Mortgage Sale Agreement);

 

Post-Enforcement Call Option Holder means Permanent PECOH Limited
(registered number 4267666), a limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE;

 

37

 

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

 

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

 

Principal Deficiency means any losses arising in relation to a
Loan in the Portfolio which causes a shortfall in the amount available to pay
principal on the Term Advances;

 

Principal Deficiency Ledger means the ledger of such name maintained
by the Cash Manager pursuant to the Cash Management Agreement, comprising, as
at the date hereof, four sub-ledgers, the AAA Principal Deficiency Sub-Ledger,
the AA Principal Deficiency Sub-Ledger, the A Principal Deficiency Sub-Ledger
and the BBB Principal Deficiency Sub-Ledger, but which may comprise additional
sub ledgers as required;

 

Principal Deficiency Sub-Ledger means singly or together (as
the context requires) the AAA Principal Deficiency Sub-Ledger, the AA Principal
Deficiency Sub-Ledger, the A Principal Deficiency Sub-Ledger, the BBB Principal
Deficiency Sub-Ledger and/or such additional principal deficiency sub ledgers
that may be established from time to time after the Initial Closing Date;

 

Principal Issuers has the meaning given in Clause 5.4
of the Funding 1 Deed of Charge;

 

Principal Ledger means the ledger of such name maintained
by the Cash Manager, pursuant to the Cash Management Agreement and Clause 14
of the Mortgages Trust Deed to record the Principal Receipts on the Loans and
distributions of such Principal Receipts to the Beneficiaries;

 

Principal Payment Rate or PPR means the average monthly rolling
principal payment rate on the Loans for the 12 months immediately preceding the
relevant Distribution Date calculated on each such date by:

 

(a)                                  dividing (i) the aggregate
Principal Receipts received in relation to the Loans during the immediately
preceding month on such calculation date by (ii) the aggregate Outstanding
Principal Balance of the Loans or the previous calculation date;

 

(b)                                 aggregating the result of the
calculation in (a) above with the results of the equivalent calculation made on
each of the eleven most recent calculation dates during the relevant 12 month
period; and

 

(c)                                  dividing the result of the
calculation in (b) above by 12;

 

Principal Receipts means any payment in respect of principal
received in respect of any Loan (including payments pursuant to any Insurance
Policies), whether as all or part of a Monthly Payment in respect of such Loan,
on redemption (including partial redemption) of such Loan, on enforcement of
such Loan (including the proceeds of sale of the relevant Property) or on the
disposal of such Loan plus on any Monthly Payment Date an amount equal to the
amount (if any) by which arrears in respect of the Loans comprised in the
Portfolio on the relevant Closing Date exceeds such arrears on such Monthly
Payment Date (without double counting but including principal received or
treated as received after completion of the enforcement procedures);

 

38

 

Principal Term Advances has the meaning given in Clause 5.4
of the Funding 1 Deed of Charge;

 

Processing has the meaning given to it in the Act;

 

Product Switch means a variation to the financial terms
or conditions included in the Mortgage Terms applicable to a Loan other than:

 

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

 

(b)                                 any variation to the interest
rate as a result of Borrowers being linked to HVR2;

 

(c)                                  any variation in the maturity
date of a Loan unless, while the First Issuer Intercompany Loan, the Second
Issuer Intercompany Loan, the Third Issuer Intercompany Loan and/or Fourth
Issuer Intercompany Loan is outstanding, it is extended beyond June, 2040;

 

(d)                                 any variation imposed by
statute;

 

(e)                                  any variation of the rate of
interest payable in respect of the loan where that rate is offered to the
Borrowers of more than 10 per cent. of the outstanding principal amount of
loans in the Trust Property in any Interest Period; or

 

(f)                                    any variation in the frequency
with which the interest payable in respect of the Loan is charged;

 

Properties in Possession Cover means in relation to policies issued
before 1st January, 2004, the properties in possession cover written by Royal
& Sun Alliance Insurance PLC and in relation to policies or renewals issued
on or after 1st January, 2004, the properties in possession cover written by St
Andrew’s Insurance, in favour of the Seller and any endorsements or extensions
thereto as issued from time to time, or any such similar alternative or
replacement policy or policies as may in future be issued in favour of the
Seller;

 

Property means a freehold, heritable or leasehold property (or
in Scotland a property held under a long lease) which is subject to a Mortgage;

 

Provisional Portfolio means the portfolio of Loans and their
Related Security, particulars of which are set out in Part 1 of the Exhibit to
the Mortgage Sale Agreement or in a document stored upon electronic media
(including, but not limited to, a CD-ROM), and all right, title, interest and
benefit of the Seller in and to:

 

(a)                                  all payments of principal and
interest (including, for the avoidance of doubt, all Accrued Interest, Arrears
of Interest, Capitalised Expenses and Capitalised Arrears) and other sums due
or to become due in respect of such Loans and Related Security including,
without limitation, the right to demand, sue for, recover and give receipts for
all principal monies, interest and costs and the right to sue on all covenants
made or expressed to be made in favour of the Seller under the applicable Mortgage
Terms;

 

(b)                                 subject where applicable to
the subsisting rights of redemption of Borrowers, all Deeds of Consent, Deeds
of Postponement or any collateral security for the repayment of the relevant
Loans secured by the Mortgages;

 

(c)                                  the right to exercise all the
powers of the Seller in relation thereto;

 

39

 

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

 

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

 

(f)                                    all rights, title and
interests of the Seller (including, without limitation, the proceeds of all
claims) to which the Seller is entitled under the Buildings Policies and the
Properties in Possession Cover; and

 

(g)                                 the MIG Policies, so far as
they relate to the Loans comprised in that portfolio of Loans and their Related
Security, including the right to receive the proceeds of any claim;

 

Purchase Price is the sum of £3,500,000,000 paid by
Funding 1 to the Seller in consideration of the Seller’s assignment of the
Initial Portfolio (together with any Accrued Interest and Arrears of Interest
as at the Initial Closing Date) to the Mortgages Trustee and the Funding 1
Share thereof;

 

Qualifying Lender means a lender which is (on a date that
any payment of interest to it under the Funding 1 Liquidity Documents falls
due):

 

(a)                                  (i)            a bank (as defined for the purpose of section 349 ICTA);
or

 

(ii)                                  in respect of an advance made
under a Funding 1 Liquidity Document by a person that was a bank (as defined
for the purpose of section 349 as above) at the time that such advance was
made, a person, which is within the charge to United Kingdom corporation tax as
regards any payments of interest received by it under the Funding 1 Liquidity
Documents and is the beneficial owner of that interest at the time the interest
is paid; or

 

(b)                                 (i)            a company resident in the United Kingdom for United
Kingdom tax purposes; or

 

(ii)                                  a partnership each member of
which is:

 

(aa)                            a company resident in the
United Kingdom for United Kingdom tax purposes; or

 

(bb)                          a company not so resident in
the United Kingdom which carries on a trade in the United Kingdom through a
permanent establishment and which brings into account in computing its
chargeable profits (within the meaning of Section 11(2) ICTA) the whole of any
share of interest payable under a Funding 1 Liquidity Document that falls to it
by reason by Sections 114 and 115 ICTA;

 

(iii)                               a company not so resident in
the United Kingdom which carries on a trade in the United Kingdom through a
permanent establishment and which brings into account payments of interest made
to it under a Funding 1 Liquidity Document in computing its chargeable profits
(within the meaning given by section 11(2) ICTA),

 

40

 

which,
in each case, is beneficially entitled to the relevant  payment of interest made to it under the
Funding 1 Liquidity Documents at the time the interest is paid; or

 

(c)                                  a Treaty Lender; or

 

(d)                                 a building society authorised
under the Building Societies Act 1986 and entitled to receive interest without
deduction or withholding on account of United Kingdom Tax to which the Income
Tax (Building Societies) (Dividends and Interest) Regulations 1990 (or other
regulations made under sub-section 477A(1) of the Income and Corporation Taxes
Act 1988) apply;

 

Quarterly CPR on any date means the average of the three most
recent CPRs;

 

Rating Agencies means S&P, Moody’s and Fitch;

 

Reasonable, Prudent Mortgage Lender means a reasonably prudent
prime residential mortgage lender lending to borrowers in England, Wales and
Scotland who generally satisfy the lending criteria of traditional sources of
residential mortgage capital;

 

Receiver means any person or persons appointed (and any
additional person or persons appointed or substituted) as an administrative
receiver, receiver, manager, or receiver and manager of the Funding 1 Charged
Property by the Security Trustee pursuant to Clause 13.1 of the Funding 1
Deed of Charge;

 

Redemption Fee means the standard redemption fee charged
to the Borrower by the Seller where the Borrower makes a repayment of the full
outstanding principal of a Loan;

 

Reference Banks means the principal London office of each
of ABN AMRO Bank N.V., Barclays Bank PLC, Citibank, N.A. and the Royal Bank of
Scotland plc and/or such other bank as may be appointed agent bank from time to
time pursuant to the Fourth Issuer Paying Agent and Agent Bank Agreement or, as
the context may require, the Third Issuer Paying Agent and Agent Bank
Agreement, the Second Issuer Paying Agent and Agent Bank Agreement or First
Issuer Paying Agent and Agent Bank Agreement;

 

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

 

Registered Transfer means a deed of transfer of a Mortgage or
Mortgages over Registered Land substantially in the form set out in Schedule 2
to the Mortgage Sale Agreement with such modifications as may be required from
time to time;

 

Related Security means, in relation to a Loan, the security
for the repayment of that Loan including the relevant Mortgage and all other
matters applicable thereto acquired as part of the Portfolio sold to the
Mortgage Trustee pursuant to Clause 2.1 or Clause 4.1 of the Mortgage
Sale Agreement including (without limitation):

 

(a)                                  the benefit of all affidavits,
consents, renunciations, guarantees, indemnities, waivers and postponements
(including, without limitation, Deeds of Consent, Deeds of Postponement and MHA
Documentation) from occupiers and other persons having an interest in or rights
in connection with the relevant Property;

 

(b)                                 each right of action of the
Seller against any person (including, without limitation, any valuer, licensed
or qualified conveyancer, solicitor and any registrar or registry) in
connection with any report, valuation, opinion, certificate or other statement
of fact

 

41

 

or opinion (including, without limitation,
each Certificate of Title and Valuation Report) given or received in connection
with all or part of any Loan and its Related Security or affecting the decision
of the Seller to make or offer to make all or part of the relevant Loan; and

 

(c)                                  the benefit of (including,
without limitation, the rights as the insured person under and as notations of
interest on, returns of premium and proceeds of claims under) insurance and
assurance policies (including, the Buildings Policies and MIG Policies)
deposited, charged, obtained, or held in connection with the relevant Loan,
Mortgage and/or Property and Loan Files;

 

(but excluding, for the avoidance of doubt,
the Properties in Possession Cover in respect of which the Mortgages Trustee,
Funding 1 and the Security Trustee have received the Insurance
Acknowledgement);

 

Relevant Accumulation Amount means the amount of funds to be
accumulated over a Cash Accumulation Period in order to repay a Bullet Term
Advance or a Scheduled Amortisation Instalment on its Scheduled Repayment Date;

 

Relevant Event means, in relation to the Funding 1
Liquidity Facility Provider:

 

(a)                                  the downgrade on any day of
the Funding 1 Liquidity Facility Provider’s short-term, unsecured,
unsubordinated and unguaranteed debt to below the Requisite Ratings; or

 

(b)                                 the refusal by the Funding 1
Liquidity Facility Provider, to grant an extension of the Funding 1 Liquidity
Facility Commitment Period, in accordance with Clause 2.3 of the Funding 1
Liquidity Facility Agreement;

 

Relevant Screen Rate in relation to each Intercompany Loan
means (a) in respect of the first Interest Period, the Initial Relevant Screen
Rate specified in the relevant Intercompany Loan Confirmation; and (b) in
respect of subsequent Interest Periods, means the arithmetic mean of offered
quotations for three-month Sterling deposits in the London inter-bank market
displayed on the Dow-Jones/Telerate Monitor at Telerate Page No. 3750; in each
case, displayed on the above mentioned page of the Dow-Jones/Telerate Monitor
(or such replacement page on that service which displays the information) or,
if that service ceases to display the information, such other screen service as
may be determined by Funding 1 with the approval of the Security Trustee
(rounded upwards, if necessary, to five decimal places);

 

Relevant Share Calculation Date means the Calculation Date at
the start of the most recently completed Calculation Period;

 

Repayment Date has the meaning given to it in Clause
2.3(d) of the Funding 1 Liquidity Facility Agreement;

 

Repayment Requirement means on a Calculation Date, the amount,
if any, by which the aggregate of all amounts that will be payable by Funding 1
on the next Funding 1 Interest Payment Date as described in paragraphs 2.1 (d)
to (f) (inclusive) of Part II of Schedule 3 to the Funding 1 Deed of Charge on
the basis:

 

(a)                                  that there would be no
deferral in relation to Term Advances pursuant to Rule (1) set out in paragraph
2.2(a) of Part II of Schedule 3;

 

(b)                                 that where Rule (2) or Rule
(3) as set out in paragraph 2.2(a) of Part II of Schedule 3 applies to an
Intercompany Loan, the amount so payable by Funding 1 in respect of

 

42

 

Term Advances (other than Bullet Term
Advances and Scheduled Amortisation Instalments) under that Intercompany Loan
shall be treated as the lesser of (A) the amount due and payable in respect of
those Term Advances, and (B) the product of (i) the Funding 1 Share Percentage
as at the start of the most recently ended Calculation Period (provided
that if during the most recently ended Calculation Period Loans and their
Related Security are sold to the Mortgages Trustee or Funding 1 has acquired
part of the Seller Share of the Trust Property from the Seller, then the
Funding 1 Share Percentage will be calculated for purposes of this paragraph as
the weighted average of the Funding 1 Share Percentages as of the first day of
such Calculation Period and as of the date immediately after such sale or
acquisition, (ii) the aggregate amount of principal receipts received by the
mortgages trustee during the most recently ended Calculation Period (iii) the
Outstanding Principal Balance of Intercompany Loan A (in the case of Rule (2))
or Intercompany Loan B (in the case of Rule (3)), divided by the aggregate
outstanding principal balance of all Intercompany Loans, each as of the most
recent Funding 1 Interest Payment Date;

 

(c)                                  that Term Advances will be
treated as due and payable if they are already due and payable, or would become
due and payable on or before the next Funding 1 Interest Payment Date if all
Principal Receipts were paid to Funding 1 on that Calculation Date; and

 

(d)                                 excluding amounts due and
payable in respect of Bullet Term Advances and Scheduled Amortisation
Instalments,

 

exceeds
the sum of:

 

(e)                                  the amounts standing to the
credit of the Funding 1 Principal Ledger as at the last Funding 1 Interest
Payment Date (which amount was not distributed on that Funding 1 Interest
Payment Date to the First Issuer); and

 

(f)                                    the sum of each Repayment
Requirement amount paid to Funding 1 on a previous Distribution Date during the
relevant interest period;

 

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

 

Requisite Rating means in respect of the Funding 1
Liquidity Facility Provider as provider of the Funding 1 Liquidity Facility, a
rating of P-1 by Moody’s, F1 by Fitch and A+ by S&P;

 

Reserve Funds means the General Reserve Fund and the Liquidity
Reserve Fund;

 

Revenue Ledger means the ledger maintained by the Cash
Manager pursuant to the Cash Management Agreement and Clause 14 of the Mortgages
Trust Deed to record Revenue Receipts received by the Mortgage Trustee and
payment of the same to Beneficiaries;

 

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

 

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

 

43

 

Sale Date means the date on which any New Portfolio is sold to
the Mortgages Trustee in accordance with Clause 4 of the Mortgage Sale Agreement;

 

Sasine Transfer means, in relation to Properties situated
in Scotland title to which is recorded in the General Register of Sasines, each
assignation of the relevant Scottish Loans and their related Scottish Mortgages
in the relevant form set out in Schedule 14 to the Mortgage Sale Agreement with
such modifications as may be required from time to time;

 

Scheduled Amortisation Instalment means that part of a
Scheduled Amortisation Term Advance which is payable on each of the Scheduled
Repayment Dates of that Term Advance;

 

Scheduled Amortisation Repayment Restrictions means at any time on a
Funding 1 Interest Payment Date:

 

(a)                                  where there is not a Bullet
Accumulation Shortfall at that time, the total amount withdrawn from the Cash
Accumulation Ledger on that Funding 1 Interest Payment Date for repayment of
the relevant Scheduled Amortisation Instalments shall not exceed the Cash
Accumulation Ledger Amount less the Bullet Accumulation Liability at that time;
and

 

(b)                                 where there is a Bullet
Accumulation Shortfall at that time:

 

(i)                                     no amount may be withdrawn
from the Cash Accumulation Ledger on that Funding 1 Interest Payment Date to be
applied in repayment of the relevant Scheduled Amortisation Instalments; and

 

(ii)                                  no amount may be applied in
repayment of the relevant Scheduled Amortisation Instalments unless:

 

(A)                              the sum of the Cash
Accumulation Ledger Amount and the amount of Funding 1 Available Principal
Receipts after the application of items (a), (b) and (c) and before item (d) of
the Funding 1 Pre-Enforcement Principal Priority of Payments,

 

is
greater than or equal to

 

(B)                                the sum of the Bullet
Accumulation Liability and the aggregate amount of Scheduled Amortisation
Instalments which are due and payable as at that time;

 

Scheduled Amortisation Term Advance means the Second Issuer
Series 3 Term AAA Advance, the Third Issuer Series 3 Term AAA Advance, the
Third Issuer Series 4 Term AAA Advances and any New Scheduled Amortisation Term
Advance;

 

Scheduled Repayment Date in relation to a Term Advance means its
Scheduled Repayment Date(s), as defined in the relevant Issuer Master
Definitions and Construction Schedule relating to the corresponding class of
Issuer Notes;

 

Scottish Declaration of Trust means each declaration of trust entered
into among the Seller, the Mortgage Trustee and Funding 1 pursuant to Clauses
4.5(a)(vi) of the Mortgage Sale Agreement substantially in the form set out in
Schedule 15 to the Mortgage Sale Agreement;

 

Scottish Loan means a Loan secured by a standard security over a
Property located in Scotland;

 

44

 

Scottish Mortgage means a Mortgage securing a Scottish Loan;

 

Scottish Transfers means each Sasine Transfer and each SLR
Transfer;

 

Scottish Trust Property means the aggregate of all Scottish Trust
Property as defined in each relevant Scottish Declaration of Trust;

 

Search Indemnity Policy means the search indemnity policy written
by Royal & Sun Alliance Insurance PLC in favour of the Seller and any endorsements
or extensions thereto as issued from time to time, or any such similar
alternative or replacement policy or policies as may in future be issued in
favour of the Seller;

 

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

 

Second Issuer means Permanent Financing (No. 2) PLC (registered
number 4623188), a public limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE;

 

Second Issuer Closing Date means on or about 6th March, 2003;

 

Second Issuer Intercompany Loan Agreement means the Second Issuer
Intercompany Loan Confirmation and the Intercompany Loan Terms and Conditions
together entered into on the Second Issuer Closing Date by the Second Issuer,
Funding 1 and the Security Trustee (as the same may be amended and/or
supplemented from time to time);

 

Second Issuer Security means the security created by the Second
Issuer pursuant to the Second Issuer Deed of Charge in favour of the Second
Issuer Secured Creditors;

 

Second Start-up Loan means the start-up loan that the Second
Start-up Loan Provider has made available to Funding 1 pursuant to the Second
Start-up Loan Agreement;

 

Second Start-up Loan Agreement means the agreement entered into on the
Second Issuer Closing Date between Funding 1, the Second Start-up Loan Provider
and the Security Trustee relating to the provision of the Second Start-up Loan
to Funding 1 (as the same may be amended and/or supplemented from time to
time);

 

Second Start-up Loan Provider means Halifax in its capacity as provider
of the Second Start-up Loan;

 

Second Supplemental Funding 1 Deed of Charge means the second supplemental
Funding 1 deed of charge entered into on or around the date of Fourth Issuer
Closing Date between Funding 1, the First Issuer, the Second Issuer, the Third
Issuer, the Fourth Issuer, the Security Trustee, the Mortgages Trustee, the
Cash Manager, the Account Bank, the Funding 1 GIC Provider, the Funding 1 Swap
Provider, the First Start-up Loan Provider, the Second Start-up Loan Provider,
the Third Start-up Loan Provider and the Fourth Start-up Loan Provider, the
Funding 1 Liquidity Facility Provider and the Funding 1 Corporate Services
Provider and the Seller;

 

Secured Amounts means any and all of the moneys and
liabilities which an Issuer covenants to pay or discharge under of the relevant
Issuer Deed of Charge and all other amounts owed by it to the Beneficiaries
under and pursuant to the relevant Transaction Documents;

 

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

 

45

 

Security Interest or Encumbrance means any mortgage, sub
mortgage, standard security, charge, sub charge, pledge, lien (other than a
lien arising in the ordinary course of business or by operation of law)
assignation in security or other encumbrance or security interest howsoever
created or arising;

 

Security Power of Attorney means the power of attorney granted by
Funding 1 in favour of the Security Trustee under the Funding 1 Deed of Charge
on the Initial Closing Date substantially in the form set out in Schedule 1 to
the Funding 1 Deed of Charge;

 

Security Trustee means The Bank of New York, acting through
its offices at 48th Floor, One Canada Square, London E14 5AL or such other
persons or companies as may from time to time be appointed as Security Trustee
(or co-trustee) pursuant to the term of the First Issuer Deed of Charge and/or
the Second Issuer Deed of Charge and /or the Third Issuer Deed of Charge and/or
the Fourth Issuer Deed of Charge and/or the Funding 1 Deed of Charge;

 

Seller means Halifax;

 

Seller Bank Accounts means the bank account(s) of the Seller
into which monies may be paid from time to time pursuant to the terms of the
Mortgages Trust Deed, details of which will be given to the Mortgages Trustee
and Funding 1;

 

Seller Power of Attorney means the power of attorney granted by the
Seller in favour of Funding 1, the Mortgages Trustee and the Security Trustee
on the Initial Closing Date and on the Fourth Issuer Closing Date,
substantially in the form set out in Schedule 5 to the Mortgage Sale Agreement;

 

Seller Share means, only in respect of the period prior to the
first Distribution Date, the Initial Seller Share and thereafter means the
Current Seller Share;

 

Seller Share Percentage means, only in respect of the period prior
to the first Distribution Date, the Initial Seller Share Percentage and
thereafter means the Current Seller Share Percentage;

 

Seller’s Policy means the originating, underwriting,
administration, arrears and enforcement policy applied by the Seller from time
to time to loans and the security for their repayment which are beneficially
owned solely by the Seller;

 

Servicer means Halifax, or such other person as may from time
to time be appointed as servicer of the Portfolio pursuant to the Servicing
Agreement;

 

Servicer Termination Event means any of the events listed in Clause 21
of the Servicing Agreement;

 

Services has the meaning set out in Clause 3.1(a) of the
Servicing Agreement;

 

Servicing Agreement means the agreement entered into on the
Initial Closing Date between the Servicer, the Mortgages Trustee, the Security
Trustee, Funding 1 and the Seller (as amended and restated on the Second Issuer
Closing Date, the Third Issuer Closing Date and as further amended and restated
on the Fourth Issuer Closing Date and from time to time) pursuant to which the
Servicer agrees to administer the Loans and their Related Security comprised in
the Portfolio (as the same may be further amended and/or supplemented from time
to time);

 

46

 

Share Trustee means, in respect of Holdings, SFM Corporate Services
Limited of Blackwell House, Guildhall Yard, London EC2V 5AE; and in respect of
Mortgages Trustee, SFM Offshore Limited of 47 Esplanade, St. Helier, Jersey JE1
0BD, Channel Islands;

 

SLR Transfer means, in relation to Properties situated in Scotland
title to which is registered or is in the course of being registered in the
Land Register of Scotland, each assignation of the relevant Scottish Loans and
their related Scottish Mortgages in the relevant form set out in Schedule 12 to
the Mortgage Sale Agreement with such modifications as may be required from
time to time;

 

standard security means a standard security as defined in
Part II of the Conveyancing and Feudal Reform (Scotland) Act 1970;

 

Standard Documentation means the standard documentation, a list
of which is set out in Part 2 of the Exhibit to the Mortgage Sale Agreement and
copies of which have been initialled on behalf of the parties thereto for the
purposes of identification, or any update or replacement therefor as the Seller
may from time to time introduce acting in accordance with the standards of a
reasonable, prudent mortgage lender;

 

St Andrew’s Insurance means St Andrew’s Insurance, a non-life
insurance company incorporated on 15th September, 2003 whose offices are at St
Andrew’s House, Portsmouth Road, Esher, Surrey;

 

Start-up Loan Agreements means the First Start-up Loan Agreement,
the Second Start-up Loan Agreement, the Third Start up Loan Agreement, the
Fourth Start-up Loan Agreement and any New Start-up Loan Agreements and Start-up
Loan Agreement means any of them;

 

Start-up Loan Providers means the First Start-up Loan Provider,
the Second Start-up Loan Provider, the Third Start-up Loan Provider, the Fourth
Start-up Loan Provider or, as the context may require, any New Start-up Loan
Provider and Start-up Loan Provider means any of them;

 

Start-up Loans means the First Start-up Loan, the Second
Start-up Loan, the Third Start-up Loan, the Fourth Start-up Loan and any New
Start-up Loan;

 

Step-up Date means:

 

(a)                                  in respect of any Intercompany
Loan, the Funding 1 Interest Payment Date on which the interest rate payable in
respect of the relevant Term Advances made thereunder increases by a
pre-determined amount; and

 

(b)                                 in respect of any Notes, the
date on which the interest rate payable by the Issuer in respect of those Notes
increases by a pre-determined amount;

 

Subsidiary means a subsidiary as defined in section 736 of the
Companies Act 1985;

 

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

 

Tax Credit means a credit against Tax obtained on the Funding 1
Liquidity Facility Provider’s overall net income which the Funding 1 Liquidity
Facility Provider is able to identify as attributable to a specific Tax
Payment;

 

47

 

Tax Payment means a payment made by Funding 1 to the Funding 1
Liquidity Facility Provider as per Clause 10.1 of the Funding 1 Liquidity
Facility Agreement;

 

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

 

Term AAA Advances means the First Issuer Term AAA Advances,
the Second Issuer Term AAA Advances, the Third Issuer Term AAA Advances, the
Fourth Issuer Term AAA Advance and any term AAA advances made by any New
Issuer;

 

Term Advance Rating means the designated rating of each Term
Advance which reflects the rating assigned to the corresponding class of Notes
used to fund each such Term Advance on the relevant Closing Date of that Term
Advance;

 

Term Advances has the meaning given in each Issuer Master
Definitions and Construction Schedule as prefixed by the definition of each
respective Issuer (being by way of example the

 

Third Deed of Accession means the third deed of accession to the
Funding 1 Deed of Charge entered into on the Fourth Issuer Closing Date
between Funding 1, the First Issuer, the Second Issuer, the Third Issuer, the
Fourth Issuer the Corporate Services Provider, the Account Bank, the Security
Trustee, the Seller, the First Start-up Loan Provider, the Second Start-up Loan
Provider, the Third Start-up Loan Provider, the Fourth Start-up Loan Provider
the Cash Manager, the Funding 1 Swap Provider and the Funding 1 Liquidity
Facility Provider as supplemented, amended and/or restated from time to time;

 

Third Issuer means Permanent Financing (No. 3) PLC (registered
number 4907355), a public limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE;

 

Third Issuer Closing Date means 25th November, 2003;

 

Third Issuer Intercompany Loan Agreement means the Third Issuer
Intercompany Loan Confirmation and the Intercompany Loan Terms and Conditions
together entered into on the Third Issuer Closing Date by the Third Issuer,
Funding 1 and the Security Trustee (as the same may be amended and/or
supplemented from time to time);

 

Third Issuer Security means the security created by the Third
Issuer pursuant to the Third Issuer Deed of Charge in favour of the Third
Issuer Secured Creditors;

 

Third Party Amounts includes:

 

(a)                                  amounts under a direct debit
which are repaid to the bank making the payment if such a bank is unable to
recoup that amount itself from the customer’s account;

 

(b)                                 payments by Borrowers of any
fees and other charges which are due to the Seller; or

 

(c)                                  recoveries in respect of
amounts deducted from Loans as described in paragraphs (i) to (iv) of Clause
8.4(a) of the Mortgages Trust Deed, which will belong to and be paid
to Funding 1 and/or the Seller as described therein;

 

48

 

Third Party Collection Agent means an entity that shall act as
collection agent for the Mortgages Trustee and the Beneficiaries under the
Direct Debiting Scheme or any successor to that scheme pursuant to Clause
5.1(a)(i) of the Servicing Agreement;

 

Third Start-up Loan means the start-up loan that the Third
Start-up Loan Provider has made available to Funding 1 pursuant to the Third
Start-up Loan Agreement;

 

Third Start-up Loan Agreement means the agreement  entered into on the Third Issuer Closing
Date between Funding 1, the Third Start-up Loan Provider and the Security
Trustee relating to the provision of the Third Start-up Loan to Funding 1 (as
the same may be amended and/or supplemented from time to time);

 

Third Start-up Loan Provider means Halifax in its capacity as provider
of the Third Start-up Loan;

 

Title Deeds means, in relation to each Loan and its Related
Security and the Property relating thereto, all conveyancing deeds, MHA
Documentation and all other documents which make up the title to the Property
and the security for the Loan and all searches and enquiries undertaken in
connection with the grant by the Borrower of the related Mortgage;

 

Total Property means at any time the aggregate amount
standing to the credit of the Collection Account and held by Halifax on trust
for the Issuer, the Mortgages Trustee and Halifax, subject to and in accordance
with the Bank Agreement;

 

Tracker Rate means the rate of interest applicable to a Tracker
Rate Loan (before applying any cap or minimum rate);

 

Tracker Rate Loan means those Loans to the extent that and
for such period that their Mortgage Terms provide that they are subject to an
interest rate which is linked to a variable interest rate other than the
Variable Base Rates.  For example, the
rate on a Tracker Rate Loan may be set at a margin above sterling LIBOR or
above rates set by the Bank of England;

 

Tracker Swap Rate means a rate linked to the Bank of England
repo rate, as shall be determined by the Cash Manager in accordance with the
provisions of the Cash Management Agreement;

 

Transaction Documents means the Funding 1 Agreements, the First
Issuer Transaction Documents, the Second Issuer Transaction Documents, the
Third Issuer Transaction Documents, the Fourth Issuer Transaction Documents and
any documents and agreements to which any New Issuer is a party, the Mortgages
Trustee Guaranteed Investment Contract and all other documents and agreements
referred to therein;

 

Treaty Lender means a person who is resident (as such term is
defined in the appropriate Double Taxation Treaty) in a country with which the
United Kingdom has a Double Taxation Treaty giving residents of that country
complete exemption from United Kingdom taxation on interest and does not carry
on business in the United Kingdom through a permanent establishment with which
any payment under the Funding 1 Liquidity Documents is effectively connected;

 

Trigger Event means an Asset Trigger Event and/or a Non-Asset
Trigger Event, as the case may be;

 

Trust Corporation means a corporation entitled by rules made
under the Public Trustee Act 1906 to carry out the functions of a custodian
trustee;

 

49

 

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

 

Trust Property means:

 

(a)                                  the Initial Trust Property,
the Initial Closing Trust Property and any Future Trust Property (together with
the proceeds of sale of any of them) including, without limitation, the
Mortgage Trustee’s whole right, title and beneficial interest in and to all
Scottish Trust Property pursuant to any relevant Scottish Declaration of Trust;
but excludes any Loans that have been repaid or which have been repurchased by
the Seller pursuant to the Mortgage Sale Agreement or other actual adjustments
and, for the avoidance of doubt, which are not deemed adjustments to the Trust
Property as set out in the Mortgages Trust Deed;

 

(b)                                 any increase in the
Outstanding Principal Balance of a Loan due to Borrowers taking Payment Holidays
or making Underpayments or making drawings under any Flexible Loans;

 

(c)                                  any interest and principal
paid by Borrowers on their Loans;

 

(d)                                 any other amounts received
from Borrowers under their Loans or in respect of their Loans and Related
Security (but excluding Third Party Amounts);

 

(e)                                  rights under the Insurance
Policies that are sold to the Mortgages Trustee or which the Mortgages Trustee
has the benefit of; and

 

(f)                                    amounts on deposit (and
interest earned on those amounts) in the Mortgages Trustee GIC Account;

 

less

 

(g)                                 any losses in relation to
Loans and any actual reductions (and for the avoidance of doubt, not deemed
reductions) occurring in respect of the Loans as set out in Clause
8.4(a) of the Mortgages Trust Deed ; and

 

(h)                                 allocations of Mortgages Trust
Available Principal Receipts to the Beneficiaries in accordance with Clause 11
of the Mortgages Trust Deed;

 

UK Non-Bank Lender means a lender within the meaning of
paragraph (b) of the definition of Qualifying Lender;

 

Uncured Funding 1 Revenue Shortfall has the meaning given to it
in Part 1 of Schedule 3 to the Funding 1 Deed of Charge;

 

Underpayment means a payment made by a Borrower in an amount less
than the Monthly Payment then due on the Loan being a sum not exceeding the
aggregate of any previous Overpayments;

 

United Kingdom means The United Kingdom of Great Britain
and Northern Ireland;

 

United States means The United States of America;

 

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

 

50

 

Unregistered Transfer means a deed of transfer of a Mortgage or
Mortgages over Unregistered Land substantially in the form set out in Schedule
3 to the Mortgage Sale Agreement with such modifications as may be required
from time to time;

 

Valuation Report means the valuation report or reports for
mortgage purposes, in the form of the pro-forma contained in the Standard
Documentation, obtained by the Seller from a Valuer in respect of each Property
or a valuation report in respect of a valuation made using a methodology which
would be acceptable to a reasonable prudent mortgage lender and which has been
approved by the Director of Group Property and Survey of the Seller (or his
successor);

 

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

 

Variable Base Rates means HVR 1, HVR 2 or the Mortgages
Trustee Variable Base Rate, as applicable;

 

Variable Mortgage Rate means the rate of interest which
determines the amount of interest payable each month on a Variable Rate Loan;

 

Variable Rate Loans means those Loans to the extent that and
for such period that their Mortgage Terms provide that they are subject to a
rate of interest which may at any time be varied in accordance with the
relevant Mortgage Terms (and shall, for the avoidance of doubt, exclude Loans
during the period that they are Fixed Rate Loans or Tracker Rate Loans);

 

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

 

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

 

2.                                      INTERPRETATION AND CONSTRUCTION

 

Any
reference in any Transaction Document or in any document to which this Master
Definitions and Construction Schedule is expressed to be incorporated or apply
to:

 

affiliate of any person shall be construed as a reference to
the ultimate holding company of that person or an entity of which that person
or its ultimate holding company (a) has direct or indirect control or (b) owns
directly or indirectly more than fifty per cent. (50%) of the share capital or
similar rights of ownership;

 

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

 

an authorisation includes an authorisation,
consent, approval, resolution, licence, exemption, filing or registration;

 

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

 

51

 

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

 

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

 

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

 

a regulation includes any regulation, rule,
official directive, request or guideline (whether or not having the force of
law) of any governmental, inter-governmental or supranational body, agency,
department or regulatory, self-regulatory or other authority or organisation;

 

set-off shall be deemed to inclde analogous rights in other
relevant jurisdictions;

 

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

 

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

 

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

 

2.1                                 £, sterling or pounds  sterling denotes the lawful
currency for the time being of the United Kingdom and e or Euro denotes the single
currency introduced at the start of the third stage of European Economic
Monetary Union pursuant to the Treaty of Rome of 25th March, 1957, as amended
by, inter
alia, the Single European Act of 1986 and the Treaty of European
Union of 7th February, 1992 and the Treaty of Amsterdam of 2nd October, 1997
establishing the European Community, as further amended from time to time.

 

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

 

52

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.3                                 Any definition that appears in
the Funding 1 Agreements or the Mortgages Trustee Guarantee Investment Contract
that does not appear in this Amended and Restated Master Definitions and
Construction Schedule, shall have the meaning given in the relevant Issuer
Master Definitions and Construction Schedule or each Issuer Master Definitions
and Construction Schedule, as the context so requires.

 

2.4                                 Terms used in
any Transaction Document which incorporates both this Amended and Restated
Master Definitions and Construction Schedule and an Issuer Master Definitions
and Construction Schedule, unless otherwise defined in therein or unless the context
otherwise requires, shall, in the event of conflict between this Amended
and Restated Master Definitions and Construction Schedule and an Issuer Master
Definitions and Construction Schedule, be construed in accordance with the
relevant Issuer Master Definitions and Construction Schedule.

 

3.                                      AMENDMENTS

 

Subject
to Clause
25 of the Funding 1 Deed of Charge (Supplemental Provisions
Regarding the Security Trustee), any amendments to this Amended and Restated
Master Definitions and Construction Schedule will be made only with the prior
written consent of each party to this Amended and Restated Master Definitions
and Construction Schedule.

 

4.                                      COUNTERPARTS

 

This
Amended and Restated Master Definitions and Construction Schedule may be signed
in any number of counterparts each of which, when signed, shall constitute one
and the same instrument.

 

53

 

5.                                      GOVERNING LAW

 

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

 

54

 

SIGNATORIES

 

	
  Funding 1 Liquidity Facility Provider

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  JPMORGAN CHASE BANK

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Seller,
  Servicer, Beneficiary, Cash Manager, Issuer Cash Manager, Funding 1 Swap
  Provider and Start-up Loan Providers

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  HALIFAX plc

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Funding 1 and Beneficiary

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT FUNDING (NO. 1) LIMITED

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Mortgages Trustee

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT MORTGAGES

  	
  )

  
	
  TRUSTEE LTD

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Share Trustee  and Mortgages Trustee
  Corporate Services Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  SFM OFFSHIRE LIMITED

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  The Fourth Issuer

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT FINANCING (NO.  4) PLC

  	
  )

  

 

55

 

	
  The Third Issuer

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT FINANCING (NO.  3) PLC

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  The Second Issuer

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT FINANCING (NO. 2) PLC

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  The First Issuer

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT FINANCING (NO. 1) PLC

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Funding 1 Corporate Services Provider and
  Issuer Corporate Services Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  STRUCTURED FINANCE

  	
  )

  
	
  MANAGEMENT LIMITED

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Permanent Holdings Limited

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT HOLDINGS LIMITED

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Permanent PECOH Limited

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  PERMANENT PECOH LIMITED

  	
  )

  

 

56

 

	
  The First Issuer Security Trustee, the
  Second Issuer Security Trustee, the Third Issuer Security Trustee, the Fourth
  Issuer Security Trustee and the Security Trustee

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  THE BANK OF NEW YORK

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  The First Issuer Note Trustee, the Second
  Issuer Note Trustee, the Third Issuer Note Trustee and the Fourth Issuer Note
  Trustee

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  THE BANK OF NEW YORK

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agent Bank, Principal Paying Agent,
  Registrar and Transfer Agent for the First Issuer Notes the Second Issuer
  Notes, the Third Issuer Notes  and the
  Fourth Issuer Notes

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of CITIBANK, N.A.

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Account Bank, Issuer Account Bank,
  Mortgage Trustee GIC Provider and Funding 1 GIC Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of THE GOVERNOR AND

  	
  )

  
	
  COMPANY OF THE BANK OF

  	
  )

  
	
  SCOTLAND

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  U.S. Paying Agent for the First Issuer
  Notes, the Second Issuer Notes, the Third Issuer Notes and the Fourth Issuer
  Notes

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  CITIBANK, N.A., NEW YORK BRANCH

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Series 4 First Issuer Swap Provider,
  Series 1 Third Issuer Swap Provider and Series 2 Third Issuer Swap Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  CREDIT SUISSE FIRST BOSTON

  	
  )

  
	
  INTERNATIONAL

  	
  )

  

 

57

 

	
  Series 3 First Issuer Swap Provider,
  Series 4 Second Issuer Dollar Swap Provider, Series 4 Second Issuer Euro Swap
  Provider, Series 3 Third Issuer Swap Provider, Series 5 Third Issuer Currency
  Swap Provider, Series 3 Fourth Issuer Swap Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  BANQUE AIG, LONDON BRANCH

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Series 1 First Issuer Swap Provider,
  Series 2 First Issuer Swap Provider, Series 2 Second Issuer Swap Provider and
  Series 4 Third Issuer Swap Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  JPMORGAN CHASE BANK

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Series 1 Second Issuer Swap Provider and
  Series 3 Second Issuer Swap Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  CDC IXIS CAPITAL MARKETS

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Interest Rate  Swap Provider for the Series 5 Class A Third Issuer Notes and
  the Series 5 Class A1 Fourth Issuer 
  Notes

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  HBOS TREASURY SERVICES PLC

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Series 2 Fourth Issuer Swap Provider and
  the Series 4 Fourth Issuer Swap Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  CITIBANK, N.A., LONDON BRANCH

  	
  )

  
	
   

  	
   

  
	
   

  	
   

  
	
  Series 1 Fourth Issuer Swap Provider

  	
   

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  WESTLB AG, LONDON BRANCH

  	
  )

  

 

58

 

	
  Series 
  5 Class A1 Fourth Issuer Swap Provider

  
	
   

  	
   

  
	
  SIGNED by

  	
  )

  
	
  for and on behalf of

  	
  )

  
	
  SWISS RE FINANCIAL PRODUCTS

  	
  )

  
	
  CORPORATION

  	
  )

  

 

59Exhibit 4.7

 

EXECUTION COPY

 

FOURTH ISSUER TRUST DEED

 

 

DATED 12th March, 2004

 

 

PERMANENT FINANCING (NO. 4) PLC

 

and

 

THE BANK OF NEW YORK

 

constituting

 

U.S.$1,500,000,000
Series 1 Class A Asset Backed Floating Rate Notes due March 2005

U.S.$78,100,000
Series 1 Class B Asset Backed Floating Rate Notes due June 2042

U.S.$56,500,000
Series 1 Class M Asset Backed Floating Rate Notes due June 2042

U.S.$2,400,000,000
Series 2 Class A Asset Backed Floating Rate Notes due March 2009

U.S.$100,700,000
Series 2 Class B Asset Backed Floating Rate Notes due June 2042

U.S.$59,900,000
Series 2 Class M Asset Backed Floating Rate Notes due June 2042

U.S.$82,200,000
Series 2 Class C Asset Backed Floating Rate Notes due June 2042

U.S.$1,700,000,000
Series 3 Class A Asset Backed Floating Rate Notes due March 2024

U.S.$75,800,000
Series 3 Class B Asset Backed Floating Rate Notes due June 2042

U.S.$40,400,000
Series 3 Class M Asset Backed Floating Rate Notes due June 2042

U.S.$55,400,000
Series 3 Class C Asset Backed Floating Rate Notes due June 2042

€1,500,000,000
Series 4 Class A Asset Backed Floating Rate Notes due June 2034

€85,000,000
Series 4 Class B Asset Backed Floating Rate Notes due June 2042

€62,500,000
Series 4 Class M Asset Backed Floating Rate Notes due June 2042

€750,000,000
Series 5 Class A1 Asset Backed Floating Rate Notes due June 2042

££1,100,000,000
Series 5 Class A2 Asset Backed Fixed Rate Notes due June 2042

£43,000,000
Series 5 Class B Asset Backed Floating Rate Notes due June 2042

£32,000,000
Series 5 Class M Asset Backed Floating Rate Notes due June 2042

£54,000,000 Series 5 Class C Asset Backed
Floating Rate Notes due June 2042

 

 

LONDON

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  
	
  2.

  	
  Covenant
  to Repay and to Pay Interest on Fourth Issuer Notes

  	
   

  
	
  3.

  	
  Form
  and Issue of Fourth Issuer Notes

  	
   

  
	
  4.

  	
  Replacement
  of Fourth Issuer Notes

  	
   

  
	
  5.

  	
  Register,
  Transfer and Exchange of Fourth Issuer Notes

  	
   

  
	
  6.

  	
  Fees, Duties and
  Taxes

  	
   

  
	
  7.

  	
  Covenant of
  Compliance

  	
   

  
	
  8.

  	
  Cancellation
  of Fourth Issuer Notes and Records

  	
   

  
	
  9.

  	
  Enforcement

  	
   

  
	
  10.

  	
  Proceedings,
  Actions and Indemnification

  	
   

  
	
  11.

  	
  Discharge of Payment

  	
   

  
	
  12.

  	
  Partial Payments

  	
   

  
	
  13.

  	
  Covenants
  by the Fourth Issuer

  	
   

  
	
  14.

  	
  Remuneration
  and Indemnification of the Note Trustee

  	
   

  
	
  15.

  	
  Supplement to
  Trustee Acts

  	
   

  
	
  16.

  	
  Note Trustee’s
  Liability

  	
   

  
	
  17.

  	
  Note
  Trustee Contracting with the Fourth Issuer

  	
   

  
	
  18.

  	
  Waiver,
  Authorisation and Determination

  	
   

  
	
  19.

  	
  Entitlement
  to Treat Noteholder as Absolute Owner

  	
   

  
	
  20.

  	
  Currency Indemnity

  	
   

  
	
  21.

  	
  Eligibility
  and Disqualification; New Note Trustee

  	
   

  
	
  22.

  	
  Note
  Trustee’s Retirement and Removal

  	
   

  
	
  23.

  	
  Note
  Trustee’s Powers to be Additional

  	
   

  
	
  24.

  	
  Notices

  	
   

  
	
  25.

  	
  Rights of Third
  Parties

  	
   

  
	
  26.

  	
  Trust
  Indenture Act Prevails

  	
   

  
	
  27.

  	
  Certificates
  and Opinions

  	
   

  
	
  28.

  	
  Governing Law

  	
   

  
	
  29.

  	
  Counterparts

  	
   

  
	
  30.

  	
  Submission to
  Jurisdiction

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Forms of Global
  Fourth Issuer Notes

  	
   

  
	
  2.

  	
  Forms of
  Definitive Fourth Issuer Notes

  	
   

  
	
  3.

  	
  Terms
  and Conditions of the Fourth Issuer Notes

  	
   

  
	
  4.

  	
  Provisions for
  Meetings of Noteholders

  	
   

  
	
  5.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  

 

 

THIS FOURTH ISSUER TRUST DEED is made
on 12th March, 2004

 

BETWEEN:

 

(1)                                  PERMANENT FINANCING (NO. 4) PLC (registered number
4988201) whose registered office is at Blackwell House, Guildhall Yard, London
EC2V 5AE (the Fourth Issuer); and

 

(2)                                  THE BANK OF NEW YORK, a New York banking corporation whose London
branch address is at 48th Floor, One Canada Square, London E14 5AL (acting in
its capacity as Note Trustee) as trustee for the Noteholders which expression
shall include such company and all other persons and companies for the time
being acting as note trustee under this Deed.

 

WHEREAS:

 

(A)                              By a
resolution of a duly authorised Board of Directors of the Fourth Issuer passed
on 11th March, 2004 the Fourth Issuer has resolved to issue the Fourth Issuer
Notes which are constituted by this Deed and secured by the Fourth Issuer Deed
of Charge.

 

(B)                                The Note
Trustee has agreed to act as trustee of these presents for the benefit of the
Noteholders upon and subject to the terms and conditions of these presents.

 

NOW THIS FOURTH ISSUER TRUST DEED WITNESSES AND IT IS AGREED
AND DECLARED:

 

1.                                      DEFINITIONS

 

1.1                                 The
amended and restated master definitions and construction schedule signed
by, amongst others, the parties to this Deed and dated 12th March, 2004 (as the
same may be amended, varied or supplemented from time to time with the consent
of the parties to this Deed) (the Master Definitions
and Construction Schedule) and the fourth issuer master definitions
and construction schedule, signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood on 12th March, 2004 (as the same
may be amended, varied or supplemented from time to time) (the Fourth Issuer Master Definitions and Construction
Schedule) are expressly and specifically incorporated into this Deed
and, accordingly, the expressions defined in the Master Definitions and
Construction Schedule and the Fourth Issuer Master Definitions and
Construction Schedule (as so amended, varied or supplemented from time to
time) shall, except where the context otherwise requires and save where
otherwise defined herein, have the same meanings in this Deed.

 

1.2                                 (a)                                  All
references in these presents to principal and/or interest in respect of the
Fourth Issuer Notes or to any monies payable by the Fourth Issuer under these
presents shall be deemed to include a reference to any additional amounts which
may be payable under Condition 4(B)
or, if applicable, under any undertaking or covenant given pursuant to Clause 2.2.

 

(b)                                 All
references in these presents to £,
sterling or pounds sterling shall be construed as
references to the lawful currency or currency unit for the time being of the
United Kingdom.  All references to €, EUR, euro
or Euro shall be construed as
references to the single currency introduced at the third stage of European
Economic and Monetary Union pursuant to the Treaty establishing the European
Communities as amended from time to time. 
All references to $, U.S.$ or U.S.
dollars shall be construed as references to the lawful currency or
currency unit for the time being of the United States of America.

 

1

 

(c)                                  All
references in this Deed to these presents
means this Deed, the schedules hereto, the Fourth Issuer Notes, the Conditions,
any deed expressed to be supplemental hereto or thereto and the Fourth Issuer
Deed of Charge and the schedules thereto, all as from time to time supplemented
or modified in accordance with the provisions contained in this Deed and/or
where applicable, therein contained.

 

(d)                                 All
references in these presents to guarantees or to an obligation being guaranteed
shall be deemed to include respectively references to indemnities or to an
indemnity being given in respect thereof.

 

(e)                                  All
references in these presents to any action, remedy or method of proceeding for
the enforcement of the rights of creditors shall be deemed to include, in respect
of any jurisdiction other than England, references to such action, remedy or
method of proceeding for the enforcement of the rights of creditors available
or appropriate in such jurisdiction as shall most nearly approximate to such
action, remedy or method of proceeding described or referred to in these
presents.

 

(f)                                    All
references in these presents to taking proceedings against the Fourth Issuer
shall be deemed to include references to proving in the winding up of the
Fourth Issuer.

 

(g)                                 All references
in these presents to DTC, Euroclear and Clearstream, Luxembourg, shall be
deemed to include references to any other or additional clearing system as may
be approved in writing by the Note Trustee.

 

(h)                                 Unless the
context otherwise requires words or expressions used in these presents shall
bear the same meanings as in the Companies Act 1985 of England.

 

(i)                                     Whenever
this Deed refers to a provision of the Trust Indenture Act, the provision is
incorporated by reference in and made part of this Deed.  All other Trust Indenture Act terms used in
this Deed that are defined by the Trust Indenture Act, defined in the Trust
Indenture Act by reference to another statute or defined by SEC rules have the
meanings assigned to them in the Trust Indenture Act.

 

(j)                                     Wherever
in this Deed there is a requirement for the consent of, or a request from, the
Fourth Issuer Noteholders, then, for so long as any of the Fourth Issuer Notes
is represented by a Fourth Issuer Global Note registered in the name of DTC or
its nominee, DTC may mail an Omnibus Proxy to the Fourth Issuer in accordance
with and in the form used by DTC as part of its usual procedures from time to
time.  Such Omnibus Proxy shall assign
the right to give such consent or, as the case may be,make such request to
DTC’s direct participants as of the record date specified therein and any such
assignee participant may give the relevant consent or, as the case may be, make
the relevant request in accordance with this Deed.

 

2.                                      COVENANT TO REPAY AND TO PAY INTEREST ON FOURTH ISSUER NOTES

 

2.1                                 The
aggregate principal amount of:

 

(a)                                  the Series
1 Class A Fourth Issuer Notes is limited to U.S.$1,500,000,000;

 

(b)                                 the Series
1 Class B Fourth Issuer Notes is limited to U.S.$78,100,000;

 

(c)                                  the Series
1 Class M Fourth Issuer Notes is limited to U.S.$56,500,000;

 

(d)                                 the Series
2 Class A Fourth Issuer Notes is limited to U.S.$2,400,000,000;

 

2

 

(e)                                  the Series
2 Class B Fourth Issuer Notes is limited to U.S.$100,700,000;

 

(f)                                    the Series
2 Class M Fourth Issuer Notes is limited to U.S.$59,900,000;

 

(g)                                 the Series
2 Class C Fourth Issuer Notes is limited to U.S.$82,200,000;

 

(h)                                 the Series
3 Class A Fourth Issuer Notes is limited to U.S.$1,700,000,000;

 

(i)                                     the Series
3 Class B Fourth Issuer Notes is limited to U.S.$75,800,000;

 

(j)                                     the Series
3 Class M Fourth Issuer Notes is limited to U.S.$40,400,000;

 

(k)                                  the Series
3 Class C Fourth Issuer Notes is limited to U.S.$55,400,000;

 

(l)                                     the Series
4 Class A Fourth Issuer Notes is limited to €1,500,000,000;

 

(m)                               the Series
4 Class B Fourth Issuer Notes is limited to €85,000,000;

 

(n)                                 the Series
4 Class M Fourth Issuer Notes is limited to €62,500,000;

 

(o)                                 the Series
5 Class A1 Fourth Issuer Notes is limited to €750,000,000;

 

(p)                                 the Series
5 Class A Fourth Issuer Notes is limited to £1,100,000,000;

 

(q)                                 the Series
5 Class B Fourth Issuer Notes is limited to ££43,000,000;

 

(r)                                    the Series
5 Class M Fourth Issuer Notes is limited to ££32,000,000 and

 

(s)                                  the Series
5 Class C Fourth Issuer Notes is limited to ££54,000,000.

