Document:

EXHIBIT 4.5.1

 

EXECUTION COPY

 

 

SECOND SUPPLEMENTAL FUNDING 1 DEED OF CHARGE

 

 

DATED 12th March, 2004

 

PERMANENT FUNDING (NO. 1) LIMITED

 

and

 

PERMANENT FINANCING (NO. 1) PLC

 

and

 

PERMANENT FINANCING (NO. 2) PLC

 

and

 

PERMANENT FINANCING (NO. 3) PLC

 

and

 

PERMANENT FINANCING (NO. 4) PLC

 

and

 

THE BANK OF NEW YORK

 

and

 

PERMANENT MORTGAGES TRUSTEE

 

and

 

HALIFAX plc

 

and

 

JPMORGAN CHASE BANK

 

and

 

STRUCTURED FINANCE MANAGEMENT LIMITED

 

and

 

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

 

 

 

LONDON

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Interpretation

  	
   

  
	
  2.

  	
  Additional Funding 1
  Security

  	
   

  
	
  3.

  	
  Incorporation of
  the Principal Deed

  	
   

  
	
  4.

  	
  Choice of Law

  	
   

  

 

 

THIS SECOND SUPPLEMENTAL
DEED OF CHARGE is made on 12th March, 2004

 

BETWEEN:

 

(1)                                  PERMANENT FUNDING (NO. 1) LIMITED (registered number 4267660),
a private limited company incorporated under the laws of England and Wales,
whose registered office is at Blackwell House, Guildhall Yard, London EC2V 5AE
(Funding
1);

 

(2)                                  PERMANENT FINANCING (NO. 1) PLC (registered number 4416192),
a public limited company incorporated in England and Wales, whose registered
office is at Blackwell House, Guildhall Yard, London EC2V 5AE (the First Issuer);

 

(3)                                  PERMANENT FINANCING (NO. 2) PLC (registered number 4623188),
a public limited company incorporated in England and Wales, whose registered
office is at Blackwell House, Guildhall Yard, London EC2V 5AE (the Second
Issuer);

 

(4)                                  PERMANENT FINANCING (NO. 3) PLC (registered number 4907355),
a public limited company incorporated in England and Wales, whose registered
office is at Blackwell House, Guildhall Yard, London EC2V 5AE (the Third Issuer);

 

(5)                                  PERMANENT FINANCING (NO. 4) PLC (registered number 4988201),
a public limited company incorporated in England and Wales, whose registered
office is at Blackwell House, Guildhall Yard, London EC2V 5AE (the Fourth
Issuer);

 

(6)                                  THE BANK OF NEW YORK, acting through its office at
One Canada Square, London E14 5AL, acting in its capacity as Security Trustee;

 

(7)                                  PERMANENT MORTGAGES TRUSTEE LIMITED,  (registered number 83116), a
private limited company incorporated under the laws of Jersey, Channel Islands
whose registered office is at 47 Esplanade, St Helier, Jersey JE1 0BD, Channel
Islands, in its capacity as the Mortgages Trustee;

 

(8)                                  THE GOVERNOR AND COMPANY OF THE BANK
OF SCOTLAND, established by an Act of the Parliament of Scotland in 1695, acting
through its office situated at 116 Wellington Street, Leeds LS1 4LT, England
acting in its capacity as Account Bank;

 

(9)                                  HALIFAX plc (registered number 2367076),
a public limited company incorporated under the laws of England and Wales, whose
registered office is at Trinity Road, Halifax, West Yorkshire HX1 2RG acting in
its capacities as Funding 1 GIC Provider, Funding 1 Swap Provider, First
Start-up Loan Provider, Second Start-up Loan Provider, Third Start-up Loan
Provider and Fourth Start-up Loan Provider, Cash Manager and Seller;

 

(10)                            JPMORGAN CHASE BANK acting through its office at
125 London Wall, London EC2Y 5AJ in its capacity as Funding 1 Liquidity
Facility Provider; and

 

(11)                            STRUCTURED FINANCE MANAGEMENT LIMITED
(registered
number 3853947), a private limited company incorporated under the laws of
England and Wales, whose registered office is at Blackwell House, Guildhall
Yard, London EC2V 5AE acting in its capacity as the Funding 1 Corporate
Services Provider.

 

1

 

WHEREAS:

 

(A)                              This Deed is supplemental to
the Funding 1 Deed of Charge made between the parties hereto (other than the
Second Issuer, the Third Issuer, the Fourth Issuer and the Mortgages Trustee)
and dated the Initial Closing Date (herein after referred to as the Principal
Deed).

 

(B)                                The Second Issuer and the
Second Start-up Loan Provider acceded to the terms of the Principal Deed by
executing a Deed of Accession to the Principal Deed (the First Deed of Accession)
dated 6th March, 2003 between, inter alios, Funding 1, the Second
Start-up Loan Provider and the Second Issuer.

 

(C)                                The Bank of New York acceded
to the role of Security Trustee pursuant to a Supplemental Deed of Charge dated
25th July, 2003 (the First Supplemental Funding 1 Deed of Charge)
between, inter
alios, Funding 1, the First Issuer and the Second Issuer.

 

(D)                               The Third Issuer and the Third
Start-up Loan Provider acceded to the terms of the Principal Deed by executing
a Deed of Accession to the Principal Deed (the Second Deed of Accession)
dated 25th November, 2003 between, inter alios, Funding 1, the Third Start-up
Loan Provider and the Third Issuer.

 

(E)                                 The Fourth Issuer and the
Fourth Start-up Loan Provider acceded to the terms of the Principal Deed by
executing a Deed of Accession to the Principal Deed (the Third Deed of Accession)
dated on or about the date of this Deed, between, inter alios, Funding 1, the
Fourth Start-up Loan Provider and the Fourth Issuer.

 

(F)                                 The Seller has sold mortgage
loans together with the benefit of their related security to the Mortgages
Trustee.  By an Amended and Restated
Mortgages Sale Agreement dated on or about the date hereof, the Seller agreed
to sell and the Mortgages Trustee agreed to buy a further portfolio of mortgage
loans together with the benefit of their related security. Certain of the
mortgage loans in the new portfolio were secured over property situated in
Scotland (the Scottish Trust Property).

 

(G)                                The Mortgage Trustee holds all
the above mentioned mortgage loans as bare trustee for Funding 1 as to the
Funding 1 Share and the Seller as to the Seller Share of the Trust Property
upon, with and subject to the trusts, powers and the provisions of the Amended
and Restated Mortgages Trust Deed dated on or about the date hereof.

 

(H)                               Pursuant to the Principal
Deed, Funding 1 granted to the Security Trustee first ranking fixed and
floating security over all the property, assets and rights present and future
set out in Clause 3 thereof to secure the performance of the Funding 1
Secured Obligations to the Funding 1 Secured Creditors under the Funding 1
Agreements subject to and upon the terms set out therein (the Existing
Security).

 

(I)                                    To further secure the
performance of the Funding 1 Secured Obligations, Funding 1 has agreed to
provide the Security Trustee with the benefit of the additional fixed and
floating security over all the property, asset and rights present and future
set out in this Deed including, but not limited to, Funding 1’s interest in any
Scottish Trust Property not effectively charged by the security created by or
pursuant to the Principal Deed (the Additional Security) to hold on trust for
the benefit of the Funding 1 Secured Creditors and Funding 1 and the other
parties to this Deed have agreed to supplement the Principal Deed on the terms
set out herein.

 

2

 

NOW THIS DEED WITNESSES AS
FOLLOWS:

 

1.                                      INTERPRETATION

 

1.1                               Definitions

 

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) is expressly and specifically
incorporated into this Deed and, accordingly, the expressions defined in the
Master Definitions and Construction Schedule (as so amended, varied or
supplemented from time to time) shall, except where the context otherwise
requires and save where otherwise defined herein, have the same meanings in
this Deed, including the recitals hereto and this Deed shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the Master
Definitions and Construction Schedule.

 

1.2                               Construction

 

In this Deed, except where the context otherwise
requires:

 

(a)                                  the terms of the Master
Definitions and Construction Schedule and of any agreement in existence at
the date hereof between the parties hereto in relation to any such documents
are incorporated in this Deed to the extent required to ensure that any
proposed disposition of the Funding 1 Charged Property contained in this Deed
is a valid disposition in accordance with Section 2(1) of the Law of
Property (Miscellaneous Provisions) Act 1989;

 

(b)                                 a reference in this Deed to
any property, assets, undertakings or rights includes, unless the context
otherwise requires, present and future property, assets, undertakings or
rights; and

 

(c)                                  this Deed means this Second
Supplemental Funding 1 Deed of Charge (as from time to time modified and/or
supplemented in accordance with the provisions set out in the Principal Deed
including all Accession Undertakings and each other document or deed entered
into pursuant thereto (as from time to time modified and/or supplemented as
aforesaid) and expressed to be supplemental thereto).

 

1.3                               Acknowledgement

 

Each of the parties hereto agrees and acknowledges
that nothing in this Deed shall constitute a release of the security created
pursuant to the Principal Deed.

 

2.                                      ADDITIONAL FUNDING 1 SECURITY

 

2.1                               Trust Property

 

(a)                                  Funding 1, by way of fixed
security for the payment or discharge of the Funding 1 Secured Obligations,
subject to Clause 4 (Release of Funding 1 Charged Property) of the
Principal Deed, hereby assigns (or to the extent not assignable, charges) to
the Security Trustee (on trust for itself and the other Funding 1 Secured
Creditors) all of its right, title, interest and benefit present and future in,
to and under the Funding 1 Share of the Trust Property (including, without
limitation, the Scottish Trust Property, present and future, comprised in the
Trust Property) and including all rights to receive payment of any amounts
which may

 

3

 

become payable
to Funding 1 thereunder and all payments received by it thereunder including,
without limitation, all rights to serve notices and/or make demands thereunder
and/or to take such steps as are required to cause payments to become due and
payable thereunder and all rights of action in respect of any breach thereof
and all rights to receive damages or obtain relief in respect thereof.

 

(b)                                 The assignment granted under
or pursuant to Clause 2.1(a) above will rank subsequent to the assignment
granted by Funding 1 under or pursuant to Clause 3.1(a) of the Principal Deed.

 

2.2                               Floating Charge

 

(a)                                  Funding 1, by way of floating
security for the payment or discharge of the Funding 1 Secured Obligations,
subject to Clause 4 (Release of Funding 1 Charged Property) of the
Principal Deed, hereby charges by way of a floating charge in favour of the
Security Trustee (on trust for itself and the other Funding 1 Secured
Creditors) the whole of its undertaking and all its property, assets, rights
and revenues, whatsoever and wheresoever, both present and future (including,
without limitation, all of its assets, property and undertaking situated in or
governed by the laws of Scotland all of which are charged by the floating
charge created hereby).

 

(b)                                 The floating charge granted by
Funding 1 under or pursuant to Clause 2.2(a) (Floating Charge) shall take
effect as a second floating charge, ranking subsequent to the first floating
charge granted by Funding 1 under or pursuant to Clause 3.5 of the Principal
Deed.

 

(c)                                  The floating charge created by
Clause
2.2(a) above is a qualifying floating charge for the purpose of
paragraph 14 of Schedule B1 to the Insolvency Act 1986.

 

2.3                               Title Guarantee

 

Each of the dispositions, assignations, assignments or
charges over property effected in or pursuant to Clauses 2.1 (Trust Property) and Clause 2.2 (Floating Charge)
is made with full title guarantee (or in relation to assets or rights situated
in Scotland or governed by the laws of Scotland, with absolute warrandice).

 

2.4                               Notice and Acknowledgement

 

Funding 1 hereby intimates and gives notice to the
Mortgages Trustee as trustee under and in terms of the Mortgages Trust Deed of
the assignation in security made in terms of Clause 2.1 and the Mortgages
Trustee by its execution of this Deed as such trustee immediately subsequent to
the execution hereof by Funding 1 confirms that as at the date hereof it has
received no intimation of any other dealing with the Funding 1 Share of the
Trust Property or any part thereof except in accordance with the Funding 1
Agreements.

 

2.5                               Warranties

 

(a)                                  Funding 1 hereby represents
and warrants to the Security Trustee (for itself and on trust for the other
Funding 1 Secured Creditors) that, save for registration of certain of the
Transaction Documents with the Registrar of Companies in accordance with the
provisions of Chapter 1 of Part XII of the Companies Act 1985, no
authorisation, approval, consent, licence, exemption, registration, recording,
filing or notarisation and no payment of any duty or tax and no other action
whatsoever is necessary to ensure the validity, legality or enforceability of
the liabilities and obligations of Funding 1 or the rights of the Funding 1
Secured Creditors and the Security Trustee in respect of Funding 1 under this
Deed.

 

4

 

(b)                                 Funding 1 represents and
warrants to the Security Trustee that, other than pursuant to the Funding 1
Agreements, it has not assigned or granted any Security Interest over the
Funding 1 Share of the Trust Property.

 

(c)                                  Funding represents and
warrants that no attachment, distress or execution affects the Funding 1 Share
of the Trust Property and no diligence has been executed in respect of the
Funding 1 Share of the Trust Property.

 

2.6                               Registrar of Companies

 

Funding 1 undertakes to the Funding 1 Secured
Creditors to file or procure the filing with the Registrar of Companies
pursuant to Chapter 1 of Part XII of the Companies Act 1985 of a duly completed
Form 395 together with an executed original of this Deed within 21 days after
the date of this Deed.

 

2.7                               Scottish Trust Property

 

Without prejudice to the provisions of Clause 12 of
the Principal Deed and Clause 16 of the Mortgages Trust Deed, Funding 1 and the
Mortgages Trustee hereby undertake to the Security Trustee that if at any time
after the security constituted by or pursuant to the Principal Deed shall have
become enforceable and the Security Trustee or any Receiver shall so require,
they will join together in directing the Seller to sell or dispose of all or
any part of the Scottish Trust Property on terms previously approved by the
Security Trustee and/or in causing the trusts constituted by any Scottish
Declaration of Trust to be wound up or performed and they will take all such
actions and execute all such documents as may be necessary to effect such sale
or disposal or winding-up or performance and the distribution or transfer of
the Scottish Trust Property or any part thereof in accordance with the terms of
each Scottish Declaration of Trust, the Mortgages Trust Deed, the Principal
Deed and this Deed.  The Seller and the
Mortgages Trustee hereby acknowledge and consent to the foregoing as trustee
and beneficiary respectively in terms of each Scottish Declaration of Trust.

 

2.8                               Additional Security

 

The security constituted by this Deed is in addition
to and shall not in any way be prejudiced by any other security now or
subsequently held by the Security Trustee as security for the Funding 1 Secured
Obligations.

 

3.                                      INCORPORATION OF THE PRINCIPAL
DEED

 

3.1                               Incorporation of Terms

 

(a)                                  The parties to this Deed
hereby agree, subject to Clause 3.2 below, that all of the
obligations, undertakings, covenants, rights and powers specified and contained
in the Principal Deed, other than the covenants of, and the creation of
security by, Funding 1 contained in Clause 3 thereof and the covenant to
execute the Funding 1 Power of Attorney in the form annexed to the Principal
Deed contained in Clause 19.1 thereof shall be deemed to be
repeated herein mutatis mutandis and shall apply mutatis mutandis to the
property referred to in Clause 2 hereof and the security and other
rights and powers created under and pursuant to this Deed.  The parties to this Deed further agree that
all of the remaining terms of the Principal Deed shall, except in so far as
they are inconsistent with the terms of this Deed, apply mutatis mutandis to this
Deed provided always that this Deed shall be without prejudice to the Principal
Deed, the security and other rights and powers created under and pursuant to Clause 3
of the Principal Deed and all of the other rights, powers, obligations and
immunities

 

5

 

comprised
therein and arising pursuant thereto, which shall remain in full force and effect
notwithstanding this Deed.

 

(b)                                 In the event of the Security
Trustee converting the floating charges created by either this Deed or the
Principal Deed into first specific fixed charges over the undertaking, property
and assets charged by such floating charges (or such part of them as the
Security Trustee may specify) pursuant to Clause  18.1 of the Principal Deed, Funding 1
shall, at its own expense, execute all conveyances, deeds, certificates and
documents which may be necessary in respect of any of Funding 1’s Scottish
assets, to create and perfect such first specific fixed charges.

 

3.2                               No Effect on Existing Charges

 

For the avoidance of doubt, Clause 3.1 of this Deed shall
not be construed as, or otherwise be deemed to result in, Clause 3 of the Principal
Deed being repeated mutatis mutandis in relation to any
property or assets from time to time being effectively charged by way of fixed
charge or otherwise effectively assigned as fixed security pursuant to Clause 3
of the Principal Deed nor shall it otherwise be construed as any release or
memorandum of satisfaction in whole or in part of the security created pursuant
to Clause
3 of the Principal Deed.

 

3.3                               Exclusion Of Third Party
Rights

 

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

 

3.4                               Submission to Jurisdiction

 

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

 

4.                                      CHOICE OF LAW

 

4.1                               Governing Law

 

This Deed is governed by and shall be construed in
accordance with English law (provided that any provisions of this deed which
are particular to the laws of Scotland shall be construed in accordance with
Scots law).

 

DULY EXECUTED AND
DELIVERED AS A DEED by each of the parties hereto or on its behalf on the
date appearing on page 1.

 

	
  Funding 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  PERMANENT FUNDING (NO. 1)

  	
  )

  	
   

  
	
  LIMITED acting by two

  	
  )

  	
   

  
	
  directors/a
  director and the secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
   

  

 

6

 

	
  First Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  PERMANENT FINANCING (NO. 1)

  	
  )

  	
   

  
	
  PLC acting by two

  	
  )

  	
   

  
	
  directors/a
  director and the secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Second Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  PERMANENT FINANCING (NO. 2)

  	
  )

  	
   

  
	
  PLC acting by two

  	
  )

  	
   

  
	
  directors/a
  director and the secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Third Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  PERMANENT FINANCING (NO. 3)

  	
  )

  	
   

  
	
  PLC acting by two

  	
  )

  	
   

  
	
  directors/a
  director and the secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Fourth Issuer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  PERMANENT FINANCING (NO. 4)

  	
  )

  	
   

  
	
  PLC acting by two

  	
  )

  	
   

  
	
  directors/a
  director and the secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
   

  

 

7

 

	
  Seller

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  HALIFAX plc

  	
  )

  	
   

  
	
  in its capacity as Seller

  	
  )

  	
   

  
	
  acting by
  its attorney

  	
  )

  	
  (as attorney for HALIFAX PLC)

  
	
  in the
  presence of

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Cash Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  HALIFAX plc

  	
  )

  	
   

  
	
  in its capacity as Cash Manager

  	
  )

  	
   

  
	
  acting by
  its attorney

  	
  )

  	
  (as attorney for HALIFAX PLC)

  
	
  in the
  presence of

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Account Bank

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  THE GOVERNOR AND COMPANY OF

  	
  )

  	
   

  
	
  THE BANK OF SCOTLAND

  	
  )

  	
   

  
	
  in its capacity as Account Bank)

  	
  )

  	
   

  
	
  and Funding 1
  GIG Provider

  	
  )

  	
  (as attorney for THE GOVERNOR AND

  
	
  acting by
  acting by its attorney

  	
  )

  	
  COMPANY OF THE BANK OF

  
	
  in the
  presence of

  	
  )

  	
  SCOTLAND)

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  

 

8

 

	
  Funding 1 Swap Provider

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  HALIFAX plc

  	
  )

  	
   

  
	
  in its capacity as Funding 1 Swap
  Provider

  	
  )

  	
   

  
	
  acting by
  its attorney

  	
  )

  	
   

  
	
  in the
  presence of

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Funding 1 Corporate
  Services Provider

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  STRUCTURED FINANCE)

  	
  )

  	
   

  
	
  MANAGEMENT LIMITED

  	
  )

  	
   

  
	
  acting by two
  Directors/a director

  	
  )

  	
   

  
	
  and the
  secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director/Secretary

  	
   

  	
   

  

 

9

 

	
  First Start-up Loan
  Provider, Second Start-up Loan Provider, Third Start-up Loan Provider and
  Fourth Start-up Loan Provider

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  HALIFAX plc)

  	
  )

  	
   

  
	
  in its capacity as)

  	
  )

  	
   

  
	
  First Start-up Loan Provider,
  Second)

  	
  )

  	
   

  
	
  Start-up Loan Provider, Third
  Start-up)

  	
  )

  	
   

  
	
  Loan Provider and Fourth Start-up)

  	
  )

  	
   

  
	
  Loan Provider

  	
  )

  	
  (as attorney for HALIFAX PLC)

  
	
  acting by
  its attorney

  	
  )

  	
   

  
	
  in the
  presence of

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Funding 1 Liquidity
  Facility Provider

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  JPMORGAN CHASE BANK

  	
  )

  	
   

  
	
  acting by
  its attorney

  	
  )

  	
   

  
	
  in the
  presence of

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Security Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED as a DEED by

  	
  )

  	
   

  
	
  THE BANK OF NEW YORK

  	
  )

  	
   

  
	
  acting by
  its authorised signatory

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorised
  Signatory:

  	
   

  	
   

  

 

10

 

	
  EXECUTED as a DEED by

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PERMANENT MORTGAGES TRUSTEE)

  	
  )

  	
   

  
	
  LIMITED

  	
  )

  	
   

  
	
  acting under
  the authority of that

  	
  )

  	
   

  
	
  Company, in
  the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  

 

11EXHIBIT 4.6

 

EXECUTION COPY 

 

THIRD ISSUER TRUST DEED

 

 

DATED 25th
November, 2003

 

PERMANENT FINANCING (NO. 3) PLC

 

and

 

THE BANK OF NEW YORK

 

constituting

 

 

US$1,100,000,000 Series 1 Class A Asset Backed Floating Rate
Notes due December 2004

US$38,000,000 Series 1 Class B Asset Backed Floating Rate Notes due
June 2042

US$38,000,000 Series 1 Class C Asset Backed Floating Rate Notes due
June 2042

US$1,700,000,000 Series 2 Class A Asset Backed Floating Rate Notes due
September 2010

US$59,000,000 Series 2 Class B Asset Backed Floating Rate Notes due
June 2042

US$59,000,000 Series 2 Class C Asset Backed Floating Rate Notes due
June 2042

US$1,500,000,000 Series 3 Class A Asset Backed Floating Rate Notes due
September 2033

US$52,000,000 Series 3 Class B Asset Backed Floating Rate Notes due
June 2042

US$52,000,000 Series 3 Class C Asset Backed Floating Rate Notes due
June 2042

e700,000,000 Series 4 Class A1 Asset Backed Floating Rate Notes due
September 2033

£750,000,000 Series 4 Class A2 Asset Backed Floating Rate Notes due
September 2033
e62,000,000 Series 4
Class B Asset Backed Floating Rate Notes due June 2042
e62,000,000 Series 4
Class C Asset Backed Floating Rate Notes due June 2042

£400,000,000 Series 5 Class A Asset Backed Fixed-Floating Rate Notes due
June 2042
e20,000,000 Series 5
Class B Asset Backed Floating Rate Notes due June 2042
e20,000,000 Series 5
Class C Asset Backed Floating Rate Notes due June 2042

 

	
  

  
	
   

  
	
  London

  
	
  ICM:7338503

  

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
   

  
	
  2.

  	
  Covenant
  to Repay and to Pay Interest on Third Issuer Notes

  	
   

  
	
  3.