 

2.2                                 The Fourth
Issuer covenants with the Note Trustee that it will, in accordance with these
presents, on the due date for the final maturity of the Fourth Issuer Notes
provided for in the Conditions, or on such earlier date as the same or any part
thereof may become due and repayable thereunder, pay or procure to be paid
unconditionally to or to the order of the Note Trustee in euro, U.S. dollars or
sterling, as applicable, in London or New York City, as applicable, in immediately
available funds the principal amount of the Fourth Issuer Notes repayable on
that date and shall in the meantime and until the due date for the final
maturity of the Fourth Issuer Notes (both before and after any judgment or
other order of a court of competent jurisdiction) pay or procure to be paid
unconditionally to or to the order of the Note Trustee as aforesaid interest
(which shall accrue from day to day) on the Principal Amount Outstanding of the
Fourth Issuer Notes at the rates set out in or (as the case may be) calculated
from time to time in accordance with Condition
4 and on the dates provided for in the Conditions PROVIDED THAT:

 

(a)                                  every
payment of principal or interest in respect of the Fourth Issuer Notes to or to
the account of the Principal Paying Agent, in the manner provided in the Fourth
Issuer Paying Agent and Agent Bank Agreement, shall operate in satisfaction pro tanto of the relative covenant by the
Fourth Issuer in this Clause 2.2
except to the extent that there is default in the subsequent payment thereof in
accordance with the Conditions to the Noteholders;

 

(b)                                 in any
case where payment of principal is not made to the Note Trustee or the
Principal Paying Agent on or before the due date, interest shall continue to
accrue on the principal amount of the Fourth Issuer Notes (both before and
after any judgment 

 

3

 

or
other order of a court of competent jurisdiction) at the rates aforesaid (or,
if higher, the rate of interest on judgment debts for the time being provided
by English law) up to and including the date which the Note Trustee determines
to be the date on and after which payment is to be made to the Noteholders in
respect thereof as stated in a notice given to the Noteholders in accordance
with Condition 14 (such date to be
not later than 30 days after the day on which the whole of such principal
amount, together with an amount equal to the interest which has accrued and is
to accrue pursuant to this proviso up to and including that date, has been
received by the Note Trustee or the Principal Paying Agent);

 

(c)                                  in any
case where payment of the whole or any part of the principal amount of any
Fourth Issuer Note is improperly withheld or refused upon due presentation
thereof (other than in circumstances contemplated by proviso (b) above)
interest shall accrue on that principal amount of which has been so withheld or
refused (both before and after any judgment or other order of a court of
competent jurisdiction) at the rates aforesaid (or, if higher, the rate of
interest on judgment debts for the time being provided by English law) from and
including the date of such withholding or refusal up to and including the date
on which, upon further presentation of the relevant Fourth Issuer Note, payment
of the full amount (including interest as aforesaid) in euro, U.S. dollars or
sterling, as applicable, payable in respect of such Fourth Issuer Note is made
or (if earlier) the seventh day after notice is given to the relevant Noteholder
(either individually or in accordance with Condition
14 that the full amount (including interest as aforesaid) in euro,
U.S. dollars or sterling, as applicable, payable in respect of such Fourth
Issuer Note is available for payment, provided that, upon further presentation
thereof being duly made, such payment is made; and

 

(d)                                 notwithstanding
any other provision of this Deed, the right of any Noteholder to receive
payment of principal and interest on the Fourth Issuer Notes, on or after the
respective due dates expressed in the Fourth Issuer Notes, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Noteholder.

 

The
Fourth Issuer shall pay Additional Interest in accordance with Condition 4(B).

 

The
Note Trustee will hold the benefit of the covenants contained in this Clause on
trust for the Noteholders and itself in accordance with this Deed.

 

2.3                                 At any
time after a Note Event of Default shall have occurred or the Fourth Issuer
Notes shall otherwise have become due and repayable or the Definitive Fourth
Issuer Notes have not been issued when so required in accordance with this Deed
and the relative Global Fourth Issuer Notes, the Note Trustee may and shall, if
directed by an Extraordinary Resolution of the Noteholders and subject to it
being indemnified and/or secured to its satisfaction:

 

(a)                                  by notice
in writing to the Fourth Issuer, the Principal Paying Agent, the U.S. Paying
Agent, the Transfer Agent and the Registrar require the Principal Paying Agent,
the U.S. Paying Agent, the Transfer Agent and the Registrar pursuant to the
Fourth Issuer Paying Agent and Agent Bank Agreement and by notice in writing to
the Fourth Issuer:

 

(i)                                     act
thereafter as Principal Paying Agent, U.S. Paying Agent, Transfer Agent and
Registrar of the Note Trustee in relation to payments to be made by or on
behalf of the Note Trustee under the provisions of this Deed mutatis mutandis on the terms provided in
the Fourth Issuer Paying Agent and Agent Bank Agreement (save that the Note
Trustee’s liability under any provisions thereof 

 

4

 

for
the indemnification, remuneration and payment of out-of-pocket expenses of the
Paying Agents, the Transfer Agent and the Registrar shall be limited to the
amounts for the time being held by the Note Trustee on the trusts of these
presents relating to the relevant Fourth Issuer Notes and available for such
purpose) and thereafter to hold all Fourth Issuer Notes and all sums, documents
and records held by them in respect of Fourth Issuer Notes on behalf of the
Note Trustee; or

 

(ii)                                  deliver up
all Fourth Issuer Notes and all sums, documents and records held by them in
respect of the Fourth Issuer Notes to the Note Trustee or as the Note Trustee
shall direct in such notice provided that such notice shall be deemed not to
apply to any documents or records which the relevant Paying Agent or the
Registrar, as the case may be, is obliged not to release by any law or
regulation; and/or

 

(b)                                 by notice
in writing to the Fourth Issuer require it to make all subsequent payments in
respect of the Fourth Issuer Notes to or to the order of the Note Trustee and
not to the Principal Paying Agent; with effect from the issue of any such
notice to the Fourth Issuer and until such notice is withdrawn Clause 2.2(a) relating to the Fourth Issuer
Notes shall cease to have effect.

 

2.4                                 The Fourth
Issuer shall require each paying agent not a party to the Fourth Issuer Paying
Agent and Agent Bank Agreement to agree in writing to hold in trust to the
extent required by the Trust Indenture Act for the benefit of the Noteholders
or the Note Trustee all money held by such paying agent for the payment of
principal of or interest on the Fourth Issuer Notes (whether such money has
been paid to it by the Fourth Issuer or any other obligor of the Fourth Issuer
Notes), and the Fourth Issuer and such paying agent shall each notify the Note
Trustee of any default by the Fourth Issuer (or any other obligor of the Fourth
Issuer Notes) in making any such payment.

 

3.                                      FORM AND ISSUE OF FOURTH ISSUER NOTES

 

3.1                                 (a)                                  The Series
1 Fourth Issuer Notes, the Series 2 Fourth Issuer Notes and the Series 3 Fourth
Issuer Notes will be initially offered and sold pursuant to a Registration
Statement filed with the SEC.  Each
class of the Series 1 Fourth Issuer Notes, the Series 2 Fourth Issuer Notes and
the Series 3 Fourth Issuer Notes will initially be represented by a separate
global note in registered form (the Series 1
Class A Global Fourth Issuer Note, the Series 1 Class B Global Fourth Issuer Note, the Series 1 Class M Global Fourth Issuer Note,
the Series 1 Class C Global Fourth Issuer
Note, the Series 2 Class A Global
Fourth Issuer Note, the Series 2
Class B Global Fourth Issuer Note, the Series 2 Class M Global Fourth Issuer Note, the Series 2 Class C Global Fourth Issuer Note,
the Series 3 Class A Global Fourth Issuer
Note, Series 3 Class B Global Fourth Issuer Note, the Series 3 Class M Global Fourth Issuer Note and
the Series 3 Class C Global Fourth Issuer
Note respectively, and together, the Dollar Global Fourth Issuer Notes), in each case without
coupons or talons attached and which, in aggregate, will represent the
aggregate principal amount outstanding of the Series 1 Fourth Issuer Notes, the
Series 2 Fourth Issuer Notes and the Series 3 Fourth Issuer Notes.

 

(b)                                 The Series
4 Fourth Issuer Notes and the Series 5 Fourth Issuer Notes will be initially
offered and sold outside the United States to non-U.S. persons pursuant to
Regulation S (Reg S) under the
Securities Act.  Each class of the
Series 4 Fourth Issuer Notes and the Series 5 Fourth Issuer Notes will
initially be represented by a global note in registered form (the Series 4 Class A Global Fourth Issuer Note,
the Series 4 Class B

 

5

 

Global Fourth Issuer Note, the Series 4 Class M Global Fourth Issuer Note,
the Series 5 Class A1 Global Fourth Issuer
Note, the Series 5 Class A2 Global
Fourth Issuer Note, the Series 5
Class B Global Fourth Issuer Note, the Series 5 Class M Global Fourth Issuer Note and the Series 5 Class C Global Fourth Issuer Note
together, the Reg S Global Fourth Issuer
Notes and, together with the Dollar Global Fourth Issuer Notes, the Global Fourth Issuer Notes), in each case
without coupons or talons attached and which, in aggregate, will represent the
aggregate principal amount outstanding of the Series 4 Fourth Issuer Notes and
the Series 5 Fourth Issuer Notes.

 

3.2                                 The Global
Fourth Issuer Notes shall be printed or typed in, or substantially in, the
respective forms set out in Schedule 1 and may be executed in
facsimile.  Each Global Fourth Issuer
Note shall represent such of the outstanding Fourth Issuer Notes of the
relevant class as shall be specified therein and each shall provide that it
shall represent the aggregate Principal Amount Outstanding of the relevant
class of Fourth Issuer Notes from time to time endorsed thereon and that the
aggregate Principal Amount Outstanding of the Fourth Issuer Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges, redemptions, purchases and transfers of interests therein in
accordance with the terms of this Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement.  Any endorsement
of a Global Fourth Issuer Note to reflect the amount of any increase or
decrease in the Principal Amount Outstanding of the Fourth Issuer Notes
represented thereby shall be made by the Registrar in accordance with Clause 5. 
Title to the Global Fourth Issuer Notes shall pass by and upon the
registration in the Register in respect thereof in accordance with the
provisions of these presents.  The Global
Fourth Issuer Notes shall be issuable only in registered form without coupons
or talons attached and signed manually by a person duly authorised by the
Fourth Issuer on behalf of the Fourth Issuer and shall be authenticated by or
on behalf of the Registrar.  The Global
Fourth Issuer Notes so executed and authenticated shall be binding and valid
obligations of the Fourth Issuer, notwithstanding that such duly authorised
person no longer holds that office at the time the Registrar authenticates the
relevant Global Fourth Issuer Note.

 

3.3                                 The Global
Fourth Issuer Notes shall be issued by the Fourth Issuer to Cede & Co., as
nominee for DTC, in respect of each Dollar Global Fourth Issuer Note and to
Citivic Nominees Limited, as nominee for the Common Depositary, in respect of
each Reg S Global Fourth Issuer Note, on terms that Cede & Co. and Citivic
Nominees Limited shall, respectively, hold the same for the account of the
persons who would otherwise be entitled to receive the Definitive Fourth Issuer
Notes and the successors in title to such persons appearing in the records of
DTC, Euroclear and Clearstream, Luxembourg for the time being.  Upon the issuance of each such Global Fourth
Issuer Notes, DTC, Euroclear and Clearstream, Luxembourg shall credit, on their
respective internal book-entry registration and transfer systems, the accounts
of holders of Book-Entry Interests with the respective interests owned by such
Noteholders.

 

3.4                                 The
provisions of the Operating Procedures of the Euroclear System and Terms and
Conditions Governing Use of Euroclear and the General Terms and Conditions of
Clearstream, Luxembourg and Customer Handbook of Clearstream, Luxembourg shall
be applicable to interests in the Global Fourth Issuer Notes that are held
through Euroclear and Clearstream, Luxembourg.

 

3.5                                 The Fourth
Issuer shall issue Definitive Fourth Issuer Notes only if any of the following
applies while any of the Fourth Issuer Notes of any class are represented by a
Global Fourth Issuer Note of the relevant class at any time after the fortieth
day following the later of the Fourth Issuer Closing Date and the date of the
issue of such Global Fourth Issuer Note:

 

6

 

(a)                                  (in the
case of Dollar Global Fourth Issuer Notes) DTC has notified the Fourth Issuer
that it is at any time unwilling or unable to continue as the registered holder
of such Dollar Global Fourth Issuer Notes or is at any time unwilling or unable
to continue as, or ceases to be, a clearing agency registered under the
Exchange Act, and a successor to DTC registered as a clearing agency under the
Exchange Act is not able to be appointed by the Fourth Issuer within 90 days of
such notification, or (in the case of the Reg S Global Fourth Issuer Notes)
both Euroclear and Clearstream, Luxembourg are closed for business for a
continuous period of 14 days (other than by reason of holiday, statutory or
otherwise) or announce an intention permanently to cease business and do so
cease to do business and no alternative clearing system satisfactory to the
Note Trustee is available; and

 

(b)                                 as a
result of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political sub-division thereof) or of any authority therein
or thereof having power to tax or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the Fourth Issuer Notes in definitive form.

 

If
required by this Clause 3, the
Fourth Issuer shall, at its sole cost and expense within 30 days of the
occurrence of the relevant event, issue Definitive Fourth Issuer Notes of the
same class as the class of Fourth Issuer Notes represented by the relevant
Global Fourth Issuer Note in exchange for the whole (or the remaining part(s)
outstanding) of the relevant Global Fourth Issuer Note.  If Definitive Fourth Issuer Notes are
issued, the beneficial interests represented by the Reg S Global Fourth Issuer
Notes of each class shall be exchanged by the Fourth Issuer for Definitive
Fourth Issuer Notes of that class (Reg S
Definitive Fourth Issuer Notes) and the beneficial interests
represented by the Dollar Global Fourth Issuer Note of each class shall be
exchanged by the Fourth Issuer for Definitive Fourth Issuer Notes of that class
(Dollar Definitive Fourth Issuer Notes).

 

3.6                                 The
Definitive Fourth Issuer Notes shall be printed or typed in, or substantially
in, the form set out in Schedule 2 in the denomination and transferable in
units of (a) U.S.$1,000 and U.S.$10,000 (in the case of the Series 1 Fourth
Issuer Notes, the Series 2 Fourth Issuer Notes and the Series 3 Fourth Issuer
Notes), (b) €500,000 (in the case of the Series 4 Fourth Issuer Notes, and the
Series 5 Class A1 Fourth Issuer Notes and (c) £1,000 or £10,000 (in the case of
the Series 5 Class A2 Fourth Issuer Notes, the Series 5 Class B Fourth Issuer
Notes, the Series 5 Class M Fourth Issuer Notes and the Series 5 Class C Fourth
Issuer Notes) each or, in each case, integral multiples thereof or in such
other denominations (which in the case of the Series 4 Fourth Issuer Notes and
the Series 5 Class A1 Fourth Issuer Notes must be higher than €500,000) as the
Note Trustee shall determine and notify to the relevant Noteholders, shall be
serially numbered and shall be endorsed with a form of transfer in the form or
substantially in the form also set out in Schedule 2.  Title to the Definitive Fourth Issuer Notes
shall pass by and upon the registration in the Register in respect thereof in
accordance with the provisions of these presents.  The Definitive Fourth Issuer Notes shall be issuable only in
registered form without coupons or talons attached and signed manually or in
facsimile by a person duly authorised by or on behalf of the Fourth Issuer and
shall be authenticated by or on behalf of the Registrar.  Each Fourth Issuer Note so executed and
authenticated shall be a binding and valid obligation of the Fourth Issuer
notwithstanding that such duly authorised person (for whatever reason) no
longer holds that office at the time the Registrar authenticates the Fourth
Issuer Note.

 

7

 

3.7                                 If the
Fourth Issuer is obliged to issue or procure the issue of any Definitive Fourth
Issuer Notes pursuant to Clause 3.5
but fails to do so within 30 days of the occurrence of the relevant event
described in Clause 3.5, then the
Fourth Issuer shall indemnify the Note Trustee, the registered holder of the
relevant Global Fourth Issuer Note(s) and the relevant Noteholders and keep
them indemnified against any and all loss or damage incurred by any of them if
the amount received by the Note Trustee, the registered holder of such Global
Fourth Issuer Note(s) or the relevant Noteholders in respect of the Fourth
Issuer Notes is less than the amount that would have been received had
Definitive Fourth Issuer Notes been issued in accordance with Clause 3.5.  If and for so long as the Fourth Issuer discharges its
obligations under this indemnity, the breach by the Fourth Issuer of the
provisions of Clause 3.5 shall be
deemed to be cured ab initio.

 

4.                                      REPLACEMENT OF FOURTH ISSUER NOTES

 

If a
mutilated or defaced Global Fourth Issuer Note or Definitive Fourth Issuer Note
is surrendered to the Registrar or Transfer Agent or if a Noteholder claims
that a Global Fourth Issuer Note or Definitive Fourth Issuer Note has been
lost, stolen or destroyed, the Fourth Issuer shall issue, and the Registrar
shall authenticate, a replacement Global Fourth Issuer Note or Definitive
Fourth Issuer Note, respectively, on receipt of satisfactory evidence in
accordance with Condition 13.  An indemnity for an amount sufficient in the
judgement of the Fourth Issuer and the Registrar to protect the Fourth Issuer
and the Registrar from any loss which any of them may suffer if a Global Fourth
Issuer Note or a Definitive Fourth Issuer Note is replaced may be required by
the Fourth Issuer and the Registrar.  The
Fourth Issuer may charge such Noteholder for its costs in replacing such Fourth
Issuer Note.

 

5.                                      REGISTER, TRANSFER AND EXCHANGE OF FOURTH ISSUER NOTES

 

5.1                               Transfer and Exchange of Global Fourth Issuer Notes

 

A
Global Fourth Issuer Note will be exchanged by the Fourth Issuer for another
Global Fourth Issuer Note or Definitive Fourth Issuer Note(s) only in the
circumstances set forth in Clause 3.5,
the Conditions, the Fourth Issuer Paying Agent and Agent Bank Agreement and the
relevant Global Fourth Issuer Note. 
Upon the occurrence of any of the events specified therein concerning
their exchange for Definitive Fourth Issuer Notes, Definitive Fourth Issuer
Notes of the relevant class shall be issued in such names as the Fourth Issuer
shall instruct the Registrar (based on the instructions of DTC and Euroclear
and Clearstream, Luxembourg) and the Registrar shall cause the Principal Amount
Outstanding of the applicable Global Fourth Issuer Note to be reduced
accordingly, cancel such Global Fourth Issuer Note (if applicable) and direct
DTC and Euroclear and Clearstream, Luxembourg to make corresponding reductions
in their book-entry systems, and the Fourth Issuer shall execute and the
Registrar shall authenticate such Definitive Fourth Issuer Notes of the relevant
class in the appropriate principal amounts and the Registrar will register
them.  The Registrar shall deliver such
Definitive Fourth Issuer Notes to the persons in whose names such Fourth Issuer
Notes are so registered.  Reg S
Definitive Fourth Issuer Notes issued in exchange for a Book-Entry Interest
pursuant to this Clause 5.1 shall
bear the legend set forth in Clause 5.4,
and shall be subject to all restrictions on transfer contained therein to the
same extent as the Global Fourth Issuer Note so exchanged.  Global Fourth Issuer Notes may also be
exchanged or replaced, in whole or in part, as provided in Clause 4. 
Every Fourth Issuer Note authenticated and delivered in exchange for, or
in lieu of, a Global Fourth Issuer Note or any portion thereof, pursuant to Clause 4 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Fourth Issuer Note.  A Global Fourth Issuer Note may not be
exchanged for another Fourth Issuer Note other than as provided in this Clause 5.1.

 

8

 

5.2                               Transfer and Exchange of Book-Entry Interests

 

The
transfer and exchange of Book-Entry Interests shall be effected through DTC,
Euroclear and/or Clearstream, Luxembourg, as the case may be, in accordance with
these presents, the Fourth Issuer Paying Agent and Agent Bank Agreement and the
procedures therefor of DTC, Euroclear and/or Clearstream, Luxembourg, as the
case may be.  Book-Entry Interests shall
be subject to restrictions on transfer comparable to those set forth herein and
in the Fourth Issuer Paying Agent and Agent Bank Agreement to the extent
required by the Securities Act.  The
Note Trustee shall have no obligation to ascertain or to monitor DTC’s,
Euroclear’s or Clearstream, Luxembourg’s compliance with any such restrictions
on transfer.

 

5.3                               Transfer of Definitive Fourth Issuer Notes

 

Definitive
Fourth Issuer Notes may be transferred in whole or in part (provided that any
partial transfer relates to a Definitive Fourth Issuer Note) in the principal
amount of, in the case of the Series 1 Fourth Issuer Notes, the Series 2 Fourth
Issuer Notes and the Series 3 Fourth Issuer Notes, U.S.$1,000 or U.S.$10,000;
in the case of the Series 4 Fourth Issuer Notes and the Series 5 Class A1
Fourth Issuer Notes, €500,000; and in the case of the Series 5 Fourth Issuer
Notes, (other than the Series 5 Class A1 Fourth Issuer Notes) £1,000 or £10,000
or, in each case, any integral multiple thereof or in such other denominations
(which in the case of the Series 4 Fourth Issuer Notes and the Series 5 Class
A1 Fourth Issuer Notes must be higher than €500,000) as the Note Trustee shall
determine and notify to the relevant Noteholders.  When Definitive Fourth Issuer Notes are presented by a Noteholder
to the Registrar with a request to register the transfer of such Definitive
Fourth Issuer Notes, the Registrar shall register the transfer as requested
only if such Definitive Fourth Issuer Notes are presented or surrendered for
registration of transfer and are endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Registrar duly executed by
such Noteholder or by his attorney duly authorised in writing and upon receipt
of such certificates and other documents as shall be necessary to evidence compliance
with the restrictions on transfer contained in this Agreement and in the Fourth
Issuer Paying Agent and Agent Bank Agreement. 
Thereupon, the Registrar shall request the Fourth Issuer to issue and
the Registrar shall itself authenticate new Definitive Fourth Issuer Notes
required to be issued in connection with such transfer.  In the case of a transfer of part only of
such Definitive Fourth Issuer Note, a new Definitive Fourth Issuer Note in
respect of the balance not transferred will be issued to the transferor.  All transfers of Definitive Fourth Issuer
Notes are subject to any restrictions on transfer set forth on such Definitive
Fourth Issuer Notes and the detailed regulations concerning transfers in the Fourth
Issuer Paying Agent and Agent Bank Agreement.

 

5.4                               Regulation S Legend

 

Each
Reg S Global Fourth Issuer Note and each Reg S Definitive Fourth Issuer Note
issued in exchange therefor shall bear a legend in substantially the following
form:

 

THIS
FOURTH ISSUER NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW,
PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE
COMMENCEMENT OF THE OFFERING OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF 

 

9

 

THE
SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES.

 

5.5                               Cancellation and/or Adjustment of Global Fourth Issuer Notes

 

At
such time as all Book-Entry Interests in respect of a Global Fourth Issuer Note
have been exchanged for Definitive Fourth Issuer Notes, such Global Fourth
Issuer Note shall be returned to or retained and cancelled by the Registrar as
set out in the Fourth Issuer Paying Agent and Agent Bank Agreement.  At any time prior to such cancellation, if
any Book-Entry Interest is exchanged for an interest in another Global Fourth
Issuer Note, the principal amount of Fourth Issuer Notes represented by such
Global Fourth Issuer Note shall be reduced accordingly and an endorsement shall
be made on such Global Fourth Issuer Note by the Registrar to reflect such
reduction.

 

5.6                               General Provisions Relating to all Transfers and Exchanges

 

(a)                                  To permit
registrations of transfers and exchanges of Fourth Issuer Notes, the Fourth
Issuer shall execute and the Registrar shall authenticate Global Fourth Issuer
Notes and Definitive Fourth Issuer Notes upon a written order signed by an
officer of the Fourth Issuer.

 

(b)                                 No service
fee shall be charged to a Noteholder for any registration of a Definitive
Fourth Issuer Note on transfer or exchange but the Fourth Issuer may require
payment of a sum sufficient to cover any stamp or transfer tax or similar
governmental charge payable in connection therewith (other than any such stamp
or transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Condition 13)
and the Registrar may require an indemnity in respect of such tax or charge.

 

(c)                                  All Global
Fourth Issuer Notes and Definitive Fourth Issuer Notes issued upon any
registration of transfer or exchange of Global Fourth Issuer Notes or
Definitive Fourth Issuer Notes shall be the valid obligations of the Fourth
Issuer, evidencing the same debt and entitled to the same benefits under this
Deed, as the Global Fourth Issuer Notes or Definitive Fourth Issuer Notes
surrendered upon such registration of transfer or exchange.

 

5.7                               Register of Fourth Issuer Notes

 

The
Fourth Issuer shall at all times ensure that the Registrar maintains in London,
or at such other place as the Note Trustee may agree in writing, a register
(the Register) in respect of the
Fourth Issuer Notes showing the amount of the Global Fourth Issuer Notes or
Definitive Fourth Issuer Notes, as the case may be, from time to time
outstanding and the dates of issue and all subsequent transfers and changes of
ownership thereof and the names and addresses of the holders of the Global
Fourth Issuer Notes or the Definitive Fourth Issuer Notes.  So long as DTC or its nominee, or the Common
Depositary or its nominee, is the registered holder of a Global Fourth Issuer
Note, DTC or the Common Depositary, as the case may be, will be considered the
sole registered holder of such Global Fourth Issuer Note for all purposes under
this Fourth Issuer Trust Deed.  Each
Fourth Issuer Note, whether in global or definitive form, shall have an
identifying serial number which shall be entered on the Register.  The Note Trustee and the holders of such
Fourth Issuer Notes or any of them and any person authorised by it or any of
them may at all reasonable times during office hours inspect the Register and
take copies of or extracts from it.

 

6.                                      FEES, DUTIES AND TAXES

 

The
Fourth Issuer will pay any stamp duty, issue, registration, documentary or
other taxes of a similar nature and duties payable in the United Kingdom,
Belgium, Luxembourg or the 

 

10

 

United
States, including interest and penalties, on or in connection with (a) the
execution and delivery of these presents and the Transaction Documents to which
it is a party and any documents executed pursuant thereto, (b) the constitution
and original issue of the Fourth Issuer Notes, and (c) any action in any
jurisdiction taken by or on behalf of the Note Trustee or (where permitted
under these presents so to do) any Noteholder to enforce the Fourth Issuer
Notes.

 

7.                                      COVENANT OF COMPLIANCE

 

The
Fourth Issuer covenants with the Note Trustee that it will comply with and
perform and observe all the provisions of these presents, the Fourth Issuer
Notes, the Fourth Issuer Deed of Charge, the Fourth Issuer Paying Agent and
Agent Bank Agreement and the documents executed pursuant thereto and the other
Transaction Documents which are expressed to be binding on it.  The Conditions shall be binding on the
Fourth Issuer, the Noteholders, the Note Trustee and all persons claiming
through or under any of them.  The Note
Trustee shall be entitled to enforce the obligations of the Fourth Issuer under
the Fourth Issuer Notes and the Conditions and to exercise any other rights,
powers, authorities and discretions conferred upon the Note Trustee in the
Conditions as if the same were set out and contained in this Deed, which shall
be read and construed as one document with the Fourth Issuer Notes.  The Note Trustee shall hold the benefit of
this covenant upon trust for itself and the Noteholders according to its and
their respective interests.  The
provisions of Schedule 4
shall have effect in the same manner as if herein set forth.

 

8.                                      CANCELLATION OF FOURTH ISSUER NOTES AND RECORDS

 

8.1                                 The Fourth
Issuer shall procure that all Fourth Issuer Notes (a) redeemed, (b) being
mutilated or defaced, surrendered and replaced pursuant to Condition 13 or (c) exchanged as provided
in these presents shall forthwith be cancelled by or on behalf of the Fourth
Issuer and a certificate stating:

 

(d)                                 the
aggregate principal amount of Fourth Issuer Notes which have been redeemed;

 

(e)                                  the serial
numbers of Fourth Issuer Notes of each class so redeemed;

 

(f)                                    the
aggregate amount of interest paid (and the due dates of such payments) on
Fourth Issuer Notes of each class; and

 

(g)                                 the
aggregate principal amounts of Fourth Issuer Notes of each class which have
been so exchanged and replaced and the serial numbers of such Fourth Issuer
Notes in definitive form,

 

shall
be given to the Note Trustee by or on behalf of the Fourth Issuer as soon as
possible and in any event within four months after the date of such redemption,
purchase, cancellation, exchange or replacement, as the case may be.  The Note Trustee may accept without further
investigation or inquiry such certificate as conclusive evidence of such
redemption, purchase, exchange or replacement pro
tanto of the Fourth Issuer Notes or payment of interest thereon and
of cancellation of the relative Fourth Issuer Notes.

 

8.2                                 The Fourth
Issuer shall procure that the Registrar shall keep a full and complete record
of all Fourth Issuer Notes and of their redemption, cancellation, payment or
exchange (as the case may be) and of all replacement Fourth Issuer Notes issued
in substitution for lost, stolen, mutilated, defaced or destroyed Fourth Issuer
Notes.  The Fourth Issuer shall procure
that the Registrar shall at all reasonable times make such record available to
the Fourth Issuer and the Note Trustee.

 

11

 

8.3                                 All
records and certificates maintained pursuant to this Clause shall make a
distinction between Definitive Fourth Issuer Notes and Global Fourth Issuer
Notes.

 

9.                                      ENFORCEMENT

 

9.1                                 The Note
Trustee may at any time, at its discretion and without notice, take such
proceedings and/or other action as it may think fit against or in relation to
the Fourth Issuer or any other person as it may think fit to enforce its
obligations under these presents, the Fourth Issuer Notes or any of the other
Transaction Documents.

 

9.2                                 Unless the
contrary be proved to the satisfaction of the Note Trustee, proof that as
regards any specified Fourth Issuer Note the Fourth Issuer has made default in
paying any amount due in respect of such Fourth Issuer Note shall be sufficient
evidence that the same default has been made as regards all other Fourth Issuer
Notes in respect of which the relevant amount is due and payable.

 

9.3                                 References
in Clauses 2.2(b) and 2.2(c) or the provisions of any trust deed
supplemental to this Deed corresponding to Clauses
2.2(b) and 2.2(c) to
the rates aforesaid shall, in the event of such Fourth Issuer Notes having
become due and repayable, with effect from the expiry of the Interest Period
during which such Fourth Issuer Notes become due and repayable, be construed as
references to rates of interest calculated mutatis
mutandis in accordance with the Conditions except that no notices
need be published in respect thereof.

 

10.                               PROCEEDINGS, ACTIONS AND INDEMNIFICATION

 

10.1                           The Note
Trustee shall not be bound to take any proceedings mentioned in Clause 9.1 or any other action in relation
to these presents, the Fourth Issuer Notes or any documents executed pursuant
thereto or any of the other Transaction Documents to which the Note Trustee is
a party unless (a) respectively directed or requested to do so by an
Extraordinary Resolution of the Class A Fourth Issuer Noteholders, the Class B
Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders, or the Class
C Fourth Issuer Noteholders, as the case may be, or in writing by the holders
of at least one-quarter in aggregate Principal Amount Outstanding of the Class
A Fourth Issuer Notes, the Class B Fourth Issuer Notes, the Class M Fourth
Issuer Notes or the Class C Fourth Issuer Notes, as the case may be, and (b) it
shall be indemnified and/or secured to its satisfaction against all
liabilities, actions, proceedings, claims and demands to which it may be or
become liable and all costs, charges, damages and expenses which may be
incurred by it in connection therewith, and the terms of such indemnity may
include the provisions of a fighting fund, non-recourse loan or other similar arrangement
PROVIDED THAT:

 

(a)                                  the Note
Trustee shall not be obliged to act at the direction or request of the Class B
Fourth Issuer Noteholders as aforesaid unless either the Note Trustee is of the
sole opinion that to do so would not be materially prejudicial to the interests
of the Class A Fourth Issuer Noteholders or such action is sanctioned by an
Extraordinary Resolution of the Class A Fourth Issuer Noteholders;

 

(b)                                 the Note
Trustee shall not be obliged to act at the direction or request of the Class M
Fourth Issuer Noteholders as aforesaid unless (x) either the Note Trustee is of
the sole opinion that to do so would not be materially prejudicial to the
interests of the Class A Fourth Issuer Noteholders or such action is sanctioned
by an Extraordinary Resolution of the Class A Fourth Issuer Noteholders and (y)
either the Note Trustee is of the sole opinion that to do so would not be
materially prejudicial to the interests of the Class B Fourth Issuer
Noteholders or such action is sanctioned by an Extraordinary Resolution of the
Class B Fourth Issuer Noteholders.

 

12

 

(c)                                  the Note
Trustee shall not be obliged to act at the direction or request of the Class C
Fourth Issuer Noteholders as aforesaid unless (x) either the Note Trustee is of
the sole opinion that to do so would not be materially prejudicial to the
interests of the Class A Fourth Issuer Noteholders or such action is sanctioned
by an Extraordinary Resolution of the Class A Fourth Issuer Noteholders and (y)
either the Note Trustee is of the sole opinion that to do so would not be
materially prejudicial to the interests of the Class B Fourth Issuer
Noteholders or such action is sanctioned by an Extraordinary Resolution of the
Class B Fourth Issuer Noteholders and (z) either the Note Trustee is of the
sole opinion that to do so would not be materially prejudicial to the interests
of the Class M Fourth Issuer Noteholders or such action is sanctioned by an
Extraordinary Resolution of the Class M Fourth Issuer Noteholders.

 

10.2                           Save as
provided below, only the Note Trustee may enforce the provisions of these
presents, the Conditions or the Fourth Issuer Notes.  No Noteholder shall be entitled to proceed directly against the
Fourth Issuer or any other party to any of the Fourth Issuer Transaction
Documents unless the Note Trustee having become bound as aforesaid to take
proceedings fails to do so within a reasonable period and such failure is
continuing provided that no Class C Fourth Issuer Noteholder, no Class M Fourth
Issuer Noteholder and no Class B Fourth Issuer Noteholder shall be entitled to
take proceedings for the winding up or administration of the Fourth Issuer for
so long as there are any Class A Fourth Issuer Notes outstanding and no Class M
Fourth Issuer Noteholder shall be entitled to take proceedings for the winding
up or administration of the Fourth Issuer for so long as there are any Class B
Fourth Issuer Notes outstanding and no Class C Fourth Issuer Noteholder shall
be entitled to take proceedings for the winding up or administration of the
Fourth Issuer for so long as there are any Class M Fourth Issuer Notes
outstanding.  Consistent with
Section 316 of the Trust Indenture Act, each Noteholder shall have the
right to institute proceedings for the enforcement of payment of principal and
interest on the Fourth Issuer Notes held by it, on or after the maturity date
of the relevant Fourth Issuer Notes set out on the face of such Fourth Issuer
Notes.

 

11.                               DISCHARGE OF PAYMENT

 

Any payment to be made in respect of the Fourth Issuer
Notes by the Fourth Issuer or the Note Trustee may be made in accordance with
the Conditions and any payment so made shall be a good discharge of the
relevant payment obligation of the Fourth Issuer or, as the case may be, the
Note Trustee.

 

12.                               PARTIAL PAYMENTS

 

Upon presentation and surrender to the Registrar of a
Definitive Fourth Issuer Note that is redeemed in part, the Registrar shall
authenticate for the holder a new Definitive Fourth Issuer Note equal in
principal amount to the principal amount of the unredeemed portion of the
Definitive Fourth Issuer Note surrendered. 
Upon presentation of a Global Fourth Issuer Note that is redeemed in
part, the Registrar shall make a notation on Part Ii of the
Schedule thereto to reduce the aggregate principal amount of such Global
Fourth Issuer Note to an amount equal to the aggregate principal amount of the
unredeemed portion of the Global Fourth Issuer Note presented.

 

13.                               COVENANTS BY THE FOURTH ISSUER

 

So long as any of the Fourth Issuer Notes remains
outstanding (or, in the case of paragraphs (h),
(i), (j), (n) and (o), so long as any of the Fourth Issuer
Notes remains liable to prescription or, in the case of paragraph (q), until the expiry of a period
of 30 days after the relevant date (as defined in Condition 7) in respect of the payment of principal in respect
of 

 

13

 

all such Fourth Issuer Notes remaining outstanding at
such time) the Fourth Issuer covenants with the Note Trustee that it shall:

 

(a)                                  Conduct:  at all times carry on and
conduct its affairs in a proper and efficient manner and in accordance with its
constitutive documents and all laws and regulations applicable to it;

 

(b)                                 Information:  give or
procure to be given to the Note Trustee such opinions, certificates,
information and evidence as the Note Trustee shall require and in such form as
it shall require, including without limitation the procurement by the Fourth
Issuer of all such certificates called for by the Note Trustee pursuant to this
Deed for the purpose of the discharge or exercise of the duties, trusts,
powers, authorities and discretions vested in it under these presents or by
operation of law;

 

(c)                                  Accounts for Stock Exchange:  cause to be
prepared and certified by the Auditors of the Fourth Issuer in respect of each
Financial Period, accounts in such form as will comply with all relevant legal
and accounting requirements and all requirements for the time being of any
stock exchange, competent listing authority and/or quotation system on or by
which the Fourth Issuer Notes are listed, quoted and/or traded;

 

(d)                                 Books and Records:  at all times
keep proper books of account and allow the Note Trustee and any person
appointed by the Note Trustee free access to such books of account at all
reasonable times during normal business hours;

 

(e)                                  Noteholder Information:  send to the
Note Trustee (in addition to any copies to which it may be entitled as a holder
of any securities of the Fourth Issuer) two copies in English of every balance
sheet, profit and loss account, report, circular and notice of general meeting
and every other document issued or sent to its shareholders as a class together
with any of the foregoing, and every document issued or sent to holders of
securities other than its shareholders (including the Noteholders) as soon as
practicable after the issue or publication thereof;

 

(f)                                    Notice of Note Event of Default:  give notice
in writing to the Note Trustee of the occurrence of any Note Event of Default
or any matter it concludes, acting reasonably, to be likely to give rise to a
Note Event of Default immediately upon becoming aware thereof, including the
status of any such default or matter and what action the Fourth Issuer is
taking or proposes to take with respect thereto, and without waiting for the
Note Trustee to take any action;

 

(g)                                 Notice of Deferral of Payments:  as soon as
practicable after becoming aware that any part of a payment of interest on the
Fourth Issuer Notes will be deferred or that a payment previously deferred will
be made in accordance with Condition 4,
give notice thereof to the Noteholders in accordance with Condition 14 and, for so long as the Fourth
Issuer Notes are listed on the official list of the United Kingdom Listing
Authority and admitted to trading on the London Stock Exchange’s market for
listed securities, in accordance with the listing rules of the United Kingdom
Listing Authority and the rules of the London Stock Exchange;

 

(h)                                 Certificates Relating to Financial
Information:  give to the Note Trustee (i) within 14 days
after demand by the Note Trustee therefor and (ii) (without the necessity for
any such demand) promptly after the publication of its audited accounts in
respect of each Financial Period commencing with the financial period first
ending after the date hereof and in any event not later than 120 days after the
end of each such financial period a certificate signed by two directors of the
Fourth Issuer to the effect that as at 

 

14

 

a date not more than seven days before delivering such
certificate (the certification date)
there did not exist and had not existed since the certification date of the
previous certificate (or in the case of the first such certificate the date
hereof) any Note Event of Default (or if such exists or existed, specifying the
same) and that during the period from and including the certification date of
the last such certificate (or in the case of the first such certificate the
date hereof) to and including the certification date of such certificate the
Fourth Issuer has complied, to the best of such directors’ knowledge and
belief, with all its obligations contained in these presents and each of the
Fourth Issuer Transaction Documents to which it is a party or (if such is not
the case) specifying the respects in which it has not so complied;

 

(i)                                     Further Assurances:  at all times
execute and do all such further documents, acts and things as may be necessary
at any time or times in the opinion of the Note Trustee to give effect to these
presents and the other Fourth Issuer Transaction Documents only in so far as
permitted by law;

 

(j)                                     Agent Bank, Reference Banks etc.:  at all times
maintain an Agent Bank, four Reference Banks, a Paying Agent, a Transfer Agent
and a Registrar in accordance with the Conditions;

 

(k)                                  Notification of Non-Payment:  procure the
Principal Paying Agent (or any other relevant Paying Agent) to notify the Note
Trustee forthwith in the event that (i) the Principal Paying Agent (or other
relevant Paying Agent) does not, on or before the due date for any payment in
respect of any of the Fourth Issuer Notes, receive unconditionally pursuant to
the Fourth Issuer Paying Agent and Agent Bank Agreement, as applicable, payment
of the full amount in the requisite currency of the monies payable on such due
date on all such Fourth Issuer Notes, or (ii) there are insufficient funds in
euro, U.S. dollars, or sterling, as the case may be, available to the Principal
Paying Agent to discharge the amount of the monies payable on such due date;

 

(l)                                     Notification of Late Unconditional
Payment:  in
the event of any unconditional payment to the Principal Paying Agent, any other
relevant Paying Agent, or the Note Trustee of any sum due in respect of any of
the Fourth Issuer Notes being made after the due date for payment thereof
forthwith give or procure to be given notice to the relevant Noteholders in
accordance with Condition 14 that such payment has been made;

 

(m)                               Listing:  use reasonable endeavours to
maintain the listing of the Fourth Issuer Notes on the official list of the
United Kingdom Listing Authority and to maintain the admission to trading of
the Fourth Issuer Notes on the London Stock Exchange’s market for listed securities
or, if it is unable to do so having used reasonable endeavours, use reasonable
endeavours to obtain and maintain a quotation, listing and admission to trading
of the Fourth Issuer Notes on or by such other stock exchanges, competent
listing authorities and/or quotation systems as the Fourth Issuer may decide
(with the prior written approval of the Note Trustee) and shall also upon
obtaining a quotation, listing and admission to trading of such Fourth Issuer
Notes on or by such other stock exchanges, competent listing authorities and/or
quotation systems enter into a trust deed supplemental to this Deed to effect
such consequential amendments to this Deed as the Note Trustee may require or
as shall be requisite to comply with the requirements of any such stock
exchange, competent listing authority and/or quotation system;

 

15

 

(n)                                 Change of Agent Bank, Reference
Banks, etc.:  give notice to the Noteholders in accordance
with Condition 14 of any
appointment, resignation or removal of any Agent Bank, Reference Banks, Paying
Agent, Transfer Agent or Registrar (other than the appointment of the initial
Agent Bank, Reference Banks, Paying Agents, Transfer Agent and Registrar)
after, except in the case of resignation, having obtained the prior written
approval of the Note Trustee (such approval not to be unreasonably withheld or
delayed) thereto or any change of any Paying Agent’s, Agent Bank’s, Transfer
Agent’s or Registrar’s specified office and (except as provided by the Fourth
Issuer Paying Agent and Agent Bank Agreement or the Conditions) at least 30
days prior to such event taking effect; PROVIDED
ALWAYS THAT so long as any of the Fourth Issuer Notes remains
outstanding in the case of the termination of the appointment of the Agent
Bank, Transfer Agent or the Registrar or so long as any of the Fourth Issuer
Notes remains liable to prescription in the case of the termination of the
appointment of the Principal Paying Agent no such termination shall take effect
until a new Agent Bank, Transfer Agent, Registrar or Principal Paying Agent, as
the case may be, has been appointed on terms previously approved in writing by
the Note Trustee;

 

(o)                                 Pre-Approval of Notices:  obtain the
prior written approval of the Note Trustee to, and promptly give to the Note
Trustee and the Rating Agencies two copies of, the form of every notice given
to the Noteholders in accordance with Condition
14 (such approval, unless so expressed, not to constitute an
invitation or inducement to engage in investment activities within the meaning
of Section 21 of the Financial Services and Markets Act 2000);

 

(p)                                 Availability of Meeting Materials:  from time to
time as required or contemplated by this Deed or as reasonably requested by the
Note Trustee, make available through the Paying Agents, or otherwise, such
documents as may be required by the Noteholders in connection with meetings of
Noteholders;

 

(q)                                 Compliance with Fourth Issuer Paying
Agent and Agent Bank Agreement and other Transaction Documents:  use its best
endeavours to procure that the Agent Bank, the Paying Agents, the Transfer
Agent and the Registrar comply with and perform all their respective
obligations under the Fourth Issuer Paying Agent and Agent Bank Agreement and
the other Transaction Documents and (in the case of the Paying Agents, the
Transfer Agent and the Registrar) any notice given by the Note Trustee pursuant
to Clause 2.3(a) and not make any
amendment or modification to the Fourth Issuer Paying Agent and Agent Bank
Agreement or any other Transaction Documents or agree to waive or authorise any
breach thereof without the prior written approval of the Note Trustee;

 

(r)                                    Exercise of Redemption Rights:  in the event
that Funding 1 elects to prepay any Term Advance in whole or in part under Clause 8 of the Intercompany Loan Terms and
Conditions or Clause 6 of the
Fourth Issuer Intercompany Loan Confirmation, the Fourth Issuer shall exercise
its right to redeem the corresponding class or classes of Fourth Issuer Notes
in the same respective aggregate principal amounts as such Term Advance on the
same Interest Payment Date under Condition
5(B) or Condition 5(F),
as applicable;

 

(s)                                  Redemption Requirements:  not give
notice of its election to redeem all or any part of a class or classes of
Fourth Issuer Notes pursuant to Condition
5(D),  (E) or (F) unless it shall first have:

 

16

 

(i)                                     given prior written notice to the Note Trustee of its
intention so to do in accordance with the Fourth Issuer Paying Agent and Agent
Bank Agreement;

 

(ii)                                  delivered to the Note Trustee a certificate signed by
two directors of the Fourth Issuer certifying that the Fourth Issuer will have
the necessary funds on the Interest Payment Date on which redemption is to
occur (the redemption date) to
discharge all amounts required under the Fourth Issuer Deed of Charge to be
paid in priority to such class or classes of Fourth Issuer Notes on the
redemption date, and to redeem such class or classes of Fourth Issuer Notes in
whole or, as the case may be, in part; and that all such funds will on such
redemption date be subject to the security constituted by the Fourth Issuer
Deed of Charge and not subject to the interest of any other person; and

 

(iii)                               provided evidence acceptable to the Note Trustee of
the matters certified by it in paragraph (ii) above,

 

provided always that the provisions of this subclause
are subject to and without prejudice to the provisions of Clause 13(o);

 

(t)                                    United States Reporting Requirements:  file with
the Note Trustee copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the
foregoing as the SEC may by rules and regulations prescribe) which the Fourth
Issuer is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act within 15 days after it files them with the SEC and comply
with the other provisions of Section 314(a) of the Trust Indenture Act;

 

(u)                                 Interest in Fourth Issuer Charged
Property:  ensure that, save as permitted in these
presents, the Fourth Issuer Deed of Charge, the Conditions and the other Fourth
Issuer Transaction Documents, no person other than the Fourth Issuer and the
Security Trustee shall have any equitable interest in the Fourth Issuer Charged
Property;

 

(v)                                 Maintenance of Fourth Issuer Cash
Manager: 
ensure that there is at all times a cash manager appointed in accordance
with the provisions of the Fourth Issuer Cash Management Agreement;

 

(w)                               Tax Deduction:  take
reasonable steps to ensure that it does not engage in any course of conduct
that would lead to a deduction, for United Kingdom corporation tax purposes, in
respect of accrued interest or discount on the Fourth Issuer Notes by the
Fourth Issuer being denied, postponed or restricted (whether such denial,
postponement or restriction results from the application of paragraph 2 or 13
of Schedule 9 of the Finance Act 1996 or otherwise);

 

(x)                                   United Kingdom and United States Tax
Status: 
ensure that it is at all times solely resident in the United Kingdom for
United Kingdom tax purposes and has no branch, business establishment or other
fixed establishment outside the United Kingdom; and furthermore, ensure that it
will not engage in any activities in the United States (directly or through
agents), will not derive any income from United States sources as determined
under United States income tax principles, and will not 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 income tax
principles;

 

17

 

(y)                                 Pre-Enforcement Payments:  ensure that
amounts standing to the credit of the Fourth Issuer Transaction Account will be
applied by the Fourth Issuer in or towards satisfaction of such of the
obligations set out in the Fourth Issuer Cash Management Agreement as may be,
at any given time, then due and payable (in each case only if and to the extent
that payments or provisions of a higher order of priority which are also due
and payable or are likely to fall due at that time or prior to the next
succeeding Interest Payment Date have been made or provided for in full);

 

(z)                                   Availability of Information:  make
available for inspection by Noteholders at the specified office of the
Registrar during normal business hours on any Business Day copies of each
balance sheet and profit and loss account sent to the Note Trustee pursuant to Clause 13(e), this Deed, and the other
Transaction Documents and promptly provide the Registrar with the information
specified in Condition 5(C);

 

(aa)                            Ratings:  furnish, or procure that there
is furnished, from time to time, any and all documents, instruments,
information and undertakings that may be reasonably necessary in order to
maintain the current ratings of the Fourth Issuer Notes by the Rating Agencies
(save that when any such document, instrument, information and/or undertaking
is not within the possession or control of the Fourth Issuer, the Fourth Issuer
agrees only to use its best efforts to furnish, or procure that there is
furnished, from time to time any such documents, instruments, information and
undertakings as may be reasonably necessary in order to maintain the current
ratings of the Fourth Issuer Notes by the Rating Agencies);

 

(bb)                          Calculations:  do, or
procure that there are done on its behalf, all calculations required pursuant
to the Conditions;

 

(cc)                            DTC, Euroclear and Clearstream,
Luxembourg:  use its reasonable endeavours to procure
that DTC, Euroclear and/or Clearstream, Luxembourg (as the case may be)
issue(s) any certificate or other document requested by the Note Trustee acting
reasonably pursuant to these presents as soon as practicable after such
request;

 

(dd)                          Information Regarding Noteholders:  furnish or
cause to be furnished to the Note Trustee on 30th June and 31st
December of each year, commencing 30th June, 2004 and at such other times
as the Note Trustee may request in writing, all information in the possession
or control of the Fourth Issuer, or of the Registrar as to the names and
addresses of the Noteholders, and requiring the Note Trustee to preserve, in as
current a form as is reasonably practicable, all such information so furnished
to it;

 

(ee)                            Officers’ Certificates and Opinions
of Counsel; Statements to be Contained Therein:  upon any application, demand
or request by the Fourth Issuer to the Note Trustee to take any action under
any of the provisions of this Deed (other than the issuance of Fourth Issuer
Notes) and upon request of the Note Trustee, furnish to the Note Trustee an
officers’ certificate and opinion of counsel complying with the provisions of
Section 314 of the Trust Indenture Act (an Officers’ Certificate and Opinion
of Counsel, respectively);

 

(ff)                                Authorised Signatories:  upon the
execution of this Deed and thereafter forthwith upon any change of the same,
deliver to the Note Trustee (with a copy to the Principal Paying Agent and the
Registrar) a list of the Authorised Signatories of the Fourth Issuer, together
with certified specimen signatures of the same; and

 

(gg)                          New Notes: procure that notice of any New Notes to be issued by
any New Issuer is given to the Noteholders in accordance with Condition 14.

 

18

 

14.                               REMUNERATION AND INDEMNIFICATION OF
THE NOTE TRUSTEE

 

14.1                           The Fourth Issuer shall pay to the Note Trustee
remuneration for its services as trustee as from the date of this Deed, such
remuneration to be at such rate and to be paid on such dates as may from time
to time be agreed in writing between the Fourth Issuer and the Note
Trustee.  The rate of remuneration in
force from time to time may upon the final redemption of the whole of the
Fourth Issuer Notes of any series be reduced by such amount as shall be agreed
in writing between the Fourth Issuer and the Note Trustee, such reduced
remuneration to be calculated from such date as shall be agreed as
aforesaid.  Such remuneration shall
accrue from day to day and be payable (in priority to payments to the
Noteholders) up to and including the date when, all the Fourth Issuer Notes
having become due for redemption, the redemption monies and interest thereon to
the date of redemption have been paid to the Principal Paying Agent or, as the
case may be, the Note Trustee PROVIDED THAT if
upon due presentation of any Fourth Issuer Note or any cheque payment of the
monies due in respect thereof is improperly withheld or refused, remuneration
will commence again to accrue until payment to Noteholders is made.

 

14.2                           In the event of the occurrence of a Note Event of
Default or the Note Trustee in its absolute discretion considering it
necessary, or being requested by the Fourth Issuer to undertake duties which
the Note Trustee and the Fourth Issuer agree to be of an exceptional nature or
otherwise outside the scope of the normal duties of the Note Trustee under this
Deed, the Fourth Issuer shall pay to the Note Trustee such additional
remuneration as shall be agreed between them.

 

14.3                           The Fourth Issuer shall pay to the Note Trustee in
addition an amount equal to the amount of any value added tax or similar tax
chargeable in respect of its remuneration under this Deed against production of
a valid tax invoice.

 

14.4                           In the event of the Note Trustee and the Fourth Issuer
failing to agree:

 

(a)                                  (in a case to which subclause
14.1 above applies) upon the amount of the remuneration; or

 

(b)                                 (in a case to which subclause
14.2 above applies) upon whether
such duties shall be of an exceptional nature or otherwise outside the scope of
the normal duties of the Note Trustee under this Deed, or upon such additional
remuneration,

 

such matters shall be determined by a merchant or
investment bank (acting as an expert and not as an arbitrator) selected by the
Note Trustee and approved by the Fourth Issuer or, failing such approval,
nominated (on the application of the Note Trustee) by the President for the
time being of The Law Society of England and Wales (the expenses involved in
such nomination and the fees of such merchant or investment bank being payable
by the Fourth Issuer) and the determination of any such merchant or investment
bank shall be final and binding upon the Note Trustee and the Fourth Issuer.

 

14.5                           In addition to remuneration hereunder, the Fourth
Issuer shall on written request pay (on an indemnity basis) all other costs,
charges and expenses which the Note Trustee may properly incur in relation to
the negotiation, preparation and execution of, the exercise of its powers and
the performance of its duties under, and in any other manner in relation to,
this Deed and any other Transaction Document to which the Note Trustee is a
party, including but not limited to travelling and legal expenses properly
incurred and any stamp, issue, registration, documentary and other similar
taxes or duties paid or payable by the Note Trustee in connection with any
action taken or contemplated by or on behalf of the Note Trustee for 

 

19

 

enforcing, or for any other purpose in relation to,
this Deed or any of the other Transaction Documents.

 

14.6                           All amounts payable pursuant to subclause  14.2
above and/or Clause 15(l)
shall be payable by the Fourth Issuer on the date specified in a written demand
by the Note Trustee and in the case of payments actually made by the Note
Trustee prior to such demand shall (if not paid within three days after such
demand and the Note Trustee so requires) carry interest at the rate of 3 per
cent. per annum above the mean base rate from time to time of the Reference
Banks from the date specified in such demand, and in all other cases shall (if
not paid on the date specified in such demand or, if later, within three days
after such demand and, in either case, the Note Trustee so requires) carry
interest at such rate from the date specified in such demand.  All remuneration payable to the Note Trustee
shall carry interest at such rate from the due date therefor.

 

14.7                           Unless otherwise specifically stated in any discharge
of this Deed the provisions of this Clause and Clause 15(l) shall continue in full force and effect
notwithstanding such discharge.

 

14.8                           The Note Trustee shall be entitled in its absolute
discretion to determine in respect of which series of Fourth Issuer Notes any
liabilities incurred under this Deed have been incurred.

 

15.                               SUPPLEMENT TO TRUSTEE ACTS

 

Section 1 of the Trustee Act 2000 shall not apply
to the duties of the Trustee in relation to the trusts constituted by these
presents.  Where there are any
inconsistencies between the Trustee Acts and the provisions of these presents,
the provisions of these presents shall, to the extent allowed by law, prevail
and, in the case of any such inconsistency with the Trustee Act 2000, the
provisions of these presents shall constitute a restriction or exclusion for
the purposes of that Act.