  	
  Form and Issue of Third
  Issuer Notes

  	
   

  
	
  4.

  	
  Replacement of
  Third Issuer Notes

  	
   

  
	
  5.

  	
  Register, Transfer and
  Exchange of Third Issuer Notes

  	
   

  
	
  6.

  	
  Fees, Duties and Taxes

  	
   

  
	
  7.

  	
  Covenant
  of Compliance

  	
   

  
	
  8.

  	
  Cancellation of Third Issuer
  Notes and Records

  	
   

  
	
  9.

  	
  Enforcement

  	
   

  
	
  10.

  	
  Proceedings, Actions and
  Indemnification

  	
   

  
	
  11.

  	
  Discharge of Payment

  	
   

  
	
  12.

  	
  Partial Payments

  	
   

  
	
  13.

  	
  Covenants by the Third 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 Third 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 Third
  Issuer Notes

  	
   

  
	
  2.

  	
  Forms
  of Definitive Third Issuer Notes

  	
   

  
	
  3.

  	
  Terms
  and Conditions of the Third Issuer Notes

  	
   

  
	
  4.

  	
  Provisions
  for Meetings of Noteholders

  	
   

  
	
   

  	
   

  	
   

  
	
  Signatories

  	
   

  

 

 

THIS THIRD ISSUER TRUST DEED is made on 25th November, 2003

 

BETWEEN:

 

(1)                                  PERMANENT
FINANCING (NO. 3) PLC (registered number
4907355) whose registered office is at Blackwell House, Guildhall Yard, London
EC2V 5AE (the Third 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 Third Issuer passed
on 25th
November, 2003 the Third Issuer has resolved to issue the
Third Issuer Notes which are constituted by this Deed and secured by the Third
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 THIRD 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 25th November, 2003 (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 third issuer master definitions and construction schedule, signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood on
25th November, 2003 (as the same may be amended, varied or
supplemented from time to time) (the Third 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 Third 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.  In the event of a conflict between the
Master Definitions and Construction Schedule and the Third Issuer Master
Definitions and Construction Schedule, the Third Issuer Master Definitions
Schedule shall prevail.

 

1.2                                 (a)                                  All
references in these presents to principal and/or interest in respect of the
Third Issuer Notes or to any monies payable by the Third 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 e, 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.

 

(c)                                  All references
in this Deed to these presents means this Deed, the schedules hereto, the
Third Issuer Notes, the Conditions, any deed expressed to be supplemental
hereto or thereto and the Third 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 Third Issuer shall be
deemed to include references to proving in the winding up of the Third 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.

 

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

 

2.1                                 The aggregate
principal amount of:

 

(a)                                  the Series 1
Class A Third Issuer Notes is limited to U.S.$1,100,000,000;

 

(b)                                 the Series 1
Class B Third Issuer Notes is limited to U.S.$38,000,000;

 

(c)                                  the Series 1
Class C Third Issuer Notes is limited to U.S.$38,000,000;

 

(d)                                 the Series 2
Class A Third Issuer Notes is limited to U.S.$1,700,000,000;

 

(e)                                  the Series 2
Class B Third Issuer Notes is limited to U.S.$59,000,000;

 

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

 

(g)                                 the Series 3
Class A Third Issuer Notes is limited to U.S.$1,500,000,000;

 

2

 

(h)                                 the Series 3
Class B Third Issuer Notes is limited to U.S.$52,000,000;

 

(i)                                     the Series 3
Class C Third Issuer Notes is limited to U.S.$52,000,000;

 

(j)                                     the Series 4
Class A1 Third Issuer Notes is limited to e700,000,000;

 

(k)                                  the Series 4
Class A2 Third Issuer Notes is limited to £750,000,000;

 

(l)                                     the Series 4
Class B Third Issuer Notes is limited to e62,000,000;

 

(m)                               the Series 4
Class C Third Issuer Notes is limited to e62,000,000;

 

(n)                                 the Series 5
Class A Third Issuer Notes is limited to £400,000,000;

 

(o)                                 the Series 5
Class B Third Issuer Notes is limited to e20,000,000;
and

 

(p)                                 the Series 5
Class C Third Issuer Notes is limited to e20,000,000.

 

2.2                                 The Third Issuer
covenants with the Note Trustee that it will, in accordance with these
presents, on the due date for the final maturity of the Third 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 Third Issuer Notes
repayable on that date and shall in the meantime and until the due date for the
final maturity of the Third 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
Third 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 Third Issuer Notes to or to the account
of the Principal Paying Agent, in the manner provided in the Third Issuer
Paying Agent and Agent Bank Agreement, shall operate in satisfaction pro tanto
of the relative covenant by the Third Issuer in this Clause 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 Third Issuer Notes (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) 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 Third
Issuer Note is improperly withheld or refused upon due presentation thereof

 

3

 

(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 Third 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 Third 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 Third 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 Third Issuer Notes, on or after the
respective due dates expressed in the Third 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 Third 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 Third Issuer Notes
shall otherwise have become due and repayable or the Definitive Third Issuer
Notes have not been issued when so required in accordance with this Deed and
the relative Global Third 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 Third 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 Third
Issuer Paying Agent and Agent Bank Agreement and by notice in writing to the
Third 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 Third Issuer Paying Agent and Agent Bank Agreement (save that the Note
Trustee’s liability under any provisions thereof 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
Third Issuer Notes and available for such purpose) and thereafter to hold all
Third Issuer Notes and all sums, documents and records held by them in respect
of Third Issuer Notes on behalf of the Note Trustee; or

 

(ii)                                  deliver up all
Third Issuer Notes and all sums, documents and records held by them in respect
of the Third 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

 

4

 

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 Third Issuer require it to make all subsequent payments in
respect of the Third 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 Third Issuer and until such notice is withdrawn Clause 2.2(a)
relating to the Third Issuer Notes shall cease to have effect.

 

2.4                                 The Third Issuer
shall require each paying agent not a party to the Third 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 Third Issuer Notes (whether such money has been paid to
it by the Third Issuer or any other obligor of the Third Issuer Notes), and the
Third Issuer and such paying agent shall each notify the Note Trustee of any
default by the Third Issuer (or any other obligor of the Third Issuer Notes) in
making any such payment.

 

3.                                      FORM AND ISSUE OF THIRD ISSUER NOTES

 

3.1                                 (a)                                  The
Series 1 Third Issuer Notes, the Series 2 Third Issuer Notes and the Series 3
Third Issuer Notes will be initially offered and sold pursuant to a
Registration Statement filed with the SEC. 
Each class of the Series 1 Third Issuer Notes, the Series 2 Third Issuer
Notes and the Series 3 Third Issuer Notes will initially be represented by a
separate global note in registered form (the Series 1 Class A Global Third Issuer
Note, the Series 1 Class B Global Third Issuer Note,
the Series
1 Class C Global Third Issuer Note, the Series 2 Class A Global Third Issuer
Note, the Series 2 Class B Global Third Issuer Note, the
Series 2
Class C Global Third Issuer Note, the Series 3 Class A Global Third Issuer
Note, Series 3 Class B Global Third Issuer Note and the Series 3
Class C Global Third Issuer Note respectively, and together, the Dollar
Global Third 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 Third Issuer Notes, the Series 2 Third Issuer Notes
and the Series 3 Third Issuer Notes.

 

(b)                                 The Series 4
Third Issuer Notes and the Series 5 Third 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 Issuer Notes and the Series 5 Third Issuer Notes
will initially be represented by a global note in registered form (the Series 4
Class A1 Global Third Issuer Note, the Series 4 Class A2 Global Third Issuer
Note, the Series 4 Class B Global Third Issuer Note,
the Series
4 Class C Global Third Issuer Note, the Series 5 Class A Global Third Issuer
Note, the Series 5 Class B Global Third Issuer Note
and the Series
5 Class C Global Third Issuer Note together, the Reg S Global
Third Issuer Notes and, together with the Dollar Global Third Issuer
Notes, the Global Third 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
Third Issuer Notes and the Series 5 Third Issuer Notes.

 

3.2                                 The Global Third
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 Third Issuer Note shall
represent such of the outstanding Third 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 Third Issuer
Notes from time to time endorsed thereon

 

5

 

and that the aggregate Principal Amount Outstanding of the Third 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 Third
Issuer Paying Agent and Agent Bank Agreement. 
Any endorsement of a Global Third Issuer Note to reflect the amount of
any increase or decrease in the Principal Amount Outstanding of the Third
Issuer Notes represented thereby shall be made by the Registrar in accordance
with Clause 5.  Title to the Global
Third 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 Third Issuer Notes shall be
issuable only in registered form without coupons or talons attached and signed
manually by a person duly authorised by the Third Issuer on behalf of the Third
Issuer and shall be authenticated by or on behalf of the Registrar.  The Global Third Issuer Notes so executed
and authenticated shall be binding and valid obligations of the Third Issuer,
notwithstanding that such duly authorised person no longer holds that office at
the time the Registrar authenticates the relevant Global Third Issuer Note.

 

3.3                                 The Global Third
Issuer Notes shall be issued by the Third Issuer to Cede & Co., as nominee
for DTC, in respect of each Dollar Global Third Issuer Note and to Citivic
Nominees Limited, as nominee for the Common Depositary, in respect of each Reg
S Global Third 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 Third 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 Third
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 Third Issuer Notes that are held through Euroclear
and Clearstream, Luxembourg.

 

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

 

(a)                                  (in the case of
Dollar Global Third Issuer Notes) DTC has notified the Third Issuer that it is
at any time unwilling or unable to continue as the registered holder of such
Dollar Global Third 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 Third Issuer within 90 days of such
notification, or (in the case of the Reg S Global Third 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

 

6

 

effective on or after the Third Issuer Closing Date, the Third Issuer or
any Paying Agent is or will be required to make any deduction or withholding
from any payment in respect of the Third Issuer Notes which would not be
required were the Third Issuer Notes in definitive form.

 

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

 

3.6                                 The Definitive Third
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 Third Issuer Notes, the
Series 2 Third Issuer Notes and the Series 3 Third Issuer Notes), (b) e500,000
(in the case of the Series 4 Third Issuer Notes, (other than the Series 4 Class
A2 Third Issuer Notes), the Series 5 Class B Third Issuer Notes and the Series
5 Class C Third Issuer Notes) and (c) £1,000 or £10,000 (in the case of the
Series 4 Class A2 Third Issuer Notes and the Series 5 Class A Third Issuer
Notes) each or, in each case, integral multiples thereof or in such other
denominations (which in the case of the Series 4 Third Issuer Notes (other than
the Series 4 Class A2 Third Issuer Notes), the Series 5 Class B Third Issuer
Notes and the Series 5 Class C Third Issuer Notes must be higher than e500,000)
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 Third 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 Third 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 Third Issuer and
shall be authenticated by or on behalf of the Registrar.  Each Third Issuer Note so executed and
authenticated shall be a binding and valid obligation of the Third Issuer
notwithstanding that such duly authorised person (for whatever reason) no
longer holds that office at the time the Registrar authenticates the Third
Issuer Note.

 

3.7                                 If the Third
Issuer is obliged to issue or procure the issue of any Definitive Third 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 Third Issuer shall
indemnify the Note Trustee, the registered holder of the relevant Global Third
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 Third Issuer Note(s) or
the relevant Noteholders in respect of the Third Issuer Notes is less than the
amount that would have been received had Definitive Third Issuer Notes been
issued in accordance with Clause 3.5. 
If and for so long as the Third Issuer discharges its obligations under
this indemnity, the breach by the Third Issuer of the provisions of Clause 3.5
shall be deemed to be cured ab initio.

 

7

 

4.                                      REPLACEMENT OF THIRD ISSUER NOTES

 

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

 

5.                                      REGISTER, TRANSFER AND EXCHANGE OF THIRD ISSUER NOTES

 

5.1                               Transfer
and Exchange of Global Third Issuer Notes

 

A Global Third Issuer Note
will be exchanged by the Third Issuer for another Global Third Issuer Note or
Definitive Third Issuer Note(s) only in the circumstances set forth in Clause
3.5, the Conditions, the Third Issuer Paying Agent and Agent Bank Agreement and
the relevant Global Third Issuer Note. 
Upon the occurrence of any of the events specified therein concerning
their exchange for Definitive Third Issuer Notes, Definitive Third Issuer Notes
of the relevant class shall be issued in such names as the Third 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 Third Issuer Note to be reduced
accordingly, cancel such Global Third Issuer Note (if applicable) and direct
DTC and Euroclear and Clearstream, Luxembourg to make corresponding reductions
in their book-entry systems, and the Third Issuer shall execute and the
Registrar shall authenticate such Definitive Third Issuer Notes of the relevant
class in the appropriate principal amounts and the Registrar will register
them.  The Registrar shall deliver such
Definitive Third Issuer Notes to the persons in whose names such Third Issuer
Notes are so registered.  Reg S
Definitive Third 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 Third Issuer Note so exchanged.  Global Third Issuer Notes may also be exchanged or replaced, in
whole or in part, as provided in Clause 4. 
Every Third Issuer Note authenticated and delivered in exchange for, or
in lieu of, a Global Third 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 Third Issuer Note.  A
Global Third Issuer Note may not be exchanged for another Third Issuer Note
other than as provided in this Clause 5.1.

 

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 Third 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 Third 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.

 

8

 

5.3                               Transfer
of Definitive Third Issuer Notes

 

Definitive Third Issuer
Notes may be transferred in whole or in part (provided that any partial
transfer relates to a Definitive Third Issuer Note) in the principal amount of,
in the case of the Series 1 Third Issuer Notes, the Series 2 Third Issuer Notes
and the Series 3 Third Issuer Notes, U.S.$1,000 or U.S.$10,000; in the case of
the Series 4 Third Issuer Notes (other than the Series 4 Class A2 Third Issuer
Notes), the Series 5 Class B Third Issuer Notes and the Series 5 Class C Third
Issuer Notes, e500,000;
and in the case of the Series 4 Class A2 Third Issuer Notes and the Series 5
Class A Third 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 Third Issuer Notes (other than the Series 4 Class A2 Third Issuer
Notes), the Series 5 Class B Third Issuer Notes and the Series 5 Class C Third
Issuer Notes must be higher than e500,000) as the Note
Trustee shall determine and notify to the relevant Noteholders.  When Definitive Third Issuer Notes are
presented by a Noteholder to the Registrar with a request to register the
transfer of such Definitive Third Issuer Notes, the Registrar shall register
the transfer as requested only if such Definitive Third 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 Third Issuer Paying Agent and Agent Bank
Agreement.  Thereupon, the Registrar
shall request the Third Issuer to issue and the Registrar shall itself
authenticate new Definitive Third Issuer Notes required to be issued in
connection with such transfer.  In the
case of a transfer of part only of such Definitive Third Issuer Note, a new
Definitive Third Issuer Note in respect of the balance not transferred will be
issued to the transferor.  All transfers
of Definitive Third Issuer Notes are subject to any restrictions on transfer
set forth on such Definitive Third Issuer Notes and the detailed regulations
concerning transfers in the Third Issuer Paying Agent and Agent Bank Agreement.

 

5.4                               Regulation
S Legend

 

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

 

THIS THIRD 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 THIRD 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.

 

5.5                               Cancellation and/or
Adjustment of Global Third Issuer Notes

 

At such time as all
Book-Entry Interests in respect of a Global Third Issuer Note have been
exchanged for Definitive Third Issuer Notes, such Global Third Issuer Note
shall be returned to or retained and cancelled by the Registrar as set out in
the Third 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 Third
Issuer Note, the principal amount of Third Issuer Notes represented by such
Global Third Issuer Note shall be reduced accordingly and

 

9

 

an endorsement shall be
made on such Global Third 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 Third Issuer Notes, the Third
Issuer shall execute and the Registrar shall authenticate Global Third Issuer
Notes and Definitive Third Issuer Notes upon a written order signed by an
officer of the Third Issuer.

 

(b)                                 No service fee
shall be charged to a Noteholder for any registration of a Definitive Third
Issuer Note on transfer or exchange but the Third 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 Third
Issuer Notes and Definitive Third Issuer Notes issued upon any registration of
transfer or exchange of Global Third Issuer Notes or Definitive Third Issuer
Notes shall be the valid obligations of the Third Issuer, evidencing the same
debt and entitled to the same benefits under this Deed, as the Global Third
Issuer Notes or Definitive Third Issuer Notes surrendered upon such
registration of transfer or exchange.

 

5.7                               Register
of Third Issuer Notes

 

The Third 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
Third Issuer Notes showing the amount of the Global Third Issuer Notes or
Definitive Third 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
Third Issuer Notes or the Definitive Third Issuer Notes.  So long as DTC or its nominee, or the Common
Depositary or its nominee, is the registered holder of a Global Third Issuer
Note, DTC or the Common Depositary, as the case may be, will be considered the
sole registered holder of such Global Third Issuer Note for all purposes under
this Third Issuer Trust Deed.  Each
Third 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
Third 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 Third 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
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 Third 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 Third
Issuer Notes.

 

7.                                      COVENANT OF COMPLIANCE

 

The Third Issuer covenants
with the Note Trustee that it will comply with and perform and observe all the
provisions of these presents, the Third Issuer Notes, the Third Issuer Deed of

 

10

 

Charge, the Third 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 Third 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 Third Issuer under
the Third 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 Third 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 THIRD ISSUER NOTES AND RECORDS

 

8.1                                 The Third Issuer
shall procure that all Third 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
Third Issuer and a certificate stating:

 

(a)                                  the aggregate
principal amount of Third Issuer Notes which have been redeemed;

 

(b)                                 the serial
numbers of Third Issuer Notes of each class so redeemed;

 

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

 

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

 

shall be given to the Note
Trustee by or on behalf of the Third 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 Third
Issuer Notes or payment of interest thereon and of cancellation of the relative
Third Issuer Notes.

 

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

 

8.3                                 All records and
certificates maintained pursuant to this Clause shall make a distinction
between Definitive Third Issuer Notes and Global Third 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 Third
Issuer or any other person as it may think fit to enforce its obligations under
these presents, the Third Issuer Notes or any of the other Transaction Documents.

 

11

 

9.2                                 Unless the
contrary be proved to the satisfaction of the Note Trustee, proof that as
regards any specified Third Issuer Note the Third Issuer has made default in
paying any amount due in respect of such Third Issuer Note shall be sufficient
evidence that the same default has been made as regards all other Third 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 Third Issuer Notes having become due and repayable,
with effect from the expiry of the Interest Period during which such Third
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 Third 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 Third Issuer Noteholders, the
Class B Third Issuer Noteholders or the Class C Third 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 Third Issuer Notes, the Class B
Third Issuer Notes or the Class C Third 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:

 

(c)                                  the Note Trustee
shall not be obliged to act at the direction or request of the Class B Third
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 Third Issuer Noteholders or such action is sanctioned by an
Extraordinary Resolution of the Class A Third Issuer Noteholders; and

 

(d)                                 the Note Trustee
shall not be obliged to act at the direction or request of the Class C Third
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 Third Issuer Noteholders or such action is sanctioned by an
Extraordinary Resolution of the Class A Third 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 Third Issuer Noteholders or such
action is sanctioned by an Extraordinary Resolution of the Class B Third Issuer
Noteholders.

 

10.2                           Save
as provided below, only the Note Trustee may enforce the provisions of these
presents, the Conditions or the Third Issuer Notes.  No Noteholder shall be entitled to proceed directly against the
Third Issuer or any other party to any of the 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 Third Issuer Noteholder and no Class B Third Issuer Noteholder shall be
entitled to take proceedings for the winding up or administration of the Third
Issuer for so long as there are any Class A Third Issuer Notes outstanding and
no Class C Third Issuer Noteholder shall be entitled to take proceedings for
the winding up or administration of the Third Issuer for so long as there are
any Class B Third Issuer Notes outstanding. 
Consistent with Section 316 of the Trust

 

12

 

Indenture Act, each Noteholder shall have the right to institute
proceedings for the enforcement of payment of principal and interest on the
Third Issuer Notes held by it, on or after the maturity date of the relevant
Third Issuer Notes set out on the face of such Third Issuer Notes.

 

11.                               DISCHARGE OF PAYMENT

 

Any payment to be made in
respect of the Third Issuer Notes by the Third 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 Third Issuer or, as
the case may be, the Note Trustee.

 

12.                               PARTIAL PAYMENTS

 

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

 

13.                               COVENANTS BY THE THIRD ISSUER

 

So long as any of the Third
Issuer Notes remains outstanding (or, in the case of paragraphs (h), (i),
(j), (n) and (o), so long as any of the Third 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 all such Third Issuer Notes remaining
outstanding at such time) the Third 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 Third 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 Third 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 Third 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;

 

13

 

(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 Third
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
Third 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 Third 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 Third Issuer Notes are listed on the
official list of the United Kingdom Listing Authority and admitted to trading
on the London Stock Exchange, 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
Third Issuer to the effect that as at 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 Third Issuer has complied, to
the best of such directors’ knowledge and belief, with all its obligations contained
in these presents and each of the 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 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 Third Issuer
Notes, receive

 

14

 

unconditionally pursuant to the Third 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 Third 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 Third 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 Third
Issuer Notes on the official list of the United Kingdom Listing Authority and
to maintain the admission to trading of the Third Issuer Notes on the London
Stock Exchange 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 Third Issuer Notes on or by such other stock
exchanges, competent listing authorities and/or quotation systems as the Third
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
Third 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;

 

(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 Third 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 Third 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 Third 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

 

15

 

the Paying Agents, or otherwise, such documents as may be required by
the Noteholders in connection with meetings of Noteholders;

 

(q)                                 Compliance with Third 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 Third 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 Third 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,
the Third Issuer shall exercise its right to redeem the corresponding class or
classes of Third Issuer Notes in the same respective aggregate principal
amounts as such Term Advance on the same Interest Payment Date under
Condition 5(B);

 

(s)                                  Redemption Requirements:  not give notice of its election to redeem
all or any part of a class or classes of Third Issuer Notes pursuant to
Condition 5(D) or (E) unless it shall first have:

 

(i)                                     given prior
written notice to the Note Trustee of its intention so to do in accordance with
the Third Issuer Paying Agent and Agent Bank Agreement;

 

(ii)                                  delivered to the
Note Trustee a certificate signed by two directors of the Third Issuer
certifying that the Third 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 Third Issuer Deed of Charge to be paid in
priority to such class or classes of Third Issuer Notes on the redemption date,
and to redeem such class or classes of Third 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 Third 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 Third 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 Third Issuer Charged Property:  ensure that, save as permitted in these
presents, the Third Issuer Deed of Charge, the Conditions and the other
Transaction

 

16

 

Documents, no person other than the Third Issuer and the Security
Trustee shall have any equitable interest in the Third Issuer Charged Property;

 

(v)                                 Maintenance of Third Issuer Cash Manager:  ensure that there is at all times a cash
manager appointed in accordance with the provisions of the Third 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 Third Issuer Notes by the Third 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;

 

(y)                                 Pre-Enforcement Payments:  ensure that amounts standing to the credit
of the Third Issuer Transaction Account will be applied by the Third Issuer in
or towards satisfaction of such of the obligations set out in the Third 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 Third
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
Third Issuer, the Third 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 Third 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)

 

17

 

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 31st December,
2003 and at such other times as the Note Trustee may request in writing, all
information in the possession or control of the Third 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 Third Issuer to the Note Trustee to take any action under any of the
provisions of this Deed (other than the issuance of Third 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 Third 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.

 

14.                               REMUNERATION AND INDEMNIFICATION OF THE NOTE TRUSTEE

 

14.1                           The Third 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 Third
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 Third Issuer Notes of any series be reduced by such amount as
shall be agreed in writing between the Third 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 Third 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 Third 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 Third Issuer to
undertake duties which the Note Trustee and the Third 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 Third Issuer shall pay to the Note Trustee
such additional remuneration as shall be agreed between them.

 

14.3                           The Third 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.

 

18

 

14.4                           In the event of
the Note Trustee and the Third 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 Third 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 Third Issuer) and the determination of any
such merchant or investment bank shall be final and binding upon the Note
Trustee and the Third Issuer.

 

14.5                           In addition to
remuneration hereunder, the Third 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 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 14.5 above and/or Clause 15(l) shall be payable
by the Third 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 Third 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.

 

19

 

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 Third 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
Third 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;

 

(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 Third
Issuer Notes by the Third Issuer, the exchange of any Global Third Issuer Note
for another Global Third Issuer Note or Definitive Third Issuer Notes or the
exchange of any Definitive Third Issuer Note for another Definitive Third
Issuer Note or the delivery of any Global Third Issuer Note or Definitive Third
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
Third 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

 

20

 

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 Third 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 Third Issuer’s liabilities in respect of the Third 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
Third Issuer to discharge or pay such liabilities and other amounts;

 

(i)                                     Third
Issuer Charged Property:  the Note Trustee may accept without enquiry, requisition or
objection such title as the Third Issuer may have to the Third 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 Third Issuer to the Third
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 Third 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;

 

21

 

(k)                                  Third 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 Third
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 Third 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 Third 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 Third 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 Third 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 Noteholder any information (including, without limitation,
information of a confidential, financial or price sensitive nature) made
available to the Note Trustee by the Third 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 Third Issuer and any rate,
method and date so agreed shall be binding on the Third 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 Third 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;

 

22

 

(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
Third 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 Third Issuer Noteholders, the Class B Third Issuer Noteholders and the
Class C Third 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 Third
Issuer Noteholders, on the one hand and the interests of the Class B Third
Issuer Noteholders and/or the Class C Third Issuer Noteholders on the other
hand, the Note Trustee shall have regard only to the interests of the Class A
Third Issuer Noteholders and subject to (B), if in the opinion of the Note
Trustee there is a conflict between the interests of the Class B Third Issuer
Noteholders on one hand and the interests of the Class C Third Issuer
Noteholders on the other hand, the Note Trustee shall have regard only to the
interests of the Class B Third 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 Third 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 Third Issuer Notes,
these presents or any of the other Transaction Documents, that such exercise
will not be materially prejudicial to the interests of the Class A Third Issuer
Noteholders if each of the Rating Agencies has confirmed that the then current
rating by it of the Class A Third 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 Third Issuer Noteholders if each of the Rating
Agencies has confirmed that the then current rating by it of the Class B Third
Issuer Notes would not be adversely affected by such exercise and that such
exercise will not be materially prejudicial to the interests of the Class C
Third Issuer Noteholders if each of the Rating Agencies has confirmed that the
then current rating by it of the Class C Third 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 Third Issuer Notes
represented by a Global Third Issuer Note standing to the account of any
person.

 

23

 

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;

 

(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 Third 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 Third 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 Third 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, 2003, 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)

 

24

 

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 Third
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 Third Issuer as the obligor of the Third 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 delivered to the Note Trustee in accordance with Clause
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 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 Third 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 Third Issuer;

 

(ii)                                  the execution,
delivery, legality, validity, adequacy, admissibility in evidence or
enforceability of any Transaction Document or any other document entered into
in connection therewith;

 

(iii)                               the title,
ownership, value, sufficiency, enforceability or existence of any Third Issuer
Charged Property or any security (howsoever described) relating thereto;

 

25

 

(iv)                              the
registration, filing, protection or perfection of any security (howsoever
described) relating to the Third 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 Third Issuer or Funding 1 or any other person or entity who has at any
time provided the same in any Transaction Document or in any document entered
into in connection therewith;

 

(vi)                              the
performance or observance by the Third Issuer or Funding 1 or any other person
of any provisions of any Transaction Document or any document entered into in
connection therewith or the fulfilment or 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 Third Issuer
Charged Property or Transaction Document;

 

(viii)                        the title of the Third
Issuer to any Third Issuer Charged Property;

 

(ix)                                the suitability,
adequacy or sufficiency of any applicable criteria for any advances under the
Third 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 Third Issuer to obtain or comply with any licence, consent or other
authority in connection with the Third Issuer Charged Property or the
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 Third Issuer
Charged Property or the 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 Transaction Documents or any other
document;

 

(xii)                             any assets comprised
in the security (howsoever described) created by the Third 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
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;

 

26

 

(xiii)                          any accounts,
books, records or files maintained by the Third Issuer or any other person in
respect of any of the Third Issuer Charged Property or Transaction Documents;
or

 

(xiv)                         any other matter or thing
relating to or in any way connected with any Third Issuer Charged Property or
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
Transaction Documents to which the Note Trustee is a party conferring on the
Note Trustee 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 THIRD 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 Third Issuer or any other party to the Transaction
Documents or any person or body corporate associated with the Third Issuer or
any other party to the 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 Third Issuer Notes or any other notes, bonds, stocks, shares,
debenture stock, debentures or other securities of, the Third Issuer or any
other party to the 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 Third Issuer or any other party to the
Transaction Documents or any such person or body corporate so associated or any
other office of profit under the Third Issuer or any other party to the
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.

 

27

 

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 Third Issuer Notes shall not be materially
prejudiced thereby waive or authorise any breach or proposed breach by the Third
Issuer or any other party thereto of any of the covenants or provisions
contained in these presents or any of the other 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 Third
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 Third 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 Third 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 Third 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 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 Third Issuer Notes or (ii) to these presents or any of the other 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 Third 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 Third
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 Third 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 Third Issuer Notes are rated by the Rating Agencies, the Third Issuer
shall notify the Rating Agencies in writing as soon as reasonably practicable
thereafter

 

28

 

of any modification to the provisions of these presents, the Third
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 Third Issuer
Notes and/or the 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 Transaction Document; and

 

(b)                                 a written request for such
confirmation or response is delivered to each Rating Agency by the Third 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 (b) 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 Third Issuer, Funding 1, the Seller, any investment
bank or financial adviser acting in relation to the Third Issuer Notes as to
any matter referred to in (b) 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 Third 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 Third 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 Third Issuer Note or of a particular principal amount of the
Third Issuer Notes as the absolute owner of such Third Issuer Note or principal
amount, as the case may be, for all purposes (whether or not such Third 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 Third 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

 

29

 

Third Issuer Note or Global
Third 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 Third Issuer Note or principal amount, as the case may be.

 

20.                               CURRENCY INDEMNITY

 

The Third 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 Third 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
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 Third 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 Third
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 Third Issuer in Clause 14.5 and Clause 15(l)) shall
constitute obligations of the Third Issuer separate and independent from its
obligations under the other provisions of these presents and the Third 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 Third 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 Third 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 Third
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 Third 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.

 

30

 

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 Third Issuer but no person shall be appointed who shall
not previously have been approved by an Extraordinary Resolution of the Class A
Third Issuer Noteholders, the Class B Third Issuer Noteholders and the Class C
Third 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 as practicable
thereafter be notified by the Third 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 Third Issuer or of any person involved in the
organisation or operation of the Third Issuer; (iii) not offer or provide
credit or credit enhancement to the Third Issuer; and (iv) execute an agreement
or instrument concerning the Third 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 Third Issuer (but without requiring the consent of the Third
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 Transaction Documents against the Third
Issuer or any other party thereto.

 

The Third 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.

 

31

 

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 Third 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 Third 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 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 Third Issuer Notes.

 

24.                               NOTICES

 

24.1                           Any notice or
demand to the Third 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)                                  Third
  Issuer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Permanent Financing (No.
  3) 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 Capital Markets and Securitisation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile: +44 (0) 20
  7574 8784

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)                                 Note Trustee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Bank of New York

  	
   

  	
   

  
	
  One Canada Square

  	
   

  	
   

  

 

32

 

	
  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.

 

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 Third Issuer Notes.  The Third 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 Third 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 Third Issuer to the Note Trustee to take any action under
this Deed, the Third 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

 

33

 

(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;

 

(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
Third 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 Third Issuer and the Note
Trustee and delivered on the date first stated on page 1.

 

34

 

SCHEDULE 1

 

FORMS OF GLOBAL THIRD ISSUER NOTES

 

PART A

 

(1)SERIES
1 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE NO. 1

 

PERMANENT FINANCING (NO.
3) PLC

 

(Incorporated with
limited liability in England with registered number 4907355 )

 

SERIES 1 CLASS A GLOBAL
THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000
Series 1 Class A Asset Backed Floating Rate Third Issuer Notes due December,
2004

 

(Initial aggregate
principal amount of Series 1 Class A Global Notes: U.S.$1,100,000,000)

 

This Series 1
Class A Global Third Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 1 Class A Third Issuer
Notes of Permanent
Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated 25th November, 2003 (the Third Issuer Trust Deed) between the Third
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 Third 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 25th
November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated 25th November, 2003 and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood
(the Third
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master Definitions
and Construction Schedule.  The
aggregate principal amount from time to time of this Global Third 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 Third Issuer
Notes.  This Global Third Issuer Note is
evidence of entitlement only.  Title to
the Global Third Issuer Notes passes only on due registration in the Register
and only the registered holder is entitled to payment in respect of this Global
Third Issuer Note.

 

35

 

1.                                      Promise
to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third 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 December 2004 (or on such earlier date as
the said principal amount may become repayable in accordance with the
Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange
for Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third
Issuer that it is at any time unwilling or unable to continue as holder of this
Global Third 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 Third 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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for

 

36

 

Definitive Third Issuer
Notes, this Global Third Issuer Note shall be surrendered to or to the order of
the Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third 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 Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer Note is governed by, and shall be construed in
accordance with, the laws of England and the Third
Issuer has in the Third Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with this
Third 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 Third Issuer Global Note, but this does not affect
any right or remedy of any person which exists or is available apart from that
Act.

 

37

 

IN WITNESS WHEREOF
the Third Issuer has caused this Global Third Issuer Note to be signed manually
or in facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
  Issued in
  London, England on 25th November, 2003.

  

 

38

 

Certificate of authentication

 

This Global Third
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

39

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$ 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

40

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following
exchanges for Definitive Third Issuer Notes and purchases and cancellations of
a part of this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$ 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

41

 

PART A

 

(2)

 

SERIES 1 CLASS A GLOBAL
THIRD ISSUER NOTE

 

NOTE NO. 2

 

PERMANENT FINANCING (NO.
3) PLC

 

(Incorporated with
limited liability in England with registered number 4907355)

 

SERIES 1 CLASS A GLOBAL
THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 1 Class A Asset Backed Floating
Rate Third Issuer Notes due December 2004

 

(Initial aggregate
principal amount of Series 1 Class A Global Notes: U.S.$1,100,000,000)

 

This Series 1
Class A Global Third Issuer Note is issued without principal or interest
coupons in respect of a duly authorised issue of Series 1 Class A Third Issuer
Notes of Permanent
Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated 25th November, 2003 (the Third Issuer Trust Deed) between the Third
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 Third 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 25th
November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated 25th November, 2003 and signed for the purposes of
identification by Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
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 Third Issuer
Notes.  This Global Third Issuer Note is
evidence of entitlement only.  Title to
the Global Third Issuer Notes passes only on due registration in the Register
and only the registered holder is entitled to payment in respect of this Global
Third Issuer Note.

 

1.                                      Promise
to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the

 

42

 

date hereof five hundred
million U.S. dollars (U.S.$500,000,000)) on the Interest Payment Date falling
in December 2004 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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
Third Issuer Trust Deed.

 

2.                                      Exchange
for Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third
Issuer that it is at any time unwilling or unable to continue as holder of this
Global Third 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 Third 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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

43

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third 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 Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer Note is governed by, and shall be construed in
accordance with, the laws of England and the Third
Issuer has in the Third Issuer Trust Deed submitted to the non exclusive
jurisdiction of the courts of England for all purposes in connection with this
Third 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 Third Issuer Global Note, but this does not affect
any right or remedy of any person which exists or is available apart from that
Act.

 

44

 

IN
WITNESS WHEREOF the Third Issuer has
caused this Global Third Issuer Note to be signed manually or in facsimile by a
person duly authorised on its behalf.

 

	
  PERMANENT FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  
	
   

  
	
   

  
	
  Issued in
  London, England on 25th November, 2003.

  

 

45

 

Certificate of authentication

 

This Global Third
Issuer Note is duly authenticated

without
recourse, warranty or liability.

 

	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

46

 

THE SCHEDULE

 

PART I

 

PAYMENTS OF PRINCIPAL
AND INTEREST

 

The following
payments on this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

47

 

PART A

 

(3)

 

SERIES 1 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE NO. 3

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 1 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$100,000,000 Series 1 Class A Asset Backed Floating
Rate Third Issuer Notes due December 2004

 

(Initial aggregate principal amount of Series 1 Class A Global Notes:
U.S.$1,100,000,000)

 

This Series 1 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 1 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to one hundred million U.S.
dollars (U.S.$100,000,000) and constituted by a Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule) and the third
issuer master definitions and construction schedule, dated 25th November, 2003
and signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Third Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding U.S.$100,000,000 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

 

49

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof one hundred million U.S. dollars (U.S.$100,000,000)) on the
Interest Payment Date falling in December 2004 (or on such earlier date as
the said principal amount may become repayable in accordance with the
Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global Third Issuer Note for Definitive Third Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for 

 

50

 

Definitive Third Issuer
Notes, this Global Third Issuer Note shall be surrendered to or to the order of
the Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third 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 Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with this Third 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 Third Issuer Global Note, but this does not affect any right
or remedy of any person which exists or is available apart from that Act.

 

51

 

IN WITNESS
WHEREOF
the Third Issuer has caused this Global Third Issuer Note to be signed manually
or in facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

52

 

Certificate of authentication

 

This Global Third Issuer
Note is duly authenticated

without recourse, warranty or liability.

 

	
   

  	
   

  	
   

  
	
  Duly authorised

  for and on behalf of

  CITIBANK, N.A.

  as Registrar

  	
   

  

 

53

 

THE SCHEDULE

 

PART 1

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

54

 

PART 2

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

55

 

PART B

 

SERIES 1 CLASS B GLOBAL THIRD ISSUER NOTE

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 1 CLASS B GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$38,000,000 Series 1 Class B Asset Backed Floating
Rate Third Issuer Notes due June 2042

 

This Series 1 Class B Global
Third Issuer Note is issued without principal or interest coupons in respect of
a duly authorised issue of Series 1 Class B Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to thirty eight million U.S.
dollars (U.S.) $38,000,000) and constituted by a Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated 25th
November, 2003 and signed for the purposes of identification by Allen &
Overy and Sidley Austin Brown & Wood (the Third
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding U.S.$38,000,000 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 B Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof thirty eight million U.S. dollars (U.S.$38,000,000)) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

54

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing
Date, the Third Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Third Issuer Notes
which would not be required were the relevant Third Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note
Trustee and the Noteholders, of its intention to exchange this Global Third
Issuer Note for Definitive Third Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Ii of the
Schedule hereto.

 

55

 

Upon any payment of
principal and endorsement of such payment on Part Ii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with this Third 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 Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

57

 

Certificate of authentication

 

This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

59

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

60

 

PART C

 

SERIES 1 CLASS C GLOBAL THIRD ISSUER NOTE

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 1 CLASS C GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$38,000,000 Series 1 Class C Asset Backed Floating
Rate Third Issuer Notes due June 2042

 

This Series 1 Class C
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 1 Class C Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to thirty eight million U.S.
dollars (U.S.$38,000,000) and constituted by a Third Issuer Trust Deed dated
25th November,  2003 (the Third Issuer Trust Deed) between the Third
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 Third 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 25th November, 2003 (the Master
Definitions and Construction Schedule) and the third issuer master
definitions and construction schedule, dated 25th November, 2003 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood (the Third Issuer Master
Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Third Issuer Trust Deed and this
Third Issuer Global Note shall be construed in accordance with the interpretation
provisions set out in Clause 2 of the Third Issuer Master Definitions and
Construction Schedule.  The aggregate
principal amount from time to time of this Global Third Issuer Note shall be
that amount not exceeding U.S.$38,000,000 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof thirty eight million U.S. dollars (U.S.$38,000,000) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

61

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this Global Third
Issuer Note shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Iii of the
Schedule hereto.

 

62

 

Upon any payment of
principal and endorsement of such payment on Part Iii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with this Third 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 Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

64

 

Certificate of authentication

 

This Global Third 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 III

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

66

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

67

 

PART D

 

(1)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE NO. 1

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 2 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2010

 

(Initial aggregate principal amount of Series 2 Class A Global Notes:
U.S.$1,700,000,000)

 

This Series 2 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 2 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed
dated25th November, 2003 (the Third Issuer
Trust Deed) between the Third 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
Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the 

 

68

 

date hereof five hundred
million U.S. dollars (U.S.$500,000,000) on the Interest Payment Date falling in
September 2010 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

69

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Iv of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Iv of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England England and the Third Issuer has in the Third Issuer Trust Deed
submitted to the non exclusive jurisdiction of the courts of England for all
purposes in connection with this Third 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.

 

70

 

IN WITNESS WHEREOF the Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

71

 

Certificate of authentication

 

This Global Third 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 IV

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

73

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

74

 

PART D

 

(2)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE NO. 2

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 2 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2010

 

(Initial aggregate principal amount of Series 2 Class A Global Notes:
U.S.$1,700,000,000)

 

This Series 2 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 2 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master
Definitions and Construction Schedule) and the third issuer master
definitions and construction schedule, dated and made on 25th November, 2003
and signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Third Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

75

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third 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 September 2010 (or on such earlier date
as the said principal amount may become repayable in accordance with the Conditions
or the Third 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 Third
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 Third Issuer Trust
Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the 

 

76

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part V of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part V of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

78

 

Certificate of authentication

 

This Global Third 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 V

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

80

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

81

 

PART D

 

(3)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE NO. 3

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 2 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2010

 

(Initial aggregate principal amount of Series 2 Class A Global Notes:
U.S.$1,700,000,000)

 

This Series 2 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 2 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the 

 

82

 

date hereof five hundred
million U.S. dollars (U.S.$500,000,000) on the Interest Payment Date falling in
September 2010 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

83

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Vi of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Vi of the Schedule hereto,
the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

85

 

Certificate of authentication

 

This Global Third 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 VI

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

87

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

88

 

PART D

 

(4)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE NO. 4

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 2 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$200,000,000 Series 2 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2010

 

(Initial aggregate principal amount of Series 2 Class A Global Notes:
U.S.$1,700,000,000)

 

This Series 2 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 2 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated 25th
November, 2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third 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 2 Class A Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at the

 

89

 

date hereof two hundred
million U.S. dollars (U.S.$200,000,000) on the Interest Payment Date falling in
September 2010 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its intention
to exchange this Global Third Issuer Note for Definitive Third Issuer Notes on
or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third
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 Third Issuer Note for Definitive Third Issuer Notes, this Global Third
Issuer Note shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

90

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and interest
in respect of Third Issuer Notes represented by this Global Third Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal or interest on this Global Third
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the Third Issuer on Part Vi of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Vi of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

92

 

 

Certificate of authentication

 

This Global Third 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 VII

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

94

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

95

 

PART E

 

SERIES 2 CLASS B GLOBAL THIRD ISSUER NOTE

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 2 CLASS B GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$59,000,000 Series 2 Class B Asset Backed Floating
Rate Third Issuer Notes due June 2042

 

This Series 2 Class B
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 2 Class B Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to fifty nine million U.S.
dollars (U.S.$59,000,000) and constituted by a Third Issuer Trust Deed dated
25th November 2003 (the Third Issuer
Trust Deed) between the Third 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
Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third Issuer Note shall be that amount not exceeding
U.S.$59,000,000 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 B Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof fifty nine million U.S. dollars (U.S.$59,000,000) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

96

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Viii of the
Schedule hereto.

 

97

 

Upon any payment of
principal and endorsement of such payment on Part Viii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

99

 

 

Certificate of authentication

 

This Global Third 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 VIII

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

101

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

102

PART F

 

SERIES 2 CLASS C GLOBAL THIRD ISSUER NOTE

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 2 CLASS C GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$59,000,000 Series 2 Class C Asset Backed Floating
Rate Third Issuer Notes due June 2042

 

This Series 2 Class C
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 2 Class C Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to fifty nine million U.S.
dollars (U.S.$59,000,000) and constituted by a Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third Issuer Note shall be that amount not exceeding
U.S.$59,000,000 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 C Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof fifty nine million U.S. dollars (U.S.$59,000,000) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

103

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Ix of the
Schedule hereto.

 

104

 

Upon any payment of
principal and endorsement of such payment on Part Ix of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to the
non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

106

 

Certificate of authentication

 

This Global Third 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 IX

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

108

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

109

 

PART G

 

(1)

 

SERIES 3 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE No. 1

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 3 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 3 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2033

 

(Initial aggregate principal amount of Series 3 Class A Global Notes:
U.S.$1,500,000,000)

 

This Series 3 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 3 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed
dated25th November, 2003 (the Third Issuer
Trust Deed) between the Third 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
Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the

 

110

 

date hereof five hundred
million U.S. dollars (U.S.$500,000,000) on the Interest Payment Date falling in
September 2033 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third Issuer may give
notice to the Note Trustee and the Noteholders, of its intention to exchange
this Global Third Issuer Note for Definitive Third Issuer Notes on or after the
Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

111

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the Conditions,
the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third Issuer on Part Iv of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Iv of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

113

 

Certificate of authentication

 

This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

106

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

107

 

PART G

 

(2)

 

SERIES 3 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE No. 2

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 3 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 3 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2033

 

(Initial aggregate principal amount of Series 3 Class A Global Notes:
U.S.$1,500,000,000)

 

This Series 3 Class A
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 3 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and made
on 25th November, 2003 and signed for the purposes of identification by Allen
& Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction Schedule)
(each as may be amended and/or restated from time to time), and the Third
Issuer Trust Deed and this Third Issuer Global Note shall be construed in
accordance with the interpretation provisions set out in Clause 2 of the Third
Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to time of this Global
Third 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third 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
September 2033 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this Global Third
Issuer Note shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

109

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Iv of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Iv of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

111

 

Certificate of authentication

 

This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

113

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

114

 

PART G

 

(3)

 

SERIES 3 CLASS A GLOBAL THIRD ISSUER NOTE

 

NOTE No. 3

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 3 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$500,000,000 Series 3 Class A Asset Backed Floating
Rate

Third Issuer Notes due September 2033

 

(Initial aggregate principal amount of Series 3 Class A Global Notes:
U.S.$1,500,000,000

 

This Series 3 Class A Global
Third Issuer Note is issued without principal or interest coupons in respect of
a duly authorised issue of Series 3 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third 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 Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third 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
September 2033 (or on such earlier date as the said principal amount may
become repayable in accordance with the Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing
Date, the Third Issuer or any Paying Agent is or will be required to make any
deduction or withholding from any payment in respect of the Third Issuer Notes
which would not be required were the relevant Third Issuer Notes in definitive
registered form.  Thereupon the holder
of this Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note
Trustee and the Noteholders, of its intention to exchange this Global Third
Issuer Note for Definitive Third Issuer Notes on or after the Exchange Date (as
defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this
Global Third Issuer Note shall be surrendered to or to the order of the
Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

116

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Iv of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Iv of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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.