 

The Note Trustee shall have all the powers conferred
upon trustees by the Trustee Act 1925 of England and Wales and by way of
supplement thereto it is expressly declared as follows (which provisions,
except as expressly provided in this Clause
15, shall be in lieu of the provisions contained in
Section 315(a) of the Trust Indenture Act):

 

(a)                                  Expert Advice or Opinion:  the Note
Trustee may in relation to these presents or the other Transaction Documents
act on the advice or opinion of or any information obtained from any lawyer,
valuer, accountant, surveyor, banker, broker, auctioneer or other expert
whether obtained by the Fourth Issuer, the Note Trustee, the Principal Paying
Agent, the Registrar or otherwise and shall not be responsible for any
liability occasioned by so acting in good faith; any such advice, opinion or
information may be sent or obtained by letter, telex, telegram, facsimile
transmission, e-mail or cable and the Note Trustee shall not be liable for acting
on any advice, opinion or information purporting to be conveyed by any such
letter, telex, telegram, facsimile transmission or cable although the same
shall contain some error or shall not be authentic;

 

(b)                                 Certificate as Sufficient Evidence:  the Note
Trustee may call for and shall be at liberty to accept as sufficient evidence
of any fact or matter or the expediency of any transaction or thing a
certificate signed by any two directors of the Fourth Issuer and the Note
Trustee shall not be bound in any such case to call for further evidence or be
responsible for any liability that may be occasioned by it or any other person
acting on such certificate;

 

20

 

(c)                                  Custody of Documents:  the Note
Trustee shall be at liberty to hold these presents and any other documents
relating thereto or any other Transaction Documents or to deposit them in any
part of the world with any banker or banking company or company whose business
includes undertaking the safe custody of documents or lawyer or firm of lawyers
considered by the Note Trustee to be of good repute and the Note Trustee shall
not be responsible for or required to insure against any liability incurred in
connection with any such holding or deposit and may pay all sums required to be
paid on account of or in respect of any such deposit;

 

(d)                                 Application of Proceeds:  the Note
Trustee shall not be responsible for the receipt or application of the proceeds
of the issue of any of the Fourth Issuer Notes by the Fourth Issuer, the
exchange of any Global Fourth Issuer Note for another Global Fourth Issuer Note
or Definitive Fourth Issuer Notes or the exchange of any Definitive Fourth
Issuer Note for another Definitive Fourth Issuer Note or the delivery of any
Global Fourth Issuer Note or Definitive Fourth Issuer Notes to the person(s)
entitled to it or them;

 

(e)                                  Assumption of No Default:  except to
the extent required pursuant to Section 315(b) of the Trust Indenture Act,
the Note Trustee shall not be bound to give notice to any person of the
execution of any documents comprised or referred to in these presents or to
take any steps to ascertain whether any Note Event of Default has happened and,
until it shall have actual written notice pursuant to these presents to the
contrary, the Note Trustee shall be entitled to assume that no Note Event of
Default has occurred and that the Fourth Issuer is observing and performing all
of its obligations under these presents;

 

(f)                                    Absolute Discretion:  save as
expressly otherwise provided in this Deed, the Note Trustee shall have absolute
and uncontrolled discretion as to the exercise or non-exercise of its trusts,
powers, authorities and discretions under these presents (the exercise or
non-exercise of which as between the Note Trustee and the Noteholders shall be
conclusive and binding on the Noteholders) and provided it shall not have acted
fraudulently or negligently or in breach of the terms of this Deed, shall not
be responsible for any liability which may result from their exercise or
non-exercise;

 

(g)                                 Reliance on Extraordinary Resolution:  the Note
Trustee shall not be liable to any person by reason of having acted upon any
Extraordinary Resolution in writing or any Extraordinary Resolution or other
resolution purporting to have been passed at any meeting of the Noteholders of
all or any class or classes in respect whereof minutes have been made and
signed even though subsequent to its acting it may be found that there was some
defect in the constitution of the meeting or the passing of the resolution or
(in the case of an Extraordinary Resolution in writing) that not all
Noteholders had signed the Extraordinary Resolution or that for any reason the
resolution was not valid or binding upon such Noteholders;

 

(h)                                 Reliance on Notice of Prepayment:  without
prejudice to the right of the Note Trustee to require and/or accept any other
evidence, the Note Trustee may accept as conclusive evidence of the matters
certified therein a certificate signed by two directors of the Fourth Issuer
under Clause 13(s)(ii).  The Note Trustee shall have no
responsibility to the Noteholders or any other person for guaranteeing or
ensuring that the Fourth Issuer’s liabilities in respect of the Fourth Issuer
Notes and any other amounts are in fact discharged on the due date and shall
have no liability to the Noteholders or any other person for any failure by the
Fourth Issuer to discharge or pay such liabilities and other amounts;

 

21

 

(i)                                     Fourth Issuer Charged Property:  the Note
Trustee may accept without enquiry, requisition or objection such title as the
Fourth Issuer may have to the Fourth Issuer Charged Property or any part
thereof from time to time and shall not be bound to investigate or make any enquiry
into the title of the Fourth Issuer to the Fourth Issuer Charged Property or
any part thereof from time to time whether or not any default or failure is or
was known to the Note Trustee or might be, or might have been, discovered upon
examination, inquiry or investigation and whether or not capable of
remedy.  Notwithstanding the generality
of the foregoing, each Noteholder shall be solely responsible for making its
own independent appraisal of and investigation into the financial condition,
creditworthiness, condition, affairs, status and nature of the Fourth Issuer,
and the Note Trustee shall not at any time have any responsibility for the same
and each Noteholder shall not rely on the Note Trustee in respect thereof;

 

(j)                                     Reliance on Certificates or
Confirmations:  except in the event of wilful default or
manifest error, the Note Trustee shall be entitled to rely without
investigation or enquiry on a certificate or confirmation of the Agent Bank,
any Paying Agent, any Rating Agency or any Reference Bank in respect of every
matter and circumstance for which a certificate or confirmation of the Agent
Bank, any Paying Agent, any Rating Agency or any Reference Bank is expressly
provided for under these presents, the Conditions or any other Transaction Document
and to call for and rely upon a certificate or confirmation of the Agent Bank,
any Paying Agent, any Rating Agency or any Reference Bank or any other person
as to any other fact or matter prima facie
within the knowledge of the Agent Bank, any Paying Agent, any Rating Agency or
any Reference Bank or such other person, as sufficient evidence thereof and the
Note Trustee shall not be bound in any such case to call for further evidence
or be responsible for any loss, liability, costs, damages, expenses or
inconvenience that may be occasioned by its failing so to do or the exercise or
non-exercise by the Note Trustee of any of its powers, duties and discretions
hereunder;

 

(k)                                  Fourth Issuer Notes Not Authentic:  the Note
Trustee shall not be liable to any person by reason of having accepted as valid
or not having rejected any Fourth Issuer Note purporting to be such and
subsequently found to be forged or not authentic;

 

(l)                                     Indemnity:  without prejudice to the right
of indemnity by law given to trustees, the Fourth Issuer shall indemnify the
Note Trustee (except where the Note Trustee is indemnified by the Noteholders)
and keep it or him indemnified against all liabilities to which it or he may be
or become subject or which may be incurred by it or him in the proper execution
or purported proper execution of any of its or his trusts, powers, authorities
and discretions under these presents or any other Transaction Document or its
or his functions under any such appointment or in respect of any other matter or
thing done or omitted in any way relating to these presents or any other
Transaction Document or any such appointment save to the extent that the same
arises as a result of wilful default, wilful misconduct, fraud or breach of
trust on the part of the Note Trustee. 
The Note Trustee shall keep the Fourth Issuer informed of the progress
of any claims against the Note Trustee;

 

(m)                               Consent or Approval:  any consent
or approval given by the Note Trustee for the purposes of these presents or the
Fourth Issuer Notes may be given on such terms and subject to such conditions
(if any) as the Note Trustee thinks fit (acting reasonably) and,
notwithstanding anything to the contrary in these presents or the Fourth Issuer
Notes, may be given retrospectively;

 

(n)                                 No Disclosure Obligation:  unless and
to the extent ordered so to do by a court of competent jurisdiction, the Note
Trustee shall not be required to disclose to any 

 

22

 

Noteholder any information (including, without
limitation, information of a confidential, financial or price sensitive nature)
made available to the Note Trustee by the Fourth Issuer or any other person in
connection with these presents or any other Transaction Document and no
Noteholder shall be entitled to take any action to obtain from the Note Trustee
any such information;

 

(o)                                 Currency Conversion:  where it is
necessary or desirable for any purpose in connection with these presents to
convert any sum from one currency to another it shall be converted (unless
otherwise provided by these presents or required by law) at such rate or rates,
in accordance with such method and as at such date for the determination of
such rate of exchange, as may be agreed by the Note Trustee in consultation
with the Fourth Issuer and any rate, method and date so agreed shall be binding
on the Fourth Issuer and the Noteholders;

 

(p)                                 Certificate in respect of Material
Prejudice:  the Note Trustee may certify whether or not
any of the conditions, events and acts set out in Condition 9 (each of which conditions, events and acts shall,
unless the Note Trustee in its absolute discretion shall otherwise determine,
for all the purposes of these presents be deemed to include the circumstances
resulting therein and the consequences resulting therefrom) is in its opinion
materially prejudicial to the interests of the Noteholders of the relevant
class or classes and any such certificate shall be conclusive and binding upon
the Fourth Issuer and the Noteholders;

 

(q)                                 Determination by Note Trustee:  the Note
Trustee as between itself and the Noteholders may determine all questions and
doubts arising in relation to any of the provisions of this Deed.  Every such determination, whether or not
relating in whole or in part to the acts or proceedings of the Note Trustee,
shall be conclusive and shall bind the Note Trustee and the Noteholders;

 

(r)                                    Interests of Noteholders:  in
connection with the exercise by the Note Trustee of any of its trusts, duties,
rights, powers, authorities and discretions under these presents and the other
Transaction Documents:

 

(i)                                     where it is required to have regard to the interests
of the Noteholders of any class, it shall have regard to the interests of such
Noteholders as a class and, in particular but without prejudice to the
generality of the foregoing, shall not have regard to, or be in any way liable
for, the consequences of any exercise thereof for individual Noteholders
resulting from their being for any purpose domiciled or resident in, or
otherwise connected with, or subject to the jurisdiction of, any particular
territory, and the Note Trustee shall not be entitled to require, nor shall any
Noteholder be entitled to claim, from the Fourth Issuer or any other person,
any indemnification or payment in respect of any tax consequence of any such
exercise upon individual Noteholders;

 

(ii)                                  except where expressly provided otherwise, it shall
have regard to the interests of the Class A Fourth Issuer Noteholders, the
Class B Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders and
the Class C Fourth Issuer Noteholders equally PROVIDED
THAT (A) if in the opinion of the Note Trustee there is a conflict
between the interests of the Class A Fourth Issuer Noteholders, on the one hand
and the interests of the Class B Fourth Issuer Noteholders and/or the Class M
Fourth Issuer Noteholders and/or the Class C Fourth Issuer Noteholders on the
other hand, the Note Trustee shall have regard only to the interests of the
Class A Fourth Issuer Noteholders and (B), if in the opinion of the Note
Trustee there is a conflict between the 

 

23

 

interests of the Class B Fourth Issuer Noteholders on
one hand and the interests of the Class M Fourth Issuer Noteholders and the Class
C Fourth Issuer Noteholders on the other hand, the Note Trustee shall have
regard only to the interests of the Class B Fourth Issuer Noteholders and (C),
if in the opinion of the Note Trustee there is a conflict between the interests
of the Class M Fourth Issuer Noteholders on one hand and the interests of the
Class C Fourth Issuer Noteholders on the other hand, the Note Trustee shall
have regard only to the interests of the Class M Fourth Issuer Noteholders; but
so that this proviso shall not apply in the case of powers, authorities or
discretions in relation to which it is expressly stated that they may be
exercised by the Note Trustee only if in its opinion the interests of all the
Noteholders would not be materially prejudiced thereby; and

 

(iii)                               it shall not have regard to, or be in any way liable
for, the consequences of any exercise thereof for any other Fourth Issuer
Secured Creditor or any other person,

 

the Note Trustee shall be entitled to assume, for the
purposes of exercising any power, right, trust, authority, duty or discretion
under or in relation to the Fourth Issuer Notes, these presents or any of the
other Fourth Issuer Transaction Documents, that such exercise will not be
materially prejudicial to the interests of the Class A Fourth Issuer
Noteholders if each of the Rating Agencies has confirmed that the then current
rating by it of the Class A Fourth Issuer Notes would not be adversely affected
by such exercise, that such exercise will not be materially prejudicial to the
interests of the Class B Fourth Issuer Noteholders if each of the Rating
Agencies has confirmed that the then current rating by it of the Class B Fourth
Issuer Notes would not be adversely affected by such exercise, that such
exercise will not be materially prejudicial to the interests of the Class M
Fourth Issuer Noteholders if each of the Rating Agencies has confirmed that the
then current rating by it of the Class M Fourth Issuer Notes will not be
adversely affected by such exercise and that such exercise will not be materially
prejudicial to the interests of the Class C Fourth Issuer Noteholders if each
of the Rating Agencies has confirmed that the then current rating by it of the
Class C Fourth Issuer Notes will not be adversely affected by such exercise;

 

(s)                                  Certificate of Principal Amount
Outstanding:  the Note Trustee may call for any
certificate or other document to be issued by DTC, Euroclear or Clearstream,
Luxembourg as to the Principal Amount Outstanding of Fourth Issuer Notes
represented by a Global Fourth Issuer Note standing to the account of any
person.  Any such certificate or other
document shall (in the absence of manifest error) be conclusive and binding for
all purposes.  The Note Trustee shall
not be liable to any person by reason of having accepted as valid or not having
rejected any certificate or other document to such effect purporting to be
issued by DTC, Euroclear or Clearstream, Luxembourg and subsequently found to
be forged or not authentic;

 

(t)                                    Professional Charges:  any trustee
of these presents being a lawyer, accountant, broker or other person engaged in
any profession or business shall be entitled to charge and be paid all usual
professional and other charges for business transacted and acts done by him or
his firm in connection with the trusts of these presents and also his
reasonable charges in addition to disbursements for all other work and business
done and all time spent by him or his firm in connection with matters arising
in connection with these presents;

 

24

 

(u)                                 Power of Attorney:  the Note
Trustee may whenever it thinks fit (acting reasonably) delegate by power of
attorney or otherwise to any person or persons or fluctuating body of persons
(whether being a joint trustee of these presents or not) all or any of its
trusts, powers, authorities and discretions under these presents.  Such delegation may be made upon such terms
(including power to sub-delegate) and subject to such conditions and regulations
as the Note Trustee may in the interests of the Noteholders think fit.  The Note Trustee shall not be under any
obligation to supervise the proceedings or acts of any such delegate or
sub-delegate or be in any way responsible for any liability incurred by reason
of any misconduct or default on the part of any such delegate or sub-delegate
(except where such delegate or sub-delegate is an affiliate, associate or
otherwise connected with the Note Trustee). 
The Note Trustee shall within a reasonable time after any such
delegation or any renewal, extension or termination thereof give notice thereof
to the Fourth Issuer;

 

(v)                                 Delegation:  the Note
Trustee may in the conduct of the trusts of these presents instead of acting
personally employ and pay an agent (whether being a lawyer or other professional
person) to transact or conduct, or concur in transacting or conducting, any
business and to do, or concur in doing, all acts required to be done in
connection with these presents.  The
Note Trustee shall not be in any way responsible for any liability incurred by
reason of any misconduct or default on the part of any such agent or be bound
to supervise the proceedings or acts of any such agent;

 

(w)                               Ratings:  the Note Trustee shall have no
responsibility for the maintenance of any rating of any of the Fourth Issuer
Notes by the Rating Agencies or any other person;

 

(x)                                   No Requirement to Perform Illegal
Acts, etc.:  no provision of these presents shall require
the Note Trustee to do anything which may be illegal or contrary to applicable
law or regulation or expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties, or in the exercise
of any of its rights or powers or otherwise in connection with these presents,
any other Transaction Document or the Fourth Issuer Notes (including, without
limitation, forming any opinion or employing any legal, financial or other
adviser), if it shall believe that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;

 

(y)                                 Reports by Note Trustee to
Noteholders:  if required by Section 313(a) of the
Trust Indenture Act, within 60 days after 31st December of any year,
commencing 31st December, 2004, the Note Trustee shall deliver to each
Noteholder a brief report dated as of such 31st December that complies
with Section 313(a) of the Trust Indenture Act.  The Note Trustee also shall comply with Section 313(b), (c)
and (d) of the Trust Indenture Act. 
Reports delivered pursuant to this Clause
15(y) shall be sent as provided in Clause
24;

 

(z)                                   Preferential Collection of Claims
Against the Fourth Issuer:  the Note Trustee shall comply with
Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act.  A Note Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act to
the extent indicated therein.  The
provisions of Section 311 of the Trust Indenture Act shall apply to the
Fourth Issuer as the obligor of the Fourth Issuer Notes;

 

(aa)                            Responsibility for Reports etc.:  the Note
Trustee has no responsibility to verify or monitor the contents of, or (if
applicable) to check any calculations contained in, any reports, information,
documents, Officers’ Certificate and Opinions of Counsel 

 

25

 

delivered to the Note Trustee in accordance with Clauses 13(t), (dd), (ee) or (ff) or Clause
27, and is under no obligation to inform Noteholders of the contents
of any such reports, information, documents, Officers’ Certificate and Opinions
of Counsel, other than allowing Noteholders upon reasonable notice, to inspect
such reports, information, documents, Officers’ Certificate and Opinions of
Counsel;

 

(bb)                          Auditors Reports and Certificates:  any
certificate or report of the Auditors called for by or provided to the Note
Trustee in accordance with or for the purposes of these presents may be relied
on upon by the Note Trustee without further investigation or enquiry as
sufficient evidence of the facts stated therein notwithstanding that such
certificate or report and/or any engagement letter or other document entered
into by the Note Trustee in connection therewith contains a monetary or other
limit on the liability of the Auditors in respect thereof; and

 

(cc)                            Limitation of Liability:  subject to Clause 16 and save as required for the
purposes of the Trust Indenture Act, the Note Trustee shall not be responsible
for the genuineness, validity, effectiveness or suitability of any of the Fourth
Issuer Transaction Documents or any other documents entered into in connection
therewith or any other document or any obligation or rights created or
purported to be created thereby or pursuant thereto or any security or the
priority thereof constituted or purported to be constituted thereby or pursuant
thereto, nor shall it be responsible or liable to any person because of any
invalidity of any provision of such documents or the unenforceability thereof,
whether arising from statute, law or decisions of any court and (without
prejudice to the generality of the foregoing) the Note Trustee shall not have
any responsibility for or have any duty to make any investigation in respect of
or in any way be liable whatsoever for:

 

(i)                                     the nature, status, creditworthiness or solvency of
the Fourth Issuer or Funding 1 or any other person or entity who has at any
time provided any security or support whether by way of guarantee, charge or
otherwise in respect of any advance made to the Fourth Issuer;

 

(ii)                                  the execution, delivery, legality, validity, adequacy,
admissibility in evidence or enforceability of any Fourth Issuer Transaction
Document or any other document entered into in connection therewith;

 

(iii)                               the title, ownership, value, sufficiency,
enforceability or existence of any Fourth Issuer Charged Property or any
security (howsoever described) relating thereto;

 

(iv)                              the registration, filing, protection or perfection of
any security (howsoever described) relating to the Fourth Issuer Charged
Property or the priority of the security (howsoever described) thereby created
whether in respect of any initial advance or any subsequent advance or any
other sums or liabilities;

 

(v)                                 the scope or accuracy of any representations,
warranties or statements made by or on behalf of the Fourth Issuer or Funding 1
or any other person or entity who has at any time provided the same in any
Fourth Issuer Transaction Document or in any document entered into in
connection therewith;

 

(vi)                              the performance or observance by the Fourth Issuer or
Funding 1 or any other person of any provisions of any Fourth Issuer
Transaction Document or any document entered into in connection therewith or
the fulfilment or 

 

26

 

satisfaction of any conditions contained therein or
relating thereto or as to the existence or occurrence at any time of any
default, event of default or similar event howsoever described contained
therein or any waiver or consent which has at any time been granted in relation
to any of the foregoing;

 

(vii)                           the existence, accuracy or sufficiency of any legal or
other opinions, searches, reports, certificates, valuations or investigations
delivered or obtained or required to be delivered or obtained at any time in
connection with any Fourth Issuer Charged Property or Fourth Issuer Transaction
Document;

 

(viii)                        the title of the Fourth Issuer to any Fourth Issuer
Charged Property;

 

(ix)                                the suitability, adequacy or sufficiency of any
applicable criteria for any advances under the Fourth Issuer Intercompany Loan
Agreement or the legality or recoverability or enforceability thereof or the
priority of any security (howsoever described) in relation thereto;

 

(x)                                   the failure by the Fourth Issuer to obtain or comply
with any licence, consent or other authority in connection with the Fourth
Issuer Charged Property or the Fourth Issuer Transaction Documents or the
making of any advances in connection therewith or the failure to effect or
procure registration of or to give notice to any person in relation to or
otherwise protect the security (howsoever described) created or purported to be
created by or pursuant to any of the Fourth Issuer Charged Property or the
Fourth Issuer Transaction Documents or other documents entered into in
connection therewith;

 

(xi)                                the failure to call for delivery of documents of title
to or require any transfers, legal mortgages, charges or other further
assurances in relation to any of the assets that are the subject matter of any
of the Fourth issuer Transaction Documents or any other document;

 

(xii)                             any assets comprised in the security (howsoever
described) created by the Fourth Issuer Deed of Charge, or any deeds or
documents of title thereto, being uninsured or inadequately insured or being
held by or to the order of other parties to the Fourth Issuer Transaction
Documents, clearing organisations or their operators or by intermediaries such
as banks, brokers, depositories, warehousemen or other similar persons whether
or not on behalf of the Note Trustee;

 

(xiii)                          any accounts, books, records or files maintained by
the Fourth Issuer or any other person in respect of any of the Fourth Issuer
Charged Property or Transaction Documents; or

 

(xiv)                         any other matter or thing relating to or in any way
connected with any Fourth Issuer Charged Property or any Fourth Issuer
Transaction Document or any document entered into in connection therewith
whether or not similar to the foregoing.

 

16.                               NOTE TRUSTEE’S LIABILITY

 

None of the provisions of these presents shall, in any
case in which the Note Trustee has failed to show the degree of care and
diligence required of it as trustee of these presents, having regard to the
provisions of these presents and any of the other Fourth Issuer Transaction
Documents to which the Note Trustee is a party conferring on the Note Trustee

 

27

 

any powers, authorities or discretions, relieve or
indemnify the Note Trustee against any liabilities which by virtue of any rule
of law would otherwise attach to it in respect of any wilful default, wilful
misconduct, breach of duty, negligence or breach of trust of which it may be
guilty in relation to its duties under these presents.

 

17.                               NOTE TRUSTEE CONTRACTING WITH THE
FOURTH ISSUER

 

Neither the Note Trustee nor any director or officer
or holding company or associated company of a corporation acting as a trustee
under these presents shall by reason of its or his fiduciary position be in any
way precluded from:

 

(a)                                  entering into or being interested in any contract or
financial or other transaction or arrangement with the Fourth Issuer or any
other party to the Transaction Documents or any person or body corporate
associated with the Fourth Issuer or any other party to the Fourth Issuer
Transaction Documents (including without limitation any contract, transaction
or arrangement of a banking or insurance nature or any contract, transaction or
arrangement in relation to the making of loans or the provision of financial
facilities or financial advice to, or the purchase, placing or underwriting of
or the subscribing or procuring subscriptions for or otherwise acquiring,
holding or dealing with, or acting as paying agent in respect of, the Fourth
Issuer Notes or any other notes, bonds, stocks, shares, debenture stock,
debentures or other securities of, the Fourth Issuer or any other party to the
Fourth Issuer Transaction Documents or any person or body corporate associated
as aforesaid); or

 

(b)                                 accepting or holding the trusteeship of any other
trust deed constituting or securing any other notes issued by or relating to
the Fourth Issuer or any other party to the Fourth Issuer Transaction Documents
or any such person or body corporate so associated or any other office of
profit under the Fourth Issuer or any other party to the Fourth Issuer
Transaction Documents or any such person or body corporate so associated,

 

and shall be entitled to exercise and enforce its
rights, comply with its obligations and perform its duties under or in relation
to any such contract, transaction or arrangement as is referred to in (a) above
or, as the case may be, any such trusteeship or office of profit as is referred
to in (b) above without regard to the interests of the Noteholders and
notwithstanding that the same may be contrary or prejudicial to the interests
of the Noteholders and shall not be responsible for any liability occasioned to
the Noteholders thereby and shall be entitled to retain and shall not be in any
way liable to account for any profit made or share of brokerage or commission
or remuneration or other amount or benefit received thereby or in connection
therewith.

 

Where any holding company, subsidiary or associated
company of the Note Trustee or any director or officer of the Note Trustee
acting other than in such capacity as director or officer has any information,
the Note Trustee shall not thereby be deemed also to have knowledge of such
information and, unless it shall have express notice pursuant to this Deed of
such information, shall not be responsible for any loss suffered by Noteholders
resulting from the Note Trustee’s failing to take such information into account
in acting or refraining from acting under or in relation to these presents.

 

18.                               WAIVER, AUTHORISATION AND
DETERMINATION

 

18.1                           The Note Trustee may, without the consent or sanction
of the Noteholders and without prejudice to its rights in respect of any
subsequent breach, from time to time and at any time but only if and in so far
as in its opinion the interests of the Noteholders of each class of 

 

28

 

Fourth Issuer Notes shall not be materially prejudiced
thereby waive or authorise any breach or proposed breach by the Fourth Issuer
or any other party thereto of any of the covenants or provisions contained in
these presents or any of the other Fourth Issuer Transaction Documents or
determine that any Note Event of Default shall not be treated as such for the
purposes of these presents PROVIDED ALWAYS
THAT the Note Trustee shall not exercise any powers conferred on it
by this Clause in contravention of any express direction given by Extraordinary
Resolution of any class of Fourth Issuer Notes or by a request under Condition 9 or 10 but so that no such direction or request shall affect any
waiver, authorisation or determination previously given or made.  Any such waiver, authorisation or
determination may be given or made on such terms and subject to such conditions
(if any) as the Note Trustee may determine, shall be binding on the Noteholders
and, if, but only if, the Note Trustee shall so require, shall be notified by
the Fourth Issuer to the Noteholders in accordance with Condition 14 as soon as
practicable thereafter.  The provisions
of this Clause 18.1 shall be in
lieu of section 316(a)(1)(B) of the Trust Indenture Act and
section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Deed and the Fourth Issuer Notes, as permitted by the Trust
Indenture Act.

 

18.2                        Modification

 

(a)                                  The Note Trustee may without the consent or sanction of
the Noteholders at any time and from time to time concur with the Fourth Issuer
in making any modification (except a Basic Terms Modification (as defined in paragraph 5 of Schedule 4 hereto)) (i) to these presents or any of the
other Fourth Issuer Transaction Documents which in the sole opinion of the Note
Trustee it may be proper to make PROVIDED
THAT the Note Trustee is of the opinion that such modification will
not be materially prejudicial to the interests of the Noteholders of each class
of Fourth Issuer Notes or (ii) to these presents or any of the other Fourth
Issuer Transaction Documents if in the sole opinion of the Note Trustee such
modification is of a formal, minor or technical nature or is necessary to
correct a manifest error or an error established as such to the satisfaction of
the Note Trustee (and for the avoidance of doubt, the Note Trustees shall be
entitled to assume, without further investigation or inquiry, that such
modification, waiver or authorisation will not be materially prejudicial to the
interests of the Fourth Issuer Noteholders of each of the Rating Agencies has
confirmed in writing that the then current ratings of the applicable series
and/or class or classes of Fourth Issuer Notes would not be adversely affected
by such modification, waiver or authorisation).  Any such modification may be made on such terms and subject to
such conditions (if any) as the Note Trustee may determine, shall be binding
upon the Noteholders and, unless the Note Trustee agrees otherwise, shall be notified
by the Fourth Issuer to the Noteholders and the Rating Agencies in accordance
with Condition 14 as soon as
practicable thereafter.

 

(b)                                 So long as any of the Fourth Issuer Notes are rated by
the Rating Agencies, the Fourth Issuer shall notify the Rating Agencies in
writing as soon as reasonably practicable thereafter of any modification to the
provisions of these presents, the Fourth Issuer Notes or any of the other
Transaction Documents.  The Note Trustee
may also agree, without the consent of the Noteholders, to a change of the laws
governing the Fourth Issuer Notes and/or the Fourth Issuer Transaction
Documents (and to any consequential amendments deriving therefrom) PROVIDED THAT such change and consequential
amendments would not, in the opinion of the Note Trustee, be materially
prejudicial to the interests of the Noteholders.

 

18.3                        Rating Agencies

 

If:

 

(a)                                  a confirmation of rating or other response by a Rating
Agency is a condition to any action or step under any Fourth Issuer Transaction
Document; and

 

29

 

(b)                                 a written request for such confirmation or response is
delivered to each Rating Agency by the Fourth Issuer (copied to the Note
Trustee and either one or more Rating Agency (each a Non-Responsive Rating Agency) indicates that it does not
consider such confirmation or response necessary in the circumstances or within
30 days of delivery of such request elicits no confirmation or response and/or
such request elicits no statement by such Rating Agency that such request could
not be given; and

 

(c)                                  at lease one Rating Agency gives such a confirmation
or response based on the same facts,

 

then such condition shall be deemed to be modified
with respect to the facts set out in the request referred to in paragraph (b) (above) so that there shall
be no requirement for the confirmation or response from the Non-Responsive
Rating Agency.

 

The Note Trustee shall be entitled to treat as
conclusive a certificate by any director, officer or employee of the Fourth
Issuer, Funding 1, the Seller, any investment bank or financial adviser acting
in relation to the Fourth Issuer Notes as to any matter referred to in paragraph (b) (above) in the absence of
manifest error or the Note Trustee having facts contradicting such certificates
specifically drawn to his attention and the Note Trustee shall not be
responsible for any loss, liability, costs, damages, expenses or inconvenience
that may be caused as a result of treating such certificate as conclusive.

 

18.4                        Breach

 

Any breach of or failure to comply with any such terms
and conditions as are referred to in subclauses
18.1 and 18.2 of this
Clause shall constitute a default by the Fourth Issuer in the performance or
observance of a covenant or provision binding on it under or pursuant to these
presents.

 

19.                               ENTITLEMENT TO TREAT NOTEHOLDER AS
ABSOLUTE OWNER

 

The Fourth Issuer, the Note Trustee, the Paying
Agents, the Transfer Agent and the Registrar may (to the fullest extent
permitted by applicable laws) deem and treat the registered holder of any
Fourth Issuer Note or of a particular principal amount of the Fourth Issuer
Notes as the absolute owner of such Fourth Issuer Note or principal amount, as
the case may be, for all purposes (whether or not such Fourth Issuer Note or
principal amount shall be overdue and notwithstanding any notice of ownership
thereof or of trust or other interest with regard thereto, any notice of loss
or theft thereof or any writing thereon), and the Fourth Issuer, the Note
Trustee, the Paying Agents, the Transfer Agent and the Registrar shall not be
affected by any notice to the contrary. 
All payments made to any such registered holder of a Definitive Fourth
Issuer Note or Global Fourth Issuer Note shall be valid and, to the extent of
the sums so paid, effective to satisfy and discharge the liability for the
monies payable in respect of such Fourth Issuer Note or principal amount, as
the case may be.

 

20.                               CURRENCY INDEMNITY

 

The Fourth Issuer shall indemnify the Note Trustee,
every appointee of the Note Trustee and the Noteholders and keep them
indemnified against:

 

(a)                                  any liability incurred by any of them arising from the
non-payment by the Fourth Issuer of any amount due to the Note Trustee or the
Noteholders under these presents by reason of any variation in the rates of
exchange between those used for the 

 

30

 

purposes of calculating the amount due under a
judgment or order in respect thereof and those prevailing at the date of actual
payment by the Fourth Issuer; and

 

(b)                                 any deficiency arising or resulting from any variation
in rates of exchange between (i) the date as of which the local currency
equivalent of the amounts due or contingently due under these presents (other
than this Clause) is calculated for the purposes of any bankruptcy, insolvency
or liquidation of the Fourth Issuer and (ii) the final date for ascertaining
the amount of claims in such bankruptcy, insolvency or liquidation.  The amount of such deficiency shall be
deemed not to be reduced by any variation in rates of exchange occurring
between the said final date and the date of any distribution of assets in
connection with any such bankruptcy, insolvency or liquidation.

 

The above indemnity (and the indemnities given by the
Fourth Issuer in Clause 14.5 and Clause 15(l)) shall constitute obligations
of the Fourth Issuer separate and independent from its obligations under the
other provisions of these presents and the Fourth Issuer Notes and shall apply
irrespective of any indulgence granted by the Note Trustee or the Noteholders
from time to time and shall continue in full force and effect notwithstanding
the judgment or filing of any proof or proofs in any bankruptcy, insolvency or
liquidation of the Fourth Issuer for a liquidated sum or sums in respect of
amounts due under these presents (other than this Clause).  Any such deficiency as aforesaid shall be
deemed to constitute a loss suffered by the Noteholders and no proof or
evidence of any actual loss shall be required by the Fourth Issuer or its
liquidator or liquidators.

 

21.                               ELIGIBILITY AND DISQUALIFICATION; NEW
NOTE TRUSTEE

 

21.1                        Eligibility and Disqualification

 

This Deed shall always have a Note Trustee which shall
be eligible to act as Note Trustee under Sections 310(a)(1) and 310(a)(2) of
the Trust Indenture Act.  The Note
Trustee shall have a combined capital and surplus of at least U.S.$50,000,000
as set forth in its most recent published annual report of condition.  If the Note Trustee has or shall acquire any
conflicting interest within the meaning of Section 310(b) of the Trust
Indenture Act, the Note Trustee and the Fourth Issuer shall comply with the
provisions of Section 310(b) of the Trust Indenture Act; provided,
however, that there shall be excluded from the operation of
Section 310(b)(1) of the Trust Indenture Act any deed or deeds under which
other securities or certificates of interest or participation in other
securities of the Fourth Issuer are outstanding if the requirements for such
exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are
met.  If at any time the Note Trustee
shall cease to be eligible in accordance with the provisions of this Clause 21.1, the Note Trustee shall resign
promptly in the manner and with the effect specified in Clause 22.

 

21.2                        New Note Trustee

 

(a)                                  Subject to paragraph
(b) below the power to appoint a new trustee of these presents shall
be vested in the Fourth Issuer but no person shall be appointed who shall not
previously have been approved by an Extraordinary Resolution of the Class A
Fourth Issuer Noteholders, the Class B Fourth Issuer Noteholders, the Class M
Fourth Issuer Noteholders and the Class C Fourth Issuer Noteholders.  One or more persons may hold office as
trustee or trustees of these presents but such trustee or trustees shall be or
include a Trust Corporation.  Whenever
there shall be more than two trustees of these presents the majority of such
trustees shall be competent to execute and exercise all the duties, powers,
trusts, authorities and discretions vested in the Note Trustee by these
presents provided that a Trust Corporation shall be included in such
majority.  Any appointment of a new
trustee of these presents shall as soon 

 

31

 

as practicable thereafter be notified by the Fourth
Issuer to the Principal Paying Agent, the Transfer Agent, the Registrar, the
Noteholders and the Rating Agencies.

 

(b)                                 Any new trustee must (i) meet the requirements of
Section 26(a)(1) of the U.S. Investment Company Act of 1940; (ii) not be
an affiliate (as defined in Rule 405 of the Securities Act) of the Fourth
Issuer or of any person involved in the organisation or operation of the Fourth
Issuer; (iii) not offer or provide credit or credit enhancement to the Fourth
Issuer; and (iv) execute an agreement or instrument concerning the Fourth
Issuer Notes containing provisions to the effect set forth in
Section 26(a)(3) of the U.S. Investment Company Act of 1940.

 

21.3                        Separate and Co-Trustees

 

Notwithstanding the provisions of subclause 21.2 above, the Note Trustee may,
upon giving prior notice to the Fourth Issuer (but without requiring the
consent of the Fourth Issuer or the Noteholders), appoint any person
established or resident in any jurisdiction (whether a Trust Corporation or
not) to act either as a separate trustee or as a co-trustee jointly with the
Note Trustee:

 

(a)                                  if the Note Trustee considers such appointment to be
in the interests of the Noteholders;

 

(b)                                 for the purposes of conforming to any legal requirements,
restrictions or conditions in any jurisdiction in which any particular act or
acts is or are to be performed; or

 

(c)                                  for the purposes of obtaining a judgment in any
jurisdiction or the enforcement in any jurisdiction of either a judgment already
obtained or any of the provisions of these presents or any of the other Fourth
Issuer Transaction Documents against the Fourth Issuer or any other party
thereto.

 

The Fourth Issuer irrevocably appoints the Note
Trustee to be its attorney in its name and on its behalf to execute any such
instrument of appointment.  Such a
person shall (subject always to the provisions of these presents) have such
trusts, powers, authorities and discretions (not exceeding those conferred on
the Note Trustee by these presents) and such duties and obligations as shall be
conferred or imposed by the instrument of appointment.  The Note Trustee shall have power in like
manner to remove any such person.  Such
reasonable remuneration as the Note Trustee may pay to any such person,
together with any attributable costs, charges and expenses incurred by it in
performing its function as such separate trustee or co-trustee, shall for the
purposes of this Deed be treated as costs, charges and expenses incurred by the
Note Trustee.

 

22.                               NOTE TRUSTEE’S RETIREMENT AND REMOVAL

 

A trustee of this Deed may retire at any time on
giving not less than three months’ prior written notice to the Fourth Issuer
without giving any reason and without being responsible for any costs incurred
by reason of such retirement.  The
Noteholders may by Extraordinary Resolution of each class of Noteholders remove
any trustee or trustees for the time being of these presents.  The Fourth Issuer undertakes that in the
event of the only trustee of these presents which is a Trust Corporation giving
notice under this Clause or being removed by Extraordinary Resolution of each
class of Noteholders it will use its best endeavours to procure that a new
trustee of these presents being a Trust Corporation is appointed as soon as
reasonably practicable thereafter.  The
retirement or removal of any such trustee shall not become effective until a
successor trustee being a Trust Corporation is appointed.  If a successor trustee being a trust
corporation has not been appointed within two months after the 

 

32

 

date of the notice of retirement of the Note Trustee,
then the retiring Note Trustee may appoint its own successor trustee being a
trust corporation.

 

23.                               NOTE TRUSTEE’S POWERS TO BE
ADDITIONAL

 

The powers conferred upon the Note Trustee by these
presents shall be in addition to any powers which may from time to time be
vested in the Note Trustee by the general law or as a holder of any of the
Fourth Issuer Notes.

 

24.                               NOTICES

 

24.1                           Any notice or demand to the Fourth Issuer or the Note
Trustee to be given, made or served for any purposes under these presents shall
be in writing and shall be given, made or served by sending the same by
pre-paid post (first class if inland, first class airmail if overseas) or
facsimile transmission or by delivering it by hand to:

 

(a)                                  Fourth Issuer:

 

Permanent Financing (No. 4) PLC

Blackwell House

Guildhall Yard

London EC2V 5AE

 

For the attention of: the Directors

 

Facsimile: +44 (0) 20 7556 0975

 

With a copy to:

 

HBOS Treasury Services plc

33 Old Broad Street

London EC2N 1HZ

 

For the attention of: Head of Mortgage Securitisation
and Covered Bonds

 

Facsimile: +44 (0) 20 7574 8784

 

(b)                                 Note Trustee:

 

The Bank of New York

One Canada Square

London E14 5AL

 

For the attention of: Global Structured Finance -
Corporate Trust

 

Facsimile: + 44 (0) 20 7964 6061/6399

 

or to such other address or facsimile number as shall
have been notified (in accordance with this Clause) to the other party hereto
and any notice or demand sent by post as aforesaid shall be deemed to have been
given, made or served three days in the case of inland post or seven days in
the case of overseas post after despatch and any notice or demand sent by
facsimile transmission as aforesaid shall be deemed to have been given, made or
served on report of successful transmission.

 

33

 

24.2                        Communications by Noteholders with
Other Noteholders

 

Noteholders may communicate pursuant to Trust
Indenture Act Section 312(b) with other Noteholders with respect to their
rights under this Deed or the Fourth Issuer Notes.  The Fourth Issuer, the Note Trustee, the Principal Paying Agent,
the Registrar and anyone else shall have the protection of the Trust Indenture
Act Section 312(c).

 

24.3                        Notices to Noteholders

 

Any notice or communication mailed to Noteholders
hereunder shall be transmitted by mail:

 

(a)                                  to all Noteholders of Definitive Fourth Issuer Notes,
as the names and addresses of such Noteholders appear upon the Register; and

 

(b)                                 to such other Noteholders as have, within the two
years preceding such transmission, filed their names and addresses with the
Note Trustee for that purpose.

 

25.                               RIGHTS OF THIRD PARTIES

 

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

 

26.                               TRUST INDENTURE ACT PREVAILS

 

If any provision of this Deed limits, qualifies or
conflicts with another provision which is required to be included in this Deed
by, and is not subject to a contractual waiver under, the Trust Indenture Act,
the required provision of the Trust Indenture Act shall prevail.

 

27.                               CERTIFICATES AND OPINIONS

 

27.1                        Certificate and Opinions as to
Conditions Precedent

 

Upon any request or application by the Fourth Issuer
to the Note Trustee to take any action under this Deed, the Fourth Issuer shall
furnish to the Note Trustee:

 

(a)                                  an Officers’ Certificate (which shall include the
statements set forth in Clause  27.2 below) stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Deed or
required by the Note Trustee pursuant to the terms of this Deed relating to the
proposed action have been complied with; and

 

(b)                                 an Opinion of Counsel (which shall include the
statements set forth in Clause  27.2 below) stating that, in the opinion of
such counsel, all such conditions precedent, if any, provided for in this Deed
or required by the Note Trustee pursuant to the terms of this Deed relating to
the proposed action have been complied with.

 

27.2                        Statements Required in Certificate
and Opinion

 

Each certificate and opinion with respect to compliance
with a condition or covenant provided for in this Deed shall include:

 

(a)                                  a statement that the person making such certificate or
opinion has read such covenant or condition and the definitions relating
thereto;

 

34

 

(b)                                 a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;

 

(c)                                  a statement that, in the opinion of such person, it or
he has made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

 

(d)                                 a statement as to whether or not, in the opinion of
such person, such covenant or condition has been complied with.

 

28.                               GOVERNING LAW

 

These presents and the Fourth Issuer Notes are
governed by, and shall be construed in accordance with, English law.

 

29.                               COUNTERPARTS

 

This Deed and any trust deed supplemental hereto may
be executed and delivered in any number of counterparts, all of which, taken
together, shall constitute one and the same deed and any party to this Deed or
any trust deed supplemental hereto may enter into the same by executing and
delivering a counterpart.

 

30.                               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 inconvenient forum for
the maintenance or hearing of such action or proceeding.

 

IN WITNESS WHEREOF this Deed has been executed as a deed by the Fourth
Issuer and the Note Trustee and delivered on the date first stated on page 1.

 

35

 

SCHEDULE 1

 

FORMS OF GLOBAL FOURTH
ISSUER NOTES

 

PART A

 

(1)

 

SERIES 1 CLASS A GLOBAL FOURTH ISSUER NOTE

 

NOTE NO. 1

 

PERMANENT FINANCING (NO. 4) PLC

 

(Incorporated
with limited liability in England with registered number 4988201)

 

SERIES 1 CLASS A GLOBAL FOURTH ISSUER NOTE

representing
up to

 

U.S.$500,000,000 Series 1 Class A Asset Backed Floating Rate Fourth
Issuer Notes due March, 2005

 

(Initial
aggregate principal amount of Series 1 Class A Global Notes:
U.S.$1,500,000,000)

 

This Series 1 Class A Global Fourth Issuer Note is
issued without principal or interest coupons in respect of a duly authorised
issue of Series 1 Class A Fourth Issuer Notes of Permanent Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes),
limited to the aggregate principal amount of up to five hundred million U.S.
dollars (U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated
12th March, 2004 (the Fourth Issuer Trust
Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the
Fourth Issuer Trust Deed.  Terms used
but not defined herein have the meanings ascribed to them in the amended and
restated master definitions and construction schedule signed by the
parties to the Transaction Documents and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated 12th
March, 2004 and signed for the purposes of identification by Allen & Overy
and Sidley Austin Brown & Wood (the Fourth
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co.
as nominee on behalf of The Depositary Trust Company

 

is/are the duly registered holder(s) of one of the
Series 1 Class A Global Fourth Issuer Notes. 
This Global Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes
passes only on due registration in the Register and only the registered holder
is entitled to payment in respect of this Global Fourth Issuer Note.

 

36

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof five hundred
million U.S. dollars (U.S.$500,000,000)) on the Interest Payment Date falling
in April 2004 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Fourth Issuer Trust
Deed) and to pay interest monthly or quarterly, as the case may be, in arrear
on each Interest Payment Date on the principal amount from time to time of this
Global Fourth Issuer Note at the rates determined in accordance with the
Conditions together with such other amounts (if any) as may be payable, all
subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give
notice to the Fourth Issuer, and the Fourth Issuer may give notice to the Note
Trustee and the Noteholders, of its intention to exchange this Global Fourth
Issuer Note for Definitive Fourth Issuer Notes on or after the Exchange Date
(as defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the Fourth Issuer on
Part Ii of the Schedule hereto, whereupon the principal amount hereof
shall be increased or, as the case may be, reduced for all purposes by the
amount so exchanged or so purchased and 

 

37

 

cancelled and endorsed.  Upon the exchange of the whole of this Global Fourth Issuer Note
for Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this
Global Fourth Issuer Note shall be reduced for all purposes by the principal
amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third Parties)
Act 1999 to enforce any term of this Fourth Issuer Global Note, but this does
not affect any right or remedy of any person which exists or is available apart
from that Act.

 

38

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth
Issuer Note to be signed manually or in facsimile by a person duly authorised
on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

39

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

40

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on this Global Fourth Issuer
Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

41

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer
Notes and purchases and cancellations of a part of this Global Fourth Issuer
Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

42

 

PART A

 

(2)

 

SERIES 1 CLASS A GLOBAL FOURTH ISSUER NOTE

 

NOTE NO. 2

 

PERMANENT FINANCING (NO. 4) PLC

 

(Incorporated
with limited liability in England with registered number 4988201)

 

SERIES 1 CLASS A GLOBAL FOURTH ISSUER NOTE

representing
up to

 

U.S.$500,000,000 Series 1 Class A Asset Backed Floating Rate Fourth
Issuer Notes due March 2005

 

(Initial
aggregate principal amount of Series 1 Class A Global Notes:
U.S.$1,500,000,000)

 

This Series 1 Class A Global Fourth Issuer Note is
issued without principal or interest coupons in respect of a duly authorised
issue of Series 1 Class A Fourth Issuer Notes of Permanent Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes),
limited to the aggregate principal amount of up to five hundred million U.S.
dollars (U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated
12th March, 2004 (the Fourth Issuer Trust
Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the
Fourth Issuer Trust Deed.  Terms used
but not defined herein have the meanings ascribed to them in the amended and
restated master definitions and construction schedule signed by the
parties to the Transaction Documents and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated 12th
March, 2004 and signed for the purposes of identification by Allen & Overy
and Sidley Austin Brown & Wood (the Fourth
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co.
as nominee on behalf of The Depositary Trust Company

 

is/are the duly registered holder(s) of one of the
Series 1 Class A Global Fourth Issuer Notes. 
This Global Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes
passes only on due registration in the Register and only the registered holder
is entitled to payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof five hundred
million U.S. dollars (U.S.$500,000,000)) on the Interest Payment 

 

43

 

Date falling in April 2004 (or on such earlier
date as the said principal amount may become repayable in accordance with the
Conditions or the Fourth Issuer Trust Deed) and to pay interest monthly or
quarterly, as the case may be, in arrear on each Interest Payment Date on the
principal amount from time to time of this Global Fourth Issuer Note at the
rates determined in accordance with the Conditions together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time unwilling
or unable to continue as, or ceases to be, a clearing agency under the United
States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder of
this Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of
(a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give
notice to the Fourth Issuer, and the Fourth Issuer may give notice to the Note
Trustee and the Noteholders, of its intention to exchange this Global Fourth
Issuer Note for Definitive Fourth Issuer Notes on or after the Exchange Date
(as defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the Fourth Issuer on
Part Ii the Schedule hereto, whereupon the principal amount hereof shall
be increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global Fourth Issuer Note
for Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

44

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this
Global Fourth Issuer Note shall be reduced for all purposes by the principal
amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third Parties)
Act 1999 to enforce any term of this Fourth Issuer Global Note, but this does
not affect any right or remedy of any person which exists or is available apart
from that Act.

 

45

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth
Issuer Note to be signed manually or in facsimile by a person duly authorised
on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

46

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

47

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on this Global Fourth Issuer
Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the Fourth

  Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

48

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer
Notes and purchases and cancellations of a part of this Global Fourth Issuer
Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the Fourth

  Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

49

 

PART A

 

(3)

 

SERIES 1 CLASS A GLOBAL FOURTH ISSUER NOTE

 

NOTE NO. 3

 

PERMANENT FINANCING (NO. 4) PLC

 

(Incorporated
with limited liability in England with registered number 4988201)

 

SERIES 1 CLASS A GLOBAL FOURTH ISSUER NOTE

representing
up to

 

U.S.$500,000,000 Series 1 Class A Asset Backed Floating Rate Fourth
Issuer Notes due March 2005

 

(Initial
aggregate principal amount of Series 1 Class A Global Notes:
U.S.$1,500,000,000)

 

This Series 1 Class A Global Fourth Issuer Note is
issued without principal or interest coupons in respect of a duly authorised
issue of Series 1 Class A Fourth Issuer Notes of Permanent Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes),
limited to the aggregate principal amount of up to five hundred million U.S.
dollars (U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated
12th March, 2004 (the Fourth Issuer Trust
Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the
Fourth Issuer Trust Deed.  Terms used
but not defined herein have the meanings ascribed to them in the amended and
restated master definitions and construction schedule signed by the parties
to the Transaction Documents dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated 12th
March, 2004 and signed for the purposes of identification by Allen & Overy
and Sidley Austin Brown & Wood (the Fourth
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co.
as nominee on behalf of The Depositary Trust Company

 

is/are the duly registered holder(s) of one of the
Series 1 Class A Global Fourth Issuer Notes. 
This Global Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes
passes only on due registration in the Register and only the registered holder
is entitled to payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

50

 

date hereof five hundred million U.S. dollars
(U.S.$500,000,000)) on the Interest Payment Date falling in March 2005 (or
on such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
interest monthly or quarterly, as the case may be, in arrear on each Interest
Payment Date on the principal amount from time to time of this Global Fourth
Issuer Note at the rates determined in accordance with the Conditions together
with such other amounts (if any) as may be payable, all subject to and in
accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give
notice to the Fourth Issuer, and the Fourth Issuer may give notice to the Note
Trustee and the Noteholders, of its intention to exchange this Global Fourth
Issuer Note for Definitive Fourth Issuer Notes on or after the Exchange Date
(as defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be endorsed
by or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of
the Schedule hereto, whereupon the principal amount hereof shall be
increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global Fourth Issuer Note
for Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

51

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this
Global Fourth Issuer Note shall be reduced for all purposes by the principal
amount so paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this Fourth Issuer Global Note, but
this does not affect any right or remedy of any person which exists or is
available apart from that Act.

 

52

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth
Issuer Note to be signed manually or in facsimile by a person duly authorised
on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

53

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

54

 

THE SCHEDULE

 

PART 1

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

55

 

PART 2

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

56

 

PART B

 

SERIES 1 CLASS B GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 1 CLASS B GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$78,100,000 Series 1
Class B Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 1 Class B Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 1
Class B Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to seventy eight million one hundred thousand
U.S. dollars (U.S.) ($78,100,000) and constituted by a Fourth Issuer Trust Deed
dated 12th March, 2004 (the Fourth Issuer
Trust Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the Fourth
Issuer Trust Deed.  Terms used but not
defined herein have the meanings ascribed to them in the amended and restated
master definitions and construction schedule signed by the parties to the
Transaction Documents and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated 12th
March, 2004 and signed for the purposes of identification by Allen & Overy
and Sidley Austin Brown & Wood (the Fourth
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$78,100,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 1 Class B
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof seventy
eight million one hundred thousand U.S. dollars (U.S.$78,100,000)) on the
Interest Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with the Conditions
together with such other amounts (if any) as may be payable, 

 

54

 

all subject to and in accordance with the Conditions
and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying Agent and Agent Bank Agreement, the portion of the
principal amount hereof so exchanged or so purchased and cancelled shall be
endorsed by or on behalf of the Registrar on behalf of the Fourth Issuer on
Part Ii of the Schedule hereto, whereupon the principal amount hereof shall be
increased or, as the case may be, reduced for all purposes by the amount so
exchanged or so purchased and cancelled and endorsed.  Upon the exchange of the whole of this Global Fourth Issuer Note
for Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal 

 

55

 

and interest in respect of Fourth Issuer Notes
represented by this Global Fourth Issuer Note will be made in accordance with
the Conditions.  Upon any payment of
principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this Fourth Issuer Global Note, but
this does not affect any right or remedy of any person which exists or is
available apart from that Act.

 

56

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

57

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

58

 

THE SCHEDULE

 

PART II

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

59

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

60

 

PART C

 

SERIES 1 CLASS M GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 1 CLASS M GLOBAL
FOURTH ISSUER NOTE

 

representing up to

 

U.S.$56,500,000 Series 1
Class M Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 1 Class M Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 1
Class M Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to fifty six million five hundred thousand
U.S. dollars (U.S.$56,500,000) and constituted by a Fourth Issuer Trust Deed
dated 12th March, 2004 (the Fourth Issuer
Trust Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the Fourth
Issuer Trust Deed.  Terms used but not
defined herein have the meanings ascribed to them in the amended and restated
master definitions and construction schedule signed by the parties to the Transaction
Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated 12th March, 2004 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood (the Fourth Issuer Master
Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Fourth Issuer Trust Deed and this
Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$56,500,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 1 Class M
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof fifty six
million five hundred thousand U.S. dollars (U.S.$56,500,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with the Conditions
together with such other amounts (if any) as may be payable, 

 

61

 

all subject to and in accordance with the Conditions
and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal 

 

62

 

and interest in respect of Fourth Issuer Notes
represented by this Global Fourth Issuer Note will be made in accordance with
the Conditions.  Upon any payment of
principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this Fourth Issuer Global Note, but
this does not affect any right or remedy of any person which exists or is
available apart from that Act.

 

63

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March, 2004.

  

 

64

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

65

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

66

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

67

 

PART D

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE NO. 1

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 1
Class C Asset Backed Floating Rate Fourth Issuer Notes due March 2009

 

(Initial aggregate principal amount of Series 2 Class
A Global Notes: U.S.$2,400,000,000)

 

This Series 2 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust
Deed.  Terms used but not defined herein
have the meanings ascribed to them in the amended and restated master
definitions and construction schedule signed by the parties to the Transaction
Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated 12th March, 2004 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood (the Fourth Issuer Master
Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Fourth Issuer Trust Deed and this
Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 1 Class C
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof five hundred
million U.S. dollars (U.S.$500,000,000) on the Interest Payment Date falling in
June 2009 (or on such earlier date as the said principal amount may become 

 

68

 

repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with the Conditions
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth Issuer
Note in accordance with the Fourth Issuer Trust Deed, the Conditions and the
Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed.  Upon
the exchange of the whole of this Global Fourth Issuer Note for Definitive
Fourth Issuer Notes, this Global Fourth Issuer Note shall be surrendered to or
to the order of the Registrar and cancelled and, if the holder of this Global
Fourth Issuer Note requests, returned to it together with any relevant
Definitive Fourth Issuer Notes.

 

69

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on behalf
of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this Fourth Issuer Global Note, but
this does not affect any right or remedy of any person which exists or is
available apart from that Act.

 

70

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

71

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

72

 

THE SCHEDULE

 

PART II

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

73

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

74

 

PART D

 

(2)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE NO. 2

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 2
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2009

 

(Initial aggregate principal amount of Series 2 Class
A Global Notes: U.S.$2,400,000,000)

 

This Series 2 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust
Deed.  Terms used but not defined herein
have the meanings ascribed to them in the amended and restated master
definitions and construction schedule signed by the parties to the Transaction
Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be shown
by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

75

 

date hereof five hundred million U.S. dollars
(U.S.$500,000,000) on the Interest Payment Date falling in March 2009 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in
accordance with the Conditions together with such other amounts (if any) as may
be payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i) The
Depositary Trust Company (DTC) has
notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

76

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with this Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this temporary Global Note, but this
does not affect any right or remedy of any person which exists or is available
apart from that Act.

 

77

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

 

78

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

79

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

80

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

81

 

PART D

 

(3)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE NO. 3

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 2
Class A Asset Backed Floating Rate Fourth Issuer Notes due March 2009

 

(Initial aggregate principal amount of Series 2 Class
A Global Notes: U.S.$2,400,000,000)

 

This Series 2 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents and
dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

82

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof five hundred
million U.S. dollars (U.S.$500,000,000) on the Interest Payment Date falling in
March 2009 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the Fourth Issuer Trust Deed)
and to pay quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global Fourth Issuer Note at the rates
determined in accordance with the Conditions together with such other amounts
(if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note 

 

83

 

for Definitive Fourth Issuer Notes, this Global Fourth
Issuer Note shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment of
principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

84

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

85

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

86

 

THE SCHEDULE

 

PART II

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

87

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

88

 

PART D

 

(4)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE NO. 4

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 2
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2009

 

(Initial aggregate principal amount of Series 2 Class
A Global Notes: U.S.$2,400,000,000)

 

This Series 2 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust
Deed.  Terms used but not defined herein
have the meanings ascribed to them in the amended and restated master
definitions and construction schedule signed by the parties to the Transaction
Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

89

 

date hereof five hundred million U.S. dollars
(U.S.$500,000,000) on the Interest Payment Date falling in March 2009 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in
accordance with the Conditions together with such other amounts (if any) as may
be payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice to the
Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee and
the Noteholders, of its intention to exchange this Global Fourth Issuer Note
for Definitive Fourth Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global Fourth
Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

90

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

91

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

92

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

93

 

THE SCHEDULE

 

PART III

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

94

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

95

 

PART D

 

(5)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE NO. 5

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$400,000,000 Series 2
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2009

 

(Initial aggregate principal amount of Series 2 Class
A Global Notes: U.S.$2,400,000,000)

 

This Series 2 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to four hundred million U.S. dollars
(U.S.$400,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any
particular numbered Condition) shall be to the Conditions (or that particular
one of them) set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents and
dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$400,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

96

 

date hereof four hundred million U.S. dollars
(U.S.$400,000,000) on the Interest Payment Date falling in March 2009 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in accordance
with the Conditions together with such other amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

97

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part Ii of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

98

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

99

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

100

 

THE SCHEDULE

 

PART IV

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

101

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

102

 

PART E

 

SERIES 2 CLASS B GLOBAL FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO. 4) PLC

 

(Incorporated
with limited liability in England with registered number 4988201)

 

SERIES 2 CLASS B GLOBAL FOURTH ISSUER NOTE

representing
up to

 

U.S.$100,700,000 Series 2 Class B Asset Backed Floating
Rate Fourth Issuer Notes due June 2042

 

This Series 2 Class B Global
Fourth Issuer Note is issued without principal or interest coupons in respect
of a duly authorised issue of Series 2 Class B Fourth Issuer Notes of Permanent Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes),
limited to the aggregate principal amount of up to one hundred million seven
hundred thousand U.S. dollars (U.S.$100,700,000) and constituted by a Fourth
Issuer Trust Deed dated 12th March (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of New York, as trustee (the
trustee for the time being thereof being herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents and
dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$100,700,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede
& Co. as nominee on behalf of The Depositary Trust Company

 

is/are the duly registered
holder(s) of one of the Series 2 Class B Global Fourth Issuer Notes.  This Global Fourth Issuer Note is evidence
of entitlement only.  Title to the Global
Fourth Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Fourth
Issuer Note.

 

1.                                      Promise to pay

 

Subject
as provided in this Global Fourth Issuer Note the Fourth Issuer promises to pay
to the registered holder hereof the principal amount of this Global Fourth
Issuer Note (being at the date hereof one hundred million seven hundred
thousand U.S. dollars (U.S.$100,700,000) on the Interest Payment Date falling
in June 2042 (or on such earlier date as the said principal amount may become
repayable in accordance with the Conditions or the Fourth Issuer Trust Deed)
and to pay interest quarterly in arrear on each Interest Payment Date on the
principal amount from time to time of this Global Fourth Issuer Note at the
rates determined in 

 

103

 

accordance
with the Conditions together with such other amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer Notes and purchases

 

This
Global Fourth Issuer Note will be exchangeable (free of charge to the holder)
for Definitive Fourth Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Fourth Issuer that it
is at any time unwilling or unable to continue as holder of this Global Fourth
Issuer Note or is at any time unwilling or unable to continue as, or ceases to
be, a clearing agency under the United States Securities Exchange Act of 1934,
as amended (the Exchange Act), and
a successor to DTC registered as a clearing agency under the Exchange Act is
not able to be appointed by the Fourth Issuer within 90 days of such
notification, or (ii) as a result of any amendment to, or change in, the laws
or regulations of the United Kingdom (or of any political subdivision thereof),
or of any authority therein or thereof having power to tax, or in the
interpretation or administration by a revenue authority or a court or
administration of such laws or regulations which becomes effective on or after
the Fourth Issuer Closing Date, the Fourth Issuer or any Paying Agent is or
will be required to make any deduction or withholding from any payment in
respect of the Fourth Issuer Notes which would not be required were the
relevant Fourth Issuer Notes in definitive registered form.  Thereupon the holder of this Global Fourth
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to the Fourth
Issuer, and the Fourth Issuer may give notice to the Note Trustee and the
Noteholders, of its intention to exchange this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes on or after the Exchange Date (as defined
below).

 

On
or after the Exchange Date, the holder of this Global Fourth Issuer Note shall
surrender this Global Fourth Issuer Note to or to the order of the
Registrar.  In exchange for this Global
Fourth Issuer Note the Fourth Issuer will deliver, or procure the delivery of,
Definitive Fourth Issuer Notes in registered form in denominations of
U.S.$1,000 or U.S.$10,000 each, or any integral multiple thereof, or in such
other denominations as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global Fourth Issuer
Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon
the cancellation of a part of this Global Fourth Issuer Note in accordance with
the Fourth Issuer Trust Deed, the Conditions and the Fourth Issuer Paying and
Agent Bank Agreement, the portion of the principal amount hereof so exchanged
or so purchased and cancelled shall be endorsed by or on behalf of the
Registrar on behalf of the Fourth Issuer on Part Iiof the Schedule hereto,
whereupon the principal amount hereof shall be increased or, as the case may
be, reduced for all purposes by the amount so exchanged or so purchased and
cancelled and endorsed.  Upon the
exchange of the whole of this Global Fourth Issuer Note for Definitive Fourth
Issuer Notes, this Global Fourth Issuer Note shall be surrendered to or to the
order of the Registrar and cancelled and, if the holder of this Global Fourth
Issuer Note requests, returned to it together with any relevant Definitive
Fourth Issuer Notes.

 

3.                                      Payments

 

Until
the entire principal amount of this Global Fourth Issuer Note has been
extinguished, this Global Fourth Issuer Note shall be entitled to the benefit
of and be bound by the Conditions, 

 

104

 

the
Fourth Issuer Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in
respect of Fourth Issuer Notes represented by this Global Fourth Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal or interest on this Global Fourth
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the Fourth Issuer on Part I of the Schedule hereto.

 

Upon
any payment of principal and endorsement of such payment on Part I of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note shall
be reduced for all purposes by the principal amount so paid and endorsed.

 

All
payments of any amounts payable and paid to the registered holder of this
Global Fourth Issuer Note shall be valid and, to the extent of the sums so
paid, effectual to satisfy and discharge the liability for the monies payable
hereon.

 

4.                                      DTC

 

References
herein to DTC shall be deemed to include references to any other clearing
system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The
Fourth Issuer will treat this Global Fourth Issuer Note as indebtedness for
U.S. federal income tax purposes.  Each
Holder, by the acceptance hereof, agrees to treat this Note for U.S. federal
income tax purposes as indebtedness.

 

6.                                      Authentication

 

This
Global Fourth Issuer Note shall not be or become valid or obligatory for any
purpose unless and until authenticated by or on behalf of the Registrar.

 

7.                                      Governing law

 

This
Global Fourth Issuer Note is governed by, and shall be construed in accordance
with, the laws of England and the Fourth Issuer has in the Fourth Issuer Trust
Deed submitted to the non exclusive jurisdiction of the courts of England for
all purposes in connection with the Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties) Act 1999

 

No
rights are conferred on any person under the Contracts (Rights of Third
Parties) Act 1999 to enforce any term of this temporary Global Note, but this
does not affect any right or remedy of any person which exists or is available
apart from that Act.

 

105

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

106

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

107

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

108

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

109

 

PART F

 

SERIES 2 CLASS M GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS M GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$59,900,000 Series 2
Class M Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 2 Class M Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class M Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to fifty nine million nine hundred thousand
U.S. dollars (U.S.$59,900,000) and constituted by a Fourth Issuer Trust Deed
dated 12th March, 2004 (the Fourth Issuer
Trust Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the Fourth
Issuer Trust Deed.  Terms used but not
defined herein have the meanings ascribed to them in the amended and restated
master definitions and construction schedule signed by the parties to the
Transaction Documents and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated and
made on 12th March, 2004 and signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood (the Fourth Issuer Master Definitions and Construction Schedule)
(each as may be amended and/or restated from time to time), and the Fourth
Issuer Trust Deed and this Fourth Issuer Global Note shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the Fourth
Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to time of this Global
Fourth Issuer Note shall be that amount not exceeding U.S.$59,900,000 as shall
be shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class M
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof fifty nine
million nine hundred thousand U.S. dollars (U.S.$59,900,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in 

 

110

 

accordance with the Conditions together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable (free
of charge to the holder) for Definitive Fourth Issuer Notes only if (i) The
Depositary Trust Company (DTC) has
notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Iiof the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the holder
of this Global Fourth Issuer Note requests, returned to it together with any
relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, 

 

111

 

the Fourth Issuer Trust Deed and the Fourth Issuer
Deed of Charge.  Payments of principal
and interest in respect of Fourth Issuer Notes represented by this Global
Fourth Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part I of the
Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

112

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

113

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

114

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

115

 

PART II 

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

116

 

PART F

 

SERIES 2 CLASS C GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 2 CLASS C GLOBAL FOURTH
ISSUER NOTE

representing up to

 

U.S.$82,200,000 Series 2
Class C Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 2 Class C Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 2
Class C Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to eighty two million two hundred thousand
U.S. dollars (U.S.$82,200,000) and constituted by a Fourth Issuer Trust Deed
dated 12th March, 2004 (the Fourth Issuer
Trust Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time
being thereof being herein called the Note
Trustee).  References herein
to the Conditions (or to any particular numbered Condition) shall be to the
Conditions (or that particular one of them) set out in Schedule 3 to the Fourth
Issuer Trust Deed.  Terms used but not
defined herein have the meanings ascribed to them in the amended and restated
master definitions and construction schedule signed by the parties to the
Transaction Documents and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated and
made on 12th March, 2004 and signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood (the Fourth Issuer Master Definitions and Construction Schedule)
(each as may be amended and/or restated from time to time), and the Fourth
Issuer Trust Deed and this Fourth Issuer Global Note shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the Fourth
Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to time of this Global
Fourth Issuer Note shall be that amount not exceeding U.S.$82,200,000 as shall
be shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 2 Class C
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof eighty two
million two hundred thousand U.S. dollars (U.S.$82,200,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with the Conditions
together with such other amounts (if any) as may be payable, 

 

117

 

all subject to and in accordance with the Conditions
and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Iiof the Schedule
hereto, whereupon the principal amount hereof shall be increased or, as the
case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal 

 

118

 

and interest in respect of Fourth Issuer Notes
represented by this Global Fourth Issuer Note will be made in accordance with
the Conditions.  Upon any payment of
principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

119

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth
Issuer Note to be signed manually or in facsimile by a person duly authorised
on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

120

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

121

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

122

 

PART II 

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

123

 

PART G 

 

(1)

 

SERIES 3 CLASS A GLOBAL FOURTH
ISSUER NOTE

 

NOTE No. 1

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 3
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2024

 

(Initial aggregate principal amount of Series 3 Class
A Global Notes: U.S.$1,700,000,000)

 

This Series 3 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents and
dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Fourth Issuer Trust Deed and this
Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

124

 

date hereof fifteen hundred million U.S. dollars
(U.S.$500,000,000) on the Interest Payment Date falling in March 2024 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in
accordance with the Conditions together with such other amounts (if any) as may
be payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

125

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

126

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

127

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

128

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

106

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

107

 

PART G 

 

(2)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE No. 2

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 3
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2024

 

(Initial aggregate principal amount of Series 3 Class
A Global Notes: U.S.$1,700,000,000)

 

This Series 3 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust
Deed.  Terms used but not defined herein
have the meanings ascribed to them in the amended and restated master
definitions and construction schedule signed by the parties to the Transaction
Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

108

 

date hereof five hundred million U.S. dollars
(U.S.$500,000,000) on the Interest Payment Date falling in March 2024 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in
accordance with the Conditions together with such other amounts (if any) as may
be payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global Fourth
Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

109

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

110

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4)
  PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

111

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

112

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

113

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

114

 

PART G 

 

(3)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE No. 3

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 3
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2024

 

(Initial aggregate principal amount of Series 3 Class
A Global Notes: U.S.$1,700,000,000

 

This Series 3 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to five hundred million U.S. dollars
(U.S.$500,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust
Deed.  Terms used but not defined herein
have the meanings ascribed to them in the amended and restated master definitions
and construction schedule signed by the parties to the Transaction Documents
and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$500,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

9.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

115

 

date hereof five hundred million U.S. dollars
(U.S.$500,000,000) on the Interest Payment Date falling in March 2024 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in accordance
with the Conditions together with such other amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

10.                               Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

116

 

11.                               Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid shall
be endorsed by or on behalf of the Registrar on behalf of the Fourth Issuer on
Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

12.                               DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

13.                               Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

14.                               Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

15.                               Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

16.                               Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

117

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

118

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

119

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

120

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

121

 

PART G 

 

(4)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

NOTE No. 4

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 3 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$200,000,000 Series 3
Class A Asset Backed Floating Rate

Fourth Issuer Notes due March 2024

 

(Initial aggregate principal amount of Series 3 Class
A Global Notes: U.S.$1,700,000,000

 

This Series 3 Class A Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class A Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to two hundred million U.S. dollars
(U.S.$200,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th
March, 2004 (the Fourth Issuer Trust Deed)
between the Fourth Issuer and The Bank of New
York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust
Deed.  Terms used but not defined herein
have the meanings ascribed to them in the amended and restated master
definitions and construction schedule signed by the parties to the Transaction
Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding U.S.$200,000,000 as shall be
shown by the latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class A
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due registration
in the Register and only the registered holder is entitled to payment in
respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the 

 

122

 

date hereof two hundred million U.S. dollars
(U.S.$200,000,000) on the Interest Payment Date falling in March 2024 (or on
such earlier date as the said principal amount may become repayable in accordance
with the Conditions or the Fourth Issuer Trust Deed) and to pay quarterly in
arrear on each Interest Payment Date on the principal amount from time to time
of this Global Fourth Issuer Note at the rates determined in accordance with
the Conditions together with such other amounts (if any) as may be payable, all
subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

123

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in respect of Fourth Issuer
Notes represented by this Global Fourth Issuer Note will be made in accordance
with the Conditions.  Upon any payment
of principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the Contracts
(Rights of Third Parties) Act 1999 to enforce any term of this temporary Global
Note, but this does not affect any right or remedy of any person which exists
or is available apart from that Act.

 

124

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

125

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

126

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

127

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount exchanged

  for Definitive

  Fourth Issuer

  Notes

  	
   

  	
  Part of principal

  amount purchased

  and cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made on

  behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

128

 

PART H

 

SERIES 3 CLASS B GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with
registered number 4988201)

 

SERIES 3 CLASS B GLOBAL
FOURTH ISSUER NOTE

representing up to

 

U.S.$75,800,000 Series 3
Class B Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 3 Class B Global Fourth Issuer Note is issued without
principal or interest coupons in respect of a duly authorised issue of Series 3
Class B Fourth Issuer Notes of Permanent
Financing (No. 4) PLC (the Fourth
Issuer), designated as specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to seventy five million eight hundred thousand
U.S. dollars (U.S.$75,800,000) and constituted by a Fourth Issuer Trust Deed
dated 12th March, 2004 (the Fourth Issuer
Trust Deed) between the Fourth Issuer and The Bank of New York, as trustee (the trustee for the time being
thereof being herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents and
dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated and made on 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master Definitions
and Construction Schedule.  The
aggregate principal amount from time to time of this Global Fourth Issuer Note
shall be that amount not exceeding U.S.$75,800,000 as shall be shown by the
latest entry duly made in the Schedule hereto.

 

This is to certify that:

 

Cede & Co. as nominee on behalf of The Depositary
Trust Company

 

is/are the duly registered holder(s) of one of the Series 3 Class B
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

1.                                      Promise to pay

 

Subject as provided in this Global Fourth Issuer Note
the Fourth Issuer promises to pay to the registered holder hereof the principal
amount of this Global Fourth Issuer Note (being at the date hereof seventy five
million eight hundred thousand U.S. dollars (U.S.$75,800,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with the Conditions
together with such other amounts (if any) as may be payable, 

 

129

 

all subject to and in accordance with the Conditions
and the provisions of the Fourth Issuer Trust Deed.

 

2.                                      Exchange for Definitive Fourth Issuer
Notes and purchases

 

This Global Fourth Issuer Note will be exchangeable
(free of charge to the holder) for Definitive Fourth Issuer Notes only if (i)
The Depositary Trust Company (DTC)
has notified the Fourth Issuer that it is at any time unwilling or unable to
continue as holder of this Global Fourth Issuer Note or is at any time
unwilling or unable to continue as, or ceases to be, a clearing agency under
the United States Securities Exchange Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange Date, the holder of this
Global Fourth Issuer Note shall surrender this Global Fourth Issuer Note to or
to the order of the Registrar.  In
exchange for this Global Fourth Issuer Note the Fourth Issuer will deliver, or
procure the delivery of, Definitive Fourth Issuer Notes in registered form in
denominations of U.S.$1,000 or U.S.$10,000 each, or any integral multiple
thereof, or in such other denominations as the Note Trustee shall determine and
notify to the relevant Noteholders, in exchange for the whole of this Global
Fourth Issuer Note.

 

Exchange Date means a day specified in the notice requiring
exchange falling not more than 60 days after that on which such notice is given
and on which banks are open for business in the city in which the specified
office of the Registrar is located and in the city in which the relevant
clearing system is located.

 

Upon the cancellation of a part of this Global Fourth
Issuer Note in accordance with the Fourth Issuer Trust Deed, the Conditions and
the Fourth Issuer Paying and Agent Bank Agreement, the portion of the principal
amount hereof so exchanged or so purchased and cancelled shall be endorsed by
or on behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto, whereupon the principal amount hereof shall be increased or,
as the case may be, reduced for all purposes by the amount so exchanged or so
purchased and cancelled and endorsed. 
Upon the exchange of the whole of this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes, this Global Fourth Issuer Note shall be
surrendered to or to the order of the Registrar and cancelled and, if the
holder of this Global Fourth Issuer Note requests, returned to it together with
any relevant Definitive Fourth Issuer Notes.

 

3.                                      Payments

 

Until the entire principal amount of this Global
Fourth Issuer Note has been extinguished, this Global Fourth Issuer Note shall
be entitled to the benefit of and be bound by the Conditions, the Fourth Issuer
Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal 

 

130

 

and interest in respect of Fourth Issuer Notes
represented by this Global Fourth Issuer Note will be made in accordance with
the Conditions.  Upon any payment of
principal or interest on this Global Fourth Issuer Note the amount so paid
shall be endorsed by or on behalf of the Registrar on behalf of the Fourth
Issuer on Part I of the Schedule hereto.

 

Upon any payment of principal and endorsement of such
payment on Part I of the Schedule hereto, the principal amount of this Global
Fourth Issuer Note shall be reduced for all purposes by the principal amount so
paid and endorsed.

 

All payments of any amounts payable and paid to the
registered holder of this Global Fourth Issuer Note shall be valid and, to the
extent of the sums so paid, effectual to satisfy and discharge the liability
for the monies payable hereon.

 

4.                                      DTC

 

References herein to DTC shall be deemed to include
references to any other clearing system approved by the Note Trustee.

 

5.                                      Tax Treatment

 

The Fourth Issuer will treat this Global Fourth Issuer
Note as indebtedness for U.S. federal income tax purposes.  Each Holder, by the acceptance hereof,
agrees to treat this Note for U.S. federal income tax purposes as indebtedness.

 

6.                                      Authentication

 

This Global Fourth Issuer Note shall not be or become
valid or obligatory for any purpose unless and until authenticated by or on
behalf of the Registrar.

 

7.                                      Governing law

 

This Global Fourth Issuer Note is governed by, and
shall be construed in accordance with, the laws of England and the Fourth
Issuer has in the Fourth Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with the
Fourth Issuer Global Note.

 

8.                                      Contracts (Rights of Third Parties)
Act 1999

 

No rights are conferred on any person under the
Contracts (Rights of Third Parties) Act 1999 to enforce any term of this
temporary Global Note, but this does not affect any right or remedy of any
person which exists or is available apart from that Act.

 

131

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO.
  4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London, England on 12th March,
  2004.

  

 

132

 

Certificate of authentication

 

This Global Fourth Issuer Note is duly authenticated

without recourse, warranty or liability.

 

 

	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  

 

133

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL AND
INTEREST

 

The following payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

134

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for Definitive Fourth Issuer Notes and purchases
and cancellations of a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

135

PART I

 

SERIES 3 CLASS M GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 3
CLASS M GLOBAL FOURTH ISSUER NOTE
representing
up to

 

U.S.$40,400,000 Series 3 Class M Asset Backed Floating
Rate Fourth Issuer Notes due June 2042

 

This Series 3
Class M Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 3 Class M Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to forty million four hundred thousand U.S.
dollars (U.S.$40,400,000) and constituted by a Fourth Issuer Trust Deed dated
12th March, 2004 (the Fourth Issuer Trust Deed) between the
Fourth Issuer and The Bank of New York, as trustee (the
trustee for the time being thereof being herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents
and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated and
made on 12th March, 2004 and signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood (the Fourth Issuer Master Definitions and
Construction Schedule) (each as may be amended and/or restated from
time to time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global
Note shall be construed in accordance with the interpretation provisions set
out in Clause 2 of the Fourth Issuer Master Definitions and Construction
Schedule.  The aggregate principal
amount from time to time of this Global Fourth Issuer Note shall be that amount
not exceeding U.S.$40,400,000 as shall be shown by the latest entry duly made
in the Schedule hereto.

 

This is to certify
that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly
registered holder(s) of one of the Series 3 Class M Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the
Register and only the registered holder is entitled to payment in respect of
this Global Fourth Issuer Note.

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof forty million four hundred thousand U.S. dollars
(U.S.$40,400,000) on the Interest Payment Date falling in June 2042 (or on
such earlier date as the said principal amount may become repayable in accordance
with the Conditions or the Fourth Issuer Trust

 

136

 

Deed) and to pay interest
quarterly in arrear on each Interest Payment Date on the principal amount from
time to time of this Global Fourth Issuer Note at the rates determined in
accordance with the Conditions together with such other amounts (if any) as may
be payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Fourth
Issuer that it is at any time unwilling or unable to continue as holder of this
Global Fourth Issuer Note or is at any time unwilling or unable to continue as,
or ceases to be, a clearing agency under the United States Securities Exchange
Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give
notice to the Fourth Issuer, and the Fourth Issuer may give notice to the Note
Trustee and the Noteholders, of its intention to exchange this Global Fourth
Issuer Note for Definitive Fourth Issuer Notes on or after the Exchange Date
(as defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of U.S.$1,000 or U.S.$10,000
each, or any integral multiple thereof, or in such other denominations as the
Note Trustee shall determine and notify to the relevant Noteholders, in
exchange for the whole of this Global Fourth Issuer Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes,
this Global Fourth Issuer Note shall be surrendered to or to the order of the Registrar
and cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

137

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and interest
in respect of Fourth Issuer Notes represented by this Global Fourth Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal or interest on this Global Fourth
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the Fourth Issuer on Part I of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part I of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             DTC

 

References herein to DTC
shall be deemed to include references to any other clearing system approved by
the Note Trustee.

 

5.             Tax Treatment

 

The Fourth Issuer will
treat this Global Fourth Issuer Note as indebtedness for U.S. federal income
tax purposes.  Each Holder, by the
acceptance hereof, agrees to treat this Note for U.S. federal income tax
purposes as indebtedness.

 

6.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

7.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

8.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

138

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

139

 

Certificate of authentication

 

This Global Fourth
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

140

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

141

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

142

 

PART I

 

SERIES 3 CLASS C GLOBAL
FOURTH ISSUER NOTE

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 3
CLASS C GLOBAL FOURTH ISSUER NOTE
representing up to

 

U.S.$55,400,000 Series 3 Class C Asset Backed Floating
Rate Fourth Issuer Notes due June 2042

 

This Series 3
Class C Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 3 Class C Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to fifty five million four hundred thousand
U.S. dollars (U.S.$55,400,000) and constituted by a Fourth Issuer Trust Deed
dated 12th March, 2004 (the Fourth Issuer Trust Deed) between the
Fourth Issuer and The Bank of New York, as trustee (the
trustee for the time being thereof being herein called the Note Trustee).  References herein to the Conditions (or to
any particular numbered Condition) shall be to the Conditions (or that
particular one of them) set out in Schedule 3 to the Fourth Issuer Trust Deed.  Terms used but not defined herein have the
meanings ascribed to them in the amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents
and dated 12th March, 2004 (the Master Definitions and Construction Schedule)
and the fourth issuer master definitions and construction schedule, dated and
made on 12th March, 2004 and signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood (the Fourth Issuer Master Definitions and
Construction Schedule) (each as may be amended and/or restated from
time to time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global
Note shall be construed in accordance with the interpretation provisions set
out in Clause 2 of the Fourth Issuer Master Definitions and Construction
Schedule.  The aggregate principal
amount from time to time of this Global Fourth Issuer Note shall be that amount
not exceeding U.S.$55,400,000 as shall be shown by the latest entry duly made
in the Schedule hereto.

 

This is to certify
that:

 

Cede & Co. as nominee on behalf of The
Depositary Trust Company

 

is/are the duly
registered holder(s) of one of the Series 3 Class C Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the
Register and only the registered holder is entitled to payment in respect of
this Global Fourth Issuer Note.

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof fifty five million four hundred thousand U.S. dollars
(U.S.$55,400,000) on the Interest Payment Date falling in June 2042 (or on
such earlier date as the said principal amount may become repayable in
accordance with the Conditions or the Fourth Issuer Trust Deed) and to pay
interest quarterly in arrear on each Interest Payment Date on the principal
amount from time to time of this Global Fourth Issuer Note at the rates
determined in accordance with the Conditions together with such other amounts
(if any) as may be payable,

 

143

 

all subject to and in
accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Fourth
Issuer that it is at any time unwilling or unable to continue as holder of this
Global Fourth Issuer Note or is at any time unwilling or unable to continue as,
or ceases to be, a clearing agency under the United States Securities Exchange
Act of 1934, as amended (the Exchange Act), and a successor to DTC
registered as a clearing agency under the Exchange Act is not able to be
appointed by the Fourth Issuer within 90 days of such notification, or (ii) as
a result of any amendment to, or change in, the laws or regulations of the
United Kingdom (or of any political subdivision thereof), or of any authority
therein or thereof having power to tax, or in the interpretation or
administration by a revenue authority or a court or administration of such laws
or regulations which becomes effective on or after the Fourth Issuer Closing
Date, the Fourth Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Fourth Issuer Notes
which would not be required were the relevant Fourth Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Fourth Issuer Note (acting on the instructions of (a) holder(s)
of (a) Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of U.S.$1,000 or
U.S.$10,000 each, or any integral multiple thereof, or in such other
denominations as the Note Trustee shall determine and notify to the relevant
Noteholders, in exchange for the whole of this Global Fourth Issuer Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes,
this Global Fourth Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Fourth Issuer Note
requests, returned to it together with any relevant Definitive Fourth Issuer
Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal

 

144

 

and interest in respect of
Fourth Issuer Notes represented by this Global Fourth Issuer Note will be made
in accordance with the Conditions.  Upon
any payment of principal or interest on this Global Fourth Issuer Note the
amount so paid shall be endorsed by or on behalf of the Registrar on behalf of
the Fourth Issuer on Part I of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part I of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             DTC

 

References herein to DTC
shall be deemed to include references to any other clearing system approved by
the Note Trustee.

 

5.             Tax Treatment

 

The Fourth Issuer will
treat this Global Fourth Issuer Note as indebtedness for U.S. federal income
tax purposes.  Each Holder, by the
acceptance hereof, agrees to treat this Note for U.S. federal income tax
purposes as indebtedness.

 

6.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

7.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

8.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

145

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in London,
  England on 12th March, 2004.

  

 

146

 

Certificate of authentication

 

This Global Fourth
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

147

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

148

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

149

 

PART J

 

SERIES 4 CLASS A GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE
OFFERING OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 4 CLASS A GLOBAL
FOURTH ISSUER NOTE

representing up to

 

€1,500,000,000 Series 4 Class A Asset Backed Floating
Rate Fourth Issuer Notes due June 2034

 

This Series 4
Class A Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 4 Class A Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to one billion five hundred million euro (€1,500,000,000)
and constituted by a Fourth Issuer Trust Deed dated 12th March, 2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3 to the Fourth Issuer Trust Deed. 
Terms used but not defined herein have the meanings ascribed to them in
the amended and restated master definitions and construction
schedule signed by the parties to the Transaction Documents and dated 12th
March, 2004 (the Master Definitions and Construction Schedule) and the fourth
issuer master definitions and construction schedule, dated 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global Note
shall be construed in accordance with the interpretation provisions set out in
Clause 2 of the Fourth Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Fourth Issuer Note shall be that amount not exceeding €1,500,000,000 as shall be shown by the latest entry
duly made in the Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one of the Series 4 Class A Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the
Register and only the registered holder is entitled to payment in respect of
this Global Fourth Issuer Note.

 

150

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof one billion five hundred million euro (€1,500,000,000) on the
Interest Payment Date falling in June 2034 (or on such earlier date
as the said principal amount may become repayable in accordance with the
Conditions or the Fourth Issuer Trust Deed) and to pay interest quarterly, as
the case may be, in arrear on each Interest Payment Date on the principal
amount from time to time of this Global Fourth Issuer Note at the rates
determined in accordance with Conditions together with such other amounts (if
any) as may be payable, all subject to and in accordance with the Conditions
and the provisions of the Fourth Issuer Trust Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the Euroclear
System (Euroclear)
and Clearstream Banking, société anonyme (Clearstream, Luxembourg) are closed for
business for a continuous period of 14 days (other than by reason of holiday,
statutory or otherwise) or announce an intention permanently to cease business
or do so and no alternative clearing system satisfactory to the Note Trustee is
then available, or (ii) as a result of any amendment to, or change in, the laws
or regulations of the United Kingdom (or of any political subdivision thereof),
or of any authority therein or thereof having power to tax, or in the
interpretation or administration by a revenue authority or a court or
administration of such laws or regulations which becomes effective on or after
the Fourth Issuer Closing Date, the Fourth Issuer or any Paying Agent is or
will be required to make any deduction or withholding from any payment in
respect of the Fourth Issuer Notes which would not be required were the
relevant Fourth Issuer Notes in definitive registered form.  Thereupon the holder of this Global Fourth
Issuer Note (acting on the instructions of (a) holder(s) of (a) Book-Entry
Interest(s) (as defined in Section 3 hereof)) may give notice to the
Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee and the
Noteholders, of its intention to exchange this Global Fourth Issuer Note for
Definitive Fourth Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of €500,000 each, or
any integral multiple thereof, or in such other denominations (which must be
higher than €500,000) as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global Fourth Issuer
Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note

 

151

 

for Definitive Fourth
Issuer Notes this Global Fourth Issuer Note shall be surrendered to or to the
order of the Registrar and cancelled and, if the holder of this Global Fourth
Issuer Note requests, returned to it together with any relevant Definitive
Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and
interest in respect of Fourth Issuer Notes represented by this Global Fourth
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

152

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

153

 

Certificate of authentication

 

This Global Fourth
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

154

 

THE SCHEDULE

 

PART II

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

155

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

156

 

PART K

 

SERIES 4 CLASS B GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 4
CLASS B GLOBAL FOURTH ISSUER NOTE
representing up to

 

€85,000,000 Series
4 Class B Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 4
Class B Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 4 Class B Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to eighty five million euro (€85,000,000) and
constituted by a Fourth Issuer Trust Deed dated 12th March, 2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3 to the Fourth Issuer Trust Deed. 
Terms used but not defined herein have the meanings ascribed to them in
the amended and restated master definitions and construction
schedule signed by the parties to the Transaction Documents and dated 12th
March, 2004 (the Master Definitions and Construction Schedule) and the fourth
issuer master definitions and construction schedule, dated 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global Note
shall be construed in accordance with the interpretation provisions set out in
Clause 2 of the Fourth Issuer Master Definitions and Construction
Schedule.  The aggregate principal amount
from time to time of this Global Fourth Issuer Note shall be that amount not
exceeding €85,000,000 as shall be shown by the latest entry duly made in the
Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one Series 4 Class B Global Fourth Issuer Notes.  This Global Fourth Issuer Note is evidence
of entitlement only.  Title to the
Global Fourth Issuer Notes passes only on due registration in the Register and
only the registered holder is entitled to payment in respect of this Global
Fourth Issuer Note.

 

157

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof eighty five million euro (€85,000,000) on the Interest Payment
Date falling in June 2042 (or on such earlier date as the said principal
amount may become repayable in accordance with the Conditions or the Fourth
Issuer Trust Deed) and to pay interest quarterly in arrear on each Interest
Payment Date on the principal amount from time to time of this Global Fourth
Issuer Note at the rates determined in accordance with Conditions together with
such other amounts (if any) as may be payable, all subject to and in accordance
with the Conditions and the provisions of the Fourth Issuer Trust Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14 days
(other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of €500,000 each, or
any integral multiple thereof, or in such other denominations (which must be
higher than €500,000) as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global Fourth Issuer
Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes this
Global Fourth Issuer Note, shall be surrendered to or to

 

158

 

the order of the Registrar
and cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and
interest in respect of Fourth Issuer Notes represented by this Global Fourth
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the Schedule hereto.

 

Upon any payment of principal
and endorsement of such payment on Part Ii of the Schedule hereto, the
principal amount of this Global Fourth Issuer Note shall be reduced for all
purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to Euroclear
and/or Clearstream, Luxembourg shall be deemed to include references to any
other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and until
authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

159

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

160

 

Certificate of authentication

 

This Global Fourth
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

161

 

THE SCHEDULE

 

PART III

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

162

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

163

 

PART L

 

SERIES 4 CLASS M GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 4
CLASS M GLOBAL FOURTH ISSUER NOTE
representing up to

 

€62,500,000 Series 4 Class M Asset Backed Floating Rate
Fourth Issuer Notes due June 2042

 

This Series 4
Class M Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 4 Class M Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to sixty two million five hundred thousand
euro (€62,500,000) and constituted by a Fourth Issuer Trust Deed dated 12th March, 2004
(the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3 to the Fourth Issuer Trust Deed. 
Terms used but not defined herein have the meanings ascribed to them in
the amended and restated master definitions and construction
schedule signed by the parties to the Transaction Documents and dated 12th
March, 2004 (the Master Definitions and Construction Schedule) and the fourth
issuer master definitions and construction schedule, dated 25th
November and signed for the purposes of identification by Allen &
Overy and Sidley Austin Brown & Wood (the Fourth Issuer Master Definitions and
Construction Schedule) (each as may be amended and/or restated from
time to time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global
Note shall be construed in accordance with the interpretation provisions set
out in Clause 2 of the Fourth Issuer Master Definitions and Construction
Schedule.  The aggregate principal
amount from time to time of this Global Fourth Issuer Note shall be that amount
not exceeding €62,500,000 as shall be shown by the latest entry duly made in the
Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one of the Series 4 Class M Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the
Register and only the registered holder is entitled to payment in respect of
this Global Fourth Issuer Note.

 

164

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof sixty two million five hundred thousand euro (€62,500,000) on
the Interest Payment Date falling in June 2042 (or on such earlier date as
the said principal amount may become repayable in accordance with the Conditions
or the Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on
each Interest Payment Date on the principal amount from time to time of this
Global Fourth Issuer Note at the rates determined in accordance with Conditions
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of €500,000 each, or
any integral multiple thereof, or in such other denominations (which must be
higher than €500,000) as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global Fourth Issuer
Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes this
Global Fourth Issuer Note, shall be surrendered to or to

 

165

 

the order of the Registrar
and cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and
interest in respect of Fourth Issuer Notes represented by this Global Fourth
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

166

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

167

 

Certificate of authentication

 

This Global Fourth
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

168

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

169

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

170

 

PART M

 

SERIES 5 CLASS A1 GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 5
CLASS A1 GLOBAL FOURTH ISSUER NOTE
representing up to

 

€750,000,000 Series 5 Class A Asset Backed Floating
Rate Fourth Issuer Notes due June 2042

 

This Series 5
Class A Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 5 Class A1 Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to seven hundred and fifty million euro
(€750,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th March,
2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3 to the Fourth Issuer Trust Deed. 
Terms used but not defined herein have the meanings ascribed to them in
the amended and restated master definitions and construction
schedule signed by the parties to the Transaction Documents and dated 12th
March, 2004 (the Master Definitions and Construction Schedule) and the fourth
issuer master definitions and construction schedule, dated 12th March, 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global Note
shall be construed in accordance with the interpretation provisions set out in
Clause 2 of the Fourth Issuer Master Definitions and Construction
Schedule.  The aggregate principal
amount from time to time of this Global Fourth Issuer Note shall be that amount
not exceeding €750,000,000 as shall be shown by the latest entry duly made in the
Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one of the Series 5 Class A1 Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the Register
and only the registered holder is entitled to payment in respect of this Global
Fourth Issuer Note.

 

171

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof seven hundred and fifty million euro (€750,000,000) on the
Interest Payment Date falling in June 2042 (or on such earlier date
as the said principal amount may become repayable in accordance with the
Conditions or the Fourth Issuer Trust Deed) and to pay interest annually or
quarterly, as the case may be, in arrear on each Interest Payment Date on the
principal amount from time to time of this Global Fourth Issuer Note at the
rates determined in accordance with Conditions together with such other amounts
(if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of €500,000 each, or
any integral multiple thereof, or in such other denominations (which must be
higher than €500,000) as the Note Trustee shall determine and notify to the
relevant Noteholders, in exchange for the whole of this Global Fourth Issuer
Note.

 

Exchange Date means a day
specified in the notice requiring exchange falling not more than 60 days after
that on which such notice is given and on which banks are open for business in
the city in which the specified office of the Registrar is located and in the
city in which the relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note

 

172

 

for Definitive Fourth
Issuer Notes this Global Fourth Issuer Note shall be surrendered to or to the
order of the Registrar and cancelled and, if the holder of this Global Fourth
Issuer Note requests, returned to it together with any relevant Definitive
Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and
interest in respect of Fourth Issuer Notes represented by this Global Fourth
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

173

 

IN WITNESS WHEREOF the Fourth Issuer has caused this Global Fourth Issuer Note to be
signed manually or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

174

 

Certificate of authentication

 

This Global Fourth
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

175

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

176

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

177

PART N

 

SERIES 5 CLASS A2 GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE
OFFERING OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 5 CLASS A2 GLOBAL
FOURTH ISSUER NOTE

representing up to

 

£600,000,000 Series 5 Class A2 Asset Backed Floating
Rate Fourth Issuer Notes due June 2042

 

This Series 5
Class A2 Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 5 Class A2 Fourth
Issuer Notes of Permanent Financing (No. 4) PLC (the Fourth Issuer), designated as
specified in the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to six hundred million pounds sterling
(£600,000,000) and constituted by a Fourth Issuer Trust Deed dated [•],
2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3
to the Fourth Issuer Trust Deed.  Terms
used but not defined herein have the meanings ascribed to them in the amended
and restated master definitions and construction schedule signed by the
parties to the Transaction Documents and dated [•], 2004
(the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated [•], 2004 and
signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Fourth Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Fourth Issuer Trust Deed and this Fourth Issuer Global Note
shall be construed in accordance with the interpretation provisions set out in
Clause 2 of the Fourth Issuer Master Definitions and Construction
Schedule.  The aggregate principal
amount from time to time of this Global Fourth Issuer Note shall be that amount
not exceeding £600,000,000
as shall be shown by the latest entry duly made in the Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one of the Series 5 Class A2 Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the
Register and only the registered holder is entitled to payment in respect of
this Global Fourth Issuer Note.

 

178

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof six hundred million pounds sterling (£600,000,000) on the
Interest Payment Date falling in June 2042 (or on such earlier date as the
said principal amount may become repayable in accordance with the Conditions or
the Fourth Issuer Trust Deed) and to pay interest quarterly, as the case may
be, in arrear on each Interest Payment Date on the principal amount from time
to time of this Global Fourth Issuer Note at the rates determined in accordance
with Conditions together with such other amounts (if any) as may be payable,
all subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of £1,000 or £10,000
each, or any integral multiple thereof, or in such other denominations as the
Note Trustee shall determine and notify to the relevant Noteholders, in exchange
for the whole of this Global Fourth Issuer Note.

 

Exchange Date means a day specified in the notice
requiring exchange falling not more than 60 days after that on which such
notice is given and on which banks are open for business in the city in which
the specified office of the Registrar is located and in the city in which the
relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note

 

179

 

for Definitive Fourth
Issuer Notes this Global Fourth Issuer Note shall be surrendered to or to the
order of the Registrar and cancelled and, if the holder of this Global Fourth
Issuer Note requests, returned to it together with any relevant Definitive
Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the Conditions,
the Fourth Issuer Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in
respect of Fourth Issuer Notes represented by this Global Fourth Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal or interest on this Global Fourth
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

180

 

IN WITNESS WHEREOF the Fourth
Issuer has caused this Global Fourth Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

181

 

	
  Certificate of authentication

  
	
   

  
	
  This Global
  Fourth Issuer Note is duly authenticated

  without
  recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

182

 

THE SCHEDULE

 

PART IV

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

183

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

184

 

PART O

 

SERIES 5 CLASS B GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE
OFFERING OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 5 CLASS B GLOBAL
FOURTH ISSUER NOTE

representing up to

 

£43,000,000 Series
5 Class B Asset Backed Floating Rate Fourth Issuer Notes due June 2042

 

This Series 5
Class B Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 5 Class B Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to forty three million pounds sterling
(£43,000,000) and constituted by a Fourth Issuer Trust Deed dated 12th March,
2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3
to the Fourth Issuer Trust Deed.  Terms
used but not defined herein have the meanings ascribed to them in the amended
and restated master definitions and construction schedule signed by the
parties to the Transaction Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated 12th March, 2004 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood (the Fourth Issuer Master Definitions and Construction Schedule)
(each as may be amended and/or restated from time to time), and the Fourth
Issuer Trust Deed and this Fourth Issuer Global Note shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the Fourth
Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to time of this Global
Fourth Issuer Note shall be that amount not exceeding £43,000,000 as shall
be shown by the latest entry duly made in the Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one Series 5 Class B Global Fourth Issuer Notes.  This Global Fourth Issuer Note is evidence
of entitlement only.  Title to the
Global Fourth Issuer Notes passes only on due registration in the Register and
only the registered holder is entitled to payment in respect of this Global Fourth
Issuer Note.

 

185

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof forty three million pounds sterling (£43,000,000) on the
Interest Payment Date falling in June 2042 (or on such earlier date as the
said principal amount may become repayable in accordance with the Conditions or
the Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with Conditions
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of £1,000 each, or any
integral multiple thereof, or in such other denominations or £10,000 as the
Note Trustee shall determine and notify to the relevant Noteholders, in
exchange for the whole of this Global Fourth Issuer Note.

 

Exchange Date means a day specified in the notice
requiring exchange falling not more than 60 days after that on which such
notice is given and on which banks are open for business in the city in which
the specified office of the Registrar is located and in the city in which the
relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes this
Global Fourth Issuer Note, shall be surrendered to or to

 

186

 

the order of the Registrar
and cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and
interest in respect of Fourth Issuer Notes represented by this Global Fourth
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the Schedule hereto,
the principal amount of this Global Fourth Issuer Note shall be reduced for all
purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

187

 

IN WITNESS WHEREOF the Fourth
Issuer has caused this Global Fourth Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

188

 

	
  Certificate of authentication

  
	
   

  
	
  This Global
  Fourth Issuer Note is duly authenticated

  without
  recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

189

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

190

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

191

 

PART P

 

SERIES 5 CLASS M GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE
OFFERING OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 5 CLASS M GLOBAL
FOURTH ISSUER NOTE

representing up to

 

£32,000,000 Series 5 Class M Asset Backed Floating Rate
Fourth Issuer Notes due June 2042

 

This Series 5
Class M Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 5 Class M Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to thirty two million pounds sterling (£32,000,000)
and constituted by a Fourth Issuer Trust Deed dated 12th March, 2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3
to the Fourth Issuer Trust Deed.  Terms
used but not defined herein have the meanings ascribed to them in the amended
and restated master definitions and construction schedule signed by the
parties to the Transaction Documents and dated 12th March, 2004 (the Master
Definitions and Construction Schedule) and the fourth issuer master
definitions and construction schedule, dated 12th March and signed for the
purposes of identification by Allen & Overy and Sidley Austin Brown &
Wood (the Fourth
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding £32,000,000 as shall
be shown by the latest entry duly made in the Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly registered holder(s) of one of the Series 5 Class M
Global Fourth Issuer Notes.  This Global
Fourth Issuer Note is evidence of entitlement only.  Title to the Global Fourth Issuer Notes passes only on due
registration in the Register and only the registered holder is entitled to
payment in respect of this Global Fourth Issuer Note.

 

192

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof thirty two million pounds sterling (£32,000,000) on the
Interest Payment Date falling in June 2042 (or on such earlier date as the
said principal amount may become repayable in accordance with the Conditions or
the Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with Conditions
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive
Fourth Issuer Notes in registered form in denominations of £1,000 or £10,000
each, or any integral multiple thereof, or in such other denominations as the
Note Trustee shall determine and notify to the relevant Noteholders, in
exchange for the whole of this Global Fourth Issuer Note.

 

Exchange Date means a day specified in the notice
requiring exchange falling not more than 60 days after that on which such
notice is given and on which banks are open for business in the city in which
the specified office of the Registrar is located and in the city in which the
relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes this
Global Fourth Issuer Note, shall be surrendered to or to

 

193

 

the order of the Registrar
and cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge.  Payments of principal and
interest in respect of Fourth Issuer Notes represented by this Global Fourth
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Fourth Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references to
any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in connection
with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

194

 

IN WITNESS WHEREOF the Fourth
Issuer has caused this Global Fourth Issuer Note to be signed manually or in facsimile
by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

195

 

	
  Certificate of authentication

  
	
   

  
	
  This Global
  Fourth Issuer Note is duly authenticated

  without
  recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

196

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

197

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

198

 

PART P

 

SERIES 5 CLASS C GLOBAL
FOURTH ISSUER NOTE

 

THIS FOURTH ISSUER
NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT
IS 40 DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE
OFFERING OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

SERIES 5 CLASS C GLOBAL
FOURTH ISSUER NOTE

representing up to

 

£54,000,000 Series 5 Class C Asset Backed Floating Rate
Fourth Issuer Notes due June 2042

 

This Series 5
Class C Global Fourth Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 5 Class C Fourth Issuer
Notes of Permanent
Financing (No. 4) PLC (the Fourth Issuer), designated as specified in
the title hereof (the Fourth Issuer Notes), limited to the
aggregate principal amount of up to fifty four million pounds sterling (£54,000,000)
and constituted by a Fourth Issuer Trust Deed dated 12th March, 2004 (the Fourth
Issuer Trust Deed) between the Fourth Issuer and The Bank of
New York, as trustee (the trustee for the time being thereof being
herein called the Note Trustee).  References herein to the Conditions (or to any particular
numbered Condition) shall be to the Conditions (or that particular one of them)
set out in Schedule 3
to the Fourth Issuer Trust Deed.  Terms
used but not defined herein have the meanings ascribed to them in the amended
and restated master definitions and construction schedule signed by the
parties to the Transaction Documents and dated 12th March, 2004 (the Master Definitions
and Construction Schedule) and the fourth issuer master definitions
and construction schedule, dated 12th March and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood (the Fourth
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Fourth Issuer Trust Deed
and this Fourth Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Fourth Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Fourth
Issuer Note shall be that amount not exceeding £54,000,000 as shall
be shown by the latest entry duly made in the Schedule hereto.

 

This is to certify
that:

 

Citivic Nominees Limited as nominee on behalf of
the Common Depositary

 

is/are the duly
registered holder(s) of one of the Series 5 Class C Global Fourth Issuer
Notes.  This Global Fourth Issuer Note
is evidence of entitlement only.  Title
to the Global Fourth Issuer Notes passes only on due registration in the
Register and only the registered holder is entitled to payment in respect of
this Global Fourth Issuer Note.

 

199

 

1.             Promise to pay

 

Subject as provided in this
Global Fourth Issuer Note the Fourth Issuer promises to pay to the registered
holder hereof the principal amount of this Global Fourth Issuer Note (being at
the date hereof fifty four million punds sterling (£54,000,000) on the Interest
Payment Date falling in June 2042 (or on such earlier date as the said
principal amount may become repayable in accordance with the Conditions or the
Fourth Issuer Trust Deed) and to pay interest quarterly in arrear on each
Interest Payment Date on the principal amount from time to time of this Global
Fourth Issuer Note at the rates determined in accordance with Conditions
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

2.             Exchange for
Definitive Fourth Issuer Notes and purchases

 

This Global Fourth Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Fourth
Issuer Notes only if (i) both Euroclear Bank S.A./N.V., as operator of the
Euroclear System (Euroclear) and Clearstream Banking, société
anonyme (Clearstream,
Luxembourg) are closed for business for a continuous period of 14
days (other than by reason of holiday, statutory or otherwise) or announce an
intention permanently to cease business or do so and no alternative clearing
system satisfactory to the Note Trustee is then available, or (ii) as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof), or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or administration of such laws or regulations
which becomes effective on or after the Fourth Issuer Closing Date, the Fourth
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Fourth Issuer Notes which would
not be required were the relevant Fourth Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Fourth Issuer Note (acting on the instructions of (a) holder(s) of (a)
Book-Entry Interest(s) (as defined in Section 3 hereof)) may give notice
to the Fourth Issuer, and the Fourth Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Fourth Issuer
Note for Definitive Fourth Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Fourth Issuer Note shall surrender this Global
Fourth Issuer Note to or to the order of the Registrar.  In exchange for this Global Fourth Issuer
Note the Fourth Issuer will deliver, or procure the delivery of, Definitive Fourth
Issuer Notes in registered form in denominations of £1,000 or £10,000 each, or
any integral multiple thereof, or in such other denominations as the Note
Trustee shall determine and notify to the relevant Noteholders, in exchange for
the whole of this Global Fourth Issuer Note.

 

Exchange Date means a day specified in the notice
requiring exchange falling not more than 60 days after that on which such
notice is given and on which banks are open for business in the city in which
the specified office of the Registrar is located and in the city in which the
relevant clearing system is located.

 

Upon the cancellation of a
part of this Global Fourth Issuer Note in accordance with the Fourth Issuer
Trust Deed, the Conditions and the Fourth Issuer Paying Agent and Agent Bank
Agreement, the portion of the principal amount hereof so exchanged or so
purchased and cancelled shall be endorsed by or on behalf of the Registrar on
behalf of the Fourth Issuer on Part Ii of the Schedule hereto, whereupon
the principal amount hereof shall be increased or, as the case may be, reduced
for all purposes by the amount so exchanged or so purchased and cancelled and
endorsed.  Upon the exchange of the
whole of this Global Fourth Issuer Note for Definitive Fourth Issuer Notes this
Global Fourth Issuer Note, shall be surrendered to or to

 

200

 

the order of the Registrar
and cancelled and, if the holder of this Global Fourth Issuer Note requests,
returned to it together with any relevant Definitive Fourth Issuer Notes.

 

3.             Payments

 

Until the entire principal
amount of this Global Fourth Issuer Note has been extinguished, this Global
Fourth Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of Charge.  Payments of principal and interest in
respect of Fourth Issuer Notes represented by this Global Fourth Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal or interest on this Global Fourth
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the Fourth Issuer on Part Ii of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Fourth Issuer Note
shall be reduced for all purposes by the principal amount so paid and endorsed.