 

117

 

 

IN WITNESS WHEREOF the Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

118

 

Certificate of authentication

 

This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

120

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

121

 

PART H

 

SERIES 3 CLASS B GLOBAL THIRD ISSUER NOTE

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 3 CLASS B GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$52,000,000 Series 3 Class B Asset Backed Floating
Rate Third Issuer Notes due June 2042

 

This Series 3 Class B
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 3 Class B Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to fifty two million U.S.
dollars (U.S.$52,000,000) and constituted by a Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust
Deed) between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated and
made on 25th November, 2003 and signed for the purposes of identification by
Allen & Overy and Sidley Austin Brown & Wood (the Third Issuer Master Definitions and Construction
Schedule) (each as may be amended and/or restated from time to
time), and the Third Issuer Trust Deed and this Third Issuer Global Note shall
be construed in accordance with the interpretation provisions set out in Clause
2 of the Third Issuer Master Definitions and Construction Schedule.  The aggregate principal amount from time to
time of this Global Third Issuer Note shall be that amount not exceeding
U.S.$52,000,000 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 B Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof fifty two million U.S. dollars (U.S.$52,000,000) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

122

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this Global Third
Issuer Note shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Ix of the
Schedule hereto.

 

123

 

Upon any payment of
principal and endorsement of such payment on Part Ix of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in facsimile
by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

125

 

Certificate of authentication

 

This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

127

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

128

 

PART I

 

SERIES 3 CLASS C GLOBAL THIRD ISSUER NOTE

 

PERMANENT FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 3 CLASS C GLOBAL THIRD ISSUER NOTE

representing up to

 

U.S.$52,000,000 Series 3 Class C Asset Backed Floating
Rate Third Issuer Notes due June 2042

 

This Series 3 Class C
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 3 Class C Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to fifty two million U.S.
dollars (U.S.$52,000,000) and constituted by a Third Issuer Trust Deed dated
25th November, 2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master
Definitions and Construction Schedule) and the third issuer master
definitions and construction schedule, dated and made on 25th November, 2003
and signed for the purposes of identification by Allen & Overy and Sidley
Austin Brown & Wood (the Third Issuer
Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding U.S.$52,000,000 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 C Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof fifty two million U.S. dollars (U.S.$52,000,000) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

129

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
Issuer Notes only if (i) The Depositary Trust Company (DTC) has notified the Third Issuer that it
is at any time unwilling or unable to continue as holder of this Global Third
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 Third 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 Third Issuer Closing Date, the Third Issuer or any Paying Agent is or will
be required to make any deduction or withholding from any payment in respect of
the Third Issuer Notes which would not be required were the relevant Third
Issuer Notes in definitive registered form. 
Thereupon the holder of this Global Third 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 Third Issuer, and the Third
Issuer may give notice to the Note Trustee and the Noteholders, of its
intention to exchange this Global Third Issuer Note for Definitive Third Issuer
Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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
Third 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 Third Issuer Note for Definitive Third Issuer Notes, this Global Third
Issuer Note shall be surrendered to or to the order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part Ix of the
Schedule hereto.

 

130

 

Upon any payment of
principal and endorsement of such payment on Part Ix of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third Issuer will treat
this Global Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

132

 

Certificate of authentication

 

This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

134

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
  U.S.$

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

135

 

PART J

 

SERIES 4 CLASS A1 GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 4 CLASS A1 GLOBAL THIRD ISSUER NOTE

representing up to

 

€700,000,000 Series 4 Class A1 Asset Backed Floating
Rate Third Issuer Notes due September 2033

 

This Series 4 Class A1
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 4 Class A1 Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to seven hundred million euro
(€700,000,000) and constituted by a Third Issuer Trust Deed dated 25th
November, 2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated 25th
November, 2003 and signed for the purposes of identification by Allen &
Overy and Sidley Austin Brown & Wood (the Third
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding €700,000,000 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 A1 Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

136

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof seven hundred million euro (€700,000,000) on the Interest
Payment Date falling in September 2033 (or on such earlier date as the
said principal amount may become repayable in accordance with the Conditions or
the Third 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 Third 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
Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for

 

137

 

Definitive Third Issuer
Notes this Global Third Issuer Note shall be surrendered to or to the order of
the Registrar and cancelled and, if the holder of this Global Third Issuer Note
requests, returned to it together with any relevant Definitive Third Issuer
Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third Issuer on Part X of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part X of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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.

 

138

 

IN WITNESS WHEREOF the Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
  (Duly authorised)

  
	
   

  
	
  Issued in London, England
  on 25th November, 2003.

  

 

139

 

Certificate of authentication

 

This Global Third 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 X

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

141

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

142

PART K

 

SERIES 4 CLASS A2 GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 4 CLASS A2 GLOBAL THIRD ISSUER NOTE

representing up to

 

£750,000,000 Series 4 Class A2 Asset Backed Floating
Rate Third Issuer Notes due September 2033

 

This Series 4 Class A2
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 4 Class A2 Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to seven hundred and fifty
million pounds sterling (£750,000,000) and constituted by a Third Issuer Trust
Deed dated 25th November, 2003 (the Third
Issuer Trust Deed) between the Third 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 Third 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 25th November, 2003 (the Master
Definitions and Construction Schedule) and the third issuer master
definitions and construction schedule, dated 25th November, 2003 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood (the Third Issuer Master
Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Third Issuer Trust Deed and this
Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
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 4 Class A2 Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

143

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof seven hundred and fifty million pounds sterling (£750,000,000)
on the Interest Payment Date falling in September 2033 (or on such earlier
date as the said principal amount may become repayable in accordance with the
Conditions or the Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes this
Global Third Issuer Note shall be surrendered to or to the

 

144

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests, returned
to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and
interest in respect of Third Issuer Notes represented by this Global Third
Issuer Note will be made in accordance with the Conditions.  Upon any payment of principal or interest on
this Global Third Issuer Note the amount so paid shall be endorsed by or on
behalf of the Registrar on behalf of the Third Issuer on Part X of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part X of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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.

 

145

 

IN WITNESS WHEREOF the Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

146

 

Certificate of authentication

 

This Global Third 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 XI

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

148

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

149

 

PART L

 

SERIES 4 CLASS B GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 4 CLASS B GLOBAL THIRD ISSUER NOTE

representing up to

 

€62,000,000 Series 4 Class B Asset Backed Floating Rate
Third Issuer Notes due June 2042

 

This Series 4 Class B
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 4 Class B Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to sixty two million euro (€62,000,000)
and constituted by a Third Issuer Trust Deed dated 25th November, 2003 (the Third Issuer Trust Deed) between the Third
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 Third 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 25th November, 2003 (the Master
Definitions and Construction Schedule) and the third issuer master
definitions and construction schedule, dated 25th November, 2003 and signed for
the purposes of identification by Allen & Overy and Sidley Austin Brown
& Wood (the Third Issuer Master
Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Third Issuer Trust Deed and this
Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding €62,000,000 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

150

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof sixty two million euro (€62,000,000) 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 Third
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 Third
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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes this
Global Third Issuer Note, shall be surrendered to or to the

 

151

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third Issuer on Part Xii of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Xii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England on 25th November, 2003.

 

153

 

 

Certificate of authentication

 

This Global Third 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 XII

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

155

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

156

 

PART M

 

SERIES 4 CLASS C GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 4 CLASS C GLOBAL THIRD ISSUER NOTE

representing up to

 

€62,000,000 Series 4 Class C Asset Backed Floating Rate
Third Issuer Notes due June 2042

 

This Series 4 Class C
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 4 Class C Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to sixty two million euro
(€62,000,000) and constituted by a Third Issuer Trust Deed dated 25th November,
2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master
Definitions and Construction Schedule) and the third 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 Third Issuer Master
Definitions and Construction Schedule) (each as may be amended
and/or restated from time to time), and the Third Issuer Trust Deed and this
Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding €62,000,000 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 C Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

157

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof sixty two million euro (€62,000,000) 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 Third
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 Third
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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes this
Global Third Issuer Note, shall be surrendered to or to the

 

158

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third Issuer on Part Xiii of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Xiii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  

 

Issued in London, England
on 25th November, 2003.

 

160

 

Certificate of authentication

 

This Global Third 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 XIII

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

162

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

163

 

PART N

 

SERIES 5 CLASS A GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 5 CLASS A GLOBAL THIRD ISSUER NOTE

representing up to

 

£400,000,000 Series 5 Class A Asset Backed
Fixed-Floating Rate Third Issuer Notes due June 2042

 

This Series 5 Class A
Global Third Issuer Note is issued without principal or interest coupons in respect
of a duly authorised issue of Series 5 Class A Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to four hundred million pounds
sterling (£400,000,000) and constituted by a Third Issuer Trust Deed dated 25th
November, 2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated 25th
November, 2003 and signed for the purposes of identification by Allen &
Overy and Sidley Austin Brown & Wood (the Third
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding £400,000,000 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 A Global Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

164

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof four hundred million pounds sterling (£400,000,000) 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 Third 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
Third 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 Third Issuer Trust
Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third Issuer, and the Third Issuer may give notice to the Note Trustee
and the Noteholders, of its intention to exchange this Global Third Issuer Note
for Definitive Third Issuer Notes on or after the Exchange Date (as defined
below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes this
Global Third Issuer Note, shall be surrendered to or to the

 

165

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of
Charge.  Payments of principal and interest
in respect of Third Issuer Notes represented by this Global Third Issuer Note
will be made in accordance with the Conditions.  Upon any payment of principal or interest on this Global Third
Issuer Note the amount so paid shall be endorsed by or on behalf of the
Registrar on behalf of the Third Issuer on Part Xiv of the
Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Xiv of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT
  FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  

 

Issued in London, England
on 25th November, 2003.

 

167

 

	
  Certificate of authentication

  	
   

  
	
   

  	
   

  
	
  This Global Third 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 XIV

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

169

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
  £

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

170

 

PART O

 

SERIES 5 CLASS B GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 5 CLASS B GLOBAL THIRD ISSUER NOTE

representing up to

 

€20,000,000 Series 5 Class B Asset Backed Floating Rate
Third Issuer Notes due June 2042

 

This Series 5 Class B
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 5 Class B Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to twenty million euro
(€20,000,000) and constituted by a Third Issuer Trust Deed dated 25th November,
2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third issuer master definitions and construction schedule, dated 25th
November, 2003 and signed for the purposes of identification by Allen &
Overy and Sidley Austin Brown & Wood (the Third
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding €20,000,000 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

171

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof twenty million euro (€20,000,000) 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 Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third
Issuer, and the Third Issuer may give notice to the Note Trustee and the
Noteholders, of its intention to exchange this Global Third Issuer Note for
Definitive Third Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes this
Global Third Issuer Note, shall be surrendered to or to the

 

172

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third Issuer on Part Xii of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Xii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT
  FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  

 

Issued in London, England
on 25th November, 2003.

 

174

 

	
  Certificate of authentication

  	
   

  
	
   

  	
   

  
	
  This Global Third 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 Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

176

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

177

 

PART P

 

SERIES 5 CLASS C GLOBAL THIRD ISSUER NOTE

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

SERIES 5 CLASS C GLOBAL THIRD ISSUER NOTE

representing up to

 

€20,000,000 Series 5 Class C Asset Backed Floating Rate
Third Issuer Notes due June 2042

 

This Series 5 Class C
Global Third Issuer Note is issued without principal or interest coupons in
respect of a duly authorised issue of Series 5 Class C Third Issuer Notes of Permanent Financing (No. 3) PLC (the Third Issuer), designated as specified in
the title hereof (the Third Issuer Notes),
limited to the aggregate principal amount of up to twenty million euro
(€20,000,000) and constituted by a Third Issuer Trust Deed dated 25th November,
2003 (the Third Issuer Trust Deed)
between the Third 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 Third 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 25th November, 2003 (the Master Definitions and Construction Schedule)
and the third 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 Third
Issuer Master Definitions and Construction Schedule) (each as may be
amended and/or restated from time to time), and the Third Issuer Trust Deed and
this Third Issuer Global Note shall be construed in accordance with the
interpretation provisions set out in Clause 2 of the Third Issuer Master
Definitions and Construction Schedule. 
The aggregate principal amount from time to time of this Global Third
Issuer Note shall be that amount not exceeding €20,000,000 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 Third Issuer Notes.  This Global Third Issuer Note is evidence of
entitlement only.  Title to the Global
Third Issuer Notes passes only on due registration in the Register and only the
registered holder is entitled to payment in respect of this Global Third Issuer
Note.

 

178

 

1.                                      Promise to pay

 

Subject as provided in this
Global Third Issuer Note the Third Issuer promises to pay to the registered
holder hereof the principal amount of this Global Third Issuer Note (being at
the date hereof twenty million euro (€20,000,000) 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 Third 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 Third 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 Third Issuer Trust Deed.

 

2.                                      Exchange for
Definitive Third Issuer Notes and purchases

 

This Global Third Issuer
Note will be exchangeable (free of charge to the holder) for Definitive Third
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 Third Issuer Closing Date, the Third
Issuer or any Paying Agent is or will be required to make any deduction or
withholding from any payment in respect of the Third Issuer Notes which would
not be required were the relevant Third Issuer Notes in definitive registered
form.  Thereupon the holder of this
Global Third 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 Third
Issuer, and the Third Issuer may give notice to the Note Trustee and the
Noteholders, of its intention to exchange this Global Third Issuer Note for
Definitive Third Issuer Notes on or after the Exchange Date (as defined below).

 

On or after the Exchange
Date, the holder of this Global Third Issuer Note shall surrender this Global
Third Issuer Note to or to the order of the Registrar.  In exchange for this Global Third Issuer
Note the Third Issuer will deliver, or procure the delivery of, Definitive
Third 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 Third 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 Third Issuer Note in accordance with the Third Issuer Trust
Deed, the Conditions and the Third 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 Third 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 Third Issuer Note for Definitive Third Issuer Notes this
Global Third Issuer Note, shall be surrendered to or to the

 

179

 

order of the Registrar and
cancelled and, if the holder of this Global Third Issuer Note requests,
returned to it together with any relevant Definitive Third Issuer Notes.

 

3.                                      Payments

 

Until the entire principal
amount of this Global Third Issuer Note has been extinguished, this Global
Third Issuer Note shall be entitled to the benefit of and be bound by the
Conditions, the Third Issuer Trust Deed and the Third Issuer Deed of Charge.  Payments of principal and interest in
respect of Third Issuer Notes represented by this Global Third Issuer Note will
be made in accordance with the Conditions. 
Upon any payment of principal or interest on this Global Third Issuer
Note the amount so paid shall be endorsed by or on behalf of the Registrar on
behalf of the Third Issuer on Part Xiii of the Schedule hereto.

 

Upon any payment of
principal and endorsement of such payment on Part Xiii of the
Schedule hereto, the principal amount of this Global Third 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 Third 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 Third 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 Third Issuer
Note is governed by, and shall be construed in accordance with, the laws of
England and the Third Issuer has in the Third Issuer Trust Deed submitted to
the non exclusive jurisdiction of the courts of England for all purposes in
connection with the Third 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 Third
Issuer has caused this Global Third Issuer Note to be signed manually or in
facsimile by a person duly authorised on its behalf.

 

	
  PERMANENT
  FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Duly authorised)

  	
   

  

 

Issued in London, England
on 25th November, 2003.

 

181

 

	
  Certificate of authentication

  	
   

  
	
   

  	
   

  
	
  This Global Third 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 I

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

The following payments on
this Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Interest Paid

  	
   

  	
  Principal Paid

  	
   

  	
  Remaining

  principal amount

  of this Global

  Third Issuer

  Note following

  such payment

  	
   

  	
  Notation made

  on behalf of the

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

183

 

PART II

 

EXCHANGES,

PURCHASES AND CANCELLATIONS

 

The following exchanges for
Definitive Third Issuer Notes and purchases and cancellations of a part of this
Global Third Issuer Note have been made:

 

	
  Date Made

  	
   

  	
  Part of principal

  amount

  exchanged for

  Definitive Third

  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

  Third Issuer

  	
   

  
	
   

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
  €

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

184

 

SCHEDULE 2

 

FORMS OF DEFINITIVE THIRD ISSUER NOTES

 

PART 1

 

SERIES 1 CLASS A DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
  [ISIN:US71419MAA53]

  	
  [SERIES]

  
	
   

  	
  [SERIAL NO.]

  	
   

  

 

PERMANENT FINANCING (NO.
3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$1,100,000,000 Series 1 Class A Asset Backed
Floating Rate Third Issuer Notes due December 2004

(the Series 1 Class A Third Issuer
Notes)

 

This Series 1 Class A Third
Issuer Note forms one of a series of notes constituted by a third issuer trust
deed (the Third Issuer Trust Deed)
dated 25th November, 2003 made between Permanent
Financing (No. 3) PLC (the Third
Issuer) and The Bank of New York,
as trustee for the holders of the Series 1 Class A Third Issuer Notes (the Note Trustee) and issued as registered
Series 1 Class A Third 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 Third Issuer Notes.

 

THIS IS TO
CERTIFY that

 

is/are the registered holder(s)
of one of the above-mentioned registered Series 1 Class A Third Issuer Notes,
such Series 1 Class A Third Issuer Notes being in the denomination of
U.S.$             (                                       U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
December 2004 (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 Third 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 Third 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 Third 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 Third Issuer Trust Deed.

 

185

 

IN WITNESS WHEREOF this
registered Series 1 Class A Third Issuer Note has been executed on behalf of
the Third Issuer.

 

	
  PERMANENT
  FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  	
   

  
	
   

  	
   

  
	
  This Series 1 Class A
  Third Issuer Note is duly authenticated

  	
   

  
	
  without recourse,
  warranty or liability.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Duly authorised

  	
   

  
	
  for and on behalf of

  	
   

  
	
  CITIBANK,
  N.A.

  	
   

  
	
  as Registrar

  	
   

  
			

 

186

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

187

 

FORM OF TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                        
as attorney to transfer such principal amount of this Series 1 Class A Third
Issuer Note in the register maintained by or on behalf of PERMANENT  FINANCING
(NO. 3) 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 Third Issuer Trust Deed and the Third 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 Third Issuer Note in every particular, without alteration
or enlargement or any change whatever.

 

188

 

PART 2

 

SERIES 1 CLASS B DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
  [ISIN:US71419MAB37]

  	
  [SERIES]

  
	
   

  	
  [SERIAL NO.]

  	
   

  

 

PERMANENT FINANCING (NO.
3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$38,000,000 Series 1 Class B Asset Backed Floating
Rate Third Issuer Notes due June 2042

(the Series 1 Class B Third Issuer Notes)

 

This Series 1 Class B Third
Issuer Note forms one of a series of notes constituted by a third issuer trust
deed (the Third Issuer Trust Deed)
dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as
trustee for the holders of the Series 1 Class B Third Issuer Notes (the Note Trustee) and issued as registered
Series 1 Class B Third 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 Third Issuer Notes.

 

THIS IS TO
CERTIFY that

 

is/are the registered
holder(s) of one of the above-mentioned registered Series 1 Class B Third
Issuer Notes, such Series 1 Class B Third 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 Third 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 Third 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 Third 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 Third Issuer Trust
Deed.

 

IN WITNESS
WHEREOF
this registered Series 1 Class B Third Issuer Note has been executed on behalf
of the Third Issuer.

 

	
  PERMANENT
  FINANCING (NO. 3) PLC

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
  Director

  
	
   

  
	
  Dated

  
				

 

189

 

	
  Certificate of authentication

  	
   

  
	
   

  	
   

  
	
  This Series 1 Class B
  Third Issuer Note is duly authenticated

  	
   

  
	
  without recourse,
  warranty or liability.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Duly authorised

  	
   

  
	
  for and on behalf of

  	
   

  
	
  CITIBANK,
  N.A.

  	
   

  
	
  as Registrar

  	
   

  
			

 

190

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form set out in
Schedule 3]

 

191

 

FORM OF TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                          
as attorney to transfer such principal amount of this Series 1 Class B Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the Third 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 Third Issuer Note in every particular, without alteration
or enlargement or any change whatever.

 

192

PART 3

 

SERIES 1 CLASS C DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAC10]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$38,000,000 Series 1 Class C Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 1 Class C Third Issuer
Notes)

 

This Series 1
Class C Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing
(No. 3) PLC (the Third Issuer) and
The Bank of New York, as trustee for the holders of the Series 1 Class C Third
Issuer Notes (the Note Trustee)
and issued as registered Series 1 Class C Third 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 C Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 1 Class C
Third Issuer Notes, such Series 1 Class C Third 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 C Third 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 Third Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 1 Class C Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 1 Class C Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

193

 

	
  Certificate
  of authentication

  
	
   

  
	
  This Series 1 Class C Third
  Issuer Note is duly authenticated

  
	
  without recourse, warranty or
  liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly authorised

  
	
  for and on behalf of

  
	
  CITIBANK,
  N.A.

  
	
  as Registrar

  

 

194

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

195

 

FORM OF TRANSFER OF DEFINITIVE THIRD 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 C Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                           
as attorney to transfer such principal amount of this Third Issuer Note in the
register maintained by or on behalf of PERMANENT
FINANCING (NO. 3) 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 C Third Issuer
Trust Deed and the Third 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 C Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

196

 

PART 4

 

SERIES 2 CLASS A DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAD92]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$1,700,000,000 Series 2 Class A Asset
Backed Floating Rate Third Issuer Notes due September 2010

(the Series 2 Class A Third Issuer
Notes)

 

This Series 2
Class A Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 2 Class A Third Issuer Notes (the Note Trustee) and issued as registered
Series 2 Class A Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 2 Class A
Third Issuer Notes, such Series 2 Class A Third Issuer Notes being in the
denomination of U.S.$                 (                                  U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
September 2010 (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 Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 2 Class A Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

197

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  2 Class A Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

198

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

199

 

FORM OF TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                               as
attorney to transfer such principal amount of this Series 2 Class A Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

200

 

PART 5

 

SERIES 2 CLASS B DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAE75]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$59,000,000 Series 2 Class B Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 2 Class B Third Issuer
Notes)

 

This Series 2
Class B Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 2 Class B Third Issuer Notes (the Note Trustee) and issued as registered
Series 2 Class B Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 2 Class B
Third Issuer Notes, such Series 2 Class B Third 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 Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 2 Class B Third
Issuer Note has been executed on behalf of the Third Issuer.

 

201

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  2 Class B Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

202

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

203

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                        
as attorney to transfer such principal amount of this Series 2 Class B Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

204

 

PART 6

 

SERIES 2 CLASS C DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAF41]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$59,000,000 Series 2 Class C Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 2 Class C Third Issuer
Notes)

 

This Series 2
Class C Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 2 Class C Third Issuer Notes (the Note Trustee) and issued as registered
Series 2 Class C Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY  that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 2 Class C
Third Issuer Notes, such Series 2 Class C Third 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 Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 2 Class C Third
Issuer Note has been executed on behalf of the Third Issuer.