 

All payments of any amounts
payable and paid to the registered holder of this Global Fourth Issuer Note
shall be valid and, to the extent of the sums so paid, effectual to satisfy and
discharge the liability for the monies payable hereon.

 

4.             Euroclear and
Clearstream, Luxembourg

 

References herein to
Euroclear and/or Clearstream, Luxembourg shall be deemed to include references
to any other clearing system approved by the Note Trustee.

 

5.             Authentication

 

This Global Fourth Issuer
Note shall not be or become valid or obligatory for any purpose unless and
until authenticated by or on behalf of the Registrar.

 

6.             Governing law

 

This Global Fourth Issuer Note
is governed by, and shall be construed in accordance with, the laws of England
and the Fourth Issuer has in the Fourth Issuer Trust Deed submitted to the non
exclusive jurisdiction of the courts of England for all purposes in connection
with the Fourth Issuer Global Note.

 

7.             Contracts
(Rights of Third Parties) Act 1999

 

No rights are
conferred on any person under the Contracts (Rights of Third Parties) Act 1999
to enforce any term of this temporary Global Note, but this does not affect any
right or remedy of any person which exists or is available apart from that Act.

 

201

 

IN WITNESS WHEREOF the Fourth
Issuer has caused this Global Fourth Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  
	
   

  
	
  Issued in
  London, England on 12th March, 2004.

  

 

202

 

	
  Certificate of authentication

  
	
   

  
	
  This Global
  Fourth Issuer Note is duly authenticated

  without
  recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

203

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Fourth Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

204

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Fourth Issuer Notes and purchases and cancellations of
a part of this Global Fourth Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Fourth

  Issuer Notes

  	
   

  	
  Part of principal

  amount

  purchased and

  cancelled

  	
   

  	
  Aggregate

  principal amount

  following such

  exchange or

  purchase and

  cancellation

  	
   

  	
  Notation made

  on behalf of the

  Fourth Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

205

 

SCHEDULE 2

 

FORMS OF DEFINITIVE FOURTH
ISSUER NOTES

 

PART 1

 

SERIES 1 CLASS A
DEFINITIVE FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

U.S.$1,500,000,000 Series 1 Class A Asset Backed Floating
Rate Fourth Issuer Notes due

December 2004

(the Series 1 Class A Fourth Issuer Notes)

 

This Series 1
Class A Fourth Issuer Note forms one of a series of notes constituted by a
fourth issuer trust deed (the Fourth Issuer Trust Deed) dated 12th March,
2004 made between Permanent Financing (No. 4) PLC (the Fourth
Issuer) and The Bank of New York, as trustee for
the holders of the Series 1 Class A Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 1 Class A Fourth Issuer Notes in denominations
of U.S.$1,000 or U.S.$10,000 each, or integral multiples thereof, or in such
other denominations as the Note Trustee shall determine and notify to the
holders of the relevant Series 1 Class A Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 1 Class A
Fourth Issuer Notes, such Series 1 Class A Fourth Issuer Notes being in the
denomination of
U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
March 2005 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 1 Class A Fourth Issuer Notes (the Conditions) endorsed hereon)
to the repayment of such principal sum of:

 

U.S.$             (                                       U.S.
dollars)

 

together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 1 Class A Fourth Issuer Note at rates determined
in accordance with the Conditions payable monthly or quarterly, as the case may
be, in arrear on each Interest Payment Date and together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

206

 

IN WITNESS WHEREOF this
registered Series 1 Class A Fourth Issuer Note has been executed on behalf of
the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 1 Class A Fourth Issuer Note is
  duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK,
  N.A.

  as Registrar

  
				

 

207

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set
out in Schedule 3]

 

208

 

FORM OF TRANSFER OF
DEFINITIVE FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  type name and address (including postal code) of transferee)

  

 

U.S.$
                                                       
principal amount of this Series 1 Class A Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                            
as attorney to transfer such principal amount of this Series 1 Class A Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT  FINANCING
(NO. 4) PLC with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.             This
form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Fourth Issuer Trust Deed and the
Fourth Issuer Paying Agent and Agent Bank Agreement (as defined in the Conditions)
and must be executed under the hand of the transferor or, if the transferor is
a corporation, either under its common seal or under the hand of two of its
officers duly authorised in writing and, in such latter case, the document so
authorising such officers must be delivered with this form of transfer.

 

2.             The
signature(s) on this form of transfer must correspond with the name(s) as
it/they appear(s) on the face of this Series 1 Class A Fourth Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

209

 

PART 2

 

SERIES 1 CLASS B
DEFINITIVE FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

U.S.$78,100,000 Series 1 Class B Asset Backed Floating
Rate Fourth Issuer Notes due June 2042

(the Series 1 Class B Fourth Issuer Notes)

 

This Series 1
Class B Fourth Issuer Note forms one of a series of notes constituted by a
fourth issuer trust deed (the Fourth Issuer Trust Deed) dated 12th March,
2004 made between Permanent Financing (No. 4) PLC (the Fourth Issuer) and The Bank
of New York, as trustee for the holders of the Series 1 Class B Fourth Issuer
Notes (the Note Trustee) and issued as registered Series 1 Class B Fourth
Issuer Notes in denominations of U.S.$1,000 or U.S.$10,000 each, or integral
multiples thereof, or in such other denominations as the Note Trustee shall
determine and notify to the holders of the relevant Series 1 Class B Fourth
Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 1 Class B
Fourth Issuer Notes, such Series 1 Class B Fourth Issuer Notes being in the denomination
of
U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 1 Class B Fourth Issuer Notes (the Conditions) endorsed hereon)
to the repayment of such principal sum of:

 

U.S.$             (                                       U.S.
dollars)

 

together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 1 Class B Fourth Issuer Note at rates determined
in accordance with the Conditions payable quarterly in arrear on each Interest
Payment Date and together with such other amounts (if any) as may be payable,
all subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this
registered Series 1 Class B Fourth Issuer Note has been executed on behalf of
the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  

 

210

 

	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 1 Class B Fourth Issuer Note is
  duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK,
  N.A.

  as Registrar

  

 

211

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set
out in Schedule 3]

 

212

 

FORM OF TRANSFER OF
DEFINITIVE FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  type name and address (including postal code) of transferee)

  

 

U.S.$
                                                            
principal amount of this Series 1 Class B Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                             
as attorney to transfer such principal amount of this Series 1 Class B Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.             This
form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Fourth Issuer Trust Deed and the
Fourth Issuer Paying Agent and Agent Bank Agreement (as defined in the
Conditions) and must be executed under the hand of the transferor or, if the
transferor is a corporation, either under its common seal or under the hand of
two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.             The
signature(s) on this form of transfer must correspond with the name(s) as
it/they appear(s) on the face of this Series 1 Class B Fourth Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

213

 

PART 3

 

SERIES 1 CLASS M
DEFINITIVE FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

U.S.$56,500,000 Series 1
Class M Asset Backed Floating Rate Fourth Issuer Notes due June

2042
(the Series 1 Class C
Fourth Issuer Notes)

 

This Series 1
Class M Fourth Issuer Note forms one of a series of notes constituted by a
fourht issuer trust deed (the Fourth Issuer Trust Deed) dated 12th March,
2004 made between Permanent Financing (No. 4) PLC (the Fourth Issuer) and The Bank
of New York, as trustee for the holders of the Series 1 Class C Fourth Issuer
Notes (the Note Trustee) and issued as registered Series 1 Class M Fourth
Issuer Notes in denominations of U.S.$1,000 or U.S.$10,000 each, or integral
multiples thereof, or in such other denominations as the Note Trustee shall
determine and notify to the holders of the relevant Series 1 Class M Fourth
Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 1 Class C
Fourth Issuer Notes, such Series 1 Class M Fourth Issuer Notes being in the
denomination of
U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions (the
Series 1 Class M Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

U.S.$             (                                       U.S.
dollars)

 

together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 1 Class M Fourth Issuer Note at rates determined
in accordance with the Conditions payable quarterly in arrear on each Interest
Payment Date and together with such other amounts (if any) as may be payable,
all subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this
registered Series 1 Class M Fourth Issuer Note has been executed on behalf of
the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  

 

214

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 1 Class M Fourth Issuer Note is
  duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

215

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set
out in Schedule 3]

 

216

 

FORM OF TRANSFER OF
DEFINITIVE FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  type name and address (including postal code) of transferee)

  

 

U.S.$
                                                       
principal amount of this Series 1 Class M Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                   
as attorney to transfer such principal amount of this Fourth Issuer Note in the
register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC with full
power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.             This
form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Series 1 Class M Fourth Issuer
Trust Deed and the Fourth Issuer Paying Agent and Agent Bank Agreement (as
defined in the Conditions) and must be executed under the hand of the
transferor or, if the transferor is a corporation, either under its common seal
or under the hand of two of its officers duly authorised in writing and, in
such latter case, the document so authorising such officers must be delivered
with this form of transfer.

 

2.             The
signature(s) on this form of transfer must correspond with the name(s) as
it/they appear(s) on the face of this Series 1 Class M Fourth Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

217

 

PART 4

 

SERIES 2 CLASS A DEFINITIVE FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO. 4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

U.S.$2,400,000,000 Series 2 Class A Asset Backed Floating
Rate Fourth Issuer Notes due March 2009

 

(the Series 2 Class A Fourth Issuer Notes)

 

This Series 2
Class A Fourth Issuer Note forms one of a series of notes constituted by a
fourth issuer trust deed (the Fourth Issuer Trust Deed) dated 12th March,
2004 made between Permanent Financing (No. 4) PLC (the Fourth
Issuer) and The Bank of New York, as trustee for the
holders of the Series 2 Class A Fourth Issuer Notes (the Note Trustee) and issued as
registered Series 2 Class A Fourth Issuer Notes in denominations of U.S.$1,000
or U.S.$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 2 Class A Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 2 Class A Fourth
Issuer Notes, such Series 2 Class A Fourth Issuer Notes being in the
denomination of
U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
March 2009 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 2 Class A Fourth Issuer Notes (the Conditions) endorsed hereon)
to the repayment of such principal sum of:

 

U.S.$             (                                       U.S.
dollars)

 

together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 2 Class A Fourth Issuer Note at rates determined
in accordance with the Conditions payable quarterly in arrear on each Interest
Payment Date and together with such other amounts (if any) as may be payable,
all subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this
registered Series 2 Class A Fourth Issuer Note has been executed on behalf of
the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
				

 

218

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 2 Class A Fourth Issuer Note is
  duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
					

 

219

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set
out in Schedule 3]

 

220

 

FORM OF TRANSFER OF
DEFINITIVE FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  type name and address (including postal code) of transferee)

  

 

U.S.$
                                                          
principal amount of this Series 2 Class A Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing                              
as attorney to transfer such principal amount of this Series 2 Class A Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.             This
form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Fourth Issuer Trust Deed and the
Fourth Issuer Paying Agent and Agent Bank Agreement (as defined in the
Conditions) and must be executed under the hand of the transferor or, if the
transferor is a corporation, either under its common seal or under the hand of
two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.             The
signature(s) on this form of transfer must correspond with the name(s) as
it/they appear(s) on the face of this Series 2 Class A Fourth Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

221

 

PART 5

 

SERIES 2 CLASS B
DEFINITIVE FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

U.S.$100,700,000 Series 2
Class B Asset Backed Floating Rate Fourth Issuer Notes due June

2042
(the Series 2 Class B
Fourth Issuer Notes)

 

This Series 2
Class B Fourth Issuer Note forms one of a series of notes constituted by a fourth
issuer trust deed (the Fourth Issuer Trust Deed) dated 12th March,
2004 made between Permanent Financing (No. 4) PLC (the Fourth
Issuer) and The Bank of New York, as trustee for the
holders of the Series 2 Class B Fourth Issuer Notes (the Note Trustee) and issued as
registered Series 2 Class B Fourth Issuer Notes in denominations of U.S.$1,000
or U.S.$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 2 Class B Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 2 Class B
Fourth Issuer Notes, such Series 2 Class B Fourth Issuer Notes being in the
denomination of U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 2 Class B Fourth Issuer Notes (the Conditions) endorsed hereon)
to the repayment of such principal sum of:

 

U.S.$             (                                       U.S.
dollars)

 

together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 2 Class B Fourth Issuer Note at rates determined
in accordance with the Conditions payable quarterly in arrear on each Interest
Payment Date and together with such other amounts (if any) as may be payable,
all subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this
registered Series 2 Class B Fourth Issuer Note has been executed on behalf of
the Fourth Issuer.

 

222

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 2 Class B Fourth Issuer Note is
  duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK,
  N.A.

  as Registrar

  
				

 

223

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set
out in Schedule 3]

 

224

 

FORM OF TRANSFER OF
DEFINITIVE FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  type name and address (including postal code) of transferee)

  

 

U.S.$
                                            
principal amount of this Series 2 Class B Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                         
as attorney to transfer such principal amount of this Series 2 Class B Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC with
full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.             This
form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Fourth Issuer Trust Deed and the
Fourth Issuer Paying Agent and Agent Bank Agreement (as defined in the
Conditions) and must be executed under the hand of the transferor or, if the
transferor is a corporation, either under its common seal or under the hand of
two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

2.             The
signature(s) on this form of transfer must correspond with the name(s) as
it/they appear(s) on the face of this Series 2 Class B Fourth Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

225

 

PART 6

 

SERIES 2 CLASS M
DEFINITIVE FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO.
4) PLC

 

(Incorporated with
limited liability in England with registered number 4988201)

 

U.S.$59,900,000 Series 2
Class M Asset Backed Floating Rate Fourth Issuer Notes due June

2042
(the Series 2 Class M
Fourth Issuer Notes)

 

This Series 2 Class
M Fourth Issuer Note forms one of a series of notes constituted by a fourth
issuer trust deed (the Fourth Issuer Trust Deed) dated 12th March,
2004 made between Permanent Financing (No. 4) PLC (the Fourth
Issuer) and The Bank of New York, as trustee for the
holders of the Series 2 Class M Fourth Issuer Notes (the Note Trustee) and issued as
registered Series 2 Class M Fourth Issuer Notes in denominations of U.S.$1,000
or U.S.$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 2 Class M Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 2 Class M
Fourth Issuer Notes, such Series 2 Class M Fourth Issuer Notes being in the
denomination of
U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
June 2042 (or on such earlier date as the principal sum hereinafter
mentioned may become repayable in accordance with the terms and conditions of
the Series 2 Class M Fourth Issuer Notes (the Conditions) endorsed hereon)
to the repayment of such principal sum of:

 

U.S.$             (                                       U.S.
dollars)

 

together with such
other amounts (if any) as may be payable, all subject to and in accordance with
the said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 2 Class M Fourth Issuer Note at rates determined
in accordance with the Conditions payable quarterly in arrear on each Interest
Payment Date and together with such other amounts (if any) as may be payable,
all subject to and in accordance with the Conditions and the provisions of the
Fourth Issuer Trust Deed.

 

226

 

IN WITNESS WHEREOF this
registered Series 2 Class M Fourth Issuer Note has been executed on behalf of
the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 2 Class M Fourth Issuer Note is
  duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK,
  N.A.

  as Registrar

  
				

 

227

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set
out in Schedule 3]

 

228

 

FORM OF TRANSFER OF
DEFINITIVE FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
  (Please print or
  type name and address (including postal code) of transferee)

  

 

U.S.$
                                                
principal amount of this Series 2 Class M Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                               
as attorney to transfer such principal amount of this Series 2 Class M Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.             This
form of transfer must be accompanied by such documents, evidence and
information as may be required pursuant to the Fourth Issuer Trust Deed and the
Fourth Issuer Paying Agent and Agent Bank Agreement (as defined in the
Conditions) and must be executed under the hand of the transferor or, if the
transferor is a corporation, either under its common seal or under the hand of
two of its officers duly authorised in writing and, in such latter case, the
document so authorising such officers must be delivered with this form of
transfer.

 

THE SIGNATURE(S) ON THIS FORM OF TRANSFER MUST CORRESPOND WITH THE

NAME(S) AS IT/THEY APPEAR(S) ON THE FACE OF THIS SERIES 2 CLASS M FOURTH

ISSUER NOTE IN EVERY PARTICULAR, WITHOUT ALTERATION OR

ENLARGEMENT OR ANY CHANGE WHATEVER.

 

229

 

PART 7

 

SERIES 2 CLASS C DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

U.S.$82,200,000 Series 2 Class
C Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 2
Class C Fourth Issuer Notes)

 

This Series 2 Class C Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 2 Class C Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 2 Class C Fourth Issuer Notes in denominations
of U.S.$1,000 or U.S.$10,000 each, or integral multiples thereof, or in such
other denominations as the Note Trustee shall determine and notify to the
holders of the relevant Series 2 Class C Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 2 Class C Fourth
Issuer Notes, such Series 2 Class C Fourth Issuer Notes being in the
denomination of
U.S.$             (                                U.S.
dollars) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 2 Class C
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

U.S.$          (                      U.S.
dollars)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 2 Class C Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

IN WITNESS WHEREOF this registered Series 2 Class C Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

230

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 2 Class
  C Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

231

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

232

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

U.S.$
                                                  
principal amount of this Series 2 Class C Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                       
as attorney to transfer such principal amount of this Series 2 Class C Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

2.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

3.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 2 Class C Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

233

 

PART 8

 

SERIES 3 CLASS A DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

U.S.$1,700,000,000 Series 3
Class A Asset Backed Floating Rate Fourth Issuer Notes due March 2024

(the Series 3
Class A Fourth Issuer Notes)

 

This Series 3 Class A Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 3 Class A Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 3 Class A Fourth Issuer Notes in denominations
of US$1,000 or US$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 3 Class A Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 3 Class A Fourth
Issuer Notes, such Series 3 Class A Fourth Issuer Notes being in the
denomination of U.S.$               (                                  U.S.
dollars) and is/are entitled on the Interest Payment Date falling in March 2024
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 3 Class A
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

U.S.$        (                        U.S.
dollars)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 3 Class A Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

234

 

IN WITNESS WHEREOF this registered Series 3 Class A Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 3 Class
  A Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
					

 

235

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

236

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

U.S.$
                                               
principal amount of this Series 3 Class A Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                   
as attorney to transfer such principal amount of this Series 3 Class A Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 3 Class A Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

237

 

PART 9

 

SERIES 3 CLASS B DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

US$75,800,000 Series 3 Class B
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 3
Class B Fourth Issuer Notes)

 

This Series 3 Class B Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 3 Class B Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 3 Class B Fourth Issuer Notes in denominations
of US$1,000 or US$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 3 Class B Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 3 Class B Fourth
Issuer Notes, such Series 3 Class B Fourth Issuer Notes being in the
denomination of
U.S.$          (                             U.S.
dollars) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 3 Class B
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

U.S.$          (                             U.S.
dollars)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 3 Class B Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

IN WITNESS WHEREOF this registered Series 3 Class B Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

238

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 3 Class
  B Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

239

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

240

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

U.S.$
                                    
principal amount of this Series 3 Class B Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                    
as attorney to transfer such principal amount of this Series 3 Class B Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC with
full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 3 Class B Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

241

 

PART 10

 

SERIES 3 CLASS M DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

US$40,400,000 Series 3 Class M
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 3
Class M Fourth Issuer Notes)

 

This Series 3 Class M Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as trustee
for the holders of the Series 3 Class M Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 3 Class M Fourth Issuer Notes in denominations
of US$1,000 or US$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 3 Class M Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 3 Class M Fourth
Issuer Notes, such Series 3 Class M Fourth Issuer Notes being in the
denomination of
U.S.$           (                              U.S.
dollars) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 3 Class M
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

U.S.$           (                              U.S.
dollars)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 3 Class M Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

IN WITNESS WHEREOF this registered Series 3 Class M Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

242

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 3 Class
  M Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

243

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

244

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

U.S.$
                                            
principal amount of this Series 3 Class M Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                            
as attorney to transfer such principal amount of this Series 3 Class M Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

3.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

4.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 3 Class M Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

245

 

PART 11

 

SERIES 3 CLASS C DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

US$55,400,000 Series 3 Class C
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 3
Class C Fourth Issuer Notes)

 

This Series 3 Class C Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 3 Class C Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 3 Class C Fourth Issuer Notes in denominations
of US$1,000 or US$10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 3 Class C Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 3 Class C Fourth
Issuer Notes, such Series 3 Class C Fourth Issuer Notes being in the
denomination of
U.S.$            (                                U.S.
dollars) and is/are entitled on the Interest Payment Date falling in June 2042 (or
on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 3 Class C
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

U.S.$            (                                U.S.
dollars)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 3 Class C Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other amounts (if any) as may be payable, all subject to and
in accordance with the Conditions and the provisions of the Fourth Issuer Trust
Deed.

 

IN WITNESS WHEREOF this registered Series 3 Class C Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

246

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 3 Class
  C Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

247

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

248

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

U.S.$
                                  
principal amount of this Series 3 Class C Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                  
as attorney to transfer such principal amount of this Series 3 Class C Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 3 Class C Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

249

 

PART 12

 

SERIES 4 CLASS A DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: ]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

€1,500,000,000 Series 4 Class
A Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 4
Class A1 Fourth Issuer Notes)

 

This Series 4 Class A1 Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 4 Class A1 Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 4 Class A1 Fourth Issuer Notes in denominations
of €500,000 each, or integral multiples thereof, or in such other denominations
(which must be higher than €500,000) as the Note Trustee shall determine and
notify to the holders of the relevant Series 4 Class A1 Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 4 Class A Fourth
Issuer Notes, such Series 4 Class A Fourth Issuer Notes being in the
denomination of €        (             euro)
and is/are entitled on the Interest Payment Date falling in June 2042 (or on
such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 4 Class A
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

€               (                     euro)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 4 Class A Fourth Issuer Note at rates determined in accordance with
the said Conditions payable quarterly, as the case may be, in arrear on each
Interest Payment Date and

 

250

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class A Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 4 Class
  A1 Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

251

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

252

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

€
                                              
principal amount
of this Series 4 Class A Fourth Issuer Note and all rights hereunder, hereby
irrevocably constituting and appointing                                               
as attorney to transfer such principal amount of this Series 4 Class A Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 4 Class A Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

253

 

3.

 

PART 13

 

SERIES 4 CLASS B DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: ]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

€85,000,000 Series 4 Class B
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 4
Class B Fourth Issuer Notes)

 

This Series 4 Class B Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 4 Class B Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 4 Class B Fourth Issuer Notes in denominations
of €500,000 each, or integral multiples thereof, or in such other denominations
(which must be higher than €500,000) as the Note Trustee shall determine and
notify to the holders of the relevant Series 4 Class B Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 4 Class B Fourth
Issuer Notes, such Series 4 Class B Fourth Issuer Notes being in the
denomination of €               (                         euro)
and is/are entitled on the Interest Payment Date falling in June 2042 (or on
such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 4 Class B
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

€               (                         euro)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 4 Class B Fourth Issuer Note at rates determined in accordance with
the

 

254

 

Conditions payable quarterly
in arrear on each Interest Payment Date and together with such other amounts
(if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class B Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 4 Class
  B Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

255

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

256

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

€
                                    
principal amount of this Series 4 Class B Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                    
as attorney to transfer such principal amount of this Series 4 Class B Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 4 Class B Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

257

 

PART 14

 

SERIES 4 CLASS M DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: ]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

€62,500,000 Series 4 Class M
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 4
Class M Fourth Issuer Notes)

 

This Series 4 Class M Fourth
Issuer Note forms one of a series of notes constituted by a fourht issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as trustee
for the holders of the Series 4 Class M Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 4 Class M Fourth Issuer Notes in denominations
of €500,000 each, or integral multiples thereof, or in such other denominations
(which must be higher than €500,00) as the Note Trustee shall determine and
notify to the holders of the relevant Series 4 Class m Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 4 Class M Fourth
Issuer Notes, such Series 4 Class M Fourth Issuer Notes being in the
denomination of €                     (                          euro)
and is/are entitled on the Interest Payment Date falling in June 2042 (or on
such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 4 Class M
Fourth Issuer Notes (the Conditions) endorsed hereon) to the repayment of such
principal sum of:

 

€                   (                          euro)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 4 Class M Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other

 

258

 

amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 4 Class M Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 4 Class
  M Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

259

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

260

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

€
                                     
principal amount of this Series 4 Class M Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                     
as attorney to transfer such principal amount of this Series 4 Class M Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 4 Class M Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

261

 

PART 15

 

SERIES 5 CLASS A1 DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN: ]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

€750,000,000 Series 5 Class A1
Asset Backed Fixed-Floating Rate Fourth Issuer Notes due June

2042

(the Series 5
Class A1 Fourth Issuer Notes)

 

This Series 5 Class A1 Fourth
Issuer Note forms one of a series of notes constituted by a fourht issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 5 Class A1 Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 5 Class A1 Fourth Issuer Notes in denominations
of €500,000, or integral multiples thereof, or in such other denominations as
the Note Trustee shall determine (which must be higher than €500,000) and
notify to the holders of the relevant Series 5 Class A1 Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 5 Class A1 Fourth
Issuer Notes, such Series 5 Class A1 Fourth Issuer Notes being in the
denomination of €                    (                              euro)
and is/are entitled on the Interest Payment Date falling in June 2042 (or on
such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 5 Class A1
Fourth Issuer Notes (the Conditions endorsed hereon) to the
repayment of such principal sum of:

 

€                    (                              euro)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the Principal
Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of this
Series 5 Class A1 Fourth Issuer Note at rates determined in accordance with the
Conditions payable quarterly in annually or arrear, as the case may be, on each
Interest Payment Date

 

262

 

and together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 5 Class A1 Fourth
Issuer Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 5 Class
  A Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

263

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in Schedule
3]

 

264

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

€
                                 
principal amount of this Series 5 Class A1 Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                 
as attorney to transfer such principal amount of this Series 5 Class A1 Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 5 Class A Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

265

 

PART 16

 

SERIES 5 CLASS A2 DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

£1,100,000,000 Series 5 Class
A2 Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 5
Class A2 Fourth Issuer Notes)

 

This Series 4 Class A2 Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 5 Class A2 Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 5 Class A2 Fourth Issuer Notes in denominations
of £1,000 or £10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 5 Class A2 Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 5 Class A2 Fourth
Issuer Notes, such Series 5 Class A2 Fourth Issuer Notes being in the
denomination of
£       (            pounds
sterling) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 5 Class A2
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

£              (                  pounds
sterling)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 5 Class A2 Fourth Issuer Note at rates determined in accordance
with the said Conditions payable quarterly, as the case may be, in arrear on
each Interest Payment Date and

 

266

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
said Conditions and the provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 5 Class A2 Fourth
Issuer Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 5 Class
  A2 Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

267

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

268

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

£                               
principal amount of this Series 5 Class A2 Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                               
as attorney to transfer such principal amount of this Series 5 Class A2 Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required pursuant
to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and Agent
Bank Agreement (as defined in the Conditions) and must be executed under the
hand of the transferor or, if the transferor is a corporation, either under its
common seal or under the hand of two of its officers duly authorised in writing
and, in such latter case, the document so authorising such officers must be
delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 5 Class A2 Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

269

 

PART 17

 

SERIES 5 CLASS B DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

£43,000,000 Series 5 Class B
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 5
Class B Fourth Issuer Notes)

 

This Series 5 Class B Fourth
Issuer Note forms one of a series of notes constituted by a fourth issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 5 Class B Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 5 Class B Fourth Issuer Notes in denominations
of £1,000 or £10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 5 Class B Fourth Issuer Notes.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 5 Class B Fourth
Issuer Notes, such Series 5 Class B Fourth Issuer Notes being in the
denomination of
£                  (                          pounds
sterling) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 5 Class B
Fourth Issuer Notes (the Conditions) endorsed hereon) to the
repayment of such principal sum of:

 

£               (                          pounds
sterling)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 5 Class B Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other

 

270

 

amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 5 Class B Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 5 Class
  B Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

271

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

272

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

£                                
principal amount of this Series 5 Class B Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                
as attorney to transfer such principal amount of this Series 5 Class B Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 5 Class B Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

273

 

PART 18

 

SERIES 5 CLASS M DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

€32,000,000 Series 5 Class M
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 5
Class M Fourth Issuer Notes)

 

This Series 5 Class M Fourth
Issuer Note forms one of a series of notes constituted by a second issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 5 Class M Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 5 Class M Fourth Issuer Notes in denominations
of £1,000/10,000each, or integral multiples thereof, or in such other
denominations (which must be higher than €500,000) as the Note Trustee shall
determine and notify to the holders of the relevant Series 5 Class M.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 5 Class M Fourth
Issuer Notes, such Series 5 Class M Fourth Issuer Notes being in the
denomination of
£                    (                               pounds
sterling) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 5 Class M
Fourth Issuer Notes (the Conditions) endorsed hereon) to the repayment of such
principal sum of:

 

£                  (                               pounds
sterling)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 5 Class M Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other

 

274

 

amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 5 Class C Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 5 Class
  M Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

275

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

276

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

£                                
principal amount of this Series 5 Class M Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                
as attorney to transfer such principal amount of this Series 5 Class M Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

1.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

2.                                       The signature(s) on this form of transfer
must correspond with the name(s) as it/they appear(s) on the face of this
Series 5 Class M Fourth Issuer Note in every particular, without alteration or
enlargement or any change whatever.

 

277

 

PART 19

 

SERIES 5 CLASS C DEFINITIVE
FOURTH ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS FOURTH ISSUER NOTE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE SECURITIES ACT) OR THE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES AND, AS A MATTER OF U.S. LAW, PRIOR TO THE DATE THAT IS 40
DAYS AFTER THE LATER OF THE CLOSING DATE AND THE COMMENCEMENT OF THE OFFERING
OF THE FOURTH ISSUER NOTES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE UNITED STATES OR TO A U.S. PERSON (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.

 

PERMANENT FINANCING (NO. 4)
PLC

 

(Incorporated with limited liability in England with registered number
4988201)

 

£54,000,000 Series 5 Class C
Asset Backed Floating Rate Fourth Issuer Notes due June 2042

(the Series 5
Class C Fourth Issuer Notes)

 

This Series 5 Class C Fourth
Issuer Note forms one of a series of notes constituted by a second issuer trust
deed (the Fourth
Issuer Trust Deed) dated 12th March, 2004 made between Permanent
Financing (No. 4) PLC (the Fourth Issuer) and The Bank of New York, as
trustee for the holders of the Series 5 Class C Fourth Issuer Notes (the Note Trustee)
and issued as registered Series 5 Class C Fourth Issuer Notes in denominations
of £1,000/10,000 each, or integral multiples thereof, or in such other
denominations as the Note Trustee shall determine and notify to the holders of
the relevant Series 5 Class C.

 

THIS IS TO CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 5 Class C Fourth
Issuer Notes, such Series 5 Class C Fourth Issuer Notes being in the
denomination of
£                      (                              pounds
sterling) and is/are entitled on the Interest Payment Date falling in June 2042
(or on such earlier date as the principal sum hereinafter mentioned may become
repayable in accordance with the terms and conditions of the Series 5 Class C
Fourth Issuer Notes (the Conditions) endorsed hereon) to the repayment of such
principal sum of:

 

£                   (                           pounds
sterling)

 

together with such other
amounts (if any) as may be payable, all subject to and in accordance with the
Conditions and the provisions of the Fourth Issuer Trust Deed.

 

Interest is payable on the
Principal Amount Outstanding (as defined in Condition 5(C)) endorsed hereon of
this Series 5 Class C Fourth Issuer Note at rates determined in accordance with
the Conditions payable quarterly in arrear on each Interest Payment Date and
together with such other

 

278

 

amounts (if any) as may be
payable, all subject to and in accordance with the Conditions and the
provisions of the Fourth Issuer Trust Deed.

 

IN WITNESS WHEREOF this registered Series 5 Class C Fourth Issuer
Note has been executed on behalf of the Fourth Issuer.

 

	
  PERMANENT FINANCING (NO. 4) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
	
   

  
	
  Certificate of authentication

  
	
   

  
	
  This Series 5 Class
  C Fourth Issuer Note is duly authenticated

  without recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  
				

 

279

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

280

 

FORM OF TRANSFER OF DEFINITIVE
FOURTH ISSUER NOTE

 

	
  FOR VALUE RECEIVED the
  undersigned hereby transfer(s) to

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Please print or type name and address (including postal code) of
  transferee)

  

 

£                              
principal amount of this Series 5 Class C Fourth Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                              
as attorney to transfer such principal amount of this Series 5 Class C Fourth
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 4) PLC
with full power of substitution.

 

	
  Signature(s)

  	
   

  	
   

  
	
   

  
	
  Date:

  	
   

  	
   

  
				

 

NOTES:

 

3.                                       This form of transfer must be
accompanied by such documents, evidence and information as may be required
pursuant to the Fourth Issuer Trust Deed and the Fourth Issuer Paying Agent and
Agent Bank Agreement (as defined in the Conditions) and must be executed under
the hand of the transferor or, if the transferor is a corporation, either under
its common seal or under the hand of two of its officers duly authorised in
writing and, in such latter case, the document so authorising such officers
must be delivered with this form of transfer.

 

4.                                       The signature(s) on this form of
transfer must correspond with the name(s) as it/they appear(s) on the face of
this Series 5 Class C Fourth Issuer Note in every particular, without
alteration or enlargement or any change whatever.

 

281

 

SCHEDULE 3

 

TERMS AND CONDITIONS OF THE
FOURTH ISSUER NOTES

Terms and conditions of the issuer notes

 

The following are the
Terms and Conditions (the “Conditions” and any reference to a “Condition”
shall be construed accordingly) of the Fourth Issuer Notes in the form (subject
to amendment) in which they will be set out in the Fourth Issuer Trust Deed (as
defined below).

 

The Fourth Issuer Notes,
as more fully defined in Condition 17 below, of Permanent Financing (No. 4) PLC
(the “Fourth
Issuer”) are constituted by a trust deed (the “Fourth Issuer Trust Deed”,
which expression includes such trust deed as from time to time modified in
accordance with the provisions therein contained and any deed or other document
expressed to be supplemental thereto as from time to time so modified) dated
12th March, 2004 (the “Closing Date”) and made between the Fourth
Issuer and The Bank of New York (in this capacity, the “Note Trustee”, which
expression includes its successors or any further or other note trustee under
the Fourth Issuer Trust Deed) as trustee for the Fourth Issuer Noteholders (as
defined in Condition 17).

 

The security for the
Fourth Issuer Notes is created pursuant to, and on the terms set out in, a deed
of charge dated on or about the Closing Date (the “Fourth Issuer Deed of Charge”,
which expression includes such deed of charge as from time to time modified in
accordance with the provisions therein contained and any deed or other document
expressed to be supplemental thereto as from time to time so modified) dated on
or about the Closing Date and made between, inter alios, the Fourth Issuer and The
Bank of New York (in this capacity, the “Security Trustee”, which expression
includes its successors or any other security trustee under the Fourth Issuer
Deed of Charge).

 

By a paying agent and
agent bank agreement dated on or about the Closing Date (the “Fourth
Issuer Paying Agent and Agent Bank Agreement”, which expression
includes such paying agent and agent bank agreement as from time to time
modified in accordance with the provisions contained therein and any agreement,
deed or other document expressed to be supplemental thereto as from time to
time so modified) and made between the Fourth Issuer, the Note Trustee,
Citibank, N.A., London Branch, as principal paying agent in the United Kingdom
(the “Principal
Paying Agent”) and as agent bank (the “Agent Bank”), Citibank, N.A.,
acting through its New York office as paying agent in the United States of
America (the “US Paying Agent” together with the Principal Paying Agent and
any further or other paying agents for the time being appointed under the
Fourth Issuer Paying Agent and Agent Bank Agreement, the “Paying Agents”) and Citibank,
N.A., as registrar (the “Registrar”) and as transfer agent (the “Transfer
Agent”), provision is made for, inter alia, the payment of principal and
interest in respect of the Fourth Issuer Notes. Certain statements in these
Conditions include summaries of, and are subject to, the detailed provisions of
the Fourth Issuer Trust Deed, the Fourth Issuer Deed of Charge and the Fourth
Issuer Paying Agent and Agent Bank Agreement. The Fourth Issuer Notes are also
subject to Fourth Issuer Dollar Currency Swap Agreements, the Fourth Issuer
Euro Currency Swap Agreements or the Fourth Issuer Interest Rate Swap Agreement
(each as defined in Condition 17).

 

Copies of the Fourth
Issuer Trust Deed, the Fourth Issuer Deed of Charge, the Fourth Issuer Paying
Agent and Agent Bank Agreement, an amended and restated master definitions and
construction schedule signed by the parties to the Transaction Documents dated
on or about the Closing Date and the Fourth Issuer master definitions and
construction schedule dated on or about the Closing Date, signed for
identification purposes by Allen & Overy and Sidley Austin Brown & Wood
(together, the “Master Definitions and Construction Schedules”) and each of
the other Fourth Issuer Transaction Documents are available for inspection at
the head office for the time being of (i) the Principal Paying Agent, being at
the date hereof 5 Carmelite Street, London EC4Y OPA and (ii) the US Paying
Agent, being at the date hereof 14th Floor, Zone 3, 111 Wall Street, New York,
New York 10043. The Fourth Issuer Noteholders are entitled to the benefit of,
are bound by, and are deemed to have notice of, all the provisions of, and
definitions contained in, the Fourth Issuer Trust Deed, the Fourth Issuer Deed
of Charge, the Fourth Issuer Intercompany Loan Agreement, the Funding 1 Deed of
Charge, the Fourth Issuer Cash Management Agreement, the Fourth Issuer Paying
Agent and Agent Bank Agreement, the Fourth Issuer Swap Agreements and the other
Fourth Issuer Transaction Documents.

 

282

 

Capitalised terms used
and not otherwise defined in these Conditions shall bear the meanings given to
them in the Master Definitions and Construction Schedules, which may be
obtained and inspected as described above.

 

The issue of the Fourth
Issuer Notes was authorised by a resolution of the Board of Directors of the
Fourth Issuer passed on 2nd March, 2004.

 

1.                     Form,
Denomination and Title

 

(A)             Form and Denomination

 

The Dollar Fourth Issuer
Notes will initially be offered and sold pursuant to a registration statement
filed with the United States Securities and Exchange Commission. Each class of
the Dollar Fourth Issuer Notes will initially be represented by a separate
global note in registered form (the “Series 1 Class A Global Fourth Issuer Note”,
the “Series
1 Class B Global Fourth Issuer Note”, the “Series 1 Class M Global Fourth Issuer
Note”, the “Series 2 Class A Global Fourth Issuer Note”,
the “Series
2 Class B Global Fourth Issuer Note”, the “Series 2 Class M Global Fourth Issuer
Note”, the “Series 2 Class C Global Fourth Issuer Note”,
the “Series
3 Class A Global Fourth Issuer Note”, the “Series 3 Class B Global Fourth Issuer
Notes”, the “Series 3 Class M Global Fourth Issuer Note”
and the “Series
3 Class C Global Fourth Issuer Note” together, the “Dollar
Global Fourth Issuer Notes”), in each case without coupons or talons
attached and which, in aggregate, will represent the aggregate Principal Amount
Outstanding from time to time of the Dollar Fourth Issuer Notes. The Dollar
Global Fourth Issuer Notes will be deposited with Citibank, N.A., as custodian
for, and registered in the name of a nominee of, The Depository Trust Company
(“DTC”).

 

The Reg S Fourth Issuer
Notes will initially be offered and sold outside the United States to non-US
persons pursuant to Regulation S (“Reg S”) under the United States Securities
Act of 1933, as amended (the “Securities Act”).

 

Each class of the Reg S
Fourth Issuer Notes will initially be represented by a separate global note in
registered form (the “Series 4 Class A Global Fourth Issuer Note”,
the “Series
4 Class B Global Fourth Issuer Note”, the “Series 4 Class M Global Fourth Issuer
Note”, the “Series 5 Class A1 Global Fourth Issuer Note”,
together, the “Euro Global Fourth Issuer Notes”; and the “Series 5
Class A2 Global Fourth Issuer Note”, the “Series 5 Class B Global Fourth Issuer
Note”, the “Series 5 Class M Global Fourth Issuer Note”
and the “Series
5 Class C Global Fourth Issuer Note”, together, the “Sterling
Global Fourth Issuer Note”; and, together with the Euro Global
Fourth Issuer Notes, the “Reg S Global Fourth Issuer Notes”), in each
case without coupons or talons attached and which, in aggregate, will represent
the aggregate Principal Amount Outstanding from time to time of the Reg S
Fourth Issuer Notes. The Reg S Global Fourth Issuer Notes will be deposited
with Citibank, N.A., London Branch as common depositary for, and registered in
the name of a nominee of, Citibank, N.A., London Branch as common depositary
for Clearstream Banking, societe anonyme (“Clearstream, Luxembourg”) and Euroclear
Bank S.A./ N.V., as operator of the Euroclear System (“Euroclear”).

 

The Dollar Global Fourth
Issuer Notes and the Reg S Global Fourth Issuer Notes are collectively referred
to herein as the “Global Fourth Issuer Notes”.

 

For so long as any Fourth
Issuer Notes are represented by a Global Fourth Issuer Note, transfers and
exchanges of beneficial interests in such Global Fourth Issuer Notes and
entitlement to payments thereunder will be effected subject to and in
accordance with the rules and procedures from time to time of DTC, in the case
of the Dollar Global Fourth Issuer Notes, and Euroclear and/or Clearstream,
Luxembourg in the case of the Reg S Global Fourth Issuer Notes.

 

A Global Fourth Issuer
Note will be exchanged for Fourth Issuer Notes of the relevant series and class
in definitive registered form (“Definitive Fourth Issuer Notes”) only if
any of the following applies:

 

(i)                         (in the
case of Dollar Global Fourth Issuer Notes) DTC has notified the Fourth Issuer
that it is at any time unwilling or unable to continue as holder of such Global
Fourth Issuer Notes or is at any time unwilling or unable to continue as, or
has ceased to be, a clearing agency registered under the Exchange Act, and a
successor to DTC registered as a clearing agency under the Exchange Act is not
able to be appointed by the Fourth Issuer within 90 days of such notification
or (in the case of the Reg S Global Fourth Issuer Notes) both Euroclear and
Clearstream, Luxembourg are closed for business for a continuous period of 14
days (other than by reason of

 

283

 

holiday, statutory or
otherwise) or announce an intention permanently to cease business and do so
cease to do business and no alternative clearing system satisfactory to the
Note Trustee is available; or

 

(ii)                      as a result
of any amendment to, or change in, the laws or regulations of the United
Kingdom (or of any political subdivision thereof) or of any authority therein
or thereof having power to tax, or in the interpretation or administration by a
revenue authority or a court or in the application of such laws or regulations,
which becomes effective on or after the Closing Date, the Fourth Issuer or any
Paying Agent is or will be required to make any deduction or withholding from
any payment in respect of the Fourth Issuer Notes which would not be required
were the Fourth Issuer Notes in definitive registered form.

 

If Definitive Fourth
Issuer Notes are issued, the beneficial interests represented by the Dollar
Global Fourth Issuer Notes of each series and class and by the Reg S Global
Fourth Issuer Notes of each series and class shall be exchanged by the Fourth
Issuer for Fourth Issuer Notes of such series and classes in definitive form
(the “Dollar
Definitive Fourth Issuer Notes” and “Reg S Definitive Fourth Issuer Notes”
respectively). The aggregate principal amount of the Dollar Definitive Fourth
Issuer Notes and the Reg S Definitive Fourth Issuer Notes shall be equal to the
Principal Amount Outstanding at the date on which notice of exchange is given
of the corresponding Dollar Global Fourth Issuer Notes of each series and class
and the corresponding Reg S Global Fourth Issuer Notes of each series and
class, respectively, subject to and in accordance with the detailed provisions
of these Conditions, the Fourth Issuer Paying Agent and Agent Bank Agreement,
the Fourth Issuer Trust Deed and the relevant Global Fourth Issuer Note.

 

Definitive Fourth Issuer
Notes of each class (which, if issued, will be in the denominations set out
below) will be serially numbered and will be issued in registered form only.

 

The denominations of the
Fourth Issuer Notes in global and (if issued) definitive form will be as
follows:

 

•                     Dollar Fourth
Issuer Notes: $1,000 and $10,000;

 

•                     Euro Fourth
Issuer Notes: €500,000; and

 

•                     Sterling
Fourth Issuer Notes: £1,000 and £10,000,

 

and integral multiples thereof, and in such other
denominations (which, in respect of the Euro Fourth Issuer Notes, must be
higher than €500,000) as the Note Trustee shall determine and notify to the
relevant Fourth Issuer Noteholders.

 

References to “Fourth
Issuer Notes” shall include the Global Fourth Issuer Notes and the
Definitive Fourth Issuer Notes.

 

(B)             Title

 

Title to the Global
Fourth Issuer Notes shall pass by and upon registration in the register (the “Register”)
which the Fourth Issuer shall procure to be kept by the Registrar. The
registered holder of any Global Fourth Issuer Note may (to the fullest extent
permitted by applicable laws) be deemed and treated at all times, by all
persons and for all purposes (including the making of any payments), as the
absolute owner of such Global Fourth Issuer Note regardless of any notice of
ownership, theft or loss of any trust or other interest therein or of any writing
thereon (other than the endorsed form of transfer).

 

Title to a Definitive
Fourth Issuer Note shall only pass by and upon registration in the Register.
Such Definitive Fourth Issuer Notes may be transferred in whole (but not in
part) upon the surrender of the relevant Definitive Fourth Issuer Note, with
the form of transfer endorsed on it duly completed and executed, at the
specified office of the Registrar or the Transfer Agent. All transfers of such
Definitive Fourth Issuer Notes are subject to any restrictions on transfer set
forth on such Definitive Fourth Issuer Notes and the detailed regulations
concerning transfers in the Fourth Issuer Paying Agent and Agent Bank
Agreement.

 

Each new Definitive
Fourth Issuer Note to be issued upon transfer of such Definitive Fourth Issuer
Note will, within five Business Days of receipt and surrender of such
Definitive Fourth Issuer Note (duly completed and executed) for transfer, be
available for delivery to the specified office of the Registrar or be mailed at
the risk of the transferee entitled to such Definitive Fourth Issuer Note to
such address as may be specified in the relevant form of transfer.

 

284

 

Registration of a
Definitive Fourth Issuer Note on transfer will be effected without charge by
the Registrar, but subject to payment of (or the giving of such indemnity as
the Registrar may require for) any tax or other government charges which may be
imposed in relation to it.

 

The Fourth Issuer Notes
are not issuable in bearer form.

 

2.                     Status,
Security and Priority

 

(A)             Status of the Class A
Fourth Issuer Notes

 

The Series 1 Class A
Fourth Issuer Notes, the Series 2 Class A Fourth Issuer Notes, the Series 3
Class A Fourth Issuer Notes, the Series 4 Class A Fourth Issuer Notes and the
Series 5 Class A Fourth Issuer Notes (together, the “Class A Fourth Issuer Notes”)
constitute direct, secured and unconditional obligations of the Fourth Issuer
and are secured by the same security that secures the Class B Fourth Issuer
Notes (as defined below), the Class M Fourth Issuer Notes (as defined below)
and the Class C Fourth Issuer Notes (as defined below). Subject to the
provisions of Condition 5 below, the Class A Fourth Issuer Notes rank,
irrespective of series, pari passu without preference or priority
amongst themselves. Subject to the provisions of Condition 5 below and subject
to the relevant scheduled and permitted redemption dates or other payment
conditions of the Fourth Issuer Notes set out in the Fourth Issuer Cash
Management Agreement, the Fourth Issuer Deed of Charge, the Funding 1 Deed of
Charge and the other Fourth Issuer Transaction Documents, payments of principal
and interest on the Class A Fourth Issuer Notes will be senior to payments of
principal and interest on the Class B Fourth Issuer Notes, the Class M Fourth
Issuer Notes and the Class C Fourth Issuer Notes.

 

(B)             Status of the Class B
Fourth Issuer Notes

 

The Series 1 Class B
Fourth Issuer Notes, the Series 2 Class B Fourth Issuer Notes, the Series 3 Class
B Fourth Issuer Notes, the Series 4 Class B Fourth Issuer Notes and the Series
5 Class B Fourth Issuer Notes (together, the “Class B Fourth Issuer Notes”)
constitute direct, secured and unconditional obligations of the Fourth Issuer
and are secured by the same security that secures the Class A Fourth Issuer
Notes, the Class M Fourth Issuer Notes and the Class C Fourth Issuer Notes. The
Class B Fourth Issuer Notes rank, irrespective of series, pari passu without
preference or priority amongst themselves. Subject to the provisions of
Condition 5 below and subject to the relevant scheduled and permitted
redemption dates or other payment conditions of the Fourth Issuer Notes set out
in the Fourth Issuer Cash Management Agreement, the Fourth Issuer Deed of Charge,
the Funding 1 Deed of Charge and the other Fourth Issuer Transaction Documents,
payments of principal and interest on the Class B Fourth Issuer Notes are
subordinated to payments of principal and interest on the Class A Fourth Issuer
Notes and will be senior to payments of principal and interest on the Class M
Fourth Issuer Notes and the Class C Fourth Issuer Notes.

 

(C)            Status of the Class M
Fourth Issuer Notes

 

The Series 1 Class M
Fourth Issuer Notes, the Series 2 Class M Fourth Issuer Notes, the Series 3
Class M Fourth Issuer Notes, the Series 4 Class M Fourth Issuer Notes and the
Series 5 Class M Fourth Issuer Notes (together, the “Class M Fourth Issuer Notes”)
constitute direct, secured and unconditional obligations of the Fourth Issuer
and are secured by the same security that secures the Class A Fourth Issuer
Notes, the Class B Fourth Issuer Notes and the Class C Fourth Issuer Notes. The
Class M Fourth Issuer Notes rank, irrespective of series, pari passu without
preference or priority amongst themselves. Subject to the provisions of
Condition 5 below and subject to the relevant scheduled and permitted
redemption dates or other payment conditions of the Fourth Issuer Notes set out
in the Fourth Issuer Cash Management Agreement, the Fourth Issuer Deed of
Charge, the Funding 1 Deed of Charge and the other Fourth Issuer Transaction
Documents, payments of principal and interest on the Class M Fourth Issuer
Notes are subordinated to payments of principal and interest on the Class A
Fourth Issuer Notes and the Class B Fourth Issuer Notes.

 

(D)            Status of the Class C
Fourth Issuer Notes

 

The Series 2 Class C
Fourth Issuer Notes, the Series 3 Class C Fourth Issuer Notes and the Series 5
Class C Fourth Issuer Notes (together, the “Class C Fourth Issuer Notes”)
constitute direct, secured and unconditional obligations of the Fourth Issuer
and are secured by the same security that secures the Class A Fourth Issuer
Notes, the Class B Fourth Issuer Notes and the Class M Fourth Issuer Notes. The
Class C Fourth Issuer Notes rank, irrespective of series, pari passu without

 

285

 

preference or priority
amongst themselves. Subject to the provisions of Condition 5 below and subject
to the relevant scheduled and permitted redemption dates or other payment
conditions of the Fourth Issuer Notes set out in the Fourth Issuer Cash
Management Agreement, the Fourth Issuer Deed of Charge, the Funding 1 Deed of
Charge and the other Fourth Issuer Transaction Documents, payments of principal
and interest on the Class C Fourth Issuer Notes are subordinated to payments of
principal and interest on the Class A Fourth Issuer Notes, the Class B Fourth
Issuer Notes and the Class M Fourth Issuer Notes.

 

(E)             Conflict between the
classes of Fourth Issuer Notes

 

Each of the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge contains provisions requiring the Note Trustee and the Security Trustee
to have regard to the interests of the Class A Fourth Issuer Noteholders, the
Class B Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders and
the Class C Fourth Issuer Noteholders equally as regards all powers, trusts,
authorities, duties and discretions of the Note Trustee and the Security
Trustee (except where expressly provided otherwise), but requiring the Note
Trustee and the Security Trustee to have regard (a) (for so long as there are
any Class A Fourth Issuer Notes Outstanding (as that term is defined in the
Fourth Issuer Trust Deed)) only to the interests of the Class A Fourth Issuer
Noteholders if, in the Note Trustee’s or the Security Trustee’s sole opinion
(as the case may be), there is or may be a conflict between the interests of
the Class A Fourth Issuer Noteholders and the interests of the Class B Fourth
Issuer Noteholders, the Class M Fourth Issuer Noteholders and/or the interests
of the Class C Fourth Issuer Noteholders, (b) (once all the Class A Fourth
Issuer Notes have been redeemed and for so long as there are any Class B Fourth
Issuer Notes Outstanding (as that term is defined in the Fourth Issuer Trust
Deed)) only to the interests of the Class B Fourth Issuer Noteholders if, in
the Note Trustee’s or the Security Trustee’s sole opinion (as the case may be),
there is or may be a conflict between the interests of the Class B Fourth
Issuer Noteholders and the interests of the Class M Fourth Issuer Noteholders
and/or the Class C Fourth Issuer Noteholders and (c) (once all the Class A
Fourth Issuer Notes and the Class B Fourth Issuer Notes have been redeemed and
for so long as there are any Class M Fourth Issuer Notes Outstanding (as that
term is defined in the Fourth Issuer Trust Deed)) only to the interests of the
Class M Fourth Issuer Noteholders if, in the Note Trustee’s or the Security
Trustee’s sole opinion (as the case may be), there is or may be a conflict
between the interests of the Class M Fourth Issuer Noteholders and the
interests of the Class C Fourth Issuer Noteholders. Except where expressly
provided otherwise, so long as any of the Fourth Issuer Notes remain
outstanding, the Security Trustee is not required to have regard to the
interests of any other persons (other than the class or classes of Noteholder
described above) entitled to the benefit of the Fourth Issuer Security.

 

The Fourth Issuer Trust
Deed and the Fourth Issuer Deed of Charge each contain provisions limiting the
powers of the Class B Fourth Issuer Noteholders, the Class M Fourth Issuer
Noteholders and the Class C Fourth Issuer Noteholders, inter alia, to request or
direct the Note Trustee or the Security Trustee to take any action or to pass
an effective Extraordinary Resolution (as defined in the Fourth Issuer Trust
Deed) according to the effect thereof on the interests of the Class A Fourth
Issuer Noteholders. Except in certain circumstances set out in Condition 11,
the Fourth Issuer Trust Deed and the Fourth Issuer Deed of Charge contain no
such limitation on the powers of the Class A Fourth Issuer Noteholders, the
exercise of which will be binding on the Class B Fourth Issuer Noteholders, the
Class M Fourth Issuer Noteholders and the Class C Fourth Issuer Noteholders
respectively, irrespective of the effect thereof on their interests.

 

The Fourth Issuer Trust
Deed and the Fourth Issuer Deed of Charge each also contain provisions limiting
the powers of the Class M Fourth Issuer Noteholders and the Class C Fourth
Issuer Noteholders, inter alia, to request or direct the Note
Trustee or the Security Trustee to take any action or to pass an effective
Extraordinary Resolution according to the effect thereof on the interests of
the Class B Fourth Issuer Noteholders. Except in certain circumstances set out
in Condition 11, the Fourth Issuer Trust Deed and the Fourth Issuer Deed of
Charge contain no such limitation on the powers of the Class B Fourth Issuer
Noteholders, the exercise of which will be binding on the Class M Fourth Issuer
Noteholders and the Class C Fourth Issuer Noteholders respectively,
irrespective of the effect thereof on their interests.

 

Similarly, the Fourth
Issuer Trust Deed and the Fourth Issuer Deed of Charge each contain provisions
limiting the powers of the Class C Fourth Issuer Noteholders, inter alia,
to request or direct the Note Trustee or the Security Trustee to take any
action or to pass an effective Extraordinary Resolution according to the effect
thereof on the interests of the Class M Fourth Issuer Noteholders.

 

286

 

Except in certain
circumstances described above and in Condition 11, the Fourth Issuer Trust Deed
and the Fourth Issuer Deed of Charge contain no such limitation on the powers
of the Class M Fourth Issuer Noteholders, the exercise of which will be binding
on the Class C Fourth Issuer Noteholders, irrespective of the effect thereof on
their interests.

 

The Fourth Issuer Trust
Deed and Condition 11 below also contain provisions regarding the resolution of
disputes between the holders of the Class A Fourth Issuer Noteholders; between
the Class B Fourth Issuer Noteholders; between the Class M Fourth Issuer
Noteholders; and between the Class C Fourth Issuer Noteholders.

 

The Note Trustee and the
Security Trustee shall each be entitled to assume, for the purpose of
exercising any right, power, trust, authority, duty or discretion under or in
relation to these Conditions or any of the Transaction Documents, without
further investigation or inquiry, that such exercise will not be materially
prejudicial to the interests of the Fourth Issuer Noteholders (or any series
and/or class thereof) if each of the Rating Agencies has confirmed in writing
that the then current ratings of the applicable series and/or class or classes
of Fourth Issuer Notes would not be adversely affected by such exercise.

 

(F)             Security

 

As security for, inter alia,
the payment of all monies payable in respect of the Fourth Issuer Notes, the
Fourth Issuer has entered into the Fourth Issuer Deed of Charge creating, inter alia,
the following security interests (the “Fourth Issuer Security”) in favour of the
Security Trustee for itself and on trust for the other persons to whom secured
amounts are outstanding (the “Fourth Issuer Secured Creditors”):

 

(i)                         an
assignment by way of first fixed security of all of the Fourth Issuer’s right,
benefit and interest under those Fourth Issuer Transaction Documents to which
the Fourth Issuer is a party, including:

 

(a)               a loan agreement
between the Fourth Issuer, the Security Trustee and Permanent Funding (No. 1)
Limited (“Funding
1”) dated on or about the Closing Date (as may be amended,
supplemented or novated from time to time, the “Fourth Issuer Intercompany Loan
Agreement”);

 

(b)              a deed of charge
between, inter
alios, the Security Trustee, the First Issuer and Funding 1 dated
14th June, 2002 as supplemented by a first deed of accession between, inter alios,
the Security Trustee, the Second Issuer and Funding 1 dated 6th March, 2003, a
second deed of accession between, inter alios, the Security Trustee, the
Third Issuer and Funding 1 dated 25th November, 2003 and a third deed of
accession between, inter alios, the Security Trustee, the
Fourth Issuer and Funding 1 dated on or about the Closing Date (as may be
amended, supplemented or novated from time to time, the “Funding 1 Deed of Charge”);

 

(c)               a second
supplemental deed of charge between, inter alios, Funding 1, the Security
Trustee and the Fourth Issuer dated on or about the Closing Date;

 

(d)              the Fourth Issuer
Dollar Currency Swap Agreements (as defined in Condition 17 below) in relation
to each class of, respectively, the Dollar Fourth Issuer Notes;

 

(e)               the Fourth Issuer
Euro Currency Swap Agreements (as defined in Condition 17 below) in relation to
each class of the Euro Fourth Issuer Notes;

 

(f)                 the Fourth Issuer
Interest Rate Swap Agreement (as defined in Condition 17 below) in relation to
the Series 5 Class A1 Fourth Issuer Notes;

 

(g)              the Fourth Issuer
Paying Agent and Agent Bank Agreement;

 

(h)              an underwriting
agreement in relation to the Dollar Fourth Issuer Notes and a subscription
agreement in relation to the Reg S Fourth Issuer Notes, in each case dated on
or about 4th March, 2004 between, inter alios, the Fourth Issuer and the
Underwriters and the Fourth Issuer and the Managers respectively (as defined
therein);

 

(i)                  a corporate
services agreement entered into on or about the Closing Date between, inter alios,
Structured Finance Management Limited and the Fourth Issuer (as may be amended,
supplemented or novated from time to time, the “Fourth Issuer Corporate Services
Agreement”);

 

287

 

(j)                  a bank account
agreement entered into on or about the Closing Date between, inter alios,
the Fourth Issuer, Bank of Scotland (in its capacity as account bank, the “Fourth
Issuer Account Bank”) and Halifax plc (in its capacity as cash
manager, the “Fourth Issuer Cash Manager”) (as may be amended, supplemented
or novated from time to time, the “Fourth Issuer Bank Account Agreement”);

 

(k)               a cash management
agreement entered into on or about the Closing Date between, inter alios,
the Fourth Issuer Cash Manager and the Security Trustee (as may be amended,
supplemented or novated from time to time, the “Fourth Issuer Cash Management Agreement”);
and

 

(l)                  the Fourth
Issuer Trust Deed,

 

and such other documents as are expressed to be
subject to the security interests created under the Fourth Issuer Deed of
Charge;

 

(ii)                      a first
ranking fixed charge (which may take effect as a floating charge) over all of
the Fourth Issuer’s right, title, interest and benefit, present and future, in
and to the Fourth Issuer Transaction Account and any amounts deposited from
time to time therein (which security interests may take effect as a floating
charge and thus the expenses of any liquidation or administration, the claims
of certain preferential creditors and the beneficiaries of the prescribed part
(if any) will be paid out of the proceeds of enforcement of the floating charge
ahead of amounts due to Noteholders);

 

(iii)                   a first ranking
fixed charge (which may take effect as a floating charge) over all of the
Fourth Issuer’s right, title, interest and benefit in and to all Authorised
Investments (as defined in Condition 17 below) made by or on behalf of the
Fourth Issuer from time to time in accordance with the relevant Fourth Issuer
Transaction Documents, including all monies, income and proceeds payable
thereunder (which security interests may take effect as a floating charge and
thus the expenses of any liquidation or administration, the claims of certain
preferential creditors and the beneficiaries of the prescribed part (if any)
will be paid out of the proceeds of enforcement of the floating charge ahead of
amounts due to Noteholders); and

 

(iv)                  a first floating
charge over the whole of the undertakings, property and assets, present and
future of the Fourth Issuer not already subject to any fixed charge or
assignment as described in (i), (ii) and (iii) above, but extending over all of
the Fourth Issuer’s undertakings, property and assets as are situated in
Scotland or governed by Scots law,

 

all as more particularly
set out in the Fourth Issuer Deed of Charge.

 

3.                     Covenants

 

Save with the prior
written consent of the Security Trustee or as provided in or envisaged by these
Conditions or any of the Fourth Issuer Transaction Documents, the Fourth Issuer
shall not, so long as any Fourth Issuer Note remains outstanding:

 

(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;

 

(B)             Disposal of Assets

 

transfer, sell, assign,
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 itself and the Security Trustee, to have any equitable or beneficial
interest in any of its assets or undertakings or any interest, estate, right,
title or benefit therein;

 

288

 

(D)            Bank Accounts

 

have an interest in any
bank account, other than the bank accounts maintained pursuant to the Fourth
Issuer Bank Account Agreement or the Fourth Issuer Cash Management Agreement;

 

(E)             Restrictions on
Activities

 

carry on any business
other than as described in the Prospectus dated 4th March, 2004 relating to the
issue of the Fourth Issuer Notes and the related activities described therein
or as contemplated in the Transaction Documents relating to the issue of the
Fourth Issuer Notes and the making of the loan under the Fourth Issuer
Intercompany Loan Agreement;

 

(F)             Borrowings

 

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

 

(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)            Other

 

permit the validity or
effectiveness of any of the Fourth Issuer Trust Deed or the Fourth Issuer Deed
of Charge or the priority of the security interests created thereby to be
amended, terminated, postponed or discharged, or permit any other person whose
obligations form part of the Fourth Issuer Security to be released from such
obligations;

 

(I)                 Employees or
Premises

 

have any employees or
premises or subsidiaries;

 

(J)               Dividends and
Distributions

 

pay any dividend or make
any other distribution to its shareholders or issue any further shares or alter
any rights attaching to its shares at the date of the Fourth Issuer Deed of
Charge;

 

(K)            Purchase Fourth Issuer
Notes

 

purchase or otherwise
acquire any Fourth Issuer Notes; or

 

(L)              US 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 in a trade or
business within the United States as determined under United States income tax
principles.

 

4.                     Interest

 

(A)             Period of Accrual

 

Each Fourth Issuer Note
bears interest on its Principal Amount Outstanding from (and including) the
Closing Date. Each Fourth Issuer Note (or, in the case of redemption in part
only of a Fourth Issuer Note, that part only of such Fourth Issuer Note) shall
cease to bear interest from its due date for redemption unless payment of the
relevant amount of principal or any part thereof is improperly withheld or
refused. In such event, interest will continue to accrue on such unpaid amount
(before as well as after any judgment) at the rate applicable to such Fourth
Issuer Note up to (but excluding) the date on which payment in full of the
relevant amount of principal is made, or (if earlier) the seventh day after
notice is duly given by the Principal Paying Agent or the US Paying Agent, as
the case may be, to the holder thereof (either in accordance with Condition 14 or
individually) that such payment will be made, provided that, subsequently,
payment is in fact made.

 

Whenever it is necessary
to compute an amount of interest in respect of the Fourth Issuer Notes for any
period (including any Interest Period (as defined below)), such interest shall
be calculated:

 

289

 

(i)                         in
respect of the Dollar Fourth Issuer Notes and the Euro Fourth Issuer Notes
(other than the Series 5 Class A1 Fourth Issuer Notes), on the basis of actual
days elapsed in a 360 day year;

 

(ii)                      in respect
of the Sterling Fourth Issuer Notes, on the basis of actual days elapsed in a
365 day year; and

 

(iii)                   in respect of
the Series 5 Class A1 Fourth Issuer Notes, up to and including the Interest
Payment Date falling in March 2011 on the basis of Rule 251 of the statutes,
bylaws, rules and recommendations of the International Securities Market
Association (“ISMA”), as published in April 1999 (actual/actual), and
thereafter on the basis of actual days elapsed in a 360 day year.

 

(B)             Interest Payment
Dates and Interest Periods

 

Interest on the Fourth
Issuer Notes (other than the Series 1 Class A Fourth Issuer Notes and the
Series 5 Class A1 Fourth Issuer Notes) is payable quarterly in arrear on the
10th day of March, June, September and December in each year (or, if such day
is not a Business Day, the next succeeding Business Day) (each such day a “Quarterly
Interest Payment Date”).

 

Interest on the Series 1
Class A Fourth Issuer Notes is payable monthly in arrear on the 10th day of
each consecutive month (or, if such day is not a Business Day; the next
succeeding Business Day), until the earliest of (i) the Quarterly Interest
Payment Date immediately following the occurrence of a Trigger Event and (ii)
the Quarterly Interest Payment Date immediately following the enforcement of
the Fourth Issuer Security in accordance with the Fourth Issuer Deed of Charge,
and thereafter is payable quarterly in arrear on the 10th day of March, June,
September and December in each year (or if such day is not a Business Day, the
next succeeding Business Day) (each such day a “Series 1 Class A Interest Payment Date”).

 

Interest on the Series 5 Class A1 Fourth Issuer Notes is payable
annually in arrear on the 10th day of March in each year (or, if such day is
not a Business Day, the next succeeding Business Day) until the earliest of (i)
the 10th day of March 2011 (or if such day is not a Business Day, the next
succeeding Business Day), (ii) the Quarterly Interest Payment Date immediately
following the occurrence of a Trigger Event and (iii) the Quarterly Interest
Payment Date immediately following the enforcement of the Fourth Issuer
Security in accordance with the Fourth Issuer Deed of Charge, and thereafter is
payable quarterly in arrear on the 10th day of March, June, September and
December in each year (or, if such day is not a Business Day, the next
succeeding Business Day) (each such day a “Series 5 Class A1 Interest Payment Date”).

 

“Interest Payment Date” means,
as applicable, a Quarterly Interest Payment Date and/or a Series 1 Class A
Interest Payment Date and/or a Series 5 Class A1 Interest Payment Date.

 

The first Interest
Payment Date will be (other than in the case of the Series 1 Class A Fourth
Issuer Notes and the Series 5 Class A1 Fourth Issuer Notes) the 10th day of
June 2004, and, in the case of the Series 1 Class A Fourth Issuer Notes, the
10th day of April 2004 and, in the case of Series 5 Class A1 Fourth Issuer
Notes, the 10th day of March 2005.

 

In these Conditions, “Interest
Period” shall mean:

 

(i)                         in
respect of interest payments made in respect of the Fourth Issuer Notes (other
than the Series 1 Class A Fourth Issuer Notes and the Series 5 Class A1 Fourth
Issuer Notes), the period from (and including) a Quarterly Interest Payment
Date (or in respect of the first Interest Period, the Closing Date) to (but
excluding) the next following (or first) Quarterly Interest Payment Date;

 

(ii)                      in respect
of the Series 1 Class A Fourth Issuer Notes, the period from (and including) a
Series 1 Class A Interest Payment Date (or in respect of the first interest
period, the Closing Date) to (but excluding) the next following (or first)
Series 1 Class A Interest Payment Date, except that following the occurrence of
a Trigger Event or the enforcement of the Fourth Issuer Security in accordance
with the Fourth Issuer Deed of Charge, the Interest Period for the Series 1
Class A Fourth Issuer Notes will be the quarterly period from (and including)
the immediately preceding Quarterly Interest Payment Date to (but excluding)
the 10th day of the then next to occur of, March, June, September or December
(or, if such day is not a Business Day, the next succeeding Business Day) and
thereafter will be the quarterly period from (and including) the 10th day of
March, June, September and December to (but excluding) the next following 10th
day of March, June, September or December; and

 

290

 

(iii)                   in respect of
the Series 5 Class A1 Fourth Issuer Notes, the period from (and including) the
Closing Date to (but excluding) the 10th day of March 2005 and thereafter means
the period from (and including) the 10th day of December in each year to (but
excluding) the 10th day of December in the following year, except that:

 

(a)               prior to the
Interest Payment Date falling in March 2011, if a Trigger Event occurs or the
Fourth Issuer Security is enforced in accordance with the Fourth Issuer Deed of
Charge, then the Interest Period for the Series 5 Class A1 Fourth Issuer Notes
will be the quarterly period from (and including) the 10th day of the then next
to occur of March, June, September and December to (but excluding) the next
following 10th day of March, June, September and December;

 

(b)              on and from the
Series 5 Class A1 Interest Payment Date falling in March 2011, the Interest
Period for the Series 5 Class A1 First Issuer Notes will be the period from
(and including) the immediately preceding Quarterly Interest Payment Date (or
in respect of the first such Interest Period, such Interest Payment Date
falling in March 2011 to (but excluding) the next following Quarterly Interest
Payment Date; and

 

(c)               the Interest Period
in respect of the Series 5 Class A1 Fourth Issuer Notes commencing immediately
prior to March 2011 shall end on and include the Series 5 Class A1 Interest
Payment Date falling in March 2011.

 

In these Conditions, “Business Day”
shall (save in Conditions 6(E) and (G)) mean a day which is a New York Business
Day, a London Business Day and a TARGET Business Day. A “New York Business Day” means
a day (other than a Saturday or a Sunday) on which banks are generally open for
business in the city of New York; “London Business Day” means a day (other
than a Saturday or a Sunday) on which banks are generally open for business in
London; and “TARGET Business Day” means a day on which the TransEuropean
Automated Realtime Gross settlement Express Transfer (TARGET) system is open.

 

To the extent that the
funds available to the Fourth Issuer, subject to and in accordance with the
Fourth Issuer Pre-Enforcement Priority of Payments, to pay interest on the
Class B Fourth Issuer Notes, the Class M Fourth Issuer Notes and the Class C
Fourth Issuer Notes on an Interest Payment Date (in each case, after
discharging the Fourth Issuer’s liabilities of a higher priority) are
insufficient to pay the full amount of such interest, payment of the shortfall
attributable to the Class B Fourth Issuer Notes, the Class M Fourth Issuer
Notes and the Class C Fourth Issuer Notes (in each case, “Deferred Interest”), which
will be borne by each Class B Fourth Issuer Note, Class M Fourth Issuer Note
and/ or Class C Fourth Issuer Note in a proportion equal to the proportion that
the Principal Amount Outstanding of that Class B Fourth Issuer Note, the Class
M Fourth Issuer Note or Class C Fourth Issuer Note, as the case may be, bears
to the aggregate Principal Amount Outstanding of the Class B Fourth Issuer
Notes, the Class M Fourth Issuer Notes or the Class C Fourth Issuer Notes, as
the case may be (in each case as determined on the Interest Payment Date on
which such Deferred Interest arises), will not then fall due but will instead
be deferred until the first Interest Payment Date thereafter on which funds are
available (after allowing for the Fourth Issuer’s liabilities of a higher
priority) to the Fourth Issuer to pay such Deferred Interest to the extent of
such available funds. Such Deferred Interest will accrue interest (“Additional
Interest”) at the rate of interest applicable from time to time to
the Class B Fourth Issuer Notes, the Class M Fourth Issuer Notes or the Class C
Fourth Issuer Notes, as the case may be, and payment of any Additional Interest
will also be deferred until the first Interest Payment Date thereafter on which
funds are available (after allowing for the Fourth Issuer’s liabilities of a
higher priority) to the Fourth Issuer to pay such Additional Interest to the
extent of such available funds. Amounts of Deferred Interest and Additional
Interest shall not be deferred beyond the Final Maturity Date of the Class B
Fourth Issuer Notes, the Class M Fourth Issuer Notes or the Class C Fourth
Issuer Notes, as the case may be, when such amounts will become due and
payable. It is possible that all or any part of any interest due on the Class B
Fourth Issuer Notes, the Class M Fourth Issuer Notes or the Class C Fourth
Issuer Notes, as the case may be, may never be made good if there are
insufficient funds available to pay such interest after paying amounts of a
higher priority. Payments of interest due on an Interest Payment Date in
respect of the Class A Fourth Issuer Notes will not be deferred. In the event
of the delivery of a Class A Fourth Issuer Note Acceleration Notice (as
described in Condition 9), the amount of interest that was due but not paid on
such Interest Payment Date will itself bear interest at the applicable rate
until both the unpaid interest and the interest on that interest are paid.

 

291

 

(C)            Rates of Interest

 

The rate of interest
payable in respect of the Fourth Issuer Notes (each a “Rate of Interest” and
together the “Rates of Interest”) and the relevant Interest Amount (as
defined below) shall be determined on the basis of the provisions set out
below:

 

(a)                                  The
Dollar Fourth Issuer Notes:

 

(i)                  on the initial
Dollar Interest Determination Date (as defined below), the Agent Bank will
calculate the Initial Relevant Screen Rate (as defined below) in respect of
each class of Dollar Fourth Issuer Notes as at or about 11.00 a.m. (London
time) on that date. If the Initial Relevant Screen Rate is unavailable, the
Agent Bank will request the principal London office of each of the Reference
Banks (as defined below) to provide the Agent Bank with its offered quotation
to leading banks (in the case of the Series 1 Class A Fourth Issuer Notes) for
two-week and one-month Dollar deposits and (in all other cases) for two-month
and three-month Dollar deposits of $10,000,000 in the London interbank market
as at or about 11.00 a.m. (London time) on such Dollar Interest Determination
Date. The Rates of Interest for the first Interest Period shall be the
aggregate of (a) the Relevant Margin (as defined below) and (b) the Initial
Relevant Screen Rate in respect of the Dollar Fourth Issuer Notes or, if the
Initial Relevant Screen Rate is unavailable, (in the case of the Series 1 Class
A Fourth Issuer Notes) the linear interpolation of the arithmetic mean of such
offered quotations for and two-week and one-month Dollar deposits and (in all other
cases) the linear interpolation of the arithmetic mean of such offered
quotations for two-month and three-month Dollar deposits (rounded upwards, if
necessary, to five decimal places);

 

(ii)               on each subsequent
Dollar Interest Determination Date, the Agent Bank will determine the Relevant
Screen Rate (as defined below) in respect of each class of Dollar Fourth Issuer
Notes as at or about 11.00 a.m. (London time) on the Dollar Interest
Determination Date in question. If the Relevant Screen Rate is unavailable, the
Agent Bank will request the principal London office of each of the Reference
Banks to provide the Agent Bank with its offered quotation to leading banks
for, as applicable, one-month or three-month Dollar deposits of $10,000,000 in
the London interbank market as at or about 11.00 a.m. (London time) on the
relevant Dollar Interest Determination Date. The Rates of Interest for the
relevant Interest Period shall be the aggregate of (a) the Relevant Margin and
(b) the Relevant Screen Rate or, if the Relevant Screen Rate is unavailable,
the arithmetic mean of such offered quotations for (in the case of the Series 1
Class A Fourth Issuer Notes) one-month Dollar Deposits and (in all other cases)
three-month Dollar deposits (rounded upwards, if necessary, to five decimal
places); and

 

(iii)            if, on any Dollar
Interest Determination Date, the Relevant Screen Rate is unavailable and two or
three only of the Reference Banks provide offered quotations, the Rates of
Interest for the relevant Interest Period shall be determined in accordance
with the provisions of subparagraph (i) or, as the case may be, (ii) above on
the basis of the offered quotations of those Reference Banks providing such
quotations. If, on any such Dollar Interest Determination Date, only one or
none of the Reference Banks provides the Agent Bank with such an offered
quotation, the Agent Bank shall forthwith consult with the Note Trustee and the
Fourth Issuer for the purposes of agreeing two banks (or, where one only of the
Reference Banks provided such a quotation, one additional bank) to provide such
a quotation or quotations to the Agent Bank (which bank or banks are in the
opinion of the Note Trustee suitable for such purpose) and the Rates of
Interest for the Interest Period in question shall be determined, as aforesaid,
on the basis of the offered quotations of such banks as so agreed (or, as the
case may be, the offered quotations of such bank as so agreed and the relevant
Reference Bank). If no such bank or banks is or are so agreed or such bank or
banks as so agreed does or do not provide such a quotation or quotations, then
the Rates of Interest for the relevant Interest Period shall be the Rates of
Interest in effect for the immediately preceding Interest Period to which
subparagraph (i) or (ii), as the case may be, shall have applied but taking
account of any change in the Relevant Margin;

 

(b)                                 The
Euro Fourth Issuer Notes:

 

(i)                  on the initial
Euro Interest Determination Date (as defined below), the Agent Bank will
calculate the Initial Relevant Screen Rate (as defined below) in respect of
each class of Euro Fourth Issuer Notes other than the Series 5 Class A1 Fourth
Issuer Notes as at or about 11.00 a.m. (Brussels time) on that date. If the
Initial Relevant Screen Rate is unavailable, the Agent Bank will request the
principal London office of each of the Reference Banks (as defined below)

 

292

 

to provide the Agent Bank
with its offered quotation to prime banks for two-month and three-month Euro
deposits of €10,000,000 in the Eurozone interbank market as at or about 11.00
a.m. (Brussels time) on such Euro Interest Determination Date. The Rates of
Interest for the first Interest Period shall be the aggregate of (a) the
Relevant Margin (as defined below) and (b) the Initial Relevant Screen Rate in
respect of the Euro Fourth Issuer Notes or, if the Initial Relevant Screen Rate
is unavailable, the linear interpolation of the arithmetic mean of such offered
quotations for two-month Euro deposits and the arithmetic mean of such offered
quotations for three-month Euro deposits (rounded upwards, if necessary, to
five decimal places);

 

(ii)               the rate of
interest payable in respect of the Series 5 Class A1 Fourth Issuer Notes shall
be 3.9615 per cent. per annum up to (and including) the interest period ending
in March 2011 and thereafter shall be a floating rate of interest calculated in
accordance with paragraphs (iii) and (iv) below;

 

(iii)            on each subsequent
Euro Interest Determination Date (as defined below) in the case of the Euro
Fourth Issuer Notes other than the Series 5 Class A1 Fourth Issuer Notes and,
in the case of the Series 5 Class A1 Fourth Issuer Notes, on the earliest to
occur of (i) the Interest Payment Date falling in March 2011, (ii) the Interest
Payment Date immediately following the occurrence of a Trigger Event and (iii)
the Interest Payment Date following the enforcement of the Fourth Issuer Deed
of Charge, the Agent Bank will determine the Relevant Screen Rate in respect of
the Euro Fourth Issuer Notes as at or about 11.00 a.m. (Brussels time) on the
Euro Interest Determination Date in question. If the Relevant Screen Rate is
unavailable, the Agent Bank will request the principal London office of each of
the Reference Banks to provide the Agent Bank with its offered quotation to
prime banks for three-month Euro deposits of €10,000,000 in the Eurozone
interbank market as at or about 11.00 a.m. (Brussels time) on the relevant Euro
Interest Determination Date. The Rates of Interest for the relevant Interest
Period shall be the aggregate of (a) the Relevant Margin and (b) the Relevant
Screen Rate or, if the Relevant Screen Rate is unavailable, the arithmetic mean
of such offered quotations for Euro deposits (rounded upwards, if necessary, to
five decimal places); and

 

(iv)           if, on any Euro
Interest Determination Date, the Relevant Screen Rate is unavailable and two or
three only of the Reference Banks provide offered quotations, the Rates of
Interest for the relevant Interest Period shall be determined in accordance
with the provisions of subparagraph (i) or, as the case may be, (ii) above on
the basis of the offered quotations of those Reference Banks providing such
quotations. If, on any such Euro Interest Determination Date, only one or none
of the Reference Banks provides the Agent Bank with such an offered quotation,
the Agent Bank shall forthwith consult with the Note Trustee and the Fourth
Issuer for the purposes of agreeing two banks (or, where one only of the
Reference Banks provided such a quotation, one additional bank) to provide such
a quotation or quotations to the Agent Bank (which bank or banks are in the
opinion of the Note Trustee suitable for such purpose) and the Rates of
Interest for the Interest Period in question shall be determined, as aforesaid,
on the basis of the offered quotations of such banks as so agreed (or, as the
case may be, the offered quotations of such bank as so agreed and the relevant
Reference Bank). If no such bank or banks is or are so agreed or such bank or
banks as so agreed does or do not provide such a quotation or quotations, then
the Rates of Interest for the relevant Interest Period shall be the Rates of
Interest in effect for the last preceding Interest Period to which subparagraph
(i) shall have applied but, as applicable, taking account of any change in the
Relevant Margin;

 

(c)                                  The
Sterling Fourth Issuer Notes:

 

(i)                  the rate of
interest payable in respect of the Sterling Fourth Issuer Notes shall be a
floating rate of interest calculated in accordance with paragraphs (ii), (iii)
and (iv) below;

 

(ii)               on the initial
Sterling Interest Determination Date (as defined below), the Agent Bank will
determine the Initial Relevant Screen Rate in respect of the Sterling Fourth
Issuer Notes, as at or about 11.00 a.m. (London time) on that date. If the
Initial Relevant Screen Rate is unavailable, the Agent Bank will request the
principal London office of each of the Reference Banks to provide the Agent
Bank with its offered quotation to leading banks for two-month and three-month
Sterling deposits of £10,000,000 in the London interbank market as at or about
11.00 a.m. (London time) on such initial Sterling Interest Determination Date
and the Rates of Interest for the first Interest Period shall be the aggregate
of (a) the Relevant Margin and (b) the Initial Relevant Screen Rate in respect
of the Sterling Fourth Issuer Notes, or, if the Initial Relevant Screen Rate is
unavailable, the linear interpolation of the arithmetic mean of such

 

293

 

offered quotations for
three-month Sterling deposits and the arithmetic mean of such offered
quotations for four-month Sterling deposits (rounded upwards, if necessary, to
five decimal places);

 

(iii)            on each subsequent
Sterling Interest Determination Date, the Agent Bank will determine the
Relevant Screen Rate in respect of the Sterling Fourth Issuer Notes, as at or
about 11.00 a.m. (London time) on the Sterling Interest Determination Date in
question. If the Relevant Screen Rate is unavailable, the Agent Bank will
request the principal London office of each of the Reference Banks to provide
the Agent Bank with its offered quotation to leading banks for three-month
Sterling deposits of £10,000,000 in the London interbank market as at or about
11.00 a.m. (London time) on the relevant Sterling Interest Determination Date
and the Rates of Interest for the relevant Interest Period shall be the
aggregate of (a) the Relevant Margin and (b) the Relevant Screen Rate or, if
the Relevant Screen Rate is unavailable, the arithmetic mean of such offered
quotations for Sterling deposits (rounded upwards, if necessary, to five
decimal places); and

 

(iv)           if, on any Sterling
Interest Determination Date, the Relevant Screen Rate is unavailable and two or
three only of the Reference Banks provide offered quotations, the Rates of
Interest for the relevant Interest Period shall be determined in accordance
with the provisions of subparagraph (i) above on the basis of the offered
quotations of those Reference Banks providing such quotations. If, on any such
Sterling Interest Determination Date, only one or none of the Reference Banks
provides the Agent Bank with such an offered quotation, the Agent Bank shall
forthwith consult with the Note Trustee and the Fourth Issuer for the purposes
of agreeing two banks (or, where one only of the Reference Banks provided such
a quotation, one additional bank) to provide such a quotation or quotations to
the Agent Bank (which bank or banks are in the opinion of the Note Trustee
suitable for such purpose) and the Rates of Interest for the Interest Period in
question shall be determined, as aforesaid, on the basis of the offered
quotations of such banks as so agreed (or, as the case may be, the offered
quotations of such bank as so agreed and the relevant Reference Bank). If no
such bank or banks is or are so agreed or such bank or banks as so agreed does
or do not provide such a quotation or quotations, then the Rates of Interest
for the relevant Interest Period shall be the Rates of Interest in effect for
the last preceding Interest Period to which subparagraph (i) shall have applied
but taking account of any change in the Relevant Margin.

 

There will be no minimum
or maximum Rate of Interest.

 

For the purposes of these
Conditions the following expressions shall have the following meanings:

 

“Dollar Interest Determination Date”
means two London Business Days before the first day of the Interest Period for
which the rate will apply (or if such day is not a Business Day, the next
succeeding Business Day);

 

“Euro Interest Determination Date”
means two TARGET Business Days before the first day of the Interest Period for
which the rate will apply;

 

“Eurozone” means the region
comprised of member states of the European Union that adopt the single currency
in accordance with the Treaty establishing the European Community, as amended
from time to time:

 

“Initial Relevant Screen Rate”
means:

 

(i)                         in
respect of the Series 1 Class A Fourth Issuer Notes, the linear interpolation
of the arithmetic mean of the offered quotations to leading banks for two-week
Dollar deposits and the arithmetic mean of the offered quotations to leading
banks for three-month Dollar deposits and in respect of the Dollar Fourth
Issuer Notes (other than the Series 1 Class A Fourth Issuer Notes), the linear
interpolation of the arithmetic mean of the offered quotations to leading banks
for two-month Dollar deposits and the arithmetic mean of the offered quotations
to leading banks for three-month Dollar deposits (in each case) (rounded
upwards, if necessary, to five decimal places), displayed on the Moneyline
Telerate Monitor at Telerate page number 3750 (or such replacement page on that
service which displays the information) or, if that service ceases to display
the information, such other screen service as may be determined by the Fourth
Issuer with the approval of the Note Trustee;

 

294

 

(ii)                      in respect
of the Euro Fourth Issuer Notes, the linear interpolation of the arithmetic
mean of the offered quotations to prime banks for two-month Euro deposits and
the arithmetic mean of the offered quotations to prime banks for three-month
Euro deposits (rounded upwards, if necessary, to five decimal places),
displayed on the Moneyline Telerate monitor at Telerate page number 248 (or
such replacement page on that service which displays the information) or, if
that service ceases to display the information, such other screen service as
may be determined by the Fourth Issuer with the approval of the Note Trustee;
and

 

(iii)                   in respect of
the Sterling Fourth Issuer Notes, the linear interpolation of the arithmetic
mean of the offered quotations to leading banks for two-month Sterling deposits
and the arithmetic mean of the offered quotations to leading banks for three-
month Sterling deposits (rounded upwards, if necessary, to five decimal
places), displayed on the Moneyline Telerate monitor at Telerate page number
3750 (or such replacement page on that service which displays the information)
or, if that service ceases to display the information, such other screen
service as may be determined by the Fourth Issuer with the approval of the Note
Trustee:

 

“Reference Banks” means the
initial Reference Banks (as defined in Condition 4(H)) and/or such other bank
as may be appointed pursuant to Condition 4(H);

 

“Relevant Margin” means:

 

(i)                              in
respect of the Series 1 Class A Fourth Issuer Notes, -0.05 per cent. per annum;

 

(ii)                           in
respect of the Series 1 Class B Fourth Issuer Notes, 0.14 per cent. per annum
up to and including the Interest Period ending in March 2011 and thereafter
0.28 per cent. per annum:

 

(iii)                        in respect
of the Series 1 Class M Fourth Issuer Notes, 0.23 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.46 per
cent. per annum;

 

(iv)                       in respect
of the Series 2 Class A Fourth Issuer Notes, 0.07 per cent. per annum;

 

(v)                          in
respect of the Series 2 Class B Fourth Issuer Notes, 0.18 per cent. per annum
up to and including the Interest Period ending in March 2011 and thereafter
0.36 per cent. per annum;

 

(vi)                       in respect
of the Series 2 Class M Fourth Issuer Notes, 0.33 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.66 per
cent. per annum;

 

(vii)                    in respect of
the Series 2 Class C Fourth Issuer Notes, 0.72 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 1.44 per
cent. per annum;

 

(viii)                 in respect of the
Series 3 Class A Fourth Issuer Notes, 0.14 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.28 per
cent. per annum;

 

(ix)                         in
respect of the Series 3 Class B Fourth Issuer Notes, 0.23 per cent. per annum
up to and including the Interest Period ending in March 2011 and thereafter
0.46 per cent. per annum;

 

(x)                            in
respect of the Series 3 Class M Fourth Issuer Notes, 0.37 per cent. per annum
up to and including the Interest Period ending in March 2011 and thereafter
0.74 per cent. per annum;

 

(xi)                         in
respect of the Series 3 Class C Fourth Issuer Notes, 0.80 per cent. per annum
up to and including the Interest Period ending in March 2011 and thereafter
1.60 per cent. per annum;

 

(xii)                      in respect
of the Series 4 Class A Fourth Issuer Notes, 0.15 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.30 per
cent. per annum;

 

(xiii)                   in respect of
the Series 4 Class B Fourth Issuer Notes, 0.28 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.56 per
cent. per annum;

 

(xiv)                  in respect of
the Series 4 Class M Fourth Issuer Notes, 0.45 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.90 per
cent. per annum;

 

(xv)                     in respect of
the Series 5 Class A1 Fourth Issuer Notes, 3.9615 per cent. per annum from but
excluding the Interest Period ending in March 2011;

 

(xvi)                  in respect of
the Series 5 Class A2 Fourth Issuer Notes, 0.17 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.34 per
cent. per annum;

 

(xvii)               in respect of the
Series 5 Class B Fourth Issuer Notes, 0.33 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 0.66 per cent.
per annum;

 

295

 

(xviii)            in respect of the
Series 5 Class M Fourth Issuer Notes, 0.50 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 1.00 per
cent. per annum;

 

(xix)                    in respect of
the Series 5 Class C Fourth Issuer Notes, 0.90 per cent. per annum up to and
including the Interest Period ending in March 2011 and thereafter 1.80 per
cent. per annum.

 

“Relevant Screen Rate” means:

 

(i)                         in
respect of the first Interest Period, the Initial Relevant Screen Rate, if any;
and

 

(ii)                      (1)               in respect of
subsequent Interest Periods of the Series 1 Class A Fourth Issuer Notes, the
arithmetic mean of the offered quotations to leading banks for one-month Dollar
deposits in the London interbank market displayed on the Moneyline Telerate
Monitor at Telerate page number 3750;

 

(2)               in respect of
subsequent Interest Periods of the Dollar Fourth Issuer Notes (other than the
Series 1 Class A Fourth Issuer Notes), the arithmetic mean of the offered
quotations to leading banks for three-month Dollar deposits in the London
interbank market displayed on the Moneyline Telerate Monitor at Telerate page
number 3750;

 

(3)               in respect of
subsequent Interest Periods of the Euro Fourth Issuer Notes (other than the
Series 5 Class A1 Fourth Issuer Notes) and (commencing from but excluding the
Interest Payment Date falling in March 2011) the Series 5 Class A1 Fourth
Issuer Notes, the arithmetic mean of offered quotations to prime banks for
three-month Euro deposits in the Eurozone interbank market displayed on the
Moneyline Telerate Monitor at Telerate page number 248; and

 

(4)               in respect of
subsequent Interest Periods of the Sterling Fourth Issuer Notes, the arithmetic
mean of offered quotations for three-month Sterling deposits in the London
interbank market displayed on the Moneyline Telerate Monitor at Telerate page
number 3750;

 

in each case, displayed
on the above mentioned page of the Moneyline Telerate Monitor (or such
replacement page on that service which displays the information) or, if that
service ceases to display the information, such other screen service as may be
determined by the Fourth Issuer with the approval of the Note Trustee (rounded
upwards, if necessary, to five decimal places); and

 

“Sterling Interest Determination Date”
means the first day of the Interest Period for which the rate will apply.

 

(D)            Determination of Rates
of Interest and Calculation of Interest Amounts

 

(i)                         The Agent
Bank shall, as soon as practicable after 11.00 a.m. (London time) on, as
applicable, each Dollar Interest Determination Date, Euro Interest
Determination Date and Sterling Interest Determination Date, determine and
notify the Fourth Issuer, the Fourth Issuer Cash Manager, the Note Trustee, the
Registrar and the Paying Agents of (i) the Rates of Interest applicable to each
class of Fourth Issuer Notes for the relevant Interest Period and (ii) the
Dollar amount (in the case of a Dollar Fourth Issuer Note), the Euro amount (in
the case of a Euro Fourth Issuer Note) and the Sterling amount (in the case of
a Sterling Fourth Issuer Note) (in each case, the “Interest Amount”) payable in
respect of each Interest Period in respect of the Principal Amount Outstanding
of each such Fourth Issuer Note.

 

(ii)                      The Interest
Amount in respect of each class of Fourth Issuer Notes shall be determined by
first applying the relevant Rate of Interest to the Principal Amount
Outstanding of the relevant class of Fourth Issuer Notes, multiplying the sum
by the applicable day count fraction described in Condition 4 (A) and rounding
the resultant figure to the nearest cent (in the case of Dollar Fourth Issuer
Notes), the nearest Euro 0.01 (in the case of Euro Fourth Issuer Notes) and the
nearest penny (in the case of Sterling Fourth Issuer Notes) (half a cent, half
a Euro 0.01 and half a penny being rounded upwards), and then apportioning the
resulting total between the Fourth Issuer Noteholders of the relevant class of
Fourth Issuer Notes, pari passu without preference or priority
amongst themselves. For these purposes, in the case of the Series 1 Class A
Fourth Issuer Notes, following the occurrence of a Trigger Event or enforcement
of the Fourth Issuer Security in accordance with the Fourth Issuer Deed of
Charge, the Principal Amount Outstanding will include any amount of interest
which would otherwise be payable on a monthly Series 1 Class A Interest Payment
Date, which interest will be deferred until the next monthly Series 1 Class A
Interest Payment Date and will itself bear interest at the rate of interest
applicable to

 

296

 

subsequent Interest
Periods in respect of the Series 1 Class A Fourth Issuer Notes until the next
Quarterly Interest Payment Date.

 

(E)             Publication of Rates
of Interest, Interest Amounts and other Notices

 

As soon as possible, the
Agent Bank will cause the Rate of Interest and the Interest Amount applicable
to each class of Fourth Issuer Notes for each Interest Period and the Interest
Payment Date falling at the end of such Interest Period to be notified to the
Fourth Issuer, the Fourth Issuer Cash Manager, the Note Trustee, the Registrar
and the Paying Agents (as applicable) and to each stock exchange, competent
listing authority and/or quotation system (if any) on which the Fourth Issuer
Notes are then listed, quoted and/or traded and the Agent Bank will cause
notice thereof to be given to the Fourth Issuer Noteholders in accordance with
Condition 14. The Interest Amounts and Interest Payment Dates so notified may
subsequently be amended (or appropriate alternative arrangements made by way of
adjustment) without notice in the event of any extension or shortening of the
relevant Interest Period.

 

(F)             Determination and/or
Calculation by Note Trustee

 

If the Agent Bank does
not at any time for any reason determine the Rate of Interest and/or calculate
the Interest Amount for any class of the Fourth Issuer Notes in accordance with
the foregoing paragraphs, the Note Trustee shall (i) determine the Rate of
Interest at such rate as (having such regard as it shall think fit to the
procedure described above) it shall deem fair and reasonable in all the
circumstances and/or (as the case may be) (ii) calculate the Interest Amount
for such class of Fourth Issuer Notes in the manner specified in paragraph (D)
above, and any such determination and/or calculation shall be deemed to have
been made by the Agent Bank.

 

(G)            Notifications to be
Final

 

All notifications,
opinions, determinations, certificates, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of this Condition 4,
whether by the Reference Banks (or any of them) or any other bank or the Agent
Bank (in the absence of wilful default; bad faith or manifest error) or the
Note Trustee (in accordance with paragraph (F) above) shall be binding on the
Fourth Issuer, the Fourth Issuer Cash Manager, the Reference Banks, such other
bank, the Agent Bank, the Note Trustee (as the case may be) and all Fourth
Issuer Noteholders and (in such absence as aforesaid) no liability to the
Fourth Issuer Noteholders shall attach to the Fourth Issuer, the Reference
Banks, such other bank, the Agent Bank, the Note Trustee (as the case may be)
or the Fourth Issuer Cash Manager in connection with the exercise or non
exercise by them or any of them of their powers, duties and discretions
hereunder.

 

(H)            Reference Banks and
Agent Bank

 

The Agent Bank shall
ensure that, so long as any of the Fourth Issuer Notes remains outstanding,
there shall at all times be four Reference Banks with offices in London and an
Agent Bank. The initial Reference Banks shall be, in the case of Fourth Issuer
Notes, the principal London offices of each of ABN AMRO Bank N.V., Barclays
Bank PLC, Citibank, N.A. and The Royal Bank of Scotland plc. The initial Agent
Bank shall be Citibank, N.A., London Branch, acting through its London office.
In the event of any Reference Bank being unable or unwilling to continue to act
as a Reference Bank, the Fourth Issuer shall, with the prior written approval
of the Note Trustee, appoint a successor Reference Bank to act as such in its
place. In the event of Citibank, N.A. being unwilling or unable to act as the
Agent Bank, or resigning pursuant to the Fourth Issuer Paying Agent and Agent
Bank Agreement, the Fourth Issuer shall, with the approval of the Note Trustee,
appoint a successor Agent Bank. If the Fourth Issuer shall fail to appoint a
successor Reference Bank or successor Agent Bank (as the case may be), the
Agent Bank shall appoint such other bank as may be previously approved in
writing by the Note Trustee to act as the Reference Bank or Agent Bank (as the
case may be). The resignation of the Agent Bank will not take effect until a
successor approved in writing by the Note Trustee has been appointed.

 

5.                     Redemption,
Purchase and Cancellation

 

(A)             Final Redemption

 

Unless previously
redeemed in full as provided in this Condition 5, the Fourth Issuer shall,
subject to Condition 2, redeem each class of the Fourth Issuer Notes at their
Principal Amount

 

297

 

Outstanding (as defined below) together with accrued interest on the
Final Maturity Date in respect of such class of Fourth Issuer Notes.

 

The Fourth Issuer may not
redeem Class A Fourth Issuer Notes in whole or in part prior to those
respective dates except as provided in paragraph (B), (D) or (E) below, but without
prejudice to Condition 9.

 

(B)             Mandatory Redemption

 

Subject as provided
below, the Class A Fourth Issuer Notes shall be redeemed on each Interest
Payment Date other than an Interest Payment Date on which the Fourth Issuer
Notes are to be redeemed under Condition 5(A), (D) or (E), in an amount equal to the amount (if
any) repaid on the corresponding Interest Payment Date in respect of, and
pursuant to, the Series 1 Fourth Issuer Term AAA Advance, the Series 2 Fourth
Issuer Term AAA Advance, the Series 3 Fourth Issuer Term AAA Advance, the
Series 4 Fourth Issuer Term AAA Advance and the Series 5 Fourth Issuer Term AAA
Advances, respectively, converted, in the case of the Series 1 Fourth Issuer
Term AAA Advance, the Series 2 Fourth Issuer Term AAA Advance and the Series 3
Fourth Issuer Term AAA Advance, into Dollars at the relevant Fourth Issuer
Dollar Currency Exchange Rate (as defined in Condition 17 below) and converted,
in the case of the Fourth Issuer Series 5A1 Term AAA Advance into euro at the
relevant Fourth Issuer Euro Currency Exchange Rate (as defined in Condition 16
below).

 

If on an Interest Payment
Date, prior to enforcement of the Fourth Issuer Security in accordance with the
Fourth Issuer Deed of Charge or the occurrence of an Asset Trigger Event,
amounts are outstanding under more than one series of the Class A Fourth Issuer
Notes, then the Fourth Issuer will apply the relevant Fourth Issuer Principal
Receipts to repay, as the case may be, (1) the Series 1 Class A Fourth Issuer
Notes, converted into Dollars at the relevant Fourth Issuer Dollar Currency
Exchange Rate, prior to making payments of principal on the Series 2 Class A Fourth
Issuer Notes, the Series 3 Class A Fourth Issuer Notes, the Series 4 Class A
Fourth Issuer Notes and the Series 5 Class A Fourth Issuer Notes; (2) the
Series 2 Class A Fourth Issuer Notes, converted into Dollars at the relevant
Fourth Issuer Dollar Currency Exchange Rate, prior to making payments of
principal on the Series 3 Class A Fourth Issuer Notes, the Series 4 Class A
Fourth Issuer Notes and the Series 5 Class A Fourth Issuer Notes; (3) the
Series 3 Class A Fourth Issuer Notes, converted into Dollars at the relevant
Fourth Issuer Dollar Currency Exchange Rate prior to making payments of
principal on the Series 4 Class A Fourth Issuer Notes and the Series 5 Class A
Fourth Issuer Notes; and (4) the Series 4 Class A Fourth Issuer Notes,
converted into Euro at the relevant Fourth Issuer Euro Currency Exchange, prior
to making payments of principal on the Series 5 Class A Fourth Issuer Notes.

 

The Series 5 Class A1
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid on the corresponding Interest
Payment Date in respect of, and pursuant to, the Series 5A1 Fourth Issuer Term
AAA Advance of the Fourth Issuer Term AAA Advances.

 

The Series 5 Class A2
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid on the corresponding Interest
Payment Date in respect of, and pursuant to, the Series 5A2 Fourth Issuer Term
AAA Advance of the Fourth Issuer Term AAA Advances.

 

The Series 1 Class B
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect, of and pursuant to, the Series 1 Fourth
Issuer Term AA Advance of the Fourth Issuer Term AA Advances converted into
Dollars at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 1 Class M
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect, of and pursuant to, the Series 1 Fourth
Issuer Term A Advance of the Fourth Issuer Term A Advances converted into
Dollars at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 2 Class B
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 2 Fourth
Issuer Term AA Advance of the Fourth Issuer

 

298

 

Term AA Advances
converted into Dollars at the relevant Fourth Issuer Dollar Currency Exchange
Rate.

 

The Series 2 Class M
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 2 Fourth
Issuer Term A Advance of the Fourth Issuer Term A Advances converted into Dollars
at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 2 Class C
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 2 Fourth
Issuer Term BBB Advance of the Fourth Issuer Term BBB Advances converted into
Dollars at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 3 Class B
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 3 Fourth
Issuer Term AA Advance of the Fourth Issuer Term AA Advances converted into
Dollar at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 3 Class M
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 3 Fourth
Issuer Term A Advance of the Fourth Issuer Term A Advances converted into
Dollars at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 3 Class C
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 3 Fourth
Issuer Term BBB Advance of the Fourth Issuer Term BBB Advances converted into
Dollar at the relevant Fourth Issuer Dollar Currency Exchange Rate.

 

The Series 4 Class B
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 4 Fourth
Issuer Term AA Advance of the Fourth Issuer Term AA Advances converted into
Euro at the relevant Fourth Issuer Euro Currency Exchange Rate.

 

The Series 4 Class M
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 4 Fourth
Issuer Term A Advance of the Fourth Issuer Term A Advances converted into Euro
at the relevant Fourth Issuer Euro Currency Exchange Rate.

 

The Series 5 Class B
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 5 Fourth
Issuer Term AA Advance of the Fourth Issuer Term AA Advances converted into
Euro at the relevant Fourth Issuer Euro Currency Exchange Rate.

 

The Series 5 Class M
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 5 Fourth
Issuer Term A Advance of the Fourth Issuer Term A Advances converted into Euro
at the relevant Fourth Issuer Euro Currency Exchange Rate.

 

The Series 5 Class C
Fourth Issuer Notes shall be redeemed on each Interest Payment Date in an
amount equal to the amount (if any) repaid by Funding 1 on the corresponding
Interest Payment Date in respect of, and pursuant to, the Series 5 Fourth
Issuer Term BBB Advance of the Fourth Issuer Term BBB Advances converted into
Euro at the relevant Fourth Issuer Euro Currency Exchange Rate.

 

(C)            Note Principal Payments,
Principal Amount Outstanding and Pool Factor

 

The principal amount
redeemable (the “Note Principal Payment”) in respect of each Fourth Issuer Note
of a particular class on any Interest Payment Date under paragraph (B) above
shall be a proportion of the amount required as at that Interest Payment Date
to be applied in redemption of the relevant class of Fourth Issuer Notes on
such date equal to the proportion that the Principal Amount Outstanding of the
relevant Fourth Issuer Note bears to the aggregate Principal Amount Outstanding

 

299

 

of the relevant class of
Fourth Issuer Notes rounded down to the nearest cent in respect of the Dollar
Fourth Issuer Notes, rounded down to the nearest Euro 0.01 in respect of the
Euro Fourth Issuer Notes and rounded down to the nearest penny in respect of
the Sterling Fourth Issuer Notes provided always that no such Note Principal
Payment may exceed the Principal Amount Outstanding of the relevant Fourth
Issuer Note.

 

Two Business Days prior
to each Interest Payment Date (the “Note Determination Date”), the Fourth
Issuer shall determine (or cause the Agent Bank to determine) (i) the amount of
any Note Principal Payment due in respect of each Fourth Issuer Note of the relevant
series on the immediately following Interest Payment Date, (ii) the Principal
Amount Outstanding of each such Fourth Issuer Note (which shall be $1,000 and
$10,000 (in the case of each Dollar Fourth Issuer Note), €500,000 (in the case
of each Euro Fourth Issuer Note) and £1,000 and £10,000 (in the case of each
Sterling Fourth Issuer Note) less (in each case) the aggregate amount of all
Note Principal Payments in respect of such Fourth Issuer Notes that have been
paid since the Closing Date and on or prior to that Note Determination Date
(the “Principal
Amount Outstanding”) and (iii) the fraction expressed as a decimal
to the first decimal point (the “Pool Factor”), of which the numerator is
the Principal Amount Outstanding of that Fourth Issuer Note (as referred to in
(ii) above) and the denominator is $1,000 and $10,000 (in the case of each
Dollar Fourth Issuer Note), €500,000 (in the case of each Euro Fourth Issuer
Note) and £1,000 and £10,000 (in the case of each Sterling Fourth Issuer
Notes). Each determination by or on behalf of the Fourth Issuer of any Note
Principal Payment of a Fourth Issuer Note, the Principal Amount Outstanding of
a Fourth Issuer Note and the Pool Factor shall in each case (in the absence of
wilful default, bad faith or manifest error) be final and binding on all
persons.

 

With respect to the
Fourth Issuer Notes of each class, the Fourth Issuer will cause each
determination of the Note Principal Payment, the Principal Amount Outstanding
and the Pool Factor to be notified forthwith, and in any event not later than
1.00 p.m. (London time) on the Note Determination Date, to the Note Trustee,
the Paying Agents, the Registrar, the Agent Bank and (for so long as the Fourth
Issuer Notes are listed on one or more stock exchanges or listing authorities)
the relevant stock exchange or listing authority, and will cause notice of each
determination of the Note Principal Payment, the Principal Amount Outstanding
and the Pool Factor to be given to Fourth Issuer Noteholders in accordance with
Condition 14 by not later than the Business Day after the relevant Interest
Payment Date in the case of Global Fourth Issuer Notes or as soon as reasonably
practicable thereafter in the case of Definitive Fourth Issuer Notes. If no
Note Principal Payment is due to be made on any Interest Payment Date falling
after March 2011, then a notice to this effect will be given by or on behalf of
the Fourth Issuer to the Fourth Issuer Noteholders which have not been paid in
full in accordance with Condition 14.

 

If the Fourth Issuer does
not at any time for any reason determine (or cause the Agent Bank to determine)
a Note Principal Payment, the Principal Amount Outstanding or the Pool Factor
in accordance with the preceding provisions of this paragraph, such Note Principal
Payment, Principal Amount Outstanding and Pool Factor may be determined by the
Note Trustee in accordance with this paragraph (C) and each such determination
or calculation shall be deemed to have been made by the Fourth Issuer. Any such
determination shall (in the absence of wilful default, bad faith or manifest
error) be binding on the Fourth Issuer, the Agent Bank and the Fourth Issuer
Noteholders.

 

(D)            Optional Redemption in
Full

 

Provided that a Fourth
Issuer Note Acceleration Notice has not been served, and subject to the
provisos below, upon giving not more than 60 nor less than 30 days’ written
notice to the Note Trustee, the counterparties under the Fourth Issuer Swap
Agreements and the Fourth Issuer Noteholders in accordance with Condition 14,
the Fourth Issuer may redeem, unless otherwise provided, all (but not some
only) of the Fourth Issuer Notes at the Principal Amount Outstanding thereof,
together with any accrued (and unpaid) interest thereon, on the following
dates:

 

•                     any interest
payment date falling on or after the interest payment date in March 2011; or

 

•                     any interest
payment date on which the aggregate principal amount of the Fourth Issuer Notes
then outstanding is less than 10 per cent. of the aggregate Principal Amount
Outstanding of the Fourth Issuer Notes as at the closing date,

 

provided that (a) prior to giving any such notice, the Fourth Issuer
shall have provided to the Note Trustee a certificate signed by two directors
of the Fourth Issuer to the effect that the Fourth Issuer will have the funds,
not subject to any interest of any other person, required to redeem the Fourth
Issuer Notes as aforesaid and any amounts required to be paid in priority to or
pari
passu with the

 

300

 

Fourth Issuer Notes outstanding in accordance with the terms and
conditions of the Fourth Issuer Cash Management Agreement and (b) the Note
Trustee is satisfied in accordance with the Transaction Documents that there
are sufficient funds to allow the Fourth Issuer to redeem the Fourth Issuer
Notes.