 

205

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  2 Class C Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

206

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

207

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                      as
attorney to transfer such principal amount of this Series 2 Class C Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 C Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

208

 

PART 7

 

SERIES 3 CLASS A DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAG24]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

U.S.$1,500,000,000 Series 3 Class A Asset
Backed Floating Rate Third Issuer Notes due September 2033

(the Series 3 Class A Third Issuer
Notes)

 

This Series 3
Class A Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 3 Class A Third Issuer Notes (the Note Trustee) and issued as registered
Series 3 Class A Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 3 Class A
Third Issuer Notes, such Series 3 Class A Third Issuer Notes being in the
denomination of
U.S.$           (                               U.S.
dollars) and is/are entitled on the Interest Payment Date falling in
September 2033 (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 Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 3 Class A Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

209

 

Certificate
of authentication

 

	
  This Series
  3 Class A Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

210

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

211

 

FORM OF TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                           
as attorney to transfer such principal amount of this Series 3 Class A Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

212

 

PART 8

 

SERIES 3 CLASS B DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAH07]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

US$52,000,000 Series 3 Class B Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 3 Class B Third Issuer
Notes)

 

This Series 3
Class B Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 3 Class B Third Issuer Notes (the Note Trustee) and issued as registered
Series 3 Class B Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 3 Class B
Third Issuer Notes, such Series 3 Class B Third 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 Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 3 Class B Third
Issuer Note has been executed on behalf of the Third Issuer.

 

213

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  3 Class B Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

214

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

215

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights hereunder,
hereby irrevocably constituting and
appointing                                                 as
attorney to transfer such principal amount of this Series 3 Class B Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

216

 

PART 9

 

SERIES 3 CLASS C DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN:US71419MAJ62]

  [SERIAL NO.]

  	
   

  	
  [SERIES]

  

 

PERMANENT
FINANCING (NO. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

US$52,000,000 Series 3 Class C Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 3 Class C Third Issuer
Notes)

 

This Series 3
Class C Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 3 Class C Third Issuer Notes (the Note Trustee) and issued as registered
Series 3 Class C Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY  that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 3 Class C
Third Issuer Notes, such Series 3 Class C Third 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 Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 3 Class C Third
Issuer Note has been executed on behalf of the Third Issuer.

 

217

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  3 Class C Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

218

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

219

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights hereunder, hereby
irrevocably constituting and appointing
                                     as
attorney to transfer such principal amount of this Series 3 Class C Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in every
particular, without alteration or enlargement or any change whatever.

 

220

 

PART 10

 

SERIES 4 CLASS A1 DEFINITIVE THIRD ISSUER
NOTE

 

 

	
  [500,000]

  	
   

  	
  [ISIN: XS0179397772]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

€700,000,000 Series 4 Class A1 Asset Backed
Floating Rate Third Issuer Notes due September 2033

(the Series 4 Class A1 Third Issuer
Notes)

 

This Series 4
Class A1 Third Issuer Note forms one of a series of notes constituted by a
third issuer trust deed (the Third Issuer
Trust Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 4 Class A1 Third Issuer Notes (the Note Trustee) and issued as registered
Series 4 Class A1 Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 4 Class A1
Third Issuer Notes, such Series 4 Class A1 Third Issuer Notes being in the
denomination of
€             (                     euro)
and is/are entitled on the Interest Payment Date falling in September 2033
(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 A1
Third 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 Third Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 4 Class A1 Third 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

 

221

 

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 Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 4 Class A1
Third Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  4 Class A1 Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

222

 

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

223

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 A1 Third Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                             
as attorney to transfer such principal amount of this Series 4 Class A1 Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 A1 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

224

 

PART 11

 

SERIES 4 CLASS A2 DEFINITIVE THIRD ISSUER
NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN: XS0179398317]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

£750,000,000 Series 4 Class A2 Asset Backed
Floating Rate Third Issuer Notes due September 2033

(the Series 4 Class A2 Third Issuer
Notes)

 

This Series 4
Class A2 Third Issuer Note forms one of a series of notes constituted by a
third issuer trust deed (the Third Issuer
Trust Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 4 Class A2 Third Issuer Notes (the Note Trustee) and issued as registered
Series 4 Class A2 Third 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 4
Class A2 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 4 Class A2
Third Issuer Notes, such Series 4 Class A2 Third Issuer Notes being in the
denomination of
£         (                  pounds
sterling) and is/are entitled on the Interest Payment Date falling in
September 2033 (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 A2 Third 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 Third Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 4 Class A2 Third 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

 

225

 

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 Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 4 Class A2
Third Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  4 Class A2 Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

226

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

227

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 A2 Third Issuer Note and all rights
hereunder, hereby irrevocably constituting and appointing
                                      
as attorney to transfer such principal amount of this Series 4 Class A2 Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 A2 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

228

 

PART 12

 

SERIES 4 CLASS B DEFINITIVE THIRD ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: XS0179398580]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

€62,000,000 Series 4 Class B Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 4 Class B Third Issuer
Notes)

 

This Series 4
Class B Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 4 Class B Third Issuer Notes (the Note Trustee) and issued as registered
Series 4 Class B Third 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 Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 4 Class B
Third Issuer Notes, such Series 4 Class B Third 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
Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

229

 

IN
WITNESS WHEREOF this registered Series 4 Class B Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  4 Class B Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

230

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

231

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing
                                     
as attorney to transfer such principal amount of this Series 4 Class B Third Issuer
Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

232

 

PART 13

 

SERIES 4 CLASS C DEFINITIVE THIRD ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: XS0179398663]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

€62,000,000 Series 4 Class C Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 4 Class C Third Issuer
Notes)

 

This Series 4
Class C Third Issuer Note forms one of a series of notes constituted by a
second issuer trust deed (the Third Issuer
Trust Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 4 Class C Third Issuer Notes (the Note Trustee) and issued as registered
Series 4 Class C Third 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 C Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 4 Class C
Third Issuer Notes, such Series 4 Class C Third 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 C Third 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 Third Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 4 Class C Third 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
Third Issuer Trust Deed.

 

233

 

IN
WITNESS WHEREOF this registered Series 4 Class C Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  4 Class C Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

234

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

235

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 C Third Issuer Note and all rights hereunder, hereby irrevocably
constituting and appointing
                                          as
attorney to transfer such principal amount of this Series 4 Class C Third Issuer
Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 C Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

236

 

PART 14

 

SERIES 5 CLASS A DEFINITIVE THIRD ISSUER NOTE

 

	
  [1,000/10,000]

  	
   

  	
  [ISIN: XS0179401806]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

£400,000,000 Series 5 Class A Asset Backed
Fixed-Floating Rate Third Issuer Notes due June 2042

(the Series 5 Class A Third Issuer
Notes)

 

This Series 5
Class A Third Issuer Note forms one of a series of notes constituted by a third
issuer trust deed (the Third Issuer Trust
Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 5 Class A Third Issuer Notes (the Note Trustee) and issued as registered
Series 5 Class A Third 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 A Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 5 Class A
Third Issuer Notes, such Series 5 Class A Third 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 A Third 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 Third Issuer Trust Deed.

 

Interest is
payable on the Principal Amount Outstanding (as defined in Condition 5(C))
endorsed hereon of this Series 5 Class A Third Issuer Note at rates determined
in accordance with the Conditions payable quarterly in arrear on each Interest
Payment Date and together with such other

 

237

 

amounts (if
any) as may be payable, all subject to and in accordance with the Conditions
and the provisions of the Third Issuer Trust Deed.

 

IN
WITNESS WHEREOF this registered Series 5 Class A Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  5 Class A Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

238

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

 

239

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 A Third Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing                                                       as
attorney to transfer such principal amount of this Series 5 Class A Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the
Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

240

 

PART 15

 

SERIES 5 CLASS B DEFINITIVE THIRD ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: XS0179402796]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

€20,000,000 Series 5 Class B Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 5 Class B Third Issuer
Notes)

 

This Series 5
Class B Third Issuer Note forms one of a series of notes constituted by a
second issuer trust deed (the Third Issuer
Trust Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 5 Class B Third Issuer Notes (the Note Trustee) and issued as registered
Series 5 Class B Third 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 5 Class B Third Issuer Notes.

 

THIS
IS TO CERTIFY that

 

is/are the
registered holder(s) of one of the above-mentioned registered Series 5 Class B
Third Issuer Notes, such Series 5 Class B Third 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 B Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

241

 

IN
WITNESS WHEREOF this registered Series 5 Class B Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  5 Class B Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

242

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

243

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights hereunder,
hereby irrevocably constituting and appointing                                                  as
attorney to transfer such principal amount of this Series 5 Class B Third
Issuer Note in the register maintained by or on behalf of PERMANENT FINANCING (NO. 3) 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 Third Issuer Trust Deed and the Third 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 Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

244

 

PART 16

 

SERIES 5 CLASS C DEFINITIVE THIRD ISSUER NOTE

 

	
  [500,000]

  	
   

  	
  [ISIN: XS0179403257]

  	
   

  	
  [SERIES]

  	
   

  	
  [SERIAL NO.]

  

 

THIS THIRD 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 THIRD 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. 3) PLC

 

(Incorporated with limited liability in England with registered number
4907355)

 

€20,000,000 Series 5 Class C Asset Backed
Floating Rate Third Issuer Notes due June 2042

(the Series 5 Class C Third Issuer
Notes)

 

This Series 5
Class C Third Issuer Note forms one of a series of notes constituted by a
second issuer trust deed (the Third Issuer
Trust Deed) dated 25th November, 2003 made between Permanent Financing (No. 3) PLC (the Third Issuer) and The Bank of New York, as trustee for the
holders of the Series 5 Class C Third Issuer Notes (the Note Trustee) and issued as registered
Series 5 Class C Third 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 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
Third Issuer Notes, such Series 5 Class C Third 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 C Third 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 Third 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 Third 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
Third Issuer Trust Deed.

 

245

 

IN
WITNESS WHEREOF this registered Series 5 Class C Third
Issuer Note has been executed on behalf of the Third Issuer.

 

PERMANENT
FINANCING (NO. 3) PLC

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Director

  	
   

  
	
   

  
	
  Dated

  

 

	
  Certificate of authentication

  
	
   

  
	
  This Series
  5 Class C Third Issuer Note is duly authenticated

  
	
  without
  recourse, warranty or liability.

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Duly
  authorised

  
	
  for and on
  behalf of

  
	
  CITIBANK, N.A.

  
	
  as Registrar

  

 

246

 

(REVERSE OF NOTE)

 

THE CONDITIONS

 

[In the form
set out in Schedule 3]

 

 

247

 

FORM OF
TRANSFER OF DEFINITIVE THIRD 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 Third Issuer Note and all rights hereunder, hereby irrevocably
constituting and appointing                                                      as attorney to transfer such principal
amount of this Series 5 Class C Third Issuer Note in the register maintained by
or on behalf of PERMANENT FINANCING (NO. 3)
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 Third Issuer Trust Deed and the
Third 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 C Third Issuer Note in
every particular, without alteration or enlargement or any change whatever.

 

248

SCHEDULE 3

 

TERMS
AND CONDITIONS OF THE THIRD ISSUER NOTES

 

The following are the Terms and Conditions (the Conditions and any reference to a Condition shall be construed accordingly)
of the Third Issuer Notes in the form (subject to amendment) in which they will
be set out in the Third Issuer Trust Deed (as defined below).

 

The Third Issuer Notes, as more fully defined in
Condition 17 below, of Permanent Financing (No. 3) PLC (the Third Issuer) are constituted by a trust
deed (the Third 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 on
25th November, 2003 (the Closing Date)
and made between the Third 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 Third
Issuer Trust Deed) as trustee for the Third Issuer Noteholders (as defined in
Condition 17).

 

The security for the Third 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 Third 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 Third 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 Third Issuer Deed of
Charge).

 

By a paying agent and agent bank agreement dated on
or about the Closing Date (the Third 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 Third 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 Third 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 Third
Issuer Notes. Certain statements in these Conditions include summaries of, and
are subject to, the detailed provisions of the Third Issuer Trust Deed, the
Third Issuer Deed of Charge and the Third Issuer Paying Agent and Agent Bank Agreement.
The Third Issuer Notes are also subject to Third Issuer Dollar Currency Swap
Agreements or the Third Issuer Euro Currency Swap Agreements or the Issuer
Interest Rate Swap Agreement (each as defined in Condition 17).

 

Copies of the Third Issuer Trust Deed, the Third
Issuer Deed of Charge, the Third 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 Third 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 Third
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
Third 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 Third Issuer Trust Deed, the Third Issuer Deed of

 

249

 

Charge, the Third Issuer Intercompany Loan
Agreement, the Funding 1 Deed of Charge, the Third Issuer Cash Management
Agreement, the Third Issuer Paying Agent and Agent Bank Agreement, the Third
Issuer Swap Agreements and the other Third Issuer Transaction Documents.

 

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 Third Issuer Notes was authorised
by a resolution of the Board of Directors of the Third Issuer passed on 13th
November, 2003.

 

1.                                      Form,
Denomination and Title

 

(A)          Form
and Denomination

 

The Dollar 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 Issuer Notes will
initially be represented by a separate global note in registered form (the Series 1 Class A Global Third Issuer Note,
the Series 1 Class B Global Third Issuer Note,
the Series 1 Class C Global Third Issuer Note,
the Series 2 Class A Global Third Issuer Note,
the Series 2 Class B Global Third Issuer Note,
the Series 2 Class C Global Third Issuer Note,
the Series 3 Class A Global Third Issuer Note,
the Series 3 Class B Global Third Issuer
Notes, and the Series 3 Class C
Global Third Issuer Note together, the Dollar Global Third 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 Issuer
Notes. The Dollar Global Third 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 Third 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 Third Issuer Notes will
initially be represented by a separate global note in registered form (the Series 4 Class A1 Global Third Issuer Note,
the Series 4 Class B Global Third Issuer Note,
the Series 4 Class C Global Third Issuer Note,
the Series 5 Class B Global Third Issuer Note
and the Series 5 Class C Global Third Issuer
Note, together, the Euro Global
Third Issuer Notes, and the Series
4 Class A2 Global Third Issuer Note and the Series 5 Class A Global Third Issuer Note,
together, the Sterling Global Third Issuer
Notes and, together with the Euro Global Third Issuer Notes, the Reg S Global Third 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 Third
Issuer Notes. The Reg S Global Third 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 Third Issuer Notes and the Reg S
Global Third Issuer Notes are collectively referred to herein as the Global Third Issuer Notes.

 

For so long as any Third Issuer Notes are
represented by a Global Third Issuer Note, transfers and exchanges of
beneficial interests in such Global Third 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
Third Issuer Notes, and Euroclear and/or Clearstream, Luxembourg in the case of
the Reg S Global Third Issuer Notes.

 

250

 

A Global Third Issuer Note will be exchanged for
Third Issuer Notes of the relevant series and class in definitive registered
form (Definitive Third Issuer Notes)
only if any of the following applies:

 

(i)                                     (in the case of Dollar Global
Third Issuer Notes) DTC has notified the Third Issuer that it is at any time
unwilling or unable to continue as holder of such Global Third 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 Third Issuer within 90 days of such notification or (in the
case of the Reg S Global Third 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; 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 Third Issuer or any Paying Agent is
or will be required to make any deduction or withholding from any payment in
respect of the Third Issuer Notes which would not be required were the Third
Issuer Notes in definitive registered form.

 

If Definitive Third Issuer Notes are issued, the
beneficial interests represented by the Dollar Global Third Issuer Notes of
each series and class and by the Reg S Global Third Issuer Notes of each series
and class shall be exchanged by the Third Issuer for Third Issuer Notes of such
series and classes in definitive form (the Dollar
Definitive Third Issuer Notes and Reg
S Definitive Third Issuer Notes respectively). The aggregate
principal amount of the Dollar Definitive Third Issuer Notes and the Reg S
Definitive Third 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 Third Issuer Notes of each series and class and the
corresponding Reg S Global Third Issuer Notes of each series and class,
respectively, subject to and in accordance with the detailed provisions of
these Conditions, the Third Issuer Paying Agent and Agent Bank Agreement, the
Third Issuer Trust Deed and the relevant Global Third Issuer Note.

 

Definitive Third 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 Third Issuer Notes in
global and (if issued) definitive form will be as follows:

 

•              Dollar Third Issuer Notes: $1,000
and $10,000;

 

•              Euro Third Issuer Notes:
€500,000; and

 

•              Sterling Third Issuer Notes:
£1,000 and £10,000,

 

and integral multiples
thereof, and in such other denominations (which, in respect of the Euro Third
Issuer Notes, must be higher than (€500,000)) as the Note Trustee shall
determine and notify to the relevant Third Issuer Noteholders.

 

References to Third
Issuer Notes shall include the Global Third Issuer Notes and the
Definitive Third Issuer Notes.

 

251

 

(B)          Title

 

Title to the Global Third Issuer Notes shall pass
by and upon registration in the register (the Register)
which the Third Issuer shall procure to be kept by the Registrar. The
registered holder of any Global Third 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 Third 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 Third Issuer Note shall only
pass by and upon registration in the Register. Such Definitive Third Issuer
Notes may be transferred in whole (but not in part) upon the surrender of the
relevant Definitive Third 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 Third Issuer Notes are subject
to any restrictions on transfer set forth on such Definitive Third Issuer Notes
and the detailed regulations concerning transfers in the Third Issuer Paying
Agent and Agent Bank Agreement.

 

Each new Definitive Third Issuer Note to be issued
upon transfer of such Definitive Third Issuer Note will, within five Business
Days of receipt and surrender of such Definitive Third 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 Third Issuer Note to such address as may be specified in the
relevant form of transfer.

 

Registration of a Definitive Third 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 Third Issuer Notes are not issuable in bearer
form.

 

2.                                      Status, Security
and Priority

 

(A)          Status
of the Class A Third Issuer Notes

 

The Series 1 Class A Third Issuer Notes, the Series
2 Class A Third Issuer Notes, the Series 3 Class A Third Issuer Notes, the
Series 4 Class A Third Issuer Notes and the Series 5 Class A Third Issuer Notes
(together, the Class A Third Issuer Notes)
constitute direct, secured and unconditional obligations of the Third Issuer
and are secured by the same security that secures the Class B Third Issuer
Notes (as defined below) and the Class C Third Issuer Notes (as defined below).
Subject to the provisions of Condition 5 below, the Class A Third 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 Third Issuer Notes set out in the Third Issuer Cash Management
Agreement, the Third Issuer Deed of Charge, the Funding 1 Deed of Charge and
the other Third Issuer Transaction Documents, payments of principal and
interest on the Class A Third Issuer Notes will be senior to payments of
principal and interest on the Class B Third Issuer Notes and the Class C Third
Issuer Notes.

 

(B)          Status
of the B Third Issuer Notes

 

The Series 1 Class B Third Issuer Notes, the Series
2 Class B Third Issuer Notes, the Series 3 Class B Third Issuer Notes, the
Series 4 Class B Third Issuer Notes and the Series 5 Class B Third Issuer Notes
(together, the Class B Third Issuer Notes)
constitute direct, secured and unconditional obligations of the Third Issuer
and are secured by the same security that secures the Class A Third Issuer Notes
and the Class C Third Issuer Notes. The Class B Third Issuer Notes rank,
irrespective of

 

252

 

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 Third Issuer Notes set out in the Third Issuer Cash
Management Agreement, the Third Issuer Deed of Charge, the Funding 1 Deed of
Charge and the other Third Issuer Transaction Documents, payments of principal
and interest on the Class B Third Issuer Notes are subordinated to payments of
principal and interest on the Class A Third Issuer Notes and will be senior to
payments of principal and interest on the Class C Third Issuer Notes.

 

(C)          Status
of the Class C Third Issuer Notes

 

The Series 1 Class C Third Issuer Notes, the Series
2 Class C Third Issuer Notes, the Series 3 Class C Third Issuer Notes, the
Series 4 Class C Third Issuer Notes and the Series 5 Class C Third Issuer Notes
(together, the Class C Third Issuer Notes)
constitute direct, secured and unconditional obligations of the Third Issuer
and are secured by the same security that secures the Class A Third Issuer
Notes and the Class B Third Issuer Notes. The Class C Third 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 Third Issuer Notes set out in the Third Issuer Cash Management
Agreement, the Third Issuer Deed of Charge, the Funding 1 Deed of Charge and
the other Third Issuer Transaction Documents, payments of principal and
interest on the Class C Third Issuer Notes are subordinated to payments of
principal and interest on the Class A Third Issuer Notes and the Class B Third
Issuer Notes.

 

(D)          Conflict
between the classes of Third Issuer Notes

 

Each of the Third Issuer Trust Deed and the Third
Issuer Deed of Charge contains provisions requiring the Note Trustee and the
Security Trustee to have regard to the interests of the Class A Third Issuer
Noteholders, the Class B Third Issuer Noteholders and the Class C Third 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 Third Issuer
Notes Outstanding (as that term is defined in the Third Issuer Trust Deed))
only to the interests of the Class A Third 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 Third Issuer
Noteholders and the interests of the Class B Third Issuer Noteholders and/or
the interests of the Class C Third Issuer Noteholders and (b) (once all the
Class A Third Issuer Notes have been redeemed and for so long as there are any
Class B Third Issuer Notes Outstanding (as that term is defined in the Third
Issuer Trust Deed)) only to the interests of the Class B Third 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 Third Issuer Noteholders and the interests of the Class C Third
Issuer Noteholders. Except where expressly provided otherwise, so long as any
of the Third 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
Third Issuer Security.

 

The Third Issuer Trust Deed and the Third Issuer
Deed of Charge each contain provisions limiting the powers of the Class B Third
Issuer Noteholders and the Class C Third 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 Third
Issuer Trust Deed) according to the effect thereof on the interests of the
Class A Third Issuer Noteholders. Except in certain circumstances set out in Condition
11, the Third Issuer Trust Deed and the Third Issuer Deed of Charge contain no
such limitation on the powers of the Class A Third Issuer Noteholders, the
exercise of which will be binding on the Class B Third Issuer Noteholders and
the Class C Third Issuer Noteholders respectively, irrespective of the effect
thereof on their interests.

 

253

 

Similarly, the Third Issuer Trust Deed and the
Third Issuer Deed of Charge each contain provisions limiting the powers of the
Class C Third 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 Third Issuer Trust Deed) according
to the effect thereof on the interests of the Class B Third Issuer Noteholders.
Except in certain circumstances described above and in Condition 11, the Third
Issuer Trust Deed and the Third Issuer Deed of Charge contain no such
limitation on the powers of the Class B Third Issuer Noteholders, the exercise
of which will be binding on the Class C Third Issuer Noteholders, irrespective
of the effect thereof on their interests.

 

The Third Issuer Trust Deed and Condition 11 below
also contain provisions regarding the resolution of disputes between the
holders of the Class A Third Issuer Noteholders; between the Class B Third
Issuer Noteholders; and between the Class C Third 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
Third 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 Third Issuer Notes would not be adversely
affected by such exercise.