 

(E)             Optional Redemption
for Tax and other Reasons

 

Provided that a Fourth
Issuer Note Acceleration Notice has not been served and if the Fourth Issuer at
any time satisfies the Note Trustee immediately prior to the giving of the
notice referred to below that on the next Interest Payment Date either (i) the
Fourth Issuer would by virtue of a change in the law or regulations of the
United Kingdom or any other jurisdiction (or the application or interpretation
thereof) be required to deduct or withhold from any payment of principal or
interest or any other amount due under any of the Fourth Issuer Notes any
amount for or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature (other than where the relevant holder
or beneficial owner has some connection with the relevant jurisdiction other
than the holding of the Fourth Issuer Notes) or (ii) Funding 1 would be
required to deduct or withhold from amounts due under the Fourth Issuer
Intercompany Loan any amount on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature, and (iii) such
obligation of the Fourth Issuer or Funding 1 (as the case may be) cannot be
avoided by the Fourth Issuer or Funding 1 (as the case may be) taking
reasonable measures available to it, then the Fourth Issuer shall use its
reasonable endeavours to arrange the substitution of a company incorporated in
another jurisdiction, if it avoids the relevant event described in (i) or (ii)
above, approved in writing by the Note Trustee as principal debtor under the
Fourth Issuer Notes and as lender under the Fourth Issuer Intercompany Loan
Agreement, as the case may be, upon the Note Trustee being satisfied that (1)
such substitution will not be materially prejudicial to the Fourth Issuer
Noteholders (and in making such determination, the Note Trustee may rely,
without further investigation or inquiry, on any confirmation from the Rating
Agencies that the then current ratings of the Fourth Issuer Notes would not be
adversely affected by such substitution); and (2) that the position of the
Fourth Issuer Secured Creditors will not thereby be adversely affected; and (3)
that such substitution would not require registration of any new security under
US securities laws or materially increase the disclosure requirements under US
law. Only if the Fourth Issuer is unable to arrange a substitution will the
Fourth Issuer be entitled to redeem the Fourth Issuer Notes as described in
this Condition 5(E).

 

If the Fourth Issuer or
Funding 1 (as the case may be) is unable to arrange a substitution as described
above and; as a result, one or more of the events described in (i) or (ii)
above (as the case may be) is continuing, then the Fourth Issuer may, having
given not more than 60 nor less than 30 days’ written notice to the Note
Trustee, the counterparties under the Fourth Issuer Swap Agreements and the
Fourth Issuer Noteholders in accordance with Condition 14, redeem all (but not
some only) of the Fourth Issuer Notes on the next following Interest Payment
Date at their aggregate Principal Amount Outstanding together with any interest
accrued (and unpaid) thereon provided that (in either case), prior to giving
any such notice, the Fourth Issuer shall have provided to the Note Trustee (1)
a certificate signed by two directors of the Fourth Issuer stating that the
circumstances referred to in (i) and/or (ii) above prevail and setting out
details of such circumstances, and (2) an opinion in form and substance
satisfactory to the Note Trustee of independent legal advisers of recognised
standing to the effect that the Fourth Issuer has or will become obliged to pay
such additional amounts as a result of such change or amendment. The Note
Trustee shall be entitled to accept such certificate and opinion as sufficient
evidence of the satisfaction of the circumstance set out in (i) and/ or (ii)
above, in which event they shall be conclusive and binding on the Fourth Issuer
Noteholders. The Fourth Issuer may only redeem the Fourth Issuer Notes as
described above if the Note Trustee is, in its absolute discretion, satisfied
that the Fourth Issuer will have the funds, not subject to the interest of any
other person, required to redeem the Fourth Issuer Notes as aforesaid and any
amounts required under the Fourth Issuer Pre- Enforcement Revenue Priority of
Payments currently set out in the Fourth Issuer Cash Management Agreement to be
paid in priority to or pari passu with the Fourth Issuer Notes outstanding
in accordance with the terms and conditions thereof.

 

If at any time, it would
be unlawful for the Fourth Issuer to make, fund or allow to remain outstanding
a Term Advance made by it under the Fourth Issuer Intercompany Loan Agreement
and the relevant certificate states that the Fourth Issuer requires Funding 1
to prepay the Term Advance, then the Fourth Issuer may redeem all (but not some
only) of the Fourth Issuer Notes at the Principal Amount Outstanding thereof,
together with any accrued interest thereon, on giving not more than 60 days and
not less than 30 days’ (or such shorter period as may be required by any
relevant law) prior written notice thereof to the Note Trustee, the
counterparties under the Fourth Issuer Swap

 

301

 

Agreements and the Fourth
Issuer Noteholders in accordance with Condition 14, provided that, prior to
giving any such notice, the Fourth Issuer shall have provided to the Note
Trustee a certificate signed by two directors of the Fourth Issuer to the
effect that it will have the funds, not subject to the interest of any other
person, required to redeem the Fourth Issuer Notes as aforesaid and any amounts
required under the Fourth Issuer Pre- Enforcement Revenue Priority of Payments
(or, as the case may be, the Fourth Issuer Post- Enforcement Revenue Priority
of Payments) currently set out in the Fourth Issuer Cash Management Agreement
to be paid in priority to or pari passu with the Fourth Issuer Notes
outstanding in accordance with the terms and conditions thereof.

 

(F)             Redemption or
purchase following a regulatory event

 

(i)                   If:

 

(a)             the New Basel Capital
Accord (as described in the consultative document titled “The New Basel Capital Accord”
published in January 2001 by the Basel Committee on Banking Supervision) has
been implemented in the United Kingdom, whether by rule of law, recommendation
of best practices or by any other regulation,

 

(b)            a Fourth Issuer Note
Acceleration Notice has not been served on the relevant Interest Payment Date
for the exercise of the Purchase Option or Redemption Option, as the case may
be,

 

(c)             the Fourth Issuer has
given not more than 60 days’ and not less than 30 days’ (or such shorter period
as may be required by any relevant law) prior written notice to the Note
Trustee, the counterparties under the Fourth Issuer Swap Agreements and the
Fourth Issuer Noteholders, in accordance with Condition 14, of the exercise of
the Purchase Option or Redemption Option, as the case may be,

 

(d)            each Rating Agency has
confirmed to the Fourth Issuer in writing that its then current ratings of none
of the Fourth Issuer Notes or notes of any other Issuer would be adversely
affected by the exercise of the Purchase Option or Redemption Option, as the
case may be, and

 

(e)             prior to giving any
such notice, the Fourth Issuer shall have provided to the Note Trustee a
certificate signed by two directors of the Fourth Issuer to the effect that the
Fourth Issuer will have sufficient funds to purchase or redeem, as the case may
be, the Called Notes in accordance with this Condtion 5(F)) and to pay any
amounts under the Issuer Pre-Enforcement Revenue Priority of Payments required
to be paid in priority to or pari passu with payments on the Fourth
Issuer Notes on the relevant Interest Payment Date,

 

then:

 

(y)            the Fourth Issuer has
the right (the Purchase Option) to require holders of all but not some only
of one or more classes of the Fourth Issuer Notes (collectively, the Called Notes)
to transfer the Called Notes to the Fourth Issuer on any Interest Payment Date
falling on or after the Interest Payment Date in March 2008 for a price equal
to the Specified Amount, together with any accrued interest on the Called
Notes, or

 

(z)              the Fourth Issuer
may redeem (the Redemption Option) the Called Notes on any Interest Payment
Date falling on or after the Interest Payment Date in March 2008 at the
Specified Amount, together with any accrued interest on the Called Notes.

 

(ii)                The Called Notes
transferred to the Fourth Issuer pursuant to the Purchase Option shall, subject
as provided in (iii) below, remain Outstanding until the date on which they
would otherwise be redeemed or cancelled in accordance with the Conditions.

 

(iii)             The Note Trustee
shall concur in, execute and do all such deeds, instruments, acts and things,
and shall consent to any amendment, modification or waiver of the provisions of
the Fourth Issuer Transaction Documents to which it is a party and of these
Conditions, which may be necessary or desirable to permit and give effect to
the exercise of the Purchase Option and the transfer of the Called Notes to the
Fourth Issuer, including any waiver of convenants of the Fourth Issuer and any
suspension or termination of the rights of the holders of the Called Notes from
(and including) the Interest Payment Date specified for the exercise of the
Purchase Option, for as long as the Called Notes have not been transferred to
the Fourth Issuer, other than the right to receive the price payable for such
transfer.

 

302

 

(iv)            Each holder of Called
Notes shall be deemed to have authorised and instructed Euroclear, or, as the
case may be, Clearstream, Luxembourg to effect the transfer of its Called Notes
on the relevant Interest Payment Date to the Fourth Issuer, in accordance with
the rules for the time being of Euroclear, or, as the case may be, Clearstream,
Luxembourg.

 

(v)               Specified
Amount means:

 

(a)             in respect of any
Called Notes other than the Series 5 Class A1 Fourth Issuer Notes, or in
respect of the Series 5 Class A1 Fourth Issuer Notes if a purchase or
redemption is effected pursuant to the Purchase Option or Redemption Option on
or after the Interest Payment Date in March 2011, the Principal Amount
Outstanding of the Called Notes; and

 

(b)            in respect the Series
5 Class A1 Fourth Issuer Notes if a purchase or redemption is effected pursuant
to the Purchase Option or Redemption Option prior to the Interest Payment Date
in March 2011, the product of the Principal Amount Outstanding of the Series 5
Class A1 Fourth Issuer Notes and the greater of:

 

(1)               100 per cent. and

 

(2)               that price (as
reported in writing to the Fourth Issuer and the Note Trustee by a financial
advisor approved in writing by the Note Trustee) expressed as a percentage (and
rounded, if necessary, to the third decimal place, with 0.0005 rounded upwards)
at which the Gross Redemption Yield on the Series 5 Class A1 Fourth Issuer
Notes on the Relevant Date (assuming the Series 5 Class A1 Fourth Issuer Notes
mature on the Interest Payment Date in March 2011) is equal to the Gross
Redemption Yield at 3.00 p.m. (Berlin time) on the Relevant Date of the
Relevant Security on the basis of the arithmetic mean (rounded if necessary as
described above) of the offered prices for the Relevant Security quoted by the
Reference Market Makers (on a dealing basis for settlement on the next
following dealing day in Berlin) at or about 3:00 p.m. (Berlin time) on the
Relevant Date.

 

In this clause (b):

 

Gross Redemption Yield
means a yield calculated on the basis indicated by the Joint Index and
Classification Committee of the Institute and Faculty of Actuaries, Volume 105,
Part 1, 1978, page 18.

 

Reference Market Makers
means three brokers and/or Berlin Bundesanleihen market makers selected by
the Agent Bank and approved in writing by the Note Trustee or such other three
persons operating in the Bundesanleihen market as are selected by
the Agent Bank and so approved by the Note Trustee.

 

Relevant Date means
the date which is the second business day in the Bundesanleihen market prior
to the date of purchase or redemption of the Called Notes pursuant to the
Purchase Option or Redemption Option.

 

Relevant Security
means such German government security (Bundesanleihen) as the Agent Bank shall determine
to be a benchmark German government security the maturity of which is closest
to the Interest Payment Date in March 2011.

 

6.                     Payments

 

(A)             Payment of Interest
and Principal

 

Payments of principal and
interest shall be made by US Dollar cheque, in the case of the Dollar Global
Fourth Issuer Notes; or Euro cheque, in the case of the Euro Global Fourth
Issuer Notes; or Sterling cheque, in the case of the Sterling Global Fourth
Issuer Notes drawn on, or upon application by the relevant Fourth Issuer Noteholder
to the specified office of the US Paying Agent (in the case of the Dollar
Global Fourth Issuer Notes) or the Principal Paying Agent (in respect of the
Euro Global Fourth Issuer Notes and the Sterling Global Fourth Issuer Notes)
not later than the fifteenth day before the due date for any such payment, or
by transfer to a US Dollar account maintained by the payee with a bank in New
York City or (as the case may be) to a Euro account or to a Sterling account
maintained by the payee with a bank in London, as the case may be, and (in the
case of final redemption) upon surrender (or, in the case of part payment only,
endorsement) of the relevant Global Fourth Issuer Notes or Definitive Fourth
Issuer Notes (as the case may be) at the specified office of any Paying Agent.

 

303

 

(B)             Laws and Regulations

 

Payments of principal and
interest in respect of the Fourth Issuer Notes are subject, in all cases, to
any fiscal or other laws and regulations applicable thereto. Fourth Issuer
Noteholders will not be charged commissions or expenses on payments.

 

(C)            Payment of Interest
following a Failure to pay Principal

 

If payment of principal
is improperly withheld or refused on or in respect of any Fourth Issuer Note or
part thereof, the interest which continues to accrue in respect of such Fourth
Issuer Note in accordance with Condition 4(A) will be paid, in respect of a
Global Fourth Issuer Note, as described in Condition 6 (A) above and, in
respect of any Definitive Fourth Issuer Note, in accordance with this Condition
6.

 

(D)            Change of Paying
Agents

 

The initial Principal
Paying Agent, the initial Registrar, the initial Transfer Agent and the initial
US Paying Agent and their respective initial specified offices are listed at
the end of these Conditions. The Fourth Issuer reserves the right, subject to
the prior written approval of the Note Trustee, at any time to vary or
terminate the appointment of the Principal Paying Agent, the Registrar, the
Transfer Agent and the US Paying Agent and to appoint additional or other
Agents. The Fourth Issuer will at all times maintain a Principal Paying Agent
with a specified office in London, and for so long as amounts are outstanding
in respect of the Dollar Fourth Issuer Notes, a US Paying Agent with a
specified office in New York City and a Registrar. Except where otherwise
provided in the Fourth Issuer Trust Deed, the Fourth Issuer will cause at least
30 days’ notice of any change in or addition to the Paying Agents, the Transfer
Agent or the Registrar or their specified offices to be given in accordance
with Condition 14 and will notify the Rating Agencies of such change or
addition. For as long as any Fourth Issuer Note is outstanding, if European
Council Directive 2003/48/EC or any other Directive implementing the
conclusions of the ECOFIN Council meeting of 26-27 November 2000 is brought
into force, the Fourth Issuer will endeavour to maintain a Paying Agent in a
member state of the European Union that will not be obliged to withhold or
deduct tax pursuant to such Directive or any such law.

 

(E)             No Payment on non
Business Day

 

If the date for payment
of any amount in respect of a Fourth Issuer Note is not a Business Day, Fourth
Issuer Noteholders shall not be entitled to payment until the next following
Business Day in the relevant place and shall not be entitled to further
interest or other payment in respect of such delay. In this Condition 6(E), the
expression “Business Day” means a day which is (i) a New York Business
Day, (ii) a London Business Day, (iii) a TARGET Business Day and (iv) a day on
which banks are generally open for business in the relevant place.

 

(F)             Partial Payment

 

If a Paying Agent makes a
partial payment in respect of any Fourth Issuer Note, the Registrar will, in
respect of the relevant Fourth Issuer Note, annotate the register of
noteholders, indicating the amount and date of such payment.

 

(G)            Payment of Interest

 

If interest is not paid
in respect of a Fourth Issuer Note of any class on the date when due and
payable (other than because the due date is not a Business Day (as defined in
Condition 6(E)) or by reason of noncompliance with Condition 6(A)), then such
unpaid interest shall itself bear interest at the Rate of Interest applicable
from time to time to such Fourth Issuer Note until such interest and interest
thereon are available for payment and notice thereof has been duly given in
accordance with Condition 14.

 

7.                     Prescription

 

Claims against the Fourth
Issuer for payment in respect of the Fourth Issuer Notes shall be prescribed
and become void unless made within a period of 10 years from the relevant date
in respect thereof. After the date on which a payment under a Fourth Issuer
Note becomes void in its entirety, no claim may be made in respect thereof. In
this Condition 7, the “relevant date”, in respect of a payment
under a Fourth Issuer Note, is the date on which the payment in respect thereof
first becomes due or (if the full amount of the monies payable in respect of
those payments under all the Fourth Issuer Notes due on or before that date has
not been duly received by the Principal Paying

 

304

 

Agent, the US Paying
Agent or the Note Trustee (as the case may be) on or prior to such date) the date
on which the full amount of such monies having been so received and notice to
that effect is duly given to Fourth Issuer Noteholders in accordance with
Condition 14.

 

8.                     Taxation

 

All payments in respect
of the Fourth Issuer Notes will be made without withholding or deduction for,
or on account of, any present or future taxes, duties or charges of whatsoever
nature unless the Fourth Issuer or any relevant Paying Agent is required by
applicable law to make any payment in respect of the Fourth Issuer Notes
subject to any such withholding or deduction. In that event, the Fourth Issuer
or such Paying Agent shall make such payment after such withholding or
deduction has been made and shall account to the relevant authorities for the
amount so required to be withheld or deducted. Neither any Paying Agent nor the
Fourth Issuer will be obliged to make any additional payments to Fourth Issuer
Noteholders in respect of such withholding or deduction.

 

9.                     Events of
Default

 

(A)             Class A Fourth Issuer
Noteholders

 

The Note Trustee in its
absolute discretion may, and if so requested in writing by the holders of not
less than 25 per cent. in aggregate of the Principal Amount Outstanding of the
Class A Fourth Issuer Notes or if so directed by or pursuant to an Extraordinary
Resolution (as defined in the Fourth Issuer Trust Deed) of the Class A Fourth
Issuer Noteholders shall (subject, in each case, to being indemnified and/or
secured to its satisfaction) give notice (a “Class A Fourth Issuer Note Acceleration
Notice”) to the Fourth Issuer and the Security Trustee declaring the
Fourth Issuer Notes to be due and repayable (and they shall forthwith become
due and repayable) at any time after the happening of any of the following
events (each a “Fourth Issuer Event of Default”) which is continuing or
unwaived:

 

(i)                default being made
for a period of three Business Days in the payment of the principal of or any
interest on any Class A Fourth Issuer Note when and as the same ought to be
paid in accordance with these Conditions; or

 

(ii)             the Fourth Issuer
failing duly to perform or observe any other obligation binding upon it under
the Class A Fourth Issuer Notes, the Fourth Issuer Trust Deed, the Fourth
Issuer Deed of Charge or any other Fourth Issuer Transaction Document and, in
any such case (except where the Note Trustee (or, in the case of the Fourth
Issuer Deed of Charge, the Security Trustee) certifies that, in its sole
opinion, such failure is incapable of remedy when no notice will be required),
such failure is continuing for a period of 20 days following the service by the
Note Trustee (or, in the case of the Fourth Issuer Deed of Charge, the Security
Trustee) on the Fourth Issuer of notice requiring the same to be remedied, and
the Note Trustee has certified in writing that the failure to perform or
observe is, in its sole opinion, materially prejudicial to the interests of the
Class A Fourth Issuer Noteholders; or

 

(iii)          the Fourth Issuer,
otherwise than for the purposes of such amalgamation or reconstruction as is
referred to in subparagraph (iv) below, ceases or threatens to cease to carry
on its business or a substantial part of its business or the Fourth Issuer is
deemed unable to pay its debts within the meaning of Section 123 (1) (a), (b),
(c) or (d) of the Insolvency Act 1986 (as that section may be amended, modified
or re-enacted) or becomes unable to pay its debts as they fall due or the value
of its assets falls to less than the amount of its liabilities (taking into
account for both these purposes its contingent and prospective liabilities) or
otherwise becomes insolvent; or

 

(iv)         an order being made or an
effective resolution being passed for the winding-up of the Fourth Issuer
except a winding-up for the purposes of or pursuant to an amalgamation or
reconstruction the terms of which have previously been approved by the Note
Trustee in writing or by an Extraordinary Resolution of the Class A Fourth
Issuer Noteholders; or

 

(v)            proceedings being
otherwise initiated against the Fourth Issuer under any applicable liquidation,
insolvency, composition, reorganisation or other similar laws (including, but
not limited to, an application for an administration order, the filing of
documents with the court for the appointment of an administrator, the service
of a notice of intention to appoint an administrator or the taking of any steps
to appoint an administrator) and (except in the case of an application for

 

305

 

an administration order
or the taking of any steps to appoint an administrator) such proceedings are
not, in the sole opinion of the Note Trustee, being disputed in good faith with
a reasonable prospect of success, or an administration order being granted or
the appointment of an administrator taking effect or an administrative receiver
or other receiver, liquidator or other similar official being appointed in
relation to the Fourth Issuer or in relation to the whole or any substantial
part of the undertaking or assets of the Fourth Issuer, or an encumbrancer
taking possession of the whole or any substantial part of the undertaking or
assets of the Fourth Issuer, or a distress, execution, diligence or other
process being levied or enforced upon or sued out against the whole or any
substantial part of the undertaking or assets of the Fourth Issuer and such
possession or process (as the case may be) not being discharged or not
otherwise ceasing to apply within 30 days, or the Fourth Issuer initiating or
consenting to judicial proceedings relating to itself under applicable liquidation,
insolvency, composition, reorganisation or other similar laws or making a
conveyance or assignment for the benefit of its creditors generally or taking
steps with a view to obtaining a moratorium in respect of any indebtedness; or

 

(vi)         if a Fourth Issuer
Intercompany Loan Acceleration Notice is served under the Fourth Issuer
Intercompany Loan Agreement, while any of the Class A Fourth Issuer Notes is
outstanding.

 

(B)             Class B Fourth Issuer
Noteholders

 

This Condition 9(B) shall
have no effect if, and for as long as, any Class A Fourth Issuer Notes are
outstanding. Subject thereto, for so long as any Class B Fourth Issuer Notes
are outstanding, the Note Trustee in its absolute discretion may, and if so
requested in writing by the holders of not less than 25 per cent. in aggregate
Principal Amount Outstanding of the Class B Fourth Issuer Notes or if so
directed by or pursuant to an Extraordinary Resolution of the Class B Fourth
Issuer Noteholders shall (subject, in each case, to being indemnified and/or
secured to its satisfaction) give notice (a “Class B Fourth Issuer Note Acceleration
Notice”) to the Fourth Issuer and the Security Trustee declaring the
Fourth Issuer Notes to be due and repayable (and they shall forthwith become
due and repayable) at any time after the happening of any of the following
events:

 

(i)                default being made
for a period of three Business Days in the payment of the principal of or any
interest on any Class B Fourth Issuer Note when and as the same ought to be
paid in accordance with these Conditions; or

 

(ii)             the occurrence of any
of the events in Condition 9(A)(ii), (iii), (iv), (v) or (vi) above
provided that the references in Condition 9(A)(ii), Condition 9(A)(iv) and Condition 9(A)(vi)
to Class A Fourth Issuer Notes and Class A Fourth Issuer Noteholders shall be
read as references to Class B Fourth Issuer Notes and Class B Fourth Issuer
Noteholders respectively.

 

(C)            Class M Fourth Issuer
Noteholders

 

This Condition 9(C)
shall have no effect if, and for as long as, any Class A Fourth Issuer Notes or
Class B Fourth Issuer Notes are outstanding. Subject thereto, for so long as
any Class M Fourth Issuer Notes are outstanding, the Note Trustee in its
absolute discretion may, and if so requested in writing by the holders of not less
than 25 per cent. in aggregate Principal Amount Outstanding of the Class M
Fourth Issuer Notes or if so directed by or pursuant to an Extraordinary
Resolution of the Class M Fourth Issuer Noteholders shall (subject, in each
case, to being indemnified and/or secured to its satisfaction) give notice (a “Class M
Fourth Issuer Note Acceleration Notice”) to the Fourth Issuer and
the Security Trustee declaring the Fourth Issuer Notes to be due and repayable
(and they shall forthwith become due and repayable) at any time after the
happening of any of the following events:

 

(i)                default being made
for a period of three Business Days in the payment of the principal of or any
interest on any Class M Fourth Issuer Note when and as the same ought to be
paid in accordance with these Conditions; or

 

(ii)             the occurrence of any
of the events in Condition 9(A)(ii), (iii), (iv), (v) or (vi) above
provided that the references in Condition 9(A)(ii), Condition 9(A)(iv) and Condition 9(A)(vi)
to Class A Fourth Issuer Notes and Class A Fourth Issuer Noteholders shall be
read as references to Class M Fourth Issuer Notes and Class M Fourth Issuer
Noteholders respectively.

 

(D)            Class C Fourth Issuer
Noteholders

 

This Condition 9(D)
shall have no effect if, and for as long as, any Class A Fourth Issuer Notes,
Class B Fourth Issuer Notes or Class M Fourth Issuer Notes are outstanding.
Subject thereto, for so

 

306

 

long as any Class C
Fourth Issuer Notes are outstanding, the Note Trustee in its absolute
discretion may, and if so requested in writing by the holders of not less than
25 per cent. in aggregate Principal Amount Outstanding of the Class C Fourth
Issuer Notes or if so directed by or pursuant to an Extraordinary Resolution of
the Class C Fourth Issuer Noteholders shall (subject, in each case, to being
indemnified and/or secured to its satisfaction) give notice (a “Class C
Fourth Issuer Note Acceleration Notice”) to the Fourth Issuer and
the Security Trustee declaring the Fourth Issuer Notes to be due and repayable
(and they shall forthwith become due and repayable) at any time after the
happening of any of the following events:

 

(i)                default being made
for a period of three Business Days in the payment of the principal of or any
interest on any Class C Fourth Issuer Note when and as the same ought to be
paid in accordance with these Conditions: or

 

(ii)             the occurrence of any
of the events in Condition 9(A)(ii), (iii), (iv), (v) or (vi) above provided
that the references in Condition 9(A)(ii), Condition 9(A)(iv) and Condition
9(A)(vi) to Class A Fourth Issuer Notes and Class A Fourth Issuer Noteholders
shall be read as references to Class C Fourth Issuer Notes and Class C Fourth
Issuer Noteholders respectively.

 

(E)             Following Service of
a Fourth Issuer Note Acceleration Notice

 

In this Condition 9(E),
a “Fourth
Issuer Note Acceleration Notice” means any of the Class A Fourth
Issuer Note Acceleration Notice, the Class B Fourth Issuer Note Acceleration
Notice, the Class M Fourth Issuer Note Acceleration Notice and the Class C
Fourth Issuer Note Acceleration Notice. For the avoidance of doubt, upon any
Fourth Issuer Note Acceleration Notice being given by the Note Trustee in
accordance with this Condition 9, all the Fourth Issuer Notes then outstanding
shall immediately become due and repayable, without further action or
formality, at their Principal Amount Outstanding together with accrued interest
as provided in the Fourth Issuer Trust Deed.

 

10.              Enforcement of
Fourth Issuer Notes

 

Each of the Note Trustee
and the Security Trustee may, at its discretion and without notice at any time
and from time to time, take such steps and institute such proceedings against
the Fourth Issuer or any other person as it may think fit to enforce the
provisions of (in the case of the Note Trustee) the Fourth Issuer Notes or the
Fourth Issuer Trust Deed (including these Conditions) or (in the case of the
Security Trustee) the Fourth Issuer Deed of Charge or (in either case) any of
the other Fourth Issuer Transaction Documents. The Security Trustee may, at its
discretion and without notice, at any time after the Fourth Issuer Security has
become enforceable, take such steps as it may think fit to enforce the Fourth
Issuer Security. Neither the Note Trustee nor the Security Trustee shall be
bound to take any such proceedings or steps unless:

 

(i)                (subject in all
cases to restrictions contained in the Fourth Issuer Trust Deed or, as the case
may be, the Fourth Issuer Deed of Charge to protect the interests of any higher
ranking class of Fourth Issuer Noteholders) it shall have been so directed by
an Extraordinary Resolution of the Class A Fourth Issuer Noteholders, the Class
B Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders or the Class
C Fourth Issuer Noteholders or so requested in writing by the holders of at
least 25 per cent. in Principal Amount Outstanding of the Class A Fourth Issuer
Notes, the Class B Fourth Issuer Notes, the Class M Fourth Issuer Notes or the
Class C Fourth Issuer Notes or, in the case of the Security Trustee (subject to
restrictions contained in the Fourth Issuer Deed of Charge to protect the
interests of the Class A Fourth Issuer Noteholders, the Class B Fourth Issuer
Noteholders, the Class M Fourth Issuer Noteholders or the Class C Fourth Issuer
Noteholders), it has been so directed by the Note Trustee acting on the
instructions of an Extraordinary Resolution of Noteholders of the relevant
class, or so requested by any other Fourth Issuer Secured Creditor; and

 

(ii)             it shall have been
indemnified and/or secured to its satisfaction.

 

Amounts available for
distribution after enforcement of the Fourth Issuer Security shall be
distributed in accordance with the terms of the Fourth Issuer Deed of Charge.

 

No Fourth Issuer
Noteholder may institute any proceedings against the Fourth Issuer to enforce
its rights under or in respect of the Fourth Issuer Notes or the Fourth Issuer
Trust Deed unless (1) the Note Trustee or the Security Trustee, as the case may
be, has become bound to institute proceedings and has failed to do so within a
reasonable time and (2) the failure is continuing. Notwithstanding the previous
sentence and notwithstanding any other provision of the Fourth Issuer Trust
Deed, the right

 

307

 

of any Fourth Issuer
Noteholder to receive payment of principal of and interest on its Fourth Issuer
Notes on or after the due date for the principal or interest, or to institute
suit for the enforcement of payment of that interest or principal, may not be
impaired or affected without the consent of that Fourth Issuer Noteholder. In
addition, no Class B Fourth Issuer Noteholder, the Class M Fourth Issuer
Noteholder or Class C Fourth Issuer Noteholder will be entitled to take
proceedings for the winding up or administration of the Fourth Issuer unless:

 

•                     there are no
outstanding Fourth Issuer Notes of a class with higher priority; or

 

•                     if Fourth
Issuer Notes of a class with higher priority are outstanding, there is consent
of holders of at least one quarter of the aggregate principal amount
outstanding of the class or classes of Fourth Issuer Notes with higher
priority.

 

If, upon the Fourth
Issuer Security having been enforced and realised to the maximum possible
extent as certified by the Security Trustee to the Note Trustee after payment
of all other claims ranking in priority to the Class B Fourth Issuer Notes, the
Class M Fourth Issuer Notes and the Class C Fourth Issuer Notes (as the case
may be) under the Fourth Issuer Deed of Charge, the remaining proceeds of such
enforcement are insufficient to pay in full all principal and interest and
other amounts whatsoever due in respect of the Class B Fourth Issuer Notes, the
Class M Fourth Issuer Notes and the Class C Fourth Issuer Notes (as the case
may be) and all other claims ranking pari passu therewith, then the Class B
Fourth Issuer Noteholders, the Class M Fourth Issuer Notes and/or the Class C
Fourth Issuer Noteholders (as the case may be) shall, be forthwith paid their
respective shares of such remaining proceeds (as determined in accordance with
the provisions of the Fourth Issuer Deed of Charge). On the date of such
payment (the “Option Exercise Date”), the Note Trustee (on behalf of all of
the Class B Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders
and/or the Class C Fourth Issuer Noteholders (as the case may be)) will, at the
request of Permanent PECOH Limited (the “Post Enforcement Call Option Holder”),
transfer all (but not some only) of the Class B Fourth Issuer Notes, the Class
M Fourth Issuer Notes and/or the Class C Fourth Issuer Notes (as the case may
be) to the Post Enforcement Call Option Holder for a nominal amount only
pursuant to the option granted to it by the Note Trustee (as agent for the
Fourth Issuer Noteholders) pursuant to a post enforcement call option agreement
(the “Fourth
Issuer Post Enforcement Call Option Agreement”) dated on or about
the Closing Date between the Fourth Issuer, the Post Enforcement Call Option
Holder, the Note Trustee and the Security Trustee. Immediately upon such
transfer, no such former Class B Fourth Issuer Noteholder, Class M Fourth
Issuer Noteholder or Class C Fourth Issuer Noteholder shall have any further
interest in the Class B Fourth Issuer Notes, the Class M Fourth Issuer Notes or
the Class C Fourth Issuer Notes (as the case may be). Each of the Class B
Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders and the Class
C Fourth Issuer Noteholders acknowledges that the Note Trustee has the
authority and the power to bind the Fourth Issuer Noteholders in accordance
with the terms and conditions set out in the Fourth Issuer Post Enforcement
Call Option Agreement and each Class B Fourth Issuer Noteholder, Class M Fourth
Issuer Noteholder or Class C Fourth Issuer Noteholder (as the case may be), by
subscribing for or purchasing Class B Fourth Issuer Notes, the Class M Fourth
Issuer Notes or Class C Fourth Issuer Notes (as the case may be), agrees to be
so bound.

 

11.              Meetings of Fourth
Issuer Noteholders, Modifications and Waiver

 

(A)             Quorum

 

The Fourth Issuer Trust
Deed contains provisions for convening meetings of Fourth Issuer Noteholders of
any series and/or class to consider any matter affecting their interests,
including the sanctioning by Extraordinary Resolution of a modification of the
Fourth Issuer Notes (including these Conditions) or a modification to the
provisions of any of the Fourth Issuer Transaction Documents.

 

(1)                Class
A Fourth Issuer Notes

 

The Fourth Issuer Trust
Deed provides that:

 

(i)                a resolution
which, in the sole opinion of the Note Trustee, affects the interests of the
holders of one series only of the Class A Fourth Issuer Notes shall be deemed
to have been duly passed if passed at a meeting of the holders of the Class A
Fourth Issuer Notes of that series;

 

(ii)             a resolution which,
in the sole opinion of the Note Trustee, affects the interests of the holders
of any two or more series classes of the Class A Fourth Issuer Notes but does
not give rise to a conflict of interest between the holders of such two or more
series of the Class A Fourth

 

308

 

Issuer Notes, shall be
deemed to have been duly passed if passed at a single meeting of the holders of
such two or more series of the Class A Fourth Issuer Notes; and

 

(iii)          a resolution which, in
the sole opinion of the Note Trustee, affects the interests of the holders of
any two or more series of the Class A Fourth Issuer Notes and gives or may give
rise to a conflict of interest between the holders of such two or more series
of the Class A Fourth Issuer Notes, shall be deemed to have been duly passed
only if, in lieu of being passed at a single meeting of the holders of such two
or more series of the Class A Fourth Issuer Notes, it shall be duly passed at
separate meetings of the holders of such two or more series of the Class A
Fourth Issuer Notes.

 

In the case of a single
meeting of the holders of two or more series of the Class A Fourth Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class A Fourth Issuer Note denominated in Dollars shall be
converted into Sterling at the relevant Fourth Issuer Dollar Currency Exchange
Rate and the Principal Amount Outstanding of any Class A Fourth Issuer Note
denominated in Euro shall be converted into Sterling at the relevant Fourth
Issuer Euro Currency Exchange Rate.

 

The Fourth Issuer Trust
Deed contains provisions similar to those in the preceding two paragraphs in
relation to requests in writing from Class A Fourth Issuer Noteholders upon
which the Note Trustee is bound to act.

 

(2)                Class
B Fourth Issuer Notes

 

The Fourth Issuer Trust
Deed provides that:

 

(i)                a resolution
which, in the sole opinion of the Note Trustee, affects the interests of the holders
of one series only of the Class B Fourth Issuer Notes shall be deemed to have
been duly passed if passed at a meeting of the holders of the Class B Fourth
Issuer Notes of that series;

 

(ii)             a resolution which,
in the sole opinion of the Note Trustee, affects the interests of the holders
of any two or more series of the Class B Fourth Issuer Notes but does not give
rise to a conflict of interest between the holders of such two or more series
of the Class B Fourth Issuer Notes, shall be deemed to have been duly passed if
passed at a single meeting of the holders of such two or more series of the
Class B Fourth Issuer Notes; and

 

(iii)          a resolution which, in
the sole opinion of the Note Trustee, affects the interests of the holders of
any two or more series of the Class B Fourth Issuer Notes and gives or may give
rise to a conflict of interest between the holders of such two or more series
of the Class B Fourth Issuer Notes, shall be deemed to have been duly passed
only if, in lieu of being passed at a single meeting of the holders of such two
or more series of the Class B Fourth Issuer Notes, it shall be duly passed at
separate meetings of the holders of such two or more series of the Class B
Fourth Issuer Notes.

 

In the case of a single
meeting of the holders of two or more series of the Class B Fourth Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class B Fourth Issuer Note denominated in Dollars shall be
converted into Sterling at the relevant Fourth Issuer Dollar Currency Exchange
Rate and the Principal Amount Outstanding of any Class B Fourth Issuer Note
denominated in Euro shall be converted into Sterling at the relevant Fourth
Issuer Euro Currency Exchange Rate.

 

The Fourth Issuer Trust
Deed contains provisions similar to those in the preceding two paragraphs in
relation to requests in writing from Class B Fourth Issuer Noteholders upon
which the Note Trustee is bound to act.

 

(3)                Class
M Fourth Issuer Notes

 

The Fourth Issuer Trust
Deed provides that:

 

(i)                a resolution
which, in the sole opinion of the Note Trustee, affects the interests of the
holders of one series only of the Class M Fourth Issuer Notes shall be deemed
to have been duly passed if passed at a meeting of the holders of the Class M
Fourth Issuer Notes of that series;

 

(ii)             a resolution which,
in the sole opinion of the Note Trustee, affects the interests of the holders
of any two or more series of the Class M Fourth Issuer Notes but does not give
rise to a

 

309

 

conflict of interest
between the holders of such two or more series of the Class M Fourth Issuer
Notes, shall be deemed to have been duly passed if passed at a single meeting
of the holders of such two or more series of the Class M Fourth Issuer Notes;
and

 

(iii)          a resolution which, in
the sole opinion of the Note Trustee, affects the interests of the holders of
any two or more series of the Class M Fourth Issuer Notes and gives or may give
rise to a conflict of interest between the holders of such two or more series
of the Class M Fourth Issuer Notes, shall be deemed to have been duly passed
only if, in lieu of being passed at a single meeting of the holders of such two
or more series of the Class M Fourth Issuer Notes, it shall be duly passed at
separate meetings of the holders of such two or more series of the Class M
Fourth Issuer Notes.

 

In the case of a single
meeting of the holders of two or more series of the Class M Fourth Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class M Fourth Issuer Note denominated in Dollars shall be
converted into Sterling at the relevant Fourth Issuer Dollar Currency Exchange
Rate and the Principal Amount Outstanding of any Class M Fourth Issuer Note
denominated in Euro shall be converted into Sterling at the relevant Fourth
Issuer Euro Currency Exchange Rate.

 

The Fourth Issuer Trust
Deed contains provisions similar to those in the preceding two paragraphs in
relation to requests in writing from Class M Fourth Issuer Noteholders upon
which the Note Trustee is bound to act.

 

(4)                Class
C Fourth Issuer Notes

 

The Fourth Issuer Trust
Deed provides that:

 

(i)                a resolution
which, in the sole opinion of the Note Trustee, affects the interests of the
holders of one series only of the Class C Fourth Issuer Notes shall be deemed
to have been duly passed if passed at a meeting of the holders of the Class C
Fourth Issuer Notes of that series;

 

(ii)             a resolution which,
in the sole opinion of the Note Trustee, affects the interests of the holders
of any two or more series of the Class C Fourth Issuer Notes but does not give
rise to a conflict of interest between the holders of such two or more series
of the Class C Fourth Issuer Notes, shall be deemed to have been duly passed if
passed at a single meeting of the holders of such two or more series of the
Class C Fourth Issuer Notes; and

 

(iii)          a resolution which, in
the sole opinion of the Note Trustee, affects the interests of the holders of
any two or more series of the Class C Fourth Issuer Notes and gives or may give
rise to a conflict of interest between the holders of such two or more series
of the Class C Fourth Issuer Notes, shall be deemed to have been duly passed
only if, in lieu of being passed at a single meeting of the holders of such two
or more series of the Class C Fourth Issuer Notes, it shall be duly passed at
separate meetings of the holders of such two or more series of the Class C
Fourth Issuer Notes.

 

In the case of a single
meeting of the holders of two or more series of the Class C Fourth Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class C Fourth Issuer Note denominated in Dollars shall be
converted into Sterling at the relevant Fourth Issuer Dollar Currency Exchange
Rate and the Principal Amount Outstanding of any Class C Fourth Issuer Note
denominated in Euro shall be converted into Sterling at the relevant Fourth
Issuer Euro Currency Exchange Rate.

 

The Fourth Issuer Trust
Deed contains provisions similar to those in the preceding two paragraphs in
relation to requests in writing from Class C Fourth Issuer Noteholders upon
which the Note Trustee is bound to act.

 

(5)                General

 

In each of the paragraphs
(1) to (4) above, subject as provided below, the quorum at any meeting of the
Fourth Issuer Noteholders of any series or class or classes for passing an
Extraordinary Resolution shall be two or more persons holding or representing
not less than 50 per cent. of the aggregate Principal Amount Outstanding of the
Fourth Issuer Notes of that series or class or classes or, at any adjourned
meeting, two or more persons being or representing Fourth Issuer Noteholders of
that series or class or classes whatever the aggregate Principal Amount
Outstanding of relevant Fourth Issuer Notes so held or represented.

 

310

 

Subject to section 316(b)
of the Trust Indenture Act, the quorum at any meeting of the Fourth Issuer
Noteholders of any series or class or classes for passing an Extraordinary
Resolution which includes the sanctioning of a modification which would have
the effect of altering the amount or timing of payments of principal on the
Fourth Issuer Notes of such series or class or classes or the rate, the day or
the timing of payments of interest thereon or of the currency of payment of the
Fourth Issuer Notes of such series or class or classes or altering the priority
of payments or altering the quorum or majority required in relation to this
exception (a “Basic Terms Modification”), shall be one or more persons
holding or representing not less than 75 per cent. or, at any adjourned and
reconvened meeting, not less than 25 per cent. in Principal Amount Outstanding
of the classes of Fourth Issuer Notes of each series for the time being
outstanding.

 

A resolution signed by or
on behalf of all the Fourth Issuer Noteholders of the relevant series or class
shall for all purposes be as valid and effective as an Extraordinary Resolution
passed at a meeting of such series or class of Fourth Issuer Noteholders.

 

(B)             Limitations on Class
B Fourth Issuer Noteholders

 

No Extraordinary
Resolution of the Class B Fourth Issuer Noteholders (other than any such
Extraordinary Resolution referred to in paragraph (E) below) shall take effect
for any purpose while any Class A Fourth Issuer Notes remain outstanding unless
it shall have been sanctioned by an Extraordinary Resolution of the Class A
Fourth Issuer Noteholders or the Note Trustee is of the opinion that it would
not be materially prejudicial to the interests of the Class A Fourth Issuer
Noteholders.

 

(C)            Limitations on Class M
Fourth Issuer Noteholders

 

No Extraordinary
Resolution of the Class M Fourth Issuer Noteholders (other than any such
Extraordinary Resolution referred to in paragraph (E) below) shall take effect
for any purpose while any Class A Fourth Issuer Notes or any Class B Fourth
Issuer Notes remain outstanding unless it shall have been sanctioned by an
Extraordinary Resolution of the Class A Fourth Issuer Noteholders and/or the
Class B Fourth Issuer Noteholders (as the case may be) or the Note Trustee is
of the opinion that it would not be materially prejudicial to the interests of
the Class A Fourth Issuer Noteholders and/or the Class B Fourth Issuer
Noteholders (as the case may be).

 

(D)            Limitations on Class C
Fourth Issuer Noteholders

 

No Extraordinary
Resolution of the Class C Fourth Issuer Noteholders (other than any such
Extraordinary Resolution referred to in paragraph (E) below) shall take effect
for any purpose while any Class A Fourth Issuer Notes, Class B Fourth Issuer
Notes or Class M Fourth Issuer Notes remain outstanding unless it shall have
been sanctioned by an Extraordinary Resolution of the Class A Fourth Issuer
Noteholders, the Class B Fourth Issuer Noteholders and/or the Class M Fourth
Issuer Noteholders (as the case may be) or the Note Trustee is of the opinion
that it would not be materially prejudicial to the interests of the Class A
Fourth Issuer Noteholders, the Class B Fourth Issuer Noteholders and/or the
Class M Fourth Issuer Notes (as the case may be).

 

(E)             Approval of
Modifications and Waivers by Class B Fourth Issuer Noteholders, Class M Fourth
Issuer Noteholders and Class C Fourth Issuer Noteholders

 

(i)                No Extraordinary
Resolution of the Class A Fourth Issuer Noteholders to sanction a modification
of, or any waiver or authorisation of any breach or proposed breach of, any of
the provisions of the Fourth Issuer Transaction Documents or these Conditions
shall take effect unless it shall have been sanctioned by an Extraordinary
Resolution of the Class B Fourth Issuer Noteholders, an Extraordinary
Resolution of the Class M Fourth Issuer Noteholders and an Extraordinary
Resolution of the Class C Fourth Issuer Noteholders or the Note Trustee is of
the opinion that it would not be materially prejudicial to the interests of the
Class B Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders and
the Class C Fourth Issuer Noteholders.

 

(ii)             After the Class A
Fourth Issuer Notes have been fully redeemed, no Extraordinary Resolution of
the Class B Fourth Issuer Noteholders to sanction a modification of, or any
waiver or authorisation of any breach or proposed breach of, any of the
provisions of the Transaction Documents or these Conditions shall take effect
unless it shall have been sanctioned by an Extraordinary Resolution of the
Class M Fourth Issuer Noteholders and the Class C Fourth Issuer Noteholders or
the Note Trustee is of the opinion that it would not be materially prejudicial

 

311

 

to the interests of the
Class M Fourth Issuer Noteholders and the Class C Fourth Issuer Noteholders.

 

(iii)          After the Class A Fourth
Issuer Notes and the Class B Fourth Issuer Notes have been fully redeemed, no
Extraordinary Resolution of the Class M Fourth Issuer Noteholders to sanction a
modification of, or any waiver or authorisation of any breach or proposed
breach of, any of the provisions of the Transaction Documents or these Conditions
shall take effect unless it shall have been sanctioned by an Extraordinary
Resolution of the Class C Fourth Issuer Noteholders or the Note Trustee is of
the opinion that it would not be materially prejudicial to the interests of the
Class C Fourth Issuer Noteholders.

 

(F)             Modifications and
Determinations by Note Trustee

 

The Note Trustee may
agree to, or authorise, without the consent of the Fourth Issuer Noteholders,
(i) any modification of, or to the waiver or authorisation of any breach or
proposed breach of, these Conditions or any of the Fourth Issuer Transaction
Documents, which is not, in the sole opinion of the Note Trustee, materially
prejudicial to the interests of the Fourth Issuer Noteholders or (ii) any
modification of these Conditions or any of the Fourth Issuer Transaction
Documents which, in the sole opinion of the Note Trustee, is to correct a
manifest error or an error established as such to the satisfaction of the Note
Trustee or is of a formal, minor or technical nature (and for the avoidance of
doubt, the Note Trustee shall be entitled to assume, without further
investigation or inquiry, that such modification, waiver or authorisation will
not be materially prejudicial to the interests of the Fourth Issuer Noteholders
if each of the Rating Agencies has confirmed in writing that the then current
ratings of the applicable series and/or class or classes of Fourth Issuer Notes
would not be adversely affected by such modification, waiver or authorisation).

 

The Note Trustee may
also, without the consent of the Fourth Issuer Noteholders, determine that any
Fourth Issuer Event of Default shall not, or shall not subject to specified
conditions, be treated as such. Any such modification, waiver, authorisation or
determination shall be binding on the Fourth Issuer Noteholders and, unless the
Note Trustee agrees otherwise, any such modification shall be notified to the
Fourth Issuer Noteholders and the Rating Agencies in accordance with Condition
14 as soon as practicable thereafter.

 

(G)            Exercise of Note
Trustee’s Functions

 

Where the Note Trustee is
required, in connection with the exercise of its powers, trusts, authorities,
duties and discretions, to have regard to the interests of the Fourth Issuer
Noteholders of any series or class, it shall have regard to the interests of
such Fourth Issuer Noteholders as a class and, in particular but without
prejudice to the generality of the foregoing, the Note Trustee shall not have
regard to, or be in any way liable for, the consequences of such exercise for
individual Fourth Issuer Noteholders resulting from their being for any purpose
domiciled or resident in, or otherwise connected with, or subject to the
jurisdiction of, any particular territory. In connection with any such
exercise, the Note Trustee shall not be entitled to require, and no Fourth
Issuer Noteholder shall be entitled to claim, from the Fourth Issuer or any
other person, any indemnification or payment in respect of any tax consequence
of any such exercise upon individual Fourth Issuer Noteholders.

 

12.              Indemnification of
the Note Trustee and the Security Trustee

 

The Fourth Issuer Trust
Deed and the Fourth Issuer Deed of Charge contain provisions governing the
responsibility (and relief from responsibility) of the Note Trustee and the
Security Trustee, respectively, and providing for their indemnification in
certain circumstances, including provisions relieving them from taking
enforcement proceedings or, in the case of the Security Trustee, enforcing the
Fourth Issuer Security unless indemnified and/or secured to their satisfaction.

 

The Note Trustee and the
Security Trustee and their related companies are entitled to enter into
business transactions with the Fourth Issuer, the Fourth Issuer Cash Manager
and/or the related companies of any of them and to act as note trustee and
security trustee, respectively, for the holders of any notes issued by a new
issuer and/or any other person who is a party to any Fourth Issuer Transaction
Document or whose obligations are comprised in the Fourth Issuer Security
and/or any of their subsidiary or associated companies without accounting for
any profit resulting therefrom.

 

Neither the Note Trustee
nor the Security Trustee will be responsible for any loss, expense or liability
which may be suffered as a result of any assets comprised in the Fourth Issuer
Security, or any deeds or documents of title thereto, being uninsured or
inadequately insured or being held by

 

312

 

clearing organisations or
their operators or by intermediaries such as banks, brokers or other similar
persons on behalf of the Note Trustee and/or the Security Trustee.

 

13.              Replacement of
Fourth Issuer Notes

 

If any Fourth Issuer Note
is mutilated, defaced, lost, stolen or destroyed, it may be replaced at the
specified office of the Registrar. Replacement of any mutilated, defaced, lost,
stolen or destroyed Fourth Issuer Note will only be made on payment of such
costs as may be incurred in connection therewith and on such terms as to evidence
and indemnity as the Fourth Issuer may reasonably require. Mutilated or defaced
Fourth Issuer Notes must be surrendered before new ones will be issued.

 

14.              Notice to Fourth
Issuer Noteholders

 

(A)             Publication of Notice

 

Any notice to Fourth
Issuer Noteholders shall be validly given if published in:

 

(i)                the Financial
Times; and

 

(ii)             for so long as
amounts are outstanding in respect of the Dollar Fourth Issuer Notes, the New
York Times;

 

or, if any such newspaper shall cease to be published or, if timely publication
therein is not practicable, in such other English newspaper or newspapers as
the Note Trustee shall approve in advance having a general circulation in the
United Kingdom and the United States, provided that if, at any time, the Fourth
Issuer procures that the information concerned in such notice shall appear on a
page of the Reuters screen, or any other medium for electronic display of data
as may be previously approved in writing by the Note Trustee and notified to
Fourth Issuer Noteholders (in each case a “Relevant Screen”), publication in the
newspapers set out above or such other newspaper or newspapers shall not be
required with respect to such information. Any such notice shall be deemed to
have been given on the date of such publication or, if published more than once
or on different dates, on the first date on which publication shall have been
made in the newspaper or newspapers in which (or on the Relevant Screen on
which) publication is required.

 

In addition, notices to
Fourth Issuer Noteholders will be sent to them by first class post (or its
equivalent) or (if posted to an address outside the United Kingdom) by airmail
at the respective addresses on the Register. Any such notice will be deemed to
have been given on the fourth day after the date of posting.

 

Whilst the Fourth Issuer
Notes are represented by Global Fourth Issuer Notes, notices to Fourth Issuer
Noteholders will be valid if published as described above, or, at the option of
the Fourth Issuer, if delivered to DTC in the case of the Dollar Global Fourth
Issuer Notes, or to Euroclear and/or Clearstream, Luxembourg in the case of the
Reg S Global Fourth Issuer Notes, for communication by them to Fourth Issuer
Noteholders. Any notice delivered to DTC, Euroclear and/or Clearstream,
Luxembourg, as aforesaid shall be deemed to have been given on the day of such
delivery.

 

(B)             Note Trustee’s
Discretion to Select Alternative Method

 

The Note Trustee shall be
at liberty to sanction some other method of giving notice to the Fourth Issuer
Noteholders or category of them if, in its sole opinion, such other method is
reasonable having regard to market practice then prevailing and to the
requirements of the stock exchanges, competent listing authorities and/or
quotation systems on or by which the Fourth Issuer Notes are then listed,
quoted and/or traded and provided that notice of such other method is given to
the Fourth Issuer Noteholders in such manner as the Note Trustee shall require.

 

15.              Rating Agencies

 

If:

 

(i)                a confirmation of
rating or other response by a Rating Agency is a condition to any action or
step under any Transaction Document; and

 

(ii)             a written request for
such confirmation or response is delivered to each Rating Agency by the Fourth
Issuer (copied to the Note Trustee and/or the Security Trustee, as applicable)
and

 

313

 

either one or more Rating
Agency (each a “Non-Responsive Rating Agency”) indicates that it does not
consider such confirmation or response necessary in the circumstances or within
30 days of delivery of such request elicits no confirmation or response and/or
such request elicits no statement by such Rating Agency that such confirmation
or response could not be given; and

 

(iii)          at least one Rating
Agency gives such a confirmation or response based on the same facts,

 

then such condition shall be deemed to be modified with respect to the
facts set out in the request referred to in (ii) so that there shall be no
requirement for the confirmation or response from the Non-Responsive Rating
Agency.

 

The Note Trustee and/or
the Security Trustee, as applicable, shall be entitled to treat as conclusive a
certificate by any director, officer or employee of the Fourth Issuer, Funding
1, the Seller, any investment bank or financial adviser acting in relation to
the Fourth Issuer Notes as to any matter referred to in (ii) in the absence of
manifest error or the Note Trustee and/or the Security Trustee, as applicable,
having facts contradicting such certificates specifically drawn to his
attention and the Note Trustee and/or the Security Trustee, as applicable,
shall not be responsible for any loss, liability, costs, damages, expenses or
inconvenience that may be caused as a result.

 

16.              Governing Law and
Jurisdiction

 

The Fourth Issuer
Transaction Documents and the Fourth Issuer Notes are governed by, and shall be
construed in accordance with, English law. The courts of England are to have
non-exclusive jurisdiction to settle any disputes which may arise out of or in
connection with the Fourth Issuer Notes and the Fourth Issuer Transaction
Documents. The Fourth Issuer and the other parties to the Fourth Issuer
Transaction Documents irrevocably submit therein to the nonexclusive
jurisdiction of the courts of England.

 

17.              Definitions

 

Unless otherwise defined
in these Conditions or unless the context otherwise requires, in these
Conditions the following words shall have the following meanings and any other
capitalised terms used in these Conditions shall have the meanings ascribed to
them in the Master Definitions and Construction Schedules:

 

“Asset Trigger Event” means
the event that occurs when there is a positive balance on the AAA Principal
Deficiency Sub-Ledger. The terms of an Asset Trigger Event may change if
Funding 1 enters into a new intercompany loan agreement;

 

“Authorised Investments” means
(i) Sterling gilt edged investments and (ii) Sterling demand or time deposits,
certificates of deposit and short term debt obligations (including commercial
paper) (which may include deposits in any account which earns a rate of
interest related to LIBOR) provided that in all cases such investments have a
maturity date of 90 days or less and mature on or before the next Interest
Payment Date and the short term unsecured, unguaranteed and unsubordinated debt
obligations of the issuing or guaranteeing entity or entity with which the
demand or time deposits are made (being an authorised institution under the
Act) are rated A1+ by Standard and Poor’s, F1+ by Fitch and P1 by Moody’s or which
are otherwise acceptable to the Rating Agencies (if they are notified in
advance) to maintain the current ratings of the Fourth Issuer Notes;

 

“Dollar Fourth Issuer Notes”
means the Series 1 Fourth Issuer Notes, the Series 2 Fourth Issuer Notes and
the Series 3 Fourth Issuer Notes;

 

“Euro Fourth Issuer Notes”
means the Series 4 Fourth Issuer Notes and the Series 5 Class A1 Fourth Issuer
Notes;

 

“Final Maturity Date” means:

 

(i)                                          in
respect of the Series 1 Class A Fourth Issuer Notes, the Interest Payment Date
falling in March 2005;

 

(ii)                                       in
respect of the Series 2 Class A Fourth Issuer Notes. the Interest Payment Date
falling in March 2009;

 

(iii)                                    in
respect of the Series 3 Class A Fourth Issuer Notes, the Interest Payment Date
falling in March 2024;

 

314

 

(iv)                                   in
respect of the Series 4 Class A Fourth Issuer Notes, the Interest Payment Date
falling in March 2034;

 

(v)                                      in
respect of the Series 5 Class A1 Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(vi)                                   in
respect of the Series 5 Class A2 Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(vii)                                in
respect of the Series 1 Class B Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(viii)                             in
respect of the Series 2 Class B Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(ix)                                     in
respect of the Series 3 Class B Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(x)                                        in
respect of the Series 4 Class B Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xi)                                     in
respect of the Series 5 Class B Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xii)                                  in
respect of the Series 1 Class M Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xiii)                               in
respect of the Series 2 Class M Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xiv)                              in
respect of the Series 3 Class M Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xv)                                 in
respect of the Series 4 Class M Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xvi)                              in
respect of the Series 5 Class M Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xvii)                           in
respect of the Series 2 Class C Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

(xviii)                        in respect
of the Series 3 Class C Fourth Issuer Notes, the Interest Payment Date falling
in June 2042; and

 

(xix)                                in
respect of the Series 5 Class C Fourth Issuer Notes, the Interest Payment Date
falling in June 2042;

 

“Fourth Issuer Dollar Currency Exchange
Rate” means the rate at which Dollars are converted to Sterling or,
as the case may be, sterling is converted to Dollars under the relevant Fourth
Issuer Dollar Currency Swap or, if there is no relevant Fourth Issuer Dollar
Currency Swap in effect at such time, the “spot” rate at which Dollars are
converted to Sterling or, as the case may be, Sterling is converted to Dollars
on the foreign exchange markets;

 

“Fourth Issuer Dollar Currency Swap
Agreements” means collectively the ISDA master agreements, schedules
and confirmations (as amended or supplemented from time to time) relating to
the Fourth Issuer Dollar Currency Swaps to be entered into on or before the
Closing Date between the Fourth Issuer, the relevant Fourth Issuer Dollar
Currency Swap Provider and the Security Trustee;

 

“Fourth Issuer Dollar Currency Swap
Providers” means each of the Series 1 Fourth Issuer Dollar Currency
Swap Provider, the Series 2 Fourth Issuer Dollar Currency Swap Provider and the
Series 3 Fourth Issuer Dollar Currency Swap Provider;

 

“Fourth Issuer Dollar Currency Swaps”
means the Sterling-Dollar currency swaps which enable the Fourth Issuer to
receive and pay amounts under the Fourth Issuer Intercompany Loan in sterling
and to receive and pay amounts under the Dollar Fourth Issuer Notes;

 

“Fourth Issuer Euro Currency Exchange
Rate” means the rate at which Euro are converted to Sterling or, as
the case may be, Sterling is converted to Euro under the relevant Fourth Issuer

 

315

 

Euro Currency Swap or, if
there is no relevant Fourth Issuer Euro Currency Swap in effect at such time,
the “spot” rate at which Euro are converted to Sterling or, as the case may be,
Sterling is converted to Euro on the foreign exchange markets;

 

“Fourth Issuer Euro Currency Swap
Agreements” means the ISDA master agreements, schedules and
confirmations (as amended or supplemented from time to time) relating to the
Fourth Issuer Euro Currency Swaps to be entered into on the Closing Date
between the Fourth Issuer, the relevant Fourth Issuer Euro Currency Swap
Provider and the Security Trustee;

 

“Fourth Issuer Euro Currency Swap
Providers” means each of the Series 4 Fourth Issuer Euro Currency
Swap Provider and the Series 5 Fourth Issuer Euro Currency Swap Provider;

 

“Fourth Issuer Euro Currency Swaps”
means the Sterling-Euro currency swaps which enables the Fourth Issuer to
receive and pay amounts under the Fourth Issuer Intercompany Loan in sterling
and to receive and pay amounts under the Euro Fourth Issuer Notes;

 

“Fourth Issuer Intercompany Loan”
means the loan of the Term Advances made by the Fourth Issuer to Funding 1
under the Fourth Issuer Intercompany Loan Agreement on or about the Closing
Date;

 

“Fourth Issuer Intercompany Loan
Agreement” means the Fourth Issuer Intercompany Loan Confirmation
and the Intercompany Loan Terms and Conditions together entered into on or
about the Closing Date by the Fourth Issuer, Funding 1 and the Security
Trustee;

 

“Fourth Issuer Intercompany Loan
Confirmation” means the loan confirmation in respect of the Fourth
Issuer Intercompany Loan Agreement entered into on or about the Closing Date
and made between the Funding 1, the Fourth Issuer and the Security Trustee;

 

“Fourth Issuer Interest Rate Swap
Agreement” means collectively the ISDA Master Agreement, schedule
and confirmation (as amended, supplemented or replaced from time to time)
relating to the Fourth Issuer Interest Rate Swap to be entered into on or
before the Closing Date between the Fourth Issuer, the Fourth Issuer Interest
Rate Swap Provider and the Security Trustee;

 

“Fourth Issuer Interest Rate Swap
Provider” means HBOS Treasury Services plc or such other swap
provider appointed from time to time in relation to the interest rate swap for
the Series 5 Class A1 Fourth Issuer Notes;

 

“Fourth Issuer Interest Rate Swap”
means the fixed-for-floating interest rate swap which will enable the Fourth
Issuer to receive a floating rate of interest from the Series 5 Fourth Issuer
Euro Currency Swap Provider under the Series 5 Fourth Issuer Euro Currency Swap
and pay interest amounts on the Series 5 Class A1 Fourth Issuer Notes with
reference to a fixed rate of interest;

 

“Fourth Issuer Noteholders” means
the holders for the time being of the Fourth Issuer Notes;

 

“Fourth Issuer Notes” means
the Class A Fourth Issuer Notes, the Class B Fourth Issuer Notes, the Class M
Fourth Issuer Notes and the Class C Fourth Issuer Notes;

 

“Fourth Issuer Swap Agreements”
means the Fourth Issuer Dollar Currency Swap Agreements, the Fourth Issuer Euro
Currency Swap Agreements and the Fourth Issuer Interest Rate Swap;

 

“Fourth Issuer Transaction Account”
means the Sterling account in the name of the Fourth Issuer held with Bank of
Scotland situated at 116 Wellington Street, Leeds LS1 4LT (or such other
accounts at such other banks as may from time to time become a Fourth Issuer
Transaction Account in accordance with the Fourth Issuer Transaction
Documents);

 

“Fourth Issuer Transaction Documents”
means the Servicing Agreement, the Mortgages Trust Deed, the Cash Management
Agreement, the Fourth Issuer Corporate Services Agreement, the Funding 1
Corporate Services Agreement, the Fourth Issuer Intercompany Loan Agreement,
the Funding 1 Deed of Charge, the Funding 1 Guaranteed Investment Contract, the
Mortgages Trustee Guaranteed Investment Contract, the Funding 1 Liquidity
Facility Agreement, the Bank Account Agreement, the Fourth Issuer Bank Account
Agreement, the Fourth Issuer Deed of Charge, the Fourth Issuer Trust Deed, the
Fourth Issuer Paying Agent and Agent Bank Agreement, the Fourth Issuer Cash
Management Agreement, the Fourth Issuer Post- Enforcement Call Option
Agreement, the Fourth Start-up Loan Agreement, the Fourth Issuer

 

316

 

Swap Agreements, the
Fourth Issuer Underwriting Agreement, the Fourth Issuer Subscription Agreement
and such other related documents which are referred to in the terms of the
above documents or which relate to the issue of the Fourth Issuer Notes;

 

“Intercompany Loan Terms and Conditions”
means the standard terms and conditions incorporated into the Fourth Issuer
Intercompany Loan Agreement and signed for the purposes of identification by
the Security Trustee, the Agent Bank and Funding 1 on 14th June, 2002;

 

“Non-Asset Trigger Event”
means the occurrence of any of the following events on a Calculation Date: (a)
an Insolvency Event which occurs in relation to the Seller on or about that
Calculation Date; (b) the role of the Seller as Servicer under the Servicing
Agreement is terminated and a new Servicer is not appointed within 60 days; (c)
as at the Calculation Date immediately preceding that Calculation Date, the
Seller Share is equal to or less than the Minimum Seller Share; or (d) the
Outstanding Principal Balance of Loans comprising the Trust Property at that
date (i) during the period from and including the Closing Date to but excluding
the Interest Payment Date in June 2006 is less than £21,500,000,000 or (ii)
during the period from and including the Interest Payment Date in June 2006 to
but excluding the Interest Payment Date in June 2008 is less than
£15,750,000,000. The terms of a Non-Asset Trigger Event may change if Funding 1
enters into a new Intercompany loan agreement;

 

“Rating Agencies” means
Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies
Inc., Moody’s Investors Service Limited and Fitch Ratings Ltd or such other
internationally recognised credit rating agencies from time to time rating the
Fourth Issuer Notes;

 

“Registrar” means Citibank,
N.A. at 5 Carmelite Street, London EC4Y 0PA;

 

“Reg S Fourth Issuer Notes”
means the Series 4 Issuer Notes and the Series 5 Issuer Notes;

 

“Series 1 Class A Fourth Issuer Noteholders”
means the holders for the time being of the Series 1 Class A Fourth Issuer
Notes;

 

“Series 1 Class B Fourth Issuer
Noteholders” means the holders for the time being of the Series 1
Class B Fourth Issuer Notes;

 

“Series 1 Class M Fourth Issuer Noteholders”
means the holders for the time being of the Series 1 Class M Fourth Issuer
Notes;

 

“Series 2 Class A Fourth Issuer
Noteholders” means the holders for the time being of the Series 2
Class A Fourth Issuer Notes;

 

“Series 2 Class B Fourth Issuer Noteholders”
means the holders for the time being of the Series 2 Class B Fourth Issuer
Notes;

 

“Series 2 Class C Fourth Issuer
Noteholders” means the holders for the time being of the Series 2
Class C Fourth Issuer Notes;

 

“Series 2 Class M Fourth Issuer Noteholders”
means the holders for the time being of the Series 2 Class M Fourth Issuer
Notes;

 

“Series 3 Class A Fourth Issuer
Noteholders” means the holders for the time being of the Series 3
Class A Fourth Issuer Notes;

 

“Series 3 Class B Fourth Issuer Noteholders”
means the holders for the time being of the Series 3 Class B Fourth Issuer
Notes;

 

“Series 3 Class C Fourth Issuer
Noteholders” means the holders for the time being of the Series 3
Class C Fourth Issuer Notes;

 

“Series 3 Class M Fourth Issuer Noteholders”
means the holders for the time being of the Series 3 Class M Fourth Issuer
Notes;

 

“Series 4 Class A Fourth Issuer
Noteholders” means the holders for the time being of the Series 4
Class A Fourth Issuer Notes;

 

“Series 4 Class B Fourth Issuer Noteholders”
means the holders for the time being of the Series 4 Class B Fourth Issuer
Notes;

 

“Series 4 Class M Fourth Issuer
Noteholders” means the holders for the time being of the Series 4
Class M Fourth Issuer Notes;

 

317

 

“Series 5 Class A Fourth Issuer
Noteholders” means the holders for the time being of the Series 5
Class A Fourth Issuer Notes;

 

“Series 5 Class B Fourth Issuer
Noteholders” means the holders for the time being of the Series 5
Class B Fourth Issuer Notes;

 

“Series 5 Class C Fourth Issuer
Noteholders” means the holders for the time being of the Series 5
Class C Fourth Issuer Notes;

 

“Series 5 Class M Fourth Issuer
Noteholders” means the holders for the time being of the Series 5
Class M Fourth Issuer Notes;

 

“Series 1 Class A Fourth Issuer Notes”
means the $1,500,000,000 series 1 class A asset backed floating rate Fourth
Issuer Notes due March 2005;

 

“Series 1 Class B Fourth Issuer Notes”
means the $78,100,000 series 1 class B asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 1 Class M Fourth Issuer Notes”
means the $56,500,000 series 1 class M asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 2 Class A Fourth Issuer Notes”
means the $2,400,000,000 series 2 class A asset backed floating rate Fourth
Issuer Notes due March 2009;

 

“Series 2 Class B Fourth Issuer Notes”
means the $100,700,000 series 2 class B asset backed floating rate Fourth
Issuer Notes due June 2042;

 

“Series 2 Class C Fourth Issuer Notes”
means the $59,900,000 series 2 class C asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 2 Class M Fourth Issuer Notes”
means the $82,200,000 series 2 class M asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 3 Class A Fourth Issuer Notes”
means the $1,700,000,000 series 3 class A asset backed floating rate Fourth
Issuer Notes due March 2024;

 

“Series 3 Class B Fourth Issuer Notes”
means the $75,800,000 series 3 class B asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 3 Class C Fourth Issuer Notes”
means the $40,400,000 series 3 class C asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 3 Class M Fourth Issuer Notes”
means the $55,400,000 series 3 class M asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 4 Class A Fourth Issuer Notes”
means the €1,500,000,000 series 4 class A asset backed floating rate Fourth
Issuer Notes due March 2034;

 

“Series 4 Class B Fourth Issuer Notes”
means the €85,000,000 series 4 class B asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 4 Class M Fourth Issuer Notes”
means the €62,500,000 series 4 class M asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 5 Class A Fourth Issuer Notes”
means the Series 5 Class A1 Fourth Issuer Notes and the Series 5 Class A2
Fourth Issuer Notes;

 

“Series 5 Class A1 Fourth Issuer Notes”
means the €750,000,000 series 5 class A1 asset backed fixed-floating rate
Fourth Issuer Notes due June 2042;

 

“Series 5 Class A2 Fourth Issuer Notes”
means the £1,100,000,000 series 5 class A2 asset backed floating rate Fourth
Issuer Notes due June 2042;

 

“Series 5 Class B Fourth Issuer Notes”
means the £43,000,000 series 5 class B asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 5 Class C Fourth Issuer Notes”
means the £32,000,000 series 5 class C asset backed floating rate Fourth Issuer
Notes due June 2042;

 

“Series 5 Class M Fourth Issuer Notes”
means the £54,000,000 series 5 class M asset backed floating rate Fourth Issuer
Notes due June 2042;

 

318

 

“Series 1 Fourth Issuer Dollar Currency
Swap Provider” means Westdeutsche Landesbank Girozentrale, acting
through its London Branch or such other swap provider appointed from time to
time in relation to the Series 1 Fourth Issuer Notes;

 

“Series 2 Fourth Issuer Dollar Currency
Swap Provider” means Citibank N.A., London Branch or such other swap
provider appointed from time to time in relation to the Series 2 Fourth Issuer
Notes;

 

“Series 3 Fourth Issuer Dollar Currency
Swap Provider” means Banque AIG, London Branch or such other swap
provider appointed from time to time in relation to the Series 3 Fourth Issuer
Notes;

 

“Series 4 Fourth Issuer Euro Currency
Swap Provider” means Citibank N.A., London Branch or such other swap
provider appointed from time to time in relation to the Series 4 Fourth Issuer
Notes;

 

“Series 5 Fourth Issuer Euro Currency
Swap Provider” means Swiss Re Financial Products Corporation or such
other swap provider appointed from time to time in relation to the currency swap
for the Series 5 Class A1 Fourth Issuer Notes;

 

“Series 1 Fourth Issuer Notes”
means collectively the Series 1 Class A Fourth Issuer Notes, the Series 1 Class
B Fourth Issuer Notes, the Series 1 Class M Fourth Issuer Notes and the Series
1 Class C Fourth Issuer Notes;

 

“Series 2 Fourth Issuer Notes”
means collectively the Series 2 Class A Fourth Issuer Notes, the Series 2 Class
B Fourth Issuer Notes, the Series 2 Class M Fourth Issuer Notes and the Series
2 Class C Fourth Issuer Notes;

 

“Series 3 Fourth Issuer Notes”
means collectively the Series 3 Class A Fourth Issuer Notes, the Series 3 Class
B Fourth Issuer Notes, the Series 3 Class M Fourth Issuer Notes and the Series
3 Class C Fourth Issuer Notes;

 

“Series 4 Fourth Issuer Notes”
means collectively the Series 4 Class A Fourth Issuer Notes, the Series 4 Class
B Fourth Issuer Notes and the Series 4 Class M Fourth Issuer Notes;

 

“Series 5 Fourth Issuer Notes”
means collectively the Series 5 Class A Fourth Issuer Notes, the Series 5 Class
B Fourth Issuer Notes, the Series 5 Class M Fourth Issuer Notes and the Series
5 Class C Fourth Issuer Notes;

 

“Sterling Fourth Issuer Notes”
means the Series 5 Class A2 Fourth Issuer Notes, Series 5 Class B Fourth Issuer
Notes, Series 5 Class M Fourth Issuer Notes and the Series 5 Class C Fourth
Issuer Notes;

 

“Transaction Documents” means
the Fourth Issuer Transaction Documents and those documents to which any new
issuers will be a party in relation to the notes issued by such new issuers;

 

“Trigger Event” means an Asset
Trigger Event or a Non-Asset Trigger Event, as the case may be; and

 

any reference to a “class”
of Fourth Issuer Notes or of Fourth Issuer Noteholders shall be a reference to
the class of any of the Series 1 Fourth Issuer Notes, the Series 2 Fourth
Issuer Notes, the Series 3 Fourth Issuer Notes, the Series 4 Fourth Issuer
Notes or the Series 5 Fourth Issuer Notes, as the context requires. Any
reference to a “series” of Fourth Issuer Notes shall be a reference, as the
context requires, to the Series 1 Fourth Issuer Notes, the Series 2 Fourth
Issuer Notes, the Series 3 Fourth Issuer Notes, the Series 4 Fourth Issuer
Notes or the Series 5 Fourth Issuer Notes.

 

319

 

SCHEDULE 4

 

PROVISIONS FOR MEETINGS OF
NOTEHOLDERS

 

1.                                       (a)                                  As used in this Schedule the
following expressions shall have the following meanings unless the context
otherwise requires:

 

(i)                                     voting certificate shall mean an English language certificate
issued by a Paying Agent and dated in which it is stated:

 

(A)                              that on the date thereof Fourth Issuer Notes
(represented by a Global Fourth Issuer Note and not being Fourth Issuer Notes
in respect of which a block voting instruction has been issued and is
outstanding in respect of the meeting specified in such voting certificate or
any adjourned such meeting) were (to the satisfaction of such Paying Agent)
held to its order or under its control and that no such Fourth Issuer Notes
will cease to be so held until the first to occur of:

 

I.                                         the conclusion of the meeting
specified in such certificate or, if applicable, of any adjourned such meeting;
and

 

II.                                     the surrender of the certificate to the Paying
Agent who issued the same; and

 

(B)                                that the bearer thereof is entitled to attend
and vote at such meeting and any adjourned such meeting in respect of the
Fourth Issuer Notes represented by such certificate;

 

(ii)                                  block
voting instruction
shall mean an English language document issued by a Paying Agent and dated in
which:

 

(A)                              it is certified that Fourth Issuer Notes
(represented by a Global Fourth Issuer Note and not being Fourth Issuer Notes
in respect of which a voting certificate has been issued and is outstanding in
respect of the meeting specified in such block voting instruction and any
adjourned such meeting) were (to the satisfaction of such Paying Agent) held to
its order or under its control and that no such Fourth Issuer Notes will cease
to be so held until the first to occur of:

 

I.                                         the conclusion of the meeting
specified in such document or, if applicable, of any adjourned such meeting;
and

 

II.                                     the surrender to that Paying Agent not less
than 48 hours before the time for which such meeting or any adjourned such
meeting is convened of the receipt issued by such Paying Agent in respect of
each such Fourth Issuer Note which is to be released or (as the case may
require) the Fourth Issuer Note or Fourth Issuer Notes ceasing with the
agreement of that Paying Agent to be held to its order or under its control and
the giving of notice by that Paying Agent to the Fourth Issuer in accordance
with paragraph 17 hereof of the necessary amendment to the block voting
instruction;

 

320

 

(B)                                it is certified that each holder of such Fourth
Issuer Notes has instructed such Paying Agent that the vote(s) attributable to
the Fourth Issuer Note or Fourth Issuer Notes so held should be cast in a
particular way in relation to the resolution or resolutions to be put to such
meeting or any adjourned such meeting and that all such instructions are during
the period commencing 48 hours prior to the time for which such meeting or any
adjourned such meeting is convened and ending at the conclusion or adjournment
thereof neither revocable nor capable of amendment;

 

(C)                                the aggregate principal amount of the Fourth
Issuer Notes so held are listed distinguishing with regard to each such
resolution between those in respect of which instructions have been given as
aforesaid that the votes attributable thereto should be cast in favour of the resolution
and those in respect of which instructions have been so given that the votes
attributable thereto should be cast against the resolution; and

 

(D)                               one or more persons named in such document
(each hereinafter called a proxy) is or are authorised and instructed
by such Paying Agent to cast the votes attributable to the Fourth Issuer Notes
so listed in accordance with the instructions referred to in (C) above as set
out in such document;

 

(iii)                               24
hours shall mean a
period of 24 hours including all or part of a day upon which banks are open for
business in both the place where the relevant meeting is to be held and in each
of the places where the Paying Agents have their specified offices
(disregarding for this purpose the day upon which such meeting is to be held)
and such period shall be extended by one period or, to the extent necessary,
more periods of 24 hours until there is included as aforesaid all or part of a
day upon which banks are open for business in all of the places as aforesaid;

 

(iv)                              48 hours shall mean a period of 48 hours
including all or part of two days upon which banks are open for business both
in the place where the relevant meeting is to be held and in each of the places
where the Paying Agents have their specified offices (disregarding for this
purpose the day upon which such meeting is to be held) and such period shall be
extended by one period or, to the extent necessary, more periods of 24 hours
until there is included as aforesaid all or part of two days upon which banks
are open for business in all of the places as aforesaid; and

 

(v)                                 Fourth
Issuer Notes and Noteholders
shall mean:

 

(A)                              in connection with a single meeting of Class A
Fourth Issuer Noteholders, Class A Fourth Issuer Notes and Class A Fourth
Issuer Noteholders, respectively;

 

(B)                                in connection with a meeting of Class B Fourth
Issuer Noteholders, Class B Fourth Issuer Notes and Class B Fourth Issuer
Noteholders respectively;

 

321

 

(C)                                in connection with a meeting of Class M Fourth
Issuer Noteholders, Class M Fourth Issuer Notes and Class M Fourth Issuer
Noteholders respectively; and

 

(D)                               in connection with a meeting of Class C Fourth
Issuer Noteholders, Class C Fourth Issuer Notes and Class C Fourth Issuer
Noteholders respectively.

 

(b)                                 A holder of a Fourth Issuer Note represented by
a Global Fourth Issuer Note may obtain a voting certificate in respect of such
Fourth Issuer Note from a Paying Agent or require a Paying Agent to issue a
block voting instruction in respect of such Fourth Issuer Note or by such
Fourth Issuer Note (to the satisfaction of such Paying Agent) being held to its
order or under its control, in each case not less than 48 hours before the time
fixed for the relevant meeting and on the terms set out in subparagraph
(a)(i)(A) or (a)(ii)(A) above (as the case may be), and (in the case of a block
voting instruction) instructing such Paying Agent to the effect set out in
subparagraph (a)(ii)(B) above.  The
holder of any voting certificate or the proxies named in any block voting
instruction shall for all purposes in connection with the relevant meeting or
adjourned meeting of Noteholders be deemed to be the holder of the Fourth
Issuer Notes to which such voting certificate or block voting instruction relates
and the person holding the same to the order or under the control of such
Paying Agent shall be deemed for such purposes not to be the holder of those
Fourth Issuer Notes.

 

(c)                                  (i)                                     A holder of Definitive Fourth Issuer
Notes may, by an instrument in writing in the English language (a form of
proxy) signed by the holder or, in the case of a corporation,
executed under its common seal or signed on its behalf by an attorney or a duly
authorised officer of the corporation and delivered to the specified office of
the Registrar not less than 48 hours before the time fixed for the relevant
meeting, appoint any person (a proxy) to act on his or its behalf in
connection with any meeting of the Noteholders and any adjourned such meeting.

 

(ii)                                  Any holder of Definitive Fourth Issuer Notes
which is a corporation may by resolution of its directors or other governing
body authorise any person to act as its representative (a representative) in connection
with any meeting of the Noteholders and any adjourned such meeting.

 

(iii)                               Any proxy appointed pursuant to subparagraph
(i) above or representative appointed pursuant to subparagraph (ii) above shall
so long as such appointment remains in force be deemed, for all purposes in
connection with the relevant meeting or adjourned meeting of the Noteholders,
to be the holder of the Definitive Fourth Issuer Notes to which such
appointment relates and the holder of the Definitive Fourth Issuer Notes shall
be deemed for such purposes not to be the holder.

 

(d)                                 [For so long as any Fourth Issuer Notes is
represented by a Fourth Issuer Global Note registered in the name of DTC or its
nominee, DTC may mail an Omnibus Proxy to the Fourth Issuer in accordance with
and in the form used by DTC as part of its usual procedures from time to time
in relation to meetings of Noteholders. 
Such Omnibus Proxy shall assign the voting rights in respect of the
relevant meeting to DTC’s direct participants as of the record date specified
therein.  Any such assignee participant
may, by an instrument in writing in the English language signed by such
assignee participant, or, in the case of a corporation, executed under its
common seal or signed on its behalf by an attorney or a duly authorised officer
of the corporation and

 

322

 

delivered to the
specified office of the Paying Agent before the time fixed for the relevant
meeting, appoint any person (a sub-proxy”) to act on his or its behalf in
connection with any meeting of Noteholders and any adjourned such meeting.  All references to “proxy” or “proxies”
in this Schedule other than in this sub-paragraph (D) shall be read so as to
include references to “sub-proxy” or “sub-proxies”.]

 

2.                                       The Fourth Issuer or the Note
Trustee may at any time and the Note Trustee shall upon a requisition in
writing signed by the holders of not less than one-tenth in principal amount of
the Fourth Issuer Notes for the time being outstanding convene a meeting of the
Noteholders and if the Fourth Issuer makes default for a period of seven days
in convening such a meeting the same may be convened by the Note Trustee or the
requisitionists.  Every such meeting
shall be held at such time and place as the Note Trustee may appoint or
approve.

 

3.                                       At least 21 days’ notice (exclusive
of the day on which the notice is given and the day on which the meeting is to
be held) specifying the place, day and hour of meeting shall be given to the
Noteholders prior to any meeting of the Noteholders.  Such notice, which shall be in the English language, shall state
generally the nature of the business to be transacted at the meeting thereby
convened but (except for an Extraordinary Resolution) it shall not be necessary
to specify in such notice the terms of any resolution to be proposed.  Such notice shall include statements, if
applicable, to the effect that (a) Fourth Issuer Notes represented by a Global
Fourth Issuer Note may, not less than 48 hours before the time fixed for the
meeting, be held to the order or under the control of any Paying Agent (to its
satisfaction) for the purpose of obtaining voting certificates or appointing
proxies and (b) the holders of Definitive Fourth Issuer Notes of the relevant
class may appoint proxies by executing and delivering a form of proxy in the
English language to the specified office of the Registrar not less than 48
hours before the time fixed for the meeting or, in the case of corporations,
may appoint representatives by resolution of their directors or other governing
body.  A copy of the notice shall be
sent by post to the Note Trustee (unless the meeting is convened by the Note
Trustee) and, to the Fourth Issuer (unless the meeting is convened by the
Fourth Issuer).

 

4.                                       A person (who may but need not be a
Noteholder) nominated in writing by the Note Trustee shall be entitled to take
the chair at the relevant meeting or adjourned meeting but if no such
nomination is made or if at any meeting or adjourned meeting the person
nominated shall not be present within 15 minutes after the time appointed for
holding the meeting or adjourned meeting the Noteholders present shall choose
one of their number to be Chairman, failing which the Fourth Issuer may appoint
a Chairman.  The Chairman of an
adjourned meeting need not be the same person as was Chairman of the meeting
from which the adjournment took place.

 

5.                                       Subject to the provisions of Section
316(b) of the Trust Indenture Act, at any such meeting one or more persons
present holding Fourth Issuer Notes or voting certificates or being proxies or
representatives and holding or representing in the aggregate not less than
one-twentieth of the principal amount of the Fourth Issuer Notes for the time
being outstanding shall (except for the purpose of passing an Extraordinary
Resolution) form a quorum for the transaction of business and no business
(other than the choosing of a Chairman) shall be transacted at any meeting
unless the requisite quorum be present at the commencement of the relevant
business.  The quorum at any such
meeting for passing an Extraordinary Resolution shall (subject as provided
below) be two or more persons present holding or representing Fourth Issuer
Notes or voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than 50 per cent. in Principal Amount
Outstanding of the Fourth Issuer Notes (or, at any adjourned meeting, two or
more persons being or representing Noteholders whatever the aggregate Principal
Amount Outstanding of the Fourth Issuer Notes so held or represented) PROVIDED
THAT at any meeting the business of

 

323

 

which includes the
passing of an Extraordinary Resolution to sanction any of the following matters
(each a Basic
Terms Modification) namely:

 

(a)                                  reduction or cancellation of the amount payable
or, where applicable, modification, except where such modification is in the
opinion of the Note Trustee bound to result in an increase, of the method of
calculating the amount payable or modification of the date of payment or, where
applicable, of the method of calculating the date of payment in respect of any
principal or interest in respect of the Fourth Issuer Notes;

 

(b)                                 alteration of the currency in which payments
under the Fourth Issuer Notes are to be made;

 

(c)                                  alteration of the quorum or majority required
to pass an Extraordinary Resolution in respect of any such Basic Terms
Modification; and

 

(d)                                 alteration of this proviso or the proviso to
paragraph 6 below,

 

the quorum for
passing the requisite Extraordinary Resolution shall be two or more persons
present holding Fourth Issuer Notes or voting certificates or being proxies or
representatives and holding or representing in the aggregate not less than
three quarters (or, at any adjourned meeting, not less than one quarter) of the
Principal Amount Outstanding of the Fourth Issuer Notes for the time being
outstanding.

 

6.                                       If within 15 minutes (or such longer
period not exceeding 30 minutes as the Chairman may decide) after the time
appointed for any such meeting a quorum is not present for the transaction of
any particular business, then, subject and without prejudice to the transaction
of the business (if any) for which a quorum is present, the meeting shall if
convened upon the requisition of Noteholders be dissolved.  In any other case it shall stand adjourned
to the same day in the next week (or if such day is a public holiday the next
succeeding Business Day) at the same time and place (except in the case of a
meeting at which an Extraordinary Resolution is to be proposed in which case it
shall stand adjourned for such period, being not less than 13 clear days nor
more than 42 clear days, and to such place as may be appointed by the Chairman
either at or subsequent to such meeting and approved by the Note Trustee).  If within 15 minutes (or such longer period
not exceeding 30 minutes as the Chairman may decide) after the time appointed
for any adjourned meeting a quorum is not present for the transaction of any
particular business, then, subject and without prejudice to the transaction of
the business (if any) for which a quorum is present, the Chairman may either
(with the approval of the Note Trustee) dissolve such meeting or adjourn the
same for such period, being not less than 13 clear days (but without any
maximum number of clear days), and to such place as may be appointed by the
Chairman either at or subsequent to such adjourned meeting and approved by the
Note Trustee, and the provisions of this sentence shall apply to all further
adjourned such meetings.  At any
adjourned meeting one or more persons present holding Definitive Fourth Issuer
Notes or voting certificates or being proxies or representatives (whatever the
principal amount of the Fourth Issuer Notes so held or represented by them)
shall (subject as provided below) form a quorum and shall (subject as provided
below) have power to pass any Extraordinary Resolution or other resolution and
to decide upon all matters which could properly have been dealt with at the
meeting from which the adjournment took place had the requisite quorum been
present PROVIDED
THAT at any adjourned meeting the quorum for the transaction of
business comprising any of the matters specified in the proviso to paragraph 5
above shall be one or more persons present holding Definitive Fourth Issuer
Notes or voting certificates or being proxies or representatives and holding or
representing in the aggregate not less than one-third of the principal amount
of the Fourth Issuer Notes for the time being outstanding.

 

324

 

7.                                       Notice of any adjourned meeting at
which an Extraordinary Resolution is to be submitted shall be given in the same
manner as notice of an original meeting but as if 10 were substituted for 21 in
paragraph 3 above and such notice shall state the relevant quorum.  Subject as aforesaid it shall not be
necessary to give any notice of an adjourned meeting.

 

8.                                       Every question submitted to a
meeting shall be decided in the first instance by a show of hands and in case
of equality of votes the Chairman shall both on a show of hands and on a poll
have a casting vote in addition to the vote or votes (if any) to which he may
be entitled as a Noteholder or as a holder of a voting certificate or as a
proxy or as a representative.

 

9.                                       At any meeting unless a poll is
(before or on the declaration of the result of the show of hands) demanded by
the Chairman, the Fourth Issuer, the Note Trustee or any person present holding
a Definitive Fourth Issuer Note or a voting certificate or being a proxy or
representative (whatever the principal amount of the Fourth Issuer Notes so
held or represented by him) a declaration by the Chairman that a resolution has
been carried or carried by a particular majority or lost or not carried by a
particular majority shall be conclusive evidence of the fact without proof of
the number or proportion of the votes recorded in favour of or against such
resolution.

 

10.                                 Subject to paragraph 12 below, if at any such
meeting a poll is so demanded it shall be taken in such manner and subject as hereinafter
provided either at once or after an adjournment as the Chairman directs and the
result of such poll shall be deemed to be the resolution of the meeting at
which the poll was demanded as at the date of the taking of the poll.  The demand for a poll shall not prevent the
continuance of the meeting for the transaction of any business other than the
motion on which the poll has been demanded.

 

11.                                 The Chairman may with the consent of (and shall
if directed by) any such meeting adjourn the same from time to time and from
place to place but no business shall be transacted at any adjourned meeting
except business which might lawfully (but for lack of required quorum) have
been transacted at the meeting from which the adjournment took place.

 

12.                                 Any poll demanded at any such meeting on the
election of a Chairman or on any question of adjournment shall be taken at the
meeting without adjournment.

 

13.                                 The Note Trustee and its lawyers and any
director, officer or employee of a corporation being a trustee of the Fourth
Issuer Trust Deed and any director or officer of the Fourth Issuer and its
lawyers and any other person authorised so to do by the Note Trustee may attend
and speak at any meeting.  Save as
aforesaid, but without prejudice to the definition of Principal Amount
Outstanding, no person shall be entitled to attend and speak nor shall any
person be entitled to vote at any meeting of the Noteholders or join with
others in requesting the convening of such a meeting or to exercise the rights
conferred on the Noteholders by Clause 10 of the Fourth Issuer Trust Deed
unless he either produces Fourth Issuer Note(s) or a voting certificate or is a
proxy or a representative or is the holder of a Definitive Fourth Issuer Note
or Definitive Fourth Issuer Notes.  No
person shall be entitled to vote at any meeting in respect of Fourth Issuer
Notes held by, for the benefit of, or on behalf of, the Fourth Issuer or the
Borrowers.  Nothing herein shall prevent
any of the proxies named in any block voting instruction or form of proxy or
any representative from being a director, officer or representative of or
otherwise connected with the Fourth Issuer.

 

14.                                 Subject as provided in paragraph 13 hereof at
any meeting:

 

(a)                                  on a show of hands every person who is present
in person and produces a voting certificate or is a holder of Fourth Issuer
Notes or is a proxy or representative shall have one vote; and

 

325

 

(b)                                 on a poll every person who is so present shall
have one vote in respect of each £1, U.S.$1 or €1 (or such other amount as the
Note Trustee may in its absolute discretion stipulate) in principal amount of
the Fourth Issuer Notes represented by the voting certificate so produced or in
respect of which he is a proxy or representative or in respect of which he is
the holder.

 

Without prejudice
to the obligations of the proxies named in any block voting instruction or form
of proxy any person entitled to more than one vote need not use all his votes
or cast all the votes to which he is entitled in the same way.

 

15.                                 The proxies named in any block voting
instruction or form of proxy and representatives need not be Noteholders.

 

16.                                 Each block voting instruction together (if so
requested by the Note Trustee) with proof satisfactory to the Note Trustee of
its due execution on behalf of the relevant Paying Agent and each form of proxy
shall be deposited by the relevant Paying Agent or (as the case may be) by the
Registrar at such place as the Note Trustee shall approve not less than 24
hours before the time appointed for holding the meeting or adjourned meeting at
which the proxies named in the block voting instruction or form of proxy
propose to vote and in default the block voting instruction or form of proxy
shall not be treated as valid unless the Chairman of the meeting decides
otherwise before such meeting or adjourned meeting proceeds to business.  A notarially certified copy of each block
voting instruction and form of proxy shall be deposited with the Note Trustee
before the commencement of the meeting or adjourned meeting but the Note
Trustee shall not thereby be obliged to investigate or be concerned with the
validity of or the authority of the proxies named in any such block voting
instruction or form of proxy.

 

17.                                 Any vote given in accordance with the terms of
a block voting instruction or form of proxy shall be valid notwithstanding the
previous revocation or amendment of the block voting instruction or form of
proxy or of any of the Noteholders’ instructions pursuant to which it was
executed provided that no intimation in writing of such revocation or amendment
shall have been received from the relevant Paying Agent or in the case of a
Definitive Fourth Issuer Note from the holder thereof by the Fourth Issuer at
its registered office (or such other place as may have been required or
approved by the Note Trustee for the purpose) by the time being 24 hours and 48
hours respectively before the time appointed for holding the meeting or
adjourned meeting at which the block voting instruction or form of proxy is to
be used.

 

18.                                 Subject always to the provisions of Clause 18
of the Fourth Issuer Trust Deed and Section 316(b) of the Trust Indenture Act,
a meeting of the Noteholders shall in addition to the powers hereinbefore given
have the following powers exercisable only by Extraordinary Resolution (subject
to the provisions relating to quorum contained in paragraphs 5 and 6 above)
namely:

 

(a)                                  power to sanction any compromise or arrangement
proposed to be made between the Fourth Issuer, the Note Trustee, any appointee
of the Note Trustee and the Noteholders or any of them;

 

(b)                                 power to sanction any abrogation, modification,
compromise or arrangement in respect of the rights of the Note Trustee, any
appointee of the Note Trustee, the Noteholders or the Fourth Issuer against any
other or others of them or against any other party to any of the Transaction
Documents or against any of their property whether such rights shall arise
under the Fourth Issuer Trust Deed, any other Transaction Document or
otherwise;

 

326

 

(c)                                  power to assent to any modification of the
provisions of the Conditions, the Fourth Issuer Trust Deed or any other
Transaction Document which shall be proposed by the Fourth Issuer, the Note
Trustee, or any Noteholder or any other person;

 

(d)                                 power to give any authority or sanction which
under the provisions of the Conditions or the Fourth Issuer Trust Deed is
required to be given by Extraordinary Resolution;

 

(e)                                  power to appoint any persons (whether
Noteholders or not) as a committee or committees to represent the interests of
the Noteholders and to confer upon such committee or committees any powers or
discretions which the Noteholders could themselves exercise by Extraordinary
Resolution;

 

(f)                                    power to approve of a person to be appointed a
trustee and power to remove any trustee or trustees for the time being of the
Fourth Issuer Trust Deed;

 

(g)                                 power to discharge or exonerate the Note
Trustee and/or any appointee of the Note Trustee from all liability in respect
of any act or omission for which the Note Trustee and/or such appointee may
have become responsible under the Fourth Issuer Trust Deed;

 

(h)                                 power to authorise the Note Trustee and/or any
appointee of the Note Trustee to concur in and execute and do all such deeds,
instruments, acts and things as may be necessary to carry out and give effect
to any Extraordinary Resolution; and

 

(i)                                     power to sanction any scheme or proposal for
the exchange or sale of the Fourth Issuer Notes for or the conversion of the
Fourth Issuer Notes into or the cancellation of the Fourth Issuer Notes in
consideration of shares, stock, notes, bonds, debentures, debenture stock
and/or other obligations and/or notes of the Fourth Issuer or any other company
formed or to be formed, or for or into or in consideration of cash, or partly
for or into or in consideration of such shares, stock, notes, bonds,
debentures, debenture stock and/or other obligations and/or notes as aforesaid
and partly for or into or in consideration of cash and for the appointment of
some person with power on behalf of the Noteholders to execute an instrument of
transfer of the Definitive Fourth Issuer Notes held by them in favour of the
persons with or to whom the Fourth Issuer Notes are to be exchanged or sold
respectively,

 

PROVIDED THAT:

 

(i)                                     no Extraordinary Resolution of the Class A
Fourth Issuer Noteholders or the Class B Fourth Issuer Noteholders or the Class
M Fourth Issuer Noteholders or the Class C Fourth Issuer Noteholders to
sanction a modification of the Conditions, the Fourth Issuer Trust Deed or any
of the other Transaction Documents or a waiver or authorisation of any breach
or proposed breach of any of the provisions of the Conditions, the Fourth
Issuer Trust Deed or any of the other Transaction Documents shall be effective
for any purpose unless either:

 

(A)                              the Note Trustee is of the opinion that it will
not be materially prejudicial to the interests of (in the case of an
Extraordinary Resolution of the Class A Fourth Issuer Noteholders) the Class B
Fourth Issuer Noteholders, the Class M Fourth Issuer Noteholders and the Class
C Fourth Issuer Noteholders or (in the case of an Extraordinary Resolution of
the Class B Fourth Issuer Noteholders) the Class M Fourth Issuer Noteholders
and Class C Fourth Issuer Noteholders (in the case of an Extraordinary
Resolution of the Class M Fourth Issuer Noteholders) the Class C Fourth Issuer
Noteholders; or

 

327

 

(B)                                it shall have been sanctioned by an Extraordinary
Resolution of (in the case of an Extraordinary Resolution of the Class A Fourth
Issuer Noteholders) the Class B Fourth Issuer Noteholders, the Class M Fourth
Issuer Noteholders, and the Class C Fourth Issuer Noteholders or (in the case
of an Extraordinary Resolution of the Class B Fourth Issuer Noteholders) the
Class M Fourth Issuer Noteholders and the Class C Fourth Issuer Noteholders or
(in the case of an Extraordinary Resolution of the Class M Fourth Issuer
Noteholders) the Class C Fourth Issuer Noteholders;

 

(ii)                                  no Extraordinary Resolution of the Class B
Fourth Issuer Noteholders shall be effective for any purpose while any Class A
Fourth Issuer Notes remain outstanding unless either (A) the Note Trustee is of
the opinion that it will not be materially prejudicial to the interests of the
Class A Fourth Issuer Noteholders or (B) it is sanctioned by an Extraordinary
Resolution of the Class A Fourth Issuer Noteholders;

 

(iii)                               no Extraordinary Resolution of the Class M
Fourth Issuer Noteholders shall be effective for any purpose while any Class B
Fourth Issuer Notes or Class A Fourth Issuer Notes remain outstanding unless
either (A) the Note Trustee is of the opinion that it will not be materially
prejudicial to the interests of the Class A Fourth Issuer Noteholders and/or
the Class B Fourth Issuer Noteholders (as the case may be) or (B) it is
sanctioned by an Extraordinary Resolution of the Class A Fourth Issuer
Noteholders and/or the Class B Fourth Issuer Noteholders (as the case may be);
and

 

(iv)                              no Extraordinary Resolution of the Class C
Fourth Issuer Noteholders shall be effective for any purpose while any Class M
Fourth Issuer Notes or Class B Fourth Issuer Notes or Class A Fourth Issuer
Notes remain outstanding unless either (A) the Note Trustee is of the opinion
that it will not be materially prejudicial to the interests of the Class A
Fourth Issuer Noteholders and/or the Class B Fourth Issuer Noteholders and/or
the Class M Fourth Issuer Noteholders (as the case may be) or (B) it is sanctioned
by an Extraordinary Resolution of the Class A Fourth Issuer Noteholders and/or
the Class B Fourth Issuer Noteholders and/or the Class M Fourth Issuer
Noteholders (as the case may be).

 

19.                                 Subject to the provisos to paragraph 18 and to
the provisions of Section 316(b) of the Trust Indenture Act, any resolution
passed at a meeting of the Noteholders duly convened and held in accordance
with the Fourth Issuer Trust Deed shall be binding upon the Noteholders of all
classes whether present or not present at such meeting and whether or not
voting and each of them shall be bound to give effect thereto accordingly and
the passing of any such resolution shall be conclusive evidence that the
circumstances justify the passing thereof. 
Notice of the result of the voting on any resolution duly considered by
the Noteholders shall be given by the Fourth Issuer to the Noteholders in
accordance with Condition 14 within 14 days of such result being known PROVIDED
THAT the non-publication of such notice shall not invalidate such
result.

 

20.                                 (a)                                  A resolution which in the opinion of
the Note Trustee affects the interests of the holders of one class only of the
Class A Fourth Issuer Notes shall be deemed to have been duly passed if passed
at a meeting of the holders of the Class A Fourth Issuer Notes of that class.

 

(b)                                 A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class A Fourth Issuer Notes but does not give rise to a conflict of interest
between the holders of such two or more classes of the Class A Fourth Issuer
Notes, shall be deemed to have been duly passed if passed

 

328

 

at a single meeting
of the holders of such two or more classes series of the Class A Fourth Issuer
Notes.

 

(c)                                  A resolution which in the opinion of the Note
Trustee affects the interests of the holders of any two or more classes of the
Class A Fourth Issuer Notes and gives or may give rise to a conflict of
interest between the holders of such two or more classes of the Class A Fourth
Issuer Notes shall be deemed to have been duly passed only if, in lieu of being
passed at a single meeting of the holders of such two or more classes of the
Class A Fourth Issuer Notes, it shall be duly passed at separate meetings of
the holders of such two or more classes of the Class A Fourth Issuer Notes.

 

(d)                                 In the case of a single meeting of the holders
of the two or more classes of the Class A Fourth Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
A Fourth Issuer Note denominated in dollars shall be converted into sterling at
the relevant Dollar Currency Swap Rate and the Principal Amount Outstanding of
any Class A Fourth Issuer Note denominated in euro shall be converted into
sterling at the relevant Euro Currency Swap Rate.

 

21.                                 (a)                                  A resolution which, in the opinion
of the Note Trustee, affects the interests of the holders of one class only of
the Class B Fourth Issuer Notes shall be deemed to have been duly passed if
passed at a meeting of the holders of the Class B Fourth Issuer Notes of that
class.

 

(a)                                  A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class B Fourth Issuer Notes but does not give rise to a conflict of interest
between the holders of such two or more classes of the Class B Fourth Issuer
Notes, shall be deemed to have been duly passed if passed at a single meeting
of the holders of such two or more classes of the Class B Fourth Issuer Notes.

 

(b)                                 A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class B Fourth Issuer Notes and gives or may give rise to a conflict of
interest between the holders of such two or more classes of the Class B Fourth
Issuer Notes, shall be deemed to have been duly passed only if, in lieu of
being passed at a single meeting of the holders of such two or more classes of
the Class B Fourth Issuer Notes, it shall be duly passed at separate meetings
of the holders of such two or more classes of the Class B Fourth Issuer Notes.

 

(c)                                  In the case of a single meeting of the holders
of the two or more classes of the Class B Fourth Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
B Fourth Issuer Note denominated in dollars shall be converted into sterling at
the relevant Dollar Currency Swap Rate and the Principal Amount Outstanding of any
Class B Fourth Issuer Note denominated in euro shall be converted into sterling
at the relevant Euro Currency Swap Rate.

 

22.                                 (a)                                  A resolution which, in the opinion
of the Note Trustee, affects the interests of the holders of one class only of
the Class M Fourth Issuer Notes shall be deemed to have been duly passed if
passed at a meeting of the holders of the Class M Fourth Issuer Notes of that
class.

 

(b)                                 A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class M Fourth Issuer Notes but does not give rise to a conflict of interest
between the holders of such two or more classes of the Class M Fourth Issuer
Notes, shall be deemed to have been duly passed if passed

 

329

 

at a single meeting
of the holders of such two or more classes of the Class M Fourth Issuer Notes.

 

(c)                                  A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class M Fourth Issuer Notes and gives or may give rise to a conflict of
interest between the holders of such two or more classes of the Class M Fourth
Issuer Notes, shall be deemed to have been duly passed only if, in lieu of
being passed at a single meeting of the holders of such two or more classes of
the Class M Fourth Issuer Notes, it shall be duly passed at separate meetings
of the holders of such two or more classes of the Class M Fourth Issuer Notes.

 

(d)                                 In the case of a single meeting of the holders
of the two or more classes of the Class M Fourth Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
M Fourth Issuer Note denominated in dollars shall be converted into sterling at
the relevant Dollar Currency Swap Rate and the Principal Amount Outstanding of
any Class M Fourth Issuer Note denominated in euro shall be converted into
sterling at the relevant Euro Currency Swap Rate.

 

23.                                 (a)                                  A resolution which, in the opinion
of the Note Trustee, affects the interests of the holders of one class only of
the Class C Fourth Issuer Notes shall be deemed to have been duly passed if
passed at a meeting of the holders of the Class C Fourth Issuer Notes of that
class.

 

(b)                                 A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class C Fourth Issuer Notes but does not give rise to a conflict of interest
between the holders of such two or more classes of the Class C Fourth Issuer
Notes, shall be deemed to have been duly passed if passed at a single meeting
of the holders of such two or more classes of the Class C Fourth Issuer Notes.

 

(c)                                  A resolution which, in the opinion of the Note
Trustee, affects the interests of the holders of any two or more classes of the
Class C Fourth Issuer Notes and gives or may give rise to a conflict of
interest between the holders of such two or more classes of the Class C Fourth
Issuer Notes, shall be deemed to have been duly passed only if, in lieu of
being passed at a single meeting of the holders of such two or more classes of
the Class C Fourth Issuer Notes, it shall be duly passed at separate meetings
of the holders of such two or more classes of the Class C Fourth Issuer Notes.

 

(d)                                 In the case of a single meeting of the holders
of the two or more classes of the Class C Fourth Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
C Fourth Issuer Note denominated in dollars shall be converted into sterling at
the relevant Dollar Currency Swap Rates and the Principal Amount Outstanding of
any Class C Fourth Issuer Note denominated in euro shall be converted into
sterling at the relevant Euro Currency Swap Rate.

 

24.                                 The expression Extraordinary Resolution when
used in the Fourth Issuer Trust Deed means (a) a resolution passed at a meeting
of the Noteholders of a relevant class of Fourth Issuer Notes duly convened and
held in accordance with the provisions of this SCHEDULE 4 by a majority consisting
of not less than three-fourths of the persons voting thereat upon a show of
hands or if a poll is duly demanded by a majority consisting of not less than
three-fourths of the votes cast on such poll or (b) a resolution in writing
signed by or on behalf of all the Noteholders of a relevant class of Fourth
Issuer Notes, which resolution in writing may be

 

330

 

contained in one
document or in several documents in like form each signed by or on behalf of
one or more of the Noteholders of a relevant class of Fourth Issuer Notes.

 

25.                                 Minutes of all resolutions and proceedings at
every meeting of the Noteholders shall be made and entered in books to be from
time to time provided for that purpose by the Fourth Issuer and any such
Minutes as aforesaid if purporting to be signed by the Chairman of the meeting
at which such resolutions were passed or proceedings transacted shall be
conclusive evidence of the matters therein contained and until the contrary is
proved every such meeting in respect of the proceedings of which Minutes have
been made shall be deemed to have been duly held and convened and all
resolutions passed or proceedings transacted thereat to have been duly passed
or transacted.

 

26.                                 Subject to all other provisions of the Fourth
Issuer Trust Deed the Note Trustee may without the consent of the Fourth Issuer
or the Noteholders prescribe such further regulations regarding the
requisitioning and/or the holding of meetings of Noteholders and attendance and
voting thereat as the Note Trustee may in its sole discretion think fit.

 

331

 

SIGNATORIES

 

	
  The
  Fourth Issuer

  
	
   

  
	
  EXECUTED and DELIVERED as a DEED by

  	
  )

  
	
  PERMANENT
  FINANCING (NO. 4) PLC

  	
  )

  
	
  acting by two directors/a

  	
  )

  
	
  director and the secretary

  	
  )

  
	
   

  	
   

  
	
  Director

  
	
   

  
	
  Director/Secretary

  
	
   

  
	
   

  
	
  The Note Trustee

  
	
   

  
	
  EXECUTED and DELIVERED as a DEED by

  	
  )

  
	
  THE
  BANK OF NEW YORK

  	
  )

  
	
  acting by its authorised signatory

  	
  )

  
	
   

  
	
  Authorised Signatory:

  

 

332

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