 

(E)          Security

 

As security for, inter alia, the payment of all
monies payable in respect of the Third Issuer Notes, the Third Issuer has
entered into the Third Issuer Deed of Charge creating, inter alia, the
following security interests (the Third
Issuer Security) in favour of the Security Trustee for itself and on
trust for the other persons to whom secured amounts are outstanding (the Third Issuer Secured Creditors):

 

(iii)                               an assignment by way of first
fixed security of all of the Third Issuer's right, benefit and interest under
those Third Issuer Transaction Documents to which the Third Issuer is a party,
including:

 

(A)                              a loan agreement between the
Third 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 Third 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 and
a second deed of accession between, inter
alios, the Security Trustee, the Third 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)                                the Third Issuer Dollar Currency
Swap Agreements (as defined in Condition 17 below) in relation to each class
of, respectively, the Dollar Third Issuer Notes;

 

(D)                               the Third Issuer Euro Currency
Swap Agreements (as defined in Condition 17 below) in relation to each class of
the Euro Third Issuer Notes;

 

254

 

(E)                                 the Third Issuer Interest Rate
Swap Agreement (as defined in Condition 17 below) in relation to the Series 5
Class A Notes;

 

(F)                                 the Third Issuer Paying Agent and
Agent Bank Agreement;

 

(G)                                an underwriting agreement in
relation to the Dollar Third Issuer Notes and a subscription agreement in
relation to the Reg S Third Issuer Notes, in each case dated on or about 14th
November, 2003 between, inter alios, the Third Issuer and the Underwriters and
the Third Issuer and the Managers respectively (as defined therein);

 

(H)                               a corporate services agreement
entered into on or about the Closing Date between, inter alios, Structured
Finance Management Limited and the Third Issuer (as may be amended,
supplemented or novated from time to time, the Third Issuer Corporate Services Agreement);

 

(I)                                    a bank account agreement entered
into on or about the Closing Date between, inter alios, the Third Issuer, Bank
of Scotland (in its capacity as account bank, the Third Issuer Account Bank) and Halifax plc (in its capacity as
cash manager, the Third Issuer Cash Manager)
(as may be amended, supplemented or novated from time to time, the Third Issuer Bank Account Agreement);

 

(J)                                   an issuer cash management
agreement entered into on or about the Closing Date between, inter alios, the
Third Issuer Cash Manager and the Security Trustee (as may be amended,
supplemented or novated from time to time, the Third Issuer Cash Management Agreement); and

 

(K)                               the Third Issuer Trust Deed,

 

and such other documents as
are expressed to be subject to the security interests created under the Third
Issuer Deed of Charge;

 

(iv)                              a first ranking fixed charge
(which may take effect as a floating charge) over all of the Third Issuer's
right, title, interest and benefit, present and future, in and to the Third 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);

 

(v)                                 a first ranking fixed charge
(which may take effect as a floating charge) over all of the Third 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 Third Issuer from
time to time in accordance with the relevant Third 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

 

255

 

(vi)                              a first floating charge over the
whole of the undertakings, property and assets, present and future of the Third
Issuer not already subject to any fixed charge or assignment as described in
(i), (ii) and (iii) above,

 

all as more particularly
set out in the Third 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 Third
Issuer Transaction Documents, the Third Issuer shall not, so long as any Third
Issuer Note remains outstanding:

 

(A)          Negative
Pledge

 

create or permit to subsist
any mortgage, 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 interest in any of
its assets or undertakings or any interest, estate, right, title or benefit
therein;

 

(D)          Bank
Accounts

 

have an interest in any
bank account, other than the bank accounts maintained pursuant to the Third
Issuer Bank Account Agreement or the Third Issuer Cash Management Agreement;

 

(E)          Restrictions
on Activities

 

carry on any business other
than as described in the Prospectus dated 14th November, 2003 relating to the
issue of the Third Issuer Notes and the related activities described therein or
as contemplated in the Transaction Documents relating to the issue of the Third
Issuer Notes and the making of the loan under the Third 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 Third Issuer Trust Deed or the Third Issuer Deed of
Charge or the priority of the security interests created thereby to be amended,

 

256

 

terminated, postponed or
discharged, or permit any other person whose obligations form part of the Third
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 Third Issuer Deed of
Charge;

 

(K)          Purchase
Third Issuer Notes

 

purchase or otherwise
acquire any Third 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 Third Issuer Note
bears interest on its Principal Amount Outstanding from (and including) the
Closing Date. Each Third Issuer Note (or, in the case of redemption in part
only of a Third Issuer Note, that part only of such Third 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 Third
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 Third Issuer Notes for any
period (including any Interest Period (as defined below)), such interest shall
be calculated:

 

(vii)                           in respect of the Dollar Third
Issuer Notes and the Euro Third Issuer Notes, on the basis of actual days
elapsed in a 360 day year;

 

(viii)                        in respect of the series 4 class
A2 issuer notes, on the basis of actual days elapsed in a 365 day year; and

 

(ix)                                in respect of the Series 5 Class
A Issuer Notes, up to and including the Interest Payment Date falling in
December 2010 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 365
day year.

 

257

 

(B)          Interest
Payment Dates and Interest Periods

 

Interest on the Third
Issuer Notes (other than the Series 1 Class A Third Issuer Notes and the Series
5 Class A Third 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 Third 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 Third Issuer
Security in accordance with the Third 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
A Third Issuer Notes is payable annually in arrear on the 10th day of December
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 December 2010 (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 Third Issuer Security in accordance with the
Third 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 A 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 A Interest Payment
Date.

 

The first Interest Payment
Date will be (other than in the case of the Series 1 Class A Third Issuer Notes
and the Series 5 Class A Third Issuer Notes) the 10th day of March 2004, and,
in the case of the Series 1 Class A Third Issuer Notes, the 10th day of
December 2003 and, in the case of Series 5 Class A Third Issuer Notes, the 10th
day of December 2004.

 

In these Conditions, Interest Period shall mean:

 

(x)                                   in respect of interest payments
made in respect of the Third Issuer Notes (other than the Series 1 Class A
Third Issuer Notes and the Series 5 Class A Third 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;

 

(xi)                                in respect of the Series 1 Class
A Third 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 Third Issuer Security in accordance with the Third Issuer
Deed of Charge, the Interest Period for the Series 1 Class A Third 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 September, December, March and June (or, if such day is not a
Business Day, the next succeeding Business Day) and thereafter will be the
quarterly period from (and

 

258

 

including) the 10th day of
September, December, March and June to (but excluding) the next following 10th
day of September, December, March and June; and

 

(xii)                             in respect of the Series 5 Class
A Third Issuer Notes, the period from (and including) the Closing Date to (but
excluding) the 10th day of December 2004 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 December 2010, if a Trigger Event occurs or the Third Issuer
Security is enforced in accordance with the Third Issuer Deed of Charge, then
the Interest Period for the Series 5 Class A Third 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 A
Interest Payment Date falling in December 2010, the Interest Period for the
Series 5 Class A 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 December 2010
to (but excluding) the next following Quarterly Interest Payment Date; and

 

(C)                                the Interest Period in respect of
the Series 5 Class A Third Issuer Notes commencing immediately prior to
December 2010 shall end on and include the Series 5 Class A Interest Payment
Date falling in December 2010.

 

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 Third
Issuer, subject to and in accordance with the Third Issuer Pre-Enforcement
Priority of Payments, to pay interest on the Class B Third Issuer Notes and the
Class C Third Issuer Notes on an Interest Payment Date (in each case, after
discharging the Third 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 Third Issuer Notes and the Class C Third Issuer
Notes (in each case, Deferred Interest),
which will be borne by each Class B Third Issuer Note and/ or Class C Third
Issuer Note in a proportion equal to the proportion that the Principal Amount
Outstanding of that Class B Third Issuer Note or Class C Third Issuer Note, as
the case may be, bears to the aggregate Principal Amount Outstanding of the
Class B Third Issuer Notes or the Class C Third 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 Third Issuer's liabilities of a higher priority) to the
Third 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 Third Issuer Notes or the Class C Third 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 Third Issuer's liabilities of a higher
priority) to the Third 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

 

259

 

Maturity Date of the Class B Third Issuer Notes or
the Class C Third 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 Third Issuer Notes or the Class C Third 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 Third Issuer
Notes will not be deferred. In the event of the delivery of a Class A Third
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.

 

(C)          Rates
of Interest

 

The rate of interest payable in respect of the
Third 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:

 

(b)                                 The Dollar Third 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
Third 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 Third Issuer Notes) for one-week and one-month Dollar
deposits and (in all other cases) for three-month and four-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 Third Issuer Notes or, if the Initial Relevant Screen
Rate is unavailable, (in the case of the Series 1 Class A Third Issuer Notes)
the linear interpolation of the arithmetic mean of such offered quotations for
and one-week and one-month Dollar deposits and (in all other cases) the linear
interpolation of the arithmetic mean of such offered quotations for three-month
and four-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 Third 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 Third Issuer Notes) one-month Dollar Deposits and (in all other cases)
three-month Dollar deposits (rounded upwards, if necessary, to five decimal
places); and

 

260

 

(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 Third 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;

 

(c)                                  The Euro Third 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 Third 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)
to provide the Agent Bank with its offered quotation to prime banks for
three-month and four-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 Third Issuer Notes
or, if the Initial Relevant Screen Rate is unavailable, the linear
interpolation of the arithmetic mean of such offered quotations for three-month
Euro deposits and the arithmetic mean of such offered quotations for four-month
Euro deposits (rounded upwards, if necessary, to five decimal places);

 

(ii)                                  on each subsequent Euro Interest
Determination Date (as defined below) the Agent Bank will determine the
Relevant Screen Rate in respect of the Euro Third 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,

 

261

 

the arithmetic mean of such
offered quotations for Euro deposits (rounded upwards, if necessary, to five
decimal places); and

 

(iii)                               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 Third 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;

 

(d)                                 The Sterling Third Issuer Notes:

 

(i)                                     the rate of interest payable in
respect of the Series 4 Class A2 Issuer Notes shall be a floating rate of
interest calculated in accordance with paragraphs (iii), (iv) and (v) below;

 

(ii)                                  the rate of interest payable in
respect of the Series 5 Class A Issuer Notes shall be 5.521 per cent. per annum
up to (and including) the interest period ending in December 2010 and
thereafter shall be a floating rate of interest calculated in accordance with
paragraphs (iv) and (v) below;

 

(iii)                               on the initial Sterling Interest
Determination Date (as defined below), the Agent Bank will determine the
Initial Relevant Screen Rate in respect of the Series 4 Class A2 Third 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 three-month and four-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 Third Issuer Notes, or, if the Initial Relevant Screen Rate is
unavailable, the linear interpolation of the arithmetic mean of such 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);

 

262

 

(iv)                              on each subsequent Sterling
Interest Determination Date, in the case of the Series 4 Class A2 Third Issuer
Notes, and, in the case of the Series 5 Class A Third Issuer Notes, on the
earlier of (i) the Interest Payment Date falling in December 2010, (ii) the
Interest Payment Date immediately following the occurrence of a Trigger Event
or (iii) the Interest Payment Date following the enforcement of the Third
Issuer Deed of Charge, the Agent Bank will determine the Relevant Screen Rate
in respect of the Sterling Third 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

 

(v)                                 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) 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 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 Third 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) or (ii), as the case may be, 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;

 

263

 

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:

 

(ii)                                  in respect of the Series 1 Class
A Third Issuer Notes, the linear interpolation of the arithmetic mean of the offered
quotations to leading banks for one week Dollar deposits and the arithmetic
mean of the offered quotations to leading banks for one- month Dollar deposits
and in respect of the Dollar Third Issuer Notes (other than the Series 1 Class
A Third Issuer Notes), the linear interpolation of the arithmetic mean of the
offered quotations to leading banks for three-month Dollar deposits and the
arithmetic mean of the offered quotations to leading banks for four-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 Third Issuer with the approval of the Note
Trustee;

 

(iii)                               in respect of the Series 4 Third
Issuer Notes (other than the Series 4 Class A2 Third Issuer Notes), the Series
5 Class B Third Issuer Notes and the Series 5 Class C Third Issuer Notes, the
linear interpolation of the arithmetic mean of the offered quotations to prime
banks for three-month Euro deposits and the arithmetic mean of the offered
quotations to prime banks for four-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 Third Issuer
with the approval of the Note Trustee; and

 

(iv)                              in respect of the Series 4 Class
A2 Third Issuer Notes, the linear interpolation of the arithmetic mean of the
offered quotations to leading banks for three- month Sterling deposits and the
arithmetic mean of the offered quotations to leading banks for four-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 Third 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:

 

(v)                                 in respect of the Series 1 Class
A Third Issuer Notes, -0.04 per cent. per annum;

 

(vi)                              in respect of the Series 1 Class
B Third Issuer Notes, 0.18 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 0.36 per cent. per annum:

 

(vii)                           in respect of the Series 1 Class
C Third Issuer Notes, 0.95 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 1.90 per cent. per annum;

 

264

 

(viii)                        in respect of the Series 2 Class
A Third Issuer Notes, 0.11 per cent. per annum;

 

(ix)                                in respect of the Series 2 Class
B Third Issuer Notes, 0.25 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 0.50 per cent. per annum;

 

(x)                                   in respect of the Series 2 Class
C Third Issuer Notes, 1.05 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 2.05 per cent. per annum;

 

(xi)                                in respect of the Series 3 Class
A Third Issuer Notes, 0.18 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 0.36 per cent. per annum;

 

(xii)                             in respect of the Series 3 Class
B Third Issuer Notes, 0.35 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 0.70 per cent. per annum;

 

(xiii)                          in respect of the Series 3 Class
C Third Issuer Notes, 1.15 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 2.15 per cent. per annum;

 

(xiv)                         in respect of the Series 4 Class
A1 Third Issuer Notes, 0.19 per cent. per annum up to and including the
Interest Period ending in December 2010 and thereafter 0.38 per cent. per
annum;

 

(xv)                            in respect of the Series 4 Class
A2 Third Issuer Notes, 0.19 per cent. per annum up to and including the
Interest Period ending in December 2010 and thereafter 0.38 per cent. per
annum;

 

(xvi)                         in respect of the Series 4 Class
B Third Issuer Notes, 0.39 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 0.78 per cent. per annum;

 

(xvii)                      in respect of the Series 4 Class
C Third Issuer Notes, 1.18 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 2.18 per cent. per annum;

 

(xviii)                   in respect of the Series 5 Class
A Third Issuer Notes, 0.434 per cent. per annum from but excluding the Interest
Period ending in December 2010;

 

(xix)                           in respect of the Series 5 Class
B Third Issuer Notes, 0.45 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 0.90 per cent. per annum; and

 

(xx)                              in respect of the Series 5 Class
C Third Issuer Notes, 1.23 per cent. per annum up to and including the Interest
Period ending in December 2010 and thereafter 2.23 per cent. per annum.

 

Relevant
Screen Rate
means:

 

(xxi)                           in respect of the first Interest
Period, the Initial Relevant Screen Rate, if any; and

 

265

 

(xxii)                        (A)          in respect of subsequent Interest Periods of
the Series 1 Class A Third 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;

 

(B)                                in respect of subsequent Interest
Periods of the Series 1 Class B Third Issuer Notes, the Series 1 Class C Third
Issuer Notes, the Series 2 Third Issuer Notes and the Series 3 Third 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; and

 

(C)                                in respect of subsequent Interest
Periods of the Series 4 Class A1 Third Issuer Notes, the Series 4 Class B Third
Issuer Notes, the Series 4 Class C Third Issuer Notes, the Series 5 Class B
Third Issuer Notes and the Series 5 Class C Third 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;

 

(D)                               in respect of subsequent Interest
Periods of the Series 4 Class A2 Third Issuer Notes and (commencing from (but
excluding) the Interest Payment Date falling in December 2010), the Series 5
Class A Third 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 Third 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

 

(xxiii)                     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 Third Issuer, the Third
Issuer Cash Manager, the Note Trustee, the Registrar and the Paying Agents of
(i) the Rates of Interest applicable to each class of Third Issuer Notes for
the relevant Interest Period and (ii) the Dollar amount (in the case of a
Series 1 Third Issuer Note, a Series 2 Third Issuer Note and a Series 3 Class A
Third Issuer Note), the Euro amount (in the case of a Series 4 Class A1 Third
Issuer Note, the Series 4 Class B Third Issuer Note, the Series 4 Class C Third
Issuer Note, the Series 5 Class B Third Issuer Note and the Series 5 Class C
Third Issuer Note) and the Sterling amount (in the case of the Series 4 Class
A2 Third Issuer Note and the Series 5 Class A Third 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 Third Issuer Note.

 

(xxiv)                    The Interest Amount in respect of
each class of Third Issuer Notes shall be determined by first applying the
relevant Rate of Interest to the Principal Amount

 

266

 

Outstanding of the relevant
class of Third 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 the Series 1 Third Issuer Notes, the Series 2
Third Issuer Notes and the Series 3 Third Issuer Notes, the nearest Euro 0.01
(in the case of the Series 4 Class A1 Third Issuer Notes, the Series 4 Class B
Third Issuer Notes, the Series 4 Class C Third Issuer Notes, the Series 5 Class
B Third Issuer Notes and the Series 5 Class C Third Issuer Notes) and the
nearest penny (in the case of the Series 4 Class A2 Issuer Notes and the Series
5 Class A Third 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
Third Issuer Noteholders of that class of Third Issuer Notes, pari passu
without preference or priority amongst themselves. For these purposes, in the
case of the Series 1 Class A Third Issuer Notes, following the occurrence of a
Trigger Event or enforcement of the Third Issuer Security in accordance with
the Third 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 subsequent Interest Periods in respect of the
Series 1 Class A Third 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 Third
Issuer Notes for each Interest Period and the Interest Payment Date falling at
the end of such Interest Period to be notified to the Third Issuer, the Third
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 Third Issuer Notes are then listed,
quoted and/or traded and the Agent Bank will cause notice thereof to be given
to the Third 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 Third 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 Third
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 Third Issuer, the Third Issuer
Cash Manager, the Reference Banks, such other bank, the Agent Bank, the Note
Trustee (as the case may be) and all Third Issuer Noteholders and (in such
absence as aforesaid) no liability to the Third Issuer Noteholders shall attach
to the Third Issuer, the Reference Banks, such other bank, the Agent Bank, the
Note Trustee (as the case may be) or the Third Issuer

 

267

 

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 Third 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 Third 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 Third
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 Third Issuer Paying Agent and Agent Bank Agreement, the Third Issuer
shall, with the approval of the Note Trustee, appoint a successor Agent Bank.
If the Third 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 Third Issuer shall, subject to Condition 2, redeem each
class of the Third Issuer Notes at their Principal Amount Outstanding (as
defined below) together with accrued interest on the Final Maturity Date in
respect of such class of Third Issuer Notes.

 

The Third Issuer may not redeem Class A Third
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 Third Issuer
Notes shall be redeemed on each Interest Payment Date other than an Interest
Payment Date on which the Third 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 Third Issuer Term AAA Advance, the Series 2 Third Issuer Term AAA Advance,
the Series 3 Third Issuer Term AAA Advance, the Series 4 Third Issuer Term AAA
Advance and the Series 5 Third Issuer Term AAA Advance, respectively,
converted, in the case of the Series 1 Third Issuer Term AAA Advance, the
Series 2 Third Issuer Term AAA Advance and the Series 3 Third Issuer Term AAA
Advance, into Dollars at the relevant Third Issuer Dollar Currency Exchange
Rate (as defined in Condition 17 below) and converted, in the case of the Third
Issuer Series 4A1 Term AAA Advance into euro at the relevant Third Issuer Euro
Currency Exchange Rate (as defined in Condition 16 below).

 

If on an Interest Payment Date, prior to
enforcement of the Third Issuer Security in accordance with the Third Issuer
Deed of Charge or the occurrence of an Asset Trigger Event, amounts are
outstanding under more than one series of the Class A Third Issuer Notes, then
the Third Issuer will apply the relevant Third Issuer Principal Receipts to
repay, as the case may be, (1) the Series 1 Class A Third Issuer Notes,
converted into Dollars at the relevant Third Issuer Dollar Currency Exchange Rate,
prior to making payments of principal on the Series 2 Class A Third Issuer
Notes, the Series 3 Class A

 

268

 

Third Issuer Notes, the Series 4 Class A Third
Issuer Notes and the Series 5 Class A Third Issuer Notes; (2) the Series 2
Class A Third Issuer Notes, converted into Dollars at the relevant Third Issuer
Dollar Currency Exchange Rate, prior to making payments of principal on the
Series 3 Class A Third Issuer Notes, the Series 4 Class A Third Issuer Notes
and the Series 5 Class A Third Issuer Notes; (3) the Series 3 Class A Third
Issuer Notes, converted into Dollars at the relevant Third Issuer Dollar
Currency Exchange Rate prior to making payments of principal on the Series 4
Class A Third Issuer Notes and the Series 5 Class A Third Issuer Notes; and (4)
the Series 4 Class A Third Issuer Notes (converted, where relevant, into Euro,
as applicable, at the relevant Third Issuer Euro Currency Exchange Rate), prior
to making payments of principal on the Series 5 Class A Third Issuer Notes.

 

The Series 5 Class A Third 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 5 Third Issuer Term AAA Advance of the Third Issuer
Term AAA Advances.

 

The Series 1 Class B Third 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 Third Issuer Term AA Advance of the Third
Issuer Term AA Advances converted into Dollars at the relevant Third Issuer
Dollar Currency Exchange Rate.

 

The Series 1 Class C Third 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 Third Issuer Term BBB Advance of the Third Issuer
Term BBB Advances converted into Dollars at the relevant Third Issuer Dollar
Currency Exchange Rate.

 

The Series 2 Class B Third 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 Third Issuer Term AA Advance of the Third
Issuer Term AA Advances converted into Dollars at the relevant Third Issuer
Dollar Currency Exchange Rate.

 

The Series 2 Class C Third 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 Third Issuer Term BBB Advance of the Third
Issuer Term BBB Advances converted into Dollars at the relevant Third Issuer
Dollar Currency Exchange Rate.

 

The Series 3 Class B Third 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 Third Issuer Term AA Advance of the Third
Issuer Term AA Advances converted into Dollar at the relevant Third Issuer
Dollar Currency Exchange Rate.

 

The Series 3 Class C Third 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 Third Issuer Term BBB Advance of the Third
Issuer Term BBB Advances converted into Dollar at the relevant Third Issuer
Dollar Currency Exchange Rate.

 

The Series 4 Class B Third 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 Third Issuer Term AA Advance of the Third
Issuer Term AA Advances converted into Euro at the relevant Third Issuer Euro
Currency Exchange Rate.

 

The Series 4 Class C Third 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 Third Issuer Term BBB Advance of the Third Issuer
Term BBB Advances converted into Euro at the relevant Third Issuer Euro
Currency Exchange Rate.

 

269

 

The Series 5 Class B Third 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 Third Issuer Term AA Advance of the Third
Issuer Term AA Advances converted into Euro at the relevant Third Issuer Euro
Currency Exchange Rate.

 

The Series 5 Class C Third 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 Third Issuer Term BBB Advance of the Third
Issuer Term BBB Advances converted into Euro at the relevant Third 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
Third 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
Third Issuer Notes on such date equal to the proportion that the Principal
Amount Outstanding of the relevant Third Issuer Note bears to the aggregate
Principal Amount Outstanding of the relevant class of Third Issuer Notes rounded
down to the nearest cent in respect of the Series 1 Third Issuer Notes, the
Series 2 Third Issuer Notes and the Series 3 Third Issuer Notes, rounded down
to the nearest Euro 0.01 in respect of the Series 4 Class A1 Third Issuer
Notes, the Series 4 Class B Third Issuer Notes, the Series 4 Class C Third
Issuer Notes, the Series 5 Class B Third Issuer Notes and the Series 5 Class C
Third Issuer Notes and rounded down to the nearest penny in respect of the
Series 4 Class A2 Third Issuer Notes, the Series 5 Class A Third Issuer Notes
provided always that no such Note Principal Payment may exceed the Principal
Amount Outstanding of the relevant Third Issuer Note.

 

Two Business Days prior to each Interest Payment
Date (the “Note Determination Date”), the Third Issuer shall determine (or
cause the Agent Bank to determine) (i) the amount of any Note Principal Payment
due in respect of each Third Issuer Note of the relevant series on the
immediately following Interest Payment Date, (ii) the Principal Amount Outstanding
of each such Third Issuer Note (which shall be $1,000 and $10,000 (in the case
of each Series 1 Third Issuer Note, each Series 2 Third Issuer Note and each
Series 3 Third Issuer Note), €500,000 (in the case of each Series 4 Class A1
Third Issuer Note, each Series 4 Class B Third Issuer Note, each Series 4 Class
C Third Issuer Note, each Series 5 Class B Third Issuer Note and each Series 5
Class C Third Issuer Note) and £1,000 and £10,000 (in the case of each Series 4
Class A2 Third Issuer Note and each Series 5 Class A Third Issuer Note) less
(in each case) the aggregate amount of all Note Principal Payments in respect
of such Third 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 Third Issuer
Note (as referred to in (ii) above) and the denominator is $1,000 and $10,000
(in the case of each Series 1 Third Issuer Note, each Series 2 Third Issuer
Note and each Series 3 Third Issuer Note), €500,000 (in the case of each Series
4 Class A1 Third Issuer Note, the Series 4 Class B Third Issuer Note, the
Series 4 Class C Third Issuer Note, each Series 5 Class B Third Issuer Note and
each Series 5 Class C Third Issuer Note) and £1,000 and £10,000 (in the case of
each Series 4 Class A2 Third Issuer Notes and each Series 5 Class A Third
Issuer Note). Each determination by or on behalf of the Third Issuer of any
Note Principal Payment of a Third Issuer Note, the Principal Amount Outstanding
of a Third 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 Third Issuer Notes of each
class, the Third 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 Third

 

270

 

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
Third 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
Issuer Notes or as soon as reasonably practicable thereafter in the case of
Definitive Third Issuer Notes. If no Note Principal Payment is due to be made
on any Interest Payment Date falling after December 2010, then a notice to this
effect will be given by or on behalf of the Third Issuer to the Third Issuer
Noteholders which have not been paid in full in accordance with Condition 14.

 

If the Third 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 Third Issuer. Any such
determination shall (in the absence of wilful default, bad faith or manifest
error) be binding on the Third Issuer, the Agent Bank and the Third Issuer
Noteholders.

 

(D)          Optional
Redemption in Full

 

Provided that a Third 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 and the
Third Issuer Noteholders in accordance with Condition 14, the Third Issuer may
redeem, unless otherwise provided, all (but not some only) of the Third 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 December 2010; or

 

•                                          any interest payment date on
which the aggregate principal amount of the issuer notes then outstanding is
less than 10 per cent. of the aggregate Principal Amount Outstanding of the
issuer notes as at the closing date,

 

provided that (a) prior to giving any such notice,
the Third Issuer shall have provided to the Note Trustee a certificate signed
by two directors of the Third Issuer to the effect that the Third Issuer will
have the funds, not subject to any interest of any other person, required to
redeem the Third Issuer Notes as aforesaid and any amounts required to be paid
in priority to or pari passu with the Third Issuer Notes outstanding in
accordance with the terms and conditions of the Third 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 Third Issuer
to redeem the Third Issuer Notes.

 

(E)          Optional
Redemption for Tax and other Reasons

 

Provided that a Third Issuer Note Acceleration
Notice has not been served and if the Third 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 Third 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 Third 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 Third
Issuer Notes) or (ii) Funding 1 would be required to deduct or withhold from
amounts due under the Third 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 Third

 

271

 

Issuer or Funding 1 (as the case may be) cannot be
avoided by the Third Issuer or Funding 1 (as the case may be) taking reasonable
measures available to it, then the Third 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 Third
Issuer Notes and as lender under the Third 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 Third 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 Third Issuer Notes would not be adversely affected
by such substitution); and (2) that the position of the Third 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 Third Issuer is unable to arrange a substitution will the
Third Issuer be entitled to redeem the Third Issuer Notes as described in this
Condition 5(E).

 

If the Third 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 Third Issuer may, having given not more than 60 nor
less than 30 days' written notice to the Note Trustee and the Third Issuer
Noteholders in accordance with Condition 14, redeem all (but not some only) of
the Third 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 Third Issuer shall have provided to the Note Trustee (1) a
certificate signed by two directors of the Third 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 Third 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 Third Issuer
Noteholders. The Third Issuer may only redeem the Third Issuer Notes as
described above if the Note Trustee is, in its absolute discretion, satisfied
that the Third Issuer will have the funds, not subject to the interest of any
other person, required to redeem the Third Issuer Notes as aforesaid and any
amounts required under the Third Issuer Pre- Enforcement Revenue Priority of
Payments currently set out in the Third Issuer Cash Management Agreement to be
paid in priority to or pari passu with the Third Issuer Notes outstanding in
accordance with the terms and conditions thereof.

 

If at any time, it would be unlawful for the Third
Issuer to make, fund or allow to remain outstanding a Term Advance made by it
under the Third Intercompany Loan Agreement and the relevant certificate states
that the Third Issuer requires Funding 1 to prepay the Term Advance, then the
Third Issuer may redeem all (but not some only) of the Third 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 and the Third Issuer Noteholders in accordance with
Condition 14, provided that, prior to giving any such notice, the Third Issuer
shall have provided to the Note Trustee a certificate signed by two directors
of the Third Issuer to the effect that it will have the funds, not subject to
the interest of any other person, required to redeem the Third Issuer Notes as
aforesaid and any amounts required under the Third Issuer Pre- Enforcement
Revenue Priority of Payments (or, as the case may be, the Third Issuer Post-
Enforcement Revenue Priority of Payments) currently set out in the Third Issuer
Cash Management Agreement to be paid in priority to or pari passu with the
Third Issuer Notes outstanding in accordance with the terms and conditions
thereof.

 

272

 

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 Third Issuer Notes; or Euro
cheque, in the case of the Euro Global Third Issuer Notes; or Sterling cheque,
in the case of the Sterling Global Third Issuer Notes drawn on, or upon
application by the relevant Third Issuer Noteholder to the specified office of
the US Paying Agent (in the case of the Dollar Global Third Issuer Notes) or
the Principal Paying Agent (in respect of the Euro Global Third Issuer Notes
and the Sterling Global Third 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 Third Issuer Notes or Definitive Third Issuer Notes (as the case may be)
at the specified office of any Paying Agent.

 

(B)          Laws
and Regulations

 

Payments of principal and interest in respect of
the Third Issuer Notes are subject, in all cases, to any fiscal or other laws
and regulations applicable thereto. Third 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 Third Issuer Note or part thereof, the interest
which continues to accrue in respect of such Third Issuer Note in accordance
with Condition 4(A) will be paid, in respect of a Global Third Issuer Note, as
described in Condition 6 (A) above and, in respect of any Definitive Third 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 Third 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 Third 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 Series 1 Third Issuer Notes
and/or the Series 2 Third Issuer Notes and/or the Series 3 Third Issuer Notes,
a US Paying Agent with a specified office in New York City and a Registrar.
Except where otherwise provided in the Third Issuer Trust Deed, the Third
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 Third Issuer Note is
outstanding, if the proposed European Union Directive on Taxation of Savings
implementing the conclusions of the ECOFIN Council meeting on 21st January,
2003, or any law implementing or complying with, or introduced in order to
conform to those conclusions is introduced, the Third 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 Third Issuer Note is not a Business Day, Third Issuer Noteholders shall not
be entitled to payment until the next following Business Day in the

 

273

 

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 Third Issuer Note, the Registrar will, in respect of the
relevant Third 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 Third
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
Third 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 Third Issuer for payment in
respect of the Third 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 Third 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 Third 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 Third Issuer Notes due on or before that date has
not been duly received by the Principal Paying 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 Third Issuer Noteholders in accordance with Condition
14.

 

8.                                      Taxation

 

All payments in respect of the Third 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
Third Issuer or any relevant Paying Agent is required by applicable law to make
any payment in respect of the Third Issuer Notes subject to any such
withholding or deduction. In that event, the Third 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. No Paying Agent nor the Third Issuer will be obliged to
make any additional payments to Third Issuer Noteholders in respect of such
withholding or deduction.

 

9.                                      Events of
Default

 

(A)          Class
A Third 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 Third Issuer Notes
or if so directed by or pursuant to an Extraordinary Resolution (as defined in
the Third Issuer Trust Deed) of the Class A Third Issuer Noteholders shall
(subject, in each case, to being indemnified and/or secured to its
satisfaction) give notice (a Class A Third
Issuer Note Acceleration Notice) to the Third Issuer and the
Security Trustee declaring the Third Issuer Notes to be due and repayable

 

274

 

(and they shall forthwith become due and repayable)
at any time after the happening of any of the following events (each a Third Issuer Event of Default) which is
continuing or unwaived:

 

(xxv)                       default being made for a period
of three Business Days in the payment of the principal of or any interest on
any Class A Third Issuer Note when and as the same ought to be paid in
accordance with these Conditions; or

 

(xxvi)                    the Third Issuer failing duly to
perform or observe any other obligation binding upon it under the Class A Third
Issuer Notes, the Third Issuer Trust Deed, the Third Issuer Deed of Charge or
any other Third Issuer Transaction Document and, in any such case (except where
the Note Trustee (or, in the case of the Third 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 Third Issuer Deed of Charge, the Security Trustee) on
the Third 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 Third
Issuer Noteholders; or

 

(xxvii)                 the Third 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 Third 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

 

(xxviii)              an order being made or an effective
resolution being passed for the winding-up of the Third 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 Third Issuer Noteholders; or

 

(xxix)                      proceedings being otherwise
initiated against the Third 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 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 Third Issuer or in
relation to the whole or any substantial part of the undertaking or assets of
the Third Issuer, or an encumbrancer taking possession of the whole or any
substantial part of the undertaking or assets of the Third 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 Third 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 Third
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

 

275

 

creditors generally or
taking steps with a view to obtaining a moratorium in respect of any
indebtedness; or

 

(xxx)                         if a Third Issuer Intercompany
Loan Acceleration Notice is served under the Third Issuer Intercompany Loan Agreement,
while any of the Class A Third Issuer Notes is outstanding.

 

(B)          Class
B Third Issuer Noteholders

 

This Condition 9(B) shall have no effect if, and
for as long as, any Class A Third Issuer Notes are outstanding. Subject
thereto, for so long as any Class B Third 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 Third Issuer Notes or if so directed by or pursuant
to an Extraordinary Resolution of the Class B Third Issuer Noteholders shall
(subject, in each case, to being indemnified and/or secured to its
satisfaction) give notice (a Class B Third
Issuer Note Acceleration Notice) to the Third Issuer and the
Security Trustee declaring the Third 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:

 

(xxxi)                      default being made for a period
of three Business Days in the payment of the principal of or any interest on
any Class B Third Issuer Note when and as the same ought to be paid in
accordance with these Conditions; or

 

(xxxii)                   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 Third Issuer Notes and Class A Third Issuer Noteholders shall be read
as references to Class B Third Issuer Notes and Class B Third Issuer
Noteholders respectively.

 

(C)          Class
C Third Issuer Noteholders

 

This Condition 9(C) shall have no effect if, and
for as long as, any Class A Third Issuer Notes or any Class B Third Issuer
Notes are outstanding. Subject thereto, for so long as any Class C Third 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 Third Issuer Notes or if
so directed by or pursuant to an Extraordinary Resolution of the Class C Third
Issuer Noteholders shall (subject, in each case, to being indemnified and/or
secured to its satisfaction) give notice (a Class
C Third Issuer Note Acceleration Notice) to the Third Issuer and the
Security Trustee declaring the Third 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:

 

(xxxiii)                default being made for a period
of three Business Days in the payment of the principal of or any interest on
any Class C Third Issuer Note when and as the same ought to be paid in
accordance with these Conditions: or

 

(xxxiv)               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 Third Issuer Notes and Class A Third Issuer Noteholders shall be read
as references to Class C Third Issuer Notes and Class C Third Issuer Noteholders
respectively.

 

276

 

(D)          Following
Service of a Third Issuer Note Acceleration Notice

 

In this Condition 9(D), a Third Issuer Note Acceleration Notice means
any of the Class A Third Issuer Note Acceleration Notice, the Class B Third
Issuer Note Acceleration Notice and the Class C Third Issuer Note Acceleration
Notice. For the avoidance of doubt, upon any Third Issuer Note Acceleration
Notice being given by the Note Trustee in accordance with this Condition 9, all
the Third 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 Third Issuer
Trust Deed.

 

10.                               Enforcement of
Third 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 Third Issuer or any
other person as it may think fit to enforce the provisions of (in the case of
the Note Trustee) the Third Issuer Notes or the Third Issuer Trust Deed
(including these Conditions) or (in the case of the Security Trustee) the Third
Issuer Deed of Charge or (in either case) any of the other Third Issuer
Transaction Documents. The Security Trustee may, at its discretion and without
notice, at any time after the Third Issuer Security has become enforceable,
take such steps as it may think fit to enforce the Third 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 Third Issuer Trust Deed or, as the case may be,
the Third Issuer Deed of Charge to protect the interests of any higher ranking
class of Third Issuer Noteholders) it shall have been so directed by an
Extraordinary Resolution of the Class A Third Issuer Noteholders, the Class B
Third Issuer Noteholders or the Class C Third Issuer Noteholders or so
requested in writing by the holders of at least 25 per cent. in Principal
Amount Outstanding of the Class A Third Issuer Notes, the Class B Third Issuer
Notes or the Class C Third Issuer Notes or, in the case of the Security Trustee
(subject to restrictions contained in the Third Issuer Deed of Charge to
protect the interests of the Class A Third Issuer Noteholders, the Class B
Third Issuer Noteholders or the Class C Third 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
Third Issuer Secured Creditor; and

 

(ii)                                  it shall have been indemnified
and/or secured to its satisfaction.

 

Amounts available for distribution after
enforcement of the Third Issuer Security shall be distributed in accordance
with the terms of the Third Issuer Deed of Charge.

 

No Third Issuer Noteholder may institute any
proceedings against the Third Issuer to enforce its rights under or in respect
of the Third Issuer Notes or the Third 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 Third Issuer Trust Deed, the right
of any Third Issuer Noteholder to receive payment of principal of and interest
on its Third 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 Third
Issuer Noteholder. In addition, no Class B Third Issuer Noteholder or Class C Third
Issuer Noteholder will be entitled to take proceedings for the winding up or
administration of the Third Issuer unless:

 

•              there are no outstanding Third
Issuer Notes of a class with higher priority; or

 

277

 

•              if Third 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 Third Issuer Notes with higher priority.

 

If, upon the Third 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 Third Issuer Notes and the Class C Third Issuer
Notes (as the case may be) under the Third 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 Third
Issuer Notes and the Class C Third Issuer Notes (as the case may be) and all
other claims ranking pari passu therewith, then the Class B Third Issuer
Noteholders and/or the Class C Third 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 Third 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
Third Issuer Noteholders and/or the Class C Third 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 Third Issuer Notes and/or the
Class C Third 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 Third Issuer Noteholders) pursuant to a post
enforcement call option agreement (the Third
Issuer Post Enforcement Call Option Agreement) dated on or about the
Closing Date between the Third Issuer, the Post Enforcement Call Option Holder,
the Note Trustee and the Security Trustee. Immediately upon such transfer, no
such former Class B Third Issuer Noteholder or Class C Third Issuer Noteholder
shall have any further interest in the Class B Third Issuer Notes or the Class
C Third Issuer Notes (as the case may be). Each of the Class B Third Issuer
Noteholders and the Class C Third Issuer Noteholders acknowledges that the Note
Trustee has the authority and the power to bind the Third Issuer Noteholders in
accordance with the terms and conditions set out in the Third Issuer Post
Enforcement Call Option Agreement and each Class B Third Issuer Noteholder or
Class C Third Issuer Noteholder (as the case may be), by subscribing for or
purchasing Class B Third Issuer Notes or Class C Third Issuer Notes (as the
case may be), agrees to be so bound.

 

11.                               Meetings of
Third Issuer Noteholders, Modifications and Waiver

 

(A)          Quorum

 

The Third Issuer Trust Deed contains provisions for
convening meetings of Third 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 Third Issuer Notes (including
these Conditions) or a modification to the provisions of any of the Third
Issuer Transaction Documents.

 

(1)          Class A Third
Issuer Notes

 

The Third 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 Third Issuer Notes shall be deemed to have been duly passed
if passed at a meeting of the holders of the Class A Third 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 Third 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 Third Issuer Notes, shall be deemed to have been duly passed if passed
at 

 

278

 

a single meeting of the
holders of such two or more series of the Class A Third 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 Third 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 Third 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 Third Issuer Notes, it shall be duly passed at separate meetings
of the holders of such two or more series of the Class A Third Issuer Notes.

 

In the case of a single meeting of the holders of
two or more series of the Class A Third Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
A Third Issuer Note denominated in Dollars shall be converted into Sterling at
the relevant Third Issuer Dollar Currency Exchange Rate and the Principal
Amount Outstanding of any Class A Third Issuer Note denominated in Euro shall
be converted into Sterling at the relevant Third Issuer Euro Currency Exchange
Rate.

 

The Third Issuer Trust Deed contains provisions
similar to those in the preceding two paragraphs in relation to requests in
writing from Class A Third Issuer Noteholders upon which the Note Trustee is
bound to act.

 

(2)          Class B Third
Issuer Notes

 

The Third 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 Third Issuer Notes shall be deemed to have been duly passed
if passed at a meeting of the holders of the Class B Third 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 Third 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 Third 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
Third 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 Third 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 Third 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 Third Issuer Notes, it shall be duly passed at separate
meetings of the holders of such two or more series of the Class B Third Issuer
Notes.

 

In the case of a single meeting of the holders of
two or more series of the Class B Third Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
B Third Issuer Note denominated in Dollars shall be converted into Sterling at
the relevant Third Issuer Dollar Currency Exchange Rate and the Principal
Amount Outstanding of any Class B Third Issuer Note denominated in Euro shall
be converted into Sterling at the relevant Third Issuer Euro Currency Exchange
Rate.

 

279

 

The Third Issuer Trust Deed contains provisions
similar to those in the preceding two paragraphs in relation to requests in
writing from Class B Third Issuer Noteholders upon which the Note Trustee is
bound to act.

 

(3)          Class C Third
Issuer Notes

 

The Third 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 Third Issuer Notes shall be deemed to have been duly passed
if passed at a meeting of the holders of the Class C Third 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 Third 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 Third 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
Third 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 Third 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 Third 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 Third Issuer Notes, it shall be duly passed at separate
meetings of the holders of such two or more series of the Class C Third Issuer
Notes.

 

In the case of a single meeting of the holders of
two or more series of the Class C Third Issuer Notes which are not all
denominated in the same currency, the Principal Amount Outstanding of any Class
C Third Issuer Note denominated in Dollars shall be converted into Sterling at
the relevant Third Issuer Dollar Currency Exchange Rate and the Principal
Amount Outstanding of any Class C Third Issuer Note denominated in Euro shall
be converted into Sterling at the relevant Third Issuer Euro Currency Exchange
Rate.

 

The Third Issuer Trust Deed contains provisions
similar to those in the preceding two paragraphs in relation to requests in
writing from Class C Third Issuer Noteholders upon which the Note Trustee is
bound to act.

 

(4)          General

 

In each of the paragraphs (1) to (3) above, subject
as provided below, the quorum at any meeting of the Third 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 Third Issuer Notes of that series
or class or classes or, at any adjourned meeting, two or more persons being or
representing Third Issuer Noteholders of that series or class or classes
whatever the aggregate Principal Amount Outstanding of relevant Third Issuer
Notes so held or represented.

 

Subject to section 316(b) of the Trust Indenture
Act, the quorum at any meeting of the Third 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 Third 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 Third Issuer Notes of 

 

280

 

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 Third Issuer Notes of each
series for the time being outstanding.

 

A resolution signed by or on behalf of all the
Third 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 Third Issuer Noteholders.

 

(B)          Limitations
on Class B Third Issuer Noteholders

 

No Extraordinary Resolution of the Class B Third
Issuer Noteholders (other than any such Extraordinary Resolution referred to in
paragraph (C) or (D) below) shall take effect for any purpose while any Class A
Third Issuer Notes remain outstanding unless it shall have been sanctioned by
an Extraordinary Resolution of the Class A Third Issuer Noteholders or the Note
Trustee is of the opinion that it would not be materially prejudicial to the
interests of the Class A Third Issuer Noteholders.

 

(C)          Limitations
on Class C Third Issuer Noteholders

 

No Extraordinary Resolution of the Class C Third
Issuer Noteholders (other than any such Extraordinary Resolution referred to in
paragraph (D) below) shall take effect for any purpose while any Class A Third
Issuer Notes or any Class B Third Issuer Notes remain outstanding unless it
shall have been sanctioned by an Extraordinary Resolution of the Class A Third
Issuer Noteholders and/or the Class B Third 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 Third Issuer Noteholders and/or the
Class B Third Issuer Noteholders (as the case may be).

 

(D)          Approval
of Modifications and Waivers by Class B Third Issuer Noteholders and Class C
Third Issuer Noteholders

 

(i)                                     No Extraordinary Resolution of
the Class A Third 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 Third Issuer Transaction Documents or these Conditions shall
take effect unless it shall have been sanctioned by an Extraordinary Resolution
of the Class B Third Issuer Noteholders and an Extraordinary Resolution of the
Class C Third Issuer Noteholders or the Note Trustee is of the opinion that it
would not be materially prejudicial to the interests of the Class B Third
Issuer Noteholders and the Class C Third Issuer Noteholders.

 

(ii)                                  After the Class A Third Issuer
Notes have been fully redeemed, no Extraordinary Resolution of the Class B
Third 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 Third Issuer
Noteholders or the Note Trustee is of the opinion that it would not be
materially prejudicial to the interests of the Class C Third Issuer
Noteholders.

 

(E)          Modifications
and Determinations by Note Trustee

 

The Note Trustee may agree to, or authorise,
without the consent of the Third 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 Third Issuer Transaction Documents, which is not, in
the sole opinion of the 

 

281

 

Note Trustee, materially prejudicial to the
interests of the Third Issuer Noteholders or (ii) any modification of these
Conditions or any of the Third 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 Third 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 Third Issuer Notes would not be adversely affected
by such modification, waiver or authorisation).

 

The Note Trustee may also, without the consent of
the Third Issuer Noteholders, determine that any Third 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 Third Issuer Noteholders and, unless the Note Trustee agrees otherwise,
any such modification shall be notified to the Third Issuer Noteholders and the
Rating Agencies in accordance with Condition 14 as soon as practicable
thereafter.

 

(F)          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 Third Issuer Noteholders of any series
or class, it shall have regard to the interests of such Third 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 Third
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 Third Issuer Noteholder shall
be entitled to claim, from the Third Issuer or any other person, any
indemnification or payment in respect of any tax consequence of any such
exercise upon individual Third Issuer Noteholders.

 

12.                               Indemnification
of the Note Trustee and the Security Trustee

 

The Third Issuer Trust Deed and the Third 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 Third 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
Third Issuer, the Third 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 Third Issuer Transaction Document or whose obligations are comprised in the
Third 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 Third Issuer Security, or any deeds or
documents of title thereto, being uninsured or inadequately insured or being
held by 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.

 

282

 

13.                               Replacement of
Third Issuer Notes

 

If any Third 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
Third 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
Third Issuer may reasonably require. Mutilated or defaced Third Issuer Notes
must be surrendered before new ones will be issued.

 

14.                               Notice to Third
Issuer Noteholders

 

(A)          Publication
of Notice

 

Any notice to Third 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 Series 1 Third Issuer Notes and/or the Series 2
Third Issuer Notes and/or the Series 3 Third 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 Third 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 Third 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 Third 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 Third Issuer Notes are represented by
Global Third Issuer Notes, notices to Third Issuer Noteholders will be valid if
published as described above, or, at the option of the Third Issuer, if
delivered to DTC in the case of the Dollar Global Third Issuer Notes, or to
Euroclear and/or Clearstream, Luxembourg in the case of the Reg S Global Third
Issuer Notes, for communication by them to Third 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 Third 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 Third Issuer Notes are then listed, quoted and/or traded and provided
that notice of such other method is given to the Third Issuer Noteholders in
such manner as the Note Trustee shall require.

 

283

 

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 Third Issuer
(copied to the Note Trustee and/or the Security Trustee, as applicable) 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 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 Third Issuer, Funding 1, the Seller, any
investment bank or financial adviser acting in relation to the Third 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 specifially 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 Third Issuer Transaction Documents and the
Third 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 Third
Issuer Notes and the Third Issuer Transaction Documents. The Third Issuer and
the other parties to the Third 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 

 

284

 

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 Third
Issuer Notes;

 

Dollar
Issuer Notes means the Series 1 Third Issuer Notes, the Series 2 Third Issuer Notes
and the Series 3 Third Issuer Notes;

 

Euro
Issuer Notes means the Series 4 Class A1 Third Issuer Notes, the Series 4 Class B
Third Issuer Notes, the Series 4 Class C Third Issuer Notes, the Series 5 Class
B Third Issuer Notes and the Series 5 Class C Third Issuer Notes;

 

Final
Maturity Date means:

 

(i)                                     in respect of the Series 1 Class
A Third Issuer Notes, the Interest Payment Date falling in December 2004;

 

(ii)                                  in respect of the Series 2 Class
A Third Issuer Notes. the Interest Payment Date falling in September 2010;

 

(iii)                               in respect of the Series 3 Class
A Third Issuer Notes, the Interest Payment Date falling in September 2033;

 

(iv)                              in respect of the Series 4 Class
A1 Third Issuer Notes, the Interest Payment Date falling in September 2033;

 

(v)                                 in respect of the Series 4 Class
A2 Third Issuer Notes, the Interest Payment Date falling in September 2033;

 

(vi)                              in respect of the Series 5 Class
A Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(vii)                           in respect of the Series 1 Class
B Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(viii)                        in respect of the Series 2 Class
B Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(ix)                                in respect of the Series 3 Class
B Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(x)                                   in respect of the Series 4 Class
B Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(xi)                                in respect of the Series 5 Class
B Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(xii)                             in respect of the Series 1 Class
C Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(xiii)                          in respect of the Series 2 Class
C Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

285

 

(xiv)                         in respect of the Series 3 Class
C Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

(xv)                            in respect of the Series 4 Class
C Third Issuer Notes, the Interest Payment Date falling in June 2042: and

 

(xvi)                         in respect of the Series 5 Class
C Third Issuer Notes, the Interest Payment Date falling in June 2042;

 

Intercompany
Loan Terms and Conditions means the standard terms and conditions incorporated into the Third
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
falls below £15,750,000,000 in the period from and including the Closing Date
to but excluding the Interest Payment Date in June 2008. 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 Third Issuer Notes;

 

Registrar means Citibank, N.A. at 5
Carmelite Street, London EC4Y 0PA;

 

Reg S
Issuer Notes means the Series 4 Issuer Notes and the Series 5 Issuer Notes;

 

Series 1
Class A Third Issuer Noteholders means the holders for the time being of the
Series 1 Class A Third Issuer Notes;

 

Series 1
Class B Third Issuer Noteholders means the holders for the time being of the
Series 1 Class B Third Issuer Notes;

 

Series 1
Class C Third Issuer Noteholders means the holders for the time being of the
Series 1 Class C Third Issuer Notes;

 

Series 2
Class A Third Issuer Noteholders means the holders for the time being of the
Series 2 Class A Third Issuer Notes;

 

Series 2
Class B Third Issuer Noteholders means the holders for the time being of the
Series 2 Class B Third Issuer Notes;

 

Series 2
Class C Third Issuer Noteholders means the holders for the time being of the
Series 2 Class C Third Issuer Notes;

 

Series 3
Class A Third Issuer Noteholders means the holders for the time being of the
Series 3 Class A Third Issuer Notes;

 

286

 

Series 3
Class B Third Issuer Noteholders means the holders for the time being of the
Series 3 Class B Third Issuer Notes;

 

Series 3
Class C Third Issuer Noteholders means the holders for the time being of the
Series 3 Class C Third Issuer Notes;

 

Series 4
Class A Third Issuer Noteholders means the holders for the time being of the
Series 4 Class A Third Issuer Notes;

 

Series 4
Class B Third Issuer Noteholders means the holders for the time being of the
Series 4 Class B Third Issuer Notes;

 

Series 4
Class C Third Issuer Noteholders means the holders for the time being of the
Series 4 Glass C Third Issuer Notes;

 

Series 5
Class A Third Issuer Noteholders means the holders for the time being of the
Series 5 Class A Third Issuer Notes;

 

Series 5
Class B Third Issuer Noteholders means the holders for the time being of the
Series 5 Class B Third Issuer Notes;

 

Series 5
Class C Third Issuer Noteholders means the holders for the time being of the
Series 5 Class C Third Issuer Notes;

 

Series 1
Class A Third Issuer Notes means the $1,100,000,000 series 1 class A asset backed floating rate
Third Issuer Notes due December 2004;

 

Series 1
Class B Third Issuer Notes means the $38,000,000 series 1 class B asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 1
Class C Third Issuer Notes means the $38,000,0000 series 1 class C asset backed floating rate
Third Issuer Notes due June 2042;

 

Series 2
Class A Third Issuer Notes means the $1,700,000,000 series 2 class A asset backed floating rate
Third Issuer Notes due September 2010;

 

Series 2
Class B Third Issuer Notes means the $59,000,000 series 2 class B asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 2
Class C Third Issuer Notes means the $59,000,000 series 2 class C asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 3
Class A Third Issuer Notes means the $1,500,000,000 series 3 class A asset backed floating rate
Third Issuer Notes due September 2033;

 

Series 3
Class B Third Issuer Notes means the $52,000,000 series 3 class B asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 3
Class C Third Issuer Notes means the $52,000,000 series 3 class C asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 4
Class A Third Issuer Notes means the Series 4 Class A1 Third Issuer Notes and the Series 4 Class
A2 Third Issuer Notes;

 

287

 

Series 4
Class A1 Third Issuer Notes means the €700,000,000 series 4 class A1 asset backed floating rate
Third Issuer Notes due September 2033;

 

Series 4
Class A2 Third Issuer Notes means the £750,000,000 series 4 class A2 asset backed floating rate
Third Issuer Notes due September 2033;

 

Series 4
Class B Third Issuer Notes means the €62,000,000 series 4 class B asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 4
Class C Third Issuer Notes means the €62,000,000 series 4 class C asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 5
Class A Third Issuer Notes means the £400,000,000 series 5 class A asset backed fixed-floating
rate Third Issuer Notes due June 2042;

 

Series 5
Class B Third Issuer Notes means the €20,000,000 series 5 class B asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 5
Class C Third Issuer Notes means the €20,000,000 series 5 class C asset backed floating rate Third
Issuer Notes due June 2042;

 

Series 5
Class A Third Issuer Swap Provider means the Third Issuer Interest Rate Swap
Provider;

 

Series 1
Third Issuer Dollar Currency Swap Provider means Credit Suisse First Boston
International or such other swap provider appointed from time to time in
relation to the Series 1 Third Issuer Notes;

 

Series 2
Third Issuer Dollar Currency Swap Provider means Credit Suisse First Boston
International or such other swap provider appointed from time to time in
relation to the Series 2 Third Issuer Notes;

 

Series 3
Third 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
Third Issuer Notes;

 

Series 4
Third Issuer Euro Currency Swap Provider means JPMorgan Chase Bank or such other
swap provider appointed from time to time in relation to the Series 4 Class A1
Third Issuer Notes, the Series 4 Class B Third Issuer Notes and the Series 4
Class C Third Issuer Notes;

 

Series 5
Third Issuer Euro Currency Swap Provider means Banque AIG, London branch or such
other swap provider appointed from time to time in relation to the Series 5
Class B Third Issuer Notes and the Series 5 Class C Third Issuer Notes;

 

Series 1
Third Issuer Notes means collectively the Series 1 Class A Third Issuer Notes, the Series
1 Class B Third Issuer Notes and the Series 1 Class C Third Issuer Notes;

 

Series 2
Third Issuer Notes means collectively the Series 2 Class A Third Issuer Notes, the Series
2 Class B Third Issuer Notes and the Series 2 Class C Third Issuer Notes;

 

Series 3
Third Issuer Notes means collectively the Series 3 Class A Third Issuer Notes, the Series
3 Class B Third Issuer Notes and the Series 3 Class C Third Issuer Notes;

 

288

 

Series 4
Third Issuer Notes means collectively the Series 4 Class A Third Issuer Notes, the Series
4 Class B Third Issuer Notes and the Series 4 Class C Third Issuer Notes;

 

Series 5
Third Issuer Notes means collectively the Series 5 Class A Third Issuer Notes, the Series
5 Class B Third Issuer Notes and the Series 5 Class C Third Issuer Notes;

 

Sterling
Issuer Notes means the Series 4 Class A2 Third Issuer Notes and the Series 5 Class A
Third Issuer Notes;

 

Third
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 Third Issuer Dollar Currency Swap or, if there is no
relevant Third 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;

 

Third
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 Third Issuer Dollar Currency Swaps to be entered into
on or before the Closing Date between the Third Issuer, the relevant Third
Issuer Dollar Currency Swap Provider and the Security Trustee;

 

Third
Issuer Dollar Currency Swap Providers means each of the Series 1 Third Issuer
Dollar Currency Swap Provider, the Series 2 Third Issuer Dollar Currency Swap
Provider and the Series 3 Third Issuer Dollar Currency Swap Provider;

 

Third
Issuer Dollar Currency Swaps means the Sterling-Dollar currency swaps
which enable the Third Issuer to receive and pay amounts under the Third Issuer
Intercompany Loan in sterling and to receive and pay amounts under the Series 1
Third Issuer Notes, the Series 2 Third Issuer Notes and the Series 3 Third
Issuer Notes;

 

Third
Issuer Euro Currency Swap Agreements means the ISDA master agreements, schedules
and confirmations (as amended or supplemented from time to time) relating to
the Third Issuer Euro Currency Swaps to be entered into on the Closing Date
between the Third Issuer, the relevant Third Issuer Euro Currency Swap Provider
and the Security Trustee;

 

Third
Issuer Euro Currency Swap Providers means each of the Series 4 Third Issuer
Euro Currency Swap Provider and the Series 5 Third Issuer Euro Currency Swap
Provider;

 

Third
Issuer Euro Currency Swaps means the Sterling-Euro currency swaps which enables the Third Issuer
to receive and pay amounts under the Third Issuer Intercompany Loan in sterling
and to receive and pay amounts under the Series 4 Third Issuer Notes, the
Series 5 Class B Third Issuer Notes and the Series 5 Class C Third Issuer
Notes;

 

Third
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 Third Issuer Euro Currency Swap or, if there is no relevant Third
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;

 

Third
Issuer Intercompany Loan means the loan of the Term Advances made by the Third Issuer to Funding
1 under the Third Issuer Intercompany Loan Agreement on or about the Closing
Date;

 

289

 

Third
Issuer Intercompany Loan Agreement means the Third Issuer Intercompany Loan
Confirmation and the Intercompany Loan Terms and Conditions together entered
into on or about the Closing Date by the Third Issuer, Funding 1 and the
Security Trustee;

 

Third
Issuer Intercompany Loan Confirmation means the loan confirmation in respect of
the Third Issuer Intercompany Loan Agreement entered into on or about the
Closing Date and made between the Funding 1, the Third Issuer and the Security
Trustee;

 

Third
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 Third Issuer Interest Rate Swap to be entered
into on or before the Closing Date between the Third Issuer, the Third Issuer
Interest Rate Swap Provider and the Security Trustee;

 

Third
Issuer Interest Rate Swap Provider means HBOS Treasury Services plc or such
other swap provider appointed from time to time in relation to the Series 5
Class A Third Issuer Notes;

 

Third
Issuer Interest Rate Swap means the fixed-for-floating interest rate swap which will enable the
Third Issuer to receive a floating rate of interest from Funding 1 on the
Series 5 Third Issuer Term AAA Advances and pay interest amounts on the Series
5 Class A Third Issuer Notes with reference to a fixed rate of interest;

 

Third
Issuer Noteholders means the holders for the time being of the Third Issuer Notes;

 

Third Issuer
Notes
means the Class A Third Issuer Notes, the Class B Third Issuer Notes and the
Class C Third Issuer Notes;

 

Third
Issuer Swap Agreements means the Third Issuer Dollar Currency Swap Agreements, the Third
Issuer Euro Currency Swap Agreements and the Issuer Interest Rate Swap
Agreement;

 

Third
Issuer Transaction Account means the Sterling account in the name of the Third 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 Third
Issuer Transaction Account in accordance with the Third Issuer Transaction
Documents);

 

Third
Issuer Transaction Documents means the Servicing Agreement, the
Mortgages Trust Deed, the Cash Management Agreement, the Third Issuer Corporate
Services Agreement, the Funding 1 Corporate Services Agreement, the Third
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 Third Issuer Bank Account Agreement, the Third Issuer Deed of
Charge, the Third Issuer Trust Deed, the Third Issuer Paying Agent and Agent
Bank Agreement, the Third Issuer Cash Management Agreement, the Third Issuer
Post-Enforcement Call Option Agreement, the Third Start-up Loan Agreement, the
Third Issuer Swap Agreements, the Third Issuer Underwriting Agreement, the
Third 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 Third Issuer Notes;

 

Transaction
Documents
means the Third 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;

 

290

 

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 Third Issuer Notes or of Third Issuer Noteholders
shall be a reference to the class of any of the Series 1 Third Issuer Notes,
the Series 2 Third Issuer Notes, the Series 3 Third Issuer Notes, the Series 4
Third Issuer Notes or the Series 5 Third Issuer Notes, as the context requires.
Any reference to a series of Third
Issuer Notes shall be a reference, as the context requires, to the Series 1
Third Issuer Notes, the Series 2 Third Issuer Notes, the Series 3 Third Issuer
Notes, the Series 4 Third Issuer Notes or the Series 5 Third Issuer Notes.

 

291

 

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 Third
Issuer Notes (represented by a Global Third Issuer Note and not being Third
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 Third 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 Third 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 Third Issuer
Notes (represented by a Global Third Issuer Note and not being Third 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 Third 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 Third Issuer Note which is to be released or (as the
case may require) the Third Issuer Note or Third 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 Third Issuer in accordance
with paragraph 17 hereof of the necessary amendment to the block voting
instruction;

 

292

 

(B)                                it is certified that each holder
of such Third Issuer Notes has instructed such Paying Agent that the vote(s)
attributable to the Third Issuer Note or Third 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 Third 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 Third 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)                                 Third Issuer
Notes and Noteholders shall mean:

 

(A)                              in connection with a single
meeting of Class A Third Issuer Noteholders, Class A Third Issuer Notes and
Class A Third Issuer Noteholders, respectively;

 

(B)                                in connection with a meeting of
Class B Third Issuer Noteholders, Class B Third Issuer Notes and Class B Third
Issuer Noteholders respectively; and

 

293

 

(C)                                in connection with a meeting of
Class C Third Issuer Noteholders, Class C Third Issuer Notes and Class C Third
Issuer Noteholders respectively.

 

(b)                                 A holder of a Third Issuer Note
represented by a Global Third Issuer Note may obtain a voting certificate in
respect of such Third Issuer Note from a Paying Agent or require a Paying Agent
to issue a block voting instruction in respect of such Third Issuer Note or by
such Third 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 Third 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 Third
Issuer Notes.

 

(c)                                  (i)            A holder of Definitive Third 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 Third
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 Third Issuer Notes to which
such appointment relates and the holder of the Definitive Third Issuer Notes
shall be deemed for such purposes not to be the holder.

 

2.                                       The Third 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
Third Issuer Notes for the time being outstanding convene a meeting of the
Noteholders and if the Third 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

 

294

 

shall include statements,
if applicable, to the effect that (a) Third Issuer Notes represented by a
Global Third 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 Third 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 Third Issuer (unless the meeting is convened by the Third
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 Third 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 this paragraph 5 being
subject to the provisions of Section 316(b) of the Trust Indenture Act, at any
such meeting one or more persons present holding Third 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 Third
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 Third 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 Third Issuer Notes (or, at any
adjourned meeting, two or more persons being or representing Noteholders
whatever the aggregate Principal Amount Outstanding of the Third Issuer Notes
so held or represented) PROVIDED THAT at
any meeting the business of 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 Third
Issuer Notes;

 

(b)                                 alteration of the currency in
which payments under the Third 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
Third 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 

 

295

 

meeting, not less than one
quarter) of the Principal Amount Outstanding of the Third 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 Third Issuer
Notes or voting certificates or being proxies or representatives (whatever the
principal amount of the Third 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 Third 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 Third Issuer Notes for
the time being outstanding.

 

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 Third Issuer, the Note Trustee or any person present holding
a Definitive Third Issuer Note or a voting certificate or being a proxy or
representative (whatever the principal amount of the Third 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.

 

296

 

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
Third Issuer Trust Deed and any director or officer of the Third 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 Third Issuer Trust Deed unless
he either produces Third Issuer Note(s) or a voting certificate or is a proxy
or a representative or is the holder of a Definitive Third Issuer Note or Definitive
Third Issuer Notes.  No person shall be
entitled to vote at any meeting in respect of Third Issuer Notes held by, for
the benefit of, or on behalf of, the Third 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 Third 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
Third Issuer Notes or is a proxy or representative shall have one vote; and

 

(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 Third 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 

 

297

 

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 Third Issuer Note from the holder thereof
by the Third 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 Third 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 Third 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 Third 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 Third Issuer Trust Deed, any other Transaction Document
or otherwise;

 

(c)                                  power to assent to any
modification of the provisions of the Conditions, the Third Issuer Trust Deed
or any other Transaction Document which shall be proposed by the Third 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 Third 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 Third 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 

 

298

 

and/or such appointee may
have become responsible under the Third 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 Third Issuer Notes for or the
conversion of the Third Issuer Notes into or the cancellation of the Third
Issuer Notes in consideration of shares, stock, notes, bonds, debentures,
debenture stock and/or other obligations and/or notes of the Third 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 Third Issuer Notes held by them in
favour of the persons with or to whom the Third Issuer Notes are to be
exchanged or sold respectively,

 

PROVIDED
THAT:

 

(i)                                     no Extraordinary Resolution of
the Class A Third Issuer Noteholders or the Class B Third Issuer Noteholders or
the Class C Third Issuer Noteholders to sanction a modification of the
Conditions, the Third 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 Third 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 Third Issuer Noteholders)
the Class B Third Issuer Noteholders and the Class C Third Issuer Noteholders
or (in the case of an Extraordinary Resolution of the Class B Third Issuer
Noteholders) the Class C Third Issuer Noteholders; or

 

(B)                                it shall have been sanctioned by
an Extraordinary Resolution of (in the case of an Extraordinary Resolution of
the Class A Third Issuer Noteholders) the Class B Third Issuer Noteholders and
the Class C Third Issuer Noteholders or (in the case of an Extraordinary
Resolution of the Class B Third Issuer Noteholders) the Class C Third Issuer
Noteholders;

 

(ii)                                  no Extraordinary Resolution of
the Class B Third Issuer Noteholders shall be effective for any purpose while
any Class A Third 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 Third Issuer Noteholders or (B) it is sanctioned by an
Extraordinary Resolution of the Class A Third Issuer Noteholders; and

 

(iii)                               no Extraordinary Resolution of
the Class C Third Issuer Noteholders shall be effective for any purpose while
any Class A Third Issuer Notes or Class B Third 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 Third Issuer Noteholders
and/or the Class B Third Issuer Noteholders (as the case may be) or (B) 

 

299

 

it is sanctioned by an
Extraordinary Resolution of the Class A Third Issuer Noteholders and/or the
Class B Third 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 Third 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 Third 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 Third Issuer Notes shall be deemed to have been duly passed if passed
at a meeting of the holders of the Class A Third 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 Third 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 Third 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 series of the
Class A Third 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 Third 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 Third 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 Third Issuer Notes, it shall be duly passed at separate
meetings of the holders of such two or more classes of the Class A Third Issuer
Notes.

 

(d)                                 In the case of a single meeting
of the holders of the two or more classes of the Class A Third Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class A Third 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 Third 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 Third Issuer Notes shall be deemed to have been duly passed if passed
at a meeting of the holders of the Class B Third 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 B Third 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 Third 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
Third Issuer Notes.

 

300

 

(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 B Third 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 Third 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 Third Issuer Notes, it shall be duly passed at separate
meetings of the holders of such two or more classes of the Class B Third Issuer
Notes.

 

(d)                                 In the case of a single meeting
of the holders of the two or more classes of the Class B Third Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class B Third 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 Third 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 C Third Issuer Notes shall be deemed to have been duly passed if passed
at a meeting of the holders of the Class C Third 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 Third 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 Third 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
Third 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 Third 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 Third 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 Third Issuer Notes, it shall be duly passed at separate
meetings of the holders of such two or more classes of the Class C Third Issuer
Notes.

 

(d)                                 In the case of a single meeting
of the holders of the two or more classes of the Class C Third Issuer Notes
which are not all denominated in the same currency, the Principal Amount
Outstanding of any Class C Third 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 Third Issuer Note denominated in euro shall be converted into sterling
at the relevant Euro Currency Swap Rate.

 

23.                                 The expression Extraordinary Resolution when used in the
Third Issuer Trust Deed means (a) a resolution passed at a meeting of the
Noteholders of a relevant class of Third 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 Third
Issuer Notes, which resolution in writing may be 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 Third Issuer Notes.

 

24.                                 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 Third Issuer and

 

301

 

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.

 

25.                                 Subject to all other provisions
of the Third Issuer Trust Deed the Note Trustee may without the consent of the
Third 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.

 

302

 

SIGNATORIES

 

The Third
Issuer

 

	
  EXECUTED and DELIVERED as
  a DEED by

  	
  )

  	
   

  
	
  PERMANENT
  FINANCING (NO. 3) PLC

  	
  )

  	
   

  
	
  acting by two directors/a

  	
  )

  	
   

  
	
  director and the
  secretary

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  DAVID
  BALAI

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  JAMES
  GARNER SMITH MACDONALD

  

 

 

	
  The Note
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXECUTED and DELIVERED as
  a DEED by

  	
  )

  	
   

  
	
  THE BANK
  OF NEW YORK

  	
  )

  	
   

  
	
  acting by its authorised
  signatory

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorised Signatory:

  	
   

  	
  KATE
  RUSSELL

  

 

303

